As filed with the Securities and Exchange Commission on July 23, 2012

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 20-F‘ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2012
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition periodtoOR‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number 000-54189

KABUSHIKI KAISHA MITSUBISHI UFJ FINANCIAL GROUP(Exact name of Registrant as specified in its charter)

MITSUBISHI UFJ FINANCIAL GROUP, INC.
(Translation of Registrant’s name into English)
Japan(Jurisdiction of incorporation or organization)

7-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100-8330
Japan(Address of principal executive offices)

Naoki Muramatsu, +81-3-3240-8111, +81-3-3240-7073, address is same as above(Name, Telephone, Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each className of each exchange on which registered
Common stock, without par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
American depositary shares, each of which represents one share of common stock . . . . . . . . . . . . . . . . . . . . . . . . . .

New York Stock Exchange(1)New York Stock Exchange(1) The listing of the registrant’s common stock on the New York Stock Exchange is for technical purposes only and without trading privileges.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
$2,300,000,000 Fixed/Floating Rate Non-Cumulative Preferred Securities of MUFG Capital Finance 1 Limited, and Mitsubishi UFJ Financial Group, Inc.’s
Guarantee thereof€750,000,000 Fixed/Floating Rate Non-Cumulative Preferred Securities of MUFG Capital Finance 2 Limited, and Mitsubishi UFJ Financial Group, Inc.’s
Guarantee thereof
Restricted Share Units granting rights to common stock pursuant to the UnionBanCal Corporation Stock Bonus Plan
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
At March 31, 2012, (1) 14,154,534,220 shares of common stock (including 10,471,043 shares of common stock held by the registrant and its consolidated
subsidiaries as treasury stock), (2) 156,000,000 shares of first series of class 5 preferred stock, and (3) 1,000 shares of class 11 preferred stock.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes È No ‘
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Yes ‘ No È
Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files).
Yes È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerÈ
Accelerated filer‘
Non-accelerated filer‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP
ÈInternational Financial Reporting Standards as issued
Other‘by the International Accounting Standards Board‘
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ‘ Item 18 ‘
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ‘ No ÈTABLE OF CONTENTS
Page

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
Identity of Directors, Senior Management and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Offer Statistics and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
Key Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4.
Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4A. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5.
Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Directors, Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7.
Major Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9.
The Offer and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10.
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11.
Quantitative and Qualitative Disclosures about Credit, Market and Other Risk . . . . . . . . . . . . .
Item 12.
Description of Securities Other than Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13.
Defaults, Dividend Arrearages and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds . . . . . . . . . . . . .
Item 15.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16A. Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16B. Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16C. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16D. Exemptions from the Listing Standards for Audit Committees . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . . . . .
Item 16F. Change in Registrant’s Certifying Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16G. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16H. Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 17.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 18.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 19.
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Statistical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2
3
3
3
21
48
49
127
144
146
148
149
171
193
195
195
195
199
199
199
200
201
201
201
203
204
204
204
A-1
F-1

For purposes of this Annual Report, we have presented our consolidated financial statements in accordancewith accounting principles generally accepted in the United States, or US GAAP, except for risk-adjusted capitalratios, business segment financial information and some other specifically identified information. Unless otherwise
stated or the context otherwise requires, all amounts in our financial statements are expressed in Japanese yen.
When we refer in this Annual Report to “MUFG,” “we,” “us,” “our” and the “Group,” we generally mean
Mitsubishi UFJ Financial Group, Inc. and its consolidated subsidiaries, but from time to time as the context
requires, we mean Mitsubishi UFJ Financial Group, Inc. as an individual legal entity. Similarly, references to“MTFG” and “UFJ Holdings” are to Mitsubishi Tokyo Financial Group, Inc. and to UFJ Holdings, Inc.,
respectively, as well as to MTFG and UFJ Holdings and their respective consolidated subsidiaries, as the context
requires. Unless the context otherwise requires, references in this Annual Report to the financial results orbusiness of the “MTFG group” and the “UFJ group” refer to those of MTFG and UFJ Holdings and theirrespective consolidated subsidiaries. In addition, our “banking subsidiaries” refers to The Bank of TokyoMitsubishi UFJ, Ltd. and Mitsubishi UFJ Trust and Banking Corporation and, as the context requires, theirrespective consolidated subsidiaries engaged in the banking business. References in this Annual Report to “yen”
or “¥” are to Japanese yen, references to “US dollars,” “US dollar,” “dollars,” “US$” or “$” are to United States
dollars, references to “euro” or “€” are to the currency of the member states of the European Union, andreferences to “£” are to British pounds sterling. Unless the context otherwise requires, references to the “Great
East Japan Earthquake” generally mean the earthquake and the ensuing tsunami in the northeastern region ofJapan that occurred on March 11, 2011, as well as the subsequent accidents at the Fukushima Daiichi Nuclear
Power Plants. Our fiscal year ends on March 31 of each year. References to years not specified as being fiscal
years are to calendar years.
We usually hold the ordinary general meeting of shareholders of Mitsubishi UFJ Financial Group, Inc. inJune of each year in Tokyo.
1Forward-Looking Statements
We may from time to time make written or oral forward-looking statements. Written forward-looking
statements may appear in documents filed with or submitted to the US Securities and Exchange Commission, orSEC, including this Annual Report, and other reports to shareholders and other communications.
The US Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking
information to encourage companies to provide prospective information about themselves. We rely on this safe
harbor in making these forward-looking statements.
Forward-looking statements appear in a number of places in this Annual Report and include statements
regarding our intent, business plan, targets, belief or current expectations or the current belief or current
expectations of our management with respect to our results of operations and financial condition, including,among other matters, our problem loans and loan losses. In many, but not all cases, we use words such as“anticipate,” “aim,” “believe,” “estimate,” “expect,” “intend,” “plan,” “probability,” “risk,” “will,” “may” andsimilar expressions, as they relate to us or our management, to identify forward-looking statements. Thesestatements reflect our current views with respect to future events and are subject to risks, uncertainties andassumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions
prove incorrect, actual results may vary materially from those which are aimed, anticipated, believed, estimated,
expected, intended or planned, or otherwise stated.
Our forward-looking statements are not guarantees of future performance and involve risks anduncertainties. Actual results may differ from those in the forward-looking statements as a result of various
factors. We identify in this Annual Report in “Item 3.D. Key Information—Risk Factors,” “Item 4.B. Informationon the Company—Business Overview,” “Item 5. Operating and Financial Review and Prospects” and elsewhere,
some, but not necessarily all, of the important factors that could cause these differences.
We are under no obligation, and disclaim any obligation, to update or alter our forward-looking statements,
whether as a result of new information, future events or otherwise.

2

PART I
Item 1.

Identity of Directors, Senior Management and Advisers.

Not applicable.
Item 2.

Offer Statistics and Expected Timetable.

Not applicable.
Item 3.
A.

Key Information.

Selected Financial Data

The selected statement of operations data and selected balance sheet data set forth below have been derived
from our audited consolidated financial statements.
Except for risk-adjusted capital ratios, which are calculated in accordance with Japanese banking regulations
based on information derived from our consolidated financial statements prepared in accordance with accounting
principles generally accepted in Japan, or Japanese GAAP, and the average balance information, the selectedfinancial data set forth below are derived from our consolidated financial statements prepared in accordance withUS GAAP.
Upon the conversion of the convertible preferred stock issued to us by Morgan Stanley into shares ofMorgan Stanley’s common stock on June 30, 2011, we adopted the equity method of accounting for ourinvestment in Morgan Stanley for the fiscal year ended March 31, 2012. Accordingly, certain financial data for
the fiscal years ended March 31, 2010 and 2011 have been retroactively adjusted on a step-by-step basis as if theequity method of accounting had been in effect during the previous reporting periods.
You should read the selected financial data set forth below in conjunction with “Item 5. Operating and
Financial Review and Prospects” and our consolidated financial statements and other financial data included
elsewhere in this Annual Report on Form 20-F. These data are qualified in their entirety by reference to all ofthat information.

3

2008
Statement of operations data:
Interest income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Fiscal years ended March 31,
2009
2010
2011
2012
(in millions, except per share data and number of shares)

4,366,811
2,087,094¥

3,895,794
1,599,389¥

2,757,866
774,400¥

2,550,144
670,673¥2,595,956
640,139

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . .

2,279,717
385,740

2,296,405
626,947

1,983,466
647,793

1,879,471
292,035

1,955,817
223,809

Net interest income after provision for credit
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . .

1,893,977
1,778,114
3,620,336

1,669,458
175,0993,608,784

1,335,673
2,469,411
2,508,060

1,587,436
1,694,822
2,460,446

1,732,008
1,440,576
2,322,642

Income (loss) from continuing operations before
income tax expense (benefit) . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . .

51,755553,045(1,764,227)(259,928)

1,297,024
413,105

821,812433,625

849,942429,191

Income (loss) from continuing operations . . . . . . . . .
Loss from discontinued operations—net . . . . . . . . . .

(501,290)(2,670)(1,504,299)—

883,919—

388,187—

420,751—(503,960)(1,504,299)

883,919

388,187

420,751

38,476(36,259)

15,257(64,458)

4,520

Net income (loss) before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to Mitsubishi UFJ
Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(542,436) ¥ (1,468,040) ¥868,662¥452,645¥416,231

Net income (loss) available to common shareholders
of Mitsubishi UFJ Financial Group . . . . . . . . . . . .

¥(557,014) ¥ (1,491,593) ¥846,984¥

431,705¥

398,291

¥

30.55

¥

28.17

Amounts per share:
Basic earnings (loss) per common share—income(loss) from continuing operations available tocommon shareholders of Mitsubishi UFJ
Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings (loss) per common share—net
income (loss) available to common shareholders
of Mitsubishi UFJ Financial Group . . . . . . . . . . . .
Diluted earnings (loss) per common share—income(loss) from continuing operations available tocommon shareholders of Mitsubishi UFJ
Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings (loss) per common share—net
income (loss) available to common shareholders
of Mitsubishi UFJ Financial Group . . . . . . . . . . . .
Number of shares used to calculate basic earnings(loss) per common share (in thousands) . . . . . . . .
Number of shares used to calculate diluted earnings(loss) per common share (in thousands) . . . . . . . .
Cash dividends per share declared during the fiscal
year:—Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Preferred stock (Class 3) . . . . . . . . . . . . . . . . . . . .

¥

¥
$
¥
$

—Preferred stock (Class 5) . . . . . . . . . . . . . . . . . . . .
—Preferred stock (Class 8) . . . . . . . . . . . . . . . . . . . .
—Preferred stock (Class 11) . . . . . . . . . . . . . . . . . . .
—Preferred stock (Class 12) . . . . . . . . . . . . . . . . . . .

¥
$
¥
$
¥
$

(53.79) ¥(137.84) ¥68.72(54.05)(137.84)

68.72

30.55

28.17

(53.79)(137.84)

68.59

30.43

28.09

(54.05)(137.84)

68.59

30.43

28.09

10,305,911

10,821,091

12,324,315

14,131,567

14,140,136

10,305,911

10,821,091

12,332,681(2)14,144,737(2)14,156,820(2)

13.00
0.11
60.00
0.51
—
—
15.90
0.14
5.30
0.05
11.50
0.10

4

¥
$
¥
$
¥
$
¥
$
¥
$

14.00
0.14
60.00
0.61
—
—
7.95
0.07
5.30
0.05
11.50
0.12

¥
$
¥
$
¥
$
¥
$

11.00 ¥
0.12 $
60.00 ¥
0.65 $
100.50(3) ¥1.10 $——
5.30 ¥
0.06 $
—
—

12.00
0.14
30.00
0.34
115.00
1.33
—
—
5.30
0.06
—
—

¥
$
¥
$
¥
$

12.00
0.15
—
—
115.00
1.45
—
—
5.30
0.07
—
—

Balance sheet data:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for credit losses . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital stock—Common stock . . . . . . . . . . . . . . . . .

2008

2009

At March 31,
2010(in millions)

2011

2012

¥195,766,083
97,867,139
186,612,152
129,240,128
13,675,250
9,153,931
1,084,708¥193,499,417
99,153,703
187,032,297
128,331,052
13,273,288
6,467,120
1,127,552¥200,081,462
90,870,295
190,980,363
135,472,496
14,162,424
9,101,099
1,643,238¥202,850,243
86,261,519
194,187,331
136,631,704
13,356,728
8,662,912
1,644,132¥215,202,514
91,012,736
206,344,067
139,493,730
12,593,062
8,858,447
1,645,144(unaudited)

Fiscal years ended March 31,
2009
2010
2011
(in millions, except percentages)(unaudited)(unaudited)(unaudited)(unaudited)¥172,467,323
156,151,982
197,946,692
10,038,425¥173,242,745
156,084,859
196,214,390
8,069,262¥175,370,688
158,156,363
195,571,703
7,871,505¥180,260,385
161,344,664
204,781,984
8,987,129¥184,179,147
165,420,569
211,835,389
8,594,310(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)

2008

Other financial data:
Average balances:
Interest-earning assets . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing liabilities . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on equity and assets:
Net income (loss) available to common shareholders
as a percentage of total average assets . . . . . . . . . .
Net income (loss) available to common shareholders
as a percentage of total average equity . . . . . . . . .
Dividends per common share as a percentage ofbasic earnings per common share . . . . . . . . . . . . .
Total average equity as a percentage of total averageassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income as a percentage of total averageinterest-earning assets . . . . . . . . . . . . . . . . . . . . . .
Credit quality data:
Allowance for credit losses . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses as a percentage ofloans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonaccrual and restructured loans, and accruingloans contractually past due 90 days or more . . . .
Nonaccrual and restructured loans, and accruingloans contractually past due 90 days or more as apercentage of loans . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses as a percentage ofnonaccrual and restructured loans, and accruingloans contractually past due 90 days or more . . . .
Net loan charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(0.28)%(0.76)%

0.43%

0.21%

0.19%

(5.55)%(18.48)%10.76%

4.80%

4.63%

—(4)

—(4)

16.01%

39.28%

42.60%

5.07%

4.11%

4.02%

4.39%

4.06%

1.32%

1.33%

1.13%

1.04%

1.06%

1,134,940¥

1,679,672

1,156,638

¥

1.15%
¥

1,792,597

1,315,615

¥

1.43%
¥

2,007,619

1,240,456

¥

1.42%
¥

2,064,477

¥

1.79%

2.18%

2.36%

67.57%
355,892 ¥64.52%
576,852 ¥65.53%
468,400 ¥60.09%
342,100 ¥(unaudited)(unaudited)(unaudited)

1,285,507
1.39%

1.70%

(unaudited)
Net loan charge-offs as a percentage of averageloans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average interest rate spread . . . . . . . . . . . . . . . . . . . .
Risk-adjusted capital ratio calculated under JapaneseGAAP(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

1.15%
¥

2012

2,178,541
2.36%
59.01%
173,370(unaudited)

0.37%
1.19%

0.58%
1.23%

0.49%
1.08%

0.39%
0.99%

0.20%
1.02%

11.19%

11.77%

14.87%

14.89%

14.91%

Notes:(1) Interest income for the fiscal year ended March 31, 2012 includes a gain of ¥139,320 million on conversion rate adjustment of
convertible preferred stock. Exclusive of the one-time gain associated with the conversion, interest income would have been lower for
the fiscal year ended March 31, 2012.
(2) Includes the common shares potentially issuable by conversion of the Class 11 Preferred Stock.
(3) Includes a cash dividend of ¥43.00 per share declared at the ordinary annual meeting of shareholders held on June 26, 2009, which was
the annual dividend declared for the fiscal year ended March 31, 2009, and a cash dividend of ¥57.50 per share declared at the board of
director’s meeting held on November 18, 2009, which represented one-half of the annual dividend declared for the fiscal year ended
March 31, 2010.
(4) Percentages of basic loss per common stock have not been presented because such information is not meaningful.
(5) Risk-adjusted capital ratios have been calculated in accordance with Japanese banking regulations, based on information derived fromour consolidated financial statements prepared in accordance with Japanese GAAP.

5Exchange Rate Information
The tables below set forth, for each period indicated, the noon buying rate in New York City for cabletransfers in Japanese yen as certified for customs purposes by the Federal Reserve Bank of New York, expressedin Japanese yen per US$1.00. On July 10, 2012, the noon buying rate was ¥79.44 to US$1.00 and the inverse
noon buying rate was US$1.26 to ¥100.00.

High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

February

March

Year 2012
April
May

June

July(1)¥81.10¥76.11¥83.78¥80.86¥82.62¥79.81¥80.52¥78.21¥79.95¥79.42

2008

Fiscal years ended March 31,
2009
2010
2011

¥80.36¥78.29Note:(1) Period from July 1, 2012 to July 10, 2012.

Average (of month-end rates) . . . . . . . . . . . . . . . . . . . . . . . . . . .
B.

¥113.61¥100.85¥92.49¥85.002012¥78.86

Capitalization and Indebtedness
Not applicable.

C.

Reasons for the Offer and Use of Proceeds
Not applicable.

D.

Risk Factors

Investing in our securities involves a high degree of risk. You should carefully consider the risks describedin this section, which is intended to disclose all of the risks that we consider material based on the information
currently available to us, as well as all the other information in this Annual Report, including our consolidated
financial statements and related notes, “Item 5. Operating and Financial Review and Prospects,” “Item 11.
Quantitative and Qualitative Disclosures about Credit, Market and Other Risk” and “Selected Statistical Data.”
Our business, operating results and financial condition could be materially and adversely affected by any of
the factors discussed below. The trading price of our securities could decline due to any of these factors. This
Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of various factors,
including the risks faced by us described in this section and elsewhere in this Annual Report. See “ForwardLooking Statements.”
Risks Related to Our Business
Because a large portion of our assets are located in Japan and our business operations are conductedprimarily in Japan, we may incur further losses if economic conditions in Japan worsen.
Our performance is particularly affected by the general economic conditions of Japan where we areheadquartered and conduct a significant amount of our business. As of March 31, 2010, 2011 and 2012, 74.5%,
71.9% and 69.1% of our total assets were related to Japanese domestic assets, respectively, including Japanesenational government and Japanese government agency bonds, which accounted for 73.8%, 77.5% and 81.1% of
our total investment securities portfolio, and 20.2%, 22.6% and 23.0% of our total assets, respectively. Moreover,
72.8% of our total interest and non-interest income for the fiscal year ended March 31, 2012 related to suchincome in Japan. Furthermore, as of March 31, 2012, our domestic loans in Japan accounted for approximately
73.8% of our total loans outstanding.
6

The Japanese economy slowed down in the quarter ended June 30, 2011 following the Great East Japan
Earthquake in March 2011 and again in the third quarter ended December 31, 2011 as overseas economies
deteriorated and the Japanese yen appreciated against other major currencies. The exchange rate between theJapanese yen and the US dollar fluctuated during the fiscal year ended March 31, 2012, with the yen appreciating
to the highest rate for the fiscal year of ¥75.32 to the US dollar on October 31, 2011. As of July 10, 2012, theexchange rate was ¥79.25 to US$1. The Japanese economy may further deteriorate if, for example, the yen
continues to appreciate or remains at current levels against other currencies, consumer spending in Japan isnegatively affected by various factors such as tax rate increases, or the global economy worsens due to theongoing sovereign debt crisis in Europe. Shortages in electricity supply and electricity rate increases could also
further adversely affect the Japanese economy. Growing global competition may adversely affect Japanesecompanies and, as a result, the Japanese economy as a whole. In addition, there is significant uncertainty
surrounding political decision-making over, and the execution of measures in response to, issues that could havea significant impact on Japan’s economy, including Japan’s energy, tax and social security policies, issuance ofgovernment bonds as well as responses to the Great East Japan Earthquake. In recent periods, several credit
rating agencies have downgraded the credit ratings of Japan’s sovereign debt, including a downgrade by
Moody’s Japan K.K., or Moody’s, in August 2011 and a downgrade by Fitch Ratings Japan Limited, or Fitch, in
May 2012. For a detailed discussion on the business environment in Japan and abroad, see “Item 5. Operating
and Financial Review and Prospects—Business Environment” and “Item 5. Operating and Financial Review andProspects—Recent Developments.”
Since the accidents at the Fukushima Daiichi Nuclear Power Plants in March 2011, the Japanese electricutility industry has been experiencing significant difficulties and has been influenced by evolving public policy.
In particular, The Tokyo Electric Power Company, Incorporated, or TEPCO, and the Nuclear Damage Liability
Facilitation Fund, which is a government-supported fund, drafted a Comprehensive Special Business Plan toaddress TEPCO’s problems following the accidents at the Fukushima Daiichi Nuclear Power Plants. That plan
was approved by the Minister of Economy, Trade and Industry in May 2012. The plan provides for a ¥1 trillion
capital injection into TEPCO by the Nuclear Damage Liability Facilitation Fund in July 2012. In addition, as partof the plan, TEPCO has requested its primary lenders, which includes us, to (1) maintain all existing credit lines
until TEPCO can procure financing independently through corporate bond issuances, (2) re-lend any previous
loans that TEPCO may have repaid between March 11 and September 30, 2011, and (3) provide additional debt
financing of up to approximately ¥1 trillion in aggregate (including the amount provided in response to therequest as described in (2) above). No request for debt-forgiveness was made to the lenders as part of the plan.
We are carefully monitoring TEPCO’s progress under the plan, and are currently considering providing therequested financial support to TEPCO if TEPCO’s operations and financial standing are in accordance with theplan without any material change. Assuming that we had provided the additional debt financing requested by
TEPCO under the plan as of March 31, 2012, our aggregate loans outstanding to the Japanese electric utility
industry would have been approximately 2% of our total outstanding loans as of such date.
Since, as described above, our domestic loans in Japan accounted for a significant portion of our loan
portfolio, deteriorating or stagnant economic conditions in Japan have resulted in, and will likely further cause,
indirect adverse effects on our financial results such as increases in credit costs as the credit quality of someborrowers could deteriorate. For a further discussion, see “—Risks Related to Our Business—We may suffer
additional credit-related losses in the future if our borrowers are unable to repay their loans as expected or if themeasures we take in reaction to, or in anticipation of, our borrowers’ deteriorating repayment abilities proveinappropriate or insufficient.”
In addition, our Japanese domestic marketable equity securities portfolio and Japanese government bondportfolio may be adversely affected, depending on how the Japanese economy performs in general and what
governmental policies may be adopted in the future. Deteriorating or stagnant economic conditions in Japan may
also result in a decrease in the volume of financial transactions in general, which in turn may reduce our domestic
income from fees and commissions. For a further discussion of our results of operations on a geographic basis,see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Geographic Segment
Analysis.”7

If the global economy deteriorates further, our credit-related losses may increase, and the value of thefinancial instruments we hold may decrease, resulting in losses.
Global economic conditions remain volatile, and it is uncertain how the global economy will evolve overtime. Especially, the financial turmoil caused by the credit crises in some European countries has negatively
impacted wider markets, including those of both emerging and developed countries. As of March 31, 2012, based
principally on the domicile of the obligors, assets related to Europe accounted for approximately 8.7% of our
total assets, assets related to Asia and Oceania excluding Japan accounted for approximately 5.8% of our total
assets, and assets related to the United States accounted for approximately 13.2% of our total assets. If the global
economy deteriorates or the global economic recovery significantly slows down again, the availability of credit
may become limited, and some of our borrowers may default on their loan obligations to us, increasing our credit
losses. In addition, concerns over the sovereign debt problem in some European countries may limit liquidity inthe global financial markets. Some of our credit derivative transactions may also be negatively affected,
including the protection we sold through single name credit default swaps, index and basket credit default swaps,
and credit linked notes. The notional amounts of these protections sold as of March 31, 2012 were ¥2.63 trillion,¥0.67 trillion and ¥0.04 trillion, respectively. In addition, if credit market conditions worsen, our capital funding
structure may need to be adjusted or our funding costs may increase, which could have a material adverse impact
on our financial condition and results of operations.
Furthermore, we have incurred losses, and may incur further losses, as a result of changes in the fair valueof our financial instruments resulting from weakening market conditions. For example, declines in the fair valueof our investment securities, particularly equity investment securities, resulted in our recording impairment lossesof ¥117.5 billion, ¥139.0 billion and ¥195.7 billion for the fiscal years ended March 31, 2010, 2011 and 2012,
respectively. As of March 31, 2012, approximately 43% of our total assets were financial instruments for which
we measure fair value on a recurring basis, and less than 0.5% of our total assets were financial instruments forwhich we measure fair value on a nonrecurring basis. Generally, in order to establish the fair value of these
instruments, we rely on quoted market prices. If the value of these financial instruments declines, acorresponding write-down may be recognized in our consolidated statements of income. In addition, because wehold a large amount of investment securities, short-term fluctuations in the value of our securities may trigger
losses or exit costs for us to manage our risk. For more information on our valuation method for financial
instruments, see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Estimates.”
We may suffer additional credit-related losses in the future if our borrowers are unable to repay theirloans as expected or if the measures we take in reaction to, or in anticipation of, our borrowers’ deteriorating
repayment abilities prove inappropriate or insufficient.
When we lend money or commit to lend money, we incur credit risk, or the risk of losses if our borrowers
do not repay their loans. We may incur significant credit losses or have to provide for a significant amount ofadditional allowance for credit losses if:‰

large borrowers become insolvent or must be restructured;‰domestic or global economic conditions, either generally or in particular industries in which large
borrowers operate, deteriorate;‰

the value of the collateral we hold, such as real estate or securities, declines; or‰

we are adversely affected by corporate credibility issues among our borrowers, to an extent that is worse
than anticipated.

As a percentage of total loans, nonaccrual and restructured loans and accruing loans contractually past due
90 days or more ranged from 1.70% to 2.36% as of the five recent fiscal year-ends, reaching its highest level of
2.36% as of March 31, 2011 and 2012. Nonaccrual and restructured loans and accruing loans contractually pastdue 90 days or more increased to ¥2.2 trillion at March 31, 2012, from ¥2.1 trillion at March 31, 2011, primarily
due to an increase in such loans in our domestic loan portfolio. If the recession in Japan worsens again, our8

problem loans and credit-related expenses may increase. An increase in problem loans and credit-related
expenses would adversely affect our results of operations, weaken our financial condition and erode our capitalbase. For a discussion of our problem loans, see “Item 5.B. Operating and Financial Review and Prospects—
Liquidity and Capital Resources—Financial Condition” and “Selected Statistical Data—Loan Portfolio.”
Due to the nuclear power plant accidents in Fukushima Prefecture following the Great East Japan
Earthquake in March 2011, certain areas in eastern Japan were affected by radiation contamination, and the
Kanto region of Japan, where Tokyo is located, experienced electricity supply shortages. Electricity is expected
to fall short in supply in wider regions of Japan. Electricity supply shortages are expected to have a significant
negative impact on the recovery efforts in the northeastern region of Japan and could also disrupt the economic
and industrial activities in other regions of Japan. Increased costs are expected to secure alternative sources ofelectricity, parts and other materials, and to provide financial support or compensation for affected individuals
and companies. In addition, electricity rates have been raised, and may be further raised, which will affect ourborrowers in Japan. As a result, our borrowers’ financial condition and creditworthiness could deteriorate, andour credit-related expenses with respect to our domestic credit portfolio could increase.
We may provide additional loans, equity capital or other forms of support to troubled borrowers in order tofacilitate their restructuring and revitalization efforts. We may also forbear from exercising some or all of ourrights as a creditor against them, and we may forgive loans to them in conjunction with their debt restructurings.
We may take these steps even when such steps might not be warranted from the perspective of our short-term or
narrow economic interests or a technical analysis of our legal rights against those borrowers, in light of otherfactors such as our longer-term economic interests, and our commitment to support the Japanese economy. These
practices may substantially increase our exposure to troubled borrowers and increase our losses. Credit losses
may also increase if we elect, or are forced by economic or other considerations, to sell or write off our problem
loans at a larger discount, in a larger amount or in a different time or manner, than we may otherwise want.
Although we, from time to time, enter into credit derivative transactions, including credit default swap
contracts, to manage our credit risk exposure, such transactions may not provide the protection against credit
defaults that we intended due to counterparty defaults or similar issues. The credit default swap contracts could
also result in significant losses. As of March 31, 2012, the total notional amount of the protection we soldthrough single name credit default swaps, index and basket credit default swaps, and credit-linked notes was¥3.3 trillion. In addition, negative changes in financial market conditions may restrict the availability andliquidity of credit default swaps. For more information on our credit derivative transactions, see Note 21 to ourconsolidated financial statements included elsewhere in this Annual Report.
Our loan losses could prove to be materially different from our estimates and could materially exceed ourcurrent allowance for credit losses, in which case we may need to provide for additional allowance for credit
losses and may also record credit losses beyond our allowance. Our allowance for credit losses in our loan
portfolio is based on evaluations about customers’ creditworthiness and the value of collateral we hold. Negativechanges in economic conditions or our borrowers’ repayment abilities could require us to provide for additional
allowance. For example, borrowers in wider regions of Japan may be adversely affected due to the compensation
issues for affected individuals and companies, electricity power supply shortages and electricity rate increases,
and other indirect consequences of the Great East Japan Earthquake beyond our expectations, as well as changes
in governmental policies in the future. As a result, our borrowers may incur financial and nonfinancial losses thatexceed our estimations. In such case, we may need to provide for additional allowance for credit losses. Also, theregulatory standards or guidance on establishing allowances may also change, causing us to change some of theevaluations used in determining the allowances. As a result, we may need to provide for additional allowance for
credit losses. For a discussion of our allowance policy, see “Item 5.B. Operating and Financial Review andProspects—Liquidity and Capital Resources—Financial Condition.”9

If the Japanese stock market or other global markets decline in the future, we may incur losses on our
securities portfolio and our capital ratios will be adversely affected.
A decline in Japanese stock prices could reduce the value of the Japanese domestic marketable equity
securities that we hold, which accounted for 5.6% of our total investment securities portfolio, or 1.6% of our total
assets, as of March 31, 2012. The Nikkei Stock Average, which is the average of 225 blue chip stocks listed on
the Tokyo Stock Exchange, fluctuated throughout the fiscal year ended March 31, 2012, with the closing price of
the Nikkei Stock Average declining to ¥8,160.01 on November 25, 2011. As of July 10, 2012, the closing priceof the Nikkei Stock Average was ¥8,857.73. Fluctuations in the Nikkei Stock Average have mainly reflectedvolatility in the global economy and weak investor sentiment that remains cautious in light of uncertainties
surrounding the global financial and capital markets and, to some extent, the appreciating Japanese yen and thegrowing global competition adversely affecting Japanese companies. If stock market prices further decline or do
not improve, we may incur additional losses on our securities portfolio. Because we hold a large amount ofJapanese domestic marketable equity securities, even short-term fluctuations in the value of our securities may
trigger losses or exit costs for us to manage our risk. Further declines in the Japanese stock market or other global
markets may also materially and adversely affect our capital ratios and financial condition. For a detailed
discussion of our holdings of marketable equity securities and the effect of market declines on our capital ratios,
see “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital
Adequacy” and “Selected Statistical Data—Investment Portfolio.”
If our strategic alliance with Morgan Stanley fails, we could suffer financial or reputational loss.
We have entered into a global strategic alliance with Morgan Stanley, under which we operate two joint
venture securities companies in Japan, engage in joint corporate finance operations in the United States andpursue other cooperative opportunities. We hold approximately 21.8% of the voting rights in Morgan Stanley asof March 31, 2012 and continue to hold approximately $0.5 billion, or ¥53.6 billion, of perpetual non-cumulative
non-convertible preferred stock with a 10% dividend. In addition, we currently have two representatives on
Morgan Stanley’s board of directors.
We initially entered into this strategic alliance in October 2008 with a view towards long-term cooperation
with Morgan Stanley, and currently plan to deepen the strategic alliance, given that the voluntary conversion of
the convertible preferred stock to the common stock was completed in June 2011. However, due to any
unexpected changes in social, economic or financial conditions, changes in the regulatory environment, or any
failure to integrate or share staff, products or services, or to operate, manage or implement the business strategyof the securities joint venture companies or other cooperative opportunities as planned, we may be unable toachieve the expected synergies from this alliance.
If our strategic alliance with Morgan Stanley is terminated, it could have a material negative impact on ourbusiness strategy, financial condition, and results of operations. For example, because we conduct our securities
operations in Japan through the joint venture companies we have with Morgan Stanley, such termination may
result in our inability to attain the planned growth in this line of business.
In addition, with our current investment in Morgan Stanley, we have neither a controlling interest in, nor
control over the business operations of Morgan Stanley. If Morgan Stanley makes any business decisions that areinconsistent with our interests, we may be unable to achieve the goals initially set out for the strategic alliance.
Furthermore, although we do not control Morgan Stanley, given the magnitude of our investment, if Morgan
Stanley encounters financial or other business difficulties, we may suffer a financial loss on our investment or
damage to our reputation. Because of a decline in the quoted market price of Morgan Stanley’s common stockthat we determined to be other than temporary in light of the increasingly stringent regulatory environment andthe existing adverse economic events in Europe, we recorded an impairment loss of ¥579.5 billion on ourinvestment in Morgan Stanley’s common stock for the fiscal year ended March 31, 2012.

10

In the fiscal year ended March 31, 2012, Morgan Stanley became an equity-method affiliate in ourconsolidated financial statements. Accordingly, Morgan Stanley’s performance will have a more significant
impact on our results of operations as a result of equity method accounting. Further, fluctuations in Morgan
Stanley’s stock price or in our equity ownership interest in Morgan Stanley may cause us to recognize additional
losses on our investment in Morgan Stanley.
For a detailed discussion of our strategic alliance with Morgan Stanley, see “Item 5. Operating and Financial
Review and Prospects—Recent Developments.”
Because of our loans to consumers and our shareholdings in companies engaged in consumer lending,changes in the business or regulatory environment for consumer finance companies in Japan may further
adversely affect our financial results.
We have a large loan portfolio in the consumer lending industry as well as large shareholdings in
subsidiaries and equity method investees in the consumer finance industry. Our domestic loans to consumers
amount to approximately one-fifth of our total outstanding loans. Of this amount, the consumer loans provided
by Mitsubishi UFJ NICOS, Co., Ltd., which is our primary consumer financing subsidiary, were ¥757.9 billion asof March 31, 2012, compared to ¥872.0 billion as of March 31, 2011. Mitsubishi UFJ NICOS’s consumer loan
portfolio has been adversely affected by a series of regulatory reforms recently implemented in Japan.
The Japanese government implemented regulatory reforms affecting the consumer lending industry in recent
years. In December 2006, the Diet passed legislation to reform the regulations relating to the consumer lending
business, including amendments to the Law Concerning Acceptance of Investment, Cash Deposit and Interest
Rate, etc., which, effective June 18, 2010, reduced the maximum permissible interest rate from 29.2% per annum
to 20% per annum. The regulatory reforms also included amendments to the Law Concerning Lending Business,
which, effective June 18, 2010, abolished the so-called “gray-zone interest.” Gray-zone interest refers to interest
rates exceeding the limits stipulated by the Interest Rate Restriction Law (between 15% per annum to 20% perannum depending on the amount of principal). Prior to June 18, 2010, gray-zone interest was permitted undercertain conditions set forth in the Law Concerning Lending Business. As a result of the regulatory reforms, allinterest rates are now subject to the lower limits imposed by the Interest Rate Restriction Law, compelling
lending institutions, including our consumer finance subsidiaries and equity method investees, to lower theinterest rates they charge borrowers. The new regulations that became effective on June 18, 2010 also have had afurther negative impact on the business of consumer finance companies as one of the new regulations requires,among other things, consumer finance companies to limit their lending to a single customer to a maximum of one
third of the customer’s annual income regardless of the customer’s repayment capability, significantly affecting
consumer financing companies.
The new regulations and regulatory reforms affecting the consumer finance business were one of the main
factors that contributed to the decrease in interest income attributable to our consumer finance business. Ourinterest income attributable to the consumer finance business was approximately ¥190 billion and ¥160 billion
for the fiscal years ended March 31, 2009 and 2010, respectively. However, following the regulatory changes inJune 2010, our interest income attributable to the consumer finance business decreased to approximately ¥130
billion and ¥120 billion for the fiscal years ended March 31, 2011 and 2012, respectively.
In addition, as a result of decisions by the Supreme Court of Japan prior to June 18, 2010 imposing stringent
requirements under the Law Concerning Lending Business for charging gray-zone interest rates, consumer
finance companies have experienced a significant increase in borrowers’ claims for reimbursement of previously
collected interest payments in excess of the limits stipulated by the Interest Rate Restriction Law.
Following the various legal developments in June 2010 and other industry developments, Mitsubishi UFJ
NICOS revised its estimate by updating management’s future forecast to reflect new reimbursement claims
information and other data. As of March 31, 2010, 2011 and 2012, we had ¥84.2 billion, ¥136.9 billion and ¥99.4
billion of allowance for repayment of excess interest, respectively. For the fiscal years ended March 31, 2010,11

2011 and 2012, we recorded provisions for repayment of excess interest of ¥44.8 billion, ¥85.7 billion and nil,respectively. For the same periods, one of our equity method investees engaged in consumer lending, ACOM
CO., LTD., had a negative impact of ¥23.1 billion, ¥96.4 billion and ¥19.3 billion, respectively, on Equity inlosses of equity method investees—net in our consolidated statements of income. We intend to carefully monitor
future developments and trends.
These developments have adversely affected, and these and any future developments may further adversely
affect, the operations and financial condition of our subsidiaries, equity method investees and borrowers which
are engaged in consumer lending, which in turn may affect the value of our related shareholdings and loan
portfolio. In particular, in March 2011, we made a capital contribution of approximately ¥85.0 billion to
Mitsubishi UFJ NICOS.
Increases in interest rates could adversely affect the value of our bond portfolio.
The aggregate carrying amount of the Japanese government and corporate bonds and foreign bonds,
including US Treasury bonds, that we hold has increased in recent fiscal years to 24.8% of our total assets as ofMarch 31, 2012. In particular, the Japanese national government and Japanese government agency bonds
accounted for 23.0% of our total assets as of March 31, 2012. For a detailed discussion of our bond portfolio, see“Selected Statistical Data—Investment Portfolio.”
The Bank of Japan has been maintaining a very low policy rate (uncollateralized overnight call rate) of
0.10% in an effort to lift the economy out of deflation. Short-term interest rates continue to decline because of
the Bank of Japan’s so-called “monetary easing policy.” Central bank’s policies, however, may change, resulting
in an interest rate increase. Separate from the central bank monetary policies, interest rates on the Japanesenational government and Japanese government agency bonds could also significantly increase if there is adisruption in the market for Japanese national government bonds caused by shifts in investor attitude,
fluctuations in other comparable debt instruments or adverse changes in the perception of Japan’s sovereign risk.
An increase in relevant interest rates, particularly if such increase is unexpected or sudden, may have asignificant negative effect on the value of our bond portfolio. See “Item 5. Operating and Financial Review andProspects—Business Environment.”
Fluctuations in foreign currency exchange rates may result in transaction losses on translation ofmonetary assets and liabilities denominated in foreign currencies as well as foreign currency translation
losses with respect to our foreign subsidiaries and equity method investees.
Fluctuations in foreign currency exchange rates against the Japanese yen create transaction gains or losseson the translation into Japanese yen of monetary assets and liabilities denominated in foreign currencies. To theextent that our foreign currency-denominated assets and liabilities are not matched in the same currency orappropriately hedged, we could incur losses due to future foreign exchange rate fluctuations. During the fiscal
year ended March 31, 2012, the average balance of our foreign interest-earning assets was ¥53.3 trillion and theaverage balance of our foreign interest-bearing liabilities was ¥34.5 trillion, representing 29.0% of our average
total interest-earning assets and 20.9% of our average total interest-bearing liabilities during the same period. For
the fiscal year ended March 31, 2012, net foreign exchange gains, which primarily include transaction gains on
the translation into Japanese yen of monetary assets and liabilities denominated in foreign currencies and net
gains on currency derivatives instruments entered into for trading purposes, were ¥34.3 billion, compared to net
foreign exchange gains of ¥260.7 billion for the previous fiscal year. In addition, we may incur foreign currencytranslation losses with respect to our foreign subsidiaries and equity method investees due to fluctuations inforeign currency exchange rates. The average exchange rate for the fiscal year ended March 31, 2012 was¥79.08 per US$1.00, compared to the average exchange rate for the fiscal year ended March 31, 2011 of¥85.72 per US$1.00. The change in the average exchange rate of the Japanese yen against the US dollar and otherforeign currencies had the effect of decreasing total revenue by ¥100.8 billion, net interest income by ¥55.0
billion and income before income tax expense by ¥45.6 billion, respectively, for the fiscal year ended March 31,
122012. For more information on foreign exchange gains and losses and foreign currency translation gains andlosses, see “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Results ofOperations” and “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Effect ofChange in Exchange Rates on Foreign Currency Translation.”
Any adverse changes in the business of Union Bank, an indirect wholly-owned subsidiary in the UnitedStates, could significantly affect our results of operations.
Union Bank, N.A., or Union Bank, is the primary subsidiary of UnionBanCal Corporation, or UNBC, which
is an indirect wholly-owned subsidiary in the United States. Union Bank has historically contributed to asignificant portion of our net income. UNBC reported net loss of $65 million for the fiscal year ended
December 31, 2009, net income of $573 million for the fiscal year ended December 31, 2010, and net income of$778 million for the fiscal year ended December 31, 2011. Any adverse developments which could arise at Union
Bank may have a significant negative impact on our results of operation and financial condition. The risks
relating to Union Bank have increased as Union Bank has been expanding its business through acquisitions ofcommunity banks within the United States. In April 2010, Union Bank acquired approximately $600 million in
total assets and assumed more than $400 million in deposits of Tamalpais Bank, a California-based bank, andacquired approximately $3.2 billion in total assets and assumed approximately $2.5 billion in deposits of FrontierBank, a Washington-based bank, pursuant to its respective purchase and assumption agreements with the US
Federal Deposit Insurance Corporation. In March 2012, UNBC entered into a definitive agreement to acquireapproximately $5.9 billion in assets and assume approximately $4.6 billion in deposits of Pacific Capital
Bancorp, a bank holding company headquartered in California. In May 2012, Union Bank signed a definitive
agreement to acquire Smartstreet, an Atlanta-based financial services division of PNC Bank, N.A., withapproximately $1 billion in deposits and comprehensive receivables offering and lockbox operations. If Union
Bank is unable to achieve the benefits expected from its business strategies, including its business expansion
strategy through acquisitions of community banks, we may suffer an adverse financial impact. Other factors thathave negatively affected, and could continue to negatively affect, Union Bank’s results of operations include
adverse economic conditions, such as a downturn in the real estate and housing industries in California and otherstates within the United States, substantial competition in the banking markets in California and other states
within the United States and uncertainty over the US economy, as well as the threat of terrorist attacks,
fluctuating oil prices, rising interest rates, negative trends in debt ratings, additional costs which may arise fromenterprise-wide compliance, or failure to comply, with applicable laws and regulations, such as the US Bank
Secrecy Act and related amendments under the USA PATRIOT Act, and any adverse impact of theimplementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-FrankAct.
We may incur further losses as a result of financial difficulties relating to other financial institutions,both directly and through the effect they may have on the overall banking environment and on theirborrowers.
Some domestic and foreign financial institutions, including banks, non-bank lending and credit institutions,securities companies and insurance companies, have experienced declining asset quality and capital adequacy
and other financial problems. This may lead to severe liquidity and solvency problems, which have in the past
resulted in the liquidation, government control or restructuring of affected institutions. In addition, allegations or
governmental prosecution of improper trading activities or inappropriate business conduct of a specific financial
institution could also negatively affect the public perception of other global financial institutions individually andthe global financial industry as a whole. These developments may adversely affect our financial results.
Financial difficulties relating to financial institutions could adversely affect us because we have extendedloans, some of which may need to be classified as nonaccrual and restructured loans, to banks, securities
companies, insurance companies and other financial institutions that are not our consolidated subsidiaries. Ourloans to banks and other financial institutions have been more than 5% of our total loans as of each year-end in13the three fiscal years ended March 31, 2012, with the percentage increasing from 8.0% to 8.9% between
March 31, 2011 and March 31, 2012. We may also be adversely affected because we are a shareholder of someother banks and financial institutions that are not our consolidated subsidiaries, including our shareholdings inJapanese regional banks and our 21.8% voting interest in Morgan Stanley as of March 31, 2012. If some of thefinancial institutions to which we have exposure, experience financial difficulties, we may need to provide
financial support to them even when such support might not be warranted from the perspective of our narroweconomic interests because such institutions may be systematically important to the Japanese or global financial
system.
We may also be adversely affected because we enter into transactions, such as derivative transactions, in theordinary course of business, with other banks and financial institutions as counterparties. For example, we enter
into credit derivatives with banks, broker-dealers, insurance and other financial institutions for managing credit
risk exposures, for facilitating client transactions, and for proprietary trading purpose. The notional amount of theprotection we sold through these instruments was ¥3.3 trillion as of March 31, 2012.
In addition, financial difficulties relating to financial institutions could indirectly have an adverse effect on
us because:‰

we may be requested to participate in providing assistance to support distressed financial institutions
that are not our consolidated subsidiaries;‰

the government may elect to provide regulatory, tax, funding or other benefits to those financial
institutions to strengthen their capital, facilitate their sale or otherwise, which in turn may increase theircompetitiveness against us;‰

deposit insurance premiums could rise if deposit insurance funds prove to be inadequate;‰

bankruptcies or government support or control of financial institutions could generally undermine
confidence in financial institutions or adversely affect the overall banking environment;‰

failures or financial difficulties experienced by other financial institutions could result in additional
regulations or requirements that increase the cost of business for us; and‰negative media coverage of the financial industry, regardless of its accuracy and applicability to us,
could affect customer or investor sentiment, harm our reputation and have a materially adverse effect on
our business or the price of our securities.

Our strategy to expand the range of our financial products and services and the geographic scope of ourbusiness globally may fail if we are unable to anticipate or manage new or expanded risks that entail such
expansion.
We continue to seek opportunities to expand the range of our products and services beyond our traditionalbanking and trust businesses, through development and introduction of new products and services or throughacquisitions of or investments in financial institutions with products and services that complement our business.
For example, taking advantage of our financial holding company status which enables us to underwrite securities,
we are currently seeking to expand our corporate banking operations in the United States. In addition, thesophistication of financial products and management systems has been growing significantly in recent years. As aresult, we are exposed to new and increasingly complex risks. Some of the activities that our subsidiaries are
expected to engage in, such as derivatives and foreign currency trading, present substantial risks. In some cases,
we have only limited experience with the risks related to the expanded range of these products and services. In
addition, we may not be able to successfully develop or operate the necessary information systems. As a result,
we may not be able to foresee the risks relating to new products and services. As we expand the geographic scopeof our business, we will also be exposed to risks that are unique to particular jurisdictions or markets. Our risk
management systems may prove to be inadequate and may not work in all cases or to the degree required. The
substantial market, credit, compliance and regulatory risks in relation to the expanding scope of our products,
services and trading activities or expanding our business beyond our traditional markets, could result in us
14

incurring substantial losses. In addition, our efforts to offer new services and products or penetrate new markets
may not succeed if product or market opportunities develop more slowly than expected, if our new services or
products are not well accepted among customers, or if the profitability of opportunities is undermined bycompetitive pressures. For a detailed discussion of our risk management systems, see “Item 11. Quantitative andQualitative Disclosures about Credit, Market and Other Risk.”
Unanticipated economic changes in, and measures taken in response to such changes by, emerging
market countries could result in additional losses.
We are increasingly active, through a network of branches and subsidiaries, in emerging market countries,
particularly countries in Asia, Latin America, Central and Eastern Europe, and the Middle East. For example,
based principally on the domicile of the obligors, assets related to Asia and Oceania excluding Japan increased
13.8% from ¥10.91 trillion as of March 31, 2011 to ¥12.41 trillion as of March 31, 2012, accounting for 5.8% of
our total assets as of March 31, 2012. The economies of emerging market countries can be volatile andsusceptible to adverse changes and trends in the global financial markets. For example, a decline in the value of
local currencies of these countries could negatively affect the creditworthiness of some of our borrowers in thesecountries. The loans we have made to borrowers and banks in these countries are often denominated in US
dollars, Euro or other foreign currencies. These borrowers often do not hedge the loans to protect against
fluctuations in the values of local currencies. A devaluation of the local currency would make it more difficult fora borrower earning income in that currency to pay its debts to us and other foreign lenders. In addition, somecountries in which we operate may attempt to support the value of their currencies by raising domestic interest
rates. If this happens, the borrowers in these countries would have to devote more of their resources to repaying
their domestic obligations, which may adversely affect their ability to repay their debts to us and other foreign
lenders. The limited credit availability resulting from these conditions may adversely affect economic conditions
in some countries. This could cause a further deterioration of the credit quality of borrowers and banks in thosecountries and cause us to incur further losses. In addition, should there be excessively rapid economic growth andincreasing inflationary pressure in some of the emerging market countries, such developments could adversely
affect the wider regional and global economies. Some emerging market countries may also change theirmonetary or other economic policies in response to economic and political instabilities or pressures, which are
difficult to predict. As of March 31, 2012, based on the domicile of the obligors, our assets in Europe, Asia andOceania excluding Japan, and other areas excluding Japan and the United States, were ¥18.62 trillion,¥12.41 trillion and ¥7.01 trillion, representing 8.7%, 5.8% and 3.3% of our total assets, respectively. See “Item5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Financial Condition.”
Our business may be adversely affected by competitive pressures, which have partly increased due toregulatory changes and recent market changes in the financial industry domestically and globally.
In recent years, the Japanese financial system has been undergoing significant changes and regulatory
barriers to competition have been reduced. In particular, any further reform of the Japanese postal savings
system, under which the Japan Post Group companies, including Japan Post Bank Co., Ltd., were established in
October 2007, could substantially increase competition within the financial services industry as Japan Post Bank,
with the largest deposit base and branch network in Japan, may begin to offer financial services in competition
with our business operations generating fee income. In May 2012, amendments to the postal privatization law
became effective under which Japan Post Bank and Japan Post Insurance may enter into new businesses upon
obtaining government approvals, and if the government’s equity holdings decrease to a certain level, the twocompanies will be allowed to enter into new businesses upon submission of a notice to the government. As aresult, the Japan Post Group companies may seek to enter into new businesses, including sales of various types of
insurance and housing loans. The privatization of the Japan Post Group companies remains subject to politicalnegotiations and government action. In addition, there has been significant consolidation and convergence among
financial institutions domestically and globally, and this trend may continue in the future and further increase
competition in the market. A number of large commercial banks and other broad-based financial services firms
have merged or formed strategic alliances with, or have acquired, other financial institutions both in Japan and15

overseas. As a result of the strategic alliance and the joint venture companies that we formed with Morgan
Stanley, we may be newly perceived as a competitor by some of the financial institutions with which we had amore cooperative relationship in the past. If we are unable to compete effectively in this more competitive andderegulated business environment, our business, results of operations and financial condition will be adversely
affected. For a more detailed discussion of our competition in Japan, see “Item 4.B. Information on the
Company—Business Overview—Competition—Japan.”
Regulatory matters and any future regulatory matters or regulatory changes could have a negative
impact on our business and results of operations.
As a global financial services provider, our business is subject to increasing regulations and associatedregulatory risks, as well as ongoing changes in laws, regulations, policies, voluntary codes of practice andinterpretations in Japan and other markets where we operate. We may not be able to improve our compliance risk
management systems and programs in a timely manner, and our risk management systems and programs may not
be fully effective in preventing all violations of laws, regulations and rules.
Major global financial institutions currently face heightened regulatory scrutiny as a result of the concerns
enveloping the global financial sector, and there is growing political pressure to demand even greater regulatory
surveillance following several high-profile scandals and risk management failures in the financial industry.
Because of our transactions or relationships with other global financial institutions or our activity or participationin the global financial market, we may become subject to various regulatory actions and other legal proceedings
arising from such role.
Our failure or inability to comply fully with applicable laws and regulations could lead to fines, public
reprimands, damage to reputation, civil liability, enforced suspension of operations or, in extreme cases,
withdrawal of authorization to operate, adversely affecting our business and results of operations. Regulatory
matters may also adversely affect our ability to obtain regulatory approvals for future strategic initiatives.
Furthermore, failure to take necessary corrective action, or the discovery of violations of laws in the process offurther review of any of the matters mentioned above or in the process of implementing any corrective measures,
could result in further regulatory action.
We could also be required to incur significant expenses to comply with new or revised regulations. For
example, if we adopt a new information system infrastructure in the future, we may be required to incur
significant additional costs for establishing and implementing effective internal controls, which may materiallyand adversely affect our financial condition and results of operations.
Future developments or changes in laws, regulations, policies, voluntary codes of practice and their effects are
expected to require greater capital resources and significant management attention, and may require us to modify
our business strategies and plans. For example, the regulations relating to the consumer lending business whichbecame effective in June 2010 impose, among other things, a limit on the amount of loans available to individual
borrowers, which have negatively affected our profitability. For more information on regulatory changes in the
consumer finance industry, see “—Risks Related to Our Business—Because of our loans to consumers and ourshareholdings in companies engaged in consumer lending, changes in the business or regulatory environment for
consumer finance companies in Japan may further adversely affect our financial results.”
Furthermore, regulatory reforms recently implemented, proposed and currently being debated in the UnitedStates may also significantly affect our business operations. For example, the provisions of the Dodd-Frank Act
generally known as the “Volcker Rule” are designed to restrict banking entities’ proprietary trading and private
fund investment activities. The Volcker Rule is subject to final rule-making and interpretation, including withrespect to the scope of its applicability to activities outside of the United States, and the impact of the rule on ourbusiness operations remain uncertain. The Volcker Rule and other reform measures may ultimately be
implemented in a manner that requires us to materially alter our business model or incur significant costs orlosses. See “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—UnitedStates.”16

Future changes in accounting standards could have a negative impact on our business and results ofoperations.
Future developments or changes in accounting standards are unpredictable and beyond our control. For
example, Japanese and other international organizations that set accounting standards have released revisions toaccounting standards applicable to retirement benefit obligations. In May 2012, the Accounting Standards Boardof Japan published revised accounting standards that will require companies preparing their financial statementsin accordance with Japanese GAAP to record as liabilities on balance sheets actuarial losses and unrecognized
past service cost, which are currently not recorded as liabilities on balance sheets. Most of the revised accounting
standards will be effective for the annual reporting period beginning on or after April 1, 2013. The revised
accounting standards could have a negative impact on our capital ratios since we calculate our capital ratios inaccordance with Japanese banking regulations based on information derived from our financial statements
prepared in accordance with Japanese GAAP. For more information, see “—Risks Related to Our Business—We
may not be able to maintain our capital ratios above minimum required levels, which could result in thesuspension of some or all of our operations.”
In addition, in response to the recent instabilities in global financial markets, several internationalorganizations which set accounting standards have released proposals to revise standards on accounting for
financial instruments. Accounting standards applicable to financial instruments remain subject to debate andrevision by international organizations which set accounting standards. If the current accounting standards
change in the future, the reported values of some of our financial instruments may need to be modified, and suchmodification could have a significant impact on our financial results or financial condition. For more
information, see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Estimates.”
We could also be required to incur significant expenses to comply with new accounting standards andregulations. For example, if we adopt a new accounting system in the future, we may be required to incur
significant additional costs for establishing and implementing effective internal controls, which may materiallyand adversely affect our financial condition and results of operations.
Transactions with counterparties in countries designated by the US Department of State as state sponsorsof terrorism may lead some potential customers and investors in the United States and other countries to avoid
doing business with us or investing in our shares.
We, through our banking subsidiaries, engage in business activities with entities in or affiliated with Iran,
including transactions with counterparties owned or controlled by the Iranian government, and our banking
subsidiary has a representative office in Iran. The US Department of State has designated Iran and other countries
as “state sponsors of terrorism,” and US law generally prohibits US persons from doing business with suchcountries. We currently have business activities with entities in or affiliated with such countries in accordancewith our policies and procedures designed to ensure compliance with regulations applicable in the jurisdictions inwhich we operate.
We have loan transactions with counterparties in or affiliated with Iran, the outstanding balance of which
was approximately $8.0 million, representing less than 0.001% of our total assets, as of March 31, 2012. We do
not have any loans outstanding to the financial institutions specifically listed by the US government. In addition
to such loan transactions, our other transactions with counterparties in or affiliated with countries designated asstate sponsors of terrorism consist of receiving deposits or holding assets on behalf of individuals residing inJapan who are citizens of countries designated as state sponsors of terrorism, and processing payments to or fromentities in or affiliated with these countries on behalf of our customers that may be engaged in transactions orother relationships with such entities. We do not believe these transactions have a material impact on ourbusiness or financial condition.
We are aware of initiatives by US governmental entities and non-government entities, including institutional
investors such as pension funds, to adopt or consider adopting laws, regulations or policies prohibitingtransactions with or investment in, or requiring divestment from, entities doing business with Iran and other17

countries identified as state sponsors of terrorism. It is possible that such initiatives may result in our being
unable to gain or retain entities subject to such prohibitions as customers, counter-parties or investors in ourshares. In addition, depending on socio-political developments, our reputation may suffer due to our transactions
with counterparties in or affiliated with these countries. The above circumstances could have an adverse effect on
our business and financial condition.
The US federal government and some state governments in the United States have enacted legislation
designed to limit economic and financial transactions with Iran by limiting the ability of financial institutions that
may have engaged in any one of a broad range of activities related to Iran to conduct various transactions in therelevant jurisdictions. The Japanese government has also implemented a series of measures under the Foreign
Exchange and Foreign Trade Act, such as freezing the assets of designated financial institutions and others that
could contribute to Iran’s nuclear activities, and our most recently modified policies and procedures take into
account the new Japanese regulatory requirements. There remains a risk of potential US regulatory action against
us, however, if US regulators perceive the modified policies and procedures not to be in compliance withapplicable regulations.
We may not be able to maintain our capital ratios above minimum required levels, which could result inthe suspension of some or all of our operations.
We, as a holding company, and our Japanese banking subsidiaries are required to maintain risk-weighted
capital ratios above the levels specified in the capital adequacy guidelines of the Financial Services Agency ofJapan. As of March 31, 2012, our total risk-adjusted capital ratio was 14.91% compared to the minimum riskadjusted capital ratio required of 8.00%, and our Tier I capital ratio was 12.31% compared to the minimum Tier I
capital ratio required of 4.00%. Our capital ratios are calculated in accordance with Japanese banking regulations
based on information derived from our financial statements prepared in accordance with Japanese GAAP. In
addition, some of our subsidiaries are also subject to the capital adequacy rules of various foreign countries,
including the United States where each of MUFG, The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU,
Mitsubishi UFJ Trust and Banking Corporation, or MUTB and UNBC is a financial holding company under the
US Bank Holding Company Act. We or our banking subsidiaries may be unable to continue to satisfy the capital
adequacy requirements because of:‰increases in credit risk assets and expected losses we or our subsidiaries may incur due to fluctuations in
our or our subsidiaries’ loan and securities portfolios as a result of deteriorations in the credit of ourborrowers and the issuers of equity and debt securities;‰

increases in credit costs we or our subsidiaries may incur as we or our subsidiaries dispose of problem
loans or as a result of deteriorations in the credit of our borrowers;‰

declines in the value of our or our subsidiaries’ securities portfolio;‰changes in the capital ratio requirements or in the guidelines regarding the calculation of bank holding
companies’ or banks’ capital ratios or changes in the regulatory capital requirements for securities firms;‰

a reduction in the value of our or our subsidiaries’ deferred tax assets;‰

adverse changes in foreign currency exchange rates; or‰other adverse developments discussed in these risk factors.

The Group of Central Bank Governors and Heads of Supervision has made a series of announcements
regarding the new global regulatory framework, which has been referred to as “Basel III,” to strengthen theregulation, supervision and risk management of the banking sector. Various Basel III measures are expected to be
introduced in phases starting in calendar 2013, including those designed to raise the level of minimum capitalrequirements and to establish an internationally harmonized leverage ratio and a global minimum liquidity
standard. In addition, in July 2011, the Basel Committee on Banking Supervision proposed additional loss
absorbency requirements to supplement the common equity Tier I capital requirement ranging from 1% to 2.5%
for global systemically important banks, depending on the bank’s systemic importance, to be introduced in18phases starting in calendar 2016. In November 2011, the Financial Stability Board tentatively identified us as a
globally systemically important financial institution, or G-SIFI. Based on the Basel III framework, the Japanese
capital ratio framework, which is currently based on Basel II, has been revised to implement the more stringent
requirements, which will be effective as of March 31, 2013. Likewise, local banking regulators outside of Japan,such as those in the United States, are expected to revise the capital and liquidity requirements imposed on our
subsidiaries and operations in those countries to implement the more stringent requirements of Basel III as
adopted in those countries.
If our capital ratios fall below required levels, the Financial Services Agency of Japan could require us to takea variety of corrective actions, including withdrawal from all international operations or suspension of all or part ofour business operations. In addition, if the capital ratios of our subsidiaries subject to capital adequacy rules offoreign jurisdictions fall below the required levels, the local regulators could also take action against them that may
result in reputational damage or financial losses to us. Since maintaining our capital ratios at acceptable levels is
crucial to our business, our management devotes a significant amount of attention and resources to capital ratio
related issues and may also significantly alter our business strategy or operations if our capital ratios decline to
unacceptable levels. For a discussion of our capital ratios and the related regulatory guidelines, see “Item 4.B.
Information on the Company—Business Overview—Supervision and Regulation” and “Item 5.B. Operating and
Financial Review and Prospects—Liquidity and Capital Resources—Capital Adequacy.”
If the goodwill recorded in connection with our acquisitions becomes impaired, we may be required torecord impairment losses, which may adversely affect our financial results and the price of our securities.
In accordance with US GAAP, we account for our business combinations using the acquisition method of
accounting. We recorded the excess of the purchase price over the fair value of the assets and liabilities of theacquired companies as goodwill. US GAAP requires us to test goodwill for impairment at least annually, or more
frequently if events or changes in circumstances indicate that goodwill may be impaired. As of March 31, 2012,
the balance of goodwill was ¥354.3 billion.
We may be required to record additional impairment losses relating to goodwill in future periods if the fairvalue of any of our reporting units declines below the fair value of related assets net of liabilities. Any additional
impairment losses will negatively affect our financial results, and the price of our securities could be adversely
affected. For a detailed discussion of our periodic testing of goodwill for impairment and the goodwill recorded,
see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Estimates—Accounting for
Goodwill and Intangible Assets.”
A further downgrade of our credit ratings could trigger additional collateral obligations under ourderivative contracts and increase our funding costs.
In August 2011, Moody’s announced that it downgraded the long-term credit ratings of BTMU and MUTB
by one-notch from Aa2 to Aa3, and the long-term credit rating of Mitsubishi UFJ Securities Holding Co., Ltd, or
MUSHD, by one-notch from A1 to A2. On July 20, 2012, Fitch downgraded the ratings assigned to BTMU and
MUTB by one-notch from A to A-. A further credit rating downgrade by Moody’s, Fitch, Standard & Poor’s
Ratings Services LLC or any other credit rating agency may have an adverse impact on us. Substantially all of
the derivative contracts with collateral obligations entered into by BTMU, MUTB and MUSHD are subject to a
Credit Support Annex, or CSA, as published by the International Swaps and Derivatives Association, Inc., or
ISDA. Following the downgrades by Moody’s in August 2011, some of our existing CSAs were modified torequire, and some of the new CSAs that we entered into required, additional collateral at lower thresholds. The
downgrades by Fitch on July 20, 2012 may result in additional modifications in the future.
Assuming all of the relevant credit rating agencies downgraded the credit ratings of BTMU, MUTB and
MUSHD by one-notch on March 31, 2012, we estimate that our three main subsidiaries under their derivative
contracts as of the same date, would have been required to provide additional collateral of approximately¥9.6 billion. Assuming a two-notch downgrade by all of the relevant credit rating agencies occurred on the same19

date, we estimate that the additional collateral requirements for BTMU, MUTB and MUSHD under theirderivative contracts as of the same date would have been approximately ¥17.0 billion. In addition, a further
downgrade of the credit ratings of our major subsidiaries could result in higher funding costs. For additional
information on the impact of recent downgrades, see “Item 5. Operating and Financial Review and Prospects—
Liquidity and Capital Resources—Financial Condition—Sources of Funding and Liquidity.”
Risks Related to Owning Our Shares
It may not be possible for investors to effect service of process within the United States upon us or our
directors, corporate auditors or other management members, or to enforce against us or those persons
judgments obtained in US courts predicated upon the civil liability provisions of the US federal or state
securities laws.
We are a joint stock company incorporated under the laws of Japan. Almost all of our directors, corporate
auditors or other management members reside outside the United States. Many of our assets and the assets ofthese persons are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for
US investors to effect service of process within the United States upon us or these persons or to enforce, against
us or these persons, judgments obtained in the US courts predicated upon the civil liability provisions of the
US federal or state securities laws.
We believe there is doubt as to the enforceability in Japan, in original actions or in actions brought inJapanese courts to enforce judgments of US courts, of claims predicated solely upon the US federal or state
securities laws mainly because the Civil Execution Act of Japan requires Japanese courts to deny requests for theenforcement of judgments of foreign courts if foreign judgments fail to satisfy the requirements prescribed by the
Civil Execution Act, including:‰the jurisdiction of the foreign court be recognized under laws, regulations, treaties or conventions;‰

proper service of process be made on relevant defendants, or relevant defendants be given appropriate
protection if such service is not received;‰

the judgment and proceedings of the foreign court not be repugnant to public policy as applied in Japan;
and‰there exist reciprocity as to the recognition by a court of the relevant foreign jurisdiction of a final
judgment of a Japanese court.

Judgments obtained in the US courts predicated upon the civil liability provisions of the US federal or state
securities laws may not satisfy these requirements.
Risks Related to Owning Our ADSs
As a holder of ADSs, you have fewer rights than a shareholder of record in our shareholder register since
you must act through the depositary to exercise these rights.
The rights of our shareholders under Japanese law to take actions such as voting, receiving dividends anddistributions, bringing derivative actions, examining our accounting books and records and exercising appraisal
rights are available only to shareholders of record. Because the depositary, through its custodian, is the record
holder of the shares underlying the American Depositary Shares, or ADSs, only the depositary can exercise
shareholder rights relating to the deposited shares. ADS holders, in their capacity, will not be able to directly
bring a derivative action, examine our accounting books and records and exercise appraisal rights. We haveappointed The Bank of New York Mellon as depositary, and we have the authority to replace the depositary.
Pursuant to the deposit agreement among us, the depositary and a holder of ADSs, the depositary will makeefforts to exercise voting or any other rights associated with shares underlying ADSs in accordance with the
instructions given by ADS holders, and to pay to ADS holders dividends and distributions collected from us.
However, the depositary can exercise reasonable discretion in carrying out the instructions or making
distributions, and is not liable for failure to do so as long as it has acted in good faith. Therefore, ADS holders
may not be able to exercise voting or any other rights in the manner that they had intended, or may lose some or20

all of the value of the dividends or the distributions. Moreover, the depositary agreement that governs theobligations of the depositary may be amended or terminated by us and the depositary without your consent,
notice, or any reason. As a result, you may be prevented from having the rights in connection with the deposited
shares exercised in the way you had wished or at all.
ADS holders are dependent on the depositary to receive our communications. We send to the depositary allof our communications to ADS holders, including annual reports, notices and voting materials, in Japanese. ADS
holders may not receive all of our communications with shareholders of record in our shareholder register in thesame manner or on an equal basis. In addition, ADS holders may not be able to exercise their rights as ADS
holders due to delays in the depositary transmitting our shareholder communications to ADS holders. For adetailed discussion of the rights of ADS holders and the terms of the deposit agreement, see “Item 10.B.
Additional Information—Memorandum and Articles of Association.”
Item 4.
A.

Information on the Company.

History and Development of the Company

Mitsubishi UFJ Financial Group, Inc.
MUFG is a bank holding company incorporated as a joint stock company (kabushiki kaisha) under theCompany Law of Japan. We are the holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU,
Mitsubishi UFJ Trust and Banking Corporation, or MUTB, Mitsubishi UFJ Securities Holdings Co., Ltd., or
MUSHD, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., or MUMSS, Mitsubishi UFJ NICOS Co., Ltd., or
Mitsubishi UFJ NICOS, and other companies engaged in a wide range of financial businesses.
On April 2, 2001, The Bank of Tokyo-Mitsubishi, Ltd., Mitsubishi Trust and Banking Corporation, orMitsubishi Trust Bank, and Nippon Trust Bank Limited established Mitsubishi Tokyo Financial Group, Inc., or
MTFG, to be a holding company for the three entities. Before that, each of the banks had been a publicly traded
company. On April 2, 2001, through a stock-for-stock exchange, they became wholly owned subsidiaries of
MTFG, and the former shareholders of the three banks became shareholders of MTFG. Nippon Trust Bank
Limited was later merged into Mitsubishi Trust Bank.
On June 29, 2005, the merger agreement between MTFG and UFJ Holdings was approved at the generalshareholders meetings of MTFG and UFJ Holdings. As the surviving entity, Mitsubishi Tokyo Financial Group,
Inc. was renamed “Mitsubishi UFJ Financial Group, Inc.” The merger of the two bank holding companies wascompleted on October 1, 2005.
On September 30, 2007, MUSHD, which was then called “Mitsubishi UFJ Securities Co., Ltd.,” or MUS,
became our wholly owned subsidiary through a share exchange transaction.
On October 13, 2008, we formed a global strategic alliance with Morgan Stanley and, as part of the alliance,
made an equity investment in Morgan Stanley in the form of convertible and non-convertible preferred stock, andsubsequently appointed a representative to Morgan Stanley’s board of directors.
On October 21, 2008, we completed a tender offer for outstanding shares of ACOM CO., LTD. common
stock, raising our ownership in ACOM to approximately 40%.
On November 4, 2008, BTMU completed the acquisition of all of the shares of common stock ofUnionBanCal Corporation, or UNBC, not previously owned by BTMU and, as a result, UNBC became a wholly
owned indirect subsidiary of MUFG.
On May 1, 2010, we and Morgan Stanley integrated our securities and investment banking businesses inJapan into two joint venture securities companies, one of which is MUMSS created by spinning off the wholesale
and retail securities businesses conducted in Japan from MUSHD and subsequently assuming certain operationsin Japan from a subsidiary of Morgan Stanley.
21

Pursuant to an agreement between us and Morgan Stanley on April 21, 2011, we converted all of theMorgan Stanley’s convertible preferred stock we previously held into Morgan Stanley’s common stock on
June 30, 2011, resulting in our holding approximately 22.4% of the voting rights in Morgan Stanley, andappointed a second representative to Morgan Stanley’s board of directors on July 20, 2011. Following theconversion on June 30, 2011, Morgan Stanley became our equity-method affiliate. As of March 31, 2012, we
held approximately 21.8% of the voting rights in Morgan Stanley, and had two representatives appointed toMorgan Stanley’s board of directors. We and Morgan Stanley continue to pursue a variety of business
opportunities in Japan and abroad in accordance with the global strategic alliance.
Our registered address is 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan, and our telephone
number is 81-3-3240-8111.
For a discussion of recent developments, see “Item 5. Operating and Financial Review and Prospects—
Recent Developments.”
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
BTMU is a major commercial banking organization in Japan that provides a broad range of domestic andinternational banking services from its offices in Japan and around the world. BTMU’s registered head office islocated at 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8388, Japan, and its telephone number is81-3-3240-1111. BTMU is a joint stock company (kabushiki kaisha) incorporated in Japan under the Company
Law.
BTMU was formed through the merger, on January 1, 2006, of Bank of Tokyo-Mitsubishi and UFJ Bank
Limited after their respective parent companies, MTFG and UFJ Holdings, merged to form MUFG on October 1,
2005.
Bank of Tokyo-Mitsubishi was formed through the merger, on April 1, 1996, of The Mitsubishi Bank,
Limited and The Bank of Tokyo, Ltd.
The origins of Mitsubishi Bank can be traced to the Mitsubishi Exchange Office, a money exchange houseestablished in 1880 by Yataro Iwasaki, the founder of the Mitsubishi industrial, commercial and financial group.
In 1895, the Mitsubishi Exchange Office was succeeded by the Banking Division of the Mitsubishi Goshi
Kaisha, the holding company of the “Mitsubishi group” of companies. Mitsubishi Bank had been a principalbank to many of the Mitsubishi group companies but broadened its relationships to cover a wide range ofJapanese industries, small and medium-sized companies and individuals.
Bank of Tokyo was established in 1946 as a successor to The Yokohama Specie Bank, Ltd., a special
foreign exchange bank established in 1880. When the government of Japan promulgated the Foreign ExchangeBank Law in 1954, Bank of Tokyo became the only bank licensed under that law. Because of its license, Bank ofTokyo received special consideration from the Ministry of Finance in establishing its offices abroad and in manyother aspects relating to foreign exchange and international finance.
UFJ Bank was formed through the merger, on January 15, 2002, of The Sanwa Bank, Limited and The
Tokai Bank, Limited.
Sanwa Bank was established in 1933 when the three Osaka-based banks, the Konoike Bank, the Yamaguchi
Bank, and the Sanjyushi Bank merged. Sanwa Bank was known as a city bank having the longest history inJapan, since the foundation of Konoike Bank can be traced back to the Konoike Exchange Office established in
1656. The origin of Yamaguchi Bank was also a money exchange house, established in 1863. Sanjyushi Bank
was founded by influential fiber wholesalers in 1878. The corporate philosophy of Sanwa Bank had been thecreation of the premier banking services especially for small and medium-sized companies and individuals.
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Tokai Bank was established in 1941 when the three Nagoya-based banks, the Aichi Bank, the Ito Bank, andthe Nagoya Bank merged. In 1896, Aichi Bank took over businesses of the Jyuichi Bank established bywholesalers in 1877 and the Hyakusanjyushi Bank established in 1878. Ito Bank and Nagoya Bank were
established in 1881 and 1882, respectively. Tokai Bank had expanded the commercial banking business tocontribute to economic growth mainly of the Chubu area in Japan, which is known for its manufacturingindustries, especially automobiles.
Mitsubishi UFJ Trust and Banking Corporation
MUTB is a major trust bank in Japan, providing trust and banking services to meet the financing andinvestment needs of clients in Japan and the rest of Asia, as well as in the United States and Europe. MUTB’s
registered head office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan, and its
telephone number is 81-3-3212-1211. MUTB is a joint stock company (kabushiki kaisha) incorporated in Japan
under the Company Law.
MUTB was formed on October 1, 2005 through the merger of Mitsubishi Trust Bank and UFJ Trust Bank
Limited. As the surviving entity, Mitsubishi Trust Bank was renamed “Mitsubishi UFJ Trust and Banking
Corporation.”
Mitsubishi Trust Bank traces its history to The Mitsubishi Trust Company, Limited, which was founded by
the leading members of the Mitsubishi group companies in 1927. The Japanese banking and financial industry
was reconstructed after World War II and, in 1948, Mitsubishi Trust Bank was authorized to engage in thecommercial banking business, in addition to its trust business, under the new name Asahi Trust & Banking
Corporation. In 1952, the bank changed its name again, to “The Mitsubishi Trust and Banking Corporation.”
Nippon Trust Bank and The Tokyo Trust Bank, Ltd., which were previously subsidiaries of Bank of TokyoMitsubishi, were merged into Mitsubishi Trust Bank on October 1, 2001.
UFJ Trust Bank was founded in 1959 as The Toyo Trust & Banking Company, Limited, or Toyo Trust
Bank. The Sanwa Trust & Banking Company, Limited, which was a subsidiary of Sanwa Bank, was merged into
Toyo Trust Bank on October 1, 1999. The Tokai Trust & Banking Company, Limited, which was a subsidiary of
Tokai Bank, was merged into Toyo Trust Bank on July 1, 2001. Toyo Trust Bank was renamed “UFJ Trust Bank
Limited” on January 15, 2002.
Mitsubishi UFJ Securities Holdings Co., Ltd.
MUSHD is a wholly owned subsidiary of MUFG. MUSHD functions as an intermediate holding company
of MUFG’s global securities business. MUSHD’s registered head office is located at 5-2, Marunouchi 2-chome,
Chiyoda-ku, Tokyo 100-0005, Japan, and its telephone number is 81-3-6213-2550. MUSHD is a joint stockcompany (kabushiki kaisha) incorporated in Japan under the Company Law. MUSHD has major overseas
subsidiaries in London, New York, Hong Kong, Singapore, Shanghai and Geneva.
In April 2010, MUSHD, which was previously called “Mitsubishi UFJ Securities Co., Ltd.,” or MUS,
became an intermediate holding company by spinning off its securities and investment banking business
operations to a wholly owned operating subsidiary established in December 2009, currently MUMSS. Upon the
consummation of the corporate spin-off transaction, the intermediate holding company was renamed “Mitsubishi
UFJ Securities Holdings Co., Ltd.” and the operating subsidiary was renamed “Mitsubishi UFJ Securities Co.,
Ltd.” The operating subsidiary was subsequently renamed MUMSS in May 2010 upon integration of our
securities operations in Japan with those of Morgan Stanley.
MUS was formed through the merger between Mitsubishi Securities Co., Ltd. and UFJ Tsubasa Securities
Co., Ltd. on October 1, 2005, with Mitsubishi Securities being the surviving entity. The surviving entity was
renamed “Mitsubishi UFJ Securities Co., Ltd.” and, in September 2007, became our wholly-owned subsidiarythrough a share exchange transaction.
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Mitsubishi Securities was formed in September 2002 through a merger of Bank of Tokyo-Mitsubishi’ssecurities subsidiaries and affiliate, KOKUSAI Securities Co., Ltd., Tokyo-Mitsubishi Securities Co., Ltd. andTokyo-Mitsubishi Personal Securities Co., Ltd., and Mitsubishi Trust Bank’s securities affiliate, Issei Securities
Co., Ltd. In July 2005, MTFG made Mitsubishi Securities a directly-held subsidiary by acquiring all of the sharesof Mitsubishi Securities common stock held by Bank of Tokyo-Mitsubishi and Mitsubishi Trust Bank.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
MUMSS is our core securities and investment banking subsidiary. MUMSS was created as one of the two
Japanese joint venture securities companies in May 2010 between Morgan Stanley and us as part of our global
strategic alliance. MUMSS succeeded to the investment banking operations conducted in Japan by a subsidiaryof Morgan Stanley and the wholesale and retail securities businesses conducted in Japan by MUS. MUFG,
through MUSHD, holds 60% voting and economic interests in MUMSS. MUMSS’s registered head office islocated at 5-2 Marunouchi 2-chome, Chiyoda-ku, Tokyo, 100-0005 Japan, and its telephone number is81-3-6213-8500. MUMSS is a joint stock company (kabushiki kaisha) incorporated in Japan under the Company
Law. For more information on our global strategic alliance with Morgan Stanley, see “—B. Business
Overview—Global Strategic Alliance with Morgan Stanley” and “Item 5. Operating and Financial Review andProspects—Recent Developments.”
Mitsubishi UFJ NICOS Co., Ltd.
Mitsubishi UFJ NICOS is a major credit card company in Japan that issues credit cards, including thoseissued under the MUFG, NICOS, UFJ and DC brands, and provides a broad range of credit card and other related
services for its card members in Japan. Mitsubishi UFJ NICOS is a consolidated subsidiary of MUFG. Mitsubishi
UFJ NICOS’s registered head office is located at 33-5, Hongo 3-chome, Bunkyo-ku, Tokyo 113-8411, Japan, andits telephone number is 81-3-3811-3111. Mitsubishi UFJ NICOS is a joint stock company (kabushiki kaisha)
incorporated in Japan under the Company Law.
On August 1, 2008, Mitsubishi UFJ NICOS became a wholly owned subsidiary of MUFG through a shareexchange transaction. On the same day, we entered into a share transfer agreement with The Norinchukin Bank,or Norinchukin, under which we sold some of our shares of Mitsubishi UFJ NICOS common stock to
Norinchukin. Currently, Mitsubishi UFJ NICOS is a consolidated subsidiary of MUFG. In March 2011, we andNorinchukin made additional equity investments in Mitsubishi UFJ NICOS in proportion to our andNorinchukin’s respective beneficial ownership of approximately 85% and 15%, respectively.
Mitsubishi UFJ NICOS was formed through the merger, on April 1, 2007, of UFJ NICOS Co., Ltd. and
DC Card Co., Ltd. As the surviving entity, UFJ NICOS Co., Ltd. was renamed “Mitsubishi UFJ NICOS Co., Ltd.”UFJ NICOS was formed through the merger, on October 1, 2005, of Nippon Shinpan Co., Ltd. and UFJ
Card Co., Ltd. Originally founded in 1951 and listed on the Tokyo Stock Exchange in 1961, Nippon Shinpan wasa leading company in the consumer credit business in Japan. Nippon Shinpan became a subsidiary of MUFG at
the time of the merger with UFJ Card.
Prior to the merger between MTFG and UFJ Holdings in October 2005, DC Card was a subsidiary of MTFG
while UFJ Card was a subsidiary of UFJ Holdings.
B.

Business Overview

We are one of the world’s largest and most diversified financial groups with total assets of ¥215 trillion asof March 31, 2012. The Group is comprised of BTMU, MUTB, MUMSS (through MUSHD), Mitsubishi UFJ
NICOS and other subsidiaries and affiliates, for which we are the holding company. As a bank holding company,
we are regulated under the Banking Law of Japan. Our services include commercial banking, trust banking,24

securities, credit cards, consumer finance, asset management, leasing and many more fields of financial services.
The Group has the largest overseas network among the Japanese banks, comprised of offices and subsidiaries,
including Union Bank, in more than 40 countries.
While maintaining the corporate cultures and core competencies of BTMU, MUTB, MUMSS (through
MUSHD) and Mitsubishi UFJ NICOS, we, as the holding company, seek to work with them to find ways to:‰establish a more diversified financial services group operating across business sectors;‰

leverage the flexibility afforded by our organizational structure to expand our business;‰benefit from the collective expertise of BTMU, MUTB, MUMSS (through MUSHD) and Mitsubishi
UFJ NICOS;‰

achieve operational efficiencies and economies of scale; and‰enhance the sophistication and comprehensiveness of the Group’s risk management expertise.

In April 2004, we introduced an integrated business group system comprising three core business areas:
Retail, Corporate, and Trust Assets. These three businesses serve as the Group’s core sources of net operating
profit. In March 2011, the sales and trading business of MUMSS was transferred from the Integrated Corporate
Banking Business Group to Global Markets, as described below. In July 2011, we added the Integrated Global
Business Group (MUFG Global) as a fourth area by shifting some of our global operations mainly from theIntegrated Corporate Banking Business Group. This change in our business segment was implemented to more
effectively coordinate and enhance our group-wide efforts to strengthen and expand overseas operations. Our
remaining business areas are grouped into Global Markets and Other. In addition, MUFG’s role as the holding
company has expanded from strategic coordination to integrated strategic management. Group-wide strategies
are determined by the holding company and executed by the banking subsidiaries and other subsidiaries.
In October 2008, each of MUFG, BTMU, MUTB and UNBC became a financial holding company under the
US Bank Holding Company Act. For more information, see “Item 3.D. Key Information—Risk Factors—Risks
Related to Our Business—We may not be able to maintain our capital ratios above minimum required levels,
which could result in the suspension of some or all of our operations” and “—B. Information on the Company—
Business Overview—Supervision and Regulation—United States.”
MUFG Management Policy
The MUFG Group put in place a management philosophy when the Group was formed. This has now beenreworked to become the Group Corporate Vision, outlined below. Throughout the Group, the individuals at the
MUFG Group are working under three shared values—Integrity and Responsibility, Professionalism andTeamwork, and Challenge Ourselves to Grow—while aiming to be the world’s most trusted financial group.
Corporate Vision
OUR MISSION
To be a foundation of strength, committed to meeting the needs ofour customers, serving society, and fostering shared and sustainablegrowth for a better world.
OUR VISION—Be the world’s most trusted financial group—
1. Work together to exceed the expectations of our customers
2. Provide reliable and constant support to our customers
3. Expand and strengthen our global presence
OUR VALUES
1. Integrity and Responsibility 2. Professionalism and Teamwork 3. Challenge Ourselves to Grow

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We have declared our message to the world as “Quality for You,” with management’s emphasis on quality.
“Quality for You” means that by providing high-quality services, we aspire to help improve the quality of the
lives of individual customers and the quality of each corporate customer. The “You” expresses the basic stance of
MUFG that we seek to contribute not only to the development of our individual customers but also communities
and society. We believe that delivering superior quality services, reliability, and global coverage will result in
more profound and enduring contributions to society.
Integrated Retail Banking Business GroupThe Integrated Retail Banking Business Group covers all domestic retail businesses, including commercial
banking, trust banking and securities businesses, and we offer a full range of banking products and services,
including financial consulting services, to retail customers in Japan. This business group integrates the retailbusiness of BTMU, MUTB, MUMSS and other affiliate companies of MUFG.
Deposits and retail asset management services. We offer a full range of bank deposit products including a
non-interest-bearing deposit account that is redeemable on demand and intended primarily for payment andsettlement functions, and is fully insured by the Deposit Insurance Corporation of Japan without a maximum
amount limitation.
We offer a variety of asset management and asset administration services to individuals, including savings
instruments such as current accounts, ordinary deposits, time deposits, deposits at notice and other deposit
facilities. We also offer trust products, such as money trusts, and other investment products, such as investment
trusts and foreign currency deposits.
We create portfolios tailored to customer needs by combining savings instruments and investment products.
We also provide a range of asset management and asset administration products as well as customized trust
products for high net worth individuals, as well as advisory services relating to, among other things, the purchaseand disposal of real estate and effective land utilization, and testamentary trusts.
Investment trusts. We provide a diverse lineup of investment trust products allowing our customers tochoose products according to their investment needs through BTMU, MUTB and MUMSS as well as kabu.com
Securities Co., Ltd., which specializes in online financial services. For example, as of March 31, 2012, BTMU
offered our clients a total of 90 investment trusts. Moreover, BTMU has placed significant importance on
providing after-sales advice to all of our customers who have purchased our investment trust products.
Insurance. We offer insurance products to meet the needs of our customers as a sales agent of third party
insurance companies. Our current lineup of insurance products consists of investment-type individual annuity
insurance, fixed-amount annuity insurance, single-premium whole-life insurance and level-payment insurance.
BTMU has been offering life, medical and cancer insurance since December 2007, nursing-care insurance sinceApril 2008 and car insurance since July 2009. As of March 31, 2012, BTMU offered 40 varieties of insurance
products at 448 BTMU branches. MUTB also offers whole life insurance and medical insurance at all of its
branches.
Financial products intermediation services. We offer financial products intermediation services through
BTMU acting as an agent with three MUFG securities companies (MUMSS, Mitsubishi UFJ Merrill Lynch PB
Securities Co., Ltd., and kabu.com Securities) and through MUTB acting as an agent with MUMSS. We offer
securities, including publicly offered stocks, foreign and domestic investment trusts, Japanese government bonds,
foreign bonds and various other products.
Loans. We offer housing loans, card loans, and other loans to individuals. With respect to housing loans,in addition to housing loans incorporating health insurance for seven major illnesses, BTMU began offering in
June 2009 preferential interest rates under its “Environmentally Friendly Support” program to customers who
26

purchase “environment-conscious” houses (e.g., houses with solar electric systems) which meet specific criteria
in response to increasing public interest in environmental issues. BTMU also offers a card loan service called“BANQUIC,” for which applications can be accepted through the internet, telephone, video counter and mobile
phone. A customer who has an account with BTMU can obtain loans through the “BANQUIC” service by having
the loan proceeds directly remitted to the customer’s BTMU account.
Credit cards. Among our group companies, Mitsubishi UFJ NICOS and BTMU issue credit cards andoffer some preferential services provided by other MUFG group companies (including preferential rates for
BTMU housing loans) to holders of the “MUFG card” issued by Mitsubishi UFJ NICOS and gold cards issued by
BTMU. BTMU has expanded value-added services and benefits for bank-issued credit card holders, including apoint program where credit card holders can earn points by using their credit cards and exchange the points forcash or other preferential treatment for banking transactions through BTMU.
Retail securities business. We conduct our retail securities business in Japan through MUMSS which wasformed in May 2010 through the integration of the domestic wholesale and retail securities business previously
conducted by MUS and the investment banking business previously conducted by Morgan Stanley Japan
Securities Co., Ltd., or Morgan Stanley Japan. See “—Global Strategic Alliance with Morgan Stanley” below.
Domestic Network. We offer products and services through a wide range of channels, including branches,
ATMs, video counters, and, Mitsubishi-Tokyo UFJ Direct (telephone, internet and mobile phone banking).
We offer integrated financial services combining our banking, trust banking and securities services at
MUFG Plazas. These Plazas provide retail customers with an integrated and flexible suite of services at one-stopoutlets. As of March 31, 2012, we provided those services through 31 MUFG Plazas.
To provide exclusive membership services to high net worth individual customers, we have Private Banking
Offices featuring lounges and private rooms where we provide wealth management advice and other services toour customers in a relaxing and comfortable setting. As of March 31, 2012, we had 29 Private Banking Offices inJapan.
To improve customer convenience, BTMU has enhanced its ATM network and ATM related services.
BTMU has also ceased to charge ATM transaction fees from customers of BTMU and MUTB for certaintransactions. Furthermore, BTMU currently shares its ATM network with 7 Japanese local banks, AEON Bank,
Ltd. and the banks belonging to the Japan Agricultural Cooperatives bank group. BTMU has also ceased tocharge ATM transaction fees from customers who use these banks’ ATMs for certain transactions.
Trust agency operations. We offer MUTB’s trust related products and advisory services through our trust
agency system not only for MUTB customers but also for BTMU and MUMSS customers. As of March 31,
2012, BTMU engaged in the following eight businesses as the trust banking agent for MUTB: testamentary
trusts, inheritance management, asset succession planning, inheritance management agency operations, business
management financial consulting, lifetime gift trusts, share disposal trusts, and marketable securities
administration trusts. MUMSS engaged in the following three businesses as the trust banking agent for MUTB:
testamentary trusts, inheritance management and asset succession planning. Because of Japan’s aging society,customer demand for inheritance-related advice is increasing, and we aim to significantly strengthen our ability
to cross-sell the inheritance products to our existing customers.
Integrated Corporate Banking Business GroupThe Integrated Corporate Banking Business Group covers domestic and overseas corporate businesses,
including commercial banking, investment banking, trust banking and securities businesses. Through the
integration of these business lines, diverse financial products and services are provided mainly to our Japanese
corporate clients, from large corporations to medium-sized and small businesses. The business group hasclarified strategic domains, sales channels and methods to match the different growth stages and financial needsof our corporate customers.
27

Commercial Banking
We provide various financial solutions, such as loans and fund management, remittance and foreignexchange services, to meet the requirements of small and medium-sized enterprise, or SME, customers. We also
help our customers develop business strategies, such as inheritance-related business transfers and stock listings.
CIB (Corporate and Investment Banking)We offer advanced financial solutions mainly to large corporations through corporate and investmentbanking services. Product specialists globally provide derivatives, securitization, syndicated loans, structured
finance, and other services. We also provide investment banking services, such as M&A advisory, bond andequity underwriting, to meet our customers’ needs.
A large part of our investment banking business in Japan is provided by MUMSS which was formed in May
2010 through the integration of the domestic wholesale and retail securities business previously conducted by
MUS and the investment banking business conducted by Morgan Stanley Japan. See “—Global Strategic
Alliance with Morgan Stanley” below.
Transaction Banking
We provide online banking services that allow customers to make domestic and overseas remittanceselectronically. We also provide a global cash pooling/netting service, and the “Treasury Station,” a fundmanagement system for multi-company groups. These services are designed particularly for customers who haveglobal business activities.
Trust Banking
MUTB’s experience and know-how in the asset management business, real estate brokerage and appraisal
services, and stock transfer agency services also enable us to offer services tailored to the financial strategies ofeach client, including securitization of real estate, receivables and other assets.
Integrated Trust Assets Business GroupThe Integrated Trust Assets Business Group covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and theinternational strengths of BTMU. The business group provides a full range of services to corporate and pension
funds, including stable and secure pension fund management and administration, advice on pension schemes, andpayment of benefits to scheme members. The business group offers asset management products developed by ouraffiliated partners outside of Japan in order to meet diverse customer needs for asset management. With the aimof further enhancing the business, in December 2011, MUTB entered into a strategic business and capital alliancewith AMP Capital Holdings Limited, an asset management company in Australia. For more information, see“Item 5. Operating and Financial Review and Prospects—Recent Developments.”
Our Integrated Trust Assets Business Group combines MUTB’s trust assets business, comprising trust assets
management services, asset administration and custodial services, and the businesses of Mitsubishi UFJ Global
Custody S.A., Mitsubishi UFJ Asset Management Co., Ltd. and KOKUSAI Asset Management Co., Ltd.
Mitsubishi UFJ Global Custody S.A. provides global custody services, administration services forinvestment funds and fiduciary and trust accounts, and other related services to institutional investors. Mitsubishi
UFJ Asset Management and KOKUSAI Asset Management provide asset management and trust products andservices mainly to individual customers and corporate clients in Japan.

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Integrated Global Business Group (“MUFG Global”)
The Integrated Global Business Group (“MUFG Global”) was established on July 1, 2011, to effectively
coordinate and enhance our group-wide efforts to strengthen and expand overseas operations. MUFG Global isdesigned to clarify the leadership in, and enhance the coordination for, our overseas strategies on a group-widebasis.
Overseas business development has been an important pillar of our growth strategy. Aiming to further raise
our presence in the global financial market, we are shifting our approach where each of our group companies
individually promotes its overseas business to a more group-wide approach. The new approach is designed toenable us to exercise our comprehensive expertise to provide our overseas customers with value-added services
more effectively.
As global financial regulations have become increasingly stringent following the recent global financial
crisis, the realignment in the global financial industry has accelerated with financial institutions merging andentering into alliances particularly in Europe and the United States. Moreover, the importance of emerging
markets in Asia and other regions has been rapidly growing, and the business environment surrounding theinternational financial industry is becoming more complex. In addition, customers’ financing needs are becoming
more diverse and sophisticated as their activities are becoming more globalized.
Amidst this dynamic environment, MUFG Global covers our overseas businesses, including commercial
banking services such as loans, deposits and cash management services, retail banking, trust assets and securities
businesses (with the retail banking and trust assets businesses being conducted through Union Bank), through a
global network of more than 500 offices outside of Japan to provide customers with financial products andservices that meet their increasingly diverse and sophisticated financing needs.
CIB (Corporate and Investment Banking)
Our CIB business primarily serves large corporations, financial institutions, and sovereign and multinationalorganizations with a comprehensive set of solutions for their financing needs. Through our global network ofoffices and branches, we provide a full range of services, including corporate banking services such as providing
credit commitments and arranging the issuance of asset-backed commercial paper, investment banking services
such as debt/equity issuance, and M&A advisory services, to help clients develop financial strategies. To meetclients’ expectations for their various financing needs, we have established a client-oriented coverage businessmodel and coordinate our product experts who can offer innovative finance services all around the world. With
our acquisition from The Royal Bank of Scotland Group plc of project finance assets consisting of loans fornatural resources, power and other infrastructure projects in Europe, the Middle-East and Africa, and related
assets in December 2010, we continue to seek to strengthen our project finance business, which is one of the corebusinesses of CIB. For more information on our transaction with The Royal Bank of Scotland Group, see“Item 5. Operating and Financial Review and Prospects—Recent Developments.”
Transaction Banking
We have Transaction Banking offices around the world through which we provide commercial banking
products and services for corporations and financial institutions in managing and processing domestic and crossborder payments, mitigating risks in international trade, and performing asset and liability management. We
provide customers with support for their domestic, regional and global trade finance and cash management
programs through our extensive global network.
Union BankUNBC is a wholly owned indirect subsidiary of MUFG. UNBC is a US bank holding company with Union
Bank being its primary subsidiary. Union Bank is a leading regional bank headquartered in California, ranked by29

the Federal Deposit Insurance Corporation, or FDIC, as the 21st largest bank in the United States in terms of total
deposits as of March 2012. Union Bank provides a wide range of financial services to consumers, small
businesses, middle-market companies and major corporations, primarily in California, Oregon, Washington, andTexas as well as nationally and internationally. In April 2010, Union Bank acquired loans and other assets andassumed deposits and other liabilities of Tamalpais Bank, a California-based bank, and Frontier Bank, aWashington-based bank, from the FDIC in separate FDIC-assisted transactions. In March 2012, UNBC enteredinto a definitive agreement to acquire Pacific Capital Bancorp, a bank holding company based in California withapproximately $5.9 billion in total assets and approximately $4.6 billion in deposits. In May 2012, Union Bank
entered into a definitive agreement with PNC Bank, N.A. to acquire Smartstreet, an Atlanta-based financial
services division of PNC Bank that has approximately $1 billion in deposits and provides banking services in the
United States to homeowners associations and community association management companies. For more
information, see “Item 5. Operating and Financial Review and Prospects—Recent Developments.”
Global Markets
Global Markets covers the asset and liability management and strategic investments of BTMU and MUTB,
and sales and trading of financial products of BTMU, MUTB and MUMSS.
Other
Other mainly consists of the corporate centers of the holding company, BTMU, MUTB and MUMSS.
Global Strategic Alliance with Morgan Stanley
As of March 31, 2011, we held a total of approximately 47 million shares of Morgan Stanley’s common
stock, Series B Non-Cumulative Non-Voting Perpetual Convertible Preferred Stock (“Series B Preferred Stock”)
with a face value of approximately $7.9 billion, or ¥808.3 billion, and a 10% dividend, and Perpetual
Non-Cumulative Non-Convertible Preferred Stock (“Series C Preferred Stock”) with a face value ofapproximately $0.5 billion, or ¥53.6 billion, and a 10% dividend.
On June 30, 2011, we converted all of the Series B Preferred Stock held by us for approximately 385 million
shares of Morgan Stanley’s common stock, resulting in us holding approximately 432 million shares of Morgan
Stanley’s common stock, which represented approximately 22.4% of the voting rights in Morgan Stanley basedon the number of shares of Morgan Stanley’s common stock outstanding as of June 30, 2011. As of March 31,
2012, we held approximately 21.8% of the voting rights in Morgan Stanley and held a total of approximately 432
million shares of Morgan Stanley’s common stock and Series C Preferred Stock with a face value ofapproximately $0.5 billion, or ¥53.6 billion, and a 10% dividend. As of the same date, we had two
representatives appointed to Morgan Stanley’s board of directors. We adopted the equity method of accounting
for our investment in Morgan Stanley for the fiscal year ended March 31, 2012. For more information, see “Item5. Operating and Financial Review and Prospects—Recent Developments.”
In May 2010, we and Morgan Stanley integrated our respective Japanese securities companies by forming
two securities joint venture companies. We converted the wholesale and retail securities businesses conducted inJapan by MUS into MUMSS. Morgan Stanley contributed the investment banking operations conducted in Japanby its former wholly-owned subsidiary, Morgan Stanley Japan, to MUMSS, and converted the sales and trading
and capital markets businesses conducted in Japan by Morgan Stanley Japan into an entity called Morgan Stanley
MUFG Securities, Co., Ltd., or MSMS. We hold a 60% economic interest in MUMSS and MSMS, and Morgan
Stanley holds a 40% economic interest in MUMSS and MSMS. We hold a 60% voting interest and Morgan
Stanley holds a 40% voting interest in MUMSS, and we hold a 49% voting interest and Morgan Stanley holds a
51% voting interest in MSMS. Morgan Stanley’s and our economic and voting interests in the securities joint
venture companies are held through intermediate holding companies. We have retained control of MUMSS and
we account for our interest in MSMS under the equity method due to our significant influence over MSMS. The
board of directors of MUMSS has fifteen members, nine of whom are designated by us and six of whom are30

designated by Morgan Stanley. The board of directors of MSMS has ten members, six of whom are designatedby Morgan Stanley and four of whom are designated by us. The CEO of MUMSS is designated by us and theCEO of MSMS is designated by Morgan Stanley. For a discussion of our recent capital contributions to MUMSS,
see “Item 5. Operating and Financial Review and Prospects—Recent Developments.”
We have also expanded the scope of our global strategic alliance with Morgan Stanley into othergeographies and businesses, including (1) a loan marketing joint venture that will provide clients in the UnitedStates with access to expand the world-class lending and capital markets services from both companies, (2) anagreement to establish business referral arrangements in Asia, Europe, the Middle East and Africa, covering
capital markets, loans, fixed income sales and other businesses, (3) a global commodities referral agreement
whereby BTMU and its affiliates will refer clients in need of commodities-related hedging solutions to certain
affiliates of Morgan Stanley, and (4) an employee secondment program to share best practices and expertise in awide range of business areas.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—If our strategic alliancewith Morgan Stanley fails, we could suffer financial or reputational loss.”
Competition
We face strong competition in all of our principal areas of operations. The structural reforms in theregulation of the financial industry and recent developments in the financial market have resulted in somesignificant changes in the Japanese financial system and prompted banks to merge or reorganize their operations,thus changing the nature of competition from other financial institutions as well as from other types ofbusinesses.
Japan
Since their formation in 2000 and 2001, the so-called Japanese “mega bank” groups, including us, theMizuho Financial Group, and the Sumitomo Mitsui Financial Group have continued to expand their businesses
and financial group capabilities. Heightened competition among the mega bank groups is currently expected in
the securities sector as they have recently announced plans to expand, or have expanded, their respective
securities businesses. In May 2010, we and Morgan Stanley created two securities joint venture companies inJapan, MUMSS and MSMS, by integrating the operations of MUS and Morgan Stanley Japan. In May 2009,
Mizuho Securities Co., Ltd. acquired Shinko Securities Co., Ltd. In September 2011, the Norinchukin Bank,
Mizuho Corporate Bank, Ltd. and Mizuho Securities entered into definitive agreements to expand areas ofbusiness cooperation and enhance collaborative relationships. In May 2012, Mizuho Securities and Mizuho
Investors Securities Co., Ltd. entered into a merger agreement, pursuant to which the merger is expected to
become effective on January 4, 2013. In October 2009, the Sumitomo Mitsui Financial Group acquired theformer Nikko Cordial Securities Inc. and other businesses from Citigroup Inc. For a discussion of the two
securities joint venture companies created by us and Morgan Stanley, see “—B. Business Overview—Global
Strategic Alliance with Morgan Stanley.”
The mega bank groups face heightened competition with other financial groups. For example, the Nomura
Group acquired Lehman Brothers Holdings Inc.’s franchise in the Asia-Pacific region and investment banking
businesses in Europe and the Middle East in October 2008. In addition, various Japanese non-bank financial
institutions, non-financial companies as well as foreign financial institutions entered into the Japanese domestic
market. For example, Orix Corporation, a non-bank financial institution, and the Seven & i Holdings group andSony Corporation, which were both non-financial companies, began to offer various banking services, often
through non-traditional distribution channels. Citigroup Inc. conducts its banking business in Japan through a
locally incorporated banking subsidiary.
In the retail banking sector, customers often seek a broad range of financial products and services, such as
investment trusts and insurance products. Recently, competition has increased due to the development of new
products and distribution channels. For example, Japanese banks have started competing with one another by31

developing innovative proprietary computer technologies that allow them to deliver basic banking services in amore efficient manner, such as internet banking services, and to create sophisticated new products in response tocustomer demand.
In recent years, the Japanese government has identified several governmental financial institutions ascandidates to privatize. In particular, the privatization of the Japan Post Group companies could substantially
increase competition within the financial services industry as Japan Post Bank Co., Ltd. is the world’s largest
holder of deposits. Although the Japanese government’s privatization plan for the Japan Post Group companies
was suspended in December 2009, a revised postal privatization law became effective in May 2012, allowing thegovernment to commence its sales of shares in the Japan Post Group companies. The revised law only requires
Japan Post Holdings Co., Ltd. to make efforts to sell its shares in Japan Post Bank and Japan Post Insurance Co.,
Ltd. as soon as possible with no specific deadline. Additionally, under the revised law, Japan Post Bank andJapan Post Insurance may enter into new businesses upon obtaining government approvals, and if thegovernment’s equity holdings decrease to a certain level, the two companies will be allowed to enter into new
businesses upon submission of a notice to the government. As a result, the Japan Post Group companies may
seek to enter into new businesses, including sales of various types of insurance and housing loans. The
privatization of the Japan Post Group companies remains subject to political negotiations and government action.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Our business may be adversely
affected by competitive pressures, which have partly increased due to regulatory changes and recent market
changes in the financial industry domestically and globally” and “—B. Business Overview—The Japanese
Financial System—Government Financial Institutions.”
In the consumer finance sector, new regulatory reforms and legal developments have negatively impacted
the business environment, resulting in failures of a large number of consumer finance companies, including amajor consumer finance company’s filing for corporate reorganization in September 2010. In April 2012,
Promise Co., Ltd. became a wholly-owned subsidiary of the Sumitomo Mitsui Financial Group. See “Item 3.D.
Key Information—Risk Factors—Risks Related to Our Business—Because of our loans to consumers and ourshareholdings in companies engaged in consumer lending, changes in the business or regulatory environment for
consumer finance companies in Japan may further adversely affect our financial results.”
The trust assets business is a growth area that is becoming increasingly competitive because of regulatorychanges in the industry that have expanded the products and services that can be offered since the mid-2000s. In
addition, there is growing corporate demand for changes in the trust regulatory environment, such as reforms of
the pension system and related accounting regulations under Japanese GAAP. Competition may increase in the
future as changes are made to respond to such corporate demand and regulatory barriers to entry are lowered. In
October 2009, The Sumitomo Trust and Banking Co., Ltd. acquired Nikko Asset Management Co., Ltd. from
Citigroup Inc. In April 2011, Sumitomo Trust and Banking and Chuo Mitsui Trust Holdings, Inc. established
Sumitomo Mitsui Trust Holdings, Inc., a holding company, to integrate their operations. In April 2012,
Sumitomo Trust and Banking, The Chuo Mitsui Trust and Banking Company, Limited and Chuo Mitsui Asset
Trust and Banking Company, Limited, the three trust bank subsidiaries of Sumitomo Mitsui Trust Holdings,
merged and were renamed Sumitomo Mitsui Trust Bank, Limited. As a result, competition is expected tointensify in the asset management and trust assets businesses.
Foreign
In the United States, we face substantial competition in all aspects of our business. We face competition
from other large US and foreign-owned money-center banks, as well as from similar institutions that provide
financial services. Through Union Bank, we currently compete principally with US and foreign-owned moneycenter and regional banks, thrift institutions, insurance companies, asset management companies, investment
advisory companies, consumer finance companies, credit unions and other financial institutions.

32

In other international markets, we face competition from commercial banks and similar financial
institutions, particularly major international banks and the leading domestic banks in the local financial markets
in which we conduct business. In addition, we may face further competition as a result of recent investments,
mergers and other business tie-ups among global financial institutions.
The Japanese Financial System
Japanese financial institutions may be categorized into three types:‰

the central bank, namely the Bank of Japan;‰

private banking institutions; and‰government financial institutions.

The Bank of JapanThe Bank of Japan’s role is to maintain price stability and the stability of the financial system to ensure asolid foundation for sound economic development.
Private Banking Institutions
Private banking institutions in Japan are commonly classified into two categories (the following numbers
are based on information published by the Financial Services Agency of Japan available as of May 7, 2012:‰

ordinary banks (128 ordinary banks and 57 foreign commercial banks with ordinary banking
operations); and‰trust banks (16 trust banks, including four Japanese subsidiaries of foreign financial institutions).

Ordinary banks in turn are classified as city banks, of which there are five, including BTMU, and regionalbanks, of which there are 107 and other banks, of which there are 16. Of the five city banks, Mizuho Bank, Ltd.
and Mizuho Corporate Bank have announced a plan to merge, effective July 1, 2013. In general, the operations ofordinary banks correspond to commercial banking operations in the United States. City banks and regional banks
are distinguished based on head office location as well as the size and scope of their operations.
The city banks are generally considered to constitute the largest and most influential group of banks inJapan. Generally, these banks are based in large cities, such as Tokyo, Osaka and Nagoya, and operate nationallythrough networks of branch offices. City banks have traditionally emphasized their business with large corporateclients, including the major industrial companies in Japan. However, many of these banks, including BTMU, in
recent years have increased their emphasis on other markets, such as small and medium-sized companies andretail banking.
With some exceptions, the regional banks tend to be much smaller in terms of total assets than the city
banks. Each of the regional banks is based in one of the Japanese prefectures and extends its operations intoneighboring prefectures. Their clients are mostly regional enterprises and local public utilities. The regionalbanks also lend to large corporations. In line with the recent trend among financial institutions toward mergers orbusiness tie-ups, various regional banks have announced or are currently negotiating or pursuing integrationtransactions.
Trust banks, including MUTB, provide various trust services relating to money trusts, pension trusts andinvestment trusts and offer other services relating to real estate, stock transfer agency and testamentary services
as well as banking services.
In recent years, almost all of the city banks have consolidated with other city banks and in some cases, withtrust banks. Integration among these banks was achieved, in most cases, through the use of a bank holding
company.
33

In addition to ordinary banks and trust banks, other private financial institutions in Japan, including shinkinbanks or credit associations, and credit cooperatives, are engaged primarily in making loans to small businesses
and individuals.
Government Financial Institutions
Since World War II, a number of government financial institutions have been established in Japan. These
corporations are wholly owned by the government and operate under its supervision. Their funds are provided
mainly from government sources. Certain types of operations undertaken by these institutions have been or areplanned to be assumed by, or integrated with the operations of, private corporations, through privatization andother measures.
Among them are the following:‰

The Development Bank of Japan, which was established for the purpose of contributing to the economic
development of Japan by extending long-term loans, mainly to primary and secondary sector industries,
and which was reorganized as a joint stock company in October 2008 as part of its ongoing privatization
process, the target completion date for which has been postponed until some time between April 2020
and March 2022;‰

Japan Finance Corporation, which was formed in October 2008, through the merger of the International
Financial Operations of the former Japan Bank for International Cooperation, National Life FinanceCorporation, Agriculture, Forestry and Fisheries Finance Corporation, and Japan Finance Corporationfor Small and Medium Enterprise, the primary purposes of which are to supplement and encourage theprivate financing of exports, imports, overseas investments and overseas economic cooperation, and to
supplement private financing to the general public, small and medium enterprises and those engaged inagriculture, forestry and fishery. In April 2012, Japan Finance Corporation spun off international
operations to create Japan Bank for International Cooperation as a separate government-owned entity;‰

Japan Housing Finance Agency, which was originally established in June 1950 as the Government
Housing Loan Corporation for the purpose of providing housing loans to the general public, wasreorganized as an incorporated administrative agency and became specialized in securitization of
housing loans in April 2007; and‰The Japan Post Group companies, a group of joint stock companies including Japan Post Bank, whichwere formed in October 2007 as part of the Japanese government’s privatization plan for the former
Japan Post, a government-run public services corporation, which had been the Postal Service Agency
until March 2003. The Japanese government’s privatization plan for the Japan Post Group companies
was suspended in December 2009. In May 2012, a revised postal privatization law became effective,
allowing the government to commence its sales of shares in the Japan Post Group companies.

Supervision and Regulation
Japan
Supervision. The Financial Services Agency of Japan, an agency of the Cabinet Office, or FSA, is
responsible for supervising and overseeing financial institutions, making policy for the overall Japanese financial
system and conducting insolvency proceedings with respect to financial institutions. The Bank of Japan, as thecentral bank for financial institutions, also has supervisory authority over banks in Japan, based primarily on its
contractual agreements and transactions with the banks.
The Banking Law. Among the various laws that regulate financial institutions, the Banking Law and its
subordinated orders and ordinances are regarded as the fundamental law for ordinary banks and other private
financial institutions. The Banking Law addresses capital adequacy, inspections and reporting to banks and bankholding companies, as well as the scope of business activities, disclosure, accounting, limitation on granting
credit and standards for arm’s length transactions for them. As a result of the amendment to the Banking Law and34

the Financial Instruments and Exchange Law, effective as of June 2009, firewall regulations that separate bankholding companies or banks from affiliated securities companies have become less stringent. On the other hand,bank holding companies, banks and other financial institutions are required to establish an appropriate system tobetter cope with conflicts of interest that may arise from their business operations.
Bank holding company regulations. A bank holding company is prohibited from carrying out any businessother than the management of its subsidiaries and other incidental businesses. A bank holding company may haveany of the following as a subsidiary: a bank, a securities company, an insurance company and a foreignsubsidiary that is engaged in the banking, securities or insurance business. In addition, a bank holding company
may have as a subsidiary, any company that is engaged in a finance-related business, such as a credit cardcompany, a leasing company or an investment advisory company. Certain companies that are designated by aministerial ordinance as those that cultivate new business fields may also become the subsidiary of a bankholding company.
Capital adequacy. The capital adequacy guidelines adopted by the FSA that are applicable to Japanesebank holding companies and banks with international operations closely follow the risk-weighted approach
introduced by the Basel Committee on Banking Supervision of the Bank for International Settlements, or BIS.
Since March 2007, Japanese banks have been subject to standards reflecting the Basel Committee standards
called “International Convergence of Capital Measurement and Capital Standards: A Revised Framework,” orBasel II.
Under the FSA guidelines reflecting Basel II, we and our banking subsidiaries currently use the Advanced
Internal Ratings-Based Approach, or the AIRB approach, to calculate capital requirements for credit risk as ofMarch 31, 2011 and 2012. The Standardized Approach is used for some subsidiaries that are considered to beimmaterial to the overall MUFG capital requirements, and UNBC has adopted a phased rollout of the internalratings-based approach. Market risk is reflected in the risk-weighted assets by applying the Internal Models
Approach to calculate general market risk and the Standardized Methodology to calculate specific risk. Under theInternal Models Approach, we principally use a historical simulation model to calculate value-at-risk amounts by
estimating the profit and loss on our portfolio by applying actual fluctuations in historical market rates and prices
over a fixed period. Under the FSA guidelines reflecting Basel II, we reflected operational risk in the riskweighted assets by applying the Standardized Approach as of March 31, 2011 and the Advanced Measurement
Approach as of March 31, 2012, respectively. For more information, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Operational Risk Management.”
The capital adequacy guidelines are in accordance with the Basel II standards for a target minimum standard
ratio of capital to modified risk-weighted assets of 8.0% on both consolidated and non-consolidated bases forbanks with international operations, including BTMU and MUTB, or on a consolidated basis for bank holding
companies with international operations, such as MUFG. Modified risk-weighted assets is the sum of riskweighted assets compiled for credit risk purposes, market risk equivalent amount divided by 8% and operationalrisk equivalent amount divided by 8%.
Capital is classified into three tiers, referred to as Tier I, Tier II and Tier III. Tier I capital generally consistsof shareholders’ equity items, including common stock, preferred stock, capital surplus, noncontrolling interests
and retained earnings (which includes deferred tax assets). However, recorded goodwill and other items, such astreasury stock, and unrealized losses on investment securities classified as “securities available for sale” underJapanese GAAP, net of taxes, if any, are deducted from Tier I capital. Tier II capital generally consists of:‰

the amount (up to a maximum of 0.6% of credit risk-weighted assets) by which eligible reserves for
credit losses exceed expected losses in the internal ratings-based approach, and general reserves for
credit losses, subject to a limit of 1.25% of modified risk-weighted assets determined by the partial useof the Standardized Approach (including a phased rollout of the internal ratings-based approach),‰

45% of the unrealized gains on investment securities classified as “securities available for sale” underJapanese GAAP,35‰45% of the land revaluation excess,‰the balance of perpetual subordinated debt, and‰the balance of subordinated term debt with an original maturity of over five years and preferred stockwith a maturity up to 50% of Tier I capital.

Tier III capital generally consists of short-term subordinated debt with an original maturity of at least two
years and which is subject to a “lock-in” provision, which stipulates that neither interest nor principal may be
paid if such payment would cause the bank’s overall capital amount to be less than its minimum capitalrequirement. At least 50% of the minimum total capital requirements must be maintained in the form of Tier I
capital.
Amendments to the capital adequacy guidelines limiting the portion of Tier I capital consisting of deferred
tax assets became effective on March 31, 2006. The restrictions are targeted at major Japanese banks and theirholding companies, which include MUFG and its banking subsidiaries. The banks subject to the restrictions will
not be able to reflect in their capital adequacy ratios any deferred tax assets that exceed the limit of 20% of their
Tier I capital.
In September 2009, the Group of Central Bank Governors and Heads of Supervision, the oversight body of
the Basel Committee on Banking Supervision, announced a comprehensive set of measures to modify theexisting three pillars of the Basel II framework. In December 2009, the Basel Committee announced a package of
proposals to strengthen global capital and liquidity regulations with the goal of promoting a more resilientbanking sector. The proposals cover the following five key areas:‰

raising the quality, consistency and transparency of the capital base,‰strengthening the risk coverage of the capital framework,‰

introducing a leverage ratio as a supplementary measure to the Basel II risk-based framework with aview to migrating to a minimum capital requirement treatment based on appropriate review andcalibration,‰

introducing a series of measures to promote the build-up of capital buffers in good times that can be
drawn upon in periods of stress, and‰introducing a global minimum liquidity standard for internationally active banks that includes a 30-day
liquidity coverage ratio requirement underpinned by a longer-term structural liquidity ratio.

These measures have not been effective yet in Japan. However, if adopted, the Japanese capital ratio
framework, which is currently based on Basel II, is expected to be revised to implement these measures, thereby
imposing possibly more stringent requirements.
In regards to the proposals, the Group of Central Bank Governors and Heads of Supervision reached anagreement on the new global regulatory framework, which has been referred to as “Basel III,” in July and
September 2010. In December 2010, the Basel Committee agreed on the details of the Basel III rules. The
agreement on Basel III includes the following:‰raising the quality of capital to ensure banks are able to better absorb losses on both a going concern anda gone concern basis,‰increasing the risk coverage of the capital framework, in particular for trading activities, securitizations,
exposures to off-balance sheet vehicles and counterparty credit exposures arising from derivatives,‰

raising the level of minimum capital requirements, including an increase in the minimum common
equity requirement from 2% to 4.5%, which is planned to be phased in between January 1, 2013 andJanuary 1, 2015, and a capital conservation buffer of 2.5%, which is planned to be phased in between
January 1, 2016 and year end 2018, bringing the total common equity requirement to 7%,36‰introducing an internationally harmonized leverage ratio to serve as a backstop to the risk-based capital
measure and to contain the build-up of excessive leverage in the system,‰

raising standards for the supervisory review process (Pillar 2) and public disclosures (Pillar 3), together
with additional guidance in the areas of sound valuation practices, stress testing, liquidity risk
management, corporate governance and compensation,‰

introducing minimum global liquidity standards consisting of both a short term liquidity coverage ratio
and a longer term, structural net stable funding ratio, and‰promoting the build up of capital buffers that can be drawn down in periods of stress, including both acapital conservation buffer and a countercyclical buffer to protect the banking sector from periods ofexcess credit growth.

In January 2011, the Basel Committee issued its final “minimum requirements to ensure loss absorbency at
the point of non-viability.” The requirements are designed to ensure that all classes of capital instruments fully
absorb losses at the point of non-viability before taxpayers are exposed to loss, and require, among other things,
that all non-common Tier I and Tier II instruments, such as non-cumulative perpetual preferred stock andsubordinated debt, issued by an internationally active bank, be either written-off or converted into common
equity upon the occurrence of certain trigger events. Instruments issued on or after January 1, 2013, must meetthe new requirements to be included in regulatory capital. Instruments issued prior to January 1, 2013, that do notmeet the requirements, but that meet all of the entry criteria for additional Tier I or Tier II capital, will beconsidered as instruments that no longer qualify as additional Tier I or Tier II capital and will be phased out fromJanuary 1, 2013 in accordance with the above Basel III framework.
In July 2011, the Basel Committee on Banking Supervision proposed additional loss absorbency
requirements to supplement the common equity Tier I capital requirement ranging from 1% to 2.5% for global
systemically important banks, depending on the bank’s systemic importance. The additional loss absorbency
requirements are expected to be phased in between January 1, 2016 and December 31, 2018, and will become
fully effective on January 1, 2019.
In November 2011, the Financial Stability Board tentatively identified us as a G-SIFI. The banks that areincluded in the group of G-SIFIs will be subject to stricter capital requirements. The group of G-SIFIs is
expected to be updated annually, and the first group of G-SIFIs to which the stricter capital requirements will
initially be applied is expected to be identified in 2014. The stricter capital requirements are expected to be
implemented in phases from 2016.
Based on the Basel III framework, the Japanese capital ratio framework, which is currently based on BaselII, has been revised to implement the more stringent requirements, which will be effective as of March 31, 2013.
Likewise, local banking regulators outside of Japan such as those in the United States are expected to revise thecapital and liquidity requirements imposed on our subsidiaries and operations in those countries to implement themore stringent requirements of Basel III as adopted in those countries. The new risk-weighted asset structure
expected to be proposed under Basel III may also encourage us to modify our business model to focus more on
flow-based client market businesses, such as transactional banking and asset management. We will continue toassess the potential impact of Basel III and other regulatory standards related thereto.
For a discussion on our capital ratios, see “Item 5.B. Operating and Financial Review andProspects—Liquidity and Capital Resources—Capital Adequacy.”
Inspection and reporting. By evaluating banks’ systems of self-assessment, auditing their accounts andreviewing their compliance with laws and regulations, the FSA monitors the financial soundness of banks,
including the status and performance of their control systems for business activities. The FSA implemented the
Financial Inspection Rating System, or FIRST, for deposit-taking financial institutions which has become
applicable to major banks since April 1, 2007. By providing inspection results in the form of graded evaluations
37

(i.e., ratings), the FSA expects this rating system to motivate financial institutions to voluntarily improve their
management and operations. Additionally, the FSA currently takes the “better regulation” approach in its
financial regulation and supervision. This consists of four pillars: (1) optimal combination of rules-based andprinciples-based supervisory approaches; (2) timely recognition of priority issues and effective response;(3) encouraging voluntary efforts by financial firms and placing greater emphasis on providing them withincentives; and (4) improving the transparency and predictability of regulatory actions, in pursuit of improvementof the quality of financial regulation and supervision.
The FSA, if necessary to secure the sound and appropriate operation of a bank’s business, may request thesubmission of reports or materials from, or conduct an on-site inspection of, the bank or the bank holding
company. If a bank’s capital adequacy ratio falls below a specified level, the FSA may request the bank to submit
an improvement plan and may restrict or suspend the bank’s operations when it determines that action isnecessary.
In addition, the Securities and Exchange Surveillance Commission of Japan inspects banks in connection
with their securities business as well as financial instruments business operators, such as securities firms.
The Bank of Japan also conducts inspections of banks. The Bank of Japan Law provides that the Bank ofJapan and financial institutions may agree as to the form of inspection to be conducted by the Bank of Japan.
Laws limiting shareholdings of banks. The provisions of the Antimonopoly Act that prohibit a bank fromholding more than 5% of another company’s voting rights do not apply to a bank holding company. However, theBanking Law prohibits a bank holding company and its subsidiaries from holding, on an aggregated basis, morethan 15% of the voting rights of companies other than those which can legally become subsidiaries of bankholding companies.
Banks are also prohibited from holding shares in other companies exceeding their Tier I capital amount. Fora detailed discussion on the capital requirements for Japanese banks, see “Item 5.B. Operating and Financial
Review and Prospects—Liquidity and Capital Resources—Capital Adequacy—Capital Requirements for
Banking Institutions in Japan.”
The Financial Instruments and Exchange Law. The Financial Instruments and Exchange Law provides
protection for investors and also regulates sales of a wide range of financial instruments and services, requiring
financial institutions to improve their sales rules and strengthen compliance frameworks and procedures. Amongthe instruments that the Japanese banks deal in, derivatives, foreign currency-denominated deposits, and variableinsurance and annuity products are subject to regulations covered by the sales-related rules of conduct under theact.
Article 33 of the Financial Instruments and Exchange Law generally prohibits banks from engaging insecurities transactions. However, bank holding companies and banks may, through a domestic or overseas
securities subsidiary, conduct all types of securities businesses, with appropriate approval from the FSA.
Similarly, registered banks are permitted to provide securities intermediation services and engage in certain othersimilar types of securities related transactions, including retail sales of investment funds and government andmunicipal bonds.
Anti-money laundering laws. Under the Act on Prevention of Transfer of Criminal Proceeds, banks andother financial institutions are required to report to the responsible ministers—in the case of banks, theCommissioner of the FSA—any assets which they receive while conducting their businesses that are suspected ofbeing illicit profits from criminal activities.
Law concerning trust business conducted by financial institutions. Under the Trust Business Act, joint
stock companies that are licensed by the Prime Minister as trust companies, including non-financial companies,
are allowed to conduct trust business. In addition, under the Act on Concurrent Operation for Trust Business by
Financial Institutions, banks and other financial institutions, as permitted by the Prime Minister, are able to38

conduct trust business. The Trust Business Act provides for a separate type of registration for trustees who
conduct only administration type trust business. The Trust Business Act also provides for various duties imposedon the trustee in accordance with and in addition to the Trust Act.
Deposit insurance system and government measures for troubled financial institutions. The Deposit
Insurance Act is intended to protect depositors if a financial institution fails to meet its obligations. The Deposit
Insurance Corporation was established in accordance with this law.
City banks (including BTMU), regional banks, trust banks (including MUTB), and various other credit
institutions participate in the deposit insurance system on a compulsory basis.
Under the Deposit Insurance Act, the maximum amount of protection is ¥10 million per customer within
one bank. All deposits are subject to the ¥10 million maximum, except for non-interest bearing deposits that areredeemable on demand and used by the depositor primarily for payment and settlement functions (the “settlement
accounts”). Deposits in settlement accounts are fully protected without a maximum amount limitation. Certain
types of deposits are not covered by the deposit insurance system, such as foreign currency deposits andnegotiable certificates of deposit. As of April 1, 2012, the Deposit Insurance Corporation charges insurance
premiums equal to 0.107% on the deposits in the settlement accounts, which are fully protected as mentioned
above, and premiums equal to 0.082% on the deposits in other accounts. If no financial institutions become
insolvent during the year ending on March 31, 2013, the premiums will be retrospectively revised to 0.089% and0.068%, respectively, and the balance will be returned.
Under the Deposit Insurance Act, a Financial Reorganization Administrator can be appointed by the Prime
Minister if a bank is unable to fully perform its obligations with its assets or may suspend or has suspended
repayment of deposits. The Financial Reorganization Administrator will take control of the assets of the troubledbank, dispose of the assets and search for another institution willing to take over its business. The troubled bank’sbusiness may also be transferred to a “bridge bank” established by the Deposit Insurance Corporation for the
purpose of the temporary maintenance and continuation of operations of the troubled bank, and the bridge bankwill seek to transfer the troubled bank’s assets to another financial institution or dissolve the troubled bank. The
Deposit Insurance Corporation protects deposits, as described above, either by providing financial aid for costs
incurred by the financial institution succeeding the insolvent bank or by paying insurance money directly todepositors. The financial aid, provided by the Deposit Insurance Corporation, may take the form of a monetary
grant, loan or deposit of funds, purchase of assets, guarantee or assumption of debts, subscription of preferredstock, or loss sharing. The Deposit Insurance Act also provides for exceptional measures to cope with systemicrisk in the financial industry.
Further, against the background of the global financial crisis, in December 2008 the Act on Special
Measures for Strengthening of Financial Function was amended in order to enable the Japanese government totake special measures in order to strengthen the capital of financial institutions. Under the act, banks and otherfinancial institutions may apply to receive capital injections from the Deposit Insurance Corporation, subject togovernment approval, which will be granted subject to the fulfillment of certain requirements, including, among
other things, the improvement of profitability and efficiency, facilitation of financing to small and medium-sizedbusiness enterprises in the local communities, and that the financial institution is not insolvent.
In response to the Great East Japan Earthquake on March 11, 2011, the act was revised in July 2011, adding
the special case for the financial institutions suffering damage from the disaster. Under the case, the requirement
to create the improvement plan of profitability and efficiency is eased. Moreover, the application deadline has
been extended from March 31, 2012 to March 31, 2017.
The Act on the Temporary Measures for the Facilitation of Finance to Small and Medium-sized Firms andOthers. In December 2009, the Act on the Temporary Measures for the Facilitation of Finance to Small andMedium-sized Firms and Others became effective, requiring financial institutions, among other things, to makean effort to reduce their customers’ burden of loan repayment by employing methods such as modifying the term39

of loans at the request of eligible borrowers, including small and medium-sized firms and individual home loanborrowers. The new legislation also requires financial institutions to internally establish a system to implement
the requirements of the legislation and periodically make public disclosure of and report to the relevant authority
on the status of implementation. This legislation has been extended to March 31, 2013.
The Personal Information Protection Act. With regard to protection of personal information, the Personal
Information Protection Act requires, among other things, Japanese banking institutions to limit the use of
personal information to the stated purpose and to properly manage the personal information in their possession,and forbids them from providing personal information to third parties without consent. If a bank violates certain
provisions of the law, the FSA may advise or order the bank to take proper action. In addition, the Banking Law
and the Financial Instruments and Exchange Law provide certain provisions with respect to appropriate handlingof customer information.
Law Concerning Protection of Depositors from Illegal Withdrawals Made by Counterfeit or Stolen
Cards. The Act on Protection, etc. of Depositors and Postal Saving Holders from Unauthorized AutomatedWithdrawal, etc. Using Counterfeit Cards, etc. and Stolen Cards, etc. requires financial institutions to establish
internal systems to prevent illegal withdrawals of deposits made using counterfeit or stolen bank cards. The act
also requires financial institutions to compensate depositors for any amount illegally withdrawn using counterfeit
bank cards, unless the financial institution can verify that it acted in good faith without negligence, and there isgross negligence on the part of the relevant account holder.
Government Reforms to Restrict Maximum Interest Rates on Consumer Lending Business. In December
2006, the Diet passed legislation to reform the regulations relating to the consumer lending business, including
amendments to the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates which,effective June 18, 2010, reduced the maximum permissible interest rate from 29.2% per annum to 20% perannum. The regulatory reforms also included amendments to the Law Concerning Lending Business which,effective June 18, 2010, abolished the so-called “gray-zone interest.” Gray-zone interest refers to interest rates
exceeding the limits stipulated by the Interest Rate Restriction Law (between 15% per annum to 20% per annum
depending on the amount of principal). Prior to June 18, 2010, gray-zone interests were permitted under certain
conditions set forth in the Law Concerning Lending Business. As a result of the regulatory reforms, all interest
rates are now subject to the lower limits imposed by the Interest Rate Restriction Law, compelling lending
institutions, including our consumer finance subsidiaries and equity method investees, to lower the interest rates
they charge borrowers. Furthermore, the new regulations, which became effective on June 18, 2010, require,among other things, consumer finance companies to limit their lending to a single customer to a maximum of one
third of the customer’s annual income regardless of the customer’s repayment capability.
In addition, as a result of decisions made by the Supreme Court of Japan prior to June 18, 2010, imposing
stringent requirements for charging such gray-zone interest rates, consumer finance companies have been
responding to borrowers’ claims for reimbursement of previously collected interest payments in excess of thelimits stipulated by the Interest Rate Restriction Law. We continue to carefully monitor future developments andtrends of the claims. See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Becauseof our loans to consumers and our shareholdings in companies engaged in consumer lending, changes in thebusiness or regulatory environment for consumer finance companies in Japan may further adversely affect our
financial results.”
Recent Regulatory Actions. In December 2011, JACCS Co., Ltd., an equity-method investee, received abusiness improvement order from the Kanto Bureau of Economy, Trade and Industry of the Ministry of
Economy, Trade and Industry of Japan under the Installment Sales Act of Japan in connection with extensions ofcredit to individuals without conducting a credit examination to determine the individual’s repayment ability as
required by the Act when JACCS experienced a system failure, resulting in loans extended to individuals inexcess of their respective estimated repayment abilities. JACCS has implemented measures designed to preventthe recurrence of similar incidents and ensure an appropriate compliance framework. For further information, see“Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Compliance.”40

United States
As a result of our operations in the United States, we are subject to extensive US federal and statesupervision and regulation.
Overall supervision and regulation. We are subject to supervision, regulation and examination withrespect to our US operations by the Board of Governors of the Federal Reserve System, or the Federal Reserve
Board, pursuant to the US Bank Holding Company Act of 1956, as amended, or the BHCA, and the International
Banking Act of 1978, as amended, or the IBA, because we are a bank holding company and a foreign banking
organization, respectively, as defined pursuant to those statutes. The Federal Reserve Board functions as our“umbrella” supervisor under amendments to the BHCA effected by the Gramm-Leach-Bliley Act of 1999, whichamong other things:‰

prohibited further expansion of the types of activities in which bank holding companies, acting directlyor through nonbank subsidiaries, may engage;‰authorized qualifying bank holding companies to opt to become “financial holding companies,” andthereby acquire the authority to engage in an expanded list of activities; and‰modified the role of the Federal Reserve Board by specifying new relationships between the Federal
Reserve Board and the functional regulators of nonbank subsidiaries of both bank holding companies
and financial holding companies.

The BHCA generally prohibits each of a bank holding company and a foreign banking organization thatmaintains branches or agencies in the United States from, directly or indirectly, acquiring more than 5% of thevoting shares of any company engaged in nonbanking activities in the United States unless the bank holding
company or foreign banking organization has elected to become a financial holding company, as discussed
above, or the Federal Reserve Board has determined, by order or regulation, that such activities are so closely
related to banking as to be a proper incident thereto and has granted its approval to the bank holding company or
foreign banking organization for such an acquisition. The BHCA also requires a bank holding company or
foreign banking organization that maintains branches or agencies in the United States to obtain the prior approvalof an appropriate federal banking authority before acquiring, directly or indirectly, the ownership of more than
5% of the voting shares or control of any US bank or bank holding company. In addition, under the BHCA, a
US bank or a US branch or agency of a foreign bank is prohibited from engaging in various tying arrangements
involving it or its affiliates in connection with any extension of credit, sale or lease of any property or provisionof any services.
On October 6, 2008, we became a financial holding company in the United States. At the same time,
BTMU, MUTB, and UNBC, which are also bank holding companies, elected to become financial holding
companies. As noted above, as a financial holding company we are authorized to engage in an expanded list ofactivities. These activities include those deemed to be financial in nature or incidental to such financial activity,
including among other things merchant banking, insurance underwriting, and a full range of securities activities.
In addition, we are permitted to engage in certain specified nonbanking activities deemed to be closely related tobanking, without prior notice to or approval from the Federal Reserve Board. To date, we have utilized thisexpanded authority by electing to engage in certain securities activities, including securities underwriting,indirectly through certain of our securities subsidiaries. In order to maintain our status as a financial holding
company that allows us to expand our activities, we must continue to meet certain standards established by theFederal Reserve Board. Those standards require that we exceed the minimum standards applicable to bankholding companies that have not elected to become financial holding companies. These higher standards include
meeting the “well capitalized” and “well managed” standards for financial holding companies as defined in theregulations of the Federal Reserve Board. In addition, as a financial holding company, we must ensure that our
US banking subsidiaries identified below meet certain minimum standards under the Community Reinvestment
Act of 1977. At this time, we continue to comply with these standards.

41

US branches and agencies of subsidiary Japanese banks. Under the authority of the IBA, our banking
subsidiaries, BTMU and MUTB, operate four branches, one agency and eight representative offices in the
United States. BTMU operates branches in Los Angeles, California; Chicago, Illinois; New York, New York; anagency in Houston, Texas; and representative offices in Washington, D.C; San Francisco, California; Seattle,
Washington; Atlanta, Georgia; Minneapolis, Minnesota; Dallas, Texas; Jersey City, New Jersey; and Florence,
Kentucky. MUTB operates a branch in New York, New York.
The IBA provides, among other things, that the Federal Reserve Board may examine US branches andagencies of foreign banks, and each branch and agency shall be subject to on-site examination by the appropriate
federal or state bank supervisor as frequently as would a US bank. The IBA also provides that if the Federal
Reserve Board determines that a foreign bank is not subject to comprehensive supervision or regulation on aconsolidated basis by the appropriate authorities in its home country, or if there is reasonable cause to believethat the foreign bank or its affiliate has committed a violation of law or engaged in an unsafe or unsound banking
practice in the United States, the Federal Reserve Board may order the foreign bank to terminate activities
conducted at a branch or agency in the United States.
US branches and agencies of foreign banks must be licensed, and are also supervised and regulated, by astate or by the Office of the Comptroller of the Currency, or the OCC, the federal regulator of US national banks.
All of the branches and agencies of BTMU and MUTB in the United States are state-licensed. Under US federalbanking laws, state-licensed branches and agencies of foreign banks may engage only in activities that would bepermissible for their federally-licensed counterparts, unless the Federal Reserve Board determines that theadditional activity is consistent with safe and sound practices. US federal banking laws also subject state-licensed
branches and agencies to the single-borrower lending limits that apply to federal branches and agencies, which
generally are the same as the lending limits applicable to national banks, but are based on the capital of the entire
foreign bank.
As an example of state supervision, the branches of BTMU and MUTB in New York are licensed by the
New York State Department of Financial Services, pursuant to the New York Banking Law. Under the New
York Banking Law and the Superintendent’s Regulations, each of BTMU and MUTB must maintain with banks
in the State of New York eligible assets as defined and in amounts determined by the Superintendent. These New
York branches must also submit written reports concerning their assets and liabilities and other matters, to theextent required by the Superintendent, and are examined at periodic intervals by the New York State Departmentof Financial Services. In addition, the Superintendent is authorized to take possession of the business andproperty of BTMU and MUTB located in New York whenever events specified in the New York Banking Law
occur.
US banking subsidiaries.

We indirectly own and control two US banks:‰

Mitsubishi UFJ Trust & Banking Corporation (U.S.A.), New York, New York (through MUTB, aregistered bank holding company), and‰Union Bank (through BTMU and its subsidiary, UNBC, a registered bank holding company).

Mitsubishi UFJ Trust & Banking Corporation (U.S.A.) is chartered by the State of New York and is subject
to the supervision, examination and regulatory authority of the Superintendent pursuant to the New York
Banking Law. Union Bank is a national bank subject to the supervision, examination and regulatory authority of
the OCC pursuant to the National Bank Act.
The FDIC is the primary federal agency responsible for the supervision, examination and regulation of the
New York-chartered banks referred to above. The FDIC may take enforcement action, including the issuance ofprohibitive and affirmative orders, if it determines that a financial institution under its supervision has engaged inunsafe or unsound banking practices, or has committed violations of applicable laws and regulations. The FDIC
insures the deposits of both of our US banking subsidiaries up to legally specified maximum amounts. In theevent of a failure of an FDIC-insured bank, the FDIC is virtually certain to be appointed as receiver, and would
42

resolve the failure under provisions of the Federal Deposit Insurance Act. An FDIC-insured institution that isaffiliated with a failed or failing FDIC-insured institution can be required to indemnify the FDIC for losses
resulting from the insolvency of the failed institution, even if this causes the affiliated institution also to become
insolvent. In the liquidation or other resolution of a failed FDIC-insured depository institution, deposits in its US
offices and other claims for administrative expenses and employee compensation are afforded priority over othergeneral unsecured claims, including deposits in offices outside the United States, non-deposit claims in all offices
and claims of a parent company. Moreover, under longstanding Federal Reserve Board policy, a bank holding
company is expected to act as a source of financial strength for its banking subsidiaries and to commit resources
to support such banks.
Bank capital requirements and capital distributions. Our US banking subsidiaries are subject to applicablerisk-based and leverage capital guidelines issued by US regulators for banks and bank holding companies. In
addition, BTMU and MUTB, as foreign banking organizations that have US branches and agencies and that arecontrolled by us as a financial holding company, are subject to the Federal Reserve’s requirements that they be“well-capitalized” based on Japan’s risk based capital standards, as well as “well managed.” All of our US
banking subsidiaries and BTMU, MUTB, and UNBC are “well capitalized” as defined under, and otherwise
comply with, all US regulatory capital requirements applicable to them. The Federal Deposit Insurance
Corporation Improvement Act of 1991, or FDICIA, provides, among other things, for expanded regulation of
insured depository institutions, including banks, and their parent holding companies. As required by FDICIA, thefederal banking agencies have established five capital tiers ranging from “well capitalized” to “criticallyundercapitalized” for insured depository institutions. As an institution’s capital position deteriorates, the federalbanking regulators may take progressively stronger actions, such as further restricting affiliate transactions,activities, asset growth or interest payments. In addition, FDICIA generally prohibits an insured depository
institution from making capital distributions, including the payment of dividends, or the payment of any
management fee to its holding company, if the insured depository institution would subsequently become
undercapitalized.
The availability of dividends from insured depository institutions in the United States is limited by various
other statutes and regulations. The National Bank Act and other federal laws prohibit the payment of dividends
by a national bank under various circumstances and limit the amount a national bank can pay without the priorapproval of the OCC. In addition, state-chartered banking institutions are subject to dividend limitations imposedby applicable federal and state laws.
Other regulated US subsidiaries. Our nonbank subsidiaries that engage in securities-related activities in
the United States are regulated by appropriate functional regulators, such as the SEC, any self-regulatoryorganizations of which they are members, and the appropriate state regulatory agencies. These nonbank
subsidiaries are required to meet separate minimum capital standards as imposed by those regulatory authorities.
Anti-Money Laundering Initiatives and the USA PATRIOT Act. A major focus of US governmental policy
relating to financial institutions in recent years has been aimed at preventing money laundering and terrorist
financing. The USA PATRIOT Act of 2001 substantially broadened the scope of US anti-money laundering laws
and regulations by imposing significant new compliance and due diligence obligations, creating new crimes andpenalties and expanding the extra-territorial jurisdiction of the United States. The US Department of the Treasury
has issued a number of implementing regulations that impose obligations on financial institutions to maintainappropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist
financing, and to verify the identity of their customers. In addition, the bank regulatory agencies carefully
scrutinize the adequacy of an institution’s policies, procedures and controls. As a result, there has been an
increased number of regulatory sanctions and law enforcement authorities have been taking a more active role inenforcing these laws. Failure of a financial institution to maintain and implement adequate policies, procedures
and controls to prevent money laundering and terrorist financing could in some cases have serious legal andreputational consequences for the institution, including the incurrence of expenses to enhance the relevant
programs, the imposition of limitations on the scope of their operations and the imposition of fines and othermonetary penalties.
43

Foreign Corrupt Practices Act. In recent years, US regulatory and enforcement agencies including the US
Securities and Exchange Commission and the US Department of Justice have significantly increased theirenforcement efforts of the Foreign Corrupt Practices Act, or the FCPA. The FCPA prohibits US securities
issuers, US domestic entities, and parties doing substantial business within the United States (including theirshareholders, directors, agents, officers, and employees) from making improper payments to non-US government
officials in order to obtain or retain business. The FCPA also requires US securities issuers to keep their books
and records in detail, accurately, and in such a way that they fairly reflect all transactions and dispositions ofassets. Those enforcement efforts have targeted a wide range of US and foreign-based entities and have been
based on a broad variety of alleged fact patterns, and in a number of cases have resulted in the imposition ofsubstantial criminal and civil penalties or in agreed payments in settlement of alleged violations. Failure of afinancial institution doing business in the United States to maintain adequate policies, procedures, internal
controls, and books and records on a global basis that address compliance with FCPA requirements could insome cases have serious legal and reputational consequences for the institution, including the incurrence ofexpenses to enhance the relevant programs and the imposition of fines and other monetary penalties.
Regulatory Reform Legislation. In response to the global financial crisis and the perception that lax
supervision of the financial industry in the United States may have been a contributing cause, new legislation
designed to reform the system for supervision and regulation of financial firms doing business in the UnitedStates, the so-called Dodd-Frank Act, was signed into law on July 21, 2010. The Dodd-Frank Act is complex andextensive in its coverage and contains a wide range of provisions that would affect financial institutions operatingin the United States, including our US operations. Included among these provisions are sweeping reforms
designed to reduce systemic risk presented by very large financial firms, promote enhanced supervision,
regulation, and prudential standards for financial firms, establish comprehensive supervision of financial
markets, impose new limitations on permissible financial institution activities and investments, expand regulationof the derivatives markets, protect consumers and investors from financial abuse, and provide the government
with the tools needed to manage a financial crisis. Many aspects of the legislation require subsequent regulatory
action by supervisory agencies for full implementation and, to date, a number of proposals for regulatory rulemaking have been issued by those supervisory agencies that, if finally adopted, would have an impact on ouroperations. Since those rules are, for the most part, not yet adopted in final form, at this time we are unable toassess with certainty the potential impact of the Dodd-Frank Act on our operations.
Currently, the components of the Dodd-Frank Act that may impact our operations are the provisions relating
to the “Volcker Rule,” enhanced prudential standards (including capital requirements, resolution plans, and credit
reporting), derivatives regulation (including the swap push-out provisions), incentive-based compensation, theestablishment of the Consumer Financial Protection Bureau, and debit interchange fees. Although most of theregulatory rules regarding the foregoing components are still pending, based on information currently available
to us, other than as discussed below, the impact of these components is expected to be mainly limited to our US
operations and not to be material to us on a consolidated basis. We intend to continue to monitor developments
relating to the Dodd-Frank Act and the potential impact on our activities inside and outside of the United States.
Under the Volcker Rule, we would be required to cease conducting certain proprietary trading activities(i.e., trading in securities and financial instruments for our own account) subject to certain exceptions including
market-making, hedging, and underwriting activities if such activities are conducted within a rigorouscompliance framework. While the Volcker Rule was intended to exclude restrictions on proprietary trading
activities conducted solely outside of the United States, US regulators have not yet finalized rules or guidance on
the application of this intended limitation. Most of our proprietary trading activities are generally executed
outside of the United States, and we have only limited proprietary trading activity in our US subsidiaries.
Accordingly, if the US regulators limit the extraterritorial application of the Volcker Rule to exclude ourproprietary trading activities conducted outside of the United States, we do not expect the proprietary trading
revenues attributable to our US subsidiaries as a result of the implementation of the Volcker Rule to be material
to our operations based on our current revenues attributable to the proprietary trading activities conducted in our
US subsidiaries.
44

US regulators have also begun to issue final regulations governing swaps and derivatives markets ascontemplated by the Dodd-Frank Act. We expect that the swaps activities of some of our subsidiaries and theirbranches will require such subsidiaries and branches to register as swap dealers with the US Commodity Futures
Trading Commission and the US Securities and Exchange Commission during 2012. The regulations will impose
substantial new requirements governing the conduct of swaps activities subject to the Dodd-Frank Act. US
regulators have issued proposed guidance on the application of US regulations to activities of registered swap
dealers outside of the United States. The potential extraterritorial application of swap dealer regulatory
requirements, as proposed, could impose significant operational and compliance burdens on our swaps activities
outside of the United States.
Foreign Account Tax Compliance Act. The Hiring Incentives to Restore Employment Act was enacted in
March 2010 and contains provisions commonly referred to as FATCA. The US Department of the Treasury, or
the US Treasury, acting through the Internal Revenue Service, is responsible for issuing regulations
implementing FATCA. Although the US Treasury has issued preliminary guidance for implementation, including
proposed regulations, final comprehensive rules and regulations governing implementation of FATCA have notyet been issued. Moreover, the United States and Japan have agreed to pursue a framework for intergovernmental
cooperation to facilitate the implementation of FATCA. However, the details of this framework have not yet
been finalized. FATCA is likely to require non-US financial institutions to develop extensive systems capabilities
and internal processes to identify and report US persons who are subject to FATCA requirements. Developing
and implementing those capabilities and processes is likely to be a complex and costly process and failure to do
so in an adequate manner may subject any institution that fails to do so to serious legal and reputational
consequences, including the imposition of fines and other monetary penalties. At this time we are unable toassess with certainty the potential impact of FATCA on our operations.
Recent Regulatory and Other Legal Developments. We have received requests and subpoenas for
information from government agencies in some jurisdictions, including the United States and Europe, which areconducting investigations into past submissions made by panel members, including us, to the bodies that set
various interbank offered rates. We are cooperating with these investigations. In addition, we and other panel
members have been named as defendants in a number of civil lawsuits, including putative class actions, in the
United States relating to similar matters. See “Item 3. Key Information—Risk Factors—Risks Related to Our
Business—Regulatory matters and any future regulatory matters or regulatory changes could have a negative
impact on our business and results of operations.”

45

C.

Organizational Structure
The following chart presents our corporate structure summary as of March 31, 2012:
Mitsubishi UFJ Financial Group, Inc.
Domestic
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

kabu.com Securities Co., Ltd.
Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd.
MU Frontier Servicer Co., Ltd.
NBL Co., Ltd.
The Mitsubishi UFJ Factors Limited
Mitsubishi UFJ Research and Consulting Co., Ltd.
Mitsubishi UFJ Capital Co., Ltd.
BOT Lease Co., Ltd.
Overseas
UnionBanCal Corporation
BTMU Capital Corporation
PT U Finance Indonesia
PT. BTMU-BRI FinanceDomestic
Mitsubishi UFJ Trust andBanking Corporation

Mitsubishi UFJ Financial GroupBTMU Leasing & Finance, Inc.

Mitsubishi UFJ Trust and Banking Corporation
The Master Trust Bank of Japan, Ltd.
Mitsubishi UFJ Real Estate Services Co., Ltd.
Mitsubishi UFJ Asset Management Co., Ltd.
Overseas
Mitsubishi UFJ Trust & Banking Corporation (U.S.A.)
Mitsubishi UFJ Global Custody S.A.
Mitsubishi UFJ Trust International Limited

Mitsubishi UFJ Securities
Holdings Co., Ltd.

Domestic
Mitsubishi UFJ Securities Holdings Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
KOKUSAI Asset Management Co., Ltd.
Overseas
Mitsubishi UFJ Securities International plc
Mitsubishi UFJ Securities (USA), Inc.
Mitsubishi UFJ Wealth Management Bank (Switzerland), Ltd.

(1)

CF subsidiaries

Mitsubishi UFJ Securities (HK) Holdings, Limited
Domestic
Mitsubishi UFJ NICOS Co., Ltd.

Note:
(1) Consumer finance subsidiaries

46

Set forth below is a list of our principal consolidated subsidiaries at March 31, 2012:
Proportion of
Ownership
Interest

Proportion of
VotingInterest (1)Name

Country ofIncorporation

The Bank of Tokyo-Mitsubishi UFJ, Ltd. ..................................................

Japan

kabu.com Securities Co., Ltd. .....................................................................

Japan

56.09%

56.09%

Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd. ..............................

Japan

50.98%

50.98%(%)(%)

100.00%100.00%MU Frontier Servicer Co., Ltd. ...................................................................

Japan

96.47%

96.47%NBL Co., Ltd. ..............................................................................................

Japan

49.74%

49.74%The Mitsubishi UFJ Factors Limited ..........................................................
Mitsubishi UFJ Research and Consulting Ltd. ..........................................

Japan
Japan

100.00%69.45%

100.00%69.45%

Mitsubishi UFJ Capital Co., Ltd. ................................................................

Japan

41.21%

41.21%

BOT Lease Co., Ltd. ...................................................................................

Japan

22.57%

22.57%

Tokyo Credit Services, Ltd. ........................................................................

Japan

74.00%

74.00%

Tokyo Associates Finance Corp. ...............................................................

Japan

100.00%100.00%Mitsubishi UFJ Personal Financial Advisers Co., Ltd. ..............................
MU Business Engineering, Ltd. .................................................................

Japan
Japan

73.69%
100.00%73.69%
100.00%100.00%Japan Electronic Monetary Claim Organization .........................................

Japan

100.00%Defined Contribution Plan Consulting of Japan Co., Ltd. ..........................

Japan

77.49%

77.49%

Mitsubishi UFJ Information Technology, Ltd. ..........................................

Japan

100.00%100.00%Mitsubishi UFJ Staff Service Co., Ltd. .......................................................

Japan

100.00%100.00%Mitsubishi UFJ Home Loan Credit Co., Ltd. ..............................................

Japan

99.88%

99.88%MU Business Service Co., Ltd. ..................................................................

Japan

100.00%100.00%Mitsubishi UFJ Trust and Banking Corporation .......................................

Japan

100.00%100.00%The Master Trust Bank of Japan, Ltd. .......................................................

Japan

46.50%

46.50%MU Investments Co., Ltd. ..........................................................................

Japan

100.00%100.00%Mitsubishi UFJ Real Estate Services Co., Ltd. ...........................................

Japan

100.00%100.00%Ryoshin DC Card Company, Ltd. ...............................................................

Japan

100.00%100.00%Mitsubishi UFJ Asset Management Co., Ltd. ...........................................

Japan

100.00%100.00%Mitsubishi UFJ Securities Holdings Co., Ltd. ...........................................

Japan

100.00%100.00%Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. .................................

Japan

60.00%

60.00%

KOKUSAI Asset Management Co., Ltd. ...................................................

Japan

66.92%

66.97%MU Hands-on Capital Co., Ltd. ..................................................................

Japan

50.00%

50.00%

Mitsubishi UFJ NICOS Co., Ltd. ................................................................

Japan

84.98%

84.98%

UnionBanCal Corporation ..........................................................................

USA

100.00%100.00%BTMU Capital Corporation ........................................................................

USA

100.00%100.00%BTMU Leasing & Finance, Inc. .................................................................

USA

100.00%100.00%Bank of Tokyo-Mitsubishi UFJ (China), Ltd. ............................................

China

100.00%100.00%PT U Finance Indonesia .............................................................................

Indonesia

95.00%

95.00%

PT. BTMU-BRI Finance .............................................................................

Indonesia

55.00%

55.00%BTMU Participation (Thailand) Co., Ltd. ...................................................

Thailand

24.49%

24.49%BTMU Lease (Deutschland) GmbH ...........................................................

Germany

100.00%100.00%Mitsubishi UFJ Trust & Banking Corporation (U.S.A.) .............................
Mitsubishi UFJ Trust International Limited ..............................................

USA

100.00%100.00%100.00%100.00%Mitsubishi UFJ Baillie Gifford Asset Management Limited .....................

UK
UK

51.00%

51.00%

Mitsubishi UFJ Global Custody S.A. .......................................................

Luxembourg

100.00%100.00%Mitsubishi UFJ Securities (USA), Inc. .....................................................

USA

100.00%100.00%Mitsubishi UFJ Securities International plc .............................................
Mitsubishi UFJ Securities (HK) Holdings, Limited ..................................

UK
Peoples' Republicof China

100.00%100.00%100.00%100.00%Mitsubishi UFJ Securities (Singapore), Limited ......................................

Singapore

100.00%100.00%Mitsubishi UFJ Wealth Management Bank (Switzerland), Ltd. ................

Switzerland

100.00%100.00%Note:(1) Includes shares held in trading accounts, custody accounts and others.

47

D.

Property, Plant and Equipment
Premises and equipment at March 31, 2011 and 2012 consisted of the following:
At March 31,
2011
2012
(in millions)Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 391,602 ¥ 381,977
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
694,384
708,223
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
667,073
687,228
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
225,407
233,123
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,007
19,330Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,993,473
1,030,925

2,029,881
1,042,407

Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 962,548¥ 987,474

Our registered address is 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan. At March 31,
2012, we and our subsidiaries conducted our operations either in premises we owned or in properties we leased.
The following table presents the book values of our material offices and other properties at March 31, 2012:
Book value(in millions)

Owned land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Owned buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥381,977
219,846

The buildings and land we own are primarily used by us and our subsidiaries as offices and branches. Mostof the buildings and land we own are free from material encumbrances.
During the fiscal year ended March 31, 2012, we invested approximately ¥131.2 billion, primarily for officerenovations and relocation.
Item 4A. Unresolved Staff Comments.
None.

48

Item 5.

Operating and Financial Review and Prospects.

The following discussion and analysis should be read in conjunction with “Item 3.A. Key Information—
Selected Financial Data,” “Selected Statistical Data” and our consolidated financial statements and related
notes included elsewhere in this Annual Report.
Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Critical Accounting Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Changes and Recently Issued Accounting Pronouncements . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50
56
64
69
76

A.

Operating Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Segment Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Geographic Segment Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of Change in Exchange Rates on Foreign Currency Translation . . . . . . . . . . . . . . . . . . . . . . .

76
76
89
95
96

B.

Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-exchange Traded Contracts Accounted for at Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97
97
119
124

C.

Research and Development, Patents and Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124

D.

Trend Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124

E.

Off-Balance Sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

125

F.

Tabular Disclosure of Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126

G.

Safe Harbor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126

49

Introduction
We are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU, Mitsubishi UFJ Trustand Banking Corporation, or MUTB, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., or MUMSS (throughMitsubishi UFJ Securities Holdings Co., Ltd., or MUSHD, an intermediate holding company), Mitsubishi UFJ
NICOS Co., Ltd., or Mitsubishi UFJ NICOS, and other subsidiaries. Through our subsidiaries and affiliatedcompanies, we engage in a broad range of financial businesses and services, including commercial banking,investment banking, trust banking and asset management services, securities businesses, and credit cardbusinesses, and provide related services to individual and corporate customers.
Key Income and Expense Figures
The following are some key figures prepared in accordance with US GAAP relating to our business:
Fiscal years ended March 31,
2010
2011
2012
(in billions, except per share data)

Net interest income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,983.5 ¥ 1,879.5 ¥ 1,955.8
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
647.8
292.0
223.8
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,469.4
1,694.8
1,440.6
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,508.1
2,460.5
2,322.7
Net income before attribution of noncontrolling interests . . . . . . . . . . . .
884.0
388.1
420.7
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . .
868.7
452.6
416.2
Diluted earnings per common share—net income available to commonshareholders of Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . .
68.59
30.43
28.09
Total assets (at end of fiscal year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
200,081.5
202,850.2
215,202.5
Note:(1) Interest income for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on conversion rate adjustment of convertible
preferred stock. Exclusive of the one-time gain associated with the conversion, interest income for the fiscal year ended March 31, 2012
would have been lower.

Our revenues consist of net interest income and non-interest income.
Net interest income.

Net interest income is a function of:‰

the amount of interest-earning assets,‰

the amount of interest-bearing liabilities,‰

the general level of interest rates,‰

the so-called “spread,” or the difference between the rate of interest earned on interest-earning assets
and the rate of interest paid on interest-bearing liabilities, and‰the proportion of interest-earning assets financed by non-interest-bearing liabilities and equity.

Our net interest income for the fiscal year ended March 31, 2012 increased compared to that for the priorfiscal year, mainly due to the recognition as interest income of a ¥139.3 billion gain realized from an adjustment
to the conversion rate associated with the conversion of Morgan Stanley’s preferred stock into Morgan Stanley’scommon stock. The average lending volumes, however, slightly decreased. Although there was a slight
improvement in interest rate spread due to the recognition of the gain stated above, the low global interest rateenvironment continued to affect our overall interest rate spread during the fiscal year ended March 31, 2012.
Excluding the effect of the gain realized in connection with our conversion of Morgan Stanley’s preferred stockof ¥139.3 billion for the fiscal year ended March 31, 2012 and the related preferred dividends of ¥66.0 billion for
the fiscal year ended March 31, 2011, the average interest rate spread decreased 0.01 percentage points from50

0.96% for the fiscal year ended March 31, 2011 to 0.95% for the fiscal year ended March 31, 2012. For more
information on the conversion of Morgan Stanley’s preferred stock, see “—Recent Developments” below.
The following table shows changes in our net interest income by changes in volume and by changes in rates
for the fiscal year ended March 31, 2011 compared to the fiscal year ended March 31, 2010 and the fiscal year
ended March 31, 2012 compared to the fiscal year ended March 31, 2011:
Fiscal year ended March 31, 2010
Fiscal year ended March 31, 2011
versusversusfiscal year ended March 31, 2011
fiscal year ended March 31, 2012
Increase (decrease)
Increase (decrease)
due to changes indue to changes inVolume(1)Rate(1)
Net change
Volume(1)Rate(1)
Net change(in millions)

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign(2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(41,926) ¥(56,372) ¥ (98,298) ¥(51,014) ¥ (36,835) ¥ (87,849)
35,377(41,074)(5,697)43,905120,290
164,195¥ (6,549) ¥(97,446) ¥(103,995) ¥ (7,109) ¥ 83,455¥ 76,346

Notes:(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “netchange.”(2) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on conversion rateadjustment of convertible preferred stock. Exclusive of the one-time gain associated with the conversion, the increases would have beensmaller for the fiscal year ended March 31, 2012 compared to the fiscal year ended March 31, 2011. For more information, see “Selected
Statistical Data.”

The following is a summary of the amount of interest-earning assets and interest-bearing liabilities averageinterest rates, the interest rate spread and non-interest-bearing liabilities for the fiscal years ended March 31,
2010, 2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
Average
Average
Average
Average
Average
Averagebalanceratebalanceratebalancerate(in billions, except percentages)

Interest-earning assets:
Domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign(1) . . . . . . . . . . . . . . . . . . . . . . .

¥127,830.2
47,540.5

1.34% ¥130,922.3
2.20
49,338.1

1.16% ¥130,856.7
2.08
53,322.4

1.07%
2.24

Total . . . . . . . . . . . . . . . . . . . . . .

¥175,370.7

1.57% ¥180,260.4

1.41% ¥184,179.1

1.41%

Financed by:Interest-bearing liabilities:
Domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . .

¥124,431.3
33,725.1

0.37% ¥126,908.2
0.93
34,436.5

0.29% ¥130,916.6
0.87
34,504.0

0.26%
0.88

Total . . . . . . . . . . . . . . . . . . . . . .
Non-interest-bearing liabilities . . . . . . . . . .

158,156.4
17,214.3

0.49
—

0.42
—

0.39
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

¥175,370.7

0.44% ¥180,260.4

0.37% ¥184,179.1

0.35%

1.08%

0.99%

1.02%

1.13%

1.04%

1.06%

Interest rate spread . . . . . . . . . . . . . . . . . . .
Net interest income as a percentage of totalinterest-earning assets . . . . . . . . . . . . . . .

161,344.7
18,915.7

165,420.6
18,758.5

Note:(1) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on conversion rateadjustment of convertible preferred stock. Exclusive of the one-time gain associated with the conversion, the average rate for the fiscal
year ended March 31, 2012 would have been lower. For more information, see “Selected Statistical Data.”

51

Provision for credit losses. Provision for credit losses is charged to operations to maintain the allowancefor credit losses at a level deemed appropriate by management. For the description of the approach andmethodology used to establish the allowance for credit losses, see “—B. Liquidity and Capital
Resources—Financial Condition—Loan Portfolio—Allowance policy.”
Non-interest income.
‰Non-interest income consists of:fees and commissions income, including‰

trust fees,‰

fees on funds transfer and service charges for collections,‰

fees and commissions on international business,‰fees and commissions on credit card business,‰

service charges on deposits,‰

fees and commissions on securities business,‰fees on real estate business,‰insurance commissions,‰

fees and commissions on stock transfer agency services,‰guarantee fees,‰

fees on investment funds business, and‰other fees and commissions;‰foreign exchange gains—net, which include gains (losses) on foreign exchange derivative contracts (forexample, foreign exchange gains and losses on currency derivatives), foreign exchange gains (losses)
other than derivative contracts (for example, gains and losses on foreign exchange transactions), andforeign exchange gains (losses) related to the fair value option (for example, foreign exchange gains(losses) on securities under the fair value option);‰trading account profits—net, which primarily include net profits (losses) on trading account securities
and interest rate derivative contracts entered into for trading purposes, including assets relating to thefollowing activities:‰

trading purpose activities, which are conducted mainly for the purpose of generating profits either
through transaction fees or arbitrage gains and involve frequent and short-term selling and buying of
securities, commodities or others; and‰trading account assets relating to application of certain accounting rules, which are generally not
related to trading purpose activities, but are classified as trading accounts due to application ofcertain accounting rules, such as assets that are subject to fair value option accounting treatment orinvestment securities held by variable interest entities that are classified as trading accountsecurities;
Of the two categories, trading purpose activities represent a smaller portion of our trading accounts
profits;‰

investment securities gains—net, which primarily include net gains or losses on sales and impairment
losses on securities available for sale;‰equity in losses of equity method investees—net, which includes our equity interest in the earnings of
our equity investees and impairment losses on our investments in equity method investees;‰

gains on sales of loans; and‰other non-interest income.
52

The following table is a summary of our non-interest income for the fiscal years ended March 31, 2010,2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
(in billions)

Fees and commissions income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,139.5 ¥1,128.4 ¥1,100.0
Foreign exchange gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
216.7
260.7
34.3
Trading account profits—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
761.5
133.9
667.3
Investment securities gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
223.0
121.8
19.4
Equity in losses of equity method investees—net . . . . . . . . . . . . . . . . . . . . . . . . .
(83.9)(113.0)(499.4)
Gains on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.2
14.5
15.6
Other non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
191.4
148.5
103.4
Total non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,469.4¥1,694.8¥1,440.6

Core Business Areas
We operate our main businesses under an integrated business group system, which integrates the operationsof BTMU, MUTB, MUMSS (through MUSHD), Mitsubishi UFJ NICOS and other subsidiaries in the following
four areas—Retail, Corporate, Trust Assets, and Global. Of these four, the Integrated Global Business Group wasadded as of July 1, 2011 by shifting most of our global operations mainly from the Integrated Corporate Banking
Group to more effectively coordinate and enhance group-wide efforts to strengthen and expand our overseas
operations. These four businesses serve as the core sources of our revenue. Operations that are not covered under
the integrated business group system are classified under Global Markets and Other. For further information, see“—A. Operating Results—Business Segment Analysis.”Our business segment information is based on financial information prepared in accordance with Japanese
GAAP, as adjusted in accordance with internal management accounting rules and practice and is not consistent
with our consolidated financial statements included elsewhere in this Annual Report, which have been preparedin accordance with US GAAP. For information on a reconciliation of operating profit under our internalmanagement reporting system to income before income tax expense shown on the consolidated statements ofincome, see Note 27 to our consolidated financial statements included elsewhere in this Annual Report. The
following table sets forth the relative contributions to operating profit for the fiscal year ended March 31, 2012 of
the four core business areas and the other business areas based on our business segment information:
Global Business
Integrated Integrated Integrated IntegratedGroup
RetailCorporate
Trust
Banking
Banking
AssetsOther
GlobalBusiness Business Businessthan
Total Markets
Group
Group
Group
UNBC UNBC(in billions)

Other

Total

Net revenue . . . . . . . . . . . ¥1,274.1 ¥884.8
Operating expenses . . . . .
903.6 447.7¥140.5 ¥401.1 ¥252.0 ¥653.1 ¥690.7
87.3 225.1 173.0 398.1
96.6¥ (49.7)
165.4¥3,593.5
2,098.7

Operating profit (loss) . . . ¥ 370.5 ¥437.1¥ 53.2 ¥176.0 ¥ 79.0 ¥255.0 ¥594.1¥(215.1)¥1,494.8

Summary of Our Recent Financial Results and Financial Condition
We reported net income attributable to Mitsubishi UFJ Financial Group of ¥416.2 billion for the fiscal year
ended March 31, 2012, compared to ¥452.6 billion for the fiscal year ended March 31, 2011. Our diluted
earnings per share of common stock (net income available to common shareholders of Mitsubishi UFJ Financial
Group) for the fiscal year ended March 31, 2012 was ¥28.09, compared to diluted earnings per share of common
53stock of ¥30.43 for the fiscal year ended March 31, 2011. Income before income tax expense for the fiscal year
ended March 31, 2012 was ¥849.9 billion, compared to income before income tax expense of ¥821.8 billion for
the fiscal year ended March 31, 2011.
Our business and results of operations as well as our assets are heavily influenced by trends in economic
conditions particularly in Japan. In the first half of fiscal year ended March 31, 2012, the Japanese economy
demonstrated modest recovery from the Great East Japan Earthquake and ensuing tsunami in the northern regionof Japan that occurred on March 11, 2011 as well as the subsequent accidents at the Fukushima Daiichi Nuclear
Power Plants, with a quarter-on-quarter real GDP growth rate of 1.9% in the July-September 2011 period,
following a negative quarter-on-quarter growth rate of 0.4% in the April-June 2011 period. The growth in the
July-September 2011 period particularly reflected a recovery in the supply chains disrupted by the earthquake, anincrease in exports supported by increased manufacturing activities and improved consumer sentiment. The
Japanese economy slowed down again with marginal quarter-on-quarter GDP growth in the October-December
2011 period, mainly due to a decrease in net exports reflecting the weak overseas economy and an increase infuel imports for thermal electricity generation. The January-March 2012 period, however, demonstrated an
upward trend again with a quarter-on-quarter real GDP growth rate of 1.2%, particularly supported by stronger
consumer spending, backed partially by the restart of government subsidies for environmentally friendly carpurchases, and an increase in public project spending as a result of the full implementation of the government’s
supplementary budget for post-earthquake restoration projects. Due to the weak overseas economy and persistent
appreciation of the Japanese yen, the Japanese economy as a whole has not recovered fully, and remains
vulnerable to negative external factors.
Reflecting the weak economic fundamentals, the closing price of the Nikkei Stock Average fluctuatedthroughout the fiscal year ended March 31, 2012. The Nikkei Stock Average moved around ¥10,000 until late
July 2011, followed by a declining trend towards late November 2011 when it reached the low ¥8,000s. It thenimproved to the ¥10,000s in late March 2012, followed then by a decline to the mid ¥8,000s to low ¥9,000s range
through early July 2012. On top of the uncertainties overlaying the Japanese economy, fluctuations in the Nikkei
Stock Average have mainly reflected volatility in the global economy and weak investor sentiment that remains
cautious in light of uncertainties surrounding the global financial and capital markets and, to some extent, theappreciating Japanese yen and the growing global competition adversely affecting Japanese companies.
See “—Business Environment” below.
For the fiscal year ended March 31, 2012, our domestic revenue, which consists of interest income andnon-interest income attributable to our operations in Japan, was ¥2,936.9 billion, while our total foreign revenue,
which consists of interest income and non-interest income attributable to our operations outside Japan, was¥1,099.6 billion, with revenue attributable to our operations in the United States contributing ¥192.8 billion, Asiaand Oceania excluding Japan contributing ¥450.6 billion, and Europe contributing ¥290.5 billion. As apercentage of total revenue, domestic revenue has declined for the three fiscal years ended March 31, 2012. For
the fiscal year ended March 31, 2012, domestic revenue represented 72.8% of total revenue.
For the fiscal year ended March 31, 2012, domestic net income attributable to Mitsubishi UFJ Financial
Group was ¥163.3 billion. Foreign net income attributable to Mitsubishi UFJ Financial Group was ¥252.9 billion
for the same period. In particular, Asia and Oceania excluding Japan contributed ¥192.8 billion, more than half ofwhich was derived from net income from China, while Europe contributed ¥113.6 billion, reflecting
improvements in net trading gains and net interest income. This was mainly due to reductions in losses in our
securities and consumer finance companies. In light of these trends, we plan to seek growth opportunities
particularly in Asia and Europe.
More specifically, our net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended
March 31, 2012 mainly reflected the following:‰

Net interest income was ¥1,955.8 billion, an increase of ¥76.3 billion from ¥1,879.5 billion for theprevious fiscal year mainly due to the recognition as interest income of the ¥139.3 billion gain realized54

from the adjustment to the conversion rate when we converted the Morgan Stanley’s preferred stock into
Morgan Stanley’s common stock. Exclusive of this one-time factor for the fiscal year ended March 31,
2012 and the related preferred dividends of ¥66.0 billion for the fiscal year ended March 31, 2011, net
interest income was ¥1,816.5 billion, an increase of ¥3.0 billion compared to the previous fiscal year;‰

Provision for credit losses was ¥223.8 billion, a decrease of ¥68.2 billion from ¥292.0 billion for theprevious fiscal year, primarily due to a decrease in domestic provision for credit losses, reflecting asmaller increase in restructured residential mortgage loans for the fiscal year ended March 31, 2012
compared to the fiscal year ended March 31, 2011, when we experienced a higher than usual increase insuch restructured residential mortgage loans;‰

Fees and commissions income for the fiscal year ended March 31, 2012 was ¥1,100 billion, a decrease of¥28.4 billion from ¥1,128.4 billion for the fiscal year ended March 31, 2011. This decrease was primarily
due to a decrease of ¥10.5 billion in fees and commissions from our securities business, reflecting theslowdown of the domestic market. The decrease in fees and commissions income was also due todecreases in trust fees, service charges on deposits, guarantee fees and fees from our investment funds
business, reflecting a general decrease in the volume of these businesses;‰

Net foreign exchange gains for the fiscal year ended March 31, 2012 were ¥34.3 billion, a decrease of¥226.4 billion from ¥260.7 billion for the fiscal year ended March 31, 2011. During the fiscal year
ended March 31, 2012, fluctuations in the exchange rate between the Japanese yen and the US dollar
remained relatively small compared to the previous fiscal year. As a result, foreign exchange gains otherthan derivative contracts decreased from the previous fiscal year, mainly due to a decrease in translation
gains on monetary liabilities denominated in foreign currencies. On the other hand, foreign exchange
losses related to the fair value option improved from the previous fiscal year, mainly due to translation
gains on securities denominated in foreign currencies;‰

Net trading account profits for the fiscal year ended March 31, 2012 were ¥667.3 billion, an increase of¥533.4 billion from ¥133.9 billion for the fiscal year ended March 31, 2011. The increase in net trading
account profits was largely due to an increase in net profits on trading account securities, excluding
derivatives. In particular, net profits on trading account securities under the fair value option increased
to ¥439.9 billion for the fiscal year ended March 31, 2012 from ¥68.6 billion for the fiscal year ended
March 31, 2011, mainly due to an increase in gains on valuation of foreign currency denominated debt
securities;‰

Net investment securities gains for the fiscal year ended March 31, 2012 were ¥19.4 billion, a decreaseof ¥102.4 billion from ¥121.8 billion for the fiscal year ended March 31, 2011. This decrease wasmainly due to a decrease of ¥53.3 billion in gains on sales of marketable equity securities, and anincrease ¥60.5 billion in impairment losses on marketable equity securities for the fiscal year ended
March 31, 2012, reflecting the weakness in the Japanese domestic stock prices following the Great East
Japan Earthquake; and‰Net equity in losses of equity method investees for the fiscal year ended March 31, 2012 were ¥499.4
billion, an increase of ¥386.4 billion from ¥113.0 billion for the fiscal year ended March 31, 2011,
mainly due to an impairment loss of ¥579.5 billion on our investment in Morgan Stanley’s common
stock, resulting from a decline in the quoted market price of Morgan Stanley’s common stock that wedetermined to be other than temporary in light of the increasingly stringent regulatory environment andthe existing adverse economic events in Europe. For further information, see Note 2 to our consolidated
financial statements included elsewhere in this Annual Report.

Our total loans outstanding at March 31, 2012 were ¥92.30 trillion, an increase of ¥4.80 trillion from¥87.50 trillion at March 31, 2011. Before unearned income, net unamortized premiums and net deferred loanfees, our loan balance at March 31, 2012 consisted of ¥68.20 trillion of domestic loans and ¥24.19 trillion of55

foreign loans. Between March 31, 2011 and March 31, 2012, domestic loans increased ¥0.65 trillion while
foreign loans increased ¥4.14 trillion. The increase in domestic loans was primarily due to an increase in ourloans outstanding to the other industries category, which includes the government sector, toward the end of the
fiscal year ended March 31, 2012, although the average total loan balance for the fiscal year ended March 31,
2012 decreased compared to the previous fiscal year. The increase in foreign loans was mainly due to higher loan
volume reflecting our increased activities in Asia excluding Japan, as well as the expansion of the foreign
operations of our banking subsidiaries.
Total allowance for credit losses at March 31, 2012 was ¥1,285.5 billion, an increase of ¥45.0 billion from
¥1,240.5 billion at March 31, 2011. This increase mainly reflected the deteriorating credit quality of our domestic
borrowers in the manufacturing industry and the wholesale and retail industry. Following the Great East Japan
Earthquake in March 2011, domestic industrial production weakened, which was adversely affecting many of ourborrowers in the manufacturing industry. Although the overall private consumption in Japan gradually improved,
the prices of most goods remained exposed to downward pressure, which had a negative impact on many of ourborrowers in the wholesale and retail industry, particularly small and medium-sized companies. These factors
contributing to the increase in total allowance were partially offset by the improved credit quality of the loan
portfolio of the UnionBanCal Corporation, or UNBC, and Card segments. The total allowance for credit losses
represented 1.39% of our total loan portfolio at March 31, 2012, a decrease of 0.03 percentage points from 1.42%
at March 31, 2011. The decrease in the ratio of the total allowance for credit losses to our total loan portfolio
primarily reflected the improved credit quality of the loan portfolio of the UNBC and Card segments. For more
information, see “—B. Liquidity and Capital Resources—Financial Condition—Loan Portfolio.”
Total investment securities increased ¥1.99 trillion to ¥61.04 trillion at March 31, 2012 from ¥59.05 trillion
at March 31, 2011, primarily due to an increase of ¥4.16 trillion in Japanese national government and Japanese
government agency bonds available for sale, partially offset by a ¥0.61 trillion decrease in corporate bonds and a¥0.22 trillion decrease in marketable equity securities, reflecting the general decline in Japanese stock prices andweak market fundamentals. Our investments in Japanese national government and government agency bonds
increased as part of our asset and liability management policy with respect to investing the amount of
yen-denominated deposit funds exceeding our net loans. As a result, our holdings of Japanese national andgovernment and Japanese government agency bonds as a percentage of our total assets have increased torelatively high levels, accounting for 23.0% of our total assets as of March 31, 2012.
The amortized cost of securities being held to maturity decreased ¥631.8 billion compared to the previous
fiscal year mainly due to a ¥436.3 billion decrease in Japanese national government and Japanese government
agency bonds and a ¥266.4 billion decrease in foreign governments and official institutions bonds as a result of
the redemption of multiple tranches of bonds at maturity, partially offset by an increase in asset backed securities
being held to maturity.
Other investment securities, consisting of nonmarketable equity securities, were primarily carried at cost of¥0.91 trillion at March 31, 2012, compared to ¥1.70 trillion at March 31, 2011. The decrease reflected theconversion of Morgan Stanley’s preferred stock into Morgan Stanley’s common stock which was reclassified
from Other investment securities to an investment in an equity method investee included in Other assets as ofMarch 31, 2012.
Our financial results for the fiscal year ending March 31, 2013, as well as our financial condition at the endof that period, are expected to be affected to a large extent by how our borrowers and the Japanese economy
respond to the effects of the Great East Japan Earthquake in March 2011 and changes in the global economic
conditions. The credit quality of some of our borrowers may deteriorate further than we currently expect, which
could affect our credit costs and loan portfolio. See “Item 3.D. Key Information—Risk Factors—Risks related to
Our Business—Because a large portion of our assets are located in Japan and our business operations are
conducted primarily in Japan, we may incur further losses if economic conditions in Japan worsen.” and“—Business Environment” below.
Business Environment
We engage, through our subsidiaries and affiliated companies, in a broad range of financial businesses andservices, including commercial banking, investment banking, trust banking and asset management services,56

securities businesses and credit card businesses, and provide related services to individuals primarily in Japanand the United States and to corporate customers around the world. Our results of operations and financial
condition are exposed to changes in various external economic factors, including:‰

general economic conditions;‰interest rates;‰

currency exchange rates; and‰stock and real estate prices.

Economic Environment in Japan
In the first half of fiscal year ended March 31, 2012, the Japanese economy demonstrated modest recovery
from the Great East Japan Earthquake and ensuing tsunami in the northern region of Japan that occurred on
March 11, 2011 as well as the subsequent accidents at the Fukushima Daiichi Nuclear Power Plants. A
quarter-on-quarter real GDP growth rate in the July-September 2011 period was 1.9%, following a negative
quarter-on-quarter growth rate of 0.4% in the April-June 2011 period. The growth in the July-September 2011
period particularly reflected a recovery in the supply chains disrupted by the earthquake, an increase in exports
supported by increased manufacturing activities and improved consumer sentiment.
The Japanese economy slowed down again with only a marginal quarter-on-quarter GDP growth in the
October-December 2011 period, mainly due to a decrease in net exports reflecting the weak overseas economy
and an increase in fuel imports for thermal electricity generation.
The January-March 2012 period, however, demonstrated an upward trend again with a quarter-on-quarter
real GDP growth rate of 1.2%, particularly supported by stronger consumer spending, backed partially by therestart of government subsidies for environmentally friendly car purchases, and an increase in public project
spending as a result of the full implementation of the government’s supplementary budget for post-earthquake
restoration projects. Due to the weak overseas economy and persistent appreciation of the Japanese yen, theJapanese economy as a whole has not yet recovered fully, and remains vulnerable to negative external factors.
Selected indicators for the most recent Japanese economy are discussed below:‰

Corporate Production: Industrial production plunged by 15.5% in March 2011 following the earthquake
especially led by an approximately 50% drop in production relating to transportation machinery (such as
automobiles). Although industrial production recovered slightly in the subsequent months, the supply
chains and networks for plants and other supplies were not fully restored, and production levels fortransportation machinery remained below pre-earthquake levels during the fiscal year ended March 31,
2012. Industrial production has been demonstrating improvement since the beginning of calendar 2012
in tandem with the gradual recovery in the Japanese economy supported by solid private consumption
and government support to accelerate the recovery. The Industrial Production Index surged by 1.3% inMarch 2012 compared to February 2012, continuing its upward trend following the earthquake inMarch 2011. Transportation machinery, chemical engineering, and information and communicationindustry contributed to the growth, while electronic device, paper and pulp, and textile industry plunged.
Although small, inventory investment by corporations also contributed by 0.3% to the real GDP growthin the January-March 2012 period. Careful attention is warranted as to how the economy and productionlevels will evolve going forward, which may be influenced by both positive factors such as restoration
demand in the northern region of Japan and negative factors such as a weak European economy.

‰

Net exports: Japan has experienced a trade deficit for the first time in 31 years in calender 2011, mainly
due to a decrease in exports following the earthquake and a high level of imports of oil and natural gas,along with persistent appreciation of the Japanese yen. Although gross exports significantly decreased57

following the earthquake in March 2011, gross exports started to increase in the January-March 2012
period. Gross exports rose by 3.0% quarter-on-quarter in the January-March 2012 period, mainly due toan increase in automobile exports to the United States, and an increase in general and electric machinery
exports to Asia. Although imports also increased by 1.9% quarter-on-quarter in the January-March 2012
period mainly due to an increase in imports of fuels for thermal electricity generation, growth in exports
exceeded that of imports, which, in turn, led to an increase in net exports by 1.1% quarter-on-quarter in
the January-March 2012 period.
‰

Employment Conditions: Employment conditions have been modest throughout calendar 2011 withstable yet lower than prior year unemployment rate of around 4.5% in calendar 2011 compared to that of
5.0% in calendar 2010. The number of employed workers and the average labor hours per employee
have also demonstrated gradual and steady improvement since the July-September 2011 period. The
unemployment rate in March 2012 remained as low as 4.5%.

‰

Private Consumption: Since the April-June 2011 period, private consumption, particularly that ofdurable goods, has been increasing steadily reflecting the gradual improvement in household disposable
income and employment condition. Real private consumption increased 1.2% quarter-on-quarter in theJanuary-March 2012 period, a fourth consecutive quarter of growth since the April-June 2011 period.
The growth was mainly led by an increase in consumption of durable goods, particularly supported byan increase in consumption of cars partially attributable to the restart of government subsidies forenvironmentally friendly cars. Improved consumer confidence also supported service industries such as
restaurant, leisure and travel. Private consumption is expected to be affected by the increases in the
consumption tax rate if the relevant proposed legislation is approved by the Japanese Diet, which would
raise the consumption tax rate from the current rate of 5% to 8% in April 2014, and to 10% in October
2015.

‰

Public Spending: Since the April-June 2011 period, public spending has been increasing partially due tothe implementation of a supplementary budget for the ongoing restoration initiatives in the northern
region of Japan. Public spending increased 1.3% quarter-on-quarter in the January-March 2012 period, afourth consecutive quarter of growth since the April-June 2011 period. The increase was mainly due toan increase in government spending in public goods and infrastructure, and multiple public projects
supported by the full implementation of the government’s supplementary budget for the post-earthquake
restoration projects.

The Bank of Japan maintained a monetary easing policy during the fiscal year ended March 31, 2012 tostimulate the economy that has been persistently weak since the financial crisis. In October 2010, the Bank ofJapan lowered its target interest rate to between 0% and 0.1% from 0.1% to support the economy and stimulate
sustainable growth. Furthermore, at the Monetary Policy Meeting held in February 2012, the Bank of Japan
introduced “the price stability goal in the medium to long term,” stating that the inflation rate that the Bank ofJapan judges to be consistent with price stability sustainable in the medium to long term is within a positive
range of 2% or lower in terms of the year-on-year rate of change in the Consumer Price Index, or CPI, and it set
the target inflation rate at 1% for the time being. At the April 2012 meeting, the Bank of Japan agreed to expand
the Asset Purchase Program, which is a program established to encourage a decline in longer-term interest rates
and risk premiums to enhance monetary easing by purchasing various financial assets and conducting fundssupplying operations against pooled collateral. For example, the Bank of Japan agreed to increase the purchase ofJapanese government bonds by approximately ¥10 trillion. Along with the monetary easing policy, the Bank ofJapan has maintained a very low policy rate (uncollateralized overnight call rate) of 0.10% or lower in an effort
to improve the economy.
Euro-yen 3-month TIBOR was around 0.33% as of early July 2012, the lowest level since 2006. Long-term
interest rates have also remained at the historical low level, due to uncertainty in the global economy, weakness
in stock prices and low expectations for a near-term rate increase in the United States, as the US government has
maintained a monetary easing policy. The yield on newly-issued ten-year Japanese government bonds fell toaround 0.81% as of early July 2012.
58

The following chart shows the interest rate trends in Japan since April 2010:
1.6

%

1.4
1.2
1.0
0.8
0.6
0.4
0.2

Ap
M r-10ay
Ju -10n
Ju -10Au l-10g
Se -10
p
O -10
ct
N -10
ov
D -10
ec
Ja -10n
Fe -11bM 11
aApr-11
M r-11ay
Ju -11n
Ju -11
Au l-11g
Se -11
p
O -11
ct
N -11
ov
D -11
ec
Ja -11n
Fe -12bM 12
aApr-12
M r-12ay
Ju -12n12

0.0

Newly Issued Japanese Government Bonds Yield (10 years) (End of Month)Uncollateralized Overnight Call Rates (End of Month)

Reflecting the weak economic fundamentals, the closing price of the Nikkei Stock Average fluctuatedthroughout the fiscal year ended March 31, 2012. The Nikkei Stock Average moved around ¥10,000 until late
July 2011, followed by a declining trend towards late November 2011 when it reached the low ¥8,000s. It thenimproved to the ¥10,000s in late March 2012, followed then by a decline to the mid ¥8,000s to low ¥9,000s range
through early July 2012. In addition to the uncertainties overlaying the Japanese economy, fluctuations in the
Nikkei Stock Average have mainly reflected volatility in the global economy and weak investor sentiment thatremains cautious in light of uncertainties surrounding the global financial and capital markets and, to someextent, the appreciating Japanese yen and the growing global competition adversely affecting Japanesecompanies. The closing price of the Tokyo Stock Price Index, or TOPIX, a composite index of all stocks listedon the First Section of the Tokyo Stock Exchange, has also been following the similar trend. It was around 850s
until late July 2011, followed by a declining trend until late November 2011 when it reached the 700s. It thenmoved upward to the high 800s towards the end of March 2012, followed by a persistent decline to the mid tohigh 700s range through early July 2012.

59

Despite the Bank of Japan’s policy to increase monetary supply, investor sentiment in the Japanese stock
market remains cautious due in part to uncertainty regarding the Japanese political leadership, the continuing
appreciation of the Japanese yen, the growing global competition adversely affecting Japanese companies, theweakness in the global economy, and the continuing uncertainties on how the global financial market will evolvein response to the sovereign financial crisis in some European countries. As of July 10, 2012, the closing price of
the Nikkei Stock Average was ¥8,857.73 and the TOPIX closed at 758.60. The following chart shows the daily
closing price of the Nikkei Stock Average since April 2010:
Yen
13,00012,00011,00010,000

9,000

8,000

Ap
rM 10
ay
Ju 10
nJu 10lAu 10
gSe 10
pO 10
ct
N 10
ov
D 10
ec
Ja 10
nFe 11
bM 11
ar
Ap 11
r
M -11
ay
Ju 11
nJu 11lAu 11
gSe 11
pO 11
ct
N -11
ov
D -11
ec
Ja 11
nFe 12
bM 12
ar
Ap 12
r-1
M 2
ay
Ju 12
nJu 12
l-1
2

7,000

Nikkei Stock Average

60

The Japanese yen appreciated against other currencies throughout the fiscal year ended March 31, 2012. The
Japanese yen appreciated from ¥83.15 to US$1 as of March 31, 2011 to ¥82.19 to US$1 as of March 30, 2012,
and then to ¥79.50 to US$1 as of July 10, 2012. The strong Japanese yen appears to reflect rising risk aversion
sentiment among Japanese investors and the lower interest rates outside of Japan, which led to lower capitaloutflow from Japan. The Japanese yen has also appreciated against the Euro during the period, as a result of thesovereign debt crisis and the subsequent tightening of monetary policies in Europe. The Japanese yen stood at¥109.80 to €1 as of March 30, 2012 as compared to ¥117.57 to €1 as of March 31, 2011. As of July 10, 2012, theJapanese yen was at ¥79.50 to US$1 and ¥97.75 to €1. The following chart shows the foreign exchange rates
expressed in Japanese yen per US dollar since April 2010:
Yen per US Dollar

Ap
r
M -10
ay
Ju 10
n1
Ju 0
l-1
Au 0
gSe 10
pO 10
ct
N 10
ov
D 10
ec
Ja 10
nFe 11
bM 11
ar
-1
Ap 1
r-1
M 1
ay
Ju 11
n1
Ju 1
l-1
Au 1
gSe 11
pO 11
ct
-1
N 1
ov
D 11
ec
Ja 11
nFe 12
bM 12
ar
Ap 12
r-1
M 2
ay
Ju 12
nJu 12
l-1
2

100
98
96
94
92
90
88
86
84
82
80
78
76
74
72
70

Yen/Dollar Spot Rate at 17:00 (Tokyo time)

In calendar 2011, the average prices for both residential and commercial real estate experienced declines forthe fourth consecutive year, although the pace of decline softened compared to the last year, reflecting the slightrecovery in the Japanese economy. According to a survey conducted by the Japanese government, the average
residential land price declined by 2.3% between January 1, 2011 and January 1, 2012. The average commercial
land price declined by 3.1% during the same period. In the three major metropolitan areas of Tokyo, Osaka andNagoya, the average residential land price declined by 1.3% between January 1, 2011 and January 1, 2012, while
the average commercial land price declined by 1.6% during the same period. In the local regions other than the
major metropolitan areas in Japan, the average residential and commercial land prices continued to decline forthe eighth consecutive year with the rates of decline between January 1, 2011 and January 1, 2012 being 3.3%
and 4.3%, respectively.
According to Teikoku Databank, a Japanese research institution, the number of companies that filed forlegal bankruptcy in Japan from April 2011 to March 2012 was 11,435, a decrease by 0.5% from the previous
fiscal year, reflecting a moderate recovery of the Japanese economy for the fiscal year ended March 31, 2012.
More specifically, the decrease in the number of companies that filed for legal bankruptcy was mainly due to thepositive effects of the Japanese government’s economic stimulus measures which financially supported various
industries’ restoration processes. The aggregate amount of liabilities subject to bankruptcy filings between April
2011 and March 2012 was approximately ¥3.92 trillion, a 14.1% decrease attributable to a decrease in thenumber of large bankruptcy filings (with the amount of liabilities ¥10 billion or higher) although the number ofsmall bankruptcy filings (the amount of liabilities ¥50 million or less) increased.

61

International Financial Markets
US Economy:
The US economy continued to improve with the annualized real GDP growth rate averaging 1.7% in
calendar 2011. Real GDP grew at an annualized rate of 3.0% quarter-on-quarter in the October-December 2011
period, the highest in six consecutive quarters. As a whole, exports have been declining and capital expenditures
slowing, but consumption has been firm and residential and commercial investments have contributed to thegrowth. This trend continued throughout the January-March 2012 period with annualized quarter-on-quarter real
GDP growth rate of 1.9%, particularly supported by strong momentum in consumer consumption withannualized quarter-on-quarter growth of 2.5%. However, uncertainties still remain over whether the US economy
will continue to improve, especially in light of the volatility in the global financial markets.
Selected indicators for the most recent status of the US economy are discussed below:‰

According to the US Bureau of Labor Statistics, the unemployment rate decreased from its cyclical highat around 10% in April 2010 to 8.2% in May 2012. Productivity growth remained weak and work hours
have just recovered to the pre-financial crisis level, leaving potential for improvement in employment
conditions.

‰

Consumption, which accounts for approximately 70% of the US real GDP, grew 2.5% quarter-onquarter in the January-March 2012 period, mainly due to an increase in spending on durable goods, suchas cars, and leisure spending, such as dining out or sports goods reflecting warm weather and improved
employment conditions, partially offset by the negative wealth effect and an increase in energy prices
such as gasoline. The University of Michigan consumer sentiment index improved to the high 70s in
May 2012 after a precipitous drop to the 50s in mid 2011.

‰

Business sentiment, overall, has been improving since the fall of 2011. Capital expenditures grew 3.1%
annualized quarter-on-quarter in the January-March 2012 period mainly due to an increase in investment
in machinery and software industries, partially offset by a decrease in investment in mining industries.
Investment in inventory grew 0.1% annualized quarter-on-quarter in the same period, demonstrating
weaker growth than capital expenditures, mainly due to an accumulation of inventory levels since theOctober-December 2011 period.

‰

The Consumer Price Index for All Urban Consumers, or CPI-U, for all items increased by 2.7% before
seasonal adjustment over the 12 months ended March 2012. It remained unchanged in April 2012 anddecreased by 0.3% in May 2012 from that of the preceding month on a seasonally adjusted basis. CPI-U
for all items less food and energy increased 2.3% before seasonal adjustment over the 12 months ended
March 2012. It increased 0.2% in both April and May 2012 from that of the preceding month on aseasonally adjusted basis.

With the US economy demonstrating moderate improvement but still lacking strong evidence of sustained
growth, the Federal Reserve Bank, or the FRB, has kept in place its zero-interest rate policy—a policy tomaintain the federal funds target rate between zero and 0.25%. In November 2011, the Federal Open Market
Committee, or the FOMC, reconfirmed its monetary policy, which was announced in September 2011, underwhich the FOMC will maintain the zero interest rate policy until mid 2013 and implement so-called twist
operation through which the FOMC will purchase $400 billion of long-term US treasury securities and sell an
equal amount of short-term treasury securities to lower long-term interest rates and to support sustained
economic growth.
Subsequently, at the March 2012 FOMC meeting, the FRB raised its prospect for the US economy byreferencing improvement in employment conditions and business activities, and extended the zero interest rate
policy until late 2014.
Major equity market indices, such as the Dow Industrial Average, have been performing better than othermajor equity indices in other regions of the globe. From the beginning of calendar 2011, the Dow Industrial
Average rose until mid 2011, when it experienced, as other major indices across the globe, a sharp decline due to62significant concerns over the sovereign debt crisis in some European countries. The Dow Industrial Average
moved upward again through the end of March 2012 as the state of the US economy improved and concerns overthe European financial crisis decreased due to the formation of comprehensive financial supporting measuresextended by international bodies such as the European Central Bank, or the ECB, and the International Monetary
Fund. The index experienced a decline again in May 2012 as concerns over Greek budgetary issues engulfed themarket.
Eurozone Economy:
The Eurozone economy remained stagnant with no growth in the January-March 2012 period after
experiencing a contraction in the October-December 2011 period. In the October-December 2011 period, thequarter-on-quarter real GDP growth rate was negative 0.3%, reflecting weak economic fundamentals triggered bybudgetary crisis in some European countries.
Consumer confidence has been impacted by the government’s fiscal austerity measures and a rise in
unemployment rates, which has in turn weakened consumer spending significantly in some countries. Industrial
production, represented by the Industrial Purchasing Manager’s Index, or PMI, has been declining since thebeginning of calendar 2012 as well. This trend may continue if the economic fundamentals remain weak andbudgetary crisis lacks fundamental solutions in the near term.
In peripheral European countries, despite the approval of the second Greek bailout and the winning of theparty supporting the austerity measures in the Greek legislative election in June 2012, there remains a concern
over political leadership in executing austerity measures. Concerns over Spanish budgetary issues also cast doubt
in the near term recovery of the Eurozone economy.
Selected indicators for the status of the Eurozone economy are discussed below:‰

Consumer spending in the January-March 2012 period increased only marginally by 0.1% quarter-onquarter reflecting weak employment conditions and consumer confidence, the trend which has continued
since the fall of 2011. Retail sales have been below prior year levels for seven consecutive months
through May 2012, with May 2012 decreasing 1.7% as compared to May 2011.

‰

The average unemployment rate in the Eurozone countries has been on an upward trend, standing at
11.1% in May 2012. Labor market conditions have been deteriorating mainly in peripheral countries,
such as Spain and Portugal, with unemployment rates of 24.6% and 15.2%, respectively, as of May
2012. However, the increase in unemployment rates has been moderate in northern European countries
such as Germany or the Netherlands, and thus employment disparities amongst Eurozone countries havebeen widening.

‰

Real purchasing power decreased as a result of fiscal austerity. A rise in inflation and an increase inenergy prices have been pushing household consumption down significantly. The consumer confidence
index in May 2012 stood at negative 19.3, one of the lowest levels since late 2009.

‰

Industrial production contracted 0.4% annualized quarter-on-quarter in the January-March 2012 period.
More recently, industrial production in May 2012 contracted 2.8% year-on-year, marking the sixth
month of negative growth. New orders showed negative growth, given the contraction in Germany. The
PMI for the manufacturing sector in May 2012 was 45.1, remaining below 50 which indicates acontraction in the sector, for ten months in a row.

‰

Exports increased in the January-March 2012 period for the second consecutive quarter, supported by
growth in Germany due to high demand from non-Eurozone economies, especially China, and weakness
in the Euro currency. Net trade remained positive in the January-March 2012 period partially due to
weak Eurozone economy, which in turn led to lower demand in imports.

‰

Although CPI for all products increased 2.7% in the January-March 2012 period as compared to thesame period of the prior year, CPI for all products has been growing at a slower pace compared topreceding quarters, mainly due to lower inflationary pressures from the demand side, particularly inenergy and food, reflecting weak domestic economies in Europe.
63‰Core CPI, excluding food and energy, increased by 1.5% in the January-March 2012 period as comparedto the same period of the prior year.

The ECB, at its July 5, 2012 meeting, lowered its policy rate by 0.25% to 0.75%, the lowest level ever in its
entire history, to stimulate the Eurozone economy. Mario Draghi, the president of ECB, reiterated that in theEurozone economy, there are prevailing uncertainties and downside risks that may materialize given the current
financial instability and turmoil.
Recent Developments
We continue to pursue global growth opportunities, including opportunities to strengthen our strategic alliancewith Morgan Stanley and expand Union Bank’s business through acquisitions of community banks in the UnitedStates during the fiscal year ended March 31, 2012. We plan to continue to selectively review and consider growth
opportunities that will enhance our global competitiveness. We will monitor regulatory developments and pursue
prudent transactions that will create a strong capital structure to enable us to contribute to the real economy, both
domestically and globally, as a provider of a stable source of funds and high quality financial services.
Exposures to Selected European Countries
During the fiscal year ended March 31, 2012, several European countries, including Italy, Spain, Portugal,
Ireland and Greece, have experienced severe weaknesses in their economic and fiscal situations. We are closely
monitoring our exposures in these countries.

64

The following table sets forth information about our exposure on a consolidated basis, based on theaggregated exposure of BTMU, MUTB and MUSHD, which were the subsidiaries holding the exposure, as ofMarch 31, 2012. The information in the table is categorized by counterparties, consisting of sovereign,
non-sovereign financial institutions and non-sovereign non-financial institutions, and by type of financial
instruments, which include loans, securities, derivatives and CDS protections (sold and bought). The securities
exposure includes available for sale, held to maturity and trading securities. The information included in the tablebelow is based on information compiled for internal risk management purposes only, and not for financial
accounting purposes. The exposures are determined based on the country in which the borrower’s head office islocated. However, in case of a subsidiary located in a country different from that in which its parent company islocated, the country exposure is determined based on the country in which the subsidiary is located.
At March 31, 2012
Gross
Loans
CDS
exposure
CDS(funded &protection (funded & protectionNet
unfunded) Securities Derivatives
soldunfunded) bought exposure(in billions)

Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Institutions . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5.9
—
0.1
5.8

$ 2.9
2.7
0.2
0.0

$1.3
—
0.0
1.3

$0.1
—
0.0
0.1

$10.2
2.7
0.3
7.2

$0.6
—
0.0
0.6

$ 9.6
2.7
0.3
6.6

Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Institutions . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.8
—
0.0
5.8

0.7
0.7
0.0
0.0

0.2
—
0.1
0.1

0.0
—
0.0
0.0

6.7
0.7
0.1
5.9

0.2
—
0.0
0.2

6.5
0.7
0.1
5.7

Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Institutions . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.5
—
0.0
0.5

0.0
—
(0.0)
0.0

0.0
—
—
0.0

—
—
—
—

0.5
—
(0.0)
0.5

0.1
—
—
0.1

0.4
—
(0.0)
0.4

Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Institutions . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.3
—
—
0.3

(0.0)
—
(0.0)
0.0

0.0
—
0.0
0.0

—
—
—
—

0.3
—
0.0
0.3

—
—
—
—

0.3
—
0.0
0.3

Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Institutions . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.2
—
—
0.2

0.1
—
—
0.1

—
—
—
—

—
—
—
—

0.3
—
—
0.3

0.0
—
—
0.0

0.3
—
—
0.3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Institutions . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$12.7
—
0.1
12.6

$ 3.7
3.4
0.2
0.1

$1.5
—
0.1
1.4

$0.1
—
0.0
0.1

$18.0
3.4
0.4
14.2

$0.9
—
0.0
0.9

$17.1
3.4
0.4
13.3

Notes:(1) Net exposure represents gross exposure (funded & unfunded), net of CDS protection bought.
(2) Securities amounts represent book values. Derivatives amounts represent current exposures, taking into consideration legally enforceable
master netting agreements. CDS protection amounts represent notional amounts.
(3) To the extent financial instruments are originally denominated in currencies other than US dollars, the exposure amounts have beentranslated into US dollars at an internal exchange rate used for our internal risk management purposes as of March 31, 2012.
(4) Negative amounts represent short positions.

Based on information collected for internal risk management purposes as of March 31, 2012, ourconsolidated exposure to Italy, Spain, Portugal, Ireland and Greece, which consisted of the aggregate, on a grossbasis, of the funded loans and unfunded commitments to, held to maturity, available for sale and trading
securities issued by, derivatives exposures to, and credit default protection sold for exposures to, sovereign
government entities of and financial institutions and other corporate entities located in these countries, that
BTMU, MUTB and MUSHD held, was less than 1% of our total assets.
65

As of March 31, 2012, other than BTMU, MUFG group companies had limited exposures to those European
countries, except such other group companies’ exposures to sovereign bonds issued by those countries as
discussed below. As of the same date, BTMU held no sovereign bonds issued by those European countries.
As of March 31, 2012, we had a total balance of $3.4 billion of sovereign bonds of the European
peripheral countries identified in the table above on a consolidated basis. Among these countries, we had no
Portuguese, Irish or Greek government bonds as of March 31, 2012. Approximately two-thirds of our Italian andSpanish government bonds were held in our trading accounts as of March 31, 2012.
As of March 31, 2012, we had a total of $13.7 billion of exposures relating to the European peripheral
countries identified in the table above, excluding sovereign bonds. These exposures mainly consisted ofcommercial loan exposures to corporations and structured finance transactions. Our exposures to Italy and Spainmainly related to the infrastructure sector, such as electricity, gas and telecommunications. Our loan-related
exposures to financial institutions in those countries were limited and therefore not material.
Effects of the Great East Japan Earthquake
On March 11, 2011, the Tohoku region in northeastern Japan experienced a major earthquake and tsunami,
which caused major property damage in the region. The Great East Japan Earthquake disrupted economic activity
in the region and also indirectly affected Japan nationwide. Infrastructure and facilities in the region suffereddamage, causing supply chain disruptions relating to parts and supplies manufactured in the region. Our loans
outstanding to borrowers in the Tohoku region as of March 31, 2012 represented less than 1% of our total loans
outstanding.
The Great East Japan Earthquake also triggered accidents at the Fukushima Daiichi Nuclear Power Plants,
coupled with a limited number of government authorizations for the resumption of operations of nuclear power
plants in Japan resulting in an electricity power supply shortage. The nation-wide electricity supply shortages
posed challenges to the recovery efforts during the summer of 2011, and further electricity supply shortages
affected some regions of Japan during the following winter. Electricity supply is expected to fall short again
during the summer of 2012 due to reduced electricity production resulting from the nuclear power plants
accidents which led to continued shut down of other nuclear power plants in Japan. In addition, electricity rates
have been raised and are expected to be further raised.
The Great East Japan Earthquake has resulted in, and will likely further cause, indirect adverse effects on
our financial results such as an increase in credit costs as the credit quality of some of our borrowers may
deteriorate.
In addition, the Great East Japan Earthquake has partially contributed to impairment losses on investment
securities for the fiscal year ended March 31, 2012, though we are unable to quantify the loss directly caused by
the earthquake separately from losses caused by other economic factors.
Legislative measures have been adopted in response to the earthquake and nuclear accidents, including the
Act to Establish the Nuclear Damage Compensation Facilitation Corporation as well as the tax reform legislation
to fund recovery efforts. The effectiveness and impact of these recent legislative measures adopted in response to
the earthquake and nuclear accidents are uncertain at this time. For further information on the tax reform
legislation, see “—B. Financial Condition—Deferred Tax Assets.”
Since the accidents at the Fukushima Daiichi Nuclear Power Plants in March 2011, the Japanese electricutility industry has been experiencing significant difficulties and has been influenced by evolving public policy.
In particular, TEPCO and the Nuclear Damage Liability Facilitation Fund, which is a government-supported
fund, drafted a Comprehensive Special Business Plan to address TEPCO’s problems following the accidents at
the Fukushima Daiichi Nuclear Power Plants. That plan was approved by the Minister of Economy, Trade andIndustry in May 2012. The plan provides for a ¥1 trillion capital injection into TEPCO by the Nuclear Damage
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Liability Facilitation Fund in July 2012. In addition, as part of the plan, TEPCO has requested its primarylenders, which includes us, to (1) maintain all existing credit lines until TEPCO can procure financing
independently through corporate bond issuances, (2) re-lend any previous loans that TEPCO may have repaid
between March 11 and September 30, 2011, and (3) provide additional debt financing of up to approximately ¥1trillion in aggregate (including the amount provided in response to the request as described in (2) above). No
request for debt-forgiveness was made to the lenders as part of the plan. We are carefully monitoring TEPCO’s
progress under the plan, and are currently considering providing the requested financial support to TEPCO if
TEPCO’s operations and financial standing are in accordance with the plan without any material change.
Assuming that we had provided the additional debt financing requested by TEPCO under the plan as of March
31, 2012, our aggregate loans outstanding to the Japanese electric utility industry would have been approximately
2% of our total outstanding loans as of such date.
Update on Investment in Morgan Stanley
Pursuant to an agreement we entered into with Morgan Stanley in April 2011, we converted all of theMorgan Stanley convertible preferred stock that we previously held into Morgan Stanley’s common stock on
June 30, 2011. Under the terms of the transaction, we exchanged convertible preferred stock with a face value ofapproximately $7.9 billion, or ¥808.3 billion, and a 10% per annum dividend for approximately 385 million
shares of Morgan Stanley’s common stock, including approximately 75 million additional shares of Morgan
Stanley’s common stock resulting from the adjustment to the conversion rate pursuant to the agreement. The
adjustment to the conversion rate was recognized as a gain of $1.7 billion, or ¥139.3 billion, and was included ininterest income on investment securities for the fiscal year ended March 31, 2012. We also appointed a second
representative to Morgan Stanley’s board of directors. This conversion further strengthens the global strategic
alliance between Morgan Stanley and us.
We held approximately 21.8% of the common shares in Morgan Stanley as of March 31, 2012, and ourinvestment in Morgan Stanley’s common stock was included in Other assets as an investment in an equity
method investee at March 31, 2012. Prior to the conversion, our investment in Morgan Stanley’s common stock
represented 3.0% of the common shares in Morgan Stanley and was included in investment securities available
for sale, and our Morgan Stanley’s convertible preferred stock was included in Other investment securities.
We adopted the equity method of accounting for our investment in Morgan Stanley for the fiscal year ended
March 31, 2012. Our investments, results of operations and retained earnings have been adjusted retroactively ona step-by-step basis as if the equity method of accounting had been in effect during the previous reporting periods
covered by this Annual Report. Our retroactive adjustment was applied to the existing approximately 3.0%
investment in Morgan Stanley’s common stock through June 30, 2011, the date of the conversion.
As a result of the decline in the quoted market price of Morgan Stanley’s common stock after the conversion
that we determined to be other than temporary in light of the increasingly stringent regulatory environment andthe existing adverse economic events in Europe, we recognized an impairment loss of ¥579.5 billion on ourinvestment in the Morgan Stanley’s common stock, as of September 30, 2011, which was included in Equity inlosses of equity method investees-net for the fiscal year ended March 31, 2012. For further information, see Note
2 to our consolidated financial statements included elsewhere in this Annual Report.
Securities Joint Ventures with Morgan Stanley
As part of our strategic alliance with Morgan Stanley, we have conducted securities operations in Japan incollaboration with Morgan Stanley through a joint ownership structure. In May 2010, Morgan Stanley and we
integrated our respective Japanese securities companies by forming securities joint ventures. We converted thewholesale and retail securities businesses in Japan conducted by the former Mitsubishi UFJ Securities Co., Ltd.,or MUS, into Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., or MUMSS. Morgan Stanley contributed its
Japanese investment banking operations conducted by its former wholly-owned subsidiary, Morgan Stanley67

Japan Securities Co., Ltd., or Morgan Stanley Japan, to MUMSS. Morgan Stanley Japan was renamed Morgan
Stanley MUFG Securities, Co., Ltd., or MSMS. We hold a 60% economic interest in MUMSS and MSMS, andMorgan Stanley holds a 40% economic interest in MUMSS and MSMS. We hold a 60% voting interest andMorgan Stanley holds a 40% voting interest in MUMSS, and we hold a 49% voting interest and Morgan Stanley
holds a 51% voting interest in MSMS. Morgan Stanley’s and our economic and voting interests in the companies
are held through intermediate holding companies. MUMSS and MSMS collaborate in providing capital markets
services to investment banking clients of MUFG and Morgan Stanley and in offering a wide range of products
and services, including Morgan Stanley’s global products and services to our retail and middle market customers
in Japan as well as to investment banking clients of both parties. The two joint venture companies have continued
to offer products and services in sales, trading and research areas separately.
Per the shareholders’ agreement between Morgan Stanley and us, to the extent that losses incurred by
MUMSS or MSMS result in a requirement to restore its capital level, the controlling shareholder is solely
responsible for providing additional capital to a minimum level and the noncontrolling shareholder is not
obligated to contribute additional capital. In April 2011, due to losses incurred by MUMSS in the fiscal year
ended March 31, 2011, we contributed ¥30 billion of new capital to MUMSS by acquiring newly issued shares of
MUMSS. In October 2011, MUMSS implemented an early retirement program to reduce expenditures andimprove operating performance. MUMSS recorded employee termination expenses of ¥20 billion in the second
half of the fiscal year ended March 31, 2012. In November 2011, we contributed ¥20 billion of new capital to
MUMSS by acquiring newly issued shares of MUMSS in order to improve and strengthen its capital base andrestore its capital adequacy level. The new MUMSS shares have no voting rights and do not change theproportion of the voting interests in MUMSS or change the right to participate in MUMSS’ earnings. In order toreflect our existing 60% economic interest in MUMSS after our capital contributions, 40% of the new shareissuances in April 2011 and November 2011, or ¥12 billion and ¥8 billion, respectively, were recognized asincreases in noncontrolling interest and reductions in capital surplus, given that the rights to participate in theresidual assets of MUMSS will be distributed to us and Morgan Stanley in proportion to our respective
percentages of ownership interests.
Per the shareholders’ agreement between Morgan Stanley and us, to the extent that MUMSS is required toincrease its capital level due to factors other than losses, such as future regulatory capital change, both we andMorgan Stanley are required to contribute the necessary capital based upon our respective economic interests as
set forth above. In this context, to meet an anticipated change in regulatory capital requirements for MUMSS, we
contributed ¥15 billion and Morgan Stanley contributed ¥10 billion of additional capital in November 2011, andthe contribution by Morgan Stanley was recognized as an increase in noncontrolling interest.
For further information, see Note 2 to our consolidated financial statements included elsewhere in thisAnnual Report.
Redemption of Preferred Securities issued by an Overseas Special Purpose Company
In July 2011, we redeemed a total of ¥120 billion of non-cumulative and non-dilutive perpetual preferred
securities issued by a special purpose company in the Cayman Islands called MUFG Capital Finance 3 Limited.
These securities were previously accounted for as part of our Tier I capital as of March 31, 2011.
Acquisition of The Royal Bank of Scotland Group’s Project Finance Related Assets
In December 2010, we entered into a sale and purchase agreement with The Royal Bank of Scotland Groupplc, or RBS, to acquire from RBS approximately £3.3 billion of project finance related assets consisting of loans
for natural resources, power and other infrastructure projects in Europe, the Middle-East and Africa, and related
assets. In connection with this acquisition, we also agreed to acquire associated derivatives through one of our
subsidiaries, Mitsubishi UFJ Securities International plc (London). The transaction contemplated by theagreement has been completed as of March 31, 2012.
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UNBC’s Acquisition of Pacific Capital Bancorp
In March 2012, UNBC entered into a definitive agreement to acquire Pacific Capital Bancorp, a bankholding company headquartered in California where its primary subsidiary, Santa Barbara Bank & Trust, N.A.,
conducts its banking activities, for approximately $1.5 billion in cash. At March 31, 2012, Pacific Bancorp had
total assets of approximately $5.9 billion and deposits of approximately $4.6 billion. The acquisition is expected
to be completed in the quarter ending December 31, 2012, subject to certain customary closing conditions,
including approvals from banking regulators.
Union Bank’s Acquisition of Smartstreet
In May 2012, Union Bank entered into a definitive agreement with PNC Bank, N.A. to acquire Smartstreet,an Atlanta-based financial services division of PNC Bank that has approximately $1 billion in deposits andprovides banking services nationwide to homeowners associations and community association managementcompanies. The acquisition is expected to be completed in the fall of 2012, subject to certain customary closing
conditions, including approvals from banking regulators.
MUTB’s Strategic Business and Capital Alliance with AMP Holdings
In December 2011, MUTB entered into a strategic business and capital alliance with AMP Capital Holdings
Limited, a subsidiary of AMP Limited, a financial services provider in Australia. As part of this alliance, inMarch 2012, MUTB acquired a 15% interest in AMP Capital Holdings, and appointed a representative to theboard of directors of AMP Capital Holdings as a non-executive director.
Critical Accounting Estimates
Our consolidated financial statements included elsewhere in this Annual Report are prepared in accordancewith US GAAP. Many of the accounting policies require management to make difficult, complex or subjective
judgments regarding the valuation of assets and liabilities. The accounting policies are fundamental tounderstanding our operating and financial review and prospects. The notes to our consolidated financial
statements included elsewhere in this Annual Report provide a summary of our significant accounting policies.
The following is a summary of the critical accounting estimates:
Allowance for Credit Losses
The allowance for credit losses represents management’s estimate of probable losses in our loan portfolio.
The evaluation process, including credit-ratings and self-assessments, involves a number of estimates andjudgments. The allowance is based on two principles of accounting guidance: (1) the guidance on contingencies
requires that losses be accrued when they are probable of occurring and can be estimated, and (2) the guidance on
accounting by creditors for impairment of a loan requires that losses be accrued based on the difference between
the loan balance, on the one hand, and the present value of expected future cash flows discounted at the loan’s
original effective interest rate, the fair value of collateral or the loan’s observable market value, on the other
hand.
Effective from the fiscal year ended March 31, 2011, we adopted new accounting guidance regarding
disclosures about the credit quality of financing receivables and the allowance for credit losses. The new
disclosure guidance defines a portfolio segment as the level at which an entity develops and documents asystematic methodology to determine the allowance for credit losses and a class of financing receivables as thelevel of disaggregation of portfolio segments based on the initial measurement attribute, risk characteristics andmethods for assessing risk. We have divided our allowance for loan losses into four portfolio segments—
Commercial, Residential, Card and UNBC. We further divide the Commercial segment into classes. The classes
within the Commercial segment are domestic, foreign, and loans acquired with deteriorated credit quality. Within
the domestic class, we further disaggregate into the industry type based on our approach to monitoring and69assessing credit risks. Under this new disclosure guidance, the allowance is presented by portfolio segment.
Specific items regarding activity that occurs during a reporting period, such as the allowance roll-forward
disclosure, became effective during the fiscal year ended March 31, 2012. The adoption of this new disclosure
guidance did not affect overall methodologies or policies used to establish our allowance for credit losses during
the fiscal years ended March 31, 2011 and 2012.
We determine the appropriate level of the allowance for credit losses for each of our loan portfolios byevaluating various factors and assumptions, such as the borrower’s credit rating, collateral value, historical loss
experience, and probability of insolvency based on the number of actual delinquencies as well as existing
economic conditions. We update these various factors and assumptions on a regular basis and upon theoccurrence of unexpected changes in the economic environment.
For the Commercial and UNBC segments, our allowance for credit losses primarily consists of allocatedallowances. The allocated allowance comprises (1) an allowance for individual loans specifically identified forevaluation, (2) an allowance for large groups of smaller-balance homogeneous loans, and (3) a formula
allowance. The allocated allowance within the Commercial segment also includes an allowance for country risk
exposure. The allowance for country risk exposure within the Commercial segment covers transfer risk which is
not specifically covered by other types of allowance. Both the allowance for country risk exposure and theformula allowance are provided for performing loans that are not subject to either the allowance for individualloans specifically identified for evaluation or the allowance for large groups of smaller-balance homogeneousloans.
The allowance for credit losses within the UNBC segment also includes an unallocated allowance which
captures losses that are attributable to economic events in various industry or geographic sectors whose impact
on our loan portfolio in this segment have occurred but have yet to be recognized in the allocated allowance.
For the Residential and Card segments, the loans are smaller-balance homogeneous loans that are pooledby the risk ratings based on the number of delinquencies. We principally determine the allowance for credit
losses based on the probability of insolvency by the number of actual delinquencies and historical loss
experience.
For all portfolio segments, key elements relating to the policies and discipline used in determining theallowance for credit losses are our credit classification and the related borrower categorization process. Each ofthese components is determined based on estimates subject to change when actual events occur. The
categorization is based on conditions that may affect the ability of borrowers to service their debt, taking into
consideration current financial information, historical payment experience, credit documentation, public
information, analyses of relevant industry segments and current trends. In determining the appropriate level ofallowance, we evaluate the probable loss by category of loan based on its type and characteristics.
In addition to the allowance for credit losses on our loan portfolio, we maintain an allowance for credit
losses on off-balance sheet credit instruments, including commitments to extend credit, a variety of guarantees
and standby letters of credit and other financial instruments. This allowance is included in other liabilities.
Determining the adequacy of the allowance for credit losses requires the exercise of considerable judgment
and the use of estimates, such as those discussed above. Our actual losses could be more or less than theestimates. To the extent that actual losses differ from management’s estimates, additional provisions for credit
losses may be required that would adversely impact our operating results and financial condition in future
periods. For further information regarding our methodologies used in establishing the allowance for credit losses
by portfolio segments and allowance for credit losses policies, see Note 1 to our consolidated financial
statements included elsewhere in this Annual Report and “—B. Liquidity and Capital Resources—Financial
Condition—Loan Portfolio.”70

For more information on our credit and borrower ratings, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Credit Risk Management.”
Impairment of Investment Securities
US GAAP requires the recognition in earnings of an impairment loss on investment securities for a decline
in fair value that is other than temporary. Determination of whether a decline is other than temporary often
involves estimating the outcome of future events. Management judgment is required in determining whether
factors exist that indicate that an impairment loss has been incurred at the balance sheet date. These judgments
are based on subjective as well as objective factors. We conduct a review semi-annually to identify and evaluate
investment securities that have indications of possible impairment. The assessment of other-than-temporary
impairment requires judgment and therefore can have an impact on the results of operations. Impairment isevaluated considering various factors, and their significance varies from case to case.
Debt and marketable equity securities. In determining whether a decline in fair value below cost is otherthan temporary for a particular equity security, we generally consider factors such as the ability and positive
intent to hold the investments for a period of time sufficient to allow for any anticipated recovery in fair value. In
addition, an other-than-temporary impairment is recognized in earnings for marketable equity securities when
one of the following criteria is met:‰

the fair value of investments is 20% or more below cost as of the end of the reporting period,‰

due to the financial condition and near-term prospects of the issuer, the issuer is categorized as “Likely
to Become Bankrupt,” “Virtually Bankrupt” or “Bankrupt or de facto Bankrupt” status under theJapanese banking regulations,‰the fair value of the investment has been below cost for six months or longer, or‰

the fair value of the securities is below cost and a decision has been made to sell the securities.

For debt securities, an other-than-temporary impairment is recognized in earnings if we have an intent tosell a debt security or if it is more likely than not we will be required to sell the debt security before recovery of
its amortized cost basis. When we do not intend to sell a debt security and if it is more likely than not that we will
not be required to sell the debt security before recovery of its amortized cost basis, the credit component of another-than-temporary impairment of the debt security is recognized in earnings, but the noncredit component isrecognized in accumulated other changes in equity from nonowner sources.
Certain securities held by BTMU, MUTB and certain other subsidiaries, which primarily consist of debt
securities issued by the Japanese national government and generally considered to be of minimal credit risk, aredetermined not to be impaired as the respective subsidiaries do not have an intention to sell the securities, or
those subsidiaries are not more likely than not required to sell before recovery of their amortized cost basis.
The determination of other-than-temporary impairment for certain debt securities held by UNBC, whichprimarily consist of residential mortgage-backed securities and certain asset-backed securities, is made on thebasis of a cash flow analysis and monitoring of performance of such securities, as well as whether UNBC intends
to sell, or is more likely than not required to sell, the securities before recovery of their amortized cost basis.
Nonmarketable equity securities. Nonmarketable equity securities include equity securities of companies
that are not publicly traded or are thinly traded. Such securities consist of cost-method investments, which areprimarily carried at cost because their fair values were not readily determinable, and investment securities carriedat their fair values, which are held by certain subsidiaries subject to specialized industry accounting principles forinvestment companies and brokers and dealers.
Nonmarketable equity securities issued by public companies and the remaining nonmarketable equity
securities are generally carried at cost, subject to impairment.
71For certain nonmarketable equity securities issued by public companies, such as preferred stock convertible
to marketable common stock in the future, we have estimated fair value using commonly accepted valuation
models, such as option pricing models based on a number of factors, including the quoted market price of theunderlying marketable common stock, volatility and dividend repayments as appropriate, to determine if theinvestment is impaired in each reporting period. If the fair value of the investment is less than the cost of theinvestment, we proceed to evaluate whether the impairment is other than temporary. When the decline is otherthan temporary, those nonmarketable equity securities issued by public companies are written down to fair value
estimated by commonly accepted valuation models.
With respect to the remaining nonmarketable equity securities, we perform a test to determine whether any
impairment indicator exists with respect to each cost-method investment in each reporting period. The primarymethod we use to identify impairment indicators is a comparison of our share in an investee’s net assets to thecarrying amount of our investment in the investee. We also consider whether significant adverse changes in theregulatory, economic or technological environment have occurred with respect to the investee. We periodicallymonitor the status of each investee including the credit ratings, which are generally updated once a year based on
the annual financial statements of issuers. In addition, if an event that could impact the credit rating of an issuer
occurs, we reassess the appropriateness of the credit rating assigned to the issuer in order to maintain an updated
credit rating. If an impairment indicator exits, we estimate the fair value of the cost-method investment. If the fairvalue of the investment is less than the cost of the investment, we proceed to conduct the other-than-temporary
impairment evaluation. When we determine that the decline is other than temporary, such remaining
nonmarketable equity securities are written down to the estimated fair value, determined based on such factors as
the ratio of our investment in the issuer to the issuer’s net assets and the latest transaction price, if applicable.
Equity method investees. We determine whether loss in value of investments is other than temporary, in
consideration of various factors, such as the length of time and the extent to which the fair value has been lessthan cost, the financial condition and near-term prospects of the investees, and the intent and ability to retain its
investment in the investees for a period of time sufficient to allow for any anticipated recovery in the fair value.
We also evaluates additional factors, such as the condition and trend of the economic cycle, and trends in thegeneral market.
Our assessment of potential impairment involves risks and uncertainties depending on market conditions
that are global or regional in nature and the condition of specific issuers or industries, as well as management’s
subjective assessment of the estimated future performance of investments. If we later conclude that a decline isother than temporary, the impairment loss may significantly affect our operating results and financial condition in
future periods.
For further information on the amount of the impairment losses and the aggregate amount of unrealized
gross losses on investment securities, see Note 3 to our consolidated financial statements included elsewhere inthis Annual Report.
Allowance for Repayment of Excess Interest
We maintain an allowance for repayment of excess interest based on our estimate of the potential liability
exposure. Our estimate of the potential liability exposure represents the estimated amount of claims for
repayment of excess interest to be received in the future. We expect that any such claim will be made in relianceon a 2006 ruling of the Japanese Supreme Court, or the Ruling. Under the Ruling, lenders are generally required
to reimburse borrowers for interest payments made in excess of the limits stipulated by the Interest Rate
Restriction Law upon receiving claims for reimbursement, despite the then-effective provisions of the Law
Concerning Lending Business that exempted a lender from this requirement if the lender provided required
notices to the borrower and met other specified requirements, and the borrower voluntarily made the interest
payment.

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While we have not entered into any consumer loan agreement after April 2007 that imposes an interest rate
exceeding the limits stipulated by the Interest Rate Restriction Law, we need to estimate the number of possible
claims for reimbursement of excess interest payments. To determine the allowance for repayment of excessinterest, we analyze the historical number of repayment claims we have received, the amount of such claims,
borrowers’ profiles, the actual amount of reimbursements we have made, management’s future forecasts, andother events that are expected to possibly affect the repayment claim trends in order to arrive at our best estimateof the potential liability. We believe that the provision for repayment of excess interest is adequate and theallowance is at the appropriate amount to absorb probable losses, so that the impact of future claims forreimbursement of excess interest will not have a material adverse effect on the our financial position and resultsof operations. The allowance is recorded as a liability in Other liabilities.
For further information, see Note 24 to our consolidated financial statements included elsewhere in thisAnnual Report and “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Because of ourloans to consumers and our shareholdings in companies engaged in consumer lending, changes in the business orregulatory environment for consumer finance companies in Japan may further adversely affect our financial
results.”
Income Taxes
Valuation of deferred tax assets. A valuation allowance for deferred tax assets is recognized if, based on
the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will
not be realized. All available evidence, both positive and negative, is considered to determine whether, based on
the weight of that evidence, a valuation allowance is needed. Future realization of the tax benefit of existing
deductible temporary differences or carryforwards ultimately depends on the existence of sufficient taxable
income and the applicable income tax rates in future periods.
In determining a valuation allowance, we perform a review of future reversals of existing taxable temporary
differences, and future taxable income exclusive of reversing temporary differences. Future taxable income isdeveloped from forecasted operating results, based on recent historical trends and approved business plans, theeligible carryforward periods and other relevant factors. For certain subsidiaries where strong negative evidence
exists, such as the existence of significant amounts of operating loss carryforwards, cumulative losses and theexpiration of unused operating loss carryforwards in recent years, a valuation allowance is recognized against thedeferred tax assets to the extent that it is more likely than not that they will not be realized.
Forecasted operating results, which serve as the basis of our estimation of future taxable income, have asignificant effect on the amount of the valuation allowance. In developing forecasted operating results, we
assume that our operating performance is stable for certain entities where strong positive evidence exists,
including core earnings based on past performance over a certain period of time. The actual results may be
adversely affected by unexpected or sudden changes in interest rates as well as an increase in credit-related
expenses due to the deterioration of economic conditions in Japan and material declines in the Japanese stock
market to the extent that such impacts exceed our original forecast. In addition, near-term taxable income andassumptions on future income tax rates are also influential on the amount of the expiration of unused operating
loss carryforwards since the Japanese corporate tax law permits operating losses to be deducted for apredetermined period generally no longer than seven years for losses generated prior to April 1, 2008 and nine
years for losses generated in fiscal years ending after April 1, 2008. For further information on the amount ofoperating loss carryforwards and the expiration dates, see Note 7 to our consolidated financial statements
included elsewhere in this Annual Report.
Because the establishment of the valuation allowance is an inherently uncertain process involving estimatesas discussed above, the currently established valuation allowance may not be sufficient. If the estimatedvaluation allowance is not sufficient, we will incur additional deferred tax expenses, which could materiallyaffect our operating results and financial condition in future periods.
73

Accruals for Uncertain Tax Positions. We provide reserves for unrecognized tax benefits as required
under the guidance on accounting for uncertainty in income taxes. In applying the guidance, we consider the
relative risks and merits of positions taken in tax returns filed and to be filed, considering statutory, judicial, andregulatory guidance applicable to those positions. The guidance requires us to make assumptions and judgments
about potential outcomes that lie outside management’s control. To the extent the tax authorities disagree withour conclusions, and depending on the final resolution of those disagreements, our effective tax rate may bematerially affected in the period of final settlement with tax authorities.
Accounting for Goodwill and Intangible Assets
US GAAP requires us to test goodwill for impairment at least annually, or more frequently if events orchanges in circumstances indicate that goodwill may be impaired, using a two-step process that begins with anestimation of the fair value of a reporting unit of our business, which is to be compared with the carrying amountof the unit, to identify potential impairment of goodwill. A reporting unit is an operating segment or componentof an operating segment that constitutes a business for which discrete financial information is available and isregularly reviewed by management. The fair value of a reporting unit is defined as the amount at which the unit
as a whole could be bought or sold in a current transaction between willing parties. For a reporting unit for which
an observable quoted market price is not available, the fair value is determined using an income approach. In theincome approach, the present value of expected future cash flows is calculated by taking the net present value
based on each reporting unit’s internal forecasts. The discount rate reflects current market capitalization. A
control premium factor is also considered in relation to market capitalization.
If the carrying amount of a reporting unit exceeds its estimated fair value, the second step of the goodwill
impairment test is performed to measure the amount of impairment loss recorded in our consolidated statements
of income. This test requires comparison of the implied fair value of the unit’s goodwill with the carrying amountof that goodwill. The estimate of the implied fair value of the reporting unit’s goodwill requires us to allocate thefair value of a reporting unit to all of the assets and liabilities of that reporting unit, including unrecognizedintangible assets, if any, since the implied fair value is determined as the excess of the fair value of a reporting
unit over the net amounts assigned to its assets and liabilities in the allocation. Accordingly, the second step of
the impairment test also requires an estimate of the fair value of individual assets and liabilities, including any
unrecognized intangible assets that belong to that unit. A change in the estimation could have an impact on
impairment recognition since it is driven by hypothetical assumptions, such as customer behavior and interest
rate forecasts. The estimation is based on information available to management at the time the estimation is
made.
Intangible assets are amortized over their estimated useful lives unless they have indefinite useful lives.
Amortization for intangible assets is computed in a manner that best reflects the economic benefits of theintangible assets. Intangible assets having indefinite useful lives are subject to annual impairment tests. An
impairment exists if the carrying value of an indefinite lived asset exceeds its fair value. For other intangible
assets subject to amortization, an impairment is recognized if the carrying amount exceeds the fair value of theintangible asset.
We evaluate the remaining useful life of an intangible asset at each reporting period to determine whether
events and circumstances warrant a revision to the remaining useful life. When the useful life of intangible assets
not subject to amortization is no longer determined to be indefinite, such as when unanticipated competition
enters a market, the intangible asset is amortized over the remaining period that it is expected to contribute topositive cash flows. During the year ended March 31, 2012, we reevaluated the useful lives of our intangible
assets related to our customer relationships from fund contracts, which had been previously recorded as
intangible assets not subject to amortization. Due to the global financial downturn, including the recent financial
market disruption in Europe and the downgrade of the US treasury bonds’ credit rating, the downward trend ofcustomer assets under management, which was previously on an upward trend, is not expected to recover in thenear future and therefore is no longer expected to support indefinite useful lives of the intangible assets
74

associated with the customer relationships from fund contracts. As a result of the reevaluation, we reclassified
our intangible assets related to the customer relationships of ¥42.2 billion from intangible assets not subject toamortization to those subject to amortization. For the details of these intangible assets, see Note 6 to ourconsolidated financial statements included elsewhere in this Annual Report.
Accrued Severance Indemnities and Pension Liabilities
We have defined retirement benefit plans, including lump-sum severance indemnities and pension plans,
which cover substantially all of our employees. Severance indemnities and pension costs are calculated based
upon a number of actuarial assumptions, including discount rates, expected long-term rates of return on our plan
assets and rates of increase in future compensation levels. In accordance with US GAAP, actual results that differ
from the assumptions are accumulated and amortized over future periods, and affect our recognized net periodic
pension costs and accrued severance indemnities and pension obligations in future periods. Differences in actual
experience or changes in assumptions may affect our financial condition and operating results in future periods.
The discount rates for the domestic plans are set to reflect the interest rates of high-quality fixed-rate
instruments with maturities that correspond to the timing of future benefit payments.
In developing our assumptions for expected long-term rates of return, we refer to the historical average
returns earned by the plan assets and the rates of return expected to be available for reinvestment of existing plan
assets, which reflect recent changes in trends and economic conditions, including market prices. We also evaluate
input from our actuaries, as well as their reviews of asset class return expectations.
Valuation of Financial Instruments
We measure certain financial assets and liabilities at fair value. The majority of such assets and liabilities
are measured at fair value on a recurring basis, including trading securities, trading derivatives and investment
securities. In addition, certain other assets and liabilities are measured at fair value on a non-recurring basis,including held for sale loans which are carried at the lower of cost or fair value, collateral dependent loans andnonmarketable equity securities subject to impairment.
We have elected the fair value option for certain foreign securities classified as available for sale, whose
unrealized gains and losses are reported in income.
The guidance on the measurement of fair value defines fair value as the price that would be received to sellan asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. We have an established and documented process for determining fair value in accordance with theguidance. To determine fair value, we use quoted market prices which include those provided from pricing
vendors, where available. We generally obtain one price or quote per instrument and do not adjust it to determine
fair value of the instrument. Certain asset-backed securities are valued based on non-binding quotes provided byindependent broker-dealers where no or few observable inputs are available to measure fair value. We do not
adjust such broker-dealer quotes to the extent that there is no evidence that would indicate that the quotes are notindicative of the fair values of the securities. We perform internal price verification procedures to ensure that thequotes provided from the independent broker-dealers are reasonable. Such verification procedures include
analytical review of periodic price changes, comparison analysis between periodic price changes and changes ofindices such as a credit default swap index, or inquiries regarding the underlying inputs and assumptions used by
the broker-dealers such as probability of default, prepayment rate and discount margin. These verification
procedures are periodically performed by independent risk management departments. For collateralized loan
obligations, or CLOs, backed by general corporate loans, the fair value is determined by weighting the internal
model valuation and the non-binding broker-dealer quotes. If quoted market prices are not available to determine
fair value of derivatives, the fair value is based upon valuation techniques that use, where possible, current
market-based or independently sourced parameters, such as interest rates, yield curves, foreign exchange rates,
75

volatilities and credit curves. The fair values of trading liabilities are determined by discounting future cash flows
at a rate which incorporates our own creditworthiness. In addition, valuation adjustments may be made to ensurethat the financial instruments are recorded at fair value. These adjustments include, but are not limited to,amounts that reflect counterparty credit quality, liquidity risk, and model risk. Our financial models are validated
and periodically reviewed by risk management departments independent of divisions that created the models.
For a further discussion of the valuation techniques or models applied to the material assets or liabilities, seeNote 29 to our consolidated financial statements included elsewhere in this Annual Report.
Accounting Changes and Recently Issued Accounting Pronouncements
See “Accounting Changes” and “Recently Issued Accounting Pronouncements” in Note 1 to ourconsolidated financial statements included elsewhere in this Annual Report.
A.

Operating Results

Results of Operations
The following table sets forth a summary of our results of operations for the fiscal years ended March 31,
2010, 2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
(in billions)Interest income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,757.9 ¥2,550.2 ¥2,595.9
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
774.4
670.7
640.1
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,983.5
1,879.5
1,955.8
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
647.8
292.0
223.8
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,469.4
1,694.8
1,440.6
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,508.1
2,460.5
2,322.7
Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,297.0
821.8
849.9
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
413.0
433.7
429.2
Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . . ¥ 884.0 ¥ 388.1 ¥ 420.7
Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . . . . . . . .
15.3(64.5)
4.5
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . ¥ 868.7 ¥ 452.6 ¥ 416.2
Note:(1) Interest income for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on conversion rate adjustment of convertible
preferred stock. Exclusive of the one-time gain associated with the conversion, interest income for the fiscal year ended March 31, 2012
would have been lower.

We reported net income attributable to Mitsubishi UFJ Financial Group of ¥416.2 billion for the fiscal year
ended March 31, 2012, a decrease of ¥36.4 billion from ¥452.6 billion for the fiscal year ended March 31, 2011.
Our diluted earnings per share of common stock (net income available to common shareholders of Mitsubishi
UFJ Financial Group) for the fiscal year ended March 31, 2012 was ¥28.09, a decrease of ¥2.34 from ¥30.43 forthe fiscal year ended March 31, 2011. Income before income tax expense for the fiscal year ended March 31,
2012 was ¥849.9 billion, an increase of ¥28.1 billion from ¥821.8 billion for the fiscal year ended March 31,
2011.

76

Net Interest Income
The following is a summary of the interest rate spread for the fiscal years ended March 31, 2010, 2011 and2012:
Fiscal years ended March 31,
2010
2011
2012
Average
Average
Average
Average
Average
Averagebalanceratebalanceratebalancerate(in billions, except percentages)

Interest-earning assets:
Domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign(1) . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . .

¥127,830.2
47,540.5¥175,370.7

1.34% ¥130,922.3
2.20
49,338.1
1.57% ¥180,260.4

1.16% ¥130,856.7
2.08
53,322.4
1.41% ¥184,179.1

1.07%
2.24
1.41%

Financed by:Interest-bearing liabilities:
Domestic . . . . . . . . . . . . . . . . . . . . . . . ¥124,431.3
Foreign . . . . . . . . . . . . . . . . . . . . . . . .
33,725.1
Total . . . . . . . . . . . . . . . . . . . . . . 158,156.4
Non-interest-bearing liabilities . . . . . . . . . .
17,214.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . ¥175,370.7

0.37% ¥126,908.2
0.93
34,436.5
0.49
161,344.7—
18,915.7
0.44% ¥180,260.4

0.29% ¥130,916.6
0.87
34,504.0
0.42
165,420.6—
18,758.5
0.37% ¥184,179.1

0.26%
0.88
0.39
—
0.35%

1.08%

0.99%

1.02%

1.13%

1.04%

1.06%

Interest rate spread . . . . . . . . . . . . . . . . . . .
Net interest income as a percentage of totalinterest-earning assets . . . . . . . . . . . . . . .

Note:(1) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on conversion rateadjustment of convertible preferred stock. Exclusive of the one-time gain associated with the conversion, the average rate for the fiscal
year ended March 31, 2012 would have been lower.

We use interest rate and other derivative contracts to manage the risks affecting the values of our financial
assets and liabilities. Although these contracts are generally entered into for risk management purposes, amajority of them do not meet the specific conditions to qualify for hedge accounting under US GAAP and thus
are accounted for as trading assets or liabilities. Any gains or losses resulting from such derivative instruments
are recorded as part of net trading account profits or losses. Therefore, our net interest income for each of the
fiscal years ended March 31, 2010, 2011 and 2012 was not materially affected by gains or losses resulting fromsuch derivative instruments. For a detailed discussion of our risk management activities, see “—A. Operating
Results—Results of Operations—Non-Interest Income” and “Item 11. Quantitative and Qualitative Disclosuresabout Credit, Market and Other Risk.”

Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
Net interest income for the fiscal year ended March 31, 2012 was ¥1,955.8 billion, an increase of¥76.3 billion from ¥1,879.5 billion for the fiscal year ended March 31, 2011. The increase in our net interest
income mainly reflected the recognition as interest income of the ¥139.3 billion gain realized from theadjustment to the conversion rate associated with our conversion of Morgan Stanley’s preferred stock into
Morgan Stanley’s common stock, and a decrease in the interest expense on deposits due to the impact of the lowinterest rate environment that continued throughout the fiscal year ended March 31, 2012. In Japan, the Bank ofJapan maintained a “monetary easing policy” throughout the fiscal year ended March 31, 2012. Exclusive of thegain associated with the conversion of our Morgan Stanley’s preferred stock of ¥139.3 billion for the fiscal year
ended March 31, 2012 and the related preferred dividends of ¥66.0 billion for the fiscal year ended March 31,
2011, net interest income was ¥1,816.5 billion, an increase of ¥3.0 billion compared to the previous fiscal year.
77Inclusive of the gain associated with the conversion of our Morgan Stanley’s preferred stock and the related
preferred dividends, the average interest rate spread (average interest rate for interest-earning assets minus
average interest rate for interest-bearing liabilities) increased three basis points from 0.99% for the fiscal year
ended March 31, 2011 to 1.02% for the fiscal year ended March 31, 2012. For the fiscal year ended March 31,
2012, the average rate on interest-bearing liabilities decreased from 0.42% to 0.39% mainly due to the lower
average rate on domestic deposits.
Exclusive of the gain associated with the conversion of our Morgan Stanley’s preferred stock of ¥139.3
billion for the fiscal year ended March 31, 2012 and the related preferred dividends of ¥66.0 billion for the fiscal
year ended March 31, 2011, the average interest rate spread decreased one basis point from 0.96% for the fiscal
year ended March 31, 2011 to 0.95% for the fiscal year ended March 31, 2012. In particular, the average rate on
domestic loans and domestic investment securities decreased because of the low interest environment in Japan,
resulting in a tighter average interest rate spread. If the Bank of Japan continues to maintain its zero interest rate
policy as well as other monetary easing policies, our interest rate spread on domestic loans will likely continue tobe under severe pressure. Moreover, if additional monetary easing policies are adopted in the United States andEuropean countries, our interest rate spread on foreign loans may also be negatively impacted.
Average interest-earning assets for the fiscal year ended March 31, 2012 were ¥184,179.1 billion, an
increase of ¥3,918.7 billion from ¥180,260.4 billion for the fiscal year ended March 31, 2011. This increase inaverage interest-earning assets was primarily attributable to an increase of ¥3,067.7 billion in domestic
investment securities and an increase of ¥2,701.8 billion in foreign trading account assets, partially offset by adecrease of ¥2,706.6 billion in domestic loans. The increase in investment securities was mainly due to anincrease in our investment in Japanese national government and government agency bonds as part of our asset
and liability management policy applicable to the yen-denominated deposited funds exceeding our net loans. The
increase both in the average balance of and the average rate on investment securities resulted in an increase in
our interest income in investment securities for the fiscal year ended March 31, 2012 by ¥62.0 billion comparedto the prior fiscal year.
Average interest-bearing liabilities for the fiscal year ended March 31, 2012 were ¥165,420.6 billion, an
increase of ¥4,075.9 billion from ¥161,344.7 billion for the fiscal year ended March 31, 2011. This increase wasmainly due to an increase of ¥2,473.4 billion in domestic other short-term borrowings and trading accountliabilities and an increase of ¥2,018.3 billion in domestic call money, funds purchased, and payables under
repurchase agreements and securities lending transactions, partially offset by a decrease of ¥885.2 billion in
long-term debt. The increase in payables under repurchase agreements and securities lending transactions was
mainly attributable to increases in repurchase and reverse repurchase transactions as our holdings of Japanese
government bonds increased. The decrease in long-term debt was mainly due to a decrease in obligations underloan securitization transactions. Despite the increase in the average balance of interest-bearing liabilities, thedecrease in the average rate resulted in a decrease in our interest expense for the fiscal year ended March 31,
2012 by ¥30.6 billion compared to the prior fiscal year.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
Net interest income for the fiscal year ended March 31, 2011 was ¥1,879.5 billion, a decrease of¥104.0 billion from ¥1,983.5 billion for the fiscal year ended March 31, 2010. The decrease in our net interest
income mainly reflected the decrease of outstanding loans and the impact of the low interest rate environmentthat continued throughout the fiscal year ended March 31, 2011. In Japan, the Bank of Japan maintainedmonetary easing policies, including its “zero interest rate” policy, throughout the fiscal year ended March 31,
2011. In this environment, the average interest rate on domestic interest-earning assets decreased more than thedecrease in the average interest rate on domestic interest-bearing liabilities. Central banks outside of Japan also
continued to reduce or maintained their base interest rates at low levels to counter deflationary pressures causedby the financial crisis and the economic recession.
The average interest rate spread (average interest rate for interest-earning assets minus average interest rate
for interest-bearing liabilities) decreased nine basis points from 1.08% for the fiscal year ended March 31, 201078

to 0.99% for the fiscal year ended March 31, 2011. For the fiscal year ended March 31, 2011, the average rate oninterest-bearing liabilities decreased from 0.49% to 0.42% mainly due to the lower average rate on total deposits.
However, the average rate on loans and investment securities decreased further due to lower domestic interest
rates, which resulted in a decrease in the average interest rate spread. Consequently, net interest income
decreased ¥104.0 billion due to changes in interest rates.
Average interest-earning assets for the fiscal year ended March 31, 2011 were ¥180,260.4 billion, an
increase of ¥4,889.7 billion from ¥175,370.7 billion for the fiscal year ended March 31, 2010. This increase inaverage interest-earning assets was primarily attributable to an increase of ¥13,417.9 billion in investment
securities, partially offset by a ¥7,717.3 billion decrease in both domestic and foreign loans. The increase ininvestment securities was mainly due to an increase in investment in Japanese national government andgovernment agency bonds as part of our asset and liability management policy applicable to the increased
amount of yen-denominated deposited funds. The increase in the average balance of investment securities anddecrease in the average rate resulted in a slight increase in our interest income in investment securities for the
fiscal year ended March 31, 2011 by ¥16.8 billion compared to the prior fiscal year, which was more than offset
by a decrease in interest income from domestic and foreign loans of ¥249.9 billion due to a decrease ofoutstanding loans and lower average domestic interest rate.
Average interest-bearing liabilities for the fiscal year ended March 31, 2011 were ¥161,344.7 billion, an
increase of ¥3,188.3 billion from ¥158,156.4 billion for the fiscal year ended March 31, 2010. The increase wasprimarily attributable to an increase of ¥2,351.8 billion in domestic interest-bearing deposits and ¥1,571.9 billion
in domestic other short-term borrowings and trading account liabilities, partially offset by a decrease of¥1,009.0 billion in due to trust account. The increase in domestic interest-bearing deposits was mainly due toincreases in deposits from retail markets. Despite the increase in the average balance of interest-bearing
liabilities, the decrease in the average rate resulted in a decrease of our interest expense for the fiscal year ended
March 31, 2011 by ¥103.7 billion compared to the prior fiscal year.
Provision for Credit Losses
Provision for credit losses is charged to operations to maintain the allowance for credit losses at a level
deemed appropriate by management. For the description of the approach and methodology used to establish theallowance for credit losses, see “—B. Liquidity and Capital Resources—Financial Condition—Loan Portfolio—
Allowance policy.”Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
Provision for credit losses for the fiscal year ended March 31, 2012 was ¥223.8 billion, a decrease of¥68.2 billion from ¥292.0 billion for the fiscal year ended March 31, 2011. The provision for credit losses
decreased ¥149.6 billion in our domestic loan portfolio and increased ¥81.4 billion in our foreign loan portfolio.
The decrease in the domestic portfolio was mainly due to a smaller increase in restructured residential
mortgage loans for the fiscal year ended March 31, 2012 compared to the fiscal year ended March 31, 2011,
when we experienced a higher than usual increase in such restructured residential mortgage loans. Domestic
restructured residential loans, however, continued to increase, though at a reduced rate, in the fiscal year ended
March 31, 2012. See “—B. Liquidity and Capital Resources—Financial Condition—Loan Portfolio—Nonaccrualand restructured loans and accruing loans contractually past due 90 days or more.”
The provision for credit losses in our foreign portfolio for the fiscal year ended March 31, 2012 was ¥4.1
billion, compared to a reversal of provision for credit losses of ¥77.3 billion for the previous fiscal year. The
reversal in the previous fiscal year was mainly due to a decrease in the provisions in UNBC and other overseas
offices as a result of a slight recovery of the global market, particularly in the United States.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
Provision for credit losses for the fiscal year ended March 31, 2011 was ¥292.0 billion, a decrease of¥355.8 billion from ¥647.8 billion for the fiscal year ended March 31, 2010. The provision for credit losses
decreased ¥132.1 billion and ¥223.7 billion in our domestic and foreign loan portfolio, respectively. While the79decrease in the domestic portfolio was mainly due to the absence of a large amount of provisions for a few
borrowers with large exposure observed in the previous fiscal year, the decrease in the foreign portfolio wasmainly attributable to a decrease in the provisions relating to Union Bank and other overseas offices as a result of
the slight recovery in the world economy, particularly in the United States.
Non-Interest Income
The following table is a summary of our non-interest income for the fiscal years ended March 31, 2010,2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
(in billions)

Fees and commissions income:
Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 107.2 ¥ 100.5 ¥ 95.0
Fees on funds transfer and service charges for collections . . . . . . . . . . . . . .
145.9
142.5
139.8
Fees and commissions on international business . . . . . . . . . . . . . . . . . . . . .
61.2
58.5
57.7
Fees and commissions on credit card business . . . . . . . . . . . . . . . . . . . . . . .
137.4
146.6
149.9
Service charges on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.4
22.2
18.2
Fees and commissions on securities business . . . . . . . . . . . . . . . . . . . . . . . .
129.7
138.9
128.4
Fees on real estate business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19.9
22.6
23.6
Insurance commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22.9
27.5
33.7
Fees and commissions on stock transfer agency services . . . . . . . . . . . . . . .
53.0
51.9
49.3
Guarantee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70.5
64.3
58.4
Fees on investment funds business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
127.3
130.4
126.6
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
237.1
222.5
219.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,139.5
1,128.4
1,100.0
Foreign exchange gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
216.7
260.7
34.3
Trading account profits—net:
Net profits (losses) on interest rate and other derivative contracts . . . . . . . .
Net profits on trading account securities, excluding derivatives . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(88.5)
850.0
761.5

(3.1)
137.0
133.9

77.7
589.6
667.3

Investment securities gains—net:
Net gains on sales of securities available for sale:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83.7
147.0
142.9
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
213.5
87.4
34.1
Impairment losses on securities available for sale:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(29.8)(20.5)(13.8)
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(62.9)(115.6)(176.1)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.5
23.5
32.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
223.0
121.8
19.4
Equity in losses of equity method investees—net . . . . . . . . . . . . . . . . . . . . . . . . .
(83.9)(113.0)(499.4)
Gains on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.2
14.5
15.6
Other non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
191.4
148.5
103.4
Total non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,469.4 ¥1,694.8 ¥1,440.6
Net foreign exchange gains are comprised of foreign exchange gains (losses) related to derivative contracts,
foreign exchange gains (losses) other than derivative contracts and foreign exchange gains (losses) related to thefair value option.
Foreign exchange gains (losses) related to derivative contracts were net gains (losses) primarily on currency
derivative instruments entered into for trading purposes. For the details of derivative contracts, see Note 21 to ourconsolidated financial statements included elsewhere in this Annual Report. Foreign exchange gains other thanderivative contracts include transaction gains (losses) on the translation into Japanese yen of monetary assets and80liabilities denominated in foreign currencies. The transaction gains (losses) on the translation into Japanese yen
fluctuate from period to period depending upon the spot rates at the end of each fiscal year. In principle, alltransaction gains (losses) on translation of monetary assets and liabilities denominated in foreign currencies areincluded in current earnings. Foreign exchange gains (losses) related to the fair value option include transaction
gains (losses) on translation into Japanese yen for securities under fair value option. For the details of the fairvalue option, see Note 29 to our consolidated financial statements included elsewhere in this Annual Report.
Trading account assets or liabilities are carried at fair value and changes in the value of trading accountassets or liabilities are recorded in net trading account profits (losses). Activities reported in our net trading
account profits (losses) can generally be classified into two categories:‰

trading purpose activities, which are conducted mainly for the purpose of generating profits either
through transaction fees or arbitrage gains and involve frequent and short-term selling and buying of
securities, commodities or others; and‰trading account assets relating to application of certain accounting rules, which are generally not related
to trading purpose activities, but simply classified as trading accounts due to application of certain
accounting rules.

Of the two categories, trading purpose activities represent a smaller portion of our trading account profits.
We generally do not separate for financial reporting purposes customer originated trading activities fromthose with non-customer related, proprietary trading activities. When an order for a financial product is placed bya customer, a dealer offers a price which includes certain transaction fees, often referred to as the “margin” to themarket price. The margin is determined by considering factors such as administrative costs, transaction amountand liquidity of the applicable currency. Once the customer agrees to the offered price, the deal is completed andthe position is recorded in our ledger as a single entry without any separation of components. To manage the risk
relating to the customer side position, we often enter into the other side of transaction with the market.
Unrealized gains and losses as of the period-end for both the customer side position and the market side position
are recorded within the same trading account profits and losses.
Net trading account profits are comprised of net profits (losses) on interest rate and other derivative
contracts and net profits on trading account securities, excluding derivatives.
Net profits (losses) on interest rate and other derivative contracts are reported for net profits (losses) on
derivative instruments which relate to primarily trading purpose activities, primarily includes:‰

Interest rate contracts: Interest rate contracts are mainly utilized to manage interest rate risks which
could arise from mismatches between assets and liabilities resulting from customer originated trading
activities;‰

Equity contracts: Equity contracts are mainly utilized to manage the risk that would arise from pricefluctuations of stocks held in connection with customer transactions; and‰Credit derivatives: Credit derivatives are mainly utilized as a part of our credit portfolio risk
management.

Derivative instruments for trading purposes also include those used as hedges of net exposures rather thanfor specifically identified assets or liabilities, which do not meet the specific criteria for hedge accounting.
Net profits on trading account securities, excluding derivatives, are comprised of net profits (losses) on
trading account securities and net profits (losses) on trading account securities under the fair value option. Net
profits (losses) on trading account securities primarily constitute gains and losses on trading and valuation of
trading securities which relate to trading purpose activities. Investment securities held by certain consolidated
variable interest entities are included in accordance with the applicable accounting treatments. Net profits81

(losses) on securities under the fair value option are classified into trading accounts profits (losses) in accordancewith certain accounting treatments. For the details of the fair value option, see Note 29 to our consolidated
financial statements included elsewhere in this Annual Report.
Net investment securities gains primarily include net gains (losses) on sales of marketable securities,
particularly debt securities and marketable equity securities that are classified as securities available for sale. In
addition, impairment losses are recognized as an offset of net investment securities gains (losses) whenmanagement concludes that declines in fair value of investment securities are other than temporary.
Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
Non-interest income for the fiscal year ended March 31, 2012 was ¥1,440.6 billion, a decrease of ¥254.2 billion
from ¥1,694.8 billion for the fiscal year ended March 31, 2011. This decrease was mainly due to an impairment loss of¥579.5 billion on our investment in Morgan Stanley’s common stock resulting from a decline in the quoted market
price of Morgan Stanley’s common stock that we determined to be other than temporary in light of the increasingly
stringent regulatory environment and the existing adverse economic events in Europe. This was partially offset by anincrease in gains on valuation of foreign currency denominated debt securities.
Fees and commissions income
Fees and commissions income for the fiscal year ended March 31, 2012 was ¥1,100.0 billion, a decrease of¥28.4 billion from ¥1,128.4 billion for the fiscal year ended March 31, 2011. This decrease was primarily due toa decrease of ¥ 10.5 billion in fees and commissions from our securities business, reflecting the slowdown of thedomestic market. The decrease in fees and commissions income was also due to decreases in trust fees, service
charges on deposits, guarantee fees and fees from our investment funds business, reflecting a general decrease in
the volume of these businesses.
Net foreign exchange gains
Net foreign exchange gains for the fiscal year ended March 31, 2012 were ¥34.3 billion, compared to net foreignexchange gains of ¥260.7 billion for the fiscal year ended March 31, 2011. During the fiscal year ended March 31,
2012, fluctuations in the exchange rate between the Japanese yen and the US dollar remained relatively small
compared to the previous fiscal year. The foreign exchange gains other than derivative contracts decreased from theprevious fiscal year, mainly due to a decrease in translation gains on monetary liabilities denominated in foreign
currencies. On the other hand, foreign exchange gains (losses) related to the fair value option improved from theprevious fiscal year, mainly due to translation gains on securities denominated in foreign currencies, which wereacquired during periods of appreciation of the Japanese yen.
Fiscal years ended March 31,
2011
2012
(in billions)

Foreign exchange gains—net:
Foreign exchange gains (losses) derivative contracts . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains on other than derivative contracts . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses) related to the fair value option . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82

¥

79.8
1,018.4(837.5)¥(94.9)72.1
57.1¥ 260.7¥ 34.3

Net trading account profits
The following table sets forth the details of our trading account profits and losses for the fiscal years ended
March 31, 2011 and 2012:
Fiscal years ended March 31,
2011
2012
(in billions)

Trading account profits—net:
Net profits (losses) on interest rate and other derivative contracts
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (27.4)
20.8
2.1
(5.9)
7.3

¥160.4(46.8)(1.3)
1.6(36.2)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (3.1)¥ 77.7

Net profits on trading account securities, excluding derivatives
Trading account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account securities under the fair value option . . . . . . . . . . . . . . . . . .

¥ 68.468.6¥149.7439.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥137.0¥589.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥133.9¥667.3

Net trading account profits for the fiscal year ended March 31, 2012 were ¥667.3 billion, compared to¥133.9 billion for the fiscal year ended March 31, 2011. The increase in net trading account profits was largely
due to an increase in net profits on trading account securities, excluding derivatives. Net profits on trading
account securities, excluding derivatives, are comprised of two items—net profits (losses) on trading accountsecurities and net profits (losses) on trading account securities under the fair value option. Net profits on trading
account securities under the fair value option increased to ¥439.9 billion for the fiscal year ended March 31, 2012
from ¥68.6 billion for the fiscal year ended March 31, 2011, mainly due to an increase in gains on valuation offoreign currency denominated debt securities.
On the other hand, we recorded net loss on equity contracts of ¥46.8 billion for the fiscal year ended March
31, 2012, compared to net profit on equity contracts ¥20.8 billion for the fiscal year ended March 31, 2011. Net
loss was mainly due to valuation losses on equity futures and options reflecting the downward trend in the equity
market. We, however, recorded net profit on interest rate contracts of ¥160.4 billion for the fiscal year ended
March 31, 2012, compared to net loss on interest rate contracts of ¥27.4 billion for the fiscal year ended
March 31, 2011, when our securities subsidiary recorded large losses on interest rate swap trading.
Net investment securities gains
Net investment securities gains for the fiscal year ended March 31, 2012 were ¥19.4 billion, a decrease of¥102.4 billion from ¥121.8 billion for the fiscal year ended March 31, 2011. This decrease was mainly due to adecrease of ¥53.3 billion in gains on sales of marketable equity securities to ¥34.1 billion for the fiscal year
ended March 31, 2012 from ¥87.4 billion for the previous fiscal year, and an increase of ¥60.5 billion in
impairment losses on marketable equity securities to ¥176.1 billion for the fiscal year ended March 31, 2012
from ¥115.6 billion for the previous fiscal year, reflecting the weakness in the Japanese domestic stock prices
following the Great East Japan Earthquake in March 2011. These factors were offset by a decrease in impairment
losses on debt securities to ¥13.8 billion for the fiscal year ended March 31, 2012 from ¥20.5 billion for the fiscal
year ended March 31, 2011, which reflected the low interest rate environment due to Japan’s long-stagnant
economy and the monetary easing policy of the Bank of Japan.
83Net equity in losses of equity method investees
Net equity in losses of equity method investees for the fiscal year ended March 31, 2012 was ¥499.4 billion,
an increase of ¥386.4 billion from ¥113.0 billion for the fiscal year ended March 31, 2011. This increase wasmainly due to an impairment loss of ¥579.5 billion on our investment in Morgan Stanley’s common stock
resulting from a decline in the quoted market price of Morgan Stanley’s common stock that we determined to beother than temporary in light of the increasingly stringent regulatory environment and the existing adverse
economic events in Europe. This was partially offset by the improvement of ¥83.7 billion in equity in profits ofequity method investees relating to our investments in the consumer finance industry. For further information,
see Note 2 to our consolidated financial statements included elsewhere in this Annual Report.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
Non-interest income for the fiscal year ended March 31, 2011 was ¥1,694.8 billion, a decrease of¥774.6 billion, from ¥2,469.4 billion for the fiscal year ended March 31, 2010. This decrease was primarily due
to a decrease in net trading account profits of ¥627.6 billion from ¥761.5 billion for the fiscal year ended
March 31, 2010 to ¥133.9 billion for the fiscal year ended March 31, 2011 and a decrease in net investment
securities profits of ¥101.2 billion from ¥223.0 billion for the fiscal year ended March 31, 2010 to ¥121.8 billion
for the fiscal year ended March 31, 2011.
Fees and commissions income
Fees and commissions income for the fiscal year ended March 31, 2011 was ¥1,128.4 billion, a decrease of¥11.1 billion from ¥1,139.5 billion for the fiscal year ended March 31, 2010. This decrease was primarily due toa decrease of ¥14.6 billion in other fees and commissions, a decrease of ¥6.7 billion in trust fees, and a decreaseof ¥6.1 billion in guarantee fees, reflecting a general decrease in the volume of these businesses. The decrease infees and commissions income was partially offset by an increase of ¥9.2 billion in fees and commissions on
credit card business mainly from member stores as the use of credit cards increased and an increase of ¥9.1
billion in fees on securities businesses as the trading volume of securities recovered from the prior year.
Net foreign exchange gains
Net foreign exchange gains for the fiscal year ended March 31, 2011 were ¥260.7 billion, compared to net
foreign exchange gains of ¥216.7 billion for the fiscal year ended March 31, 2010. During the fiscal year ended
March 31, 2011, the yen accelerated its appreciation against the US dollar. Foreign exchange gains other thanderivative contracts increased from the previous fiscal year, mainly due to the translation gains on monetaryliabilities denominated in foreign currencies. On the other hand, foreign exchange losses related to the fair value
option increased from the previous fiscal year, mainly due to the translation losses on securities denominated inforeign currencies. Gains on foreign exchange derivative contracts increased mainly due to the improvement ofour position in currency derivative contracts. The following table sets forth the details of our foreign exchange
gains and losses for the fiscal years ended March 31, 2010 and 2011:
Fiscal years ended March 31,
2010
2011
(in billions)

Foreign exchange gains—net:
Foreign exchange derivative contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains other than derivative contracts . . . . . . . . . . . . . . . . . . . . .
Foreign exchange losses related to the fair value option . . . . . . . . . . . . . . . . . . . . .

¥ 31.2557.2(371.7)¥ 79.81,018.4(837.5)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 216.7¥ 260.7

84

Net trading account profits
Net trading account profits of ¥133.9 billion were recorded for the fiscal year ended March 31, 2011,
compared to net trading account profits of ¥761.5 billion for the fiscal year ended March 31, 2010. The following
table sets forth the details of our trading account profits and losses for the fiscal years ended March 31, 2010 and2011:
Fiscal years ended March 31,
2010
2011
(in billions)

Trading account profits net:
Net profits (losses) on interest rate and other derivative contracts
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 213.4(217.2)(9.0)(97.3)
21.6¥ (27.4)
20.8
2.1
(5.9)
7.3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (88.5)¥ (3.1)

Net profits on trading account securities, excluding derivatives
Trading account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account securities under the fair value option . . . . . . . . . . . . . . . . . .

¥ 522.7
327.3¥ 68.4
68.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 850.0¥137.0Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 761.5¥133.9The decrease in net trading account profits was largely due to a decrease of net profits on trading accountsecurities, excluding derivatives. Net profits on trading account securities, excluding derivatives are comprised of
two items—net profits (losses) on trading account securities and net profits (losses) on trading account securities
under the fair value option. Net profits on trading account securities decreased from ¥522.7 billion for the fiscal
year ended March 31, 2010 to ¥68.4 billion for the fiscal year ended March 31, 2011, mainly due to a decrease ingains on valuation of foreign currency denominated debt securities, resulting from an increase in interest rates forforeign currency denominated trading account securities and a decrease in gains on valuation and sales ofdomestic equity securities, affected by low stock prices. Net profits on trading account securities under the fairvalue option decreased from ¥327.3 billion for the fiscal year ended March 31, 2010 to ¥68.6 billion for the fiscal
year ended March 31, 2011, mainly due to a decrease in gains on valuation of foreign currency denominated debt
securities, resulting from an increase in interest rates for foreign currency denominated trading account securities.
On the other hand, net losses on interest rate and other derivative contracts decreased from ¥88.5 billion for
the fiscal year ended March 31, 2010 to ¥3.1 billion for the fiscal year ended March 31, 2011, mainly due to anincrease in gains on equity contracts of ¥238.0 billion and a decrease in losses on credit derivatives of ¥91.4
billion, which was partially offset by a decrease in profits on interest rate contracts of ¥240.8 billion. Net profit
on equity contracts in the fiscal year ended March 31, 2011, was mainly due to the downward trend in equity
stock prices during the period, resulting in a positive impact on the value of our stock futures and options. Net
losses on credit derivatives decreased from the previous fiscal year as the credit spreads continued to shrink
through the fiscal year ended March 31, 2011. We recorded losses because of our larger net position in protection
bought. Profits on interest rate contracts decreased from the previous fiscal year mainly due to a decrease intransaction volume, resulting in a decrease in unrealized gains on interest rate derivative contracts, and our
securities subsidiary recording trading losses related to interest rate swaps, which led to net losses on interest rate
contracts for the fiscal year ended March 31, 2011.

85

Net investment securities gains
Net investment securities gains for the fiscal year ended March 31, 2011 were ¥121.8 billion, a decrease of¥101.2 billion from ¥223.0 billion for the fiscal year ended March 31, 2010. This decrease was mainly due to adecrease in gains on sales of marketable equity securities to ¥87.4 billion, and an increase of impairment losses
on marketable equity securities to ¥115.6 billion for the fiscal year ended March 31, 2011, compared to¥213.5 billion and ¥62.9 billion for the fiscal year ended March 31, 2010, respectively, reflecting the weakness in
the Japanese domestic stock prices following the Great East Japan Earthquake in March 2011. The Nikkei Stock
Average was ¥9,755.10 as of March 31, 2011, compared to ¥11,089.94 as of March 31, 2010. These factors wereoffset by an increase in gains on debt securities available for sale of ¥147.0 billion for the fiscal year ended
March 31, 2011, an increase of ¥63.3 billion from ¥83.7 billion for the fiscal year ended March 31, 2010, whichreflected the low interest rate due to Japan’s long-stagnant economy and the monetary easing policy of the Bankof Japan.
Net equity in losses of equity method investees
Net equity in losses of equity method investees for the fiscal year ended March 31, 2011 were ¥113.0
billion, an increase of ¥29.1 billion from ¥83.9 billion for the fiscal year ended March 31, 2010. This increase
was mainly due to an impairment loss on our investment in Morgan Stanley of ¥27.5 billion for the fiscal year
ended March 31, 2011 resulting from retroactive application of the equity method of accounting for ourinvestment in Morgan Stanley.
Non-Interest Expense
The following table shows a summary of our non-interest expense for the fiscal years ended March 31,
2010, 2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
(in billions)

Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 908.2 ¥ 864.0 ¥ 900.1
Occupancy expenses—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
171.1
162.5
150.8
Fees and commissions expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
196.5
212.5
204.7
Outsourcing expenses, including data processing . . . . . . . . . . . . . . . . . . . . . . . . .
215.4
194.8
191.1
Depreciation of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
120.3
99.7
94.8
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
225.0
220.0
212.2
Impairment of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.4
26.6
31.0
Insurance premiums, including deposit insurance . . . . . . . . . . . . . . . . . . . . . . . .
112.5
113.9
115.4
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57.1
53.0
49.3
Taxes and public charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69.1
65.9
65.6
Provision for repayment of excess interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44.8
85.7
—
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5——
Other non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
375.2
361.9
307.7
Total non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,508.1¥2,460.5¥2,322.7

Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
Non-interest expense for the fiscal year ended March 31, 2012 was ¥2,322.7 billion, a decrease of¥137.8 billion from ¥2,460.5 billion for the previous fiscal year. This decrease was mainly due to a decrease inprovision for repayment of excess interest to nil for the fiscal year ended March 31, 2012 from ¥85.7 billion for
the fiscal year ended March 31, 2011 and a decrease of ¥54.2 billion in other non-interest expenses to ¥307.7
billion for the fiscal year ended March 31, 2012 from ¥361.9 billion for the fiscal year ended March 31, 2011.
86

Salaries and employee benefits
Salaries and employee benefits for the fiscal year ended March 31, 2012 were ¥900.1 billion, an increase of¥36.1 billion from ¥864.0 billion for the previous fiscal year. This increase was mainly due to an increase ofadditional retirement benefit expenses resulting from the implementation of an early retirement program by
MUMSS and increases in retirement benefit expenses at our banking and trust banking subsidiaries.
Fees and commissions expenses
Fees and commissions expenses for the fiscal year ended March 31, 2012 were ¥204.7 billion, a decrease of¥7.8 billion from ¥212.5 billion for the fiscal year ended March 31, 2011. The decrease reflected the overall
decrease in transaction fees recorded in our banking subsidiary as transaction volume decreased.
Amortization of intangible assets
Amortization of intangible assets for the fiscal year ended March 31, 2012 were ¥212.2 billion, a decreaseof ¥7.8 billion from ¥220.0 billion for the fiscal year ended March 31, 2011. This was mainly due to an ongoingamortization on intangible assets such as core deposit intangibles, which represent a premium on a favorable andstable source of funds, under declining-balance method.
Provision for repayment for excess interest
Provision for repayment for excess interest for the fiscal year ended March 31, 2012 was nil, compared to¥85.7 billion for the fiscal year ended March 31, 2011. We believe that we maintain an appropriate level ofallowance for repayment of excess interest as of March 31, 2012.
Other non-interest expenses
Other non-interest expenses for the fiscal year ended March 31, 2012 were ¥307.7 billion, a decrease of¥54.2 billion from 361.9 billion for the fiscal year ended March 31, 2011. This decrease was mainly due to theabsence of impairment losses on the deposits with the Special Fund recorded in the fiscal year ended March 31,
2011 associated with a government-led loan restructuring program for failed housing-loan companies. For more
information, see “Loans and Allowance for Credit Losses—Government-led Loan Restructuring Program” inNote 4 to our consolidated financial statements included elsewhere in this Annual Report.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
Non-interest expense for the fiscal year ended March 31, 2011 was ¥2,460.5 billion, a decrease of¥47.6 billion from ¥2,508.1 billion for the previous fiscal year. This decrease was mainly due to the decrease insalaries and employee benefits of ¥44.2 billion to ¥864.0 billion for the fiscal year ended March 31, 2011 from¥908.2 billion for the fiscal year ended March 31, 2010. In addition, outsourcing expenses, including dataprocessing expenses, decreased. On the other hand, provision for repayment of excess interest increased to ¥85.7
billion for the fiscal year ended March 31, 2011, compared to ¥44.8 billion for the fiscal year ended March 31,
2010.
Salaries and employee benefits
Salaries and employee benefits for the fiscal year ended March 31, 2011 were ¥864.0 billion, a decrease of¥44.2 billion from ¥908.2 billion for the previous fiscal year. This decrease was mainly due to a decrease ofretirement benefit expense at our banking and trust banking subsidiaries because an improvement of economic
circumstances for the fiscal year ended March 31, 2010 resulted in a decrease of amortization of actuarial losses.
Fees and commissions expenses
Fees and commissions expenses for the fiscal year ended March 31, 2011 were ¥212.5 billion, an increase of¥16.0 billion from ¥196.5 billion for the fiscal year ended March 31, 2010. The increase reflects the overall
increase in transaction fees recorded in our banking subsidiary as transaction volume increased.
87Outsourcing expenses, including data processing
Outsourcing expenses, including data processings, for the fiscal year ended March 31, 2011 were¥194.8 billion, a decrease of ¥20.6 billion from ¥215.4 billion for the fiscal year ended March 31, 2010. Thisdecrease was mainly due to a decrease in fees for temporary staff agency and fees for transportation as a result ofcontinuous reviewing of the outsourcing expenses at each of our subsidiary level.
Provision for repayment for excess interest
Provision for repayment for excess interest for the fiscal year ended March 31, 2011 was ¥85.7 billion, an
increase of ¥40.9 billion from ¥44.8 billion for the fiscal year ended March 31, 2010. This increase was mainly
due to a change in accounting estimates in our consumer finance subsidiary. Prior to the fiscal year ended
March 31, 2011, Mitsubishi UFJ NICOS, our consumer finance subsidiary had estimated the allowance forrepayment of excess interest based primarily on historical reimbursement rates of excess interest. For the fiscal
year ended March 31, 2011, Mitsubishi UFJ NICOS revised its estimate by updating management’s futureforecast to reflect new reimbursement claims information and other data following various legal and industry
developments that occured during the fiscal year.
Income Tax Expense
The following table presents a summary of our income tax expense for the fiscal years ended March 31,
2010, 2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
(in billions, except percentages)

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,297.0¥821.8¥849.9
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 413.1¥433.7¥429.2
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31.9%
52.8%
50.5%
Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40.6%
40.6%
40.6%
Reconciling items between the combined normal effective statutory tax rates and the effective income tax
rates for the fiscal years ended March 31, 2010, 2011 and 2012 are summarized as follows:
Fiscal years ended March 31,
2010
2011
2012

Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in taxes resulting from:
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credits and payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lower tax rates applicable to income of subsidiaries . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realization of previously unrecognized tax effects of subsidiaries . . . . . . . .
Nontaxable dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax and interest expense for uncertainty in income taxes . . . . . . . . . . . . . . .
Expiration of loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in tax laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.6%

40.6%

40.6%

0.2
0.0
0.7
(0.7)
(5.8)
(0.9)
(0.1)
(1.6)
0.6
0.2
—
(1.3)

0.3
0.1
3.3
(0.6)
10.6
(3.7)
(2.7)
(1.5)
0.2
6.4
—
(0.2)

0.2
0.1
(2.1)
(0.5)
2.3
0.0
(3.4)
0.2
0.1
4.8
9.1
(0.9)

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31.9%

52.8%

50.5%

88

The effective income tax rate of 50.5% for the fiscal year ended March 31, 2012 was 9.9 percentage points
higher than the combined normal effective statutory tax rate of 40.6%. This higher effective income tax rate
primarily caused by changes in tax laws that mainly include an approximately 5% reduction in the effective
statutory rate of corporate tax from 40.6% to 35.6%, which accounted for 9.1% of the difference between the
combined normal effective statutory tax rate and the effective income tax rate. The change in tax laws resulted in
an increase of ¥78.0 billion in income tax expense for the fiscal year ended March 31, 2012. For further
information on the tax reform laws, see “—B. Liquidity and Capital Resources—Financial Condition—Deferred
Tax Assets.”
The effective income tax rate of 52.8% for the fiscal year ended March 31, 2011 was 12.2 percentage points
higher than the combined normal effective statutory tax rate of 40.6%. This higher effective income tax rate
primarily reflected an increase in the valuation allowance against deferred tax assets which accounted for 10.6%of the difference between the combined normal effective statutory tax rate and the effective income tax rate. The
valuation allowance increased ¥85.2 billion to ¥726.8 billion at March 31, 2011 from ¥641.6 billion at March 31,
2010, as a result of an additional valuation allowance related to operating loss carryforwards by certain
subsidiaries that were no longer deemed to be “more likely than not” to be realized.
The effective income tax rate of 31.9% for the fiscal year ended March 31, 2010 was 8.7 percentage points
lower than the combined normal effective statutory tax rate of 40.6%. This lower effective income tax rate
primarily reflected a decrease in the valuation allowance against deferred tax assets which accounted for
5.8 percentage points of the difference between the combined normal effective statutory tax rate and the effective
income tax rate. The valuation allowance decreased ¥88.3 billion to ¥641.6 billion at Mach 31, 2010 from¥729.9 billion at March 31, 2009, as a result of our projected ability to utilize net operating loss carryforward,
against future taxable income for the fiscal year ended March 31, 2010 in excess of the previously projected
taxable income for the fiscal year ended March 31, 2009 and improved probability of realization of future tax
benefits based on increased expected taxable income in future periods.
Net income (loss) attributable to noncontrolling interests
Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
We recorded net income attributable to noncontrolling interests of ¥4.5 billion for the fiscal year ended
March 31, 2012, compared to net loss attributable to noncontrolling interests of ¥64.5 billion for the previous
fiscal year. This was mainly due to a decrease in net loss recorded at MUMSS in the fiscal year ended
March 31, 2012.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
We recorded net loss attributable to noncontrolling interests of ¥64.5 billion for the fiscal year ended
March 31, 2011, compared to net income attributable to noncontrolling interests of ¥15.3 billion for the previous
fiscal year. This was mainly due to the loss recorded at MUMSS in the fiscal year ended March 31, 2011, which
resulted mainly from an approximately ¥80.0 billion loss from its fixed income trading business including thecost of withdrawing from the business.
Business Segment Analysis
We measure the performance of each of our business segments primarily in terms of “operating profit.”
Operating profit and other segment information in this Annual Report are based on the financial information
prepared in accordance with Japanese GAAP as adjusted in accordance with internal management accounting
rules and practices. Accordingly, the format and information are not consistent with our consolidated financial
statements prepared on the basis of US GAAP. For example, operating profit does not reflect items such as a partof the provision for credit losses (primarily equivalent to the formula allowance under US GAAP), foreign
89exchange gains (losses) and investment securities gains (losses). We do not use information on the segments’total assets to allocate our resources and assess performance. Accordingly, business segment information on total
assets is not presented.
We operate our main businesses under an integrated business group system, which integrates the operationsof BTMU, MUTB, MUMSS (through MUSHD), Mitsubishi UFJ NICOS and other subsidiaries in the following
four areas—Retail, Corporate, Trust Assets, and Global. Effective March 24, 2011, we changed our managerial
accounting method mainly by transferring the sales and trading business of MUMSS from the Integrated
Corporate Banking Business Group segment to the Global Markets segment. In addition, effective July 1, 2011,
we added the Integrated Global Business Group as a fourth area by shifting most of our global operations mainly
from the Integrated Corporate Banking Business Group. This change in our business segments was implemented
to change the previous practice of each Group entity’s individual promotion of global businesses to a moreGroup-wide approach. The new approach is designed to enable us to exercise our comprehensive expertise to
more effectively provide our customers with value-added services outside of Japan. Effective October 1, 2011,
we changed our managerial accounting method applied mainly to fees and commissions, which mainly affected
the Integrated Trust Assets Business Group.
Operations that are not covered by the integrated business group system are classified under Global Markets
and Other.
Prior period business segment information has been reclassified to enable comparisons between the relevant
amounts for the fiscal years ended March 31, 2010, 2011 and 2012, respectively.
The following is a brief explanation of our business segments:
Integrated Retail Banking Business Group—Covers all domestic retail businesses, including commercial
banking, trust banking and securities businesses. This business group integrates the retail business of BTMU,
MUTB, MUMSS, Mitsubishi UFJ NICOS and other subsidiaries as well as retail product development,
promotion and marketing in a single management structure. At the same time, this business group has developedand implemented MUFG Plaza, a one-stop, comprehensive financial services concept that provides integratedbanking, trust and securities services.
Integrated Corporate Banking Business Group—Covers all domestic corporate businesses, includingcommercial banking, investment banking, trust banking and securities businesses. Through the integration ofthese business lines, diverse financial products and services are provided to our corporate clients. This businessgroup has clarified strategic domains, sales channels and methods to match the different growth stages andfinancial needs of our corporate customers.
Integrated Trust Assets Business Group—Covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and theglobal network of BTMU. This business group provides a full range of services to corporate and other pension
funds, including stable and secure pension fund management and administration, advice on pension schemes andpayment of benefits to scheme members.
Integrated Global Business Group—Covers businesses outside Japan, including commercial banking suchas loans, deposits and cash management services, investment banking, retail banking, trust banking and securities
businesses (with the retail banking and trust assets businesses being conducted through Union Bank), through a
global network of more than 500 offices outside Japan to provide customers with financial products and services
that meet their increasingly diverse and sophisticated financing needs. Union Bank is one of the largest
commercial banks in California by both total assets and total deposits. Union Bank provides a wide range offinancial services to consumers, small businesses, middle market companies and major corporations, primarily in
California, Oregon and Washington but also nationally and internationally. Union Bank’s parent company is
UNBC, which is a bank holding company in the United States.
90

Global Markets—Covers the asset and liability management and strategic investments of BTMU and
MUTB, and sales and trading of financial products of BTMU, MUTB and MUMSS.
Other—Consists mainly of the corporate centers of MUFG, BTMU, MUTB and MUMSS. The eliminationof duplicated amounts of net revenue among business segments is also reflected in Other.
For further information, see Note 27 to our consolidated financial statements included elsewhere in thisAnnual Report.
Our business segment information, set forth in the following table, is based on financial information
prepared in accordance with Japanese GAAP, as adjusted in accordance with internal management accounting
rules and practices and is not consistent with our consolidated financial statements included elsewhere in thisAnnual Report, which have been prepared in accordance with US GAAP. For information on a reconciliation ofoperating profit under the internal management reporting system to income before income tax expense shown on
the consolidated statements of income, see Note 27 to our consolidated financial statements included elsewherein this Annual Report.
Integrated Integrated Integrated Integrated Global Business Group
Retail Corporate
Trust
Banking Banking
AssetsOther
Business Business Business
than
Global
Group
Group
Group
UNBC
UNBC
Total Markets Other

Total(in billions)Fiscal year ended March 31, 2010:
Net revenue: . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . .

¥1,436.6
988.3¥896.5473.1¥152.386.3¥341.0203.9¥265.3166.7¥606.3370.6¥597.4113.6¥ (89.0) ¥3,600.1
167.3 2,199.2

Operating profit (loss) . . . . . . . . . . .

¥ 448.3¥423.4¥ 66.0¥137.1¥ 98.6¥235.7¥483.8¥(256.3) ¥1,400.9

Fiscal year ended March 31, 2011:
Net revenue: . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . .

¥1,348.4
945.1¥900.7464.2¥148.688.1¥338.1200.7¥267.2173.3¥605.3374.0¥560.7105.7¥ (40.7) ¥3,523.0
150.9 2,128.0

Operating profit (loss) . . . . . . . . . . .

¥ 403.3¥436.5¥ 60.5¥137.4¥ 93.9¥231.3¥455.0¥(191.6) ¥1,395.0

Fiscal year ended March 31, 2012:
Net revenue: . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . .

¥1,274.1
903.6¥884.8447.7¥140.587.3¥401.1225.1¥252.0173.0¥653.1398.1¥690.7
96.6¥ (49.7) ¥3,593.5
165.4 2,098.7

Operating profit (loss) . . . . . . . . . . .

¥ 370.5¥437.1¥ 53.2¥176.0¥ 79.0¥255.0¥594.1¥(215.1) ¥1,494.8

Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
Integrated Retail Banking Business GroupNet revenue of the Integrated Retail Banking Business Group decreased ¥74.3 billion to ¥1,274.1 billion for
the fiscal year ended March 31, 2012 from ¥1,348.4 billion for the fiscal year ended March 31, 2011. Net
revenue of the Integrated Retail Banking Business Group mainly consists of domestic revenues from commercial
banking operations, such as deposits and lending operations, and fees related to sales of investment products toretail customers, as well as fees of subsidiaries within the Integrated Retail Banking Business Group. The
decrease in net revenue reflected a decrease in deposit related income due to the impact of the low interest rateenvironment that continued throughout the fiscal year ended March 31, 2012, and a decrease in income related toour group companies engaged in the consumer finance business due to regulatory changes, partially offset by anincrease in fees from sales of insurance and other investment products.
Operating expenses of the Integrated Retail Banking Business Group decreased ¥41.5 billion to¥903.6 billion for the fiscal year ended March 31, 2012 from ¥945.1 billion for the fiscal year ended March 31,
2011. This is mainly due to reductions in provisions for repayment of excess interest in our group consumer
finance companies.
91Operating profit of the Integrated Retail Banking Business Group decreased ¥32.8 billion to ¥370.5 billion
for the fiscal year ended March 31, 2012 from ¥403.3 billion for the fiscal year ended March 31, 2011.
Integrated Corporate Banking Business GroupNet revenue of the Integrated Corporate Banking Business Group decreased ¥15.9 billion to ¥884.8 billion
for the fiscal year ended March 31, 2012 from ¥900.7 billion for the fiscal year ended March 31, 2011. Net
revenue of the Integrated Corporate Banking Business Group mainly consists of domestic revenues from
corporate lending and other commercial banking operations, investment banking and trust banking businesses inrelation to corporate clients, as well as fees received by subsidiaries within the Integrated Corporate Banking
Business Group. The decrease in net revenue was mainly due to a decrease in net interest income from deposits
reflecting low interest rate environment and to weak demand for loans from customers, partially offset by anincrease in investment banking business related to structured finance.
Operating expenses of the Integrated Corporate Banking Business Group were ¥447.7 billion for the fiscal
year ended March 31, 2012, a decrease of ¥16.5 billion from ¥464.2 billion for the fiscal year ended March 31,
2011.
Operating profit of the Integrated Corporate Banking Business Group slightly increased ¥0.6 billion to¥437.1 billion for the fiscal year ended March 31, 2012 from ¥436.5 billion for the fiscal year ended March 31,
2011.
Integrated Trust Assets Business GroupNet revenue of the Integrated Trust Assets Business Group decreased ¥8.1 billion to ¥140.5 billion for the
fiscal year ended March 31, 2012 from ¥148.6 billion for the fiscal year ended March 31, 2011. Net revenue ofthe Integrated Trust Assets Business Group mainly consists of fees from asset management and administration
services for products such as pension trusts and investment trusts. The decrease in net revenue was mainly due toa decrease in volume of our investment trust business, partially offset by an increase in volume of our global
custody business.
Operating expenses of the Integrated Trust Assets Business Group decreased ¥0.8 billion to ¥87.3 billion for
the fiscal year ended March 31, 2012 from ¥88.1 billion for the fiscal year ended March 31, 2011.
Operating profit of the Integrated Trust Assets Business Group decreased ¥7.3 billion to ¥53.2 billion for the
fiscal year ended March 31, 2012 from ¥60.5 billion for the fiscal year ended March 31, 2011.
Integrated Global Business GroupNet revenue of the Integrated Global Business Group increased ¥47.8 billion to ¥653.1 billion for the fiscal
year ended March 31, 2012 from ¥605.3 billion for the fiscal year ended March 31, 2011. Net revenue of theIntegrated Global Business Group mainly consists of business outside Japan, including commercial banking suchas loans, deposits and cash management services, investment banking, retail banking, trust banking and securities
businesses. The increase in net revenue was mainly due to an increase in interest income attribute tonon-Japanese customers in Asia and investment banking business in Europe and the United States.
Operating expenses of the Integrated Global Business Group increased ¥24.1 billion to ¥398.1 billion for the
fiscal year ended March 31, 2012 from ¥374.0 billion for the fiscal year ended March 31, 2011.
Operating profit of the Integrated Global Business Group increased ¥23.7 billion to ¥255.0 billion for the
fiscal year ended March 31, 2012 from ¥231.3 billion for the fiscal year ended March 31, 2011.

92

Global Markets
Net revenue of Global Markets increased ¥130.0 billion to ¥690.7 billion for the fiscal year ended March 31,
2012 from ¥560.7 billion for the fiscal year ended March 31, 2011. This increase was mainly due to the gains
from our asset liability management business and gains attributable to the sales and trading business of MUMSS.
Operating expenses of Global Markets decreased ¥9.1 billion to ¥96.6 billion for the fiscal year ended
March 31, 2012 from ¥105.7 billion for the fiscal year ended March 31, 2011.
Operating profit of the Global Markets increased ¥139.1 billion to ¥594.1 billion for the fiscal year ended
March 31, 2012 from ¥455.0 billion for the fiscal year ended March 31, 2011. This increase was mainly due tothe gains from our asset liability management business.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
Integrated Retail Banking Business GroupNet revenue of the Integrated Retail Banking Business Group decreased ¥88.2 billion to ¥1,348.4 billion for
the fiscal year ended March 31, 2011 from ¥1,436.6 billion for the fiscal year ended March 31, 2010. Net
revenue of the Integrated Retail Banking Business Group mainly consists of revenues from commercial banking
operations, such as deposits and lending operations, and fees related to sales of investment products to retailcustomers, as well as fees of subsidiaries within the Integrated Retail Banking Business Group. The decrease in
net revenue reflected the decrease of outstanding loans and the impact of the low interest rate environment that
continued throughout the fiscal year ended March 31, 2011, partially offset by an increase of fees from sales ofinvestment trusts.
Operating expenses of the Integrated Retail Banking Business Group decreased ¥43.2 billion to¥945.1 billion for the fiscal year ended March 31, 2011 from ¥988.3 billion for the fiscal year ended March 31,
2010. This is mainly due to a reduction of operating expenses in many of our subsidiaries.
Operating profit of the Integrated Retail Banking Business Group decreased ¥45.0 billion to ¥403.3 billion
for the fiscal year ended March 31, 2011 from ¥448.3 billion for the fiscal year ended March 31, 2010.
Integrated Corporate Banking Business GroupNet revenue of the Integrated Corporate Banking Business Group increased ¥4.2 billion to ¥900.7 billion for
the fiscal year ended March 31, 2011 from ¥896.5 billion for the fiscal year ended March 31, 2010. Net revenueof the Integrated Corporate Banking Business Group mainly consists of revenues from corporate lending andother commercial banking operations, investment banking and trust banking businesses in relation to corporateclients, as well as fees received by subsidiaries within the Integrated Corporate Banking Business Group. The
increase in net revenue was mainly due to our recording a smaller loss on derivative transactions compared tothat for the prior fiscal year.
Operating expenses of the Integrated Corporate Banking Business Group were ¥464.2 billion for the fiscal
year ended March 31, 2011, a decrease of ¥8.9 billion from ¥473.1 billion for the fiscal year ended March 31,
2010.
Operating profit of the Integrated Corporate Banking Business Group increased ¥13.1 billion to¥436.5 billion for the fiscal year ended March 31, 2011 from ¥423.4 billion for the fiscal year ended March 31,
2010. This increase was mainly due to our recording a smaller loss on derivative transactions compared to thatfor the prior fiscal year.

93Integrated Trust Assets Business GroupNet revenue of the Integrated Trust Assets Business Group slightly decreased ¥3.7 billion to ¥148.6 billion
for the fiscal year ended March 31, 2011 from ¥152.3 billion for the fiscal year ended March 31, 2010. Net
revenue of the Integrated Trust Assets Business Group mainly consists of fees from asset management andadministration services for products such as pension trusts and investment trusts.
Operating expenses of the Integrated Trust Assets Business Group increased ¥1.8 billion to ¥88.1 billion for
the fiscal year ended March 31, 2011 from ¥86.3 billion for the fiscal year ended March 31, 2010.
Operating profit of the Integrated Trust Assets Business Group decreased ¥5.5 billion to ¥60.5 billion for the
fiscal year ended March 31, 2011 from ¥66.0 billion for the fiscal year ended March 31, 2010. This decrease wasmainly due to the increase in operating expenses as stated above.
Integrated Global Business GroupNet revenue of Integrated Global Business Group decreased ¥1.0 billion to ¥605.3 billion for the fiscal year
ended March 31, 2011 from ¥606.3 billion for the fiscal year ended March 31, 2010. This decrease was mainly
due to decreases in interest income in Europe and the United States, partially offset by an increase in interest
income in Asia excluding Japan.
Operating expenses of Integrated Global Business Group increased ¥3.4 billion to ¥374.0 billion for the
fiscal year ended March 31, 2011 from ¥370.6 billion for the fiscal year ended March 31, 2010.
Operating profit of the Integrated Global Business Group decreased ¥4.4 billion to ¥231.3 billion for the
fiscal year ended March 31, 2011 from ¥235.7 billion for the fiscal year ended March 31, 2010.
Global Markets
Net revenue of Global Markets decreased ¥36.7 billion to ¥560.7 billion for the fiscal year ended March 31,
2011 from ¥597.4 billion for the fiscal year ended March 31, 2010. Effective March 24, 2011, the sales andtrading business of MUMSS was included in Global Markets business and was the main factor in the decrease in
net revenue, as MUMSS recorded an approximately ¥80.0 billion loss from its fixed income trading business inthe fiscal year ended March 31, 2011. This loss was partially offset by an increase in gains from the tradingbusiness of our banking and trust banking subsidiaries.
Operating expenses of Global Markets decreased ¥7.9 billion to ¥105.7 billion for the fiscal year ended
March 31, 2011 from ¥113.6 billion for the fiscal year ended March 31, 2010.
Operating profit of the Global Markets decreased ¥28.8 billion to ¥455.0 billion for the fiscal year ended
March 31, 2011 from ¥483.8 billion for the fiscal year ended March 31, 2010. This decrease was mainly due tothe loss recorded by MUMSS in the fiscal year ended March 31, 2011.

94

Geographic Segment Analysis
The table below sets forth our total revenue, income before income tax expense and net income (loss)
attributable to Mitsubishi UFJ Financial Group on a geographic basis for the fiscal years ended March 31, 2010,2011 and 2012. Assets, income and expenses attributable to foreign operations are allocated to geographical areas
based on the domicile of the debtors and customers. For further information, see Note 28 to our consolidated
financial statements included elsewhere in this Annual Report.
Fiscal years ended March 31,
2010
2011
2012
(in billions)

Total revenue (interest income and non-interest income):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,605.0¥2,969.0¥2,936.9

Foreign:
United States of America(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

619.3
355.0
482.6
165.4

431.1
238.7
470.9
135.3

192.8
290.5
450.6
165.7

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,622.3

1,276.0

1,099.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,227.3¥4,245.0¥4,036.5

Income before income tax expense :Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 539.9¥ 186.1¥ 498.1

Foreign:
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

223.3
224.4
273.0
36.4

164.5
108.1
232.1
131.0

(91.8)
139.4
227.4
76.8

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

757.1

635.7

351.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,297.0¥ 821.8¥ 849.9

Net income (loss) attributable to Mitsubishi UFJ Financial Group
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 189.8¥ (103.0) ¥ 163.3

Foreign:
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

201.8
199.1
241.4
36.6

162.7
90.0
193.4
109.5

(119.8)
113.6
192.8
66.3

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

678.9

555.6

252.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 868.7¥ 452.6¥ 416.2

Notes:(1) Other areas primarily include Canada, Latin America, the Caribbean and the Middle East.
(2) For the fiscal year ended March 31, 2012, Total revenue of United States of America includes an other-than-temporary impairment lossof Morgan Stanley’s common stock. See Note 2 to our consolidated financial statements included elsewhere in this Annual Report for
further details of an other-than-temporary impairment loss on Morgan Stanley’s common stock.

95

Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
Domestic net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31,
2012 was ¥163.3 billion, compared to net loss of ¥103.0 billion for the fiscal year ended March 31, 2011. Thiswas mainly due to reductions in losses in our securities and consumer finance companies.
Foreign net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31, 2012was ¥252.9 billion, a decrease of ¥302.7 billion from ¥555.6 billion for the fiscal year ended March 31, 2011.
This was mainly due to a decrease in income from our overseas businesses in the United States, which included
the other-than-temporary impairment loss related to our investment in Morgan Stanley’s common stock, partially
offset by improvements in net trading gains and net interest income in Europe. Approximately three-quarters of
foreign net income attributable to Mitsubishi UFJ Financial Group were attributable to Asia and Oceania
excluding Japan, more than half of which was derived from China.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
Domestic net loss attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31, 2011was ¥103.0 billion, compared to net income of ¥189.8 billion for the fiscal year ended March 31, 2010. This was
mainly due to the losses recorded by our securities and consumer finance companies.
Foreign net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31, 2011was ¥555.6 billion, a decrease of ¥123.3 billion from ¥678.9 billion for the fiscal year ended March 31, 2010.
This was mainly due to a decrease in non-interest income from our overseas businesses in Europe.
Effect of Change in Exchange Rates on Foreign Currency Translation
Fiscal Year Ended March 31, 2012 Compared to Fiscal Year Ended March 31, 2011
The average exchange rate for the fiscal year ended March 31, 2012 was ¥79.08 per US$1.00, compared tothe prior fiscal year’s average exchange rate of ¥85.72 per US$1.00. The average exchange rate for theconversion of the US dollar financial statements of some of our foreign subsidiaries for the fiscal year ended
December 31, 2011 was ¥79.84 per US$1.00, compared to the average exchange rate for the fiscal year ended
December 31, 2010 of ¥87.81 per US$1.00.
The change in the average exchange rate of the Japanese yen against the US dollar and other foreign
currencies had the effect of decreasing total revenue by ¥100.8 billion, net interest income by ¥55.0 billion andincome before income tax expense by ¥45.6 billion, respectively, for the fiscal year ended March 31, 2012.
Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010
The average exchange rate for the fiscal year ended March 31, 2011 was ¥85.72 per US$1.00, compared tothe prior fiscal year’s average exchange rate of ¥92.85 per US$1.00. The average exchange rate for theconversion of the US dollar financial statements of some of our foreign subsidiaries for the fiscal year ended
December 31, 2010 was ¥87.81 per US$1.00, compared to the average exchange rate for the fiscal year ended
December 31, 2009 of ¥93.57 per US$1.00.
The change in the average exchange rate of the Japanese yen against the US dollar and other foreign
currencies had the effect of decreasing total revenue by ¥135.6 billion, net interest income by ¥47.1 billion andincome before income tax expense by ¥91.2 billion, respectively, for the fiscal year ended March 31, 2011.

96

B.

Liquidity and Capital Resources

Financial Condition
Total Assets
Our total assets at March 31, 2012 were ¥215.20 trillion, an increase of ¥12.35 trillion from ¥202.85 trillion
at March 31, 2011. The increase in total assets mainly reflected increases in net loans of ¥4.75 trillion, trading
securities of ¥4.60 trillion, investment securities of ¥1.99 trillion and trading derivative assets of ¥1.53 trillion.
These increases were partially offset by a decrease in interest-earning deposits in other banks of ¥1.43 trillion.
We have allocated a substantial portion of our assets to international activities. As a result, reported amounts
are affected by changes in the exchange rate of the Japanese yen against the US dollar and other foreign
currencies. Foreign assets are denominated primarily in US dollars. The following table shows our total assets at
March 31, 2011 and 2012 by geographic region based principally on the domicile of the obligors:
At March 31,
2011
2012
(in trillions)Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥145.78¥148.70

23.47
17.04
10.91
5.65
57.07
¥202.85

28.46
18.62
12.41
7.01
66.50
¥215.20Note:(1) Other areas primarily include Canada, Latin America, the Caribbean and the Middle East.

At March 31, 2012, the exchange rate was ¥82.19 per US$1.00, as compared with ¥83.15 at March 31,
2011. The Japanese yen amount of foreign currency-denominated assets decreased as the relevant exchange rates
resulted in an increase in the value of the Japanese yen relative to such foreign currencies. The appreciation of
the Japanese yen against the US dollar and other foreign currencies between March 31, 2011 and March 31, 2012
resulted in a decrease in the Japanese yen amount of our total assets at March 31, 2012 by ¥1.56 trillion.

97

Loan Portfolio
The following table sets forth our loans outstanding, before deduction of allowance for credit losses, atMarch 31, 2011 and 2012, based on the industry segment loan classifications as defined by the Bank of Japan forregulatory reporting purposes, which is not necessarily based on use of proceeds:
At March 31,
2011
2012
(in billions)

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Governments and official institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned income, unamortized premium—net and deferred loan fees—net . . . . . . . . . . .
Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,248.0
1,280.9
11,660.8
3,417.7
8,443.6
3,421.4
1,249.3
8,410.1
18,420.9
67,552.7¥11.451.7
1,155.9
11,035.0
3,239.7
8,492.2
3,511.1
1,284.6
10,390.2
17,636.6
68,197.0

516.6
554.9
3,565.5
4,722.6
13,116.4
15,676.0
2,853.7
3,238.8
20,052.2
24.192.3(102.9)(91.1)¥87,502.0 ¥92,298.2

Notes:(1) Loans to the so-called non-bank finance companies are generally included in the “Banks and other financial institutions” category.
Non-bank finance companies are primarily engaged in consumer lending, factoring and credit card businesses.
(2) The above table includes loans held for sale of ¥65.2 billion and ¥46.6 billion at March 31, 2011 and 2012, respectively, which arecarried at the lower of cost or estimated fair value.

Loans are our primary use of funds. The average loan balance accounted for 48.7% of total interest-earning
assets for the fiscal year ended March 31, 2011 and 47.4% for the fiscal year ended March 31, 2012.
At March 31, 2012, our total loans were ¥92.30 trillion, an increase of ¥4.80 trillion from ¥87.50 trillion atMarch 31, 2011. Before unearned income, net unamortized premiums and net deferred loan fees, our loanbalance at March 31, 2012 consisted of ¥68.20 trillion of domestic loans and ¥24.19 trillion of foreign loans,while the loan balance at March 31, 2011 consisted of ¥67.55 trillion of domestic loans and ¥20.05 trillion offoreign loans. Between March 31, 2011 and March 31, 2012, domestic loans increased ¥0.65 trillion and foreignloans increased ¥4.14 trillion.
The domestic loan balance increased by 1% between March 31, 2011 and March 31, 2012, after four
consecutive years of decline. However, the average total loan balance for the fiscal year ended March 31, 2012
decreased compared to the previous fiscal year. The pace of decline in total domestic loans slowed toward theend of the fiscal year ended March 31, 2012 mainly due to an increase in loans to the government institutions,which are included in the other industries category. It is uncertain whether demand for loans from thegovernment institutions will continue to increase or demand for loans from the private sector will improve infuture periods. Foreign loans increased 20% between March 31, 2011 and March 31, 2012, mainly due to ourincreased activities in Asia other than Japan, as well as the expansion of the foreign operations of our banking
subsidiaries.
98Changes in the allowance for credit losses and provision for credit losses
The following table shows a summary of the changes in the allowance for credit losses for the fiscal years
ended March 31, 2010, 2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
(in billions)

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,156.6 ¥1,315.6 ¥1,240.5
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
647.8
292.0
223.8
Charge-offs:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(401.9)(338.3)(182.7)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(118.9)(47.5)(34.1)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(520.8)(385.8)(216.8)Recoveries:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48.3
34.7
37.0
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1
9.0
6.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52.4
43.7
43.4
Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(468.4)(342.1)(173.4)
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20.4)(25.0)(5.4)
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,315.6 ¥1,240.5 ¥1,285.5
Note:(1) Others principally include losses (gains) from foreign exchange translation. In addition, for the fiscal year ended March 31, 2010, others
include adjustments related to restructuring of business operations.

As previously discussed, the provision for credit losses for the fiscal year ended March 31, 2012 was¥223.8 billion, a decrease of ¥68.2 billion from ¥292.0 billion for the fiscal year ended March 31, 2011. The
provision for credit losses decreased ¥149.6 billion in our domestic loan portfolio, and the provision for credit
losses increased ¥81.4 billion in our foreign loan portfolio. The decrease in the provision in the domestic
portfolio was mainly due to a smaller increase in restructured residential mortgage loans for the fiscal year ended
March 31, 2012 compared to the fiscal year ended March 31, 2011, when we experienced a higher than usual
increase in such restructured residential mortgage loans. Domestic restructured residential loans, however,continued to increase, though at a reduced rate, in the fiscal year ended Mach 31, 2012. See “—Nonaccrual andrestructured loans and accruing loans contractually past due 90 days or more” below.
The provision for credit losses in our foreign portfolio for the fiscal year ended March 31, 2012was ¥4.1 billion, compared to a reversal of provision for credit losses of ¥77.3 billion for the previous fiscal year.
The reversal in the previous fiscal year was mainly due to a decrease in the provisions in UNBC and otheroverseas offices as a result of a slight recovery of the global market, particularly in the United States.
For the fiscal year ended March 31, 2012, the ratio of the provision for the credit losses of ¥223.8 billion to
the average loan balance of ¥87.23 trillion was 0.26%, and that to the total average interest-earning assets for thesame period of ¥184.18 trillion was 0.12%.
Charge-offs for the fiscal year ended March 31, 2012 were ¥216.8 billion, a decrease of ¥169.0 billion from¥385.8 billion for the fiscal year ended March 31, 2011, when there was a substantial charge-off relating to thebankruptcy filing by a large borrower in the transportation industry. Charge-offs in the domestic consumer
category also decreased for the fiscal year ended March 31, 2012 compared to the previous fiscal year mainly due
to an improvement in the credit quality of our credit card business portfolio.
The total allowance for credit losses at March 31, 2012 was ¥1,285.5 billion, an increase of ¥45.0 billion
from ¥1,240.5 billion at March 31, 2011, as we recorded a provision for credit losses of ¥223.8 billion while we
had net charge-offs of ¥173.4 billion for the fiscal year ended March 31, 2012. For further information on our
allowance for credit losses, see “—Allowance for credit losses” below.
99

Allowance policy
Our credit rating system is closely linked to the risk grading standards set by the Japanese regulatory
authorities for asset evaluation and assessment, and is used as a basis for establishing the allowance for credit
losses and charge-offs. The categorization is based on conditions that may affect the ability of borrowers toservice their debt, such as current financial condition and results of operations, historical payment experience,credit documentation, other public information and current trends.
We have divided our allowance for loan losses into four portfolio segments—Commercial, Residential, Cardand UNBC.
For the Commercial and UNBC segments, our allowance for credit losses primarily consists of allocatedallowances. The allocated allowances comprise (1) an allowance for individual loans specifically identified forevaluation, (2) an allowance for large groups of smaller-balance homogeneous loans, and (3) a formula
allowance. The allocated allowance within the Commercial segment also includes an allowance for country risk
exposure. The allowance for country risk exposure within the Commercial segment covers transfer risk which is
not specifically covered by other types of allowance. Both the allowance for country risk exposure and theformula allowance are provided for performing loans that are not subject to either the allowance for individualloans specifically identified for evaluation or the allowance for large groups of smaller-balance homogeneousloans. The allowance for credit losses within the UNBC segment also includes an unallocated allowance which
captures losses that are attributable to economic events in various industry or geographic sectors whose impact
on our loan portfolio in this segment have occurred but have yet to be recognized in the allocated allowance. For
the Residential and Card segments, the loans are smaller-balance homogeneous loans that are pooled by the risk
ratings based on the number of delinquencies. For all portfolio segments, key elements relating to the policies
and discipline used in determining the allowance for credit losses are our credit classification and related
borrower categorization process. Each of these components is determined based on estimates subject to change
when actual events occur.
For more information on our credit and borrower ratings, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Credit Risk Management.”
For more information on our methodologies used to estimate the allowance for each portfolio segment, see“Summary of Significant Accounting Policies” in Note 1 to our consolidated financial statements included
elsewhere in this Annual Report, and “—Critical Accounting Estimates—Allowance for Credit Losses” above.
During the fiscal year ended March 31, 2012, there was no significant change in our general allowance
policy, which affected our allowance for credit losses for the period, resulting from directives, advice or counsel
from governmental or regulatory bodies.
As to the impact of the Great East Japan Earthquake on our allowance for credit losses, our loans
outstanding to borrowers in the Tohoku region as of March 31, 2012 was proportionally small. Shortly after theearthquake, BTMU and MUTB began offering special loan programs designed to financially assist borrowers
affected by the earthquake. Under these programs, BTMU and MUTB offer eased conditions and preferential
interest rates for new and outstanding housing loans and consumer loans to affected individual borrowers andpreferential interest rates for new loans not exceeding ¥30 million with maturities of up to five years to affected
corporate borrowers. As of March 31, 2012, the loans restructured under the special programs in the aggregate
represented less than 0.1% of the total loans outstanding for BTMU and MUTB.
Borrowers in other regions in Japan may also be affected due to the compensation issues for affectedindividuals and companies, electricity power supply shortages, electricity rate increases, supply chain disruptions
and other indirect consequences of the earthquake. Our financial statements were prepared reflecting the
anticipated consequences to the extent possible based on the information available to us, and the allowance for
credit losses also reflected such anticipated consequences to the extent possible. See “Item 3.D. Key
100

Information—Risk Factors—Risks Related to Our Business—Because a large portion of our assets are located inJapan and our business operations are conducted primarily in Japan, we may incur further losses if economic
conditions in Japan worsen” and “—Recent Developments—Effects of the Great East Japan Earthquake.”
Allowance for credit losses
Allowance for credit losses and recorded investment in loans by portfolio segment at March 31, 2011 and2012 are shown below:
At March 31, 2011:

Commercial

Residential

Card(in billions)

Allowance for credit losses:
Balance at end of fiscal year:
Individually evaluated for impairment . . . . . . . . .
Collectively evaluated for impairment . . . . . . . . .
Loans acquired with deteriorated credit quality . .

¥

587.9
277.1
30.6

¥

86.5 ¥ 47.0 ¥
76.7
35.3
2.0
0.4

9.8 ¥
85.2
2.0

Allowance for credit losses total . . . . . . . . . . . . . . . . . .

¥

895.6

¥

165.2

97.0

Loans:
Balance at end of fiscal year:
Individually evaluated for impairment . . . . . . . . .
Collectively evaluated for impairment . . . . . . . . .
Loans acquired with deteriorated credit quality . .

¥ 1,341.7
65,094.0
119.5¥

Total loans(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥66,555.2¥16,150.0¥ 82.7

UNBC

¥

Total

731.2
474.3
35.0

¥ 1,240.5

300.8 ¥150.7 ¥ 55.2 ¥ 1,848.4
15,826.8
704.9
3,793.7
85,419.4
22.4
16.5
113.5
271.9
¥872.1¥3,962.4¥87,539.7

Note:(1) Total loans in the above table do not include loans held for sale and represent balances without adjustments in relation to unearned
income, unamortized premiums and deferred loan fees.
At March 31, 2012:

Commercial

Residential

Card(in billions)

UNBC

Total

Allowance for credit losses:
Balance at end of fiscal year:
Individually evaluated for impairment . . . . . . . . .
Collectively evaluated for impairment . . . . . . . . .
Loans acquired with deteriorated credit quality . .

705.8
245.9
32.6

¥

101.8 ¥ 47.4 ¥
67.8
21.2
2.2
0.3

5.3 ¥
53.9
1.3

Allowance for credit losses total . . . . . . . . . . . . . . . . . .

984.3

¥

171.8

60.5

Loans:
Balance at end of fiscal year:
Individually evaluated for impairment . . . . . . . . .
Collectively evaluated for impairment . . . . . . . . .
Loans acquired with deteriorated credit quality . .

¥ 1,479.1
70,208.3
108.6

321.1 ¥145.8 ¥ 44.5 ¥ 1,990.5
15,246.3
597.6
4,087.3
90,139.5
19.5
14.5
70.1
212.7

Total loans(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥71,796.0¥15,586.9¥ 68.9¥757.9¥¥4,201.9

860.3
388.8
36.4

¥ 1,285.5¥92,342.7

Note:(1) Total loans in the above table do not include loans held for sale and represent balances without adjustments in relation to unearned
income, unamortized premiums and deferred loan fees.

The total allowance for credit losses at March 31, 2012 was ¥1,285.5 billion, an increase of ¥45.0 billion
from ¥1,240.5 billion at March 31, 2011. This increase mainly reflected the deteriorating credit quality of ourdomestic borrowers in the manufacturing industry and the wholesale and retail industry. Following the Great
East Japan Earthquake in March 2011, domestic industrial production weakened, which was adversely101affecting many of our borrowers in the manufacturing industry. Although the overall private consumption in
Japan gradually improved, the prices of most goods remained exposed to downward pressure, which had anegative impact on many of our borrowers in the wholesale and retail industry, particularly small and mediumsized companies. The increase in total allowance also reflected the increase in residential loans individually
evaluated for impairment. These factors contributing to the increase in total allowance were partially offset by
the improved credit quality of UNBC’s loan portfolio. For more information, see “—Nonaccrual andrestructured loans and accruing loans contractually past due 90 days or more,” “—Impaired loans andimpairment allowance” and “—Credit quality indicator” below.
The total allowance for credit losses represented 1.39% of our total loan portfolio at March 31, 2012, a
decrease of 0.03 percentage points from 1.42% at March 31, 2011. The decrease in the ratio of the total
allowance for credit losses to our total loan portfolio primarily reflected the improved credit quality of the loan
portfolio of the UNBC and Card segments.
The total allowance for the Commercial segment at March 31, 2012 was ¥984.3 billion, an increase of ¥88.7
billion from ¥895.6 billion at March 31, 2011. The total allowance for the Residential segment at March 31, 2012was ¥171.8 billion, an increase of ¥6.6 billion from ¥165.2 billion at March 31, 2011. The total allowance for theCard segment at March 31, 2012 was ¥68.9 billion, a decrease of ¥13.8 billion from ¥82.7 billion at March 31,
2011. The total allowance for the UNBC segment at March 31, 2012 was ¥60.5 billion, a decrease of ¥36.5
billion from ¥97.0 billion at March 31, 2011.
Allowance for off-balance sheet credit instruments
In addition to the allowance for credit losses on the loan portfolio, we maintain an allowance for credit
losses on off-balance sheet credit instruments, including commitments of credit, guarantees and standby letters ofcredit. This allowance is included in other liabilities. With regard to the specific allocated allowance for
specifically identified credit exposure and the allocated formula allowance, we apply the same methodology that
we use in determining the allowance for loan credit losses. The allowance for credit losses on off-balance sheet
credit instruments was ¥60.5 billion at March 31, 2012, a decrease of ¥13.1 billion from ¥73.6 billion atMarch 31, 2011.
Sales of loans
The following table presents comparative data relating to the principal amount of nonperforming loans sold
and reversal of allowance for credit losses:
Principal
amount ofloans(1)For the fiscal year ended March 31, 2011 . . . . . . . . . . . . . . . . . . . . .
For the fiscal year ended March 31, 2012 . . . . . . . . . . . . . . . . . . . . .

¥66.6
¥27.5

Allowance
Loans,
for credit
net oflosses(2)allowance(in billions)

¥11.0
¥ 7.6

¥55.6
¥19.9

Reversal of
allowance
for credit
losses¥(7.5)¥(6.4)

Notes:(1) Represents principal amount after the deduction of charge-offs made before the sales of nonperforming loans.
(2) Represents allowance for credit losses at the latest balance-sheet date.

Through the sale of nonperforming loans to third parties, additional provisions or gains may arise fromfactors such as a change in the credit quality of the borrowers or the value of the underlying collateral subsequent
to the prior reporting date, and the risk appetite and investment policy of the purchasers.
Due to the inherent uncertainty of factors that may affect negotiated prices which reflect the borrowers’
financial condition and the value of underlying collateral, the fact that we recorded no additional cost during areported period is not necessarily indicative of the results that we may record in the future.
102

In connection with the sale of loans, including performing loans, we recorded net gains of ¥10.4 billion andnet gains of ¥16.3 billion for the fiscal years ended March 31, 2011 and 2012, respectively.
Nonaccrual and restructured loans and accruing loans contractually past due 90 days or more
Loans are generally placed on nonaccrual status when substantial doubt exists as to the full and timely
collection of either principal or interest, specifically when principal or interest is contractually past due one
month or more with respect to loans within all classes of the Commercial segment, three months or more withrespect to loans within the Card and UNBC segments, and six months or more with respect to loans within the
Residential segment.
Loans are classified as restructured loans when we grant a concession to borrowers for economic or legal
reasons related to the borrowers’ financial difficulties. When we grant a concession to a borrower experiencing
financial difficulties, we account for a loan restructuring as a troubled debt restructuring in accordance with theguidance on troubled debt restructuring by creditors. When the restructuring constitutes a troubled debt
restructuring and the loan was classified as “Likely to Become Bankrupt” or “Legally/Virtually Bankrupt” in ourinternal borrower rating system and was on the nonaccrual status before the restructuring, the loan continues to
be classified as a nonaccrual loan after the restructuring. On the other hand, if the loan was an accruing loan
before the restructuring, the loan continues to be accruing after the restructuring.
For a more detailed discussion of nonaccrual, restructured and impaired loans, see “—Impaired loans andimpairment allowance” below.

103

The following table summarizes nonaccrual and restructured loans, and accruing loans that are contractuallypast due 90 days or more as to principal or interest payments at March 31, 2011 and 2012:
At March 31,
2011
2012
(in billions, except percentages)

Nonaccrual loans:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

138.0
48.5
152.3
76.6
172.7
7.3
33.2
37.3
321.8

¥

200.1
40.1
127.8
86.0
238.0
7.8
33.4
49.2
288.4

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

987.7
181.5

1,070.8
119.0

Total nonaccrual loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,169.2

1,189.8

Restructured loans:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

172.6
25.5
79.0
107.9
116.4
2.6
27.7
15.6
253.4

171.5
16.4
87.8
103.3
134.7
1.9
18.4
15.6
281.3

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

800.7
38.9

830.9
92.2

Total restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

839.6

923.1

Accruing loans contractually past due 90 days or more:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55.5
0.2

65.5
0.1

Total accruing loans contractually past due 90 days or more . . . . . . . . . . .

55.7

65.6

Total nonaccrual and restructured loans and accruing loans
contractually past due 90 days or more . . . . . . . . . . . . . . . . . . . . . .

¥ 2,064.5¥ 2,178.5

Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥87,502.0¥92,298.2

Nonaccrual and restructured loans and accruing loans contractually past due
90 days or more, as a percentage of total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.36%

2.36%

Note:
(1) Foreign accruing loans contractually past due 90 days or more do not include ¥25.4 billion and ¥12.8 billion of FDIC covered loans held
by UNBC which are subject to the guidance on loans and debt securities acquired with deteriorated credit quality at March 31, 2011 and2012, respectively.

104

Nonaccrual and restructured loans and accruing loans contractually past due 90 days or more increased¥114.0 billion to ¥2,178.5 billion at March 31, 2012 from ¥2,064.5 billion at March 31, 2011. The percentage ofsuch nonperforming loans to the total loans was 2.36% both at March 31, 2011 and March 31, 2012.
Total nonaccrual loans were ¥1,189.8 billion at March 31, 2012, an increase of ¥20.6 billion from
¥1,169.2 billion at March 31, 2011. Domestic nonaccrual loans increased ¥83.1 billion between March 31, 2011 andMarch 31, 2012, mainly due to the downgrade of some large borrowers in the manufacturing category and thewholesale and retail category from “Normal” to “Likely to Become Bankrupt” under our internal borrower ratings.
Foreign nonaccrual loans decreased ¥62.5 billion between March 31, 2011 and March 31, 2012, mainly due totransfer of loans to a large borrower in the government and official institutions category from nonaccrual loans to
restructured loans.
Nonaccrual loans in the manufacturing category increased ¥62.1 billion to ¥200.1 billion at March 31, 2012
from ¥138.0 billion at March 31, 2011. Following the Great East Japan Earthquake, industrial production in
Japan fluctuated significantly. Industrial production plunged by 15.5% in March 2011 following the earthquake
especially led by the large drop in transportation machinery (such as automobiles) by approximately 50%.
Industrial production recovered slightly in subsequent months (i.e., April 2011 +1.6% and May 2011 +6.2%
according to the Ministry of Economy, Trade and Industry), but production levels for transportation machinery
remained below pre-earthquake levels as of May 2011. Industrial production fluctuated throughout the summerof 2011 affected by reconstruction demand having a positive impact and the weakness in exporting industries, theappreciation of the Japanese yen and the weakening global economy having a negative impact. Although there
were month-to-month fluctuations, industrial production generally improved in the second half of the fiscal year
ended March 31, 2012, with the industrial production index increasing by 2.8% between September 2011 andMarch 2012. Industrial production levels, nevertheless, remained below pre-earthquake levels as of March 2012.
The increase in nonaccrual loans in the manufacturing category reflected these trends.
Total restructured loans were ¥923.1 billion at March 31, 2012, an increase of ¥83.5 billion from¥839.6 billion at March 31, 2011. The restructured loans set forth in the above table are current in accordancewith the applicable restructured contractual terms. Foreign restructured loans increased ¥53.3 billion to¥92.2 billion at March 31, 2012 from ¥38.9 billion at March 31, 2011 mainly due to the transfer of loans to alarge borrower in the government and official institutions category from nonaccrual loans to restructured loans
described in the preceding paragraph. Domestic restructured loans increased ¥30.2 billion to ¥830.9 billion atMarch 31, 2012 from ¥800.7 billion at March 31, 2011 mainly due to an increase in such loans in the consumer
category resulting from an increase in restructured residential mortgage loans.

105Impaired loans and impairment allowance
The following table shows information about impaired loans by class at March 31, 2011:

At March 31, 2011:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding UNBC . . . . . . . . . . . . .
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recorded Loan Balance
Requiring
Not Requiring
an Impairment an Impairment
Allowance
Allowance(1)Total(in billions)

UnpaidPrincipal
Balance

RelatedAllowance¥ 943.1
257.4
51.1
118.8
136.7
235.7

¥265.0
45.0
22.2
64.1
36.1
49.3

¥1,208.1
302.4
73.3
182.9
172.8
285.0

¥1,282.9
311.3
78.0
207.4
186.9
295.1

¥521.7
139.5
31.6
56.1
68.9
144.0

3.6

6.3

9.9

12.0

1.7

45.4
43.0
51.4
132.4

12.6
8.2
21.2
1.2

58.0
51.2
72.6
133.6

59.5
52.0
80.7
134.3

26.4
30.9
22.6
66.1

37.1
277.7
150.0
51.5
¥1,591.8

0.1
29.5
1.8
3.7
¥301.3

37.2
307.2
151.8
55.2
¥1,893.1

60.8
393.7
173.6
68.4
¥2,113.7

11.8
87.5
47.0
9.8
¥743.9Notes:(1) These loans do not require an allowance for credit losses under the guidance on accounting by creditors for impairment of a loan since
the fair values of the impaired loans equal or exceed the recorded investments in the loans.
(2) In addition to impaired loans presented in the above table, there were loans held for sale that were impaired of ¥4.7 billion at March 31,
2011.

106

The following table shows information about impaired loans by class at March 31, 2012 and average recorded
loan balance and recognized interest income on impaired loans for the fiscal year ended March 31, 2012:
Fiscal year ended
March 31, 2012

At March 31, 2012
Recorded Loan Balance
Requiring
Not Requiring
an Impairment an Impairment
Allowance
Allowance(1)Commercial
Domestic . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . .
Construction . . . . . . . . . . . .
Real estate . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . .
Wholesale and retail . . . . .
Banks and other financial
institutions . . . . . . . . . . .
Communication andinformation services . . .
Other industries . . . . . . . . .
Consumer . . . . . . . . . . . . . .
Foreign-excluding UNBC . . . . .
Loans acquired withdeteriorated credit quality . . .
Residential . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . .
UNBC . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

Average
UnpaidRecorded RecognizedPrincipal Related
Loan
Interest
Total
Balance Allowance Balance
Income(in billions)¥1,045.3
302.2
33.8
112.4
140.2
299.6

¥279.4
56.3
22.0
51.0
36.4
69.1

¥1,324.7 ¥1,387.0 ¥616.8 ¥1,270.8
358.5
376.4 187.1
333.5
55.8
60.5
20.0
63.2
163.4
176.5
52.1
173.7
176.6
182.0
74.7
176.0
368.7
375.5 192.7
326.4

¥21.4
5.7
1.4
2.5
3.2
5.2

9.4

0.3

9.7

11.8

2.3

9.8

0.1

39.1
54.2
54.4
154.2

12.5
8.9
22.9
0.2

51.6
63.1
77.3
154.4

54.1
63.3
86.9
155.4

23.3
40.5
24.1
89.1

55.4
57.6
75.2
138.9

1.2
0.9
1.2
1.0

34.5
303.4
145.2
29.6
¥1,712.2

0.1
23.5
1.6
14.9
¥319.7

34.6
56.1
10.7
35.3
326.9
406.7 102.9
318.5
146.8
164.7
47.4
149.3
44.5
50.0
5.3
45.3
¥2,031.9 ¥2,219.9 ¥872.2 ¥1,958.1

2.0
6.5
6.9
1.4
¥39.2

Note:
(1) These loans do not require an allowance for credit losses under the guidance on accounting by creditors for impairment of a loan since
the fair values of the impaired loans equal or exceed the recorded investments in the loans.

Impaired loans primarily include nonaccrual loans and restructured loans. We consider a loan to be impaired
when, based on current information and events, it is probable that we will be unable to collect all of thescheduled payments of interest on and repayment of the principal of the loan when due according to thecontractual terms of the loan agreement.
We consider a loan to be a nonaccrual loan when substantial doubt exists as to the full and timely
payment of interest on or repayment of the principal of the loan, which is a borrower condition thatgenerally corresponds to borrowers in categories 13 and below in our internal rating system (whichcorresponds to “Likely to Become Bankrupt,” “Virtually Bankrupt” and “Bankrupt or de facto Bankrupt”
status under the Japanese banking regulations). Substantially all nonaccrual loans are also impaired loans.
We consider a loan to be a restructured loan when we grant a concession to a borrower having financial
difficulties, such as a reduction in the stated interest rate applicable to the loan, an extension of the statedmaturity date of the loan, or a partial forgiveness of the principal of the loan. Substantially all of ourrestructured loans are considered troubled debt restructurings in accordance with the guidance on troubled
debt restructuring by creditors, and they are also classified as impaired loans.
For a discussion of the borrower categories, see “Item 11. Quantitative and Qualitative Disclosures about
Credit, Market and Other Risk—Credit Risk Management.”
In many instances, we make a concession to a borrower that meets the definition of troubled debt
restructuring when the loan is still accruing interest. We continue to accrue interest after the loan is restructured
107

if the ultimate collectibility of all amounts contractually due on the restructured loan is not in doubt. In principle,
we do not modify the terms of loans to borrowers in categories 13 and below because in these cases there is little
likelihood that the modification of the loan terms would enhance recovery of the loans. If, however, we agree to a
restructuring of a nonaccrual impaired loan, the loan generally continues to be classified as a nonaccrual loan
following the restructuring because such borrowers will often continue to face financial difficulty. If theborrower is not delinquent under the restructured terms for at least one payment period and the borrower candemonstrate that its business problems have been resolved or can be resolved in the near future, we may upgrade
the borrower to category 12 or higher in our internal rating system (which corresponds to “normal” and “close
watch” status under the Japanese banking regulations). We generally consider borrower rating upgrades only inthe context of our detailed internal credit rating review process, which is conducted once a year. Although wehave not defined any minimum period to qualify for an upgrade, it is not common for a borrower to be able todemonstrate that its business problems have been resolved or can soon be resolved within a short period of time
following a restructuring, if at all. If the borrower is upgraded to category 12 or higher in this process, therestructured loan would be reclassified to accrual status. In accordance with the guidance on troubled debt
restructuring by creditors, once a restructured nonaccrual loan is deemed to be a troubled debt restructuring, we
will continue to designate such loan as a troubled debt restructuring even if such loan is reclassified to accrual
status. The difference between the total impaired loans and the total nonaccrual loans represents the amount of
accruing restructured loans.
Impaired loans increased ¥138.8 billion from ¥1,893.1 billion at March 31, 2011 to ¥2,031.9 billion atMarch 31, 2012, mainly due to an increase in the balance of impaired loans requiring an impairment allowance,
which increased from ¥1,591.8 billion at March 31, 2011 to ¥1,712.2 billion at March 31, 2012. This was mainly
due to the downgrade of some borrowers in the domestic manufacturing category and in the domestic wholesale
and retail category from “Normal” to “Likely to Become Bankrupt” under our internal borrower ratings.
Following the Great East Japan Earthquake in March 2011, domestic industrial production weakened, which wasadversely affecting many of our borrowers in the manufacturing industry. Although the overall private
consumption in Japan gradually improved, the prices of most goods remained exposed to downward pressure,which had a negative impact on many of our borrowers in the wholesale and retail industry, particularly small
and medium-sized companies.
Total related allowance was ¥872.2 billion at March 31, 2012, an increase of ¥128.3 billion from ¥743.9
billion at March 31, 2011. This increase was partially due to an increase of ¥47.6 billion in related allowance forthe domestic manufacturing category in the Commercial segment, and an increase of ¥48.7 billion in related
allowance for the domestic wholesale and retail category in the Commercial segment.
Credit quality indicator
Loan balances by credit quality indicators and by class at March 31, 2011 and 2012 are shown below:
At March 31, 2011:
NormalLikely to become
Bankrupt or
Close
Legally/Virtually
Watch
Bankrupt(in billions)

Total(1)Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated credit quality . . . . . . . . . . . . . .

¥45,354.3
9,957.0
1,007.8
9,793.3
2,878.8
7,411.4
3,110.7
1,074.4
8,210.7
1,910.2
14,992.4
41.1¥4,357.2
1,141.1
223.8
1,023.7
445.9
829.3
298.6
140.6
156.0
98.2
1,006.0
56.2¥686.4
137.3
48.3
128.4
74.2
171.9
7.2
33.0
36.2
49.9
39.5
22.1

¥50,397.9
11,235.4
1,279.9
10,945.4
3,398.9
8,412.6
3,416.5
1,248.0
8,402.9
2,058.3
16,037.9
119.4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥60,387.8¥5,419.4¥748.0¥66,555.2

108Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Ratings Based on
the Number of Delinquencies
AccrualNonaccrual

UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,715.8¥21.6

AccrualNonaccrual(in billions)

Total(1)¥16,015.2¥ 727.9¥134.8¥144.2¥16,150.0¥ 872.1

Risk Ratings Based on
Internal Credit Ratings
Pass
Criticized(in billions)¥1,767.4¥275.8

Total(1)(2)¥3,780.6

Notes:(1) Total loans in the above table do not include loans held for sale.
(2) Total loans of UNBC do not include Federal Deposit Insurance Corporation (“FDIC”) covered loans and small business loans which are
not individually rated totaling ¥181.9 billion.
At March 31, 2012:

Likely to become
Bankrupt or
Close
Legally/Virtually
Watch
Bankrupt(in billions)

NormalCommercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥46,609.9 ¥4,324.3
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,140.0
1,100.0
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
901.4
213.6
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,366.6
972.2
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,713.3
425.7
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . .
7,434.2
788.8
Banks and other financial institutions . . . . . . . . . .
3,065.6
433.2
Communication and information services . . . . . . .
1,137.2
113.6
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,185.3
152.0
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,666.3
125.2
Foreign-excluding UNBC . . . . . . . . . . . . . . . . . . . . . . .
18,779.1
1,099.5
Loans acquired with deteriorated credit quality . . . . . .
32.7
54.9
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥65,421.7¥5,478.7

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Ratings Based on
the Number of Delinquencies
AccrualNonaccrual

UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,784.4¥24.0

Total(1)¥808.9
199.6
39.9
104.8
84.8
237.4
7.8
33.2
48.0
53.4
65.7
21.0

¥51,743.1
11,439.6
1,154.9
10,443.6
3,223.8
8,460.4
3,506.6
1,284.0
10,385.3
1,844.9
19,944.3
108.6¥895.6¥71,796.0

AccrualNonaccrual(in billions)

Total(1)¥15,461.2¥ 642.6¥125.7¥115.3¥15,586.9¥ 757.9

Risk Ratings Based on
Internal Credit Ratings
Pass
Criticized(in billions)¥2,084.0¥149.3

Total(1)(2)¥4,041.7

Notes:(1) Total loans in the above table do not include loans held for sale.
(2) Total loans of UNBC do not include FDIC covered loans and small business loans which are not individually rated totaling¥160.2 billion.

We categorize loans into risk categories based on relevant information about the ability of borrowers toservice their debt, including, but not limited to, historical and current financial information, historical and current
payment experience, credit documentation, public and non-public information about borrowers and current
economic trends as deemed appropriate to each segment.
109

The primary credit quality indicator for loans within all classes of the Commercial segment is the internal
credit rating assigned to each borrower based on our internal borrower ratings of 1 through 15 with the rating of 1
assigned to a borrower with the highest quality of credit. When assigning a credit rating to a borrower, weevaluate the borrower’s expected debt-service capability based on various information, including financial andoperating information of the borrower as well as information on the industry in which the borrower operates, andthe borrower’s business profile, management and compliance system. In evaluating a borrower’s debt-service
capability, we also conduct assessment on the level of earnings and an analysis of the borrower’s net worth.
Based on the internal borrower rating, loans within the Commercial segment are categorized as Normal (internalborrower ratings of 1 through 9), Close Watch (internal borrower ratings of 10 through 12), and Likely to
become Bankrupt or Legally/Virtually Bankrupt (internal borrower ratings of 13 through 15). Loans to borrowers
categorized as Normal represent those that are not deemed to have collectability issues. Loans to borrowers
categorized as Close Watch represent those that require close monitoring as the borrower has begun to exhibit
elements of potential concern with respect to its business performance and financial condition, the borrower has
begun to exhibit elements of serious concern with respect to its business performance and financial condition,
including business problems requiring long-term solutions, or the borrower’s loans have been deemed
restructured loans or loans contractually past due 90 days or more for special reasons. Loans to borrowers
categorized as Likely to Become Bankrupt or Legally/Virtually Bankrupt represent those that have a higher
probability of default than those categorized as Close Watch due to serious debt repayment problems with poor
progress in achieving restructuring plans, the borrower being considered virtually bankrupt with no prospects for
an improvement in business operations, or the borrower being legally bankrupt with no prospects for continued
business operations because of non-payment, suspension of business, voluntary liquidation or filing for legal
liquidation.
For more information on our credit and borrower ratings, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Credit Risk Management.”
The accrual status is a primary credit quality indicator for loans within the Residential segment, the Card
segment, and consumer loans within the UNBC segment. The accrual status of these loans is determined by the
number of delinquent payments.
Commercial loans within the UNBC segment are categorized as either Pass or Criticized based on theinternal credit rating assigned to each borrower. Criticized loans include those loans that are potentially weak, as
the borrower has begun to exhibit deteriorating trends, well-defined weaknesses, which, if not corrected, could
jeopardize the full satisfaction of the debt, and critical weaknesses that make full collection improbable on thebasis of currently existing facts and conditions.
For the Commercial, Residential and Card segments, credit quality indicators are based on March 31
information. For the UNBC segment, credit quality indicators are basically based on December 31 information.

110

Past due analysis
Age analysis of past due loans by class at March 31, 2011 and 2012 are shown below:

At March 31, 2011:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding UNBC . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total
Past Due
Current(in billions)

Total
Loans(1)(2)

Recorded
Investment>
90 Days andAccruing¥ 98.3
9.5
4.5
37.7
10.3
11.9

¥153.4
19.9
10.8
44.1
16.8
23.7

¥50,244.5
11,215.5
1,269.1
10,901.3
3,382.1
8,388.9¥50,397.9
11,235.4
1,279.9
10,945.4
3,398.9
8,412.6

¥ 8.6
0.0
0.0
3.2
0.5
0.1

0.0

6.2

6.2

3,410.3

3,416.5

0.0

5.8
1.5
6.4
1.1
93.2
34.1
24.6

5.1
4.5
8.6
74.1
55.5
79.1
27.9

10.9
6.0
15.0
75.2
148.7
113.2
52.5

1,237.1
8,396.9
2,043.3
15,962.7
15,978.9742.3
3,786.9

1,248.0
8,402.9
2,058.3
16,037.9
16,127.6
855.5
3,839.4

0.0
0.0
4.8
—
46.3
—
0.2

¥208.1¥334.9¥543.0¥86,715.3¥87,258.3¥55.1

1-3 months
Past DueGreaterThan
3 months¥ 55.1
10.4
6.3
6.4
6.5
11.8

Notes:(1) Total loans in the above table do not include loans held for sale and loans acquired with deteriorated credit quality.
(2) Total loans of UNBC do not include ¥9.5 billion of FDIC covered loans which are not subject to the guidance on loans and debt
securities acquired with deteriorated credit quality.

At March 31, 2012:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding UNBC . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total
Past Due
Current(in billions)

Total
Loans(1)(2)

Recorded
Investment>
90 Days andAccruing¥ 68.4
7.8
2.4
16.4
4.7
10.3

¥104.9
11.7
4.3
23.0
8.4
20.5

¥51.638.2
11.427.9
1,150.6
10.420.6
3,215.4
8,439.9¥51,743.1
11,439.6
1,154.9
10,443.6
3,223.8
8,460.4

¥ 8.1
0.0
0.1
2.7
0.2
0.1

0.0

0.2

0.2

3,506.4

3,506.6

—

4.7
0.2
5.3
2.5
91.6
29.7
29.7

5.9
9.6
11.1
26.6
57.9
46.7
23.0

10.6
9.8
16.4
29.1
149.5
76.4
52.7

1,273.4
10,375.5
1,828.5
19,915.2
15,417.9667.0
4,075.4

1,284.0
10,385.3
1,844.9
19,944.3
15,567.4
743.4
4,128.1

0.0
0.0
5.0
—
56.5
—
0.1

¥190.0¥222.6¥412.6¥91,713.7¥92,126.3¥64.7

1-3 months
Past DueGreaterThan
3 months¥ 36.5
3.9
1.9
6.6
3.7
10.2

Notes:(1) Total loans in the above table do not include loans held for sale and loans acquired with deteriorated credit quality.
(2) Total loans of UNBC do not include ¥3.7 billion of FDIC covered loans which are not subject to the guidance on loans and debt
securities acquired with deteriorated credit quality.

111

Total past due loans at March 31, 2012 were ¥412.6 billion, a decrease of ¥130.4 billion from ¥543.0 billion
at March 31, 2011. This decrease was primarily due to a decrease in the total past due loans in theforeign-excluding UNBC category in the Commercial segment resulting from the improvement of the status ofpreviously past due loans to a large borrower in the governments and official institutions category. In addition,
total past due domestic loans in the Commercial segment decreased mainly due to a decrease in the real estatecategory.
Investment Portfolio
Our investment securities are primarily comprised of Japanese national government and Japanese
government agency bonds, corporate bonds and marketable equity securities. Japanese national government andJapanese government agency bonds are mostly classified as securities available for sale. In recent periods, ourinvestments in Japanese national government and Japanese government agency bonds increased as part of ourasset and liability management policy with respect to investing the amount of yen-denominated funds exceeding
our net loans. As a result, our holdings of Japanese national government and Japanese government agency bonds
as a percentage of our total assets increased to 23.0% at March 31, 2012 compared to 22.6% at March 31, 2011.
We also hold Japanese national government bonds which are classified as securities being held to maturity.
Historically, we have held equity securities of some of our customers primarily for strategic purposes, inparticular, to maintain long-term relationships with these customers. However, given the recent weak financial
market conditions, we have been reducing our investment in equity securities because we believe that from a risk
management perspective, reducing the price fluctuation risk in our equity portfolio is imperative. As of
March 31, 2011 and March 31, 2012, the aggregate value of our marketable equity securities under Japanese
GAAP satisfied the requirements of the legislation prohibiting banks from holding equity securities in excess of
their Tier I capital.
Investment securities increased ¥1.99 trillion to ¥61.04 trillion at March 31, 2012 from ¥59.05 trillion atMarch 31, 2011, primarily due to an increase of ¥4.16 trillion in Japanese national government and Japanese
government agency bonds available for sale, partially offset by a ¥0.61 trillion decrease in corporate bonds and a¥0.22 trillion decrease in marketable equity securities reflecting the general decline in Japanese stock prices andweak market fundamentals.
Investment securities other than securities available for sale or being held to maturity (i.e., nonmarketable
equity securities set forth on our consolidated balance sheet as other investment securities) were primarily carriedat cost of ¥0.91 trillion at March 31, 2012 and ¥1.70 trillion at March 31, 2011, respectively, because their fairvalues were not readily determinable. The decrease reflected the conversion of Morgan Stanley’s preferred stock
into Morgan Stanley’s common stock. Following the conversion of our Morgan Stanley’s preferred stock into
Morgan Stanley’s common stock, our investment in the convertible preferred stock, which was previously
included in Other investment securities, was reclassified as an investment in equity method investees in Other
assets. Our total investment in shares of Morgan Stanley’s common stock was ¥497.4 billion as of March 31,
2012. For further information, see Notes 2 and 14 to our consolidated financial statements included elsewhere inthis Annual Report.

112

The following table shows information as to the amortized costs, net unrealized gains (losses), andestimated fair values of our investment securities available for sale and being held to maturity at March 31, 2011
and 2012:
At March 31,
2011
Amortized
cost

Estimated
fair value

Securities available for sale:
Debt securities:
Japanese national
government and Japanese
government agency
bonds . . . . . . . . . . . . . . . . . ¥44,756.8 ¥44,719.6
Japanese prefectural andmunicipal bonds . . . . . . . .
193.7
200.3
Foreign governments andofficial institutions
bonds . . . . . . . . . . . . . . . . .
973.2
988.8
Corporate bonds . . . . . . . . . .
3,058.7
3,139.5
Mortgage-backed
securities . . . . . . . . . . . . . .
1,171.7
1,168.9
Asset-backed securities(1) . . .
452.3
452.4
Other debt securities . . . . . . .
1.0
1.0Marketable equity securities . . . . .
2,642.3
3,659.4

2012Net
unrealized
Amortized
gains (losses)
cost(in billions)

Estimated
fair valueNet
unrealized
gains (losses)¥ (37.2) ¥48,736.2 ¥48,882.6¥ 146.4

6.6

173.0

180.8

7.8

15.6
80.8

953.4
2,460.3

971.2
2,526.6

17.8
66.3

(2.8)
0.1
—
1,017.1

1,226.4503.0
1.0
2,315.4

1,236.9502.5
1.0
3,438.8

10.5
(0.5)
—
1,123.4

Total securities available for sale . . . . . ¥53,249.7 ¥54,329.9¥1,080.2¥56,368.7 ¥57,740.4¥1,371.7

Debt securities being held tomaturity(2) . . . . . . . . . . . . . . . . . . . . . ¥ 3,017.2 ¥ 3,059.0¥¥ 2,385.4 ¥ 2,430.7

¥

41.8

45.3

Notes:(1) AAA and AA-rated products account for approximately three fifths of our asset-backed securities.
(2) See Note 3 to our consolidated financial statements included elsewhere in this Annual Report for more details.

Net unrealized gains on securities available for sale increased ¥291.5 billion to ¥1,371.7 billion atMarch 31, 2012 from ¥1,080.2 billion at March 31, 2011. This increase primarily consisted of a ¥183.6 billion
increase in net unrealized gains on Japanese national government and Japanese government agency bonds asinterest rates declined during the period, and a ¥106.3 billion increase in net unrealized gains on marketable
equity securities due to a decrease in unrealized losses after recording increased impairment losses on ourholdings of marketable equity securities.

113

The amortized cost of securities being held to maturity decreased ¥631.8 billion compared to the previous
fiscal year mainly due to a ¥436.3 billion decrease in Japanese national government and Japanese government
agency bonds and a ¥266.5 billion decrease in foreign governments and official institutions bonds as a result of
the redemption of multiple long-term bonds at maturity, partially offset by an increase in asset backed securities
being held to maturity.
At March 31,
2011
2012
(in billions)

Other investment securities:
Nonmarketable equity securities
Unlisted preferred securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities held by investment companies and brokers and dealers(3) . . . . . . . . . .

¥1,489
178
37

¥672
205
33

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,704¥910

Notes:(1) These securities were mainly issued by public companies, including preferred stocks issued by Morgan Stanley, a preferred security
issued by BTMU Preferred Capital 9 limited that is our non-consolidated funding vehicle, and other unlisted preferred securities issued
by several Japanese public companies. Those securities were carried at cost.
(2) These securities were equity securities issued by unlisted companies other than unlisted preferred securities. Those securities werecarried at cost.
(3) These investment securities were held by certain subsidiaries subject to specialized industry accounting principles for investmentcompanies and brokers and dealers, and were measured at fair value.

Other investment securities are comprised of nonmarketable equity securities, including unlisted preferred
securities, and investment securities held by investment companies and brokers and dealers.
Other investment securities decreased ¥794 billion to ¥910 billion mainly as a result of the conversion of
convertible preferred stock of Morgan Stanley that we previously held into Morgan Stanley’s common stock. The
convertible preferred stock was included in unlisted preferred securities and carried at cost of ¥808 billion as ofMarch 31, 2011. Following the conversion on June 30, 2011, our investment in Morgan Stanley’s common stock
was reclassified as an investment in equity method investees included in Other assets.
Nonmarketable equity securities other than unlisted preferred securities consist primarily of equity securities
issued by small and medium-sized unlisted companies in Japan.
Investment securities held by certain subsidiaries subject to specialized industry accounting principles forinvestment companies and brokers and dealers and carried at fair value were ¥37 billion and ¥33 billion atMarch 31, 2011 and 2012, respectively.
Cash and Due from Banks
Cash and due from banks fluctuate significantly from day to day depending upon financial market
conditions. Cash and due from banks at March 31, 2012 was ¥3.23 trillion, remained unchanged from March 31,
2011.
Interest-earning Deposits in Other Banks
Interest-earning deposits in other banks fluctuate significantly from day to day depending upon financial
market conditions. Interest-earning deposits in other banks at March 31, 2012 were ¥5.90 trillion, a decrease of¥1.43 trillion from ¥7.33 trillion at March 31, 2011. However the average interest-earning deposits in other banks
held by domestic and overseas offices during the fiscal year ended March 31, 2012 increased ¥1.0 trillion and¥0.8 trillion, respectively, compared to the previous fiscal year.
114

Trading Account Assets
Trading account assets increased ¥6.13 trillion to ¥34.95 trillion at March 31, 2012 from ¥28.82 trillion atMarch 31, 2011. This increase consisted of an increase of ¥4.60 trillion in trading securities and an increase of¥1.53 trillion in trading derivative assets. The increase in trading securities was mainly due to an increase inforeign bonds reflecting the lower interest rate environment. The increase in trading derivative assets was mainly
due to an increase in the value of interest rate swap contracts, partially offset by a decrease in value of foreign
currency swap and equity derivative contracts.
Deferred Tax Assets
Deferred tax assets decreased ¥0.34 trillion to ¥0.95 trillion at March 31, 2012 from ¥1.29 trillion at March
31, 2011. This decrease primarily reflected an increase in net unrealized gains on investment securities due to arecovery in the fair market value of these securities. In addition, the realization of deferred tax assets forallowance for credit losses and the effect of changes in tax laws also contributed to the decrease in deferred tax
assets.
On November 30, 2011, the Japanese Diet enacted two tax related laws: “Amendment to the 2011 Tax
Reform” and “Special Measures to Secure the Financial Resources to Implement the Restoration from The Great
East Japan Earthquake.” The changes under the new laws include a limitation on the use of net operating loss
carryforwards to 80% of taxable income, a two-year increase in the carryforward period of certain net operating
loss carryforwards to a nine-year period, and an approximately 5% reduction in the effective statutory rate ofcorporate income tax from 40.6% to 35.6%. While the reduction in the effective statutory rate was effective forthe fiscal year beginning on or after April 1, 2012, a temporary surtax levied on corporate income taxes to fundthe earthquake recovery efforts caused the effective statutory rate of corporate income tax to be approximately
38.0% for the three year period between April 1, 2012 and March 31, 2015.
Accounts Receivable
Accounts receivable, which is included in Other assets, increased ¥1.22 trillion to ¥2.86 trillion at March 31,
2012 from ¥1.64 trillion at March 31, 2011, reflecting an increase in sales of securities at the end of the period,
and the resulting increase in receivables associated with those transactions.
Investment in Equity Method Investees
Investment in equity method investees, which is included in Other assets, increased ¥0.36 trillion to ¥1.13
trillion at March 31, 2012 from ¥0.77 trillion at March 31, 2011. This increase was primarily attributable to theapplication of the equity method accounting to our investment in Morgan Stanley’s common stock upon
conversion of the convertible preferred stock of Morgan Stanley, that we previously held, in June 2011.
For more information, see “—B. Liquidity and Capital Resources—Financial Condition—Investment
Portfolio” and Note 14 to our consolidated financial statements included elsewhere in this Annual Report.
Total Liabilities
At March 31, 2012, total liabilities were ¥206.34 trillion, an increase of ¥12.15 trillion from ¥194.19 trillion
at March 31, 2011. The total balance of deposits was ¥139.49 trillion at March 31, 2012, an increase of ¥2.86
trillion from ¥136.63 trillion at March 31, 2011. Payables under securities lending transactions were ¥4.98
trillion at March 31, 2012, an increase of ¥2.87 trillion from March 31, 2011. Trading account liabilities were
¥11.97 trillion at March 31, 2012, an increase of ¥2.06 trillion from March 31, 2011. The increases were partially
offset by a decrease in long-term debt of ¥0.77 trillion.
The appreciation of the Japanese yen against the US dollar and other foreign currencies between March 31,
2011 and March 31, 2012 resulted in a decrease in the Japanese yen amount of foreign currency-denominatedliabilities at March 31, 2012 by ¥1.46 trillion.
115

Deposits
Deposits are our primary source of funds. The total average balance of deposits increased ¥0.83 trillion to¥133.92 trillion for the fiscal year ended March 31, 2012 from ¥133.09 trillion for the fiscal year ended
March 31, 2011.
The balance of domestic deposits decreased ¥0.95 trillion to ¥114.59 trillion at March 31, 2012 from¥115.54 trillion at March 31, 2011, and the balance of foreign deposits increased ¥3.81 trillion from ¥21.09
trillion at March 31, 2011 to ¥24.90 trillion at March 31, 2012. Within domestic deposits, the balance of interestbearing deposits increased, partially in response to depositors’ preference to seek the safety of deposits at large
financial institutions, while the balance of non-interest bearing deposits decreased as a result of a decrease incorporate sector deposits, reflecting a gradual recovery from the Great East Japan Earthquake in March 2011,
which caused corporations to build up liquidity for contingency circumstances. The increase in foreign deposits
was mainly due to an increase in deposits in our overseas offices, especially in the United States and Europe,
reflecting the relative increase in credibility in Japanese banks that were perceived to be less affected by theEuropean debt crisis.
Short-term Borrowings
We use short-term borrowings as a funding source and in our management of interest rate risk. For
management of interest rate risk, short-term borrowings are used in asset-liability management operations tomatch interest rate risk exposure resulting from loans and other interest-earning assets and to manage funding
costs of various financial instruments at an appropriate level, based on our forecast of future interest rate levels.
Short-term borrowings consist of call money, funds purchased, payables under repurchase agreements, payables
under securities lending transactions, due to trust accounts, and other short-term borrowings.
Short-term borrowings increased ¥6.93 trillion to ¥32.86 trillion at March 31, 2012 from ¥25.93 trillion atMarch 31, 2011. This increase was primarily attributable to an increase of ¥4.06 trillion in payables under
repurchase agreements and securities lending transactions as a result of increases in repurchase and reverse
repurchase transactions as our holdings of Japanese government bonds increased.
Trading Account Liabilities
Trading account liabilities increased ¥2.06 trillion from ¥9.91 trillion at March 31, 2011 to ¥11.97 trillion atMarch 31, 2012. This increase was supported by multiple factors, such as an increase in interest rate and foreign
currency swap transactions, resulting from weakened credits and currencies in European markets as well as
increased volatility in interest rate spreads, and an increase in foreign exchange trading volumes.
Long-term Debt
Long-term debt at March 31, 2012 was ¥12.59 trillion, a decrease of ¥0.77 trillion from ¥13.36 trillion atMarch 31, 2011. This decrease was mainly due to a decrease in obligations under loan securitization transactions.
For further information, see Note 12 to our consolidated financial statements included elsewhere in this Annual
Report.
Benefit Obligations
As of March 31, 2011 and 2012, we had benefit obligations of ¥1,928.3 billion and ¥2,023.3 billion,
respectively, and the fair value of our plan assets was ¥2,004.1 billion and ¥1,946.9 billion, respectively. The fairvalue of our plan assets has fluctuated significantly depending on the general market conditions in recent fiscal
years. If the fair value of our pension plan assets declines or our investment return on our pension plan assets
decreases, or if a change is made in the actuarial assumptions on which the calculations of the projected pension
obligations are based, we may incur losses. Changes in the interest rate environment could also result in an116increase in our pension obligations and annual funding costs. In addition, unrecognized prior service costs may
be incurred if our pension plans are amended. For more information, see Note 13 to our consolidated financial
statements included elsewhere in this Annual Report.
Other Liabilities
Other liabilities increased ¥0.71 trillion to ¥5.55 trillion at March 31, 2012 from ¥4.84 trillion at March 31,
2011. This increase was primarily due to an increase in accounts payable reflecting the purchases of investment
securities at the end of the period.
Sources of Funding and Liquidity
Our primary source of liquidity is from a large balance of deposits, mainly ordinary deposits, certificates ofdeposit and time deposits. Time deposits have historically shown a high rollover rate among our corporate
customers and individual depositors. Due to our broad customer base in Japan and the depositors’ recent
preference to seek the safety of deposits at large financial institutions, the balance of our deposits increased from¥136.63 trillion at March 31, 2011 to ¥139.49 trillion at March 31, 2012. As of March 31, 2012, our deposits
exceeded our loans, net of allowance for credit losses of ¥91.01 trillion, by ¥48.48 trillion. These deposits
provide us with a sizable source of stable and low-cost funds. Our average deposits, combined with average total
equity of ¥8.59 trillion, funded 67.3% of our average total assets of ¥211.84 trillion during the fiscal year ended
March 31, 2012.
The remaining funding was primarily provided by short-term borrowings and long-term senior andsubordinated debt. Short-term borrowings consist of call money and funds purchased, payables under repurchaseagreements, payables under securities lending transactions, due to trust account, and other short-term borrowings.
From time to time, we have issued long-term instruments such as straight bonds with maturities between three tofive years. The balance of our short-term borrowings as of March 31, 2012 was ¥32.86 trillion, and the averagebalance of our short-term borrowings for the fiscal year ended March 31, 2012 was ¥35.23 trillion. The balanceof our long-term debt as of March 31, 2012 was ¥12.59 trillion, and the average balance of our long-term debt for
the fiscal year ended March 31, 2012 was ¥12.56 trillion. Liquidity may also be provided by the sale of financial
assets, including securities available-for-sale, trading account securities and loans. Additional liquidity may beprovided by the maturity of loans.
We manage liquidity separately at certain of our foreign and domestic non-bank and bank subsidiaries
because they are subject to separate regulatory requirements, pursue different business models and havedistinctive liquidity risk profiles. We manage our group-wide liquidity on a consolidated basis based on the tests
and analyses conducted at the subsidiary level. Liquidity risk management measures at the subsidiary level
include the following:‰

Domestic Bank Subsidiaries—Our major domestic bank subsidiaries, BTMU and MUTB, set liquidityand funding limits designed to maintain their respective requirements for funding from market sources
below pre-determined levels for certain periods (e.g., one-day, two-week and one-month). The majordomestic bank subsidiaries also monitor the balance of buffer assets they respectively hold, including
Japanese government bonds and US Treasury bonds, which can be used for cash funding even in periodsof stress. In addition, the major domestic bank subsidiaries regularly perform liquidity stress testing
designed to evaluate the impact of systemic market stress conditions and institution-specific stressevents, including credit rating downgrades, on their liquidity positions;‰

Foreign Bank Subsidiaries—Our major foreign bank subsidiary, UNBC, monitors various liquidity
metrics, including total available liquidity, the net non-core funding dependence ratio, and minimum
liquidity assets, as a tool to maintain a sufficient amount of liquidity and diversity of funding sources toallow UNBC to meet expected obligations in both stable and adverse conditions. In addition, UNBC
117

regularly conducts stress testing, which incorporates both bank-specific and systemic market scenariosthat would adversely affect its liquidity position, to facilitate the identification of appropriate remedial
measures to help ensure that it maintains adequate liquidity in adverse conditions;‰

Securities Subsidiaries—Our securities subsidiaries implement liquidity and funding limits designed tomaintain their requirements for funding from market sources below pre-determined levels for specified
periods. In addition, the securities subsidiaries regularly conduct analyses designed to assess the period
for which they can continue to meet their respective liquidity requirements by selling or pledging assets
they respectively hold under scenarios where they are unable to access any additional sources offinancing in the market; and‰Non-Bank Subsidiaries—Our non-bank subsidiaries, including Mitsubishi UFJ NICOS, regularly
conduct cash flow analyses designed to assess their ability to generate sufficient liquidity for specified
periods, considering the cash and cash equivalents as well as deposits they respectively hold, and theirrespective operating income and expenses under scenarios where they are no longer able to obtainfunding from markets through issuance of commercial paper, bonds or other instruments. The non-banksubsidiaries also conduct analyses to ensure sufficient liquidity and funding available from our banksubsidiaries and other financial institutions outside of our group of companies.

We collect and evaluate the results of the stress tests individually performed by our major subsidiaries toensure our ability to meet its liquidity requirements on a consolidated basis in stress scenarios.
We manage our funding sources using buffer assets, primarily Japanese government bonds, for cash
funding. As of March 31, 2012, we held ¥48.88 trillion of Japanese national government and Japanese
government agency bonds as available for sale. Our major domestic bank subsidiaries use liquidity-supplying
assets, primarily commitment lines for minor currencies funding. In addition, the major bank subsidiaries use aliquidity gap, or the excess of cash inflows over cash outflows, for cash funding.
Following the downgrade by Moody’s of the credit ratings of BTMU, MUTB and MUSHD in August 2011,a small number of Credit Support Annexes, or CSAs, were modified to require, and some of the new CSAs
required, additional collateral at lower thresholds. The downgrades by Fitch on July 20, 2012 may result in
additional modifications in the future. However, the downgrade of the credit ratings of BTMU and MUTB by
Moody’s in August 2011 did not trigger the requirement for additional collateral. MUSHD had some contracts
which had collateral requirements affected by the Moody’s downgrade, but as their derivative values werepositive against the counterparties, no additional collateral was required in August 2011. We currently do not
expect the downgrade by Fitch on July 20, 2012 to trigger a material amount of additional collateral obligations
under our derivative contracts. Following the Moody’s downgrade in August 2011, none of BTMU, MUTB and
MUSHD recognized material changes in their yen-denominated or US dollar-denominated cost of funding.
However, a further credit rating downgrade could result in higher funding costs and also trigger additional
collateral obligations. For further information, see “Item 3.D. Key Information—Risk Factors—Risks Related to
Our Business—A further downgrade of our credit ratings could trigger additional collateral obligations under ourderivative contracts and increase our funding costs.”118

Total Equity
The following table presents a summary of our total equity at March 31, 2011 and 2012:
At March 31,
2011
2012
(in billions, except percentages)

Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings appropriated for legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unappropriated retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other changes in equity from nonowner sources, net of taxes . . . . . . .
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 442.1
1,644.1
6,395.7
239.6
254.1(628.7)(11.2)¥ 442.1
1,645.1
6,378.6239.6
482.5(596.4)(8.3)

Total Mitsubishi UFJ Financial Group shareholders’ equity . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,335.7
327.2¥8,583.2
275.2

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,662.9¥8,858.4

Ratio of total equity to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.27%

4.12%

Total equity increased ¥195.5 billion to ¥8,858.4 billion at March 31, 2012 from ¥8,662.9 billion atMarch 31, 2011. The ratio of total equity to total assets showed a decrease of 0.15 percentage points to 4.12% at
March 31, 2012 from 4.27% at March 31, 2011. The decrease in the ratio of total equity to total assets at
March 31, 2012 was principally attributable to an increase in total assets of ¥12.35 trillion, which more thanoffset the impact of an increase in total equity of ¥195.5 billion.
Due to our holdings of a large amount of marketable Japanese equity securities and the volatility of theequity markets in Japan, changes in the fair value of marketable equity securities have significantly affected our
total equity in recent years. The following table presents information relating to the accumulated net unrealized
gains, net of taxes, in respect of investment securities classified as available for sale at March 31, 2011 and 2012:
At March 31,
2011
2012
(in billions, except percentages)

Accumulated net unrealized gains on investment securities . . . . . . . . . . . . . . . . . . . .
Accumulated net unrealized gains to total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥308.13.56%¥482.4
5.45%

Capital Adequacy
We are subject to various regulatory capital requirements promulgated by the regulatory authorities of thecountries in which we operate. Failure to meet minimum capital requirements can initiate mandatory actions byregulators that, if undertaken, could have a direct material effect on our consolidated financial statements.
Moreover, if our capital ratios are perceived to be low, our counterparties may avoid entering into transactions
with us, which in turn could negatively affect our business and operations. For further information, see“Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—We may not be able to maintainour capital ratios above minimum required levels, which could result in the suspension of some or all of ouroperations.”
We continually monitor our risk-adjusted capital ratio closely and manage our operations in consideration of
the capital ratio requirements. These ratios are affected not only by fluctuations in the value of our assets,
including our credit risk assets such as loans and equity securities, the risk weights of which depend on the
borrowers’ or issuers’ internal ratings, marketable securities and deferred tax assets, but also by fluctuations in
the value of the Japanese yen against the US dollar and other foreign currencies and by general price levels ofJapanese equity securities.
119Capital Requirements for Banking Institutions in JapanA Japanese banking institution is subject to the minimum capital adequacy requirements both on aconsolidated basis and a stand-alone basis, and is required to maintain the minimum capital irrespective ofwhether it operates independently or as a subsidiary under the control of another company. A bank holding
company is also subject to the minimum capital adequacy requirements on a consolidated basis. Under theguidelines of the FSA, capital is classified into three tiers, referred to as Tier I, Tier II and Tier III capital. Our
Tier I capital generally consists of shareholders’ equity items, including common stock, non-cumulative
preferred stock, capital surplus, noncontrolling interests and retained earnings (which includes deferred tax
assets). However, recorded goodwill and other items, such as treasury stock and unrealized losses on investment
securities classified as “securities available for sale” under Japanese GAAP, net of taxes, if any, are deductedfrom Tier I capital. Our Tier II capital generally consists of the amount (up to a maximum of 0.6% of credit riskweighted assets) by which eligible reserves for credit losses exceed expected losses in the internal ratings-based
approach, or the IRB approach, and general reserves for credit losses, subject to a limit of 1.25% of modified
risk-weighted assets determined by the partial use of the Standardized Approach (including a phased rollout of
the IRB approach), 45% of the unrealized gains on investment securities classified as “securities available forsale” under Japanese GAAP, 45% of the land revaluation excess, the balance of perpetual subordinated debt andthe balance of subordinated term debt with an original maturity of over five years subject to certain limitations,
up to 50% of Tier I capital. Our Tier III capital consists of short-term subordinated debt with an original maturityof at least two years, subject to certain limitations. At least 50% of the minimum capital requirements must be
maintained in the form of Tier I capital.
The eligible regulatory capital set forth in the FSA’s guidelines discussed above was modified as ofMarch 31, 2007 to reflect the “International Convergence of Capital Measurement and Capital Standards: A
Revised Framework,” often referred to as “Basel II.” In response to the recent financial crisis, the Group ofCentral Bank Governors and Heads of Supervision has made a series of announcements regarding the new global
regulatory framework, which has been referred to as “Basel III,” to strengthen the regulation, supervision andrisk management of the banking sector. Various Basel III measures are expected to be introduced in phases
starting in calendar 2013, including those designed to raise the level of minimum capital requirements and toestablish an internationally harmonized leverage ratio and a global minimum liquidity standard. In addition, in
July 2011, the Basel Committee on Banking Supervision proposed additional loss absorbency requirements to
supplement the common equity Tier I capital requirement ranging from 1% to 2.5% for global systemicallyimportant banks, depending on the bank’s systemic importance, to be introduced in phases starting in calendar
2016. In November 2011, the Financial Stability Board tentatively identified us as a G-SIFI. Based on the
Basel III framework, the Japanese capital ratio framework, which is currently based on Basel II, has been revised
to implement the more stringent requirements, which will be effective as of March 31, 2013. Likewise, local
banking regulators outside of Japan such as those in the United States are expected to revise the capital andliquidity requirements imposed on our subsidiaries and operations in those countries to implement the more
stringent requirements of Basel III as adopted in those countries. We intend to carefully monitor further
developments with an aim to enhance our corporate value and maximize shareholder value by integrating thevarious strengths within the MUFG Group.
As of March 31, 2011 and 2012, we have calculated our risk-weighted assets in accordance with the FSA
guidelines reflecting Basel II. In determining capital ratios under the FSA guidelines reflecting Basel II, we andour banking subsidiaries used the Advanced Internal Ratings-Based approach, or the AIRB approach, to calculate
capital requirements for credit risk as of March 31, 2011 and 2012. The Standardized Approach is used for somesubsidiaries that are considered to be immaterial to the overall MUFG capital requirements, and UNBC has
adopted a phased rollout of the internal ratings-based approach. Market risk is reflected in the risk-weighted
assets by applying the Internal Models Approach to calculate general market risk and the Standardized
Methodology to calculate specific risk. Under the Internal Models Approach, we principally use a historicalsimulation model to calculate value-at-risk, or VaR, amounts by estimating the profit and loss on our portfolio byapplying actual fluctuations in historical market rates and prices over a fixed period. Under the FSA guidelines
reflecting Basel II, we reflect operational risk in the risk-weighted assets by applying the Standardized Approach120

as of March 31, 2011 and the Advanced Measurement Approach as of March 31, 2012. For more information,
see “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Operational Risk
Management.”
Under the Japanese regulatory capital requirements, our consolidated capital components, including Tier I,
Tier II and Tier III capital and risk-weighted assets, are calculated from our consolidated financial statements
prepared under Japanese GAAP. Also, each of the consolidated and stand-alone capital components and riskweighted assets of our banking subsidiaries in Japan is calculated from consolidated and non-consolidated
financial statements prepared under Japanese GAAP.
For additional discussion of the calculation of our capital ratios, see Note 19 to our consolidated financial
statements included elsewhere in this Annual Report.
For a detailed discussion of the capital adequacy guidelines adopted by the FSA and proposed amendments,
see “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—Japan—
Capital adequacy.”
Mitsubishi UFJ Financial Group Ratios
The table below presents our consolidated total capital components, risk-weighted assets and risk-adjusted
capital ratios at March 31, 2011 and 2012. Underlying figures are calculated in accordance with Japanesebanking regulations based on information derived from our consolidated financial statements prepared inaccordance with Japanese GAAP, as required by the FSA. The percentages in the table below are rounded down.
For further information, see Note 19 to our consolidated financial statements included elsewhere in this Annual
Report.
At March 31,
2011
2012
(in billions, except percentages)

Capital components:
Tier I capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier II capital includable as qualifying capital . . . . . . . . . . . .
Tier III capital includable as qualifying capital . . . . . . . . . . . .
Deductions from total qualifying capital . . . . . . . . . . . . . . . . .

¥ 9,953.3
3,920.5—(793.0)¥10,522.3
4,038.7—(1,818.5)

Total risk-based capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,080.8¥12,742.5

Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital ratios:Tier I capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥87,804.9¥85,456.6

11.33%
14.89

12.31%
14.91

Minimum capitalratios required

4.00%
8.00

Our Tier I capital ratio and total risk-adjusted capital ratio at March 31, 2012 were 12.31% and 14.91%,
respectively. The increase in total risk-adjusted capital ratio was mainly due to a decrease in risk weighted assets
during the fiscal year ended March 31, 2011 as the amount of our net loans and the value of marketable equity
securities decreased. At March 31, 2011, management believed that we were in compliance with all capital
adequacy requirements to which we were subject.

121Capital Ratios of Our Major Banking Subsidiaries in JapanThe table below presents the risk-adjusted capital ratios of BTMU and MUTB at March 31, 2011 and 2012.
Underlying figures are calculated in accordance with Japanese banking regulations based on information derived
from their consolidated and non-consolidated financial statements prepared in accordance with Japanese GAAP,
as required by the FSA. The percentages in the table below are rounded down. For further information, seeNote 19 to our consolidated financial statements included elsewhere in this Annual Report.

Consolidated capital ratios:
BTMU
Tier I capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTBTier I capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stand-alone capital ratios:
BTMU
Tier I capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTBTier I capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

At March 31,
2011
2012

Minimum capitalratios required

11.42% 11.76%
15.82 16.27

4.00%
8.00

13.02
15.93

12.38
15.74

4.00
8.00

12.09
16.61

12.60
17.41

4.00
8.00

12.64
16.01

11.71
15.76

4.00
8.00

At March 31, 2012, management believes that our banking subsidiaries were in compliance with all capital
adequacy requirements to which they were subject.
Capital Requirements for Banking Institutions in the United States
In the United States, UNBC and its banking subsidiary, Union Bank, our largest subsidiaries operating
outside Japan, are subject to various regulatory capital requirements administered by US Federal banking
agencies, including minimum capital requirements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, they must meet specific capital guidelines that involve quantitative
measures of their assets, liabilities and certain off-balance sheet items as calculated under US regulatory
accounting practices. Their capital amounts and prompt corrective action classification are also subject toqualitative judgments by the regulators about components, risk weightings and other factors.
In addition, BTMU and MUTB are subject to the Federal Reserve’s requirements as foreign banking
organizations that have US branches and agencies and that are controlled by us as a financial holding company.
For a detailed discussion of the capital adequacy guidelines applicable to us in the United States, see“Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—United States—
Bank capital requirements and capital distributions.”122Capital Ratios of Banking Subsidiaries in the United States
The table below presents the risk-adjusted capital ratios of UNBC and Union Bank, both subsidiaries of
BTMU, at December 31, 2010 and 2011:

UNBC:
Tier I capital (to risk-weighted assets) . . . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . . . .
Total capital (to risk-weighted assets) . . . . . . . . . . . . . .
Union Bank:
Tier I capital (to risk-weighted assets) . . . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . . . .
Total capital (to risk-weighted assets) . . . . . . . . . . . . . .

Ratios OCC
requires to be“well capitalized”

At December 31,
2010
2011

Minimum capitalratios required

12.44% 13.82%
10.34 11.44
15.01 15.98

4.00%
4.00
8.00

—
—
—

11.53% 12.39%
9.55 10.25
13.85 14.43

4.00%
4.00
8.00

6.00%
5.00
10.00

Note:
(1) Excludes certain intangible assets.

Management believes that, at December 31, 2011, UNBC and Union Bank met all capital adequacy
requirements to which they were subject.
At December 31, 2010 and 2011, the Office of the Comptroller of the Currency, or OCC, categorized Union
Bank as “well-capitalized.” To be categorized as “well-capitalized,” Union Bank must maintain minimum ratiosof Total and Tier I capital to risk-weighted assets and of Tier I capital to quarterly average assets (the Leverage
ratio) as set forth in the table. There are no conditions or events since December 31, 2011 that would cause
management to believe Union Bank’s category has changed.
Capital Requirements for Securities Firms in Japan and Overseas
We have securities subsidiaries in Japan and overseas, which are also subject to regulatory capitalrequirements. In Japan, the Financial Instruments and Exchange Law of Japan and related ordinances require
financial instruments firms to maintain a minimum capital ratio of 120% calculated as a percentage of capital
accounts less certain fixed assets, as determined in accordance with Japanese GAAP, against amounts equivalent
to market, counterparty credit and operations risks. Specific guidelines are issued as a ministerial ordinancewhich details the definition of essential components of the capital ratios, including capital, deductible fixed asset
items and risks, and related measures. Failure to maintain a minimum capital ratio will trigger mandatory
regulatory actions. A capital ratio of less than 140% will call for regulatory reporting and a capital ratio of lessthan 100% may lead to a suspension of all or part of the business for a period of time and cancellation ofregistration. Overseas securities subsidiaries are subject to the relevant regulatory capital requirements of thecountries or jurisdictions in which they operate.
Capital Adequacy Ratio of MUMSSAt March 31, 2011 and 2012, MUMSS’ capital accounts less certain fixed assets of ¥250.4 billion and¥387.7 billion represented 219.3% and 328.6% of the total amounts equivalent to market, counterparty credit andoperations risks, respectively, as calculated pursuant to the Financial Instruments and Exchange Law of Japan.
For further information, see Note 19 to our consolidated financial statements included elsewhere in this Annual
Report.
In April and November 2011, we injected additional capital into MUMSS to strengthen its capital base. See“—Recent Developments.”123

Non-exchange Traded Contracts Accounted for at Fair Value
The use of non-exchange traded or over-the-counter contracts provides us with the ability to adapt to thevaried requirements of a wide customer base while mitigating market risks. Non-exchange traded contracts areaccounted for at fair value, which is generally based on pricing models or quoted market prices for instrumentswith similar characteristics. Gains or losses on non-exchange traded contracts are included in “Trading accountprofits—net” in our consolidated statements of operations included elsewhere in this Annual Report. The
following table summarizes the changes in fair value of non-exchange traded contracts for the fiscal years ended
March 31, 2011 and 2012:
Fiscal years ended March 31,
2011
2012
(in millions)

Net fair value of contracts outstanding at beginning of fiscal year . . . . . . . . . . . . . .
Changes attributable to contracts realized or otherwise settled during the fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of new contracts when entered into during the fiscal year . . . . . . . . . . . . .
Other changes in fair value, principally revaluation at end of fiscal year . . . . . . . . .

¥37,138¥ 23,503(6,147)2,346(9,834)(10,044)
9,114(2,797)

Net fair value of contracts outstanding at end of fiscal year . . . . . . . . . . . . . . . . . . . .

¥23,503¥ 19,776

During the fiscal year ended March 31, 2012, the fair value of non-exchange traded contracts decreased
mainly due to contracts being settled during the fiscal year, and a decline in the fair value resulting fromfluctuations in foreign exchange rates and/or fluctuations in the value of credit default swaps embedded incollateralized debt obligations.
The following table summarizes the maturities of non-exchange traded contracts at March 31, 2012:
Net fair value of contracts—unrealized gains
Prices provided byPrices based on models andother external sources
other valuation methods(in millions)

Maturity less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity less than 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity less than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity 5 years or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥143
519
—
—

¥11,907
4,453
1,890
864

Total fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥662¥19,114

C.

Research and Development, Patents and Licenses, etc.
Not applicable.

D.

Trend Information

See the discussions in “—Business Environment,” “—Recent Developments,” “—A. Operating Results”
and “—B. Liquidity and Capital Resources.”

124

E.

Off-Balance Sheet Arrangements

In the normal course of business, we engage in several types of off-balance sheet arrangements to meet thefinancing needs of customers, including various types of guarantees, commitments to extend credit andcommercial letters of credit. The following table summarizes these commitments at March 31, 2012:
Amount of commitment by expiration period
1 year
1-5
Overor lessyears
5 years
Total(in billions)

Guarantees:
Standby letters of credit and financial guarantees . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

1,897
1,480
90,816
4,428
96

¥

884
521
54,592
324
—

¥

721
88
10,312
498
—

¥

3,502
2,089
155,720
5,250
96

Total guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98,71756,321

11,619166,657

Other off-balance sheet instruments:
Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to make investments . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47,961586
51
16

13,841
96
48
—

952
—
18
—

62,754682
117
16

Total other off-balance sheet instruments . . . . . . . . . . . . . .

48,614

13,985970

63,569Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥147,331¥70,306¥12,589¥230,226

See Note 22 to our consolidated financial statements included elsewhere in this Annual Report for a
description of the nature of our guarantees and other off-balance sheet instruments.
The contractual amounts of these guarantees and other off-balance sheet instruments represent the amounts
at risk if the contracts were to be fully drawn upon as a result of a subsequent default by our customer and a
decline in the value of the underlying collateral. Since many of these commitments expire without being drawn
upon, the total contractual or notional amounts of these commitments do not necessarily represent our future cash
requirements. At March 31, 2012, approximately 64% of these commitments will expire within one year, 31%from one year to five years and 5% after five years. Such risks are monitored and managed as a part of our risk
management system as set forth in “Item 11. Quantitative and Qualitative Disclosures about Credit, Market andOther Risk.” We evaluate off-balance sheet arrangements in the manner described in Note 1 to our consolidated
financial statements included elsewhere in this Annual Report.
The fees generated specifically from off-balance sheet arrangements are not a dominant source of ouroverall fees and commissions.
Some of our off-balance sheet arrangements are related to activities of special purpose entities, most ofwhich are variable interest entities, or VIEs. For further information, see Note 23 to our consolidated financial
statements included elsewhere in this Annual Report.

125

F.

Tabular Disclosure of Contractual Obligations
The following table shows a summary of our contractual cash obligations outstanding at March 31, 2012:
Less than
1 year

Payments due by period
1-3
3-5
Over
years
years
5 years(in billions)

Total

Contractual cash obligations:Time deposit obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . .
Capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥52,896
1,500
10
76
57

¥ 9,568
2,850
13
122
35

¥1,615
1,637
3
103
8

¥ 195
6,577
3
362
18

¥64,274
12,56429
663
118

Total(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥54,539¥12,588¥3,366¥7,155¥77,648

Notes:(1) The total amount of expected future pension payments is not included in the above table or the total amount of commitments outstandingat March 31, 2012 as such amount is not currently determinable. We expect to contribute approximately ¥55.7 billion for pension andother benefits for our employees for the fiscal year ending March 31, 2013. For further information, see Note 13 to our consolidated
financial statements included elsewhere in this Annual Report.
(2) The above table does not include unrecognized tax benefits and interest and penalties related to income tax associated with the guidanceon accounting for uncertainty in income taxes as we cannot estimate reasonably the timing of cash settlement of the liabilities forunrecognized tax benefit. The total amount of the liabilities for unrecognized tax benefits is ¥58.6 billion at March 31, 2012. Among theliabilities for unrecognized tax benefits, it is reasonably possible that approximately ¥16.6 billion will decrease during the next twelve
months. For further information, see Note 7 to our consolidated financial statements included elsewhere in this Annual Report.

Purchase obligations include any legally binding contractual obligations that require us to spend more than¥100 million annually under the contract. Purchase obligations in the table primarily include commitments tomake investments into corporate recovery or private equity investment funds.
G. Safe Harbor
See the discussion under “Forward-Looking Statements.”

126

Item 6.
A.

Directors, Senior Management and Employees.

Directors and Senior Management

The following table sets forth the members of our board of directors as of July 1, 2012, together with theirrespective dates of birth, positions and experience:
Name(Date of Birth)

Takamune Okihara(July 11, 1951)

Position in MUFG

ChairmanBusiness Experience

April 1974
March 2001
January 2002
May 2003
May 2004
June 2004
October 2005
January 2006
April 2008
June 2010

Kinya Okauchi
Deputy Chairman and April 1974
(September 10, 1951)
Chief Audit Officer June 2001
April 2003
March 2004
June 2004
June 2005
October 2005
June 2007
June 2008
April 2010
April 2012

127

Joined Sanwa Bank
Executive Officer of Sanwa Bank
Executive Officer of UFJ Bank
Senior Executive Officer of UFJ Bank
President and CEO of UFJ Bank
Director of UFJ Holdings
Managing Officer of MUFG
Deputy President of BTMU
Deputy Chairman of BTMU (incumbent)
Retired from Managing Officer of MUFG
Chairman of MUFG (incumbent)
Director of Mitsubishi UFJ NICOS Co., Ltd(incumbent)
Joined Mitsubishi Trust Bank
Director (Non-Board Member Director) of
Mitsubishi Trust BankManaging Director (Non-Board Member
Director) of Mitsubishi Trust BankManaging Director of Mitsubishi Trust Bank
Director of MTFG
Senior Managing Director of Mitsubishi TrustBank
Director of MUFG
Senior Managing Director of MUTBManaging Officer of MUFG
President of MUTB
Director of MUFG
Deputy Chairman of MUFG (incumbent)
Chairman of MUTB (incumbent)

Name(Date of Birth)

Position in MUFG

Business Experience

Katsunori Nagayasu(April 6, 1947)

President & CEO

May 1970
June 1997
June 2000

Joined Mitsubishi Bank
Director of Bank of Tokyo-Mitsubishi
Retired from Director of Bank of TokyoMitsubishi
Managing Director of Nippon Trust Bank
April 2001
Director of MTFG
October 2001
Managing Director of Mitsubishi Trust Bank
June 2002
Retired from Managing Director of
Mitsubishi Trust BankManaging Director of Bank of TokyoMitsubishi
April 2004
Director and Managing Officer of MTFG
June 2004
Managing Officer of MTFG
January 2005
Senior Managing Director of Bank of TokyoMitsubishi
May 2005
Deputy President of Bank of TokyoMitsubishi
October 2005
Managing Officer of MUFG
December 2005 Retired from Managing Officer of MUFG
January 2006
Deputy President of BTMU
June 2006
Deputy President of MUFG
April 2008
Director of MUFG
President of BTMU
April 2010
President & CEO of MUFG (incumbent)
April 2012
Chairman of BTMU (incumbent)

Masaaki Tanaka(April 1, 1953)

Deputy President

April 1977
June 2004

May 2005
January 2006
April 2007
May 2007June 2010
May 2011
May 2012
June 2012

128

Joined Mitsubishi Bank
Non-Board Member Director of Bank ofTokyo-Mitsubishi
Executive Officer of MTFG
Retired from Executive Officer of MTFG
Executive Officer of BTMU
Executive Officer of MUFG
Retired from Executive Officer of MUFG
Managing Executive Officer of BTMU
Director of UnionBanCal Corporation(incumbent)
Managing Officer of MUFG
Senior Managing Executive Officer of BTMU
Director of Morgan Stanley (incumbent)
Retired from Managing Officer of MUFG
Retired from Senior Managing Executive
Officer of BTMU
Deputy President of MUFG (incumbent)

Name(Date of Birth)

Taihei Yuki
(October 3, 1952)

Position in MUFG

Business Experience

Senior Managing
April 1977
Director and Chief June 2004
Financial Officer
October 2005
June 2006
June 2007
June 2008
June 2009
June 2010
June 2011

Ichiro Hamakawa(February 6, 1956)

Senior Managing
April 1978
Director and Chief May 2005
Planning Officer
October 2005

Akihiko Kagawa(October 6, 1955)

Managing Director
and Chief
Compliance andRisk Officer

Joined Mitsubishi Trust Bank
Director (Non-Board Member Director) of
Mitsubishi Trust Bank
Executive Officer of MUTBManaging Executive Officer of MUTBManaging Director of MUTB
Director of MUFG
Managing Officer of MUFG
Senior Managing Director of MUTB
Retired from Managing Officer of MUFG
Retired from Senior Managing Director of
MUTB
Director of BTMU (incumbent)
Senior Managing Director of MUFG
(incumbent)

Joined Sanwa Bank
Executive Officer of UFJ Holdings
Executive Officer of MUFG
Executive Officer of UFJ Bank
December 2005 Retired from Executive Officer of MUFG
January 2006
Executive Officer of BTMU
January 2009Managing Executive Officer of BTMUMay 2011
Retired from Managing Executive Officer of
BTMUManaging Officer of MUFG
June 2011
Director of MUTB (incumbent)
Managing Director of MUFG
May 2012
Senior Managing Director of MUFG
(incumbent)
April 1980
June 2006
May 2010
May 2012
June 2012

129

Joined Bank of Tokyo
Executive Officer of BTMU
Executive Officer of MUFG
Retired from Executive Officer of BTMUManaging Officer of MUFG
Director of kabu.com Securities Co., Ltd.
(incumbent)
Director of MUSHD (incumbent)
Managing Director of MUFG (incumbent)

Name(Date of Birth)

Toshiro Toyoizumi(October 26, 1949)

Position in MUFG

Director

Business Experience

April 1973
June 2001
May 2004
January 2006
June 2007
April 2008
May 2009
June 2009
May 2010
April 2011

June 2011
Nobuyuki Hirano(October 23, 1951)

Director

April 1974
June 2001
July 2004
May 2005
June 2005

October 2005
January 2006
October 2008
June 2009
June 2010
October 2010
April 2012
Shunsuke Teraoka(December 4, 1953)

Director

April 1976
May 2002
May 2004
May 2005
October 2005
June 2008
June 2010
June 2012

130

Joined Mitsubishi Bank
Non-Board Member Director of Bank ofTokyo-Mitsubishi
Non-Board Member Managing Director of
Bank of Tokyo-Mitsubishi
Managing Executive Officer of BTMUManaging Officer of MUFG
Senior Managing Executive Officer of BTMU
Retired from Managing Officer of MUFG
Deputy President of BTMUManaging Officer of MUFG
Retired from Deputy President of BTMU
Retired from Managing Officer of MUFG
President & CEO of MUSHD (incumbent)
President & CEO of MUMSS (incumbent)
Director of MUFG (incumbent)
Joined Mitsubishi Bank
Non-Board Member Director of Bank ofTokyo-Mitsubishi
Executive Officer of MTFG
Non-Board Member Managing Director of
Bank of Tokyo-Mitsubishi
Managing Director of Bank of TokyoMitsubishi
Director of MTFG
Director of MUFG
Managing Director of BTMU
Senior Managing Director of BTMU
Deputy President of BTMUManaging Officer of MUFG
Director of MUFG
Deputy President of MUFG
President of BTMU (incumbent)
Director of MUFG (incumbent)
Joined Toyo Trust Bank
Executive Officer of UFJ Trust Bank
Director and Executive Officer of UFJ TrustBank
Director and Senior Executive Officer of UFJ
Trust BankManaging Executive Officer of MUTB
Senior Managing Director of MUTB
Deputy President of MUTB
Director of MUFG (incumbent)
Deputy Chairman of MUTB (incumbent)

Name(Date of Birth)

Position in MUFG

Tatsuo Wakabayashi
Director(September 29, 1952)

Business Experience

April 1977
June 2004
October 2005
June 2006
June 2008
June 2009
June 2010
June 2011
April 2012

Saburo Araki(August 6, 1957)

Director

April 1981
May 2007June 2007
May 2009
May 2011
May 2012
June 2012

Joined Mitsubishi Trust Bank
Director (Non-Board Member Director) of
Mitsubishi Trust Bank
Executive Officer of MUTBManaging Executive Officer of MUTBManaging Director of MUTB
Senior Managing Director of MUTBManaging Officer of MUFG
Director of MUFG (incumbent)
President of MUTB (incumbent)
Joined Mitsubishi Bank
General Manager, Human Resources Divisionof BTMU
Executive Officer of BTMU
Executive Officer of MUFG
Managing Executive Officer of BTMUManaging Officer of MUFG
Retired from Managing Officer of MUFG
Managing Director of BTMU (incumbent)
Director of MUFG (incumbent)

Hiroyuki Noguchi(May 7, 1958)

Director

April 1981
Joined Tokai Bank
September 2006 General Manager, Shintomicho Commercial
Banking Office of BTMUMay 2009
General Manager, Nihonbashi-Chuo
Commercial Banking Office of BTMU
June 2009
Executive Officer of BTMUMay 2011
Retired from Executive Officer of BTMU
June 2011
Senior Executive Officer of MUSHD
Senior Executive Officer of MUMSSManaging Director of MUMSS (incumbent)
Managing Director of MUSHD (incumbent)
Director of MUFG (incumbent)

Muneaki Tokunari(March 6, 1960)

Director

April 1982
October 2005
April 2007

June 2009
June 2011
April 2012
June 2012

131

Joined Mitsubishi Trust Bank
General Manager, Frontier Strategy Planningand Support Division of MUTB
General Manager, Financial Planning
Division, Deputy General Manager,
Corporate Planning Division, and
Co-General Manager, Corporate Risk
Management Division of MUFG
Executive Officer of MUTB
Executive Officer of MUFG
Managing Executive Officer of MUTBManaging Director of MUTB (incumbent)
Director of MUFG (incumbent)

Name(Date of Birth)

Position in MUFG

Business Experience

Ryuji Araki(January 29, 1940)

Director

April 1962
Joined the Toyota Motor Co., Ltd.
September 1992 Director, Member of the Board of TOYOTA
MOTOR CORPORATION (TOYOTA)
June 1997
Managing Director, Member of the Board of
TOYOTA
June 1999
Senior Managing Director, Member of theBoard of TOYOTA
June 2001
Vice President, Member of the Board andRepresentative Director of TOYOTA
June 2002
Auditor of Aioi Insurance Company Limited.
(Aioi Insurance)
June 2005
Senior Advisor to the Board of TOYOTA
Chairman of Aioi Insurance
Chairman of TOYOTA FINANCIALSERVICES CORPORATION. (TFS)
June 2007
Advisor of TFS
June 2008
Advisor of TOYOTA (incumbent)
Senior Advisor of Aioi Insurance
June 2009Retired from Advisor of TFS
Director of MUFG (incumbent)
October 2010
Senior Advisor of Aioi Nissay Dowa InsuranceCo., Ltd. (Aioi Nissay Dowa Insurance)
June 2012
Advisor of Aioi Nissay Dowa Insurance(incumbent)

Kazuhiro Watanabe(May 19, 1947)

Director

April 1974

Public Prosecutor, Tokyo District Public
Prosecutors Office
July 1998
Assistant Vice-minister of Justice (Deputy
Director-General for Criminal Affairs
Bureau)April 2001
Public Prosecutor, Supreme Public Prosecutors
OfficeJanuary 2002
Chief Public Prosecutor, Nara District Public
Prosecutors Office
September 2004 Chief Public Prosecutor, Maebashi District
Public Prosecutors Office
September 2005 Chief Public Prosecutor, Nagoya District Public
Prosecutors Office
June 2007
Chief Public Prosecutor, Yokohama District
Public Prosecutors Office
July 2008
Superintending Prosecutor, Sapporo High Public
Prosecutors Office
July 2009Retired from Superintending Prosecutor,
Sapporo High Public Prosecutors Office
September 2009 Attorney at Law
Joined Dai-ichi Tokyo Bar Association
Professor of Law, Tokai University Law School(incumbent)
June 2010
Director of MUFG (incumbent)
Auditor of Mitsubishi Plastics, Inc. (incumbent)
January 2011
Attorney at Law of Higashimachi LPC(incumbent)

132

Name
(Date of Birth)

Takuma Otoshi(October 17, 1948)

Position in MUFG

Director

Business Experience

July 1971
Joined IBM Japan, Ltd. (IBM Japan)
March 1994
Director of IBM Japan
March 1997
Managing Director of IBM Japan
December 1999 President of IBM Japan
June 2004
Director of MTFG
October 2005
Director of MUFG (incumbent)
April 2008
President & Chairman of IBM Japan
January 2009
Chairman of IBM Japan
June 2009
Director of TOTO LTD. (incumbent)
Director of CALBEE, Inc. (incumbent)
June 2010
Director of Kao Corporation (incumbent)
Director of Meiji Yasuda Life Insurance
July 2010
Company (incumbent)
May 2012
Senior Advisor of IBM Japan (incumbent)

133

The following table sets forth our corporate auditors as of July 1, 2012, together with their respective datesof birth, positions and experience:Name(date of birth)

Position in MUFG

Tetsuo Maeda(June 10, 1951)

Corporate Auditor(Full-Time)

Takehiko Nemoto(August 20, 1953)

Corporate Auditor(Full-Time)

Tsutomu Takasuka(February 11, 1942)

Corporate Auditor

Kunie Okamoto
Corporate Auditor(September 11, 1944)

Business experience

April 1974
Joined Toyo Trust BankMay 2000
Executive Officer of Toyo Trust Bank
January 2002
Executive Officer of UFJ Trust BankMay 2003
Senior Executive Officer of UFJ Trust Bank
September 2004 Director and Senior Executive Officer of UFJ
Trust Bank
October 2005
Managing Director of MUTB
June 2006
Senior Managing Director of MUTB
June 2009Retired from Senior Managing Director of
MUTB
Corporate Auditor (Full-Time) of MUFG
(incumbent)
April 1976
Joined Mitsubishi Bank
June 2004
Non-Board Member Director of Bank ofTokyo-Mitsubishi
October 2005
Executive Officer of MUFG
January 2006
Executive Officer of BTMU
October 2008
Managing Executive Officer of BTMUMay 2009
Managing Officer of MUFG
June 2009Managing Director of BTMU
October 2010
Senior Managing Director of BTMUMay 2011
Retired from Managing Officer of MUFG
June 2011Retired from Senior Managing Director of
BTMU
Corporate Auditor (Full-Time) of MUFG
(incumbent)
April 1967
Became a member of the Japanese Institute ofCertified Public Accountants
June 1985
Partner at Mita Audit Corporation
February 1990 Partner at Tohmatsu & Co.
September 2002 Resigned Tohmatsu & Co.
April 2004
Professor, Department of Business
Administration, Bunkyo Gakuin University
October 2004
Full-time Corporate Auditor of Bank ofTokyo-Mitsubishi
June 2005
Corporate Auditor of MTFG
October 2005
Corporate Auditor of MUFG (incumbent)
January 2006
Full-time Corporate Auditor of BTMU
(incumbent)
March 2010Retired from Professor, Department of
Business Administration, Bunkyo Gakuin
University
June 1969
Joined Nippon Life Insurance Company(Nippon Life)
July 1995
Director of Nippon Life
March 1999
Managing Director of Nippon Life
March 2002
Senior Managing Director of Nippon Life
April 2005
President of Nippon Life
June 2005
Corporate Auditor of UFJ Holdings
Corporate Auditor of TOKYUCORPORATION (incumbent)
October 2005
Corporate Auditor of MUFG (incumbent)
June 2010
Director of Kintetsu Corporation (incumbent)
Corporate Auditor of Daicel Corporation(formerly Daicel Chemical Industries, Ltd.)(incumbent)
April 2011
Chairman of Nippon Life (incumbent)
134

Name
(date of birth)

Yasushi Ikeda(April 18, 1946)

Position in MUFG

Corporate Auditor

Business experience

April 1972
April 1977
June 2001
June 2007

June 2009

Admitted to the Bar
Joined the Tokyo Bar Association
Partner of the law firm Miyake Imai & Ikeda(incumbent)
Corporate Auditor of KADOKAWA GROUPHOLDINGS, INC. (incumbent)
Director of Nippon Metal Industry Co. Ltd.
(incumbent)
Director of Sony Financial Holdings Inc.
(incumbent)
Corporate Auditor of MUFG (incumbent)

The board of directors and corporate auditors may be contacted through our headquarters at Mitsubishi UFJ
Financial Group, Inc., 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan.
All directors and corporate auditors were elected at a general meeting of shareholders. The regular term ofoffice of a director is one year from the date of election, and the regular term of office of a corporate auditor isfour years from the date of election. Directors and corporate auditors may serve their terms until the close of theannual general meeting of shareholders held in the last year of their terms. Directors and corporate auditors may
serve any number of consecutive terms. No family relationship exists among any of our directors or corporate
auditors. None of our directors is party to a service contract with MUFG or any of its subsidiaries that provides
for benefits upon termination of employment.
B.

Compensation
The aggregate amount of compensation paid, including benefits in kind granted and any contingent anddeferred compensation but excluding retirement allowances paid, by MUFG and its subsidiaries during the fiscal
year ended March 31, 2012 to our directors (excluding outside directors), to corporate auditors (excluding
outside auditors) and to outside directors and auditors, was ¥953 million, ¥87 million and ¥106 million,
respectively.
The compensation paid by MUFG and its subsidiaries during the fiscal year ended March 31, 2012 to ourdirectors and corporate auditors consists of annual base salaries, stock acquisition rights, bonuses and otherbenefits. The maximum aggregate amount of each type of compensation for our directors and corporate auditors
is approved at a general meeting of our shareholders. The amount and allocation of compensation for eachdirector are then proposed to, and voted upon by, the board of directors. The amount and allocation ofcompensation for each corporate auditor are determined through discussions and agreement among the corporate
auditors. The nomination and compensation committee deliberates and makes proposals to the board of directors
regarding matters relating to, among other things, the compensation of our directors. For more information on thenomination and compensation committee, see “—C. Board Practices.”
The following table sets forth details of the aggregate compensation paid by MUFG and its subsidiaries
during the fiscal year ended March 31, 2012 to our directors (excluding outside directors) and corporate auditors(excluding outside corporate auditors):
Number of Directors andCorporate Auditors(1)21 . . . . . . . . . . . . . . . . . .

Aggregate
Compensation¥1,108

Non-Adjustable Compensation
Stock
Adjustable
Base
Acquisition
Compensation
SalaryRights(Cash Bonuses)(in millions)

¥574

¥295

¥170

Retirement
Allowances(2)

Other

¥68

¥1

Notes:(1) Includes current directors and corporate auditors as well as those who retired during the fiscal year ended March 31, 2012 but excludes
outside directors and corporate auditors.
(2) Represents the aggregate amount of retirement allowances paid in cash during the fiscal year ended March 31, 2012, pursuant to a onetime shareholders’ approval in June 2007 for the retirement allowances to be paid to the directors and corporate auditors who were
elected prior to that date at the time of their retirement. A reserve in the total amount of such retirement allowances was set aside as of
September 30, 2007. For more information, see “—Retirement Allowances” below.

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The following table sets forth the details of individual compensation paid, including benefits in kind granted
but excluding retirement allowances paid, by MUFG and its subsidiaries in an amount equal to or exceeding¥100 million during the fiscal year ended March 31, 2012:
Aggregate
amountDirectors

Takamune Okihara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥118

Katsunori Nagayasu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥124

Compensation paid
AnnualStock
Paid bysalaryoptions Bonus(in millions)

MUFG
BTMU
MUFG
BTMU

¥12
46
¥12
49

¥ 6
25
¥ 6
26

¥ 5
24
¥ 5
26

Annual Base Salary
Annual base salaries are paid to our directors (including outside directors) and corporate auditors (including
outside corporate auditors) in the form of monthly cash installment payments. The aggregate annual base salarypaid to our directors (excluding outside corporate directors) and corporate auditors (excluding outside corporate
auditors) for the fiscal year ended March 31, 2012 was ¥574 million. The aggregate annual base salary paid toour outside directors and outside corporate auditors for the same period was ¥79 million.
Stock-based Compensation Plans
We issue stock acquisition rights to further motivate our directors (including outside directors) andcorporate auditors (including outside corporate auditors) to contribute to the improvement of our stock prices andprofits and, with respect to our corporate auditors, to improve their audits and investigations aiming to increase
our corporate value. The number of options granted to each director or corporate auditor is determined bycomprehensively taking into account each grantee’s seniority of the position held at MUFG or its subsidiaries,
experience and contribution to our performance throughout the period of the grantee’s service within the
maximum aggregate number of options approved by our shareholders.
As part of our compensation structure, on June 28, 2007, our shareholders approved the creation of a stockbased compensation plan for our directors, corporate auditors and certain of our officers. On November 21, 2007,
the board of directors adopted a plan entitled “First Series of Stock Acquisition Rights of Mitsubishi UFJ
Financial Group, Inc.” for our directors, corporate auditors and certain of our officers. Under the stock-based
compensation plan, on December 6, 2007, we allotted an aggregate of 3,224 stock acquisition rights to ourdirectors and an aggregate of 493 stock acquisition rights to our corporate auditors for their respective services to
MUFG and its subsidiaries. Each stock acquisition right represents a right to purchase 100 shares of MUFG
common stock at ¥1 per share of common stock. The stock acquisition rights were subject to a one-year vesting
period. The rights are exercisable until December 5, 2037, but only after the date on which a grantee’s service asa director, corporate auditor or officer terminates. The fair value of each stock acquisition right was ¥103,200.
As part of our compensation structure, on June 27, 2008, the board of directors adopted another stock-based
compensation plan entitled “Second Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 15, 2008, we allotted an aggregate of 4,690 stock acquisition rights to our directors and an aggregate of 495
stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries. Eachstock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights were subject to a one-year vesting period. The rights are exercisable
until July 14, 2038, but only after the date on which a grantee’s service as a director, corporate auditor or officer
terminates. The fair value of each stock acquisition right was ¥92,300.

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As part of our compensation structure, on June 26, 2009, the board of directors adopted another stock-based
compensation plan entitled “Third Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 14, 2009, we allotted an aggregate of 6,466 stock acquisition rights to our directors and an aggregate of 872
stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries. Eachstock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights were subject to a one-year vesting period. The rights are exercisable
until July 13, 2039, but only after the date on which a grantee’s service as a director, corporate auditor or officer
terminates. The fair value of each stock acquisition right was ¥48,700.
As part of our compensation structure, on June 29, 2010, the board of directors adopted another stock-based
compensation plan entitled “Fourth Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 16, 2010, we allotted an aggregate of 8,014 stock acquisition rights to our directors and an aggregate of
1,149 stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries.
Each stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 15, 2040, but only after the date on which a grantee’s service as a director, corporate auditor or officer
terminates. The fair value of each stock acquisition right was ¥36,600.
As part of our compensation structure, on June 29, 2011, the board of directors adopted another stock-based
compensation plan entitled “Fifth Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 20, 2011, we allotted an aggregate of 7,740 stock acquisition rights to our directors and an aggregate of
1,160 stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries.
Each stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 19, 2041, but only after the date on which a grantee’s service as a director, corporate auditor or officer
terminates. The fair value of each stock acquisition right was ¥33,700.
As part of our compensation structure, on June 28, 2012, the board of directors adopted another stock-based
compensation plan entitled “Sixth Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 18, 2012, we allotted an aggregate of 10,002 stock acquisition rights to our directors and an aggregate of
1,161 stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries.
Each stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 17, 2042, but only after the date on which a grantee’s service as a director, corporate auditor or officer
terminates. The fair value of each stock acquisition right was ¥33,100.
Bonuses
We from time to time pay cash bonuses to our directors to further motivate them to contribute to theimprovement of our stock prices and profits if such bonuses are deemed appropriate based on a balanced
scorecard approach taking into account the results of operations of the MUFG Group and each director’s
individual performance of his duties as a director in light of both quantitative and qualitative criteria, including
our medium-term strategy for improving our corporate value. None of the outside directors and corporate
auditors (including outside corporate auditors) is eligible to receive a cash bonus. The nomination andcompensation committee evaluates the amount of cash bonuses annually to determine the reasonableness of theamount in proportion to the aggregate compensation approved by our shareholders. The aggregate cash bonus
paid to our directors for the fiscal year ended March 31, 2012 was ¥170 million.

137

Retirement Allowances
Prior to June 28, 2007, in accordance with customary Japanese practice, when a director or corporate auditor
retired, a proposal to pay a retirement allowance was submitted at the annual ordinary general meeting ofshareholders for approval. The retirement allowance consisted of a one-time payment of a portion of theallowance paid at the time of retirement and periodic payments of the remaining amount for a prescribed numberof years. After the shareholders’ approval was obtained, the retirement allowance for a director or corporate
auditor was fixed by the board of directors or by consultation among the corporate auditors in accordance with
our internal regulations and practice and generally reflected the position of the director or corporate auditor at thetime of retirement, the length of his service as a director or corporate auditor and his contribution to our
performance. Historically, MUFG did not set aside reserves for any retirement payments for directors andcorporate auditors made under this practice.
Pursuant to a one-time shareholders’ approval in June 2007, retirement allowances are paid in cash to thedirectors and corporate auditors who were elected prior to that date at the time of their retirement. A reserve inthe total amount of such retirement allowances was set aside as of September 30, 2007. The aggregate amount of
retirement allowances paid in cash by MUFG and its subsidiaries pursuant to the one-time shareholder approval
during the fiscal year ended March 31, 2012 to our directors (excluding outside directors), to corporate auditors(excluding outside auditors) and to outside directors and auditors, who have retired from their respective
positions held at MUFG or, if such directors and corporate auditors concurrently held positions at MUFG’s
subsidiaries, who have retired from such positions, was ¥67 million, ¥0 million and nil, respectively.
UNBC Employee Equity-Based Incentive Plan
UNBC has a discretionary employee equity-based incentive plan under which selected employees of UNBC
and its subsidiaries are paid some or a portion of annual bonuses in the form Restricted Share Units representing
a right to receive American Depositary Receipts, or ADRs, evidencing American Depositary Shares, or ADSs,
each exchangeable for one share of MUFG common stock, from an independent trust established to administerthe plan grants upon the satisfaction of vesting conditions as determined by the Executive Compensation and
Benefits Committee of UNBC’s board of directors, consistent with the plan and pursuant to a Restricted Share
Unit Agreement between UNBC and the grantees.
Unless otherwise provided in the relevant Restricted Share Unit Agreement, Restricted Share Units will
become vested and nonforfeitable as follows: one-third (33 1⁄ 3%) of a grantee’s Restricted Share Units would vest
on each one year anniversary of the date of the award such that all of the Restricted Share Units would be fully
vested after three years from the date of the award so long as the grantee remains an employee of UNBC or its
subsidiaries.
The ADSs to be delivered to grantees will be purchased on the open market by the trustee of the
independent trust pursuant to a trust agreement between UNBC and the trustee.

138

UNBC began granting Restricted Share Units in November 2010. As of June 30, 2012, 9,014,144 Restricted
Share Units have been granted under the plan.
Share Ownership
As of June 30, 2012, our directors and corporate auditors held the following numbers of shares of ourcommon stock:
Number of Shares
RegisteredDirectors

Takamune Okihara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kinya Okauchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Katsunori Nagayasu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masaaki Tanaka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taihei Yuki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ichiro Hamakawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akihiko Kagawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toshiro Toyoizumi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nobuyuki Hirano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shunsuke Teraoka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tatsuo Wakabayashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saburo Araki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hiroyuki Noguchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Muneaki Tokunari . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ryuji Araki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kazuhiro Watanabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takuma Otoshi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,82017,40011,64010,600135,830
148,400
15,800203,500
28,4005,440
18,10011,78095,8008,800
39,4000
3,000
Number of Shares
Registered

Corporate Auditors

Tetsuo Maeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takehiko Nemoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tsutomu Takasuka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kunie Okamoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yasushi Ikeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,330145,800
0536
0C. Board Practices
Our articles of incorporation provide for a board of directors of not more than twenty members and not morethan seven corporate auditors. Our corporate officers are responsible for executing our business operations, andour directors oversee these officers and set our fundamental strategies.
We currently have seventeen directors. Our board of directors has ultimate responsibility for theadministration of our affairs. By resolution, our board of directors shall appoint, from the directors,
representative directors who may represent us severally. Our board of directors shall appoint a president and may
also appoint a chairman, deputy chairmen, deputy presidents, senior managing directors and managing directors
from their members by resolution. Deputy presidents assist the president, and senior managing directors andmanaging directors assist the president and deputy presidents, if any, in the management of our day-by-day
operations.
We currently have three outside directors as members of our board of directors. Under the Company Law,an outside director is defined as a person who has never been an executive director (gyomu shikko
torishimariyaku), executive officer (shikkoyaku), manager (shihainin) or any other type of employee of thecompany or any of its subsidiaries prior to his or her appointment.
139

Under the Company Law, a resolution of the board of directors is required if any director wishes to engage
in any business that is in competition with us or any transaction with us. Additionally, no director may vote on a
proposal, arrangement or contract in which that director is deemed to be particularly interested.
Neither the Company Law nor our articles of incorporation contain special provisions as to the borrowing
power exercisable by a director, the retirement age of our directors and corporate auditors or a requirement of ourdirectors and corporate auditors to hold any shares of our capital stock.
The Company Law requires a resolution of the board of directors for a company to determine the executionof important businesses, to acquire or dispose of material assets, to borrow substantial amounts of money, toemploy or discharge managers (shihainin) and other important employees, and to establish, change or abolishbranch offices or other material corporate organizations, to float bonds, to establish internal control systems, andto exempt a director from liability to the company in accordance with applicable laws and regulations.
We currently have five corporate auditors, including three outside corporate auditors. An outside corporate
auditor is defined under the Company Law as a person who has not served as a director, account assistant,executive officer (shikkoyaku), manager (shihainin) or any other type of employee of the company or any of its
subsidiaries prior to his or her appointment.
Our corporate auditors, who are not required to be certified public accountants, have various statutory
duties, including principally:‰

the examination of the financial statements, business reports, proposals and other documents which ourboard of directors prepares and submits to a general meeting of shareholders;‰the examination of our directors’ administration of our affairs; and‰the preparation and submission of a report on their examination to a general meeting of shareholders.

Our corporate auditors are obligated to attend meetings of our board of directors, and to make statements at
the meetings if they deem necessary, although they are not entitled to vote at the meetings. Our corporate
auditors comprise the board of corporate auditors, which determines matters relating to the performance ofaudits. The Company Law provides that a company that has or is required to have a board of corporate auditors
must have three or more corporate auditors, and at least half of the corporate auditors must be outside corporate
auditors. In a company that has or is required to have a board of corporate auditors, one or more of the corporate
auditors must be designated by the board of corporate auditors to serve on a full-time basis.
Under the Company Law and our articles of incorporation, we may exempt, by resolution of the board of
directors, our directors and corporate auditors from liabilities to the company arising in connection with theirfailure to execute their duties without gross negligence, within the limits stipulated by applicable laws andregulations. In addition, we have entered into a liability limitation agreement with each outside director andoutside corporate auditor which limits the maximum amount of their liability to the company arising inconnection with a failure to execute their duties without gross negligence to the greater of either ¥10 million or
the aggregate sum of the amounts prescribed in paragraph 1 of Article 425 of the Company Law and Articles 113
and 114 of the Company Law Enforcement Regulations.
The Company Law permits two types of governance systems for large companies, including MUFG. The
first system is for companies with audit, nomination and compensation committees, and the other is forcompanies with corporate auditors. We have elected to adopt a corporate governance system based on corporate
auditors.
Under the Company Law, if a company has corporate auditors, the company is not obligated to have any
outside directors or to have any audit, nomination or compensation committees. Although we have adopted aboard of corporate auditors, we have three outside directors as part of our efforts to further enhance corporate
140

governance. In an effort to further enhance our corporate governance, we have also voluntarily established aninternal audit and compliance committee and a nomination and compensation committee to support our board of
directors.
Internal Audit and Compliance Committee. The internal audit and compliance committee, a majority ofwhich is comprised of outside directors and specialists, deliberates important matters relating to internal audits,internal control of financial information, financial audits, compliance, corporate risk management, and otherinternal control systems. This committee makes reports and proposals to the board of directors about importantmatters for deliberation and necessary improvement measures. We aim to enhance the effectiveness of internal
audit functions by utilizing the external view points provided by the internal audit and compliance committee
members. The chairman of the internal audit and compliance committee is Ryuji Araki, who is an outside
director. The other members of this committee are Kazuhiro Watanabe, an outside director, Yoshinari Tsutsumi,
an attorney-at-law, Hideo Kojima, a certified public accountant, and Kinya Okauchi, Deputy Chairman and Chief
Audit Officer. The internal audit and compliance committee met thirteen times between April 2011 and March2012.
Nomination and Compensation Committee. The nomination and compensation committee, a majority ofwhich is comprised of outside directors, deliberates matters relating to the appointment and dismissal of ourdirectors and the directors of our subsidiaries, the compensation framework of our directors and the directors of
our subsidiaries, as well as the compensation of our top management and the top management of our subsidiaries.
The nomination and compensation committee makes reports and proposals to the board of directors about
important matters for deliberation and necessary improvement measures. The chairman of the nomination andcompensation committee is Takuma Otoshi, an outside director. The other members of this committee are Ryuji
Araki and Kazuhiro Watanabe, who are also outside directors, and Katsunori Nagayasu, President & CEO. The
nomination and compensation committee met six times between April 2011 and March 2012.
For additional information on our board practices and the significant differences in corporate governancepractices between MUFG and US companies listed on the New York Stock Exchange, see “—A. Directors andSenior Management” and “Item 16G. Corporate Governance.”

141

D.

Employees

As of March 31, 2012, we had approximately 78,800 employees, a decrease of approximately 1,600
employees compared with the number of employees as of March 31, 2011. In addition, as of March 31, 2012, we
had approximately 31,700 part-time and temporary employees. The following tables show the percentages of ouremployees in our different business units and in different locations as of March 31, 2012:
Business unit

Bank of Tokyo-Mitsubishi UFJ:
Retail Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operations and Systems Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Center/Independent Divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Trust and Banking Corporation:
Trust-Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administration and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Securities Holdings:
Sales Marketing Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Investment Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Center and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ NICOS:
Business Marketing Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Risk Management & Risk Assets Administration Division . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operations Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Systems Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19%
13
27
1
10
2
5
3
2
1
3
4
1
1
1
2
2
1
1
0
0
1
100%

142

Location

Bank of Tokyo-Mitsubishi UFJ:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Trust and Banking Corporation:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Securities Holdings:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ NICOS:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45%
16
2
9
1
13
0
0
0
7
0
1
0
4
0
0
0
2
100%

Most of our employees are members of an employees’ union, which negotiates on behalf of employees inrelation to remuneration and working conditions. We believe our labor relations to be good.
E.

Share Ownership
The information required by this item is set forth in “—B. Compensation.”

143

Item 7.
A.

Major Shareholders and Related Party Transactions.

Major Shareholders

Common Stock
As of March 31, 2012, we had 758,290 registered shareholders of our common stock. The ten largest
holders of our common stock appearing on the register of shareholders as of March 31, 2012, and the number andthe percentage of such shares held by each of them, were as follows:
Number of shares
held

Name

Percentage of
total shares in issue

Japan Trustee Services Bank, Ltd. (Trust account)(1) . . . . . . . . . . . . . . . . . . .
The Master Trust Bank of Japan, Ltd. (Trust account)(1) . . . . . . . . . . . . . . . .
SSBT OD05 Omnibus Account—Treaty Clients . . . . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (Trust account 9)(1) . . . . . . . . . . . . . . . . . .
Nippon Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Street Bank and Trust Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meiji Yasuda Life Insurance Company(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Bank of New York Mellon as Depositary Bank for DR Holders(3) . . . . .
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Street Bank and Trust Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

904,582,800
624,695,900
371,872,750
271,399,400
271,322,953
194,890,757
175,000,000
171,735,947
149,263,153
138,920,762

6.39%
4.41
2.62
1.91
1.91
1.37
1.23
1.21
1.05
0.98

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,273,684,422

23.12%

Notes:(1) Includes the shares held in trust accounts, which do not disclose the names of beneficiaries.
(2) These shares are those held in a pension trust account with The Master Trust Bank of Japan, Ltd. for the benefit of retirement plans withvoting rights retained by Meiji Yasuda Life Insurance Company.
(3) An owner of record for our American depositary shares.

As of March 31, 2012, 1,183,976 shares, representing less than 0.01% of our outstanding common stock,were held by our directors and corporate auditors. Our major shareholders do not have different voting rights.
As of March 31, 2012, 1,779,317,090 shares, representing 12.57% of our outstanding common stock, were
owned by 322 US shareholders of record who are resident in the United States, one of whom is the ADR
depository’s nominee holding 171,735,947 shares, or 1.21%, of our issued common stock.
Preferred Stock
No holder of our preferred stock has the right to vote at a general meeting of shareholders, except:‰

from the commencement of our ordinary general meeting of shareholders if an agenda for approval todeclare a preferred dividend is not submitted to such meeting; or‰from the close of any ordinary general meeting of shareholders if a proposed resolution to declare apreferred dividend is not approved at such meeting;in each case, unless and until such time as a resolution of an ordinary general meeting of shareholders
declaring a preferred dividend is passed.

144

Holders of our preferred stock are entitled to vote at a meeting separately held for their respective classes ofpreferred stock in accordance with the Company Law. A resolution of a separate meeting of class shareholders is
required for the following actions, but only if the action is likely to prejudice the interests of the relevant classshareholders:‰

an amendment to our articles of incorporation to (a) create a new class of shares, (b) change the terms ofshares, or (c) increase the total number of authorized shares or the total number of authorized shares of aclass of stock, except in some cases, such as an amendment to change a class of stock to callable stock,
the resolution of, or the unanimous consent from, relevant class shareholders is required, regardless ofwhether the action is likely to prejudice their interests;‰

a consolidation of shares;‰

a share split;‰

an allotment of shares to our existing shareholders;‰an allotment of stock acquisition rights to our existing shareholders; and‰a merger, corporate split, stock for stock exchange, or stock for stock transfer.

Class 11 preferred stock is convertible into shares of our common stock as described in“Item 10.B. Additional Information—Memorandum and Articles of Association.”
The shareholders of our preferred stock, appearing on the register of shareholders as of March 31, 2012, andthe number and the percentage of such shares held by each of them, were as follows:First series of class 5 preferred stock
Number of shares
held

Percentage of
total shares in issue

Nippon Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meiji Yasuda Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taiyo Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Daido Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tokio Marine & Nichido Fire Insurance Co., Ltd. . . . . . . . . . . . . . . . . . . . . .
Nipponkoa Insurance Company, Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aioi Nissay Dowa Insurance Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,000,000
40,000,000
20,000,000
20,000,000
20,000,000
12,000,000
4,000,000

25.64%
25.64
12.82
12.82
12.82
7.69
2.56

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

156,000,000

100%

Name

Class 11 preferred stock
Number of shares
held

Name

Percentage of
total shares in issue

UFJ Trustee Services PVT. (Bermuda) Limited as the trustee of
UFJ International Finance (Bermuda) Trust . . . . . . . . . . . . . . . . . . . . . . . .

1,000

100%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,000

100%

B.

Related Party Transactions

We converted the convertible preferred stock issued to us by Morgan Stanley into Morgan Stanley’scommon stock in June 2011, resulting in us holding approximately 22.4% of the voting rights in Morgan Stanley,
and appointed a second representative to Morgan Stanley’s board of directors in July 2011. As a result, Morgan
Stanley became our equity-method affiliate. As of March 31, 2012, we held approximately 21.8% of the voting
145

rights in Morgan Stanley, and had two representatives appointed to Morgan Stanley’s board of directors. We andMorgan Stanley continue to pursue a variety of business opportunities in Japan and abroad in accordance with theglobal strategic alliance.
In April 2011, MUSHD made a ¥30 billion capital contribution to MUMSS. In November 2011, we andMorgan Stanley made an additional ¥45 billion of capital contributions to MUMSS. As of March 31, 2012, wehold a 60% economic interest and a 60% voting interest in MUMSS while Morgan Stanley continues to hold theremaining 40% economic interest and 40% voting interest in MUMSS.
For a detailed discussion of the foregoing transactions relating to our global alliance and securities joint
venture with Morgan Stanley, see “Item 5. Operating and Financial Review and Prospects—Recent
Developments.”
We and our banking subsidiaries had, and expect to have in the future, banking transactions and othertransactions in the ordinary course of business with our related parties. Although for the fiscal year ended
March 31, 2012, such transactions included, but were not limited to, call money, loans, electronic dataprocessing, leases and management of properties, those transactions were immaterial and were made atprevailing market rates, terms and conditions and do not involve more than the normal risk of collectibility orpresent other unfavorable features.
None of our directors or corporate auditors, and none of the close members of their respective families, has
had any transactions or has any presently proposed transactions that are material or any transactions that are
unusual in their nature or conditions, involving goods, services or tangible or intangible assets, to which we were,are or will be a party.
No loans have been made to our directors or corporate auditors other than in the normal course of business,on normal commercial terms and conditions, involving the normal risk of collectibility, and presenting normalfeatures. In addition, no loans have been made to our directors or executive officers or corporate auditors otherthan as permitted under Section 13(k) of the US Securities Exchange Act and Rule 13k-1 promulgatedthereunder.
No family relationship exists among any of our directors or corporate auditors. No arrangement or
understanding exists between any of our directors or corporate auditors and any other person pursuant to which
any director or corporate auditor was elected to their position at MUFG.
As part of our compensation structure, we have granted stock acquisition rights to our directors andcorporate auditors. For a detailed discussion of the stock acquisition rights, see “Item 6.B. Directors, Senior
Management and Employees—Compensation.”
C.

Interests of Experts and Counsel
Not applicable.

Item 8.
A.

Financial Information.

Consolidated Statements and Other Financial Information

The information required by this item is set forth in our consolidated financial statements starting on
page F-1 of this Annual Report and in “Selected Statistical Data” starting on page A-1 of this Annual Report.

146

Legal Proceedings
From time to time, we are involved in various litigation matters and other legal proceedings, including
regulatory actions. Although the final resolution of any such matters and proceedings could have a material effecton our consolidated operating results for a particular reporting period, based on our current knowledge andconsultation with legal counsel, we believe the current litigation matters and other legal proceedings, whenultimately determined, will not materially affect our results of operations or financial position.
Distributions
Our board of directors submits a recommendation for a year-end dividend for our shareholders’ approval at
the ordinary general meeting of shareholders customarily held in June of each year. The year-end dividend isusually distributed immediately following shareholders’ approval to holders of record at the end of the preceding
fiscal year. In addition to year-end dividends, we may make cash distributions by way of interim dividends toshareholders of record as of September 30 of each year as distribution of surplus by resolution of our board of
directors. On June 28, 2012, we paid year-end dividends in the amount of ¥6 per share of common stock for the
fiscal year ended March 31, 2012.
See “Item 10.B. Additional Information—Memorandum and Articles of Association” for additional
information on our dividends policy.
Under the Japanese foreign exchange regulations currently in effect, dividends paid on shares held by
non-residents of Japan may be converted into any foreign currency and repatriated abroad. Under the terms of thedeposit agreement pursuant to which ADSs are issued, the depositary is required, to the extent that in its
judgment it can convert Japanese yen on a reasonable basis into US dollars and transfer the resulting US dollars
to the United States, to convert all cash dividends that it receives in respect of deposited shares into US dollars
and to distribute the amount received, after deduction of any applicable withholding taxes, to the holders of
ADSs. See “Item 10.D. Additional Information—Exchange Controls” and “Item 12.D. Description of Securities
Other than Equity Securities—American Depositary Shares.”
B.

Significant Changes

Other than as described in this Annual Report, no significant changes have occurred since the date of ourconsolidated financial statements included in this Annual Report.

147

Item 9.
A.

The Offer and Listing.

Offer and Listing Details

Market Price Information
The following table shows, for the periods indicated, the reported high and low sale prices for shares of ourcommon stock on the Tokyo Stock Exchange, or the TSE, and of the ADSs on the New York Stock Exchange, or
the NYSE:
Price per share on the TSE
High
Low
(yen)

Fiscal year ended March 31, 2008 . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2009 . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2010 . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2011
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2012
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal year ending March 31, 2013
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July (through July 10) . . . . . . . . . . . . . . . . . . . . . . . . . . .
B.

Price per ADS on the NYSE
High
Low
(US$)

1,430
1,173
699

782
377
437

11.72
11.11
6.84

7.95
3.71
4.79

520
440
446
476

399
386
364
321

5.56
5.06
5.42
5.68

4.48
4.52
4.50
4.44

404
419
362
448
431
448

355
322
318
325
351
400

4.98
5.29
4.68
5.36
5.25
5.36

4.36
4.06
4.01
4.23
4.67
4.90

427
383
381
398

383
335
328
379

5.16
4.72
4.75
4.92

4.69
4.18
4.16
4.72

Plan of Distribution
Not applicable.

C.

Markets

The primary market for our common stock is the TSE. Our common stock is also listed on the Osaka
Securities Exchange and the Nagoya Stock Exchange in Japan. ADSs, each representing one share of common
stock, are quoted on the NYSE under the symbol, “MTU.”
D.

Selling Shareholders
Not applicable.

E.

Dilution
Not applicable.

F.

Expenses of the Issue
Not applicable.
148

Item 10. Additional Information.
A.

Share Capital
Not applicable.

B.

Memorandum and Articles of Association

Our Corporate Purpose
Article 2 of our Articles of Incorporation provides that our corporate purpose is to carry on the following
businesses:‰

administration of management of banks, trust banks, specialized securities companies, insurancecompanies or other companies which we may own as our subsidiaries under the Japanese Banking Law;and‰any other businesses incidental to the foregoing businesses mentioned in the preceding clause.

Board of Directors
For discussion of the provisions of our Articles of Incorporation as they apply to our directors, see“Item 6.C. Directors, Senior Management and Employees—Board Practices.”
Common Stock
We summarize below the material provisions of our Articles of Incorporation, our share handlingregulations and the Company Law (Law No. 86 of 2005, also known as the Companies Act) as they relate to a
type of joint stock company known as kabushiki kaisha, within which we fall. Because it is a summary, this
discussion should be read together with our Articles of Incorporation and share handling regulations, which havebeen filed as exhibits to this Annual Report.
GeneralA joint stock company is a legal entity incorporated under the Company Law. The investment and rights ofthe shareholders of a joint stock company are represented by shares of stock in the company and shareholders’liability is limited to the amount of the subscription for the shares.
As of June 28, 2012, our authorized common share capital was comprised of 33,000,000,000 shares ofcommon stock with no par value.
As of March 31, 2012, a total of 14,154,534,220 shares of common stock (including 10,471,043 shares ofcommon stock held by us and our consolidated subsidiaries as treasury stock) had been issued. Each of the sharesissued and outstanding was fully paid and non-assessable.
As of June 28, 2012, we were authorized to issue 920,001,000 shares of preferred stock, including
120,000,000 shares of class 3 preferred stock, 400,000,000 shares of each of the first to fourth series of class 5
preferred stock (provided the aggregate number of shares authorized to be issued with respect to the four series ofclass 5 preferred stock does not exceed 400,000,000 shares), 200,000,000 shares of each of the first to fourth
series of class 6 preferred stock (provided the aggregate number of shares authorized to be issued with respect tothe four series of class 6 preferred stock does not exceed 200,000,000 shares), 200,000,000 shares of each of thefirst to fourth series of class 7 preferred stock (provided the aggregate number of shares authorized to be issued
with respect to the four series of class 7 preferred stock does not exceed 200,000,000 shares), and 1,000 shares ofclass 11 preferred stock. As of March 31, 2012, we had 156,000,000 shares of first series of class 5 preferredstock and 1,000 shares of class 11 preferred stock issued and outstanding.
149

We may issue shares from our authorized but unissued share capital following a resolution to that effect byour board of directors. An increase in our authorized share capital is only possible by amendment of our Articles
of Incorporation, which generally requires shareholders’ special approval.
In order to assert shareholder rights against us, a shareholder must have its name and address registered on
our register of shareholders, in accordance with the Company Law and our share handling regulations. The
registered holder of deposited shares underlying the ADSs is the depositary for the ADSs, or its nominee.
Accordingly, holders of ADSs will not be able to assert shareholder rights other than as provided in theagreement among us, the depositary and the holders of the ADSs.
Under the Law Concerning Book-Entry Transfer of Corporate Bonds, Stocks etc., the shares of all Japanesecompanies listed on any Japanese stock exchange, including our shares, are traded without share certificatesthrough entry in the books maintained under a central clearing system.
Dividends
Dividends are distributed in proportion to the number of shares owned by each shareholder on the record
date for the dividend. Dividends for each financial period may be distributed following shareholders’ approval ata general meeting of shareholders.
Payment of dividends on common stock is subject to the preferential dividend rights of holders of preferredstock.
Under the Banking Law and our Articles of Incorporation, our financial accounts are closed on March 31 ofeach year, and dividends, if any, are paid to shareholders of record as of March 31 following shareholders’approval at a general meeting of shareholders. In addition to year-end dividends, our board of directors may by
resolution declare an interim cash dividend to shareholders of record as of September 30 of each year. Under theCompany Law, distribution of dividends will take the form of distribution of surplus (as defined below). We will
be permitted to make distributions of surplus to our shareholders any number of times per fiscal year pursuant toresolutions of our general meetings of shareholders, subject to certain limitations described below. Distributionsof surplus are in principle required to be authorized by a resolution of a general meeting of shareholders.
Distributions of surplus would, however, be permitted to be made pursuant to a resolution of our board of
directors if:(a) our Articles of Incorporation so provide (our Articles of Incorporation currently contain no suchprovisions);(b) the normal term of office of our directors is one year; and(c) certain conditions concerning our non-consolidated annual financial statements and certain documents
for the latest fiscal year as required by an ordinance of the Ministry of Justice are satisfied.
In an exception to the above rule, even if the requirements described in (a) through (c) are not met, we are
permitted to make distributions of surplus in cash to our shareholders by resolutions of the board of directors
once per fiscal year as mentioned above concerning interim cash dividend.
Under the Company Law, distributions of surplus may be made in cash or in kind in proportion to thenumber of shares of common stock held by each shareholder. A resolution of a general meeting of shareholders
or our board of directors authorizing a distribution of surplus must specify the kind and aggregate book value ofthe assets to be distributed, the manner of allocation of such assets to shareholders, and the effective date of the
distribution. If a distribution of surplus is to be made in kind, we may, pursuant to a resolution of a general
meeting of shareholders or (as the case may be) our board of directors, grant to our shareholders the right torequire us to make such distribution in cash instead of in kind. If no such right is granted to shareholders, therelevant distribution of surplus must be approved by a special resolution of a general meeting of shareholders.
See “—B. Memorandum and Articles of Association—Common Stock—Voting Rights.”
150

Under the Company Law, we may make distribution of surplus to the extent that the aggregate book valueof the assets to be distributed to shareholders does not exceed the distributable amount (as defined below) as ofthe effective date of such distribution of surplus. The amount of surplus (the “surplus”) at any given time shall be
the amount of our assets and the book value of our treasury stock after subtracting the amounts of items (1)through (5) below as they appear on our non-consolidated balance sheet as of the end of our last fiscal year, andafter reflecting the changes in our surplus after the end of our last fiscal year, by adding the amounts of items (6),(7) and (8) below and/or subtracting the amounts of items (9), (10) and (11) below:(1) our liabilities;(2) our stated capital;(3) our additional paid-in capital;(4) our accumulated legal reserve;(5) other amounts as are set out in an ordinance of the Ministry of Justice;(6) (if we transferred our treasury stock after the end of the last fiscal year) the transfer price of ourtreasury stock after subtracting the book value thereof;(7) (if we decreased our stated capital after the end of the last fiscal year) the amount of decrease in ourstated capital (excluding the amount transferred to additional paid-in capital or legal reserve);(8) (if we decreased our additional paid-in capital or legal reserve after the end of the last fiscal year) theamount of decrease in our additional paid-in capital or legal reserve (excluding the amount transferred
to stated capital);(9) (if we cancelled our treasury stock after the end of the last fiscal year) the book value of the cancelledtreasury stock;(10) (if we distributed surplus to shareholders after the end of the last fiscal year) the amount of the assets
distributed to shareholders by way of such distribution of surplus; and(11) other amounts as are set out in an ordinance of the Ministry of Justice.
A distributable amount (the “distributable amount”) at any given time shall be the aggregate amount of(a) the surplus, (b) the amount of profit as recorded for the period after the end of our last fiscal year until thedate of an extraordinary settlement of account (if any) as is set out in an ordinance of the Ministry of Justice and(c) the transfer price of our treasury stock in the same period, after subtracting the amounts of the following
items:(1) the book value of our treasury stock;(2) (if we transferred our treasury stock after the end of the last fiscal year) the transfer price of ourtreasury stock;(3) the losses recorded for the period after the end of our last fiscal year until the date of an extraordinary
settlement of account (if any) as set out in an ordinance of the Ministry of Justice; and(4) other amounts as set out in an ordinance of the Ministry of Justice.
In Japan, the “ex-dividend” date and the record date for any dividends precede the date of determination of
the amount of the dividend to be paid. The market price of shares generally becomes ex-dividend on the third
business day prior to the record date. Under our Articles of Incorporation, we are not obligated to pay any
dividends which are left unclaimed for a period of five years after the date on which they first became payable.
Capital and Reserves
Under the Company Law, we may reduce our additional paid-in capital or legal reserve (without limitation
as to the amount of such reduction) as mentioned previously, generally by resolution of a general meeting of151

shareholders and, if so resolved in the same resolution, may account for the whole or any part of the amount ofsuch reduction as stated capital. We may also reduce our stated capital generally by special resolution of ageneral meeting of shareholders and, if so resolved in the same resolution, such reduction may account for thewhole or any part of the amount of such reduction as additional paid-in capital or legal reserve. Conversely, we
may reduce our surplus and increase either (i) stated capital or (ii) additional paid-in capital and/or legal reserveby the same amount, in either case by resolution of a general meeting of shareholders.
Stock Splits
Stock splits of our outstanding stock may be effected at any time by resolution of the board of directors.
When a stock split is to be effected, we may increase the authorized share capital to cover the number of shares
to be increased by the stock split by amending our Articles of Incorporation by resolution of the board of
directors without approval by special resolution of the general meeting of shareholders, unless more than one
class of stock is issued and outstanding. We must give public notice of the stock split, specifying a record date atleast two weeks prior to the record date.
We conducted a stock split pursuant to which each of our shares of common and preferred stock were split
into 1,000 shares of the respective classes of securities, effective as of September 30, 2007. Our Articles ofIncorporation were amended to increase the authorized share capital to cover the number of shares increased by
the stock split, which amendment became effective simultaneously with the effectiveness of the stock split.
Unit Share (tan-gen kabu) System
We have adopted a unit share system, where 100 shares of either common or preferred stock shall eachconstitute a unit, as the amendment of our Articles of Incorporation to provide for such system was approved at
the shareholders’ meetings on June 27 and 28, 2007.
Under the unit share system, each unit is entitled to one voting right. A holder of less than one unit has no
voting right. Our Articles of Incorporation provide that the holders of shares constituting less than a full unit will
not have shareholder rights except for those specified in the Company Law or an ordinance of the Ministry ofJustice, including rights (i) to receive dividends, (ii) to receive cash or other assets in case of consolidation or
split of shares, stock-for-stock exchange or stock-for-stock transfer, corporate split or merger or (iii) to be
allotted rights to subscribe for free for new shares and stock acquisition rights when such rights are granted toshareholders. Shareholders may require us to purchase shares constituting less than a unit at the current market
price. In addition, holders of shares constituting less than a unit may require us to sell them such number ofshares, which, when combined with the number of shares already held by such holder, shall constitute a wholeunit of share; provided that we will be obliged to comply with such request only when we own a sufficientnumber of shares to accommodate the desired sale and purchase. The board of directors may reduce the numberof shares constituting a unit or cease to use the unit share system by amendments to the Articles of Incorporation
without shareholders’ approval even though amendments to the Articles of Incorporation generally require a
special resolution of the general meeting of shareholders.
General Meeting of Shareholders
The ordinary general meeting of our shareholders is usually held in June of each year in Tokyo. In addition,
we may hold an extraordinary general meeting of shareholders whenever necessary by giving at least two weeks’advance notice to shareholders who are entitled to vote at the relevant general meeting of shareholders. The
record date for ordinary general meetings of our shareholders is March 31.
Any shareholder holding at least 300 voting rights or 1% of the total number of voting rights for six
consecutive months or longer may propose a matter to be considered at a general meeting of shareholders bysubmitting a written request to a director at least eight weeks prior to the date of the meeting. The number of152minimum voting rights, minimum percentage and time period necessary for exercising the minority shareholder
rights described above may be decreased or shortened if our Articles of Incorporation so provide. Our Articles ofIncorporation currently contain no such provisions.
Voting Rights
A holder of shares of our common stock is generally entitled to one voting right for each unit of common
stock held. The following shares of common stock are not entitled to voting rights even when such sharesconstitute a whole unit, and such shares of common stock are not considered when determining whether aquorum exists for a shareholders’ meeting:‰treasury stock;‰shares held by a company in which we, we and our subsidiaries or our subsidiaries own 25% or more of
the total voting rights; and‰shares issued after the record date as a result of conversion of convertible stock, exercise of stockacquisition rights, and fractional shareholders becoming a shareholder of a whole unit share.

On the other hand, holders of certain class of preferred stock shall be entitled to a voting right for each unitof preferred stock held under certain conditions provided for by relevant laws or regulations and our Articles ofIncorporation, for example, when a proposal to pay the full amount of preferential dividends on any class ofpreferred stock in compliance with the terms of such preferred stock is not included in the agenda of the relevant
shareholders meeting. See “—Preferred Stock.”
Under our Articles of Incorporation, except as otherwise provided by law or by other provisions of our
Articles of Incorporation, a resolution can be adopted at a shareholders’ meeting by the holders of a majority ofthe voting rights represented at the meeting. The Company Law and our Articles of Incorporation require aquorum of not less than one-third of the total number of voting rights for election of our directors and corporate
auditors.
The Company Law and our Articles of Incorporation provide that a quorum of not less than one-third ofoutstanding voting rights, excluding those owned by our subsidiaries and affiliates of which we own, directly or
indirectly, 25 percent or more, must be present at a shareholders’ meeting to approve specified corporate actions,such as:‰the amendment of our Articles of Incorporation, except in some limited cases;‰

the repurchase of our own stock from a specific shareholder other than our subsidiary;‰

the consolidation of shares;‰

the offering to persons other than shareholders of stock at a specially favorable price, or of stockacquisition rights or bonds or notes with stock acquisition rights with specially favorable conditions;‰the removal of a corporate auditor;‰

the exemption from liability of a director or corporate auditor, with certain exceptions;‰a reduction in stated capital with certain exceptions in which a shareholders’ resolution is not required;‰a distribution of in-kind dividends which meets certain requirements;‰

the transfer of the whole or an important part of our business, except in some limited circumstances;‰

the acquisition of the whole business of another company, except in some limited circumstances;‰a dissolution, merger or consolidation, except for certain types of mergers;153‰a stock-for-stock exchange (kabushiki-kokan) or stock-for-stock transfer (kabushiki-iten), except insome limited circumstances; and‰a corporate split, except in some limited circumstances.

A special resolution representing at least two-thirds of the voting rights represented at the meeting isrequired to approve these actions.
Our Articles of Incorporation do not include any provision that grants shareholders cumulative voting rights
at elections of directors or corporate auditors.
Subscription Rights
Holders of our shares have no preemptive rights under our Articles of Incorporation. Under the Company
Law, however, our board of directors may determine that shareholders be given subscription rights in connection
with a particular issue of new shares. In this case, these subscription rights must be given on uniform terms to allshareholders, and if a specified record date is set, it must be announced in a public notice at least two weeks prior
to the record date. A notification to each individual shareholder must also be given at least two weeks prior to thesubscription date.
Under the Company Law, rights to subscribe for new shares may not be transferred; however, we may allot
stock acquisition rights to shareholders without consideration, and such rights will be transferable.
Stock Acquisition Rights
We may issue stock acquisition rights (shinkabu yoyakuken), which in the United States are often in theform of warrants, or bonds with stock acquisition rights that cannot be detached (shinkabu yoyakuken-tsuki
shasai), which in the United States are often in the form of convertible bonds or bonds with non-detachable
warrants. Except where the issuance would be on “specially favorable” conditions, the issuance of stockacquisition rights or bonds with stock acquisition rights may be authorized by a resolution of our board of
directors. Upon exercise of the stock acquisition rights, the holder of such rights may acquire shares by paying
the applicable exercise price or, if so determined by a resolution of our board of directors, by making a substitute
payment, such as having the convertible bonds redeemed for no cash in lieu of the exercise price.
Liquidation Rights
Upon our liquidation, the assets remaining after payment of all debts, liquidation expenses, taxes andpreferred distributions to holders of shares of our preferred stock will be distributed among the holders of sharesof our common stock in proportion to the number of shares they own.
Transfer Agent
MUTB is the transfer agent for our common stock. The office of MUTB for this purpose is located at 4-5,
Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan. MUTB maintains our register of shareholders.
Reports to Shareholders
We furnish to our shareholders notices, in Japanese, of shareholders’ meetings, annual business reports,
including our financial statements, and notices of resolutions adopted at our shareholders’ meetings.
Record Dates
As stated above, March 31 is the record date for the payment of annual dividends, if any, and thedetermination of shareholders entitled to vote at ordinary general meetings of our shareholders. September 30 is154the record date for the payment of interim dividends, if any. In addition, by a resolution of our board of directors
and after giving at least two weeks’ prior public notice, we may at any time set a record date in order todetermine the shareholders who are entitled to the rights pertaining to our shares.
Repurchase of Our Shares
We may repurchase our own shares:‰

through the Tokyo Stock Exchange or other stock exchanges on which our shares are listed, if
authorized by a resolution of a general meeting of shareholders or our board of directors;‰

by way of a tender offer, if authorized by a resolution of a general meeting of shareholders or our boardof directors;‰

from a specific party, if authorized by a special resolution of a general meeting of shareholders and wegive notice thereof to shareholders prior to such general meeting, in general;‰from all shareholders of a specific class of shares offering to sell their shares, if authorized by aresolution of a general meeting of shareholders or our board of directors and we give a public notice ornotice thereof to all of the shareholders (if we repurchase any class of preferred stock, notices to allshareholders of the relevant class of preferred stock); or‰from our subsidiaries, if authorized by a resolution of the board of directors.

When the repurchase is made by us from a specific party, as authorized by a special resolution of a general
meeting of shareholders, any shareholder may make a demand to a director, five days or more prior to therelevant shareholders’ meeting, that we also repurchase the shares held by that shareholder. However, no suchright will be available if the shares have a market price, and if the purchase price does not exceed the then market
price calculated in a manner set forth in an ordinance of the Ministry of Justice.
Repurchase of our own shares described above must satisfy various specified requirements. In general, thesame restrictions on the distributable amount as described in the seventh paragraph under “—Common Stock—
Dividends.” are applicable to the repurchase of our own shares, so the total amount of the repurchase price may
not exceed the distributable amount.
We may hold our own shares so repurchased without restrictions. In addition, we may cancel or dispose of
our repurchased shares by a resolution of our board of directors. As of March 31, 2012, we (excluding our
subsidiaries) owned 108,947 shares of treasury stock.
Preferred Stock
The following is a summary of information concerning the shares of our preferred stock, including briefsummaries of the relevant provisions of our Articles of Incorporation, the share handling regulations and theCompany Law as currently in effect. The detailed rights of our preferred stock are set out in our Articles ofIncorporation and the resolutions of our board of directors relating to the issuance of the relevant stock.
General
As of March 31, 2012, we were authorized under our Articles of Incorporation to issue five classes ofpreferred stock totaling 920,001,000 shares of preferred stock, including 120,000,000 shares of class 3 preferredstock, 400,000,000 shares of each of the first to fourth series of class 5 preferred stock (provided the aggregate
number of shares authorized to be issued with respect to the four series of class 5 preferred stock does not exceed
400,000,000 shares), 200,000,000 shares of each of the first to fourth series of class 6 preferred stock (provided
the aggregate number of shares authorized to be issued with respect to the four series of class 6 preferred stock
does not exceed 200,000,000 shares), 200,000,000 shares of each of the first to fourth series of class 7 preferred155

stock (provided the aggregate number of shares authorized to be issued with respect to the four series of class 7
preferred stock does not exceed 200,000,000 shares) and 1,000 shares of class 11 preferred stock. Our preferredstock has equal preference over our shares of common stock with respect to dividend entitlements anddistribution of assets upon our liquidation. However, holders of shares of our preferred stock are not entitled tovote at general meetings of shareholders, subject to the exceptions provided under our Articles of Incorporation.
As of March 31, 2012, 156,000,000 shares of first series class 5 preferred stock and 1,000 shares of class 11
preferred stock had been outstanding, but there were no shares of class 3, 6 or 7 preferred stock outstanding. We
may, at any time, following necessary authorization as described in the first paragraph under “Repurchase of Our
Shares,” purchase and cancel, at fair value, any shares of preferred stock outstanding out of the distributableamount.
We may acquire shares of class 3, first to fourth series of class 5 and first to fourth series of class 6 preferredstock at our discretion pursuant to the terms and conditions provided by our Articles of Incorporation and theresolution of our board of directors. We may acquire outstanding shares, if any, of class 3 preferred stock at¥2,500 per share, in whole or in part, on or after February 18, 2010. The provisions for acquisition of shares offirst to fourth series of class 5 and first to fourth series of class 6 preferred stock will be determined by the boardof directors at the time of issuance of such preferred stock. When issued, any holder of shares of first to fourth
series of class 6 preferred stock or first to fourth series of class 7 preferred stock may request acquisition ofshares of such preferred stock in exchange for shares of our common stock during the period determined byresolution of the board of directors adopted at the time of issuance of such shares of preferred stock. Any sharesof first to fourth series of class 6 preferred stock or first to fourth series of class 7 preferred stock for which norequest for acquisition in exchange for shares of our common stock is made during such period will bemandatorily acquired on the day immediately following the last day of such period (the “Mandatory Acquisition
Date”) in the number obtained by dividing an amount equivalent to the subscription price per each relevant shareof preferred stock by the average daily closing price of our common stock as reported by the Tokyo Stock
Exchange for the 30 trading days commencing on the 45th trading day prior to the Mandatory Acquisition Date.
Any holder of shares of class 11 preferred stock may request acquisition of shares of the relevant preferred stockin exchange for shares of our common stock during the period as provided for in the attachment to our Articles ofIncorporation. Any shares of class 11 preferred stock for which no request for acquisition in exchange for sharesof our common stock is made during such period will be mandatorily acquired on the Mandatory Acquisition
Date in the number obtained by dividing an amount equivalent to the subscription price per each relevant share ofpreferred stock by the average daily closing price of our common stock as reported by the Tokyo Stock Exchange
for the 30 trading days commencing on the 45th trading day prior to the Mandatory Acquisition Date.
Preferred Dividends
In priority to the payment of dividends to holders of our common stock, the amount of preferred dividends
payable each fiscal year for each class of our preferred stock is set forth below:‰

class 3 preferred stock: ¥60.00 per share as set by the resolution of our board of directors dated
January 27, 2005 and amended to reflect the stock split pursuant to our Articles of Incorporation;‰

first series of class 5 preferred stock: ¥115.00 per share;‰

second to fourth series of class 5 preferred stock: to be set by resolution of our board of directors at thetime of issuance, up to a maximum of ¥250.00 per share;‰first to fourth series of class 6 preferred stock: to be set by resolution of our board of directors at thetime of issuance, up to a maximum of ¥125.00 per share;‰first to fourth series of class 7 preferred stock: to be set by resolution of our board of directors at thetime of issuance, up to a maximum of ¥125.00 per share; and‰class 11 preferred stock: ¥5.30 per share.

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In the event that our board of directors decides to pay an interim dividend to holders of record of ourcommon stock as of September 30 of any year, we will, in priority to the payment of that interim dividend, pay a
preferred interim dividend in the amount specified in our Articles of Incorporation to holders of record of ourpreferred stock as of September 30 of the same year. The amount of any preferred interim dividend will be
deducted from the preferred dividend payable on the relevant class of our preferred stock for the same fiscal year.
No preferred dividend will be paid on any of our preferred stock converted into our common stock for theperiod from the date following the record date for the preferred dividend or preferred interim dividend last
preceding the relevant conversion date to the relevant conversion date, but the common stock issued upon
conversion will be entitled to receive any dividend payable to holders of record of common stock upon the next
succeeding record date for common stock dividends.
No payment of dividends on our preferred stock or any other shares can be made unless we have a sufficient
distributable amount and a resolution to distribute such distributable amount is obtained at the relevant ordinary
general meeting of shareholders, in the case of annual preferred dividends, or at the board of directors, in the caseof preferred interim dividends.
Dividends on our preferred stock are non-cumulative. If the full amount of any dividend is not declared on
our preferred stock in respect of any fiscal year, holders of our preferred stock do not have any right to receive
dividends in respect of the deficiency in any subsequent fiscal year, and we will have no obligation to pay the
deficiency or to pay any interest regardless of whether or not dividends are paid in respect of any subsequentfiscal year. The holders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of our profits.
Liquidation Rights
In the event of our voluntary or involuntary liquidation, record holders of our preferred stock are entitled,equally in rank as among themselves, to receive before any distribution out of our residual assets is made toholders of our common stock, a distribution out of our residual assets of:‰¥2,500 per share of class 3 preferred stock;‰¥2,500 per share of first to fourth series of class 5 preferred stock;‰¥2,500 per share of first to fourth series of class 6 preferred stock;‰¥2,500 per share of first to fourth series of class 7 preferred stock; and‰¥1,000 per share of class 11 preferred stock.

The holders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of our residual assets upon our liquidation.
Voting Rights
No holder of our preferred stock has the right to receive notice of, or to vote at, a general meeting ofshareholders, except as otherwise specifically provided under our Articles of Incorporation or other applicablelaw. Under our Articles of Incorporation, holders of our preferred stock will be entitled to receive notice of, andhave one voting right per unit of preferred stock at, our general meetings of shareholders:‰from the commencement of our ordinary general meeting of shareholders if an agenda for approval todeclare a preferred dividend is not submitted to such meeting; or‰from the close of any ordinary general meeting of shareholders if a proposed resolution to declare apreferred dividend is not approved at such meeting.
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In each case, holders of our preferred stock will be entitled to receive notice of and vote at the relevant
general meetings of shareholders unless and until such time as a resolution of an ordinary general meeting ofshareholders declaring a preferred dividend is passed.
For more information, see “Item 7.A. Major Shareholders and Related Party Transactions—Major
Shareholders—Preferred Stock.”
American Depositary Shares
The Bank of New York Mellon will issue the American depositary receipts, or ADRs. Each ADR will
represent ownership interests in American depositary shares, or ADSs. As a result of the 1,000-for-one stock split
that became effective on September 30, 2007, each ADS represents one share of our common stock. Each ADS isheld by BTMU, acting as custodian, at its principal office in Tokyo, on behalf of The Bank of New York Mellon,
acting as depositary. Each ADS will also represent securities, cash or other property deposited with The Bank of
New York Mellon but not distributed to ADS holders. The Bank of New York Mellon’s corporate trust office islocated at 101 Barclay Street, New York, New York 10286 and its principal executive office is located at One
Wall Street, New York, New York 10286.
You may hold ADSs either directly or indirectly through your broker or other financial institution. If you
hold ADSs directly, you are an ADS holder. This description assumes you hold your ADSs directly. If you holdthe ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert therights of ADS holders described in this section. You should consult with your broker or financial institution tofind out what those procedures are.
The Bank of New York Mellon will actually be the registered holder of the common stock, so you will haveto rely on it to exercise your rights as a shareholder. Our obligations and the obligations of The Bank of
New York Mellon are set out in a deposit agreement among us, The Bank of New York Mellon and you, as an
ADS holder. The deposit agreement and the ADSs are governed by New York law.
The following is a summary of the material terms of the deposit agreement. Because it is a summary, it does
not contain all the information that may be important to you. For more complete information, you should read theentire deposit agreement and the form of ADR.
Share Dividends and Other Distributions
The Bank of New York Mellon has agreed to pay to you the cash dividends or other distributions it or thecustodian receives on shares of common stock or other deposited securities, after deducting its fees and expenses.
You will receive these distributions in proportion to the number of shares your ADSs represent.
Cash. The Bank of New York Mellon will convert any cash dividend or other cash distribution we pay on
our common stock into US dollars, if it can do so on a reasonable basis and can transfer the US dollars to theUnited States. If that is not possible or if any approval from the Japanese government is needed and cannot be
obtained, the deposit agreement allows The Bank of New York Mellon to distribute the Japanese yen only tothose ADS holders to whom it is possible to do so. The Bank of New York Mellon will hold the Japanese yen it
cannot convert for the account of the ADS holders who have not been paid. It will not invest the Japanese yen
and it will not be liable for any interest.
Before making a distribution, any withholding taxes that must be paid under Japanese law will be deducted.
See “—E. Taxation—Japanese Taxation.” The Bank of New York Mellon will distribute only whole US dollars
and cents and will round fractional cents to the nearest whole cent. If the relevant exchange rates fluctuate during
a time when The Bank of New York Mellon cannot convert the Japanese currency, you may lose some or all of
the value of the distribution.
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Shares. The Bank of New York Mellon may distribute new ADSs representing any shares we may
distribute as a dividend or free distribution, if we furnish The Bank of New York Mellon promptly withsatisfactory evidence that it is legal to do so. The Bank of New York Mellon will only distribute whole ADSs. It
will sell shares which would require it to issue a fractional ADS and distribute the net proceeds in the same way
as it distributes cash dividends. If The Bank of New York Mellon does not distribute additional ADSs, each ADS
will also represent the new shares.
Rights to receive additional shares. If we offer holders of our common stock any rights to subscribe for
additional shares of common stock or any other rights, The Bank of New York Mellon may, after consultation
with us, make those rights available to you. We must first instruct The Bank of New York Mellon to do so andfurnish it with satisfactory evidence that it is legal to do so. If we do not furnish this evidence and/or do not givethese instructions, and The Bank of New York Mellon decides that it is practical to sell the rights, The Bank of
New York Mellon will sell the rights and distribute the proceeds in the same way as it distributes cash dividends.
The Bank of New York Mellon may allow rights that are not distributed or sold to lapse. In that case, you will
receive no value for them.
If The Bank of New York Mellon makes rights available to you, upon instruction from you it will exercise
the rights and purchase the shares on your behalf. The Bank of New York Mellon will then deposit the shares andissue ADSs to you. It will only exercise the rights if you pay it the exercise price and any other charges the rights
require you to pay.
US securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after the
exercise of the rights. For example, you may not be able to trade the ADSs freely in the United States. In thiscase, The Bank of New York Mellon may issue the ADSs under a separate restricted deposit agreement which
will contain the same provisions as the deposit agreement, except for changes needed to put the restrictions inplace. The Bank of New York Mellon will not offer you rights unless those rights and the securities to which therights relate are either exempt from registration or have been registered under the US Securities Act with respect
to a distribution to you. We will have no obligation to register under the Securities Act those rights or the
securities to which they relate.
Other distributions. The Bank of New York Mellon will send to you anything else we distribute on
deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in thatway, The Bank of New York Mellon has a choice. It may decide to sell what we distributed and distribute the net
proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case
ADSs will also represent the newly distributed property.
The Bank of New York Mellon is not responsible if it decides that it is unlawful or impractical to make a
distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or othersecurities under the Securities Act. We also have no obligation to take any other action to permit the distributionof ADSs, shares, rights or anything else to ADS holders. This means that you may not receive the distributions
we make on our shares or any value for them if it is illegal or impractical for us or The Bank of New York
Mellon to make them available to you.
Deposit, Withdrawal and Cancellation
The Bank of New York Mellon will issue ADSs if you or your broker deposits shares or evidence of rights
to receive shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as
stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will register the appropriate number of
ADSs in the names you request and will deliver the ADSs at its corporate trust office to the persons you request.
In certain circumstances, subject to the provisions of the deposit agreement, The Bank of New York Mellon
may issue ADSs before the deposit of the underlying shares. This is called a pre-release of ADSs. A pre-release159

is closed out as soon as the underlying shares are delivered to the depositary. The depositary may receive ADSs
instead of the shares to close out a pre-release. The depositary may pre-release ADSs only on the following
conditions:‰

Before or at the time of the pre-release, the person to whom the pre-release is made must represent to
the depositary in writing that it or its customer, as the case may be, owns the shares to be deposited;‰

The pre-release must be fully collateralized with cash or collateral that the depositary considers
appropriate; and‰The depositary must be able to close out the pre-release on not more than five business days’ notice.

The pre-release will be subject to whatever indemnities and credit regulations that the depositary considers
appropriate. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as aresult of a pre-release.
You may turn in your ADSs at the Corporate Trust Office of The Bank of New York Mellon’s office. Upon
payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees,
The Bank of New York Mellon will deliver (1) the underlying shares to an account designated by you and(2) any other deposited securities underlying the ADS at the office of the custodian. Or, at your request, risk andexpense, The Bank of New York Mellon will deliver the deposited securities at its Corporate Trust Office.
As a result of the stock split and the adoption of the unit share system on September 30, 2007, the ADSs
may only be presented for cancellation and release of the underlying shares of common stock or other deposited
securities in multiples of 100 ADSs. Holders of ADRs evidencing less than 100 ADSs are not entitled to deliveryof any underlying shares or other deposited securities unless ADRs, together with other ADRs presented by thesame holder at the same time, represent in the aggregate at least 100 ADSs. If any ADSs are surrendered but notcancelled pursuant to the preceding sentence, The Bank of New York Mellon will execute and deliver an ADR or
ADRs evidencing the balance of ADSs not so cancelled to the person or persons surrendering the same.
Voting Rights
If you are an ADS holder on a record date fixed by The Bank of New York Mellon, you may instruct The
Bank of New York Mellon to vote the shares underlying your ADSs at a meeting of our shareholders inaccordance with the procedures set forth in the deposit agreement.
The Bank of New York Mellon will notify you of the upcoming meeting and arrange to deliver our voting
materials to you. The notice shall contain (a) such information as is contained in such notice of meeting, (b) astatement that as of the close of business on a specified record date you will be entitled, subject to any applicableprovision of Japanese law and our Articles of Incorporation, to instruct The Bank of New York Mellon as to theexercise of the voting rights, if any, pertaining to the amount of shares or other deposited securities represented
by your ADSs, and (c) a brief statement as to the manner in which such instructions may be given, including an
express indication that instructions may be given to The Bank of New York Mellon to give a discretionary proxy
to a person designated by us. Upon your written request, received on or before the date established by The Bankof New York Mellon for such purpose, The Bank of New York Mellon shall endeavor in so far as practicable tovote or cause to be voted the amount of shares or other deposited securities represented by your ADSs inaccordance with the instructions set forth in your request. So long as Japanese law provides that votes may only
be cast with respect to one or more whole shares or other deposited securities, The Bank of New York Mellon
will aggregate voting instructions to the extent such instructions are the same and vote such whole shares or otherdeposited securities in accordance with your instructions. If, after aggregation of all instructions to vote received
by The Bank of New York Mellon, any portion of the aggregated instructions constitutes instructions withrespect to less than a whole share or other deposited securities, The Bank of New York Mellon will not vote orcause to be voted the shares or other deposited securities to which such portion of the instructions apply. The
160

Bank of New York Mellon will not vote or attempt to exercise the right to vote that attaches to the shares or otherdeposited securities, other than in accordance with the instructions of the ADS holders. If no instructions arereceived by The Bank of New York Mellon from you with respect to any of the deposited securities represented
by your ADSs on or before the date established by The Bank of New York Mellon for such purpose, The Bank of
New York Mellon shall deem you to have instructed The Bank of New York Mellon to give a discretionary
proxy to a person designated by us with respect to such deposited securities and The Bank of New York Mellon
shall give a discretionary proxy to a person designated by us to vote such deposited securities, provided that nosuch instruction shall be given with respect to any matter as to which we inform The Bank of New York Mellon(and we have agreed to provide such information as promptly as practicable in writing) that (1) we do not wish
such proxy given, (2) substantial opposition exists or (3) such matter materially and adversely affects the rights
of holders of shares.
We cannot assure you that you will receive the voting materials in time to ensure that you can instruct The
Bank of New York Mellon to vote your shares. In addition, The Bank of New York Mellon is not responsible for
failing to carry out voting instructions or for the manner of carrying out voting instructions as long as it has acted
in good faith. This means that you may not be able to exercise your right to vote and there may be nothing you
can do if your shares are not voted as you requested.
Fees and Expenses
See “Item 12.D. Description of Securities Other than Equity Securities—American Depositary Shares.”
Payment of Taxes
You will be responsible for any taxes or other governmental charges payable on your ADSs or on thedeposited securities underlying your ADSs. The Bank of New York Mellon may refuse to transfer your ADSs or
allow you to withdraw the deposited securities underlying your ADSs until those taxes or other charges are paid.
It may apply payments owed to you or sell deposited securities underlying your ADSs to pay any taxes owed andyou will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the numberof ADSs to reflect the sale and pay to you any property remaining after it has paid the taxes.
Reclassifications, Recapitalizations and Mergers
If we:‰

reclassify, split up or consolidate any of our shares or the deposited securities;‰

recapitalize, reorganize, merge, liquidate, consolidate or sell all or substantially all of our assets or takeany similar action; or‰

distribute securities on the shares that are not distributed to you, then,(1) the cash, shares or other securities received by The Bank of New York Mellon will become deposited
securities and each ADS will automatically represent its equal share of the new deposited securities
unless additional ADSs are issued; and(2) The Bank of New York Mellon may, and will if we request, issue new ADSs or ask you to surrender
your outstanding ADSs in exchange for new ADSs, identifying the new deposited securities.
Amendment and Termination
We may agree with The Bank of New York Mellon to amend the deposit agreement and the ADSs without
your consent for any reason. If the amendment adds or increases fees or charges, except for taxes and othergovernmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such161

expenses, or prejudices an important right of ADS holders, it will only become effective three months after The
Bank of New York Mellon notifies you of the amendment. At the time an amendment becomes effective, you areconsidered, by continuing to hold your ADS, to agree to the amendment and to be bound by the ADSs and thedeposit agreement as amended. However, no amendment will impair your right to receive the deposited securities
in exchange for your ADSs.
The Bank of New York Mellon will terminate the deposit agreement if we ask it to do so, in which case it
must notify you at least 30 days before termination. The Bank of New York Mellon may also terminate thedeposit agreement if The Bank of New York Mellon has told us that it would like to resign and we have notappointed a new depositary bank within 60 days.
If any ADSs remain outstanding after termination, The Bank of New York Mellon will stop registering thetransfers of ADSs, will stop distributing dividends to ADS holders and will not give any further notices or doanything else under the deposit agreement other than:(1) collect dividends and distributions on the deposited securities;(2) sell rights and other property offered to holders of deposited securities; and(3) deliver shares and other deposited securities in exchange for ADSs surrendered to The Bank of
New York Mellon.
At any time after one year following termination, The Bank of New York Mellon may sell any remaining
deposited securities. After that, The Bank of New York Mellon will hold the money it received on the sale, as
well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADS holders thathave not surrendered their ADSs. It will not invest the money and has no liability for interest. The Bank of
New York Mellon’s only obligations will be to account for the money and other cash and with respect toindemnification and to retain depositary documents. After termination, our only obligations will be with respect
to indemnification and to pay certain amounts to The Bank of New York Mellon.
Limitations on Obligations and Liability to ADS Holders
The deposit agreement expressly limits our obligations and the obligations of The Bank of New York
Mellon. It also limits our liability and the liability of The Bank of New York Mellon. We and The Bank of
New York Mellon:‰

are only obligated to take the actions specifically set forth in the deposit agreement without negligenceor bad faith;‰

are not liable if either is prevented or delayed by law, any provision of our Articles of Incorporation or
circumstances beyond their control from performing their obligations under the deposit agreement;‰

are not liable if either exercises or fails to exercise discretion permitted under the deposit agreement;‰

have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or thedeposit agreement on your behalf or on behalf of any other party unless indemnified to their satisfaction;and‰may rely upon any advice of or information from legal counsel, accountants, any person depositing
shares, any ADS holder or any other person believed in good faith to be competent to give them that
advice or information.

In the deposit agreement, we and The Bank of New York Mellon agree to indemnify each other for
liabilities arising out of acts performed or omitted by the other party in accordance with the deposit agreement.

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Requirements for Depositary Actions
Before The Bank of New York Mellon will issue or register transfer of an ADS, make a distribution on an
ADS, or permit withdrawal of shares, it may require:‰

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees
charged by third parties for the transfer of any shares or other deposited securities;‰

production of satisfactory proof of the identity and genuineness of any signature or other information it
deems necessary; and‰compliance with regulations it may establish, from time to time, consistent with the deposit agreement,
including presentation of transfer documents.

The Bank of New York Mellon may refuse to deliver, transfer, or register transfers of ADSs generally when
its transfer books are closed, when our transfer books are closed or at any time if it or we think it advisable to doso.
You have the right to cancel your ADSs and withdraw the underlying shares at any time except:‰

when temporary delays arise because: (1) The Bank of New York Mellon has closed its transfer books
or we have closed our transfer books; (2) the transfer of shares is blocked to permit voting at ashareholders’ meeting; or (3) we are paying a dividend on the shares;‰

when you or other ADS holders seeking to withdraw shares owe money to pay fees, taxes and similar
charges; or‰when it is necessary to prohibit withdrawals in order to comply with any laws or governmental
regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.
Reports and Other Communications
The Bank of New York Mellon will make available for your inspection at its corporate trust office any
reports and communications, including any proxy soliciting material, that it receives from us, if those reports andcommunications are both (a) received by The Bank of New York Mellon as the holder of the deposited securitiesand (b) made generally available by us to the holders of the deposited securities. If we ask it to, The Bank of
New York Mellon will also send you copies of those reports it receives from us.
Inspection of Transfer Books
The Bank of New York Mellon will keep books for the registration and transfer of ADSs, which will be
open for your inspection at all reasonable times. You will only have the right to inspect those books if theinspection is for the purpose of communicating with other owners of ADSs in connection with our business or amatter related to the deposit agreement or the ADSs.
C.

Material Contracts

Except as described elsewhere in this Annual Report, all material contracts entered into by us in the past two
years preceding the filing of this Annual Report were entered into in the ordinary course of business.

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D.

Exchange Controls

Foreign Exchange and Foreign Trade Law
The Foreign Exchange and Foreign Trade Law of Japan and the cabinet orders and ministerial ordinances
incidental thereto, collectively known as the Foreign Exchange Law, set forth, among other matters, theregulations relating to the receipt by non-residents of Japan of payment with respect to shares to be issued by us
and the acquisition and holding of shares by non-residents of Japan and foreign investors, both as defined below.
It also applies in some cases to the acquisition and holding of ADSs representing such shares acquired and heldby non-residents of Japan and by foreign investors. Generally, the Foreign Exchange Law currently in effect does
not affect the right of a non-resident of Japan to purchase or sell an ADR outside Japan for non-Japanesecurrency.
“Non-residents of Japan” are defined as individuals who are not resident in Japan and corporations whose
principal offices are located outside Japan. Generally, the branches and offices of non-resident corporations
which are located in Japan are regarded as residents of Japan while the branches and offices of Japanese
corporations located outside Japan are regarded as non-residents of Japan.
“Foreign investors” are defined as:‰

non resident individuals;‰

corporations which are organized under the laws of foreign countries or whose principal offices arelocated outside Japan;‰

corporations of which 50% or more of the shares are directly or indirectly held by individuals notresident of Japan and corporations which are organized under the laws of foreign countries or whose
principal offices are located outside Japan; and‰corporations, a majority of officers (or a majority of officers having the power of representation) of
which are non-resident individuals.

Dividends and Proceeds of Sales
Under the Foreign Exchange Law, dividends paid on, and the proceeds of sales in Japan of, shares held by
non-residents of Japan may in general be converted into any foreign currency and repatriated abroad. The
acquisition of our shares by non-residents by way of a stock split is not subject to any notification or reporting
requirements.
Acquisition of Shares
In general, a non-resident who acquires shares from a resident of Japan is not subject to any prior filing
requirement, although the Foreign Exchange Law empowers the Minister of Finance of Japan to require a priorapproval for any such acquisition in certain limited circumstances.
If a foreign investor acquires our shares, and, together with parties who have a special relationship with that
foreign investor, holds 10% or more of our issued shares as a result of such acquisition, the foreign investor mustfile a report of such acquisition with the Minister of Finance and any other competent Minister by the fifteenth
day of the month immediately following the month to which the date of such acquisition belongs. In certain
limited circumstances, however, a prior notification of such acquisition must be filed with the Minister ofFinance and any other competent Minister, who may modify or prohibit the proposed acquisition.
Deposit and Withdrawal under American Depositary Facility
The deposit of shares with us, in our capacity as custodian and agent for the depositary, in Tokyo, theissuance of ADSs by the depositary to a non-resident of Japan in respect of the deposit and the withdrawal of the164

underlying shares upon the surrender of the ADSs are not subject to any of the formalities or restrictions referred
to above. However, where as a result of a deposit or withdrawal the aggregate number of shares held by thedepositary, including shares deposited with us as custodian for the depositary, or the holder surrendering ADSs,
as the case may be, would be 10% or more of the total outstanding shares, a report will be required, and inspecified circumstances, a prior notification may be required, as noted above.
Reporting of Substantial Shareholdings
The Financial Instruments and Exchange Law of Japan requires any person who has become, beneficiallyand solely or jointly, a holder of more than 5% of the total issued shares of capital stock of a company listed on
any Japanese financial instruments exchange or whose shares are traded on the over-the-counter market in Japanto file with the director of a competent finance bureau within 5 business days a report concerning suchshareholdings.
A similar report must also be filed in respect of any subsequent change of 1% or more in any such holding
ratio or any change in material matters set out in reports previously filed, with certain exceptions. For thispurpose, shares issuable to such person upon exchange of exchangeable securities, conversion of convertible
securities or exercise of share subscription warrants or stock acquisition rights (including those incorporated inbonds with stock acquisition rights) are taken into account in determining both the number of shares held by suchholder and the issuer’s total issued shares of capital stock. Copies of such report must also be furnished to theissuer of such shares and all Japanese financial instruments exchanges on which the shares are listed or (in thecase of shares traded over-the-counter) the Japan Securities Dealers Association.
E.

Taxation

Japanese Taxation
The following sets forth the material Japanese tax consequences to owners of shares of our common stock or
ADSs who are non-resident individuals or non-Japanese corporations without a permanent establishment in Japanto which the relevant income is attributable, which we refer to as “non-resident holders” in this section. The
statements regarding Japanese tax laws below are based on the laws in force and as interpreted by the Japanesetaxation authorities as at the date of this Annual Report and are subject to changes in the applicable Japaneselaws, double taxation treaties, conventions or agreements or interpretations thereof occurring after that date. Thissummary is not exhaustive of all possible tax considerations that may apply to a particular investor, and potential
investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership anddisposition of shares of our common stock or ADSs, including specifically the tax consequences under Japaneselaw, the laws of the jurisdiction of which they are resident and any tax treaty between Japan and their country ofresidence, by consulting their own tax advisers.
For the purpose of Japanese tax law and the Convention between the Government of the United States ofAmerica and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect toTaxes on Income (the “Tax Convention”), a US holder of ADSs will be treated as the owner of the shares of ourcommon stock underlying the ADSs evidenced by the ADRs.
Generally, a non-resident holder of shares of our common stock or ADSs is subject to Japanese withholding
tax on dividends paid by us. In the absence of any applicable tax treaty, convention or agreement reducing therate of withholding tax, the rate of Japanese withholding tax applicable to dividends paid by us to non-resident
holders is (i) 7% for dividends to be paid on or before December 31, 2012, (ii) 7.147% for dividends to be paidon or after January 1, 2013 but on or before December 31, 2013, (iii) 15.315% for dividends to be paid on orafter January 1, 2014 but on or before December 31, 2037 and (iv) 15% for dividends to be paid thereafter,
except for dividends paid to any individual non-resident holder who holds 3% or more of our issued shares forwhich the applicable rate is 20%, pursuant to Japanese tax law.
The Tax Convention establishes the maximum rate of Japanese withholding tax which may be imposed on
dividends paid to a US resident not having a permanent establishment in Japan. Under the Tax Convention, the165

maximum withholding rate for US holders (as defined below) is generally set at 10% of the gross amount
distributed. However, the maximum rate is 5% of the gross amount distributed if the recipient is a corporationand owns directly or indirectly, on the date on which entitlement to the dividends is determined, at least 10% of
the voting shares of the paying corporation. Furthermore, the amount distributed shall not be taxed if therecipient is (i) a pension fund which is a US resident, provided that such dividends are not derived from thecarrying on of a business, directly or indirectly, by such pension fund or (ii) a parent company with a controllinginterest in the paying company and satisfies certain other requirements. US holders (as defined below) are urged
to consult their own tax advisors with respect to their eligibility for benefits under the Tax Convention.
Japanese tax law provides in general that if the Japanese statutory rate is lower than the maximum rateapplicable under tax treaties, conventions or agreements, the Japanese statutory rate as stated above shall beapplicable.
Non-resident holders of shares who are entitled to a reduced rate of Japanese withholding tax on paymentsof dividends on the shares of our common stock or ADSs by us are required to submit an Application Form for
the Income Tax Convention regarding Relief from Japanese Income Tax on Dividends in advance through us to
the relevant tax authority before the payment of dividends. A standing proxy for non-resident holders may
provide this application service for the non-resident holders. Non-resident holders who do not submit anapplication in advance will generally be entitled to claim a refund from the relevant Japanese tax authority ofwithholding taxes withheld in excess of the rate of an applicable tax treaty.
Gains derived from the sale or other disposition of shares of our common stock or ADSs by a non-resident
holder are not, in general, subject to Japanese income or corporation taxes or other Japanese taxes.
Any deposits or withdrawals of shares of our common stock by a non-resident holder in exchange for ADSs
are not subject to Japanese income or corporation tax.
Japanese inheritance and gift taxes, at progressive rates, may be payable by an individual who has acquired
shares of our common stock or ADSs as legatee, heir or donee, even if none of the individual, the decedent or thedonor is a Japanese resident.
US Taxation
The following sets forth the material US federal income tax consequences of the ownership of shares and
ADSs by a US holder, as defined below. This summary is based on US federal income tax laws, including the US
Internal Revenue Code of 1986, or the Code, its legislative history, existing and proposed Treasury regulations
thereunder, published rulings and court decisions, and the Tax Convention (as defined above), all of which are
subject to change, possibly with retroactive effect.
The following summary is not a complete analysis or description of all potential US federal income tax
consequences to a particular US holder. It does not address all US federal income tax considerations that may be
relevant to all categories of potential purchasers, certain of which (such as banks or other financial institutions,insurance companies, dealers in securities, tax-exempt entities, non-US persons, persons holding a share or an
ADS as part of a “straddle,” “hedge,” conversion or integrated transaction, holders whose “functional currency”
is not the US dollar, holders liable for alternative minimum tax and holders of 10% or more of our voting shares)
are subject to special tax treatment. This summary does not address any foreign, state, local or other tax
consequences of investments in our shares or ADSs.
This summary addresses only shares or ADSs that are held as capital assets within the meaning ofSection 1221 of the Code.
166

As used herein, a “US holder” is a beneficial owner of shares or ADSs, as the case may be, that is, for US
federal income tax purposes:‰

a citizen or resident of the United States;‰

a corporation or other entity taxable as a corporation created or organized under the laws of the UnitedStates, any state thereof or the District of Columbia;‰

an estate, the income of which is subject to US federal income tax regardless of its source; or‰a trust‰the administration of which is subject to (1) the supervision of a court within the United States and(2) the control of one or more US persons as described in Section 7701(a)(30) of the Code; or‰that has a valid election in effect under applicable US Treasury regulations to be treated as a US
person.

A “Non-US holder” is any beneficial holder of shares or ADSs that is not a US holder.
If a partnership holds shares or ADSs, the tax treatment of a partner will generally depend on the status of
the partner and the activities of the partnership. If you are a partner of a partnership holding shares or ADSs, you
should consult your tax advisor.
We urge US holders to consult their own tax advisors concerning the US federal, state and local and othertax consequences to them of the purchase, ownership and disposition of shares or ADSs.
This summary is based in part on representations by the depositary and assumes that each obligation under
the deposit agreement and any related agreement will be performed in accordance with its respective terms. For
US federal income tax purposes, holders of ADSs will be treated as the owners of the shares represented by the
ADSs. Accordingly, withdrawals or deposits of shares in exchange for ADSs generally will not be subject to US
federal income tax.
The US Treasury has expressed concerns that intermediaries in the chain of ownership between the holder
of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with thebeneficial ownership of the underlying shares (for example, pre-releasing ADSs to persons who do not havebeneficial ownership of the securities underlying the ADSs). Accordingly, the discussion on the creditability ofJapanese taxes and the availability of the reduced rate of tax for dividends received by certain non-corporate US
holders, each as described below, could be affected by actions taken by intermediaries in the chain of ownership
between the holder of ADSs and us if, as a result of such actions, the holders of ADSs are not properly treated as
beneficial owners of the underlying shares. We are not aware of any intention to take any such actions, andaccordingly, the remainder of this discussion assumes that holders of ADSs will be properly treated as beneficial
owners of the underlying shares.
Special adverse US federal income tax rules apply if a US holder holds shares or ADSs of a company that istreated as a “passive foreign investment company” (a “PFIC”) for any taxable year during which the US holder
held shares or ADSs, as discussed in more detail below. US holders should consult their own tax advisors as tothe potential application of the PFIC rules to their ownership and disposition of shares or ADSs.
Taxation of Dividends
Subject to the application of the PFIC rules discussed below, US holders will include the gross amount ofany distribution received with respect to shares or ADSs (before reduction for Japanese withholding taxes), to theextent paid out of our current or accumulated earnings and profits (as determined for US federal income tax
purposes), as ordinary income in their gross income. As discussed below, for certain US holders, dividends may
be eligible for a reduced rate of taxation. The amount of distribution of property other than cash will be the fairmarket value of such property on the date of the distribution. Dividends received by a US holder will not be167eligible for the “dividends-received deduction” allowed to US corporations in respect of dividends received fromother US corporations. To the extent that an amount received by a US holder exceeds such holder’s allocable
share of our current earnings and profits, such excess will be applied first to reduce such holder’s tax basis in its
shares or ADSs, thereby increasing the amount of gain or decreasing the amount of loss recognized on asubsequent disposition of the shares or ADSs. Then, to the extent such distribution exceeds such US holder’s tax
basis, such excess will be treated as capital gain. However, we do not maintain calculations of our earnings andprofits in accordance with US federal income tax principles, and US holders should therefore assume that any
distribution by us with respect to shares or ADSs will constitute ordinary dividend income. The amount of thedividend will be the US dollar value of the Japanese yen payments received. This value will be determined at the
spot Japanese yen/US dollar rate on the date the dividend is received by the depositary in the case of US holders
of ADSs, or by the shareholder in the case of US holders of shares, regardless of whether the dividend payment isin fact converted into US dollars at that time. If the Japanese yen received as a dividend are not converted into
US dollars on the date of receipt, a US holder will have basis in such Japanese yen equal to their US dollar valueon the date of receipt, and any foreign currency gains or losses resulting from the conversion of the Japanese yen
will generally be treated as US source ordinary income or loss. If the Japanese yen received as a dividend areconverted into US dollars on the date of receipt, a US holder will generally not be required to recognize foreign
currency gain or loss in respect of the dividend income.
If a US holder is eligible for benefits under the Tax Convention, the holder may be able to claim a reduced
rate of Japanese withholding tax. All US holders should consult their tax advisors about their eligibility for
reduction of Japanese withholding tax. A US holder may claim a deduction or a foreign tax credit, subject toother applicable limitations, only for tax withheld at the appropriate rate. A US holder should not be allowed aforeign tax credit for withholding tax for any portion of the tax that could have been avoided by claiming benefits
under the Tax Convention. For foreign tax credit limitation purposes, the dividend will be income from sources
outside the United States. The limitation on foreign taxes eligible for credit is calculated separately with respect
to specific classes of income. For this purpose, dividends we pay will constitute “passive income” or, in the caseof certain US holders, “financial services income.” The rules governing US foreign tax credits are very complex
and US holders should consult their tax advisors regarding the availability of foreign tax credits under their
particular circumstances.
Subject to applicable exceptions with respect to short-term and hedged positions, qualified dividends
received by non-corporate US holders prior to January 1, 2013 from a qualified corporation may be eligible for
reduced rates of taxation. Qualified corporations include those foreign corporations eligible for the benefits of acomprehensive income tax treaty with the United States that the US Treasury Department determines to besatisfactory for these purposes and that includes an exchange of information provision. The Tax Convention
meets these requirements. We believe that we are a qualified foreign corporation and that dividends received by
US investors with respect to our shares or ADSs will be qualified dividends. Dividends received by US investors
from a foreign corporation that was a PFIC in either the taxable year of the distribution or the preceding taxable
year are not qualified dividends.
Passive Foreign Investment Company Considerations
Special adverse US federal income tax rules apply if a US holder holds shares or ADSs of a company that istreated as a PFIC, for any taxable year during which the US holder held shares or ADSs. A foreign corporation
will be considered a PFIC for any taxable year in which (i) 75% or more of its gross income is passive income(the “income test”), or (ii) 50% or more of the average fair market value of its assets (determined quarterly) is
attributable to assets that produce or are held for the production of passive income (the “asset test”). For thispurpose, passive income generally includes dividends, interest, royalties, rents and certain gains from the sale ofstock and securities. If a foreign corporation owns at least 25% (by value) of the stock of another corporation, thecorporation will be treated, for purposes of the PFIC tests, as owning a proportionate share of the othercorporation’s assets and receiving its proportionate share of the other corporation’s income. The determination ofwhether a foreign corporation is a PFIC is made annually.
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Proposed Treasury regulations convert what would otherwise be passive income into non-passive income
when such income is banking income earned by an active bank. Based upon these proposed Treasury regulations
and certain IRS guidance relating to the treatment of certain qualifying government bonds, and upon certain
management estimates and assumptions, we do not believe that we were a PFIC for the year ended March 31,
2012 because we did not meet either the income test or the asset test. The determination of whether we are a
PFIC must be made annually and involves a fact-intensive analysis based upon, among other things, thecomposition of our income and assets and the value of our assets from time to time. It is possible that we may
become a PFIC in the fiscal year ending March 31, 2013 or any future taxable year due to changes in our income
or asset composition. In addition, a decrease in the price of our shares may also result in our becoming a PFIC.
Furthermore, there can be no assurance that the above-described proposed Treasury regulations will be finalized
in their current form or that the above IRS guidance which is scheduled to expire for taxable years beginning
after 2013 will continue to apply. Moreover, the application of the proposed Treasury regulations is not clear. If
we were classified as a PFIC in any year during which a US holder owns shares or ADSs and the US holder does
not make a “mark-to-market” election, as discussed below, we generally would continue to be treated as a PFIC
as to such US holder in all succeeding years, regardless of whether we continue to meet the income or asset test
discussed above. US Holders are urged to consult their own tax advisors with respect to the tax consequences tothem if we were to become a PFIC for any taxable year in which they own our shares or ADSs.
If we were classified as a PFIC for any taxable year during which a US holder holds our shares or ADSs, theUS holder would generally not receive capital gains treatment upon the sale of the shares or ADSs and would be
subject to increased tax liability (generally including an interest charge) upon the sale or other disposition of theshares or ADSs or upon the receipt of certain distributions treated as “excess distributions,” unless the US holder
makes the mark-to-market election described below. An excess distribution generally would be any distribution
to a US holder with respect to shares or ADSs during a single taxable year that is greater than 125% of theaverage annual distributions received by a US holder with respect to shares or ADSs during the three preceding
taxable years or, if shorter, during the US holder’s holding period for the shares or ADSs.
Mark-to-Market Election. If the shares or ADSs are regularly traded on a registered national securities
exchange or certain other exchanges or markets, then such shares or ADSs would constitute “marketable stock”
for purposes of the PFIC rules, and a US holder would not be subject to the foregoing PFIC rules if such holder
made a mark-to-market election. After making such an election, the US holder generally would include as
ordinary income each year during which the election is in effect and during which we are a PFIC the excess, ifany, of the fair market value of our shares or ADSs at the end of the taxable year over such holder’s adjusted
basis in such shares or ADSs. These amounts of ordinary income would not be eligible for the favorable tax rates
applicable to qualified dividend income or long-term capital gains. A US holder also would be allowed to take anordinary loss in respect of the excess, if any, of the holder’s adjusted basis in our shares or ADSs over their fairmarket value at the end of the taxable year (but only to the extent of the net amount of income that waspreviously included as a result of the mark-to-market election). A US holder’s tax basis in our shares or ADSs
would be adjusted to reflect any income or loss amounts resulting from a mark-to-market election. If made, amark-to-market election would be effective for the taxable year for which the election was made and for all
subsequent taxable years unless the shares or ADSs cease to qualify as “marketable stock” for purposes of the
PFIC rules or the Internal Revenue Service consented to the revocation of the election. In the event that we areclassified as a PFIC, US holders are urged to consult their tax advisors regarding the availability of themark-to-market election, and whether the election would be advisable in the holder’s particular circumstances.
QEF Election. The PFIC rules outlined above also would not apply to a US holder if such holder
alternatively elected to treat us as a “qualified electing fund” or “QEF.” An election to treat us as a QEF will not
be available, however, if we do not provide the information necessary to make such an election. We will notprovide US holders with the information necessary to make a QEF election, and thus, the QEF election will not
be available with respect to our shares.
Notwithstanding any election made with respect to our shares, dividends received with respect to our shares
will not constitute “qualified dividend income” if we are a PFIC in either the year of the distribution or the169

preceding taxable year. Dividends that do not constitute qualified dividend income are not eligible for taxation at
the reduced tax rate described above in “—Taxation of Dividends.” Instead, such dividends would be subject totax at ordinary income rates.
If a US holder owns shares or ADSs during any year in which we are a PFIC, the US holder must also file
IRS Form 8621 regarding distributions received on the shares or ADSs, any gain realized on the shares or ADSs,
and any “reportable election” in accordance with the instructions to such form. In addition, under recently
enacted legislation, each US holder is required to file a separate IRS Form 8621 if such US holder owns shares or
ADSs during any year in which we are a PFIC whether or not such US holder received distributions on the sharesor ADS, realized a gain on the shares or ADSs or made a “reportable election” during such year. US holders are
urged to consult their own tax advisors concerning the US federal income tax consequences of holding shares or
ADSs if the Company were considered a PFIC in any taxable year.
Taxation of Capital Gains
Subject to the application of the PFIC rules discussed above, upon a sale or other disposition of shares or
ADSs, a US holder will recognize a gain or loss in an amount equal to the difference between the US dollar valueof the amount realized and the US holder’s tax basis, determined in US dollars, in such shares or ADSs. Suchgains or losses will be capital gains or losses and will be long-term capital gains or losses if the US holder’sholding period for such shares or ADSs exceeds one year. A US holder’s adjusted tax basis in its shares or ADSs
will generally be the cost to the holder of such shares or ADSs. Any such gains or losses realized by a US holder
upon disposal of the shares or ADSs will generally be income or loss from sources within the United States forforeign tax credit limitation purposes. The deductibility of capital losses is subject to limitations under the Code.
Information Reporting and Backup Withholding
Dividends paid on shares or ADSs to a US holder, or proceeds from a US holder’s sale or other dispositionof shares or ADSs, may be subject to information reporting requirements. Those dividends or proceeds from saleor disposition may also be subject to backup withholding unless the US holder:‰

is a corporation or other exempt recipient, and, when required, demonstrates this fact; or‰provides a correct taxpayer identification number on a properly completed US Internal Revenue Service
Form W-9 or substitute form, certifies that the US holder is not subject to backup withholding, andotherwise complies with applicable requirements of the backup withholding rules.

Backup withholding is not an additional tax. Any amount withheld under these rules will be creditableagainst the US holder’s US federal income tax liability or refundable to the extent that it exceeds such liability if
the US holder provides the required information to the Internal Revenue Service. If a US holder is required toand does not provide a correct taxpayer identification number, the US holder may be subject to penalties imposedby the Internal Revenue Service. All holders should consult their tax advisors as to their qualification for the
exemption from backup withholding and the procedure for obtaining an exemption.
In addition, for taxable years beginning after March 18, 2010, new legislation requires certain US holders
who are individuals that hold certain foreign financial assets (which may include our shares or ADSs) to report
information relating to such assets, subject to certain exceptions. US Holders should consult their tax advisors
regarding the effect, if any, of this legislation on their ownership and disposition of our shares and ADSs.
Additional Tax on Investment Income
For taxable years beginning after December 31, 2012, US Holders that are individuals, estates or trusts andwhose income exceeds certain thresholds will be subject to a 3.8% Medicare contribution tax on unearned
income, including, among other things, dividends on, and capital gains from the sale or other taxable dispositionof, shares or ADSs, subject to certain limitations and exceptions.
170

F.

Dividends and Paying Agents
Not applicable.

G. Statement by Experts
Not applicable.
H. Documents on Display
We file periodic reports and other information with the SEC. You may read and copy any document that wefile with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of its public reference rooms. The SEC also
maintains a web site that contains reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC (http://www.sec.gov). Some of this information may also befound on our website at http://www.mufg.jp.
I.

Subsidiary Information
Please refer to discussion under “Item 4.C. Information on the Company—Organizational Structure.”

Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk.
Numerous changes in our business environment have occurred as a result of globalization of the financial
industry, the advancement of information technology, and changes in economic conditions. We aim to be a
global and comprehensive financial group encompassing leading commercial and trust banks, and securities
firms in Japan. Risk management plays an increasingly important role as the risks faced by financial groups suchas us increase in scope and variety.
We identify various risks arising from businesses based on uniform criteria, and implement integrated risk
management to ensure a stronger financial condition and to maximize shareholder value. Based on this policy,
we identify, measure, control and monitor a wide variety of risks so as to achieve a stable balance between
earnings and risks. We undertake risk management to create an appropriate capital structure and to achieve
optimal allocation of resources.

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Risk Classification
At the holding company level, we broadly classify and define risk categories faced by the Group including
those that are summarized below. Group companies perform more detailed risk management based on theirrespective operations.
Type of Risk

Definition

Credit Risk

The risk of financial loss in credit assets (including off-balance sheet
instruments) caused by deterioration in the credit conditions of counterparties.
This category includes country risk.

Market Risk

Market risk is the risk of financial loss where the value of our assets andliabilities could be adversely affected by changes in market variables such as
interest rates, securities prices and foreign exchange rates. Market liquidity
risk is the risk of financial loss caused by the inability to secure market
transactions at the required volume or price levels as a result of market
turbulence or lack of trading liquidity.

Liquidity Risk

The risk of incurring loss if a poor financial position at a group company
hampers the ability to meet funding requirements or necessitates fundprocurement at interest rates markedly higher than normal.

Operational Risk

The risk of loss resulting from inadequate or failed internal processes, people
or systems, or from external events.

‰

Operations Risk

The risk of incurring loss that might be caused by negligence of correct
operational processing, or by incidents or misconduct by either officers or
staff, as well as risks similar to this risk.

‰

Information Asset Risk

The risk of loss caused by loss, alteration, falsification or leakage of
information, or by destruction, disruption, errors or misuse of information
systems, as well as risks similar to this risk.

‰

Reputation Risk

The risk of loss due to deterioration in reputation as a consequence of the
spread of rumors among customers or in the market, or as a consequence of
inadequate response to the circumstance by MUFG, as well as risks similar tothis risk.

Risk Management System
We have adopted an integrated risk management system to promote close cooperation among the holding
company and group companies. The holding company and the major subsidiaries (which include The Bank ofTokyo-Mitsubishi UFJ, Ltd., or BTMU, Mitsubishi UFJ Trust and Banking Corporation, or MUTB, andMitsubishi UFJ Securities Holdings Co., Ltd., or MUSHD) each appoint a Chief Risk Management Officer andestablish an independent risk management division. At the Risk Management Committees, our management
members discuss and dynamically manage various types of risks from both qualitative and quantitative
perspectives. The board of directors determines risk management policies for various types of risk based on thediscussions held by these committees.
The holding company seeks to enhance group-wide risk identification, to integrate and improve the Group’s
risk management system and related methods, to maintain asset quality, and to eliminate concentrations ofspecific risks. Group-wide risk management policy is determined at the holding company level and each groupcompany implements and improves its own risk management system based on this policy.
Business Continuity Management
Based on a clear critical response rationale and associated decision-making criteria, we have developed
systems to ensure that operations are not interrupted or can be restored to normal quickly in the event of a natural172

disaster or system failure so as to minimize any disruption to customers and markets. A crisis management teamwithin the holding company is the central coordinating body in the event of any emergency. Based on
information collected from crisis management personnel at the major subsidiaries, this central body would assess
the overall impact of a crisis on the Group’s business and establish task forces that could implement all
countermeasures to restore full operations. We have business continuity plans to maintain continuous operational
viability in the event of natural disasters, system failures and other types of emergencies. Regular training drills
are conducted to upgrade the practical effectiveness of these systems.
The Great East Japan Earthquake created unprecedented and extreme circumstances, an electricity power
supply shortage and a need for all companies in Japan, including us, to reduce their electricity consumption. We
have initiated a comprehensive review of our existing business continuity plan to more effectively respond tothese circumstances as well as further extreme scenarios, such as a sudden massive blackout in major
metropolitan areas in Japan.
Implementation of Basel Regulation
Basel II, as adopted by the Japanese FSA, has been applied to Japanese banks since March 31, 2007.
Basel II is a comprehensive regulatory framework based on “three pillars”: (1) minimum capital requirements,(2) the self-regulation of financial institutions based on supervisory review process, and (3) market discipline
through the disclosure of information. Based on the principles of Basel II, MUFG has adopted the Advanced
Internal Ratings-Based Approach to calculate its capital requirements for credit risk since March 31, 2009. The
Standardized Approach is used for some subsidiaries that are considered to be immaterial to our overall capitalrequirements, and UNBC has adopted a phased rollout of the Internal Ratings-Based Approach. MUFG has
adopted the Advanced Measurement Approach since March 31, 2012 to calculate its capital requirements for
operational risk. As for market risk, MUFG has adopted the Internal Models Approach mainly to calculate
general market risk and adopted the Standardized Method to calculate specific risk.
In response to the recent financial crisis, the Group of Central Bank Governors and Heads of Supervision
has made a series of announcements regarding the new global regulatory framework, which has been referred toas “Basel III,” to strengthen the regulation, supervision and risk management of the banking sector. Various
Basel III measures are expected to be introduced in phases starting in calendar 2013, including those designed toraise the level of minimum capital requirements and to establish an internationally harmonized leverage ratio anda global minimum liquidity standard. In addition, in July 2011, the Basel Committee on Banking Supervision
proposed additional loss absorbency requirements to supplement the common equity Tier I capital requirement
ranging from 1% to 2.5% for global systemically important banks, depending on the bank’s systemic importance,
to be introduced in phases starting in calendar 2016. In November 2011, the Financial Stability Board tentatively
identified us as a G-SIFI. Based on the Basel III framework, the Japanese capital ratio framework, which iscurrently based on Basel II, has been revised to implement the more stringent requirements, which will beeffective as of March 31, 2013. Likewise, local banking regulators outside of Japan such as those in the
United States are expected to revise the capital and liquidity requirements imposed on our subsidiaries andoperations in those countries to implement the more stringent requirements of Basel III as adopted in thosecountries. We intend to carefully monitor further developments with an aim to enhance our corporate value andmaximize shareholder value by integrating the various strengths within the MUFG Group.
Credit Risk Management
Credit risk is the risk of losses due to deterioration in the financial condition of a borrower. We haveestablished risk management systems to maintain asset quality, manage credit risk exposure and achieve earnings
commensurate with risk.
Our major banking subsidiaries (which include BTMU and MUTB) apply a uniform credit rating system for
asset evaluation and assessment, loan pricing, and quantitative measurement of credit risk. This system also
underpins the calculation of capital requirements and management of credit portfolios. We continually seek to173

upgrade credit portfolio management, or CPM, expertise to achieve an improved risk-adjusted return based on
the Group’s credit portfolio status and flexible response capability to economic and other external changes.
Credit Risk Management System
The credit portfolios of our major banking subsidiaries are monitored and assessed on a regular basis by theholding company to maintain and improve asset quality. A uniform credit rating and asset evaluation andassessment system is used to ensure timely and proper evaluation of all credit risks.
Under our credit risk management system, each of our subsidiaries in the banking, securities, consumer
finance, and leasing businesses, manages its respective credit risk on a consolidated basis based on the attributesof the risk, while the holding company oversees and manages credit risk on an overall group-wide basis. The
holding company also convenes regular committee meetings to monitor credit risk management at banking
subsidiaries and to issue guidance where necessary.
Each major banking subsidiary has in place a system of checks and balances in which a credit administration
section that is independent of the business promotion sections screens individual transactions and manages theextension of credit. At the management level, regular meetings of the Credit & Investment Management
Committee and related deliberative bodies ensure full discussion of important matters related to credit risk
management. Besides such checks and balances and internal oversight systems, credit examination sections also
undertake credit testing and evaluation to ensure appropriate credit risk management.
The following diagram summarizes the credit risk management framework for our major banking subsidiaries:
Board of Directors/Executive Committee
Credit & Investment Management Committee/
related deliberative bodies•Decisions regarding important matters•Delegation of authority

Monitoring by MUFG
Credit Management
Committee
Regular report•Discussion of important matters•Transaction report
Credit administration
sections
Credit screening
and management
Business promotion
sections

Credit risk management
sections

Quantitative risk
monitoring

Credit testing and evaluation
Credit examination sections

Credit Rating System
MUFG and its major banking subsidiaries use an integrated credit rating system to evaluate credit risk. The
credit rating system consists primarily of borrower rating, facility risk rating, structured finance rating and asset
securitization rating.
Country risk is also rated on a uniform group-wide basis. Our country risk rating is reviewed periodically totake into account relevant political and economic factors, including foreign currency availability.
Risk exposure for small retail loans, such as residential mortgage loans, is managed by grouping loans into
various pools and assigning ratings at the pool level.
Borrower rating
Our borrower rating classifies borrowers into 15 grades based on evaluations of their expected debt-service
capability over the next three to five years.
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The following table sets forth our borrower grades:
Definition of MUFG Borrower Rating
MUFG
Borrower
Rating

1
2
3
4
5
6
7
8
9
10 through 12

10

11

12

13

14

15

MUFG Borrower Rating Definition

The capacity to meet financial commitments is extremely certain, and the borrower has thehighest level of creditworthiness.
The capacity to meet financial commitments is highly certain, but there are some elementsthat may result in lower creditworthiness in the future.
The capacity to meet financial commitments is sufficiently certain, but there is the possibility
that creditworthiness may fall in the long run.
There are no problems concerning the capacity to meet financial commitments, but there is
the possibility that creditworthiness may fall in the long run.
There are no problems concerning the capacity to meet financial commitments, andcreditworthiness is in the middle range.
There are no problems concerning the capacity to meet financial commitments presently, butthere are elements that require attention if the situation changes.
There are no problems concerning the capacity to meet financial commitments presently, but
long-term stability is poor.
There are no problems concerning the capacity to meet financial commitments presently, but
long-term stability is poor, and creditworthiness is relatively low.
The capacity to meet financial commitments is somewhat poor, and creditworthiness is thelowest among “Normal” customers.
Borrowers who must be closely monitored because of the following business performanceand financial conditions:(1) Borrowers who have problematic business performance, such as virtually delinquent
principal repayment or interest payment;(2) Borrowers whose business performance is unsteady, or who have unfavorable financial
conditions;(3) Borrowers who have problems with loan conditions, for whom interest rates have been
reduced or shelved.
Although business problems are not serious or their improvement is seen to be remarkable,
there are elements of potential concern with respect to the borrower’s management, and closemonitoring is required.
Business problems are serious, or require long-term solutions. Serious elements concerningbusiness administration of the borrower have emerged, and subsequent debt repayment needs
to be monitored closely.
Borrowers who fall under the criteria of Rating 10 or 11 and have “Restructured Loans.”
Borrowers who have “Loans contractually past due 90 days or more.” (As a rule, delinquentborrowers are categorized as “Likely to Become Bankrupt,” but the definition here applies toborrowers delinquent for 90 days or more because of inheritance and other special reasons.)
Borrowers who pose a serious risk with respect to debt repayment, loss is likely to occur inthe course of transactions. While still not bankrupt, these borrowers are in financial
difficulty, with poor progress in achieving restructuring plans, and are likely to becomebankrupt in the future.
While not legally bankrupt, borrowers who are considered to be virtually bankrupt because
they are in serious financial difficulty and have no prospects for an improvement in theirbusiness operations.
Borrowers who are legally bankrupt (i.e., who have no prospects for continued business
operations because of non-payment, suspension of business, voluntary liquidation, or filingfor legal liquidation).
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The Japanese regulatory authorities require Japanese banks to categorize borrowers as follows:‰

Normal borrowers (generally corresponding to borrowers in categories 1 through 9 in our ratings),
which are borrowers that are performing well, with no significant financial concerns;‰

Borrowers requiring close watch (generally corresponding to borrowers in categories 10 through 12 inour ratings), which include loans that have been amended to allow for delays or forgiveness of interest
payments, borrowers experiencing difficulty in complying with loan terms and conditions and borrowersthat are recording losses or performing badly;‰

Borrowers likely to become bankrupt (generally corresponding to borrowers in category 13 in ourratings), which relate to borrowers who pose a serious risk with respect to debt repayment, loss is likely
to occur in the course of transactions. While still not bankrupt, these borrowers are in financial
difficulty, with poor progress in achieving restructuring plans, and are likely to become bankrupt in the
future;‰Virtually bankrupt borrowers (generally corresponding to borrowers in category 14 in our ratings),
which are not legally bankrupt, but borrowers who are considered to be virtually bankrupt because they
are in serious financial difficulty and have no prospects for an improvement in their business operations;and‰Bankrupt borrowers or de facto bankrupt borrowers (generally corresponding to borrowers in
category 15 in our ratings), which are borrowers who are legally bankrupt (i.e., who have no prospects
for continued business operations because of non-payment, suspension of business, voluntaryliquidation, or filing for legal liquidation) proceedings.

The primary data utilized in our assessment of borrowers include the borrower’s financial statements andnotes thereto as well as other public disclosure made by the borrower. In addition, when appropriate and possible,
we obtain non-public financial and operating information from borrowers, such as the borrower’s business plan,borrower’s self-evaluation of its operating assets and other borrower information about its business and products.
Based on the borrower and industry information, we assign borrower ratings mainly by applying financial
scoring models—either developed internally or by third party vendors, depending on the borrower’s attributes,
whether the borrower is domestic or foreign, whether the borrower is a large corporation or small and mediumsized corporation, and whether the borrower is corporate entity or another type of legal entities (school, hospital,
fund, etc.).
For example, for domestic small and medium-sized corporations, which constitute the largest borrower
attribute in our current loan portfolio in terms of number of borrowers, we have adopted an internally developed
financial scoring model, exclusively designed and developed for such attribute. We have carefully selectedvarious financial ratios that we believe to be useful and meaningful to quantitatively measure and assess theborrowers’ financial standings and repayment capability. Such financial ratios represent, among other things,
borrowers’ growth, profitability, stability, cash flow, company size and capital efficiency. The model isperiodically validated against historical results. The following is an illustration of some of the financial ratio we
utilize as part of our financial scoring model:‰

To measure growth: Sales growth, and growth in total assets;‰

To measure profitability: Current profit to sales, and profit before tax to sales; and‰To measure stability: Equity ratio and current ratio.

The financial score obtained through the models is reviewed and when necessary, adjusted downward toreflect our qualitative assessment of the borrower’s financial strength and other factors that could affect theborrower’s ability to service the debt. For example, we take into account: capability of turning around thebusiness (in case of borrowers with losses) or recovering positive net worth (in case of borrowers with negative
net worth), industry risk, management risk, legal risk, as well as our assessment of the probability of receiving
support from parent companies (if the borrower is a subsidiary of a large listed company).
176

When adjusting the results of primary financial scoring assigned to borrowers with losses, we consider theseverity of losses and the possibility of improving operating results. We analyze and assess whether the loss is
temporary, the trend in operating results is improving, or the loss is expected to continue for an extended period.
When adjusting the results of primary financial scoring assigned to borrowers with losses or borrowers withnegative net worth, we also analyze whether the borrower can return to a positive net worth, and the time period
needed to achieve such recovery (one to two years, three to five years, or five years or more).
In addition, adjustments based on industry risk are based on future prospects, applicable laws andregulations, and other factors surrounding the industry. Adjustments for management risk reflect our assessmentof management’s track record, the composition of the management team including the board of directors, any
succession management plan as well as the risk management and compliance framework of the borrower.
Adjustments for legal risk are made when the borrower is facing a lawsuit and when there is a possibility of asignificant claim payment related to product liability, intellectual property, environmental problems, building
standard law, and other legal issues.
When assessing the probability of receiving support from parent companies, various factors are examined,
such as the parent company’s credit standings, whether key management personnel are sent by the parent,
whether the borrower is consolidated by the parent, and the proportion of the borrower in consolidated sales and/or profits of the parent.
In addition, we consider outside ratings, and its internal borrower ratings may be adjusted when deemed
appropriate.
Facility risk rating
Facility risk rating is used to evaluate and classify the quality of individual credit facilities, including
guarantees and collateral. Ratings are assigned by quantitatively measuring the estimated loss rate of a facility inthe event of a default.
Structured finance rating and asset securitization rating
Structured finance rating and asset securitization rating are also used to evaluate and classify the quality of
individual credit facilities, including guarantees and collateral, and focus on the structure, including theapplicable credit period, of each credit facility. In evaluating the debt service potential of a credit facility, we
scrutinize its underlying structure to determine the likelihood of the planned future cash flows being achieved.
Pool assignment
Each major banking subsidiary has its own system for pooling and rating small retail loans designed toreflect the risk profile of its loan portfolios.
Asset Evaluation and Assessment System
The asset evaluation and assessment system is used to classify assets held by financial institutions according
to the probability of collection and the risk of any impairment in value based on borrower classifications
consistent with the borrower ratings and the status of collateral, guarantees, and other factors.
The system is used to conduct write-offs and allocate allowances against credit risk in a timely and adequate
manner.
Quantitative Analysis of Credit Risk
MUFG and its major banking subsidiaries manage credit risk by monitoring credit amount and expected
losses, and run simulations based on internal models to estimate the maximum amount of credit risk. Thesemodels are used for internal management purposes, including loan pricing and measuring economic capital.
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When quantifying credit risk amounts using the internal models, MUFG and its major banking subsidiaries
consider various parameters, including probability of default, or PD, loss given default, or LGD, and exposure atdefault, or EAD, used in their borrower ratings, facility risk ratings and pool assignments as well as any credit
concentration risk in particular borrower groups or industry sectors. MUFG and its major banking subsidiaries
also share credit portfolio data in appropriate cases.
Loan Portfolio Management
We aim to achieve and maintain levels of earnings commensurate with credit risk exposure. Products are
priced to take into account expected losses, based on the internal credit ratings.
We assess and monitor loan amounts and credit exposure by credit rating, industry and region. Portfolios areappropriately managed to limit concentrations of risk in specific categories by establishing Large Credit
Guidelines.
To manage country risk, we have established specific credit ceilings by country. These ceilings are reviewed
when there is any material change in a country’s credit standing, in addition to regular review.
Continuous CPM Improvement
With the prevalence of securitized products and credit derivatives in global markets, we seek to supplement
conventional CPM techniques with advanced methods based on the use of such market-based instruments.
Through credit risk quantification and portfolio management, we aim to improve the risk return profile of
the Group’s credit portfolio, using financial markets to rebalance credit portfolios in a dynamic and active
manner based on an accurate assessment of credit risk. The following diagram summarizes our CPM framework:
Credit Portfolio Management (CPM) Framework
Implementation of Base1 II

Objective credit rating system

Market-based advanced CPM
Risk quantification
Risk-based earnings management

Risk-based pricing management

Execute business strategies

Quantitative monitoring of credit risk
Portfolio risk concentration checks

Appropriate write-offs andallowance

Asset evaluation and assessment

Risk Management of Strategic Equity Portfolio
Strategic equity investment risk is the risk of loss caused by a decline in the prices of our equity
investments.
We hold shares of various corporate clients for strategic purposes, in particular to maintain long-term
relationships with these clients. These investments have the potential to increase business revenue and appreciate
in value. At the same time, we are exposed to the risk of price fluctuation in the Japanese stock market. For that178

reason, in recent years, it has been a high priority for us to reduce our equity portfolio to limit the risks associatedwith holding a large equity portfolio, but also to comply with a regulatory framework that prohibits Japanesebanks from holding an amount of shares in excess of their adjusted Tier I capital after September 2006.
We use quantitative analysis to manage the risks associated with the portfolio of equities held for strategic
purposes. According to internal calculations, the market value of our strategically held (Tokyo Stock Exchangelisted) stocks (excluding foreign stock exchange-listed stocks) as of March 31, 2012 was subject to a variation of
approximately ¥3.92 billion when TOPIX index moves one point in either direction.
We seek to manage and reduce strategic equity portfolio risk based on such types of simulation. The aim is
to keep this risk at appropriate levels compared with Tier I capital while generating returns commensurate withthe degree of risk exposure.
Market Risk Management
Market risk is the risk that the value of our assets and liabilities could be adversely affected by changes inmarket variables such as interest rates, securities prices, or foreign exchange rates.
Management of market risk at MUFG aims to control related risk exposure across the Group while ensuringthat earnings are commensurate with levels of risk.
Market Risk Management System
We have adopted an integrated system to manage market risk from our trading and non-trading activities.
The holding company monitors group-wide market risk, while each of the major subsidiaries manages its market
risks on a consolidated and global basis.
At each of the major subsidiaries, checks and balances are maintained through a system in which back andmiddle offices operate independently from front offices. In addition, separate Asset-Liability Management, or
ALM, Committee, ALM Council and Risk Management Meetings are held at each of the major subsidiaries
every month to deliberate important matters related to market risk and control.
The holding company and the major subsidiaries allocate economic capital commensurate with levels ofmarket risk and determined within the scope of their capital bases. The major subsidiaries have establishedquantitative limits relating to market risk based on their allocated economic capital. In addition, in order to keep
losses within predetermined limits, the major subsidiaries have also set limits for the maximum amount of losses
arising from market activities. The following diagram summarizes the market risk management system of eachmajor subsidiary:Market Risk Management System of Our Major Subsidiaries
Board of Directors / Executive Committee
ALM Committee / ALM Council / Risk Management Meeting
Delegation of
authority
Front Office

Trading result report
Quantitative risk monitoring

Confirmation of contracts and agreements
Back Office

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ReportMiddle Office(Market risk management
departments)

Market Risk Management and Control
At the holding company and the major subsidiaries, market risk exposure is reported to the Chief Risk
Management Officers on a daily basis. At the holding company, the Chief Risk Management Officer monitors
market risk exposure across the Group as well as the major subsidiaries’ control over their quantitative limits formarket risk and losses. Meanwhile, the Chief Risk Management Officers at the major subsidiaries monitor theirown market risk exposure and their control over their quantitative limits for market risk and losses. In addition,
various analyses on risk profiles, including stress testing, are conducted and reported to the Executive
Committees and the Corporate Risk Management Committees on a regular basis. At the business unit levels in
the major subsidiaries, the market risks on their marketable assets and liabilities, such as interest rate risk andforeign exchange rate risk, are controlled by entering into various hedging transactions using marketablesecurities and derivatives.
As part of our market risk management activities, we use certain derivative financial instruments to manage
our interest rate and currency exposures. We maintain an overall interest rate risk management strategy thatincorporates the use of interest rate contracts to minimize significant unplanned fluctuations in earnings that arecaused by interest rate volatility. We enter into interest rate swaps and other contracts as part of our interest raterisk management strategy primarily to alter the interest rate sensitivity of our loans, investment securities anddeposit liabilities. Our principal objectives in risk management include asset and liability management. Asset andliability management is viewed as one of the methods for us to manage our interest rate exposures on interestearning assets and interest-bearing liabilities. Interest rate contracts, which are generally non-leveraged genericinterest rate and basis swaps, options and futures, allow us to effectively manage our interest rate risk position.
Option contracts primarily consist of caps, floors, swaptions and options on index futures. Futures contracts used
for asset and liability management activities are primarily index futures providing for cash payments based upon
the movement of an underlying rate index. We enter into forward exchange contracts, currency swaps and othercontracts in response to currency exposures resulting from on-balance sheet assets and liabilities denominated inforeign currencies in order to limit the net foreign exchange position by currency to an appropriate level.
These market risk management activities are performed in accordance with the predetermined rules andprocedures. The internal auditors regularly verify the appropriateness of the management controls over these
activities and the risk evaluation models adopted.
Market Risk Measurement Model
Market risks consist of general risks and specific risks. General market risks result from changes in entire
markets, while specific risks relate to changes in the prices of individual stocks and bonds which are independentof the overall direction of the market.
To measure market risks, MUFG uses the VaR method which estimates changes in the market value of
portfolios within a certain period by statistically analyzing past market data. Since the daily variation in market
risk is significantly greater than that in other types of risk, MUFG measures and manages market risk using VaR
on a daily basis.
Market risk for trading and non-trading activities is measured using a uniform market risk measurement
model. The principal model used for these activities is historical simulation, or HS, model (holding period, 10
business days; confidence interval, 99%; and observation period, 701 business days). The HS model calculates
VaR amounts by estimating the profit and loss on the current portfolio by applying actual fluctuations in market
rates and prices over a fixed period in the past. This method is designed to capture certain statistically infrequent
movements, such as a fat tail, and accounts for the characteristics of financial instruments with non-linear
behavior. The holding company and banking subsidiaries use the HS model to calculate Basel II regulatory
capital adequacy ratios.
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In calculating VaR using the HS method, we have implemented an integrated market risk measurement
system throughout the Group. Our major subsidiaries calculate their VaR based on the risk and market dataprepared by the information systems of their front offices and other departments. The major subsidiaries provide
this risk data to the holding company, which calculates overall VaR, taking into account the diversification effectamong all portfolios of the major subsidiaries.
For the purpose of internally evaluating capital adequacy on an economic capital basis in terms of market
risk, we use this market risk measurement model to calculate risk amounts based on a holding period of one year
and a confidence interval of 99%.
Monitoring and managing our sensitivity to interest rate fluctuations is the key to managing market risk in
MUFG’s non-trading activities. The major banking subsidiaries take the following approach to measuring risks
concerning core deposits, loan prepayments and early deposit withdrawals.
To measure interest rate risk relating to deposits without contract-based fixed maturities, the amount of“core deposits” is calculated through a statistical analysis based on deposit balance trend data and the outlook forinterest rates on deposits, business decisions, and other factors. The amount of “core deposit” is categorized into
various groups of maturity terms of up to five years (2.5 years on average) to recognize interest rate risk. The
calculation assumptions and methods to determine the amount of core deposits and maturity term categorization
are regularly reviewed.
Meanwhile, deposits and loans with contract-based maturities are sometimes cancelled or repaid before theirmaturity dates. To measure interest rate risk for these deposits and loans, we reflect these early termination
events mainly by applying early termination rates calculated based on a statistical analysis of historical
repayment and cancellation data together with historical market interest rate data.
Summaries of Market Risks (Fiscal Year Ended March 31, 2012)
Trading activities
The aggregate VaR for our total trading activities as of March 31, 2012 was ¥6.37 billion, comprisinginterest rate risk exposure of ¥6.79 billion, foreign exchange risk exposure of ¥0.82 billion, and equity-related
risk exposure of ¥0.13 billion. Compared with the VaR as of March 31, 2011, we experienced a decrease inmarket risk during the fiscal year ended March 31, 2012, primarily due to a decrease in yen interest rate risk.
Our average daily VaR for the fiscal year ended March 31, 2012 was ¥12.62 billion. Based on a simple sumof figures across market risk categories, interest rate risk accounted for approximately 68%, foreign exchange
risk for approximately 26% and equity-related risk for approximately 4%, of our total trading activity market
risks.
Due to the nature of trading operations which involves frequent changes in trading positions, market risk
varied substantially during the fiscal year, depending on our trading positions.

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The following tables set forth the VaR related to our trading activities by risk category for the periods
indicated:
April 1, 2010—March 31, 2011

Average

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less diversification effect . . . . . . . . . . . . . . . . . . . . . . . . .

¥16.07
15.54
8.46
8.49
6.75
1.56
0.57
(8.35)

April 1, 2011—March 31, 2012

Average

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less diversification effect . . . . . . . . . . . . . . . . . . . . . . . . .

¥12.62
12.71
5.92
6.70
4.79
0.81
0.43
(6.12)

Maximum(1) Minimum(1)(in billions)¥25.22
20.15
13.51
11.78
16.89
3.62
1.28
—

¥12.15
12.36
5.27
5.97
0.29
0.27
0.22
—

¥18.17
20.15
11.32
9.01
3.81
0.51
0.59
(6.89)

Maximum(1) Minimum(1)(in billions)¥22.46
19.23
9.48
10.44
14.11
2.43
1.43
—

¥ 6.37
6.79
3.23
2.06
0.76
0.13
0.15
—

March 31, 2011

March 31, 2012

¥ 6.37
6.79
3.54
2.23
0.82
0.13
0.29
(1.66)

Assumptions for VaR calculations:

Historical simulation method
Holding period: 10 business days
Confidence interval: 99%
Observation period: 701 business days
Note:(1) The maximum and minimum VaR overall and for various risk categories were taken from different days. A simple summation of VaR byrisk category is not equal to total VaR due to the effect of diversification.

The average daily VaR by quarter in the fiscal year ended March 31, 2012 was as follows:
Quarter

Daily average VaR(in billions)

April—June 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July—September 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October—December 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January—March 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥17.48
13.54
10.32
9.12

The quantitative market risk figures from trading activities tend to fluctuate widely due to the market
sensitive nature of trading business. During the fiscal year ended March 31, 2012, the revenue from our trading
activities has been relatively stable, keeping positive numbers in 214 days out of 261 trading days in the period.
During the same period, there were 77 days with positive revenue exceeding ¥1 billion and 2 days with negative
revenue exceeding minus ¥1 billion.

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Non-trading Activities
The aggregate VaR for our total non-trading activities as of March 31, 2012, excluding market risks related
to our strategic equity portfolio and measured using the same standards as trading activities, was ¥471.3 billion.
Market risks related to interest rates equaled ¥453.3 billion and equities-related risks equaled ¥79.2 billion.
Compared with the VaR for MUFG at March 31, 2011, the decrease in the overall market risk was ¥88.6 billion.
Market risks related to interest rates decreased ¥70.8 billion. Equity related risks decreased ¥80.1 billion.
Based on a simple sum of figures across market risk categories, interest rate risks accounted forapproximately 85% of our total non-trading activity market risks. Looking at a breakdown of interest rate related
risk by currency, at March 31, 2012, the yen accounted for approximately 34% while the US dollar accounted forapproximately 56%.
The following table shows the VaR related to our non-trading activities by risk category for the fiscal year
ended March 31, 2012:
April 1, 2011—March 31, 2012

Average

Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥472.5
209.2
323.4
0.2
126.7
505.5

Maximum(1) Minimum(1)(in billions)¥546.3
262.4
376.3
1.3
177.5
572.2

¥386.3
159.4
268.0
0.0
78.8
415.7

March 31, 2012

¥453.3
191.2
311.5
0.1
79.2
471.3

Assumptions for VaR calculations:

Historical simulation method
Holding period: 10 business days
Confidence interval: 99%
Observation period: 701 business days
Note:(1) The maximum and minimum VaR overall for each category and in total were taken from different days. The equities-related risk figures
do not include market risk exposure from our strategic equity portfolio. A simple summation of VaR by risk category is not equal to total
VaR due to the effect of diversification.

The average daily interest rate VaR by quarter in the fiscal year ended March 31, 2012 was as follows.
Quarter

Daily average VaR(in billions)

April—June 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July—September 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October—December 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January—March 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥513.52
485.17433.95457.45Comparing the proportion of each currency’s interest rate VaR to the total interest rate VaR as of March 31,
2012 against that as of March 31, 2011, there were a 7 percentage point decrease in Japanese yen from 41% to34%, a 2 percentage point increase in Euro from 8% to 10%, and a 5 percentage point increase in US dollar from
51% to 56%.
Backtesting
We conduct backtesting in which a VaR is compared with actual realized and unrealized losses on a daily
basis to verify the accuracy of our VaR measurement model. We also conduct additional backtesting using othermethods, including testing VaR against hypothetical losses and testing VaR by various changing parameters suchas confidence intervals and observation periods used in the model.
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Actual losses exceeded VaR one time in the fiscal year ended March 31, 2012. This means that our VaR
model provided reasonably accurate measurements of market risk during the fiscal year.
Stress Testing
We have adopted an HS-VaR model, which calculates a VaR as a statistically possible amount of losses in a
fixed confidence interval based on historical market volatility. However, the HS-VaR model is not designed tocapture certain abnormal market fluctuations. In order to complement this weakness of the model, MUFG
conducts portfolio stress testing to measure potential losses using a variety of scenarios.
The holding company and the major subsidiaries conduct stress testing on a daily, monthly and quarterly
basis to monitor their overall portfolio risk by applying various scenarios. For example, daily stress testing at theholding company estimates maximum potential losses in each market on the current trading portfolio based on
the worst ten-day historical volatility recorded during the VaR observation period of 701 days.
In light of increased market volatility since the second half of calendar 2007, we have implemented
additional tests under various stress scenarios to supplement VaR and are applying the test results to risk
management.
Liquidity Risk Management
Liquidity risk is the risk of incurring losses if a poor financial position hampers the ability to meet funding
requirements, or necessitates fund procurement at interest rates markedly higher than normal.
Our major subsidiaries maintain appropriate liquidity in both Japanese yen and foreign currencies bymanaging their funding sources and mechanism, such as liquidity gap, liquidity-supplying products such ascommitment lines, and buffer assets.
We have established a group-wide system for managing liquidity risk by categorizing the risk in thefollowing three stages: Normal, With-Concern, and Critical. The front offices and risk management offices of the
major subsidiaries and the holding company exchange information and data on liquidity risk even at the Normal
stage. At higher alert stages, we centralize information about liquidity risk and discuss issues relating to groupwide liquidity control actions among group companies, if necessary. We have also established a system forliaison and consultation on funding in preparation for contingency, such as natural disasters, wars and terrorist
attacks. The holding company and the major subsidiaries conduct group-wide contingency preparedness drills ona regular basis to ensure smooth implementation in the event of an emergency.
For more information, see “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital
Resources—Financial Condition—Sources of Funding and Liquidity.”
Operational Risk Management
Operational risk refers to the risk of loss caused by either internal control issues, such as inadequate
operational processes or misconduct, system failures, or external factors such as serious political instability,
major terrorist activity, health epidemics and natural disasters. The term includes a broad range of risks that
could lead to losses, including operations risk, information asset risk, reputation risk, legal risk, and tangible
asset risk. These risks that comprise operational risk are referred to as sub-category risks.
MUFG’s board of directors has approved the MUFG Operational Risk Management Policy as a group-wide
policy for managing operational risk. This policy sets forth the core principles regarding operational risk
management, including the definition of operational risk, and the risk management system and processes. The
policy also requires the board of directors and the Executive Committee to formulate fundamental principles ofoperational risk management and establish and maintain an appropriate risk management system. The Chief Risk
Management Officer is responsible for recognizing, evaluating, and appropriately managing operational risk in184accordance with the fundamental principles formulated by the board of directors and the Executive Committee. A
division in charge of operational risk management must be established that is independent of business promotion
sections to manage overall operational risk in a comprehensive manner. These fundamental principles have also
been approved by the boards of directors of the major subsidiaries, providing a consistent framework for
operational risk management of the Group. The diagram below sets forth the operational risk management
system of each major banking subsidiary:
Operational Risk Management System of Our Major Banking Subsidiaries
Board of Directors/Executive Committee
committees regarding risk management
Reporting on risk profile

Instruction

Division in charge of Operational Risk
Management

Instruction
Head Office andBranches

Coordination
Reporting

Divisions in charge of Sub-category Risk
Management

As set forth in the following diagram, we have established a risk management framework for loss datacollection, control self assessment, or CSA, and measurement of operational risk in order to appropriately
identify, recognize, evaluate, measure, control, monitor and report operational risk.
We have also established group-wide reporting guidelines with respect to loss data collection and its
monitoring. We focus our efforts on ensuring accurate assessment of the status of operational risk losses and theimplementation of appropriate countermeasures, while maintaining databases of internal and external loss events.

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The following diagram summarizes our operational risk management framework:
Operational Risk Management Framework
evaluate and measure

identify and recognize

causalanalysiscausal analysis

incident
occuredrecordcontrol

implement preventive
measuresmonitor and reportmonitoring
prompt reporting tomanagement andrelevant supervisers

major incidents and misconduct
create potential loss
scenario

internal loss
data

external
external
loss
data
allocate economic
capital tobusiness units/subsidiaries

risk measurementmonitoring ofmonitoring of
economic capitalrisk evaluation and management through Control Self-Assessment

Operations Risk Management
Operations risk refers to the risk of loss that is attributable to the actions of executives or employees,
whether accidental or the result of neglect or deliberate misconduct. The Group companies offer a wide range offinancial services, ranging from commercial banking products such as deposits, exchange services and loans totrust and related services covering pensions, securities, real estate and securitization, as well as transfer agent
services. Cognizant of the potentially significant impact that operations risk-related events could have in terms ofboth economic losses and damage to our reputation, our banking subsidiaries continue to improve their
management systems to create and apply appropriate operations risk-related controls.
Specific ongoing measures to reduce operations risk include the development of databases to manage,
analyze and prevent the recurrence of related loss events; efforts to tighten controls over administrative
procedures and related operating authority, while striving to improve human resources management; investments
in systems to improve the efficiency of administrative operations; and programs to expand and upgrade internal
auditing and operational guidance systems.
Senior management receives regular reports on the status of our businesses from an operations risk
management perspective. We work to promote the sharing within the Group of information and expertise
concerning any operational incidents and the measures implemented to prevent any recurrence.
Efforts to upgrade the management of operations risk continue with the aim of providing our customers witha variety of high-quality services.
Information Asset Risk Management
Information asset risk refers to the risk of loss caused by loss, alteration, falsification or leakage of
information, or by destruction, disruption, errors or misuse of information systems, as well as risks similar to this186

risk. In order to ensure proper handling of information and prevent loss or leakage of information, our majorbanking subsidiaries strive to better manage and reduce such risks through the appointment of managers withspecific responsibilities for information security issues, the establishment of internal procedures, training courses
designed for all staff, and the implementation of measures to ensure stable IT systems control. We have also
formulated the Personal Information Protection Policy as the basis for ongoing programs to protect theconfidentiality of personal information.
Systems planning, development and operations include appropriate design and extensive testing phases toensure that systems are designed to help prevent failures while providing sufficient safeguards for the security of
personal information. The status of the development of any mission-critical IT systems is reported regularly tosenior management. We have developed disaster countermeasures systems and have also been investing in
duplication of the Group’s IT infrastructure to minimize damage in the event of any system failure. Emergency
drills are conducted to help increase staff preparedness.
With the aim of preventing any recurrence, we also work to promote sharing of information within theGroup related to the causes of any loss or leakage of information, or system failure.
Reputation Risk Management
Reputation risk refers to the risk of loss due to deterioration in reputation as a consequence of the spread ofrumors among customers or in the market, or as a consequence of our inadequate response to particularsituations, as well as risks similar to this risk.
We recognize the potentially significant impact reputation risk-related events can have on the management
and execution of the Group’s businesses, which in turn can result in economic losses to, or diminished market
confidence in, the Group. Accordingly, we continue to improve our risk control framework designed toappropriately manage such risk.
Specifically, in order to manage our reputation risk effectively on a group-wide basis, we have established arisk management system designed to ensure mutual consultation and reporting if a reputation risk-related event
occurs or is anticipated and, through this system, share relevant information within the Group.
Through the risk control framework and risk management system, we seek to minimize damage to thereputation and credibility of, and the market confidence in, the Group by promptly obtaining an accurate
understanding of relevant facts relating to reputation risk-related events and disclosing information concerning
the events and the measures we take in response to such events in an appropriate and timely manner.
Risk Management for Other Risks
In addition to the risks discussed above, the MUFG Group companies define and manage sub-category risks
as appropriate, including tangible asset risk, personnel risk and legal risk as set forth in the “Operational Risk
Management System of Our Major Banking Subsidiaries” diagram above.
Basel II Regulatory Capital Requirements for Operational Risk
(1) Adoption of the Advanced Measurement Approach (AMA)
We have been implementing the AMA since March 31, 2012, in place of the Standardized Approach that we
had been using previously, for calculation of the operational risk equivalent amount in connection withmeasuring capital adequacy ratios based on Basel II. We use, however, the Basic Indicator Approach, or BIA, forentities that are deemed to be less important in the calculation of the operational risk equivalent amount and forentities that are still preparing to implement the AMA.
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(2) Outline of AMA
We have established a measurement model designed to account for four data elements — internal loss data,
external loss data, scenario analysis, and business environment and internal control factors, or BEICFs — andcalculate the operational risk equivalent amount by estimating the maximum loss using a 99.9th percentile
one-tailed confidence interval and a one-year holding period.
In calculating the operational risk equivalent amount, we exclude expected losses relating to the amount ofallowance for repayment of excess interest associated with the consumer finance business of a subsidiary. We do
not exclude any other expected losses and do not reflect the risk mitigating impact of insurance. In addition, we
take into account credit risk-related events that are not reflected in the measurement of the credit risk equivalentamount.
(3) Outline of Measurement Model
Our operational risk equivalent amount measured under the AMA is a simple sum of the amounts calculated
separately for BTMU on a consolidated basis, MUTB on a consolidated basis, and the total amount for otherGroup companies (including the holding company, MUSHD and Mitsubishi UFJ NICOS). For each of BTMU
and MUTB on consolidated basis, the operational risk equivalent amount is a simple sum of the amounts
calculated based on the seven loss event types defined by Basel II. For other Group companies, the operationalrisk equivalent amount is a simple sum of the amounts calculated based on eight loss event types consisting of
the seven loss event types defined by Basel II and an additional loss event type representing losses relating to
repayment of excess interest associated with the consumer finance business of a subsidiary. We do not reflect thecorrelation effects among the loss event types in the calculation of our operational risk equivalent amount.
Outline of Measurement Model
Internal Loss Data

Litigation Data

Business Environment andInternal Control Factors

External Loss Data

Basel Loss Event Types
Internal Fraud
Risk Equivalent Amount

Scenario Analysis

External Fraud
Risk Equivalent AmountFrequency Distribution

Scenario Data

Occurrence
Frequiency

Occurrence
Frequency
Loss Severity Distribution

Loss Amount

Loss AmountMonte Carlo Simulation

Employment Practices and Workplace Safety
Risk Equivalent AmountInternal Loss Data

Loss Distribution

Clients, Products, and Business Practices
Risk Equivalent Amount
Damage to Physical Assets
Risk Equivalent Amount
Business Disruption and System Failures
Risk Equivalent Amount
Execution, Delivery, and Process Management
Risk Equivalent Amount

Repayment of Excess Interest
Risk Equivalent AmountThe risk equivalent amount for each loss event type represents the amount of maximum loss estimated witha 99.9th percentile one-tailed confidence interval and a one-year holding period based on the distribution oflosses arising from all relevant risk events for a one-year period (Loss Distribution). A Loss Distribution
combines a Frequency Distribution (through which the frequency of occurrence of risk events is expressed) and a
Loss Severity Distribution (through which the amounts of losses resulting from risk events are expressed)
through Monte Carlo simulations. The data used for this purpose include internal loss data and scenario data.
Scenario data are generated through a scenario analysis. External data and BEICFs are taken into account in the
scenario analysis and reflected in scenario data. The Frequency Distribution is derived from the occurrence
frequency information in internal loss data and scenario data expressed through a Poisson Distribution. The Loss
Severity Distribution is derived from the amount information in internal loss data and scenario data expressed ina non-parametric manner (where no underlying distribution is assumed).
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With respect to the risk of losses relating to repayment of excess interest associated with the consumer
finance business of a subsidiary, the risk equivalent amount represents the amount of maximum loss estimatedwith a 99.9th percentile one–tailed confidence interval and a one-year holding period based on a normal
distribution assumed by applying data on losses that arose in a given period, excluding any related expected
losses.
We confirm the appropriateness of the measurement models by periodic verification and back testing.
(4) Outline of Scenario Analysis
As an initial step of our scenario analysis, we identify potential severe loss events that we have notexperienced but may potentially experience in the future. In this identification process, we seek to ensure
exhaustive coverage of potential severe loss events by comprehensively examining our experience relating to loss
events and legal proceedings, external loss data, the control self-assessment results and other relevant
information.
In the next step, we prepare scenario data for each identified severe loss event by quantifying the values
depending on its occurrence frequency and loss severity, taking into account relevant transaction amounts andrestructuring costs as well as BEICFs. In preparing scenario data, we apply an analysis method we deem
appropriate for the type and nature of the operational risk involved.
In order to obtain an operational risk equivalent amount that is commensurate with, and appropriate for, ourrisk profile, we assess the need for an additional scenario or modification to our existing scenarios semi-annually.
We then reflect, as necessary, new risks arising as a result of changes in the business environment and the resultsof the implementation of measures to enhance our internal controls in response to newly identified risks in our
scenario data.
Compliance
Basic Policy
The MUFG Group’s policy is to strictly observe laws, regulations and internal rules, and conduct its
business in a fair, trustworthy and highly transparent manner based on our Corporate Vision of obtaining the trustand confidence of society as a whole. Furthermore, we have established an ethical framework and code of
conduct as the basic ethical guidelines for the Group’s directors and employees. We have expressed ourcommitment to building a corporate culture in which we act with integrity and fairness in conformity with theseguidelines.
In addition, as we expand the geographic scope of our business globally, we are increasingly committed to
keeping abreast with developments in laws and regulations of the jurisdictions in which we operate, including
anti-money laundering and anti-bribery, etc.
Despite these measures, in December 2011, JACCS Co., Ltd., an equity-method affiliate, received anadministrative order from regulatory authorities in Japan. We have taken this action seriously and implemented
measures designed to ensure an appropriate compliance structure across the MUFG Group to enable sound andappropriate business management. For more information, see “Item 4.B. Information on the Company—Business
Overview—Supervision and Regulation.”
Ethical Framework
1. Establishment of trust
We will remain keenly aware of the Group’s social responsibilities and public mission and will exercise careand responsibility in the handling of customer and other information.
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By conducting sound and appropriate business operations and disclosing corporate information in a timely
and appropriate manner, we will seek to establish enduring public trust in the Group.
2. Putting customers first
We will always consider our customers, and through close communication will endeavor to satisfy them andgain their support by providing financial services that best meet their needs.
3. Strict observance of laws, regulations and internal rules
We will strictly observe applicable laws, regulations and internal rules, and will conduct our business in afair and trustworthy manner that conforms to societal norms. As a global comprehensive financial group, we will
also respect internationally accepted standards.
4. Respect for human rights and the environment
We will respect the character and individuality of others, work to maintain harmony with society, and place
due importance on the protection of the global environment that belongs to all mankind.
5. Disavowal of anti-social elements
We will stand resolutely against any anti-social elements that threaten public order and safety.
Compliance Framework
Management and coordination of compliance-related matters are the responsibility of separate compliancemanagement divisions established at the holding company and the major subsidiaries. Each compliancemanagement division formulates compliance programs and organizes training courses to promote compliance,and regularly reports to each company’s board of directors and Executive Committee on the status of complianceactivities.
The holding company and each major subsidiary have also established voluntary committees, such as an
Internal Audit and Compliance Committee, where members from outside the Group account for a majority, and aGroup Compliance Committee. Through these measures, we have established a structure for deliberating key
issues related to compliance. Additionally, the holding company has the Group Chief Compliance Officer, or
CCO, Committee which deliberates important matters related to compliance and compliance-related issues forwhich the Group should share a common understanding.
CCO of Holding Company
Directors responsible for compliance at the holding company and the major subsidiaries have been named
the CCOs of their respective companies. The CCOs of the major subsidiaries have also been appointed as thedeputy CCOs of the holding company to assist the CCO of the holding company. This system promotes theprompt reporting of group-wide compliance-related information to the holding company and also allows the
CCO of the holding company to effectively provide compliance-related guidance, advice, and instructions to
MUFG Group companies.
Group CCO Committee
The Group CCO Committee consists of the CCO of the holding company as the committee chairman and
the CCOs of the major subsidiaries.
By timely holding meetings, the Group CCO Committee seeks to promote greater sharing of compliancerelated information among the MUFG Group companies and works to strengthen the Group’s incident prevention
controls and to help the Group companies respond to unforeseen problems. The Committee also continues tostrive to improve compliance systems throughout the Group.
190

The following diagram summarizes our compliance framework:
Compliance Framework
Holding Company (MUFG)

Board of Corporate Auditors

Internal Audit and Compliance
Committee

Board of Directors

Executive Committee

Group Compliance Committee
Group CCO Committee

CCO (Chief Compliance Officer)

Compliance Division(Coordinates compliance issues)
Guidance, advice
and instruction

Consultation
and report

Bank of Tokyo-Mitsubishi UFJ

Mitsubishi UFJ Trust and Banking

Mitsubishi UFJ Securities
Other Subsidiaries
Holdings

Group Companies

Internal Reporting System and Accounting Auditing Hotline
The major subsidiaries have established internal reporting systems that aim to identify compliance issues
early so that any problems can be quickly rectified. This system includes an independent external compliancehotline. Furthermore, the holding company has set up an MUFG Group Compliance Helpline that acts in parallelwith group-company internal reporting systems and provides a reporting channel for directors and employees ofgroup companies.
In addition to these internal reporting systems, the holding company has also established an accounting
auditing hotline that provides a means to report any problems related to MUFG accounting.
MUFG Accounting Auditing Hotline
MUFG has set up an accounting auditing hotline to be used to make reports related to instances of improper
practices (violations of laws and regulations) and inappropriate practices, or of practices raising questions aboutsuch impropriety or inappropriateness, regarding accounting and internal control or audits related to accounting
in Group companies. The reporting process works as follows, and may be carried out via letter or e-mail:Hokusei Law Office, P.C.
Address: Kojimachi 4-3-4, Chiyoda-ku, Tokyoe-mail: MUFG-accounting-audit-hotline@hokusei-law.com
When reporting information please pay attention to the following:‰

Please include the name of the company concerned, and provide detailed information with respect to thematter. Without detailed factual information there is a limit to how much our investigations can achieve.

‰

Anonymous information will be accepted.
191‰No information regarding the identity of the informant will be passed on to third parties without theapproval of the informant him-or herself. However, this excludes instances where disclosure is legally
mandated, or to the extent that the information is necessary for surveys or reports, when data may bepassed on following the removal of the informant’s name.

‰

Please submit reports in either Japanese or English.

‰

If the informant wishes, we will endeavor to report back to the informant on the response taken within areasonable period of time following the receipt of specific information, but cannot promise to do so in
all instances.

Internal Audit
Role of Internal Audit
Internal audit functions within MUFG seek to provide independent verification of the adequacy andeffectiveness of internal control systems. This includes monitoring the status of risk management and compliancesystems, which are critical to the maintenance of sound and appropriate business operations. Internal audit results
are reported to senior management. An additional role of internal audit is to make suggestions to help improve or
rectify any issues or specific problems that are identified.
Group Internal Audit Framework
The board of directors at the holding company level has instituted MUFG’s internal audit policy to define
the policy, function and organizational position of internal audits. Separate internal audit divisions have beencreated within the holding company and certain subsidiaries. Through close cooperation and collaboration among
the internal audit divisions in each of these subsidiaries, these internal audit divisions provide coverage for theentire group and also support the board of directors in monitoring and overseeing all MUFG operations.
In addition to having primary responsibility for initiating and preparing plans and proposals related tointernal audits of the entire Group, the Internal Audit Division at the holding company monitors and, as
necessary, guides, advises and administers the internal audit divisions of subsidiaries and affiliated companies.
The internal audit divisions within the major subsidiaries conduct audits of the respective head office and branch
operations of these companies. In addition, each of these internal audit divisions undertakes direct audits of theirrespective subsidiaries, and monitors and oversees the separate internal audit functions established within them.
This helps to evaluate and verify the adequacy and effectiveness of internal controls within MUFG on aconsolidated basis.
Implementing Effective and Efficient Internal Audits
To ensure that internal audit processes use available resources with optimal effectiveness and efficiency, theinternal audit divisions implement risk-focused internal audits in which the nature and magnitude of theassociated risks are considered in determining audit priorities and the frequency and depth of internal audit
activities. The internal audit divisions ensure that audit personnel attend key meetings, collect important internal
control documents and access databases to facilitate efficient off-site monitoring.
Reports to and from Internal Audit and Compliance Committees
To strengthen the respective boards of directors’ monitoring and supervision of operational execution status
and to ensure the independence of the internal audit divisions, the holding company and the major subsidiaries
have voluntarily established internal audit and compliance committees. These committees receive reports fromthe internal audit divisions on important matters, including the results of the internal audits and basic policies forplanning internal audits. The deliberations of the internal audit and compliance committees concerning suchmatters are then reported to the respective boards of directors.
192

Item 12.
A.

Description of Securities Other than Equity Securities.

Debt Securities
Not applicable.

B.

Warrants and Rights
Not applicable.

C.

Other Securities
Not applicable.

D.

American Depositary SharesFees, charges and other payments relating to ADSs
As a holder of our ADSs, you will be required to pay to The Bank of New York Mellon, as depositary for
the ADSs, or the “Depositary,” either directly or indirectly, the following fees or charges. The Depositarycollects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering
ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees formaking distributions to investors by deducting those fees from the amounts distributed or by selling a portion of
distributable property to pay the fees.
ADR holders must pay:For:

$5.00 (or less) per 100 ADSs (or portion thereof)

Each issuance of an ADS, including as a result of a
distribution of shares or rights or other property
Each cancellation of an ADS, including if theagreement terminates$0.02 (or less) per ADSs

Any cash distribution, to the extent permitted by any
securities exchange on which the ADSs may be listed
for trading

A fee equivalent to the fee that would be payable if
securities distributed to the ADR holder had been sharesand the shares had been deposited for issuance of ADSs

Distribution of securities distributed to holders ofdeposited securities which are distributed by the
Depositary to ADS registered holders

Registration or transfer fees

Transfer and registration of shares on the shareregister of the foreign registrar from your name to thename of The Bank of New York Mellon or its agent
when you deposit or withdraw shares

Expenses of The Bank of New York Mellon

Conversion of foreign currency to US dollars cable,telex and facsimile transmission expenses

Taxes and other governmental charges The Bank of
New York Mellon or BTMU, as custodian, have to pay
on any ADS or share underlying an ADS, for example,
stock transfer taxes, stamp duty or withholding taxes

As necessary

Fees Waived by the Depositary for the Fiscal Year Ended March 31, 2012
For the fiscal year ended March 31, 2012, the Depositary waived $134,152.31 of standard out-of-pocket
maintenance costs for the ADRs, which consisted of the expenses of postage and envelopes for mailing annual
reports, printing and distributing dividend checks, stationery, postage, facsimile, and telephone calls.
193

Fees Waived by the Depositary for Future Periods
The Depositary has agreed to waive the standard out-of-pocket maintenance costs for the ADRs, which
consist of the expenses of postage and envelopes for mailing annual reports, printing and distributing dividend
checks, stationery, postage, facsimile, and telephone calls.

194

PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies.
None.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
None.
Item 15. Controls and Procedures.
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of our management,
including the Chief Executive Officer, or CEO, and the Chief Financial Officer, or CFO, of the effectiveness ofour disclosure controls and procedures, as defined in Rule 13a-15(e) under the US Securities Exchange Act of1934, as of the end of the period covered by this Annual Report.
Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures wereeffective as of March 31, 2012.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) under the US Securities Exchange Act of 1934. Our internal control overfinancial reporting is a process designed by, or under the supervision of, MUFG’s principal executive andprincipal financial officers, and effected by MUFG’s board of directors, management, and other personnel, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with US GAAP and includes those policies and procedures that:(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of MUFG;(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of MUFG are being made only in accordance with authorizations of management anddirectors of MUFG; and(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of MUFG’s assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting, no matter how well designed, may
not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.
Our management evaluated the effectiveness of our internal control over financial reporting as of March 31,
2012 based on the criteria established in “Internal Control—Integrated Framework” issued by the Committee ofSponsoring Organizations of the Treadway Commission. Based on the evaluation, management has concluded
that MUFG maintained effective internal control over financial reporting as of March 31, 2012.

195

The effectiveness of our internal control over financial reporting as of March 31, 2012 has been audited by
Deloitte Touche Tohmatsu LLC, an independent registered public accounting firm, as stated in its report,
presented on page 197.
Changes in Internal Control Over Financial Reporting
During the period covered by this Annual Report, there has been no change in our internal control overfinancial reporting that has materially affected or is reasonably likely to materially affect our internal control
over financial reporting.

196

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group):
We have audited the internal control over financial reporting of Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group) (“MUFG”) and subsidiaries (together, the “MUFG Group”)
as of March 31, 2012 based on the criteria established in Internal Control—Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission. The MUFG Group’s management is
responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management’s Annual
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the MUFG
Group’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that amaterial weakness exists, testing and evaluating the design and operating effectiveness of internal control basedon the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
The MUFG Group’s internal control over financial reporting is a process designed by, or under thesupervision of, the MUFG Group’s principal executive and principal financial officers, or persons performing
similar functions, and effected by the MUFG Group’s board of directors, management, and other personnel toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. The MUFG
Group’s internal control over financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the MUFG Group; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally accepted accounting principles, and thatreceipts and expenditures of the MUFG Group are being made only in accordance with authorizations ofmanagement and directors of the MUFG Group; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the MUFG Group’s assets that could have amaterial effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility ofcollusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal
control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
In our opinion, the MUFG Group maintained, in all material respects, effective internal control overfinancial reporting as of March 31, 2012, based on the criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), the accompanying consolidated balance sheets of the MUFG Group as of March 31, 2011 and2012, and the related consolidated statements of income, changes in equity from nonowner sources, equity, andcash flows for each of the three years in the period ended March 31, 2012 (all expressed in Japanese Yen) and197

our report dated July 23, 2012 expressed an unqualified opinion on those financial statements and included
explanatory paragraphs relating to the changes in methods of accounting for (a) other-than-temporary
impairments on investment securities, and (b) consolidation of variable interest entities as described in Note 1 tothe consolidated financial statements.
/s/ Deloitte Touche Tohmatsu LLCDELOITTE TOUCHE TOHMATSU LLC
Tokyo, Japan
July 23, 2012

198

Item 16A. Audit Committee Financial Expert.
Our board of corporate auditors has determined that Mr. Tsutomu Takasuka is an “audit committee financial
expert” as defined in Item 16A. of Form 20-F and is “independent” as defined in the listing standards of the New
York Stock Exchange. Mr. Takasuka, a corporate auditor, has spent most of his business career auditing Japanese
corporations as a certified public accountant and was a professor at Bunkyo Gakuin University from April 2004
to March 31, 2010. Mr. Takasuka is an “outside corporate auditor” under Japanese law.
Item 16B. Code of Ethics.
We have adopted a code of ethics, which constitutes internal rules named ethical framework and code of
conduct, compliance rules and compliance manual, each of which applies to our principal executive officer,
principal financial officer, principal accounting officer and persons performing similar functions.
Our compliance rules set forth the necessity of adherence to our ethical framework and code of conduct byour directors, executive officers and employees. These rules also set forth the roles and responsibilities of ouremployees, compliance officers, Compliance Division and others in the event of a breach of the compliancerules.
Our compliance manual was created to identify, and to promote compliance by our directors, executive
officers and employees with, the relevant laws and regulations in conjunction with our ethical framework andcode of conduct and compliance rules. This manual also sets forth the procedures regarding the handling ofconflicts of interest for our directors and the promotion of conduct that meets our ethical framework and code of
conduct and compliance rules for employees.
A copy of the sections of our ethical framework and code of conduct, compliance rules, compliance manual,and rules of employment relating to the “code of ethics” (as defined in paragraph (b) of Item 16B. of Form 20-F)
is attached as Exhibit 11 to this Annual Report. For a detailed discussion of our current compliance structure, see“Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Compliance.” No
waivers of the ethical framework and code of conduct, compliance rules, compliance manual and rules of
employment have been granted to our principal executive officer, principal financial officer, principal accounting
officer, directors and corporate auditors, during the fiscal year ended March 31, 2012.
Item 16C. Principal Accountant Fees and Services.
Fees and Services of Deloitte Touche Tohmatsu LLC
The aggregate fees billed by Deloitte Touche Tohmatsu LLC, our independent registered public accounting
firm and its affiliates, for the fiscal years ended March 31, 2011 and 2012 are presented in the following table:
2011
2012
(in millions)Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,373368
201—¥5,312
341
198—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,942¥5,851The description of our fees billed for each category described above is as follows:
Audit fees—Audit fees are primarily for annual audit of our financial statements, review of our semi-annual
condensed financial statements, statutory audit of our financial statements and audits of our subsidiary financial
statements and attestation services relating to the internal controls over financial reporting under Section 404 of
the Sarbanes-Oxley Act.
199

Audit-related fees—Audit-related fees primarily include accounting consultations, agreed upon procedures
on internal controls, employee benefit plan audit, and advisory services relating to the internal control reviews.
Tax fees—Tax fees relate primarily to tax compliance, including assistance with preparation of tax return
filings, tax advisory and tax planning services.
All other fees—We were billed no other fees by Deloitte Touche Tohmatsu LLC for each of the fiscal years
ended March 31, 2011 and 2012.
Pre-Approval Policies and Procedures for Services by Deloitte Touche Tohmatsu LLC
Our board of corporate auditors performs the pre-approval function required by applicable SEC rules andregulations. Our board of corporate auditors has established pre-approval policies and procedures that MUFG and
its subsidiaries must follow before engaging Deloitte Touche Tohmatsu LLC to perform audit and permitted
non-audit services.
When MUFG or a subsidiary intends to engage Deloitte Touche Tohmatsu LLC to perform audit andpermitted non-audit services, it must make an application for pre-approval on either a periodic or case-by-casebasis.
‰

Periodic application is an application for pre-approval made each fiscal year for services that are
expected to be provided by Deloitte Touche Tohmatsu LLC during the next fiscal year.

‰

Case-by-case application is an application for pre-approval made on a case-by-case basis for services tobe provided by Deloitte Touche Tohmatsu LLC that are not covered by the periodic application.

Pre-approval is resolved in principle by our board of corporate auditors prior to engagement, although ifnecessary a full-time corporate auditor may consider any case-by-case application for pre-approval on behalf ofthe board of corporate auditors prior to the next scheduled board meeting. Such decisions made individually by afull-time corporate auditor are reported to and ratified by the board of corporate auditors as appropriate at thenext scheduled board meeting.
Fees approved pursuant to the procedures described in paragraph 2-01(c)(7)(i)(C) of Regulation S-X, which
provides for an exception to the general requirement for pre-approval in certain circumstances, were less than
0.1% for the fiscal year ended March 31, 2011 and approximately 1.2% for the fiscal year ended March 31, 2012.
Item 16D. Exemptions from the Listing Standards for Audit Committees.
In reliance upon the general exemption contained in Rule 10A-3(c)(3) under the US Securities Exchange
Act of 1934, MUFG does not have an audit committee. Rule 10A-3 provides an exemption from the listing
standards of the New York Stock Exchange, or the NYSE, relating to audit committees for foreign companies
like MUFG that have a board of corporate auditors established pursuant to applicable Japanese law and Articles
of Incorporation. MUFG’s reliance on Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect theability of its board of corporate auditors to act independently and to satisfy the other requirements of Rule 10A-3.

200

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
Issuer Purchases of Common Stock

Total
Number of
SharesPurchased(1)Average Price
Paid per Share

Total
Number of
SharesPurchased
as Part of
Publicly
Announced
Plans or
Programs

April 1 to April 30, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 1 to May 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 1 to June 30, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 1 to July 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August 1 to August 31, 2011 . . . . . . . . . . . . . . . . . . . . . . .
September 1 to September 30, 2011 . . . . . . . . . . . . . . . . . .
October 1 to October 31, 2011 . . . . . . . . . . . . . . . . . . . . . .
November 1 to November 30, 2011 . . . . . . . . . . . . . . . . . .
December 1 to December 31, 2011 . . . . . . . . . . . . . . . . . . .
January 1 to January 31, 2012 . . . . . . . . . . . . . . . . . . . . . . .
February 1 to February 29, 2012 . . . . . . . . . . . . . . . . . . . . .
March 1 to March 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . .

1,728
2,185
1,896
4,221
3,409
2,537
2,082
1,563
3,254
2,810
3,460
4,299

¥384.63383.57368.85399.62377.37333.28337.51336.81331.52337.42387.24424.68

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,444372.04——

Maximum
Number of
Shares thatMay Yet Be
Purchased
Under thePlans or
Programs

Note:(1) All of the purchased shares were shares constituting less than one unit (100 shares) purchased from registered holders of such shares atthe current market price of those shares.

We did not make any purchases of our shares other than the above for the fiscal year ended March 31, 2012.
In connection with UNBC’s employee equity-based incentive plan, 1,507,067 ADSs were purchased by thetrustee of the independent trust in the fiscal year ended March 31, 2012. For a discussion of UNBC’s employee
equity-based incentive plan, see “Item 6.B. Directors, Senior Management and Employees—Compensation.”
Item 16F. Change in Registrant’s Certifying Accountant.
None.
Item 16G. Corporate Governance.
The New York Stock Exchange, or the NYSE, allows NYSE-listed companies that are foreign private
issuers, such as MUFG, with certain exceptions, to follow home-country practices in lieu of the corporate
governance practices followed by US companies pursuant to the NYSE’s Listed Company Manual. The
following sections summarize the significant differences between MUFG’s corporate governance practices andthose followed by US listed companies under the NYSE’s Listed Company Manual.

201

1. A NYSE-listed US company must have a majority of directors that meet the independence requirements
under Section 303A of the NYSE’s Listed Company Manual.
As of June 30, 2012, MUFG has three outside directors as members of its board of directors. Under theCompany Law, an “outside director” is defined as a director who has not served as an executive director (gyomu
shikko torishimariyaku), executive officer (shikkoyaku), manager (shihainin) or any other type of employee ofthe relevant company or any of its subsidiaries prior to his or her appointment.
For MUFG and other large Japanese companies employing a corporate governance system based on a boardof corporate auditors, the Company Law has no requirement for independent directors or similar requirementwith respect to directors. Tokyo Stock Exchange rules require listed companies, including MUFG, to identify atleast one individual who the company believes will unlikely have a conflict of interests with general shareholders
and have such individual serve as an independent director or corporate auditor.
For companies employing the corporate auditor system such as MUFG, the task of overseeing themanagement of the company is assigned to the corporate auditors as well as the board of directors. At least halfof the corporate auditors are required to be an “outside corporate auditor.”
2. A NYSE-listed US company must have an audit committee composed entirely of independent directors.
Under the Company Law, MUFG and other Japanese companies (excluding companies with committees
established pursuant to the Company Law) are not obliged to establish an audit committee.
As discussed above, MUFG employs a corporate auditor system as stipulated by the Company Law.
Accordingly, MUFG has established a board of corporate auditors consisting of corporate auditors with astatutory duty to audit MUFG directors’ performance of their professional duties and to review and report on themanner and results of the audit of MUFG’s financial statements, for the benefit of MUFG’s shareholders.
The Company Law requires companies having a board of corporate auditors, including MUFG, to elect atleast three corporate auditors through a resolution adopted at a general meeting of shareholders. At least half ofthe corporate auditors must be an “outside corporate auditor,” which is defined as a corporate auditor who has notserved as a director, account assistant, executive officer (shikkoyaku), manager (shihainin), or any other
employee of the relevant company or any of its subsidiaries.
As of June 30, 2012, MUFG had five corporate auditors, three of whom are outside corporate auditors.
3. A NYSE-listed US company must have a compensation committee composed entirely of independent
directors.
Under the Company Law, MUFG and other Japanese companies (excluding companies with committees
established pursuant to the Company Law) are not obliged to establish a compensation committee.
The maximum aggregate amounts of compensation for MUFG’s directors and corporate auditors areapproved at MUFG’s general meeting of shareholders. The amount and allocation of compensation for each
MUFG director are then proposed to, and voted upon by, the board of directors. The amount and allocation ofcompensation for each MUFG corporate auditor are determined through discussions and agreement among
MUFG’s corporate auditors.
4. A NYSE-listed US company must have a nominating or corporate governance committee composed
entirely of independent directors.
Under the Company Law, MUFG and other Japanese companies (excluding companies with committees
established pursuant to the Company Law) are not obliged to establish a nominating or corporate governancecommittee.
202

MUFG’s directors are elected or dismissed at MUFG’s general meeting of shareholders in accordance withthe relevant provisions of the Company Law and MUFG’s articles of incorporation. MUFG’s corporate auditors
are also elected or dismissed at MUFG’s general meeting of shareholders. A proposal by MUFG’s board of
directors to elect a corporate auditor needs the consent of its board of corporate auditors. MUFG’s board ofcorporate auditors is empowered to adopt a resolution requesting that MUFG’s directors submit a proposal forelection of a corporate auditor to MUFG’s general meeting of shareholders.
The corporate auditors have the right to state their opinion concerning the election or dismissal of acorporate auditor at MUFG’s general meeting of shareholders.
5. A NYSE-listed US company must obtain shareholder approval with respect to any equity compensation
plan.
Under the Company Law, a public company seeking to issue “stock acquisition rights” (granting the holder
thereof the right to acquire from the issuer shares of its stock at a prescribed price) must obtain the approval of its
board of directors, not its shareholders.
When stock acquisition rights are issued under terms and conditions that are especially favorable to therecipients thereof, such issuance must be approved by a “special resolution” of a general meeting of shareholders.
Under MUFG’s articles of incorporation, the quorum for a special resolution is at least one-third of the total
outstanding voting rights, and the approval of at least two-thirds of the voting rights represented at the relevant
general meeting of shareholders of MUFG is required to pass a special resolution.
6. A NYSE-listed US company must adopt and disclose Corporate Governance Guidelines and a Code ofBusiness Conduct and Ethics, and it must also disclose any exemptions granted to directors or executives.
Under the Company Law, the Financial Instruments and Exchange Law of Japan and applicable stock
exchange rules, Japanese companies, including MUFG, are not obliged to adopt and disclose corporate
governance guidelines or a code of business conduct and ethics for directors, officers and employees. In order tofurther enhance its disclosure, however, MUFG has decided to disclose the details of its corporate governance in
its Annual Securities Report and related disclosure reports.
MUFG has also adopted a code of ethics, compliance rules and a compliance manual which it believes arecompliant with the requirements for a Code of Ethics as set forth under Section 406 of the US Sarbanes-Oxley
Act. MUFG has disclosed the relevant sections of its code of ethics, compliance rules and compliance manual as
an exhibit to this Annual Report. No exemptions from MUFG’s code of ethics, compliance rules or compliancemanual were granted to its directors or executives during the fiscal year ended March 31, 2012.
7. A NYSE-listed US company must hold regularly scheduled executive sessions where participants arelimited to non-management directors.
Under the Company Law, Japanese corporations are not obliged to hold executive sessions whereparticipants are limited to non-management directors. Such executive sessions are also not required under
MUFG’s internal corporate governance rules.
Item 16H. Mine Safety Disclosure.
Not applicable.

203

PART III
Item 17. Financial Statements.
In lieu of responding to this item, we have responded to Item 18 of this Annual Report.
Item 18. Financial Statements.
The information required by this item is set forth in our consolidated financial statements starting on
page F-1 of this Annual Report.
Item 19. Exhibits.
ExhibitDescription

1(a)Articles of Incorporation of Mitsubishi UFJ Financial Group, Inc., as amended on June 26,
2009. (English translation)*1(b)Board of Directors Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(c)Corporation Meetings Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(d)Share Handling Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on June 26,
2009. (English Translation)*2(a)Form of American Depositary Receipt.

2(b)Form of Deposit Agreement, amended and restated as of December 22, 2004, among
Mitsubishi Tokyo Financial Group, Inc. (subsequently renamed Mitsubishi UFJ Financial
Group, Inc.), The Bank of New York Mellon and the holders from time to time of American
Depositary Receipts issued thereunder.

4(a)Transaction Agreement, dated as of April 21, 2011, between Morgan Stanley and Mitsubishi
UFJ Financial Group, Inc.**4(b)Amended and Restated Investor Agreement, dated as of June 30, 2011, between Morgan
Stanley and Mitsubishi UFJ Financial Group, Inc.**8

Subsidiaries of the Company—see “Item 4.C. Information on the Company—Organizational
Structure.”

11

Ethical framework and code of conduct, compliance rules, compliance manual and rules of
employment of Mitsubishi UFJ Financial Group, Inc. applicable to its directors and managing
officers, including its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions. (English translationof relevant sections)**

12

Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a)(17 CFR 240.15d-14(a)).

13

Certifications required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b)(17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code
(18 U.S.C. 1350).

101.INSXBRL Instance Document

101.SCHXBRL Schema Document

101.CALXBRL Calculation Linkbase Document

204

Exhibit

Description

101.DEFXBRL Definition Linkbase Document

101.LABXBRL Label Linkbase Document

101.PREXBRL Presentation Linkbase Document

Notes:*
Incorporated by reference to our annual report on Form 20-F (File No. 333-98061-99) filed on September 2, 2009.
** Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 28, 2011.

205

SELECTED STATISTICAL DATA
Due to close integration of our foreign and domestic activities, it is difficult to make a precise determinationof the assets, liabilities, income and expenses of our foreign operations. The foreign operations as presented
include the business conducted by overseas subsidiaries and branches, and the international business principally
conducted by the several international banking-related divisions headquartered in Japan. Our management
believes that the results appropriately represent our domestic and foreign activities.

A-1

I.

Distribution of Assets, Liabilities and Equity; Interest Rates and Interest Differential

Average Balance Sheets, Interest and Average Rates
The following table shows our average balances, interest and average interest rates for the fiscal years ended
March 31, 2010, 2011 and 2012. Average balances are generally based on a daily average while a month-end
average is used for certain average balances when it is not practicable to obtain applicable daily averages. The
average balances determined by such methods are considered to be representative of our operations.

Averagebalance
Assets:Interest-earning assets:
Interest-earning deposits inother banks:
Domestic . . . . . . . . . . . . ¥Foreign . . . . . . . . . . . . .

2010
Interest Average
incomerate

Fiscal years ended March 31,
2011
Average
Interest Averagebalance
incomerate(in millions, except percentages)

Averagebalance

2012
Interest Average
incomerate

894,396 ¥3,734,585

4,177
22,520

0.47% ¥
0.60

844,158 ¥
4,155,697

2,334
26,854

0.28% ¥
0.65

1,866,249 ¥
4,976,720

2,412
37,551

0.13%
0.75

Total . . . . . . . . . . .

4,628,981

26,6970.58

4,999,855

29,1880.58

6,842,969

39,9630.58

Call loans, funds sold, andreceivables under resaleagreements and securities
borrowing transactions:
Domestic . . . . . . . . . . . .
Foreign . . . . . . . . . . . . .

5,051,284
6,062,075

9,240
26,3240.18
0.43

2,605,457
7,795,164

4,689
56,4980.18
0.72

3,409,929
8,221,074

5,299
88,0890.16
1.07

Total . . . . . . . . . . .

11,113,359

35,5640.32

10,400,621

61,1870.59

11,631,003

93,3880.80

Trading account assets:
Domestic . . . . . . . . . . . .
Foreign . . . . . . . . . . . . .

7,601,584
12,721,988

56,612
251,346

0.74
1.98

7,570,433
12,284,124

54,525
250,689

0.72
2.04

5,317,152
14,985,875

44,358271,384

0.83
1.81

Total . . . . . . . . . . .

20,323,572

307,958

1.52

19,854,557

305,214

1.54

20,303,027

315,742

1.56

Investment securities(1):Domestic . . . . . . . . . . . .
Foreign(2) . . . . . . . . . . . .

40,039,924
3,760,885

293,874
179,068

0.73
4.76

51,269,029
5,949,686

305,405
184,329

0.60
3.10

54,336,768
3,838,534

306,903244,863

0.56
6.38

Total . . . . . . . . . . .

43,800,809

472,942

1.08

57,218,715

489,734

0.86

58,175,302

551,766

0.95

Loans(3):Domestic . . . . . . . . . . . .
Foreign . . . . . . . . . . . . .

74,242,963 1,347,611
21,261,004
567,094

1.82
2.67

68,633,228 1,157,071
19,153,409
507,750

1.69
2.65

65,926,637 1,041,921
21,300,209
553,176

1.58
2.60

Total . . . . . . . . . . .

95,503,967 1,914,705

2.00

87,786,637 1,664,821

1.90

87,226,846 1,595,097

1.83

Total interest-earning assets:
Domestic . . . . . . . . . . . . 127,830,151 1,711,514
Foreign . . . . . . . . . . . . . 47,540,537 1,046,352

1.34
2.20

130,922,305 1,524,024
49,338,080 1,026,120

1.16
2.08

130,856,735 1,400,893
53,322,412 1,195,063

1.07
2.24

Total . . . . . . . . . . . 175,370,688 2,757,866

1.57

180,260,385 2,550,144

1.41

184,179,147 2,595,956

1.41

Non-interest-earning assets:
Cash and due from banks . . .
Other non-interest-earning
assets . . . . . . . . . . . . . . . . .
Allowance for credit
losses . . . . . . . . . . . . . . . . .
Total non-interestearning assets . .

2,846,828

2,757,581

2,651,846

18,560,786

23,068,649

26,235,174(1,206,599)(1,304,631)(1,230,778)

20,201,015

24,521,599

27,656,242

Total assets . . . . . . . . . . . . . . . . . ¥195,571,703¥204,781,984¥211,835,389

Notes:(1) Tax-exempt income of tax-exempt investment securities has not been calculated on a tax equivalent basis because the effect of suchcalculation would not be material.
(2) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139,320 million on conversion rateadjustment of convertible preferred stock. Exclusive of the gain associated with the conversion, the average rate decreased 3.48% from
6.38% to 2.90% for the fiscal year ended March 31, 2012.
(3) Average balances on loans outstanding include all nonaccrual and restructured loans. See “III. Loan Portfolio.” The amortized portion of
net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yields of an insignificant
amount.

A-2

Averagebalance2010
Interest Average
expenserate

Liabilities and equity:
Interest-bearing liabilities:
Deposits:
Domestic . . . . . . . . . ¥ 95,634,273 ¥ 220,073
Foreign . . . . . . . . . . . 19,182,441
133,796
Total . . . . . . . . . 114,816,714

Fiscal years ended March 31,
2011
Average
Interest Averagebalanceexpenserate(in millions, except percentages)

Averagebalance

2012
Interest Average
expenserate

0.23% ¥ 97,986,094 ¥ 136,243
0.70
19,787,919
119,947

0.14% ¥ 97,953,258 ¥ 101,673
0.61
19,678,674
127,185

0.10%
0.65

353,869

0.31

117,774,013

256,1900.22

117,631,932

228,858

0.19

Call money, funds
purchased, andpayables under
repurchase agreements
and securities lendingtransactions:
Domestic . . . . . . . . .
Foreign . . . . . . . . . . .

10,938,556
7,850,081

21,63237,5990.20
0.48

10,437,839
8,643,969

27,04345,6160.26
0.53

12,456,171
9,055,602

34,14860,9560.27
0.67

Total . . . . . . . . .

18,788,637

59,2310.32

19,081,808

72,6590.38

21,511,773

95,1040.44

Due to trust account—
Domestic . . . . . . . . . . .

1,683,607

6,119

0.36

674,622807

0.12

608,061647

0.11

Other short-termborrowings and trading
account liabilities:
Domestic . . . . . . . . .
Foreign . . . . . . . . . . .

6,513,029
2,553,648

43,84021,9140.67
0.86

8,084,897
2,286,431

40,44522,3840.50
0.98

10,558,305
2,552,810

39,42522,2320.37
0.87

Total . . . . . . . . .

9,066,677

65,7540.73

10,371,328

62,8290.61

13,111,115

61,657

0.47

Long-term debt:
Domestic . . . . . . . . .
Foreign . . . . . . . . . . .

9,661,842
4,138,886

168,256
121,171

1.74
2.93

9,724,767
3,718,126

166,190111,998

1.71
3.01

9,340,803
3,216,885

159,553
94,3201.71
2.93

Total . . . . . . . . .

13,800,728

289,427

2.10

13,442,893

278,188

2.07

12,557,688

253,873

2.02

Total interest-bearing
liabilities:
Domestic . . . . . . . . . 124,431,307
Foreign . . . . . . . . . . . 33,725,056

459,920
314,480

0.37
0.93

126,908,219
34,436,445

370,728
299,9450.29
0.87

130,916,598
34,503,971

335,446
304,693

0.26
0.88

Total . . . . . . . . . 158,156,363

774,400

0.49

161,344,664

670,673

0.42

165,420,569

640,1390.39¥1,955,817

1.02%

Non-interest-bearing
liabilities . . . . . . . . . . . . . . .

29,543,835

34,450,191

Total equity . . . . . . . . . . . . . . .

7,871,505

8,987,129

8,594,310

Total liabilities and equity . . . ¥195,571,703¥204,781,984¥211,835,389

Net interest income andinterest rate spread . . . . . .
Net interest income as apercentage of totalinterest-earning assets . . . .

¥1,983,466

1.08%

37,820,510¥1,879,471

1.13%

0.99%

1.04%

1.06%

The percentage of total average assets attributable to foreign activities was 28.7%, 28.9% and 29.5%,
respectively, for the fiscal years ended March 31, 2010, 2011 and 2012.
The percentage of total average liabilities attributable to foreign activities was 29.3%, 29.4% and 30.1%,
respectively, for the fiscal years ended March 31, 2010, 2011 and 2012.

A-3

Analysis of Net Interest Income
The following table shows changes in our net interest income by changes in volume and by changes in rate
for the fiscal year ended March 31, 2011 compared to the fiscal year ended March 31, 2010, and the fiscal year
ended March 31, 2012 compared to the fiscal year ended March 31, 2011.
Fiscal year ended March 31, 2010
Fiscal year ended March 31, 2011
versusversusfiscal year ended March 31, 2011
fiscal year ended March 31, 2012
Increase (decrease)
Increase (decrease)
due to changes indue to changes inVolume(1)Rate(1)
Net change
Volume(1)Rate(1)
Net change(in millions)Interest income:Interest-earning deposits in otherbanks:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

¥(223) ¥
2,651

(1,620) ¥1,683(1,843) ¥ 1,781 ¥ (1,703) ¥
78
4,334
5,787
4,910
10,697

Total . . . . . . . . . . . . . . . . . . .

2,428

63

2,491

7,568

3,207

10,775

Call loans, funds sold, and receivables
under resale agreements andsecurities borrowing transactions:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

(4,404)
9,033

(147)
21,141(4,551)30,174

1,311
3,238

(701)
28,353610
31,591

Total . . . . . . . . . . . . . . . . . . .

4,629

20,99425,623

4,549

27,65232,201

Trading account assets:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

(231)(8,796)(1,856)
8,139(2,087)(657)(17,906)
51,0307,739(30,335)(10,167)
20,695

Total . . . . . . . . . . . . . . . . . . .

(9,027)

6,283(2,744)

33,124(22,596)

10,528Domestic . . . . . . . . . . . . . . . . . . . .
Foreign(3) . . . . . . . . . . . . . . . . . . . .

73,12981,466(61,598)(76,205)

11,531
5,261

17,767(82,790)(16,269)
143,324

1,498
60,534

Total . . . . . . . . . . . . . . . . . . .

154,595(137,803)

16,792(65,023)

127,055

62,032Loans:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

(98,091)(55,892)(92,449)(3,452)(190,540)(59,344)(44,526)
55,931(70,624)(10,505)(115,150)
45,426

Total . . . . . . . . . . . . . . . . . . .

(153,983)(95,901)(249,884)

11,405(81,129)(69,724)

Total interest income:Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

(29,820)
28,462(157,670)(48,694)(187,490)(20,232)(41,573)
33,196(81,558)
135,747(123,131)
168,943(1,358) ¥(206,364) ¥(207,722) ¥ (8,377) ¥ 54,189¥ 45,812

Investment securities(2):Total . . . . . . . . . . . . . . . . . . .

¥Notes:(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “netchange.”(2) Tax-exempt income of tax-exempt investment securities has not been calculated on a tax equivalent basis because the effect of suchcalculation would not be material.
(3) Interest income on foreign activities includes a gain of ¥139,320 million on conversion rate adjustment of convertible preferred stock forthe fiscal year ended March 31, 2012 and related preferred dividends of ¥66,034 million for the fiscal year ended March 31, 2011.
Exclusive of the effect of the conversion, the decrease due to changes in volume was ¥39,305 million and the increase due to changes inrate was ¥26,553 million for the fiscal year ended March 31, 2012 compared to the fiscal year ended March 31, 2011.

A-4

Fiscal year ended March 31, 2010
Fiscal year ended March 31, 2011
versusversusfiscal year ended March 31, 2011
fiscal year ended March 31, 2012
Increase (decrease)
Increase (decrease)
due to changes indue to changes inVolume(1)Rate(1)
Net change
Volume(1)Rate(1)
Net change(in millions)Interest expense:
Deposits:
Domestic . . . . . . . . . . . . . . . . . . . . . ¥ 5,287
Foreign . . . . . . . . . . . . . . . . . . . . . . .
4,116¥ (89,117) ¥ (83,830) ¥(17,965)(13,849)(46) ¥ (34,524) ¥ (34,570)
(666)
7,904
7,238

Total . . . . . . . . . . . . . . . . . . . . .

9,403(107,082)(97,679)(712)(26,620)(27,332)

Call money, funds purchased, andpayables under repurchase agreements
and securities lending transactions:
Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

(1,030)
3,995

6,441
4,022

5,411
8,017

5,463
2,260

1,642
13,0807,105
15,340Total . . . . . . . . . . . . . . . . . . . . .

2,965

10,463

13,428

7,723

14,722

22,445Due to trust account—Domestic . . . . . . .

(2,506)(2,806)(5,312)

(75)

(85)

(160)

Other short-term borrowings and trading
account liabilities:
Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

9,264(2,431)(12,659)
2,901(3,395)470

10,6582,460(11,678)(2,612)(1,020)(152)

Total . . . . . . . . . . . . . . . . . . . . .

6,833(9,758)(2,925)

13,118(14,290)(1,172)Long-term debt:
Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

1,091(12,595)(3,157)3,422(2,066)(9,173)(6,559)(14,763)(78)(2,915)(6,637)(17,678)

Total . . . . . . . . . . . . . . . . . . . . .

(11,504)265(11,239)(21,322)(2,993)(24,315)

Total interest expense:
Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

12,106(6,915)(101,298)(7,620)(89,192)(14,535)

9,441(10,709)(44,723)
15,457(35,282)
4,748

Total . . . . . . . . . . . . . . . . . . . .

¥ 5,191

Net interest income:Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . .

¥(108,918) ¥(103,727) ¥ (1,268) ¥ (29,266) ¥ (30,534)¥(41,926) ¥ (56,372) ¥ (98,298) ¥(51,014) ¥ (36,835) ¥ (87,849)
35,377(41,074)(5,697)43,905120,290
164,195¥ (6,549) ¥ (97,446) ¥(103,995) ¥ (7,109) ¥ 83,455¥ 76,346

Note:(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “netchange.”A-5

II. Investment Portfolio
The following table shows information as to the value of our investment securities available for sale andbeing held to maturity at March 31, 2010, 2011 and 2012:
At March 31,
2010

Amortized
cost

Estimated
fair value

2011
Net
unrealized
gains(losses)

Amortized
cost

Estimated
fair value

2012
Net
unrealized
gains(losses)

Amortized
cost

Estimated
fair valueNet
unrealized
gains(losses)(in millions)

Securities available forsale:
Domestic:
Japanese national
government andJapanesegovernment agency
bonds . . . . . . . . . . . . ¥39,431,089 ¥39,432,861 ¥
1,772 ¥44,756,826 ¥44,719,622 ¥ (37,204) ¥48,736,276 ¥48,882,662 ¥ 146,386
Corporate bonds . . . . . 3,293,831 3,374,095
80,264 2,851,439 2,931,950
80,5112,227,855 2,294,537
66,682Marketable equity
securities . . . . . . . . . 2,960,293 4,417,031 1,456,738 2,635,801 3,652,035 1,016,234
2,305,916 3,427,722 1,121,806
Other securities . . . . . .
611,292
615,010
3,718
575,417580,5275,110
494,185
500,454
6,269
Total domestic . . . . . 46,296,505 47,838,997 1,542,492 50,819,483 51,884,134 1,064,651
Foreign:
US Treasury and other
US government
agencies bonds . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . .
Mortgage-backed
securities . . . . . . . . .
Other securities . . . . . .
Total foreign . . . . . .

53,764,232 55,105,375 1,341,143

1,180,899

1,178,334(2,565)590,333

596,995

6,662

546,813551,825

5,012

159,851

166,892

7,041

382,842

391,7968,954

406,551

419,40312,852

901,848
192,032

909,448
191,341

7,600 1,105,307(691)
351,729

1,103,924
353,032(1,383)1,303

1,182,554
468,580

1,193,627
470,171

11,0731,591

2,434,630

2,446,015

11,3852,445,747

15,5362,604,498

2,635,026

30,5282,430,211

Total . . . . . . . . . . ¥48,731,135 ¥50,285,012 ¥1,553,877 ¥53,249,694 ¥54,329,881 ¥1,080,187 ¥56,368,730 ¥57,740,401 ¥1,371,671
Securities being held tomaturity:
Domestic:
Japanese national
government andJapanesegovernment agency
bonds . . . . . . . . . . . . ¥ 1,076,900 ¥ 1,094,150 ¥Other securities . . . . . .
170,704
173,569
Total domestic . . . . .

17,250 ¥ 1,026,443 ¥ 1,034,430 ¥
2,865
137,237
138,506

7,987 ¥
1,269

590,147 ¥
43,709594,517 ¥
43,7894,370
80

1,247,604

1,267,719

20,115

1,163,680

1,172,936

9,256

633,856

638,306

4,450

Foreign:
US Treasury and other
US government
agencies bonds . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . .
Other securities . . . . . .

139,039

142,086

3,047

193,339

196,1432,804

141,810

142,740930

468,519
1,088,639

473,481
1,144,635

4,962
55,996

699,977
960,193

701,480
988,439

1,503
28,246

485,061
1,124,641

487,653
1,161,990

2,592
37,349Total foreign . . . . . .

1,696,197

1,760,202

64,005

1,853,509

1,886,062

32,553

1,751,512

1,792,383

Total . . . . . . . . . . ¥ 2,943,801 ¥ 3,027,921 ¥

84,120 ¥ 3,017,189 ¥ 3,058,998 ¥

41,809 ¥ 2,385,368 ¥ 2,430,689 ¥

40,87145,321

Nonmarketable equity securities presented in Other investment securities in the consolidated financial
statements were primarily carried at cost of ¥1,655,812 million, ¥1,667,220 million and ¥876,333 million, at
March 31, 2010, 2011 and 2012, respectively. The corresponding estimated fair values at those dates were not readily
determinable. Investment securities held by certain subsidiaries subject to specialized industry accounting principles
for investment companies and brokers and dealers presented in Other investment securities were carried at fair valueof ¥35,026 million, ¥37,024 million and ¥33,432 million, at March 31, 2010, 2011 and 2012, respectively.

A-6

The following table presents the book values, maturities and weighted average yields of investment
securities available for sale and being held to maturity, excluding equity securities, at March 31, 2012. Weighted
average yields are calculated based on amortized cost. Yields on tax-exempt obligations have not been calculated
on a tax equivalent basis because the effect of such calculation would not be material:
Maturities within
one yearAmountYield
Securities available forsale:
Domestic:
Japanese national
government andJapanese government
agency bonds . . . . . . ¥14,239,768
Corporate bonds . . . . .
381,226
Other securities . . . . . .
205,664
Total domestic . . .
Foreign:
US Treasury and other
US government
agencies bonds . . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . .
Mortgage-backed
securities . . . . . . . . .
Other securities . . . . . .
Total foreign . . . .

Total domestic . . .
Foreign:
US Treasury and other
US government
agencies bonds . . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . .
Other securities . . . . . .
Total foreign . . . .
Total . . . . . . . ¥Total
AmountYield

0.03% ¥27,297,600
1.06
1,502,896
0.46
148,063

0.44% ¥4,919,052
0.99
362,4621.00
118,057

0.80% ¥2,426,242
1.06
47,953
1.53
28,670

1.80% ¥48,882,662
1.63
2,294,537
1.87
500,454

0.42%
1.03
0.95

14,826,658

0.06

28,948,559

0.47

5,399,571

0.83

2,502,865

1.80

51,677,653

0.45

201,349

1.41

346,219

1.38

4,257

4.64

—

—

551,825

1.41

121,966

1.50

115,436

3.51

172,368

2.45

9,633

5.82

419,403

2.54—
68,556—
1.49

10,169379,788

4.16
1.43

47,643
10,7734.01
2.65

1,135,815
—

3.35
—

1,193,627
459,1173.38
1.47

391,8711.45

851,6121.72

235,041

2.82

1,145,448

3.37

2,623,972

2.50

Total . . . . . . . ¥15,218,529
Securities being held tomaturity:
Domestic:
Japanese national
government andJapanese government
agency bonds . . . . . . ¥Other securities . . . . . .

Maturities after
Maturities after
one year but
five years but
Maturities after
within five years
within ten years
ten years
AmountYield Amount
Yield AmountYield(in millions, except percentages)

0.10% ¥29,800,171

0.50% ¥5,634,612

0.91% ¥3,648,313

2.30% ¥54,301,625

0.55%

357,296
42,736

1.01% ¥
1.44

232,851—

0.53% ¥
—

—
—

—% ¥
—

—
973

—% ¥
1.75

590,147
43,7090.82%
1.45

400,032

1.06

232,851

0.53

—

—

973

1.75

633,856

0.86

105,964

1.63

33,510

1.24

2,336

8.30

—

—

141,8101.65

223,100
72

1.50
5.56

261,961
59,837

1.50
1.50

—
693,951—
1.05—
370,781—1.54

485,061
1,124,641

1.50
1.24

329,136

1.54

729,168

1.28% ¥

355,308

1.47

696,287

1.07

370,7811.54

1,751,512

588,159

1.10% ¥ 696,287

1.07% ¥ 371,754

1.55% ¥ 2,385,368

1.34
1.21%

Excluding US Treasury and other US government agencies bonds and Japanese national government bonds,
none of individual issuers held in our investment securities portfolio exceeded 10% of our consolidated total
Mitsubishi UFJ Financial Group shareholders’ equity at March 31, 2012.

A-7

III. Loan Portfolio
The following table shows our loans outstanding, before deduction of allowance for credit losses, bydomicile and type of industry of borrower at March 31 of each of the five fiscal years ended March 31, 2012.
Classification of loans by industry is based on the industry segment loan classification as defined by the Bank ofJapan for regulatory reporting purposes and is not necessarily based on the use of proceeds:
2009

At March 31,
2010(in millions)

2011

2012

¥ 12,922,822
1,803,541
10,436,795
6,750,442
9,760,805¥12,027,795
1,427,933
12,261,588
3,714,148
8,597,192¥11,248,033
1,280,899
11,660,798
3,417,689
8,443,580¥11,451,720
1,155,926
11,035,029
3,239,688
8,492,234

4,836,047

4,159,603

3,421,419

3,511,055

732,652
9,515,861
20,542,398

1,339,753
9,393,031
19,096,832

1,249,272
8,410,092
18,420,864

1,284,585
10,390,191
17,636,553

77,772,862

77,301,363

72,017,875

67,552,646

68,196,981

2008

Domestic:
Manufacturing . . . . . . . . . . . . . . ¥11,178,924
Construction . . . . . . . . . . . . . . .
1,728,534
Real estate(1) . . . . . . . . . . . . . . .
10,857,072
Services(1) . . . . . . . . . . . . . . . . .
6,553,980
Wholesale and retail . . . . . . . . .
9,308,599
Banks and other financial
institutions(2) . . . . . . . . . . . . .
4,671,499
Communication andinformation services . . . . . . .
1,150,438
Other industries . . . . . . . . . . . . . 10,806,144
Consumer . . . . . . . . . . . . . . . . . 21,517,672
Total domestic . . . . . . . . . .
Foreign:
Governments and official
institutions . . . . . . . . . . . . . . .
Banks and other financial
institutions(2) . . . . . . . . . . . . .
Commercial and industrial . . . .
Other . . . . . . . . . . . . . . . . . . . . .

316,761

351,134

490,376

516,637

554,933

2,100,057
16,189,725
2,706,750

2,687,004
17,550,544
2,510,521

2,970,470
14,252,704
2,554,209

3,565,502
13,116,390
2,853,671

4,722,587
15,675,995
3,238,830

Total foreign . . . . . . . . . . .

21,313,293

23,099,203

20,267,759

20,052,200

24,192,345

Total . . . . . . . . . . . . .
Unearned income, unamortizedpremiums—net and deferred loan
fees—net . . . . . . . . . . . . . . . . . . . .

99,086,155

100,400,566

92,285,634

87,604,846

92,389,326(84,076)(90,225)(99,724)(102,871)(91,083)

Total(3)¥99,002,079¥100,310,341¥92,185,910¥87,501,975¥92,298,243...........

Notes:(1) Since the classification by industry segment as defined by the Bank of Japan for regulatory reporting purposes was changed, loans tolease financing companies of ¥2,392,425 million, ¥2,012,242 million and ¥1,780,943 million were included in “Real estate” at March 31,
2010, 2011 and 2012, respectively. In prior periods through March 31, 2009, the related balances had been included in “Services.”(2) Loans to the so-called non-bank finance companies are generally included in “Banks and other financial institutions.” Non-bank financecompanies are primarily engaged in consumer lending, factoring and credit card businesses.
(3) The above table includes loans held for sale of ¥505,626 million, ¥119,596 million, ¥102,268 million, ¥65,162 million and¥46,634 million at March 31, 2008, 2009, 2010, 2011 and 2012, respectively, which are carried at the lower of cost or estimated fairvalue.

A-8

Maturities and Sensitivities of Loans to Changes in Interest Rates
The following table shows the maturities of our loan portfolio at March 31, 2012:
One year or lessMaturity
One to five years Over five years(in millions)

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate(1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Services(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . .
Communication and information services . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,395,230
762,0192,870,429
1,679,649
5,953,455
2,104,018
572,0316,797,375
2,100,563¥ 3,510,748
333,298
4,014,989
1,170,753
2,215,242
1,282,352
582,290
2,159,316
3,889,919¥

545,742
60,6094,149,611
389,286
323,537
124,685
130,264
1,433,500
11,646,071¥11,451,720
1,155,926
11,035,029
3,239,688
8,492,234
3,511,055
1,284,585
10,390,191
17,636,553

Total Domestic . . . . . . . . . . . . . . . . . . .

30,234,769

19,158,907

18,803,305

68,196,981

Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,844,071

8,518,556

4,829,718

24,192,345

Total . . . . . . . . . . . . . . . . . . . . . . .

¥41,078,840¥27,677,463¥23,633,023¥92,389,326

Total

The above loans due after one year which had predetermined interest rates and floating or adjustable interest
rates at March 31, 2012 are shown below:
Domestic

Foreign(in millions)

Total

Predetermined rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating or adjustable rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,807,674
26,154,538¥ 1,617,535
11,730,739¥13,425,209
37,885,277

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥37,962,212¥13,348,274¥51,310,486

Note:(1) Since the classification by industry segment as defined by the Bank of Japan for regulatory reporting purposes was changed, “Realestate” includes loans to lease financing companies of ¥910,073 million, ¥745,921 million, ¥124,949 million within the above maturity
classifications, respectively at March 31, 2012. In prior periods through March 31, 2009, the related balances had been included in“Services.”

Nonaccrual, Past Due and Restructured Loans
We generally discontinue the accrual of interest income on loans when substantial doubt exists as to the fulland timely collection of either principal or interest, specifically, when principal or interest is contractually pastdue one month or more with respect to loans within all classes of the Commercial segment, three months or morewith respect to loans within the Card and UNBC segments, and six months or more with respect to loans within
the Residential segment.
Once a loan is classified as a nonaccrual loan, the MUFG Group will generally not modify the terms of theloan as a modification would have little likelihood of resulting in the recovery of the loan in view of the severityof the financial difficulty of the borrower. If a nonaccrual loan has been restructured and the borrower is notdelinquent under the restructured terms, and demonstrates that its financial condition has been improved, the
MUFG Group may reclassify the loan to accrual status. This determination is generally performed once a year
through a detailed internal credit rating review process. Once a restructured nonaccrual loan is deemed to be atroubled debt restructuring, the MUFG Group will continue to designate the loan as a troubled debt restructuring
even if the loan is reclassified to accrual status.

A-9

The following table shows the distribution of our nonaccrual loans, restructured loans and accruing loans
which are contractually past due 90 days or more as to principal or interest payments at March 31 of each of thefive fiscal years ended March 31, 2012, based on the domicile and type of industry of the borrowers:
2008

2009

At March 31,
2010(in millions)

2011

2012

Nonaccrual loans:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . ¥ 109,023 ¥ 87,649 ¥ 111,235 ¥ 137,987 ¥ 200,074
Construction . . . . . . . . . . . . . . . . . . . . . . .
44,322
55,76033,44948,47940,098
Real estate(1) . . . . . . . . . . . . . . . . . . . . . . .
164,521263,831214,367
152,317
127,824
Services(1) . . . . . . . . . . . . . . . . . . . . . . . . .
142,795
104,594
79,51776,59786,015Wholesale and retail . . . . . . . . . . . . . . . . .
156,816
139,000
135,523
172,712
237,977
Banks and other financial institutions . . . .
10,591
14,826
2,322
7,238
7,802
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . . . .
45,11536,85373,61533,19833,418Other industries . . . . . . . . . . . . . . . . . . . . .
36,192
20,615
116,741
37,33549,212
Consumer . . . . . . . . . . . . . . . . . . . . . . . . .
318,861
372,944355,040
321,823
288,402
Total domestic . . . . . . . . . . . . . . . . . . 1,028,236 1,096,072 1,121,809
987,686 1,070,822
Foreign:
Governments and official institutions . . . .
45
4,279
70,52962,68393
Banks and other financial institutions . . . .
2,793
56,62819,88021,452
20,188Commercial and industrial . . . . . . . . . . . .
111,852
81,990135,62273,70772,750
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,529
10,553
21,16923,651
25,982
Total foreign . . . . . . . . . . . . . . . . . . .
116,219
153,450
247,200
181,493
119,013
Total . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,144,455 ¥1,249,522 ¥1,369,009 ¥1,169,179 ¥1,189,835
Restructured loans:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 492,230 ¥ 457,838 ¥ 565,008 ¥ 800,620 ¥ 830,853
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,03563,75047,18438,93092,276
Total . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 517,265 ¥ 521,588 ¥ 612,192 ¥ 839,550 ¥ 923,129
Accruing loans contractually past due 90 daysor more:Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Foreign(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . ¥14,954 ¥2,998
17,952 ¥15,047 ¥
6,440
21,487 ¥25,871 ¥547
26,418 ¥55,549 ¥199
55,748 ¥

65,446
131
65,577

Total . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,679,672 ¥1,792,597 ¥2,007,619 ¥2,064,477 ¥2,178,541
Notes:(1) Since the classification by industry segment as defined by the Bank of Japan for regulatory reporting purposes was changed, nonaccrualloans to lease financing companies of ¥28,547 million, ¥2,143 million and ¥4,174 million were included in “Real estate” at March 31,
2010, 2011 and 2012, respectively. In prior periods through March 31, 2009, the related balances had been included in “Services.”(2) Foreign accruing loans contractually past due 90 days or more do not include ¥25,425 million and ¥12,827 million of FDIC coveredloans held by UNBC which are subject to the guidance on loans and debt securities acquired with deteriorated credit quality at March 31,
2011 and 2012, respectively.

Gross interest income which would have been accrued at the original terms on domestic nonaccrual andrestructured loans outstanding during the fiscal year ended March 31, 2012 was approximately ¥83.9 billion, of
which ¥39.8 billion was included in the results of operations for the fiscal year. Gross interest income which
would have been accrued at the original terms on foreign nonaccrual and restructured loans outstanding for the
fiscal year ended March 31, 2012 was approximately ¥9.9 billion, of which ¥5.0 billion was included in the
results of operations for the fiscal year.
A-10

Potential Problem Loans
We do not have potential problem loans where known information about possible credit problems ofborrowers causes management to have serious doubts as to the borrowers’ ability to comply with the present loan
repayment terms that are not disclosed as nonaccrual, restructured loans and accruing loans past due 90 days or
more.
Foreign Loans Outstanding
We had no cross-border outstandings to borrowers in any foreign country which in total exceeded 0.75% ofconsolidated total assets at March 31, 2010, 2011 and 2012. Cross-border outstandings are defined, for thispurpose, as loans (including accrued interest), acceptances, interest-earning deposits with other banks, otherinterest-earning investments and any other monetary assets denominated in Japanese yen or other non-local
currencies. Material local currency loans outstanding which are neither hedged nor funded by local currency
borrowings are included in cross-border outstandings.
Guarantees of outstandings of borrowers of other countries are considered to be outstandings of theguarantor. Loans made to, or deposits placed with, a branch of a foreign bank located outside the foreign bank’shome country are considered to be loans to, or deposits with, the foreign bank. Outstandings of a country do notinclude principal or interest amounts of which are supported by written, legally enforceable guarantees by
guarantors of other countries or the amounts of outstandings to the extent that they are secured by tangible, liquid
collateral held and realizable by BTMU, MUTB and their subsidiaries outside the country in which they operate.
In addition to credit risk, cross-border outstandings are subject to country risk that as a result of political or
economic conditions in a country, borrowers may be unable or unwilling to pay principal and interest according
to contractual terms. Other risks related to cross-border outstandings include the possibility of insufficientforeign exchange and restrictions on its availability.
In order to manage country risk, we establish various risk management measures internally. Among otherthings, we regularly monitor economic conditions and other factors globally and assess country risk in eachcountry where we have cross-border exposure. For purposes of monitoring and controlling the amount of credit
exposed to country risk, we set a country limit, the maximum amount of credit exposure for an individual
country, in consideration of the level of country risk and our ability to bear such potential risk. We also
determine our credit policy for each country in accordance with our country risk level and our business plan withregard to the country. Assessment of country risk, establishment of country limits, and determination of country
credit policies are subject to review and approval by our senior management and are updated periodically.
Loan Concentrations
At March 31, 2012, there were no concentrations of loans to a single industry group of borrowers, as definedby the Bank of Japan industry segment loan classifications, which exceeded 10% of our consolidated total loans,
except for loans in a category disclosed in the table of loans outstanding above.
Credit Risk Management
We have a credit rating system, under which borrowers and transactions are graded on a worldwide basis.
We calculate probability of default by statistical means and manage our credit portfolio based on this credit
rating system. For a detailed description of this system and other elements of our risk management structure, see“Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Credit Risk
Management.”

A-11

IV. Summary of Loan Loss Experience
The following table shows an analysis of our loan loss experience by type of industry of borrower for eachof the five fiscal years ended March 31, 2012:2008

Allowance for credit losses at beginning of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . .
Communication and information services . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal years ended March 31,
2009
2010
2011
(in millions, except percentages)

2012¥1,112,453
385,740¥1,134,940
626,947¥1,156,638
647,793¥1,315,615
292,035¥1,240,456
223,80941,58724,097
11,77539,33670,173
13,87330,868
9,865
138,370

83,121
44,18076,73464,418118,144
25,31019,632
10,472
117,02141,93322,70775,44629,26476,407542
23,5407,225
124,792

32,162
7,414
14,453
22,11254,498608
36,871
62,711
107,473

35,577
11,034
7,001
10,526
39,676
377
8,754
1,778
67,969Total domestic . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . .

379,9446,540

559,032
44,266

401,856
118,916

338,30247,468

182,692
34,107

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

386,484

603,298

520,772

385,770

216,799

Recoveries:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,475
2,117

23,692
2,754

48,2694,103

34,6539,017

37,002
6,427

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,592

26,44652,372

43,67043,429Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

355,892(7,361)

576,852(28,397)

468,400(20,416)

342,100(25,094)

173,370(5,388)

Allowance for credit losses at end of fiscal year . . . . . . .

¥1,134,940¥1,156,638¥1,315,615¥1,240,456¥1,285,507

Allowance for credit losses applicable to foreign
activities:
Balance at beginning of fiscal year . . . . . . . . . . . . .

¥ 109,654¥ 136,656¥ 307,343¥ 327,568¥ 185,871

Balance at end of fiscal year . . . . . . . . . . . . . . . . . .

¥ 136,656¥ 307,343¥ 327,568¥ 185,871¥ 170,812

Provision (credit) for credit losses . . . . . . . . . . . . . .

¥¥ 240,015¥ 134,966¥ (86,674) ¥Ratio of net charge-offs during the fiscal year to
average loans outstanding during the fiscal year . . . . .

38,637
0.37%

0.58%

0.49%

0.39%

17,1080.20%

Notes:(1) Since the classification by industry segment as defined by the Bank of Japan for regulatory reporting purposes was changed, the chargeoffs to lease financing companies of ¥174 million, ¥396 million and ¥140 million were included in “Real estate” for the fiscal years
ended March 31, 2010, 2011 and 2012, respectively. In prior periods through March 31, 2009, the related amounts had been included in“Services.”(2) Others principally include losses (gains) from foreign exchange translation. In addition, for the fiscal year ended March 31, 2010, others
include adjustments related to restructuring of business operations.

A-12

The following table shows an allocation of our allowance for credit losses at March 31 of each of the fivefiscal years ended March 31, 2012:2008

AmountDomestic:
Manufacturing . . . . ¥Construction . . . . .
Real estate(1) . . . . .
Services(1) . . . . . . .
Wholesale andretail . . . . . . . . .
Banks and otherfinancial
institutions . . . . .
Communicationand information
services . . . . . . .
Other industries . . .
Consumer . . . . . . .
Foreign:
Governments andofficial
institutions . . . . .
Banks and otherfinancial
institutions . . . . .
Commercial andindustrial . . . . . .
Other . . . . . . . . . . .
Unallocated . . . . . . . . . .

% ofloans ineach
category
to totalloans

Amount2012

Amount% ofloans ineach
category
to totalloans

125,824
43,043112,899
126,832

11.28% ¥ 112,412
1.74
45,234
10.96
116,460
6.61
88,82912.87% ¥ 177,753
1.80
31,764
10.39
112,154
6.72
88,43513.03% ¥ 202,505
1.55
41,012
13.29
98,873
4.02
92,33612.84% ¥ 252,397
1.46
29,66313.31
91,195
3.90
92,92112.40%
1.25
11.92
3.51

141,870

9.39

115,1099.72

148,637

9.32

197,2969.64

245,101

9.19

59,2004.72

38,1894.82

20,0154.51

26,505

3.91

23,928

3.83

37,251
97,019244,652

1.16
10.91
21.72

37,54965,363
223,865

0.73
9.48
20.46

67,273
110,545
213,889

1.45
10.18
20.69

32,57058,539280,665

1.43
9.60
21.02

28,795
70,112270,088

1.39
11.25
19.08

880

0.32

2,349

0.35

70,0170.53

28,4060.59

26,800

0.60

6,858

2.12

76,5182.68

29,0303.22

26,853

4.07

24,454

5.11

126,693
2,225
9,694

16.34
2.73
—

211,307
17,169
6,285

17.48
2.50
—

203,61124,91017,582

15.44
2.77
—

114,352
16,26024,284

14.97
3.26
—

107,899
11,65910,495

16.96
3.51
—

Total . . . . . . . ¥1,134,940
Allowance as apercentage ofloans . . . . . . . . . . . . .
Allowance as apercentage ofnonaccrual andrestructured loans andaccruing loans
contractually past due
90 days or more . . . .

At March 31,
2010
2011
% of
% of
% of
loans inloans inloans in
each
each
each
category
category
category
to total
to total
to totalloans
Amountloans
Amountloans(in millions, except percentages)

2009

100.00% ¥1,156,638

100.00% ¥1,315,615

100.00% ¥1,240,456

100.00% ¥1,285,507

1.15%

1.15%

1.43%

1.42%

1.39%

67.57%

64.52%

65.53%

60.09%

59.01%

100.00%Note:(1) Since the classification by industry segment as defined by the Bank of Japan for regulatory reporting purposes was changed, theallowance for credit losses to lease financing companies of ¥25,111 million, ¥8,113 million and ¥6,965 million were included in “Realestate” at March 31, 2010, 2011 and 2012, respectively. In prior periods through March 31, 2009, the related balances had been included
in “Services.” Percentages of loans in “Lease financing” at March 31, 2010, 2011 and 2012 were 2.59%, 2.30% and 1.93%, respectively.

While the allowance for credit losses contains amounts allocated to components of specifically identified
loans as well as a group on a portfolio of loans, the allowance for credit losses is available for credit losses in theentire loan portfolio and the allocations shown above are not intended to be restricted to the specific loan
category. Accordingly, as the evaluation of credit risks changes, allocations of the allowance will be changed toreflect current conditions and various other factors.

A-13

V.

Deposits

The following table shows the average amount of, and the average rate paid on, the following deposit
categories for the fiscal years ended March 31, 2010, 2011 and 2012:2010
AverageamountDomestic offices:
Non-interest-bearing demand
deposits . . . . . . . . . . . . . . . .
Interest-bearing demand
deposits . . . . . . . . . . . . . . . .
Deposits at notice . . . . . . . . . .
Time deposits . . . . . . . . . . . . .
Certificates of deposit . . . . . . .
Foreign offices:
Non-interest-bearing demand
deposits . . . . . . . . . . . . . . . .
Interest-bearing deposits,
principally time deposits
and certificates ofdeposit . . . . . . . . . . . . . . . . .

¥ 12,958,611

Fiscal years ended March 31,
2011
Average
Average
Averagerate
amountrate(in millions, except percentages)—% ¥ 13,124,899

2012
AverageamountAveragerate—% ¥ 13,787,387—%

45,659,544
1,647,972
43,178,140
5,148,617

0.05
0.12
0.42
0.34

48,752,031
1,484,688
42,263,313
5,486,062

0.03
0.07
0.25
0.20

49,780,056
1,360,019
41,594,652
5,218,531

0.02
0.06
0.20
0.13

2,240,971—

2,188,544—

2,505,338—

19,182,441

0.70

19,787,919

0.61

19,678,674

0.65

Total . . . . . . . . . . . . . . . . ¥130,016,296¥133,087,456¥133,924,657

Deposits at notice represent interest-bearing demand deposits which require the depositor to give two or
more days notice in advance of withdrawal.
The average amounts of total deposits by foreign depositors included in domestic offices for the fiscal years
ended March 31, 2010, 2011 and 2012 were ¥417,259 million, ¥420,721 million and ¥457,525 million,
respectively.
At March 31, 2012, the balances and remaining maturities of time deposits and certificates of deposit issued
by domestic offices in amounts of ¥10 million (approximately US$121 thousand at the Federal Reserve Bank of
New York’s noon buying rate on March 30, 2012) or more and total foreign deposits issued in amounts of
US$100,000 or more are shown in the following table:Timedeposits

Certificates ofdeposit(in millions)

Total

Domestic offices:
Three months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Over three months through six months . . . . . . . . . . . . . . . . . . . .
Over six months through twelve months . . . . . . . . . . . . . . . . . . .
Over twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,312,935
5,568,143
5,069,557
3,564,208¥4,346,713
540,643
370,457
109,605¥11,659,648
6,108,786
5,440,014
3,673,813

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥21,514,843¥5,367,418¥26,882,261

Foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-14¥17,553,275

VI. Short-Term Borrowings
The following table shows certain additional information with respect to our short-term borrowings for the
fiscal years ended March 31, 2010, 2011 and 2012:
Fiscal years ended March 31,
2010
2011
2012
(in millions, except percentages)

Call money, funds purchased, and payables under repurchaseagreements and securities lending transactions:Average balance outstanding during the fiscal year . . . . . . . . . .
Maximum balance outstanding at any month-end during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . .
Weighted average interest rate on balance at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust account:
Average balance outstanding during the fiscal year . . . . . . . . . .
Maximum balance outstanding at any month-end during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . .
Weighted average interest rate on balance at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings:
Average balance outstanding during the fiscal year . . . . . . . . . .
Maximum balance outstanding at any month-end during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . .
Weighted average interest rate on balance at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-15¥18,788,637¥19,081,808¥21,511,773

19,343,97819,459,592
22,618,035
17,364,371
16,806,667
21,347,850
0.32%
0.38%
0.44%
0.30%
¥ 1,683,607

0.37%
¥

674,6220.30%¥

608,061

1,795,280
1,559,631
0.36%

752,244633,5410.12%

1,117,699
627,331
0.11%

0.32%

0.12%

0.08%

¥ 6,371,845
6,319,721
6,097,336
0.49%
0.27%

¥ 7,313,927¥10,059,100

9,544,575
12,103,569
8,488,197
10,881,525
0.34%
0.28%
0.24%

0.23%

CONSOLIDATED FINANCIAL STATEMENTS
INDEX
Page

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets as of March 31, 2011 and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income for the Fiscal Years ended March 31, 2010, 2011 and 2012 . . . . . . . .
Consolidated Statements of Changes in Equity from Nonowner Sources for the Fiscal Years ended
March 31, 2010, 2011 and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Equity for the Fiscal Years ended March 31, 2010, 2011 and 2012 . . . . . . . .
Consolidated Statements of Cash Flows for the Fiscal Years ended March 31, 2010, 2011 and 2012 . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Basis of Financial Statements and Summary of Significant Accounting Policies . . . . . . . . . . . . . .
2. Business Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Loans and Allowance for Credit Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Premises and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Goodwill and Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Pledged Assets and Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Call Loans and Funds Sold, and Call Money and Funds Purchased . . . . . . . . . . . . . . . . . . . . . . . .
11. Due to Trust Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12. Short-term Borrowings and Long-term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13. Severance Indemnities and Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14. Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15. Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16. Common Stock and Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17. Retained Earnings, Legal Reserve and Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18. Noncontrolling Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19. Regulatory Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20. Earnings per Common Share Applicable to Common Shareholders of MUFG . . . . . . . . . . . . . . .
21. Derivative Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22. Obligations Under Guarantees and Other Off-balance Sheet Instruments . . . . . . . . . . . . . . . . . . .
23. Variable Interest Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24. Commitments and Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25. Fees and Commissions Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26. Trading Account Profits and Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27. Business Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28. Foreign Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29. Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30. Stock-based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31. Parent Company Only Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32. SEC Registered Funding Vehicles Issuing Non-dilutive Preferred Securities . . . . . . . . . . . . . . . .
33. Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group):
We have audited the accompanying consolidated balance sheets of Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group) (“MUFG”) and subsidiaries (together, the “MUFG Group”)
as of March 31, 2011 and 2012, and the related consolidated statements of income, changes in equity fromnonowner sources, equity, and cash flows for each of the three years in the period ended March 31, 2012 (allexpressed in Japanese Yen). These financial statements are the responsibility of MUFG’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). 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 the financial statements. An audit also includes
assessing the accounting principles used and significant 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, such consolidated financial statements present fairly, in all material respects, the financial
position of the MUFG Group as of March 31, 2011 and 2012, and the results of their operations and their cash
flows for each of the three years in the period ended March 31, 2012, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note 1 to the consolidated financial statements, MUFG changed its method of accounting
for other-than-temporary impairments on investment securities in the fiscal year ended March 31, 2010, and its
method of accounting for consolidation of variable interest entities in the fiscal year ended March 31, 2011.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), the MUFG Group’s internal control over financial reporting as of March 31, 2012, based on thecriteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated July 23, 2012 expressed an unqualified opinion
on the MUFG Group’s internal control over financial reporting.
/s/ Deloitte Touche Tohmatsu LLCDELOITTE TOUCHE TOHMATSU LLC
Tokyo, Japan
July 23, 2012

F-3

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMARCH 31, 2011 AND 2012
(in millions)

2011

ASSETSCash and due from banks (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 3,230,804
Interest-earning deposits in other banks (including ¥4,365 and nil measured atfair value under fair value option in 2011 and 2012) (Notes 8 and 29) . . . . . . .
7,333,767
Call loans and funds sold (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
448,787
Receivables under resale agreements (including ¥26,192 and ¥26,056 measured
at fair value under fair value option in 2011 and 2012) (Note 29) . . . . . . . . . . .
4,872,171
Receivables under securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . .
3,600,318
Trading account assets (including assets pledged that secured parties are
permitted to sell or repledge of ¥8,251,723 and ¥10,573,642 in 2011 and2012) (including ¥11,917,000 and ¥15,758,131 measured at fair value underfair value option in 2011 and 2012) (Notes 8, 21 and 29) . . . . . . . . . . . . . . . . .
28,824,795
Investment securities (Notes 3, 8 and 29):
Securities available for sale—carried at estimated fair value (including assets
pledged that secured parties are permitted to sell or repledge of ¥1,297,912
and ¥2,859,124 in 2011 and 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54,329,881
Securities being held to maturity—carried at amortized cost (including assets
pledged that secured parties are permitted to sell or repledge of ¥959,241
and ¥741,560 in 2011 and 2012) (estimated fair value of ¥3,058,998 and¥2,430,689 in 2011 and 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,017,189
Other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,704,244

2012¥

3,230,409
5,897,732
451,433
4,481,863
3,282,656

34,953,245

57,740,401

2,385,368
909,765

Total investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59,051,314

61,035,534

Loans, net of unearned income, unamortized premiums and deferred loan fees(including assets pledged that secured parties are permitted to sell or repledgeof ¥3,246,293 and ¥2,491,281 in 2011 and 2012) (Notes 4 and 8) . . . . . . . . . . .
Allowance for credit losses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87,501,975(1,240,456)

92,298,243(1,285,507)

Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

86,261,519

91,012,736

Premises and equipment—net (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customers’ acceptance liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets—net (Notes 2 and 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill (Notes 2 and 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets (Notes 7 and 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (Notes 4, 8, 13 and 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

962,548
233,224
69,950991,521363,392
1,285,013
5,321,120

987,474
250,351
88,082896,483
354,283
950,395
7,329,838

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥202,850,243¥215,202,514

Assets of consolidated VIEs included in total assets above that can be used
only to settle obligations of consolidated VIEs (Note 23)
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Interest-earning deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets of consolidated VIEs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-4¥

7,640 ¥
15,006
1,157,263
493,085
7,156,823
329,746

2,229
56,275
1,576,725
530,079
7,101,464
300,208

9,159,563

9,566,980¥

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS—(Continued)
MARCH 31, 2011 AND 2012
(in millions, except shares)

LIABILITIES AND EQUITY
Deposits (Notes 8 and 9):
Domestic offices:
Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overseas offices:
Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased (Notes 8 and 10) . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under securities lending transactions (Note 8) . . . . . . . . . . . . . . . . . . . . . .
Due to trust account (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings (including ¥673 and ¥24,951 measured at fair value
under fair value option in 2011 and 2012) (Notes 8, 12 and 29) . . . . . . . . . . . . . .
Trading account liabilities (Notes 21 and 29) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations to return securities received as collateral (Note 29) . . . . . . . . . . . . . . . .
Bank acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (including ¥575,969 and ¥524,758 measured at fair value
under fair value option in 2011 and 2012) (Notes 8, 12 and 29) . . . . . . . . . . . . . .
Other liabilities (Notes 1, 7, 8, 13, 14 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingent liabilities (Notes 22 and 24)
Mitsubishi UFJ Financial Group shareholders’ equity (Note 19):
Capital stock (Notes 15 and 16):
Preferred stock—aggregate liquidation preference of ¥390,001 in 2011 and2012, with no stated value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock—authorized, 33,000,000,000 shares; issued, 14,150,894,620
shares and 14,154,534,220 shares in 2011 and 2012, with no statedvalue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings (Notes 17 and 33):
Appropriated for legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unappropriated retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other changes in equity from nonowner sources, net of taxes . . . . .
Treasury stock, at cost—16,723,747 common shares and 10,471,043 commonshares in 2011 and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Mitsubishi UFJ Financial Group shareholders’ equity . . . . . . . . . . .
Noncontrolling interests (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of consolidated VIEs for which creditors or beneficial interest
holders do not have recourse to the general credit of Mitsubishi UFJ
Financial Group (Note 23)
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities of consolidated VIEs . . . . . . . . . . . . . . . . . . . . . . . . . . .

2011

2012

¥ 16,421,024
99,120,619¥ 14,980,210
99,610,994

2,316,207
18,773,854
136,631,704
2,313,487
12,389,075
2,104,105
633,541

2,708,186
22,194,340
139,493,730
2,796,221
13,572,712
4,978,917
627,3318,488,197
9,908,974
3,267,775
69,950181,814

10,881,525
11,967,182
3,639,838
88,082
152,836

13,356,728
4,841,981
194,187,331

12,593,062
5,552,631
206,344,067

442,100

442,100

1,644,132
6,395,705

1,645,144
6,378,619

239,571254,103(628,661)

239,571482,535(596,400)(11,251)(8,411)
8,335,699
8,583,158
327,213275,289
8,662,912
8,858,447¥202,850,243 ¥215,202,514¥¥

41,252
1,668,642
207,916
1,917,810

See the accompanying notes to Consolidated Financial Statements.
F-5

¥

¥

47,147
1,389,971
367,890
1,805,008

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012
(in millions)Interest income:Loans, including fees (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on conversion rate adjustment of convertible preferred stock(Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements and securities borrowing
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense:
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements and securities lendingtransactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings and trading account liabilities . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income after provision for credit losses . . . . . . . . . . . . . . .
Non-interest income:Fees and commissions income (Note 25) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains—net (Note 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account profits—net (Note 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities gains—net (Note 3)(1) . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of equity method investees—net (Note 2) . . . . . . . . . . . . .
Gains on sales of loans (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest income (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense:
Salaries and employee benefits (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expenses—net (Notes 5 and 24) . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outsourcing expenses, including data processing . . . . . . . . . . . . . . . . . . . .
Depreciation of premises and equipment (Note 5) . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance premiums, including deposit insurance . . . . . . . . . . . . . . . . . . . .
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes and public charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for repayment of excess interest (Notes 1 and 24) . . . . . . . . . . . .
Impairment of goodwill (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest expenses (Notes 4, 5, 6 and 18) . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-6

2010

2011

2012

¥1,914,705
26,697¥1,664,821
29,188¥1,595,097
39,963305,080
167,862

320,067
169,667

307,812
104,634—
307,958
4,110—
305,214
5,613

139,320
315,742
6,918

31,454
2,757,866

55,5742,550,144

86,4702,595,956

353,869
5,683

256,190
5,931

228,858
8,157

53,5486,119
65,754289,427
774,400
1,983,466
647,793
1,335,673

66,728807
62,829278,188670,673
1,879,471
292,035
1,587,436

86,947647
61,657
253,873
640,139
1,955,817
223,809
1,732,008

1,139,543
216,720
761,472
223,030(83,893)
21,232
191,3072,469,411

1,128,358
260,683
133,905
121,803(113,017)
14,558148,532
1,694,822

1,099,963
34,302
667,285
19,384(499,427)
15,645
103,424
1,440,576

908,213
171,098
196,515
215,397
120,268
225,000
12,400112,539
57,064
69,07344,808461
375,224
2,508,060

863,996
162,498
212,460
194,842
99,661
219,980
26,566
113,892
53,04865,88285,709—361,9122,460,446

900,144
150,808
204,734
191,089
94,777212,229
30,986
115,376
49,276
65,641
37—
307,545
2,322,642

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012
(in millions, except per share amount)

2010

2011

2012

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,297,024
413,105

821,812433,625

849,942429,191

Net income before attribution of noncontrolling interests . . . . . . . . . .
Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . . .

883,919
15,257388,187(64,458)

420,751
4,520

Net income attributable to Mitsubishi UFJ Financial Group . . . . . . .

¥ 868,662¥452,645¥416,231

Income allocated to preferred shareholders:Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥21,678¥ 20,940¥ 17,940

Net income available to common shareholders of Mitsubishi UFJ
Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 846,984¥431,705¥398,291¥¥

Earnings per common share applicable to common shareholders of
Mitsubishi UFJ Financial Group (Notes 17 and 20):
Basic earnings per common share—net income available to commonshareholders of Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . . ¥Diluted earnings per common share—net income available to commonshareholders of Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . .

68.72
68.59

30.55
30.43

28.17
28.09

(1) The following credit losses are included in Investment securities gains—net:(in millions)

2010

2011

2012

Decline in fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources—net . . . . . . . . . . . . . . . . . . . . . . . . . .

¥27,962
1,860¥

17,495
2,993¥

11,704
2,078

Total credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥29,822¥

20,488¥13,782

See the accompanying notes to Consolidated Financial Statements.
F-7

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FROM NONOWNER SOURCES
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012

(in millions)Fiscal year ended March 31, 2010:
Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources:
Net unrealized holding gains on investment securities (including unrealized gain of¥1,103, net of tax, related to debt securities with credit component realized inearnings) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gains (Losses)
Gains (Losses)
before income Income tax net of income
tax expense(expense)
tax expense(benefit)
benefit(benefit)¥ 883,919¥1,173,547¥(435,651)

737,896(224,560)

90,894(133,666)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

948,987(344,757)

604,230

Net unrealized gains on derivatives qualifying for cash flow hedges . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,621(1,322)

2,299(11,711)

4,617(7,094)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8,090)3,295(4,795)Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

352,647(138,293)

214,354

48,296(19,427)

28,869Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

400,943(157,720)

243,223

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,328

7,051

28,37918,420(8,136)

10,284

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39,748(1,085)38,663

Total changes in equity from nonowner sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,765,240

Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources attributable to noncontrolling interests . . .

15,257
5,435

Total changes in equity from nonowner sources attributable to Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,744,548

Fiscal year ended March 31, 2011:
Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 388,187

Other changes in equity from nonowner sources:
Net unrealized holding losses on investment securities (including unrealized gain of¥1,778, net of tax, related to debt securities with credit component realized inearnings) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (333,466)¥ 134,674(198,792)(122,524)

50,395(72,129)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(455,990)

185,069(270,921)

Net unrealized gains on derivatives qualifying for cash flow hedges . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88

(5)

83

(5,740)2,255(3,485)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5,652)

2,250(3,402)

Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(185,002)

73,483(111,519)

10,774(4,344)

6,430

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(174,228)

69,139(105,089)

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(220,954)

11,053(209,901)

21,327(9,021)

12,306

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(199,627)

2,032(197,595)

Total changes in equity from nonowner sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(188,820)

Net loss attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources attributable to noncontrolling interests . . .

(64,458)(3,935)

Total changes in equity from nonowner sources attributable to Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (120,427)

F-8

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FROM NONOWNER SOURCES—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012

(in millions)Fiscal year ended March 31, 2012:
Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources:
Net unrealized holding gains on investment securities (including unrealized gain of¥1,234, net of tax, related to debt securities with credit component realized inearnings) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gains (Losses)
Gains (Losses)
before income Income tax net of income
tax expense(expense)
tax expense(benefit)
benefit(benefit)¥ 420,751¥ 296,347¥(118,638)

177,709(4,511)

1,641(2,870)Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

291,836(116,997)

174,839

Net unrealized losses on derivatives qualifying for cash flow hedges . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(178)

99

(79)

850

(334)

516

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

672

(235)

437

Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(189,916)

77,992(111,924)

29,128(11,419)

17,709Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(160,788)

66,573(94,215)

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net income before attribution of
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(68,269)(1,528)(69,797)

31,956(11,702)

20,254

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(36,313)(13,230)(49,543)

Total changes in equity from nonowner sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

452,269

Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources attributable to noncontrolling interests . . .

4,520
(743)

Total changes in equity from nonowner sources attributable to Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 448,492

See the accompanying notes to Consolidated Financial Statements.
F-9

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012
(in millions, except per share amount)

2010

2011

2012

Preferred stock (Note 15):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 442,100¥ 442,100¥ 442,100

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 442,100¥ 442,100¥ 442,100¥1,127,552
515,662¥1,643,238—¥1,644,132
—

24

894

1,012

¥1,643,238¥1,644,132¥1,645,144¥6,095,820
—
1,695
(641)

¥6,619,525
4,337
876
—

¥6,395,705
—
1,370
—

—
522,414—893—(250,000)

1,010
—
—

—

20,550

—

—
237

—
(476)

(20,000)
534

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,619,525¥6,395,705¥6,378,619

Retained earnings appropriated for legal reserve (Note 17):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 239,571¥ 239,571¥ 239,571

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 239,571¥ 239,571¥ 239,571¥ (845,778)
868,662¥(9,284)
452,645¥ 254,103
416,231(128,062)(6,000)(169,636)(3,000)(169,776)—(15,678)(261)—(17,940)(84)—(17,940)
(218)
135

—

1,408

—

118,210
(377)

—
(6)

—
—

(9,284)¥ 254,103¥ 482,535

Common stock (Note 16):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by way of exercise of stock acquisitionrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus (Note 16):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of subsidiary shares from noncontrolling interest shareholders . . . . . . .
Stock-based compensation expense (Note 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conversion of preferred stock to common stock by a subsidiary . . . . . . . . . . . . .
Issuance of new shares of common stock by way of exercise of stock acquisitionrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock and sale of treasury stock (Note 16) . .
Redemption of Class 3 preferred stock (Note 15) . . . . . . . . . . . . . . . . . . . . . . . . .
Change in ownership interest in Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. in connection with the securities joint venture (Note 2) . . . . . . . . . . .
Issuance of new shares of Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
(Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unappropriated retained earnings (Accumulated deficit) (Note 17):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . .
Cash dividends:
Common stock—¥11.00 in 2010, and ¥12.00 in 2011 and 2012 pershare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock (Class 3)—¥60.00 in 2010 and ¥30.00 in 2011 per share . . .
Preferred stock (Class 5)—¥100.50 in 2010, and ¥115.00 in 2011 and2012 per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on sales of shares of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of adopting new guidance on embedded credit derivatives (Note 1) . . . . .
Effect of adopting new guidance on consolidation of certain variable interest
entities (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of adopting new guidance on recognition and presentation of other-thantemporary impairments (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year (Note 33) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-10

¥

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012
(in millions)2010

Accumulated other changes in equity from nonowner sources, net oftaxes:Net unrealized gains on investment securities (Note 3):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of adopting new guidance on recognition and presentation ofother-than-temporary impairments (Note 1) . . . . . . . . . . . . . . . . .
Effect of adopting new guidance on consolidation of certain
variable interest entities (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains (losses) on derivatives qualifying for cash flow
hedges (Note 21):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

2011

95,213602,8082012¥ 579,811 ¥ 308,071(271,982)
174,363(118,210)

—

—

—

242

—

¥ 579,811¥ 308,071¥ 482,434¥

6,507 ¥
(4,795)

1,712 ¥
(3,402)(1,690)
437

¥

1,712

(1,690) ¥(1,253)¥Pension liability adjustments (Note 13):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (446,469) ¥ (203,960) ¥ (307,711)
242,509(103,751)(94,212)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (203,960) ¥ (307,711) ¥ (401,923)

Foreign currency translation adjustments:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of adopting new guidance on consolidation of certain
variable interest entities (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (468,946) ¥ (433,582) ¥ (627,331)
35,364(193,937)(48,327)—

188—

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (433,582) ¥ (627,331) ¥ (675,658)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (56,019) ¥ (628,661) ¥ (596,400)

Treasury stock:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ (10,675) ¥ (13,954) ¥ (11,251)
Purchases of shares of treasury stock (Note 16) . . . . . . . . . . . . . . . . . . . .
(5,588)(250,138)(18)
Sales of shares of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,806
1,262
849
Redemption of shares of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . .
—250,000—
Net decrease (increase) resulting from changes in interests inconsolidated subsidiaries, consolidated variable interest entities, andaffiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(497)
1,579
2,009
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (13,954) ¥ (11,251) ¥Total Mitsubishi UFJ Financial Group shareholders’ equity . . . . . . .

¥8,865,177

F-11¥8,335,699(8,411)¥8,583,158

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012
(in millions)

2010

2011

Noncontrolling interests:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 232,225 ¥Initial origination of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . .
45,130Transactions between the consolidated subsidiaries and the related
noncontrolling interest shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,555
Decrease in noncontrolling interests related to deconsolidation ofsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(59,973)
Decrease in noncontrolling interests related to disposition ofsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Change in ownership interest in Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd. in connection with the securities joint venture(Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Issuance of new shares of Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . .
15,257
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . .
(5,393)
Other changes in equity from nonowner sources, net of taxes:
Net unrealized holding gains on investment securities . . . . . . . . . . .
1,808
Reclassification adjustment for losses (gains) included in net
income (loss) attributable to noncontrolling interests in relation
to net unrealized holding gains on investment securities . . . . . . .
(386)
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
616
Reclassification adjustment for losses included in net income (loss)
attributable to noncontrolling interests in relation to pension
liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . .
3,273
Reclassification adjustment for losses included in net income (loss)
attributable to noncontrolling interests in relation to foreign
currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Effect of adopting new guidance on consolidation of certain variableinterest entities (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(314)

2012

235,922
39,799¥ 327,213
9,991

17,540(7,440)(36,911)(67,276)(480)(4,609)127,270——(64,458)(6,362)30,0004,520(16,487)

1,056

572

5
(1,355)

(96)
(86)

17
(3,687)83(1,216)29—

19,551
(723)

—
120

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 235,922¥ 327,213¥ 275,289

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥9,101,099¥8,662,912¥8,858,447

See the accompanying notes to Consolidated Financial Statements.
F-12

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012
(in millions)2010

Cash flows from operating activities:
Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income before attribution of noncontrolling interests to
net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee benefit cost for severance indemnities and pension plans(Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of premiums on investment securities . . . . . . . . . . . . . . . . . . . . . .
Changes in financial instruments measured at fair value under fair value
option, excluding trading account securities—net (Note 29) . . . . . . . . . . . . . .
Foreign exchange losses (gains)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of equity method investees—net (Note 2) . . . . . . . . . . . . . . . . .
Provision for deferred income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on conversion rate adjustment of convertible preferred stock (Note 2) . . .
Decrease (increase) in trading account assets, excluding foreign exchange
contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in trading account liabilities, excluding foreign exchange
contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in unearned income, unamortized premiums and deferred loan fees . . .
Decrease (increase) in accrued interest receivable and other receivables . . . . . .
Increase (decrease) in accrued interest payable and other payables . . . . . . . . . .
Net increase in accrued income taxes and decrease in income tax
receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in allowance for repayment of excess interest (Note 24) . . .
Net increase in collateral for derivative transactions . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities:
Proceeds from sales of investment securities available for sale (including
proceeds from securities under fair value option) (Note 3) . . . . . . . . . . . . . . .
Proceeds from maturities of investment securities available for sale (including
proceeds from securities under fair value option) (Note 3) . . . . . . . . . . . . . . .
Purchases of investment securities available for sale (including purchases of
securities under fair value option) (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturities of investment securities being held to maturity . . . . .
Purchases of investment securities being held to maturity . . . . . . . . . . . . . . . . .
Proceeds from sales of other investment securities . . . . . . . . . . . . . . . . . . . . . . .
Purchases of other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in interest-earning deposits in other banks . . . . . . . . . . .
Net decrease in call loans, funds sold, and receivables under resale agreements
and securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures for premises and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales and dispositions of investments in equity method
investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of consolidated VIEs and subsidiaries—net . . . . . . . . . . . .
Proceeds from a repayment of deposits with Government-led Loan
Restructuring Program (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-13

¥

883,9192011¥

388,1872012¥

420,751345,268461
12,400647,793319,641—
26,566
292,035

307,006—
30,986
223,80972,592(223,030)
12,33629,459(121,803)
67,13048,823(19,384)
81,384(50,295)(236,055)
83,893
322,453—

110,003
76,391
113,017
310,351—

35,297
280,997499,427
193,114(139,320)

801,245

1,148,259(3,188,559)(184,013)
18,214
3,322(6,866)

1,456,811
16,177
26,815(18,190)2,326,503
10,754(110,209)
36,425

5,762
7,378(132,610)(74,182)

6,875
52,722(37,209)(25,399)

116,180(37,452)(618,295)
94,6422,309,985

4,237,838

592,879

74,475,416

78,141,353

172,325,724

46,056,462

29,841,882

12,863,545(135,509,931)
296,420(433,118)
104,040(379,154)
5,919,699(1,273,410)(116,023,266)
415,008(644,793)
28,156(39,196)
2,751,433(2,916,248)(192,356,659)
835,356(263,300)
37,397(46,861)(5,609,261)
1,344,430

233,782
17,878(114,230)(171,405)

350,828
14,732(98,323)(151,775)

471,372
20,618(131,187)(155,308)

54,841
1,290

31,55645,957

125,690
1,297—(93,012)—(40,187)

161,435
11,462(10,814,432)(8,292,883)(10,364,250)

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2010, 2011 AND 2012
(in millions)

2010

2011

2012

9,408,480

2,211,211

3,242,703(1,048,232)(237,215)(1,720,216)
3,478,615(2,467,525)
1,036,053
1,077—(4,621)(149,486)(5,908)4,256

747,174(68,911)2,533,987
2,573,277(3,109,981)—
327(250,000)(86)(190,299)(6,314)
15,525

4,745,245(6,210)2,409,172
1,875,591(2,263,232)
—
130
—
(18)
(187,561)(16,445)(11,523)

Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,295,278

4,455,910

9,787,852

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . .

440(32,584)(16,876)

Cash flows from financing activities:
Net increase in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in call money, funds purchased, and payables under
repurchase agreements and securities lending transactions . . . . . . . . . . . . . . . . . . .
Net decrease in due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of common stock, net of stock issue expenses . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisition of preferred stock (Note 15) . . . . . . . . . . . . . . . . . . . . . . . .
Payments to acquire treasury stock (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . .

(208,729)

368,281(395)

Cash and cash equivalents at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . .

3,071,252

2,862,523

3,230,804

Cash and cash equivalents at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,862,523¥ 3,230,804¥ 3,230,409

¥

¥

¥

Supplemental disclosure of cash flow information:
Cash paid during the fiscal year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash investing and financing activities:
Obtaining assets by entering into capital lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to investment securities being held to maturity from investment securities
available for sale (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of shares in Senshu Bank for shares in Senshu Ikeda Holdings, Inc. (Note 18):
Acquisition of shares of Senshu Ikeda Holdings, Inc. recorded at fair value . . . . . . . . .
Deconsolidation of Senshu Bank at book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of ownership interest in Mitsubishi UFJ Morgan Stanley Securities, Co., Ltd.
for equity investment in Morgan Stanley MUFG Securities, Co., Ltd. in connection
with the securities joint venture (Note 2):
Noncontrolling interest in Mitsubishi UFJ Morgan Stanley Securities, Co., Ltd. . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adoption of new guidance on consolidation of certain variable interest entities (Note 1):
Increase in total assets, excluding cash and cash equivalents . . . . . . . . . . . . . . . . . . . . .
Increase in total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Union Bank’s acquisitions (Note 2):
Fair value of assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conversion of Morgan Stanley’s convertible preferred stock (Note 2) . . . . . . . . . . . . . . . .

831,847
84,890683,034
119,897

5,763

5,576

16,198111,895——

79,07350,069

—
—

—
—

—
—

127,270
20,550————237,008
214,887

—
—

—
—
—

322,312328,332———
808,266

See the accompanying notes to Consolidated Financial Statements.
F-14

725,400
116,399

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.

BASIS OF FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES

Description of Business
Mitsubishi UFJ Financial Group, Inc. (“MUFG”) is a holding company for The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (“BTMU”), Mitsubishi UFJ Trust and Banking Corporation (“MUTB”), Mitsubishi UFJ Securities
Holdings Co., Ltd. (“MUSHD”), Mitsubishi UFJ NICOS Co., Ltd. (“Mitsubishi UFJ NICOS”), and othersubsidiaries. MUSHD is an intermediate holding company for Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (“MUMSS”). See Note 2 for more information on the securities joint venture with Morgan Stanley.
Through its subsidiaries and affiliated companies, MUFG engages in a broad range of financial operations,
including commercial banking, investment banking, trust banking and asset management services, securities
businesses, and credit card businesses, and it provides related services to individual and corporate customers. See
Note 27 for more information by business segment.
Basis of Financial Statements
The accompanying consolidated financial statements are stated in Japanese yen, the currency of the country
in which MUFG is incorporated and principally operates. The accompanying consolidated financial statements
have been prepared on the basis of accounting principles generally accepted in the United States of America(“US GAAP”). In certain respects, the accompanying consolidated financial statements reflect adjustments which
are not included in the consolidated financial statements issued by MUFG and certain of its subsidiaries inaccordance with applicable statutory requirements and accounting practices in their respective countries ofincorporation. The major adjustments include those relating to (1) investment securities, (2) derivative financial
instruments, (3) allowance for credit losses, (4) income taxes, (5) consolidation, (6) premises and equipment,(7) transfer of financial assets, (8) accrued severance indemnities and pension liabilities, (9) goodwill and otherintangible assets and (10) lease transactions.
Fiscal years of certain subsidiaries, which end on or after December 31, and MUFG’s fiscal year, which
ends on March 31, have been treated as coterminous. For the fiscal years ended March 31, 2010, 2011 and 2012,
the effect of recording intervening events for the three-month periods ended March 31 on MUFG’s proportionate
equity in net income of subsidiaries with fiscal years ended on or after December 31, would have resulted in an
increase of ¥3.90 billion to net income, an increase of ¥13.87 billion to net income and a decrease of ¥1.56
billion to net income, respectively. No intervening events occurred during each of the three-month periods ended
March 31, 2010, 2011 and 2012 which, if recorded, would have had material effects on consolidated total assets,loans, total liabilities, deposits or total equity as of March 31, 2010, 2011 and 2012.
Use of Estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures ofcontingent assets and liabilities at the date of the consolidated financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to management judgment primarily relate to the allowance for credit
losses on loans and off-balance sheet credit instruments, valuation allowances of deferred tax assets, tax reserves,
valuation of financial instruments, goodwill, intangible assets, investment securities, allowances for repayment ofexcess interest and accrued severance indemnities and pension liabilities.

F-15

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Summary of Significant Accounting Policies
Significant accounting policies applied in the accompanying consolidated financial statements are
summarized below:
Consolidation—The consolidated financial statements include the accounts of MUFG, its subsidiaries andcertain variable interest entities (“VIE”s) (together, the “MUFG Group”). In situations in which the MUFG
Group has a controlling financial interest in other entities, including certain VIEs, such entities are consolidated
and noncontrolling interests are recorded in Total equity. Intercompany items have been eliminated. Investments
in affiliated companies (companies over which the MUFG Group has the ability to exercise significant influence)
are accounted for by the equity method of accounting and are reported in Other assets. The MUFG Group’s
equity interest in the earnings of these equity investees, other-than-temporary impairment, and gains or losses
realized on disposition of such investments are reported in Equity in losses of equity method investees-net. The
MUFG Group recognizes an impairment loss on investments in equity method investees that is other than
temporary. The MUFG Group determines whether loss on investments is other than temporary, throughconsideration of various factors, such as the length of time and the extent to which the fair value has been lessthan cost, the financial condition and near-term prospects of the investees, and the intent and ability to retain its
investment in the investees for a period of time sufficient to allow for any anticipated recovery in the fair value.
The MUFG Group also evaluates additional factors, such as the condition and trend of the economic cycle, andtrends in the general market.
Before April 1, 2010, the MUFG Group consolidated VIEs when MUFG had a variable interest that would
absorb the majority of the VIE’s expected losses or receive the majority of its expected residual returns or both.
After the adoption of new guidance on April 1, 2010, the MUFG Group consolidates VIEs if it has the power todirect the activities of a VIE which most significantly impact the VIE’s economic performance and has theobligation to absorb losses or the right to receive benefits that could potentially be significant to the entity, except
certain VIEs that are deemed as investment companies. For VIEs that are considered investment companies, the
MUFG Group determines whether it is the primary beneficiary by evaluation of whether it absorbs a majority of
expected losses, receives a majority of expected residual returns or both. See Accounting Changes—Amendmentof Accounting for Consolidation of Variable Interest Entities and Note 23 for the details of VIEs.
Assets that the MUFG Group holds in an agency, fiduciary or trust capacity are not assets of the MUFG
Group and, accordingly, are not included in the accompanying consolidated balance sheets.
Cash Flows—For the purposes of reporting cash flows, cash and cash equivalents are defined as thoseamounts included in the consolidated balance sheets under the caption Cash and due from banks with original
maturities of 90 days or less. Cash flows from qualified hedging activities are classified in the same category as
the items being hedged.
Translation of Foreign Currency Financial Statements and Foreign Currency Transactions—Financial
statements of overseas entities are translated into Japanese yen using the respective fiscal year-end exchange
rates for assets and liabilities. Income and expense items are translated at average rates of exchange for therespective fiscal years.
Foreign currency translation gains and losses related to the financial statements of overseas entities of the
MUFG Group, net of related income tax effects, are credited or charged directly to Foreign currency translation
adjustments, a component of accumulated other changes in equity from nonowner sources. Tax effects of gains
and losses on foreign currency translation of the financial statements of overseas entities are not recognized
unless it is apparent that the temporary differences will reverse in the foreseeable future.
F-16

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Foreign currency-denominated assets and liabilities are translated into the functional currencies of theindividual entities included in consolidation at the respective fiscal year-end foreign exchange rates. Foreign
currency-denominated income and expenses are translated using average rates of exchange for the respective
fiscal years. Gains and losses from such translation are included in Foreign exchange gains—net, as appropriate.
Repurchase Agreements, Securities Lending and Other Secured Financing Transactions—Securities soldwith agreements to repurchase (“repurchase agreements”), securities purchased with agreements to resell (“resaleagreements”) and securities lending and borrowing transactions are accounted for as secured financing or lendingtransactions, if the transferor has not surrendered control over the securities. If they meet the relevant conditions
for the surrender of control, they are accounted for as sales of securities with related off-balance sheet forward
repurchase commitments or purchases of securities with related off-balance sheet forward resale commitments.
For the fiscal years ended March 31, 2010, 2011 and 2012, there were no such transactions accounted for as
sales.
Collateral—For secured lending transactions, including resale agreements, securities borrowing
transactions, commercial lending and derivative transactions, the MUFG Group, as a secured party, generally has
the right to require the counterparties to provide collateral, including letters of credit, cash, securities and otherfinancial assets. For most securities lending transactions, the MUFG Group maintains strict levels of
collateralization governed by a daily mark-to-market analysis. Financial assets pledged as collateral are generally
negotiable financial instruments and are permitted to be sold or repledged by secured parties. If the
MUFG Group sells these financial assets received as collateral, it recognizes the proceeds from the sale and its
obligation to return the collateral. For secured borrowing transactions, principally repurchase agreements andsecurities lending transactions and derivative transactions, where the secured party has the right to sell or
repledge financial assets pledged as collateral, the MUFG Group separately discloses those financial assets
pledged as collateral in the consolidated balance sheets.
Trading Account Securities—Securities and money market instruments held in anticipation of short-term
market movements and for resale to customers are included in Trading account assets, and short trading positionsof these instruments are included in Trading account liabilities. Trading positions are carried at fair value in the
consolidated balance sheets and recorded on a trade date basis. Changes in the fair value of trading positions arerecognized currently in Trading account profits—net, as appropriate. The MUFG Group has elected the fair value
option for certain foreign securities. See Note 29 for a further discussion of fair value option.
Investment Securities—Debt securities for which the MUFG Group has both the ability and positive intent tohold to maturity are classified as Securities being held to maturity and are carried at amortized cost. Debt
securities that the MUFG Group may not hold to maturity and marketable equity securities, other than thoseclassified as Trading account securities, are classified as Securities available for sale, and are carried at their fairvalues, with unrealized gains and losses reported on a net-of-tax basis within Accumulated other changes inequity from nonowner sources, which is a component of equity. Other investment securities include
nonmarketable equity securities carried at their acquisition cost, and also investment securities held bysubsidiaries that are investment companies or brokers and dealers. Such securities held by those subsidiaries are
subject to the specialized industry accounting principles for investment companies and brokers and dealers
applicable for those subsidiaries. Securities of those subsidiaries are carried at their fair values.
Individual debt and equity securities are written down to fair value with the resulting losses charged to theconsolidated statements of income when, in the opinion of management, a decline in estimated fair value below
the cost of such securities is other than temporary. Such impairment loss is included in Investment securities
F-17

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
gains—net in the consolidated statements of income. In determining other-than-temporary declines in fair value
to be recognized as an impairment loss on investment securities, the MUFG Group generally considers factors
such as the ability and positive intent to hold the investments for a period of time sufficient to allow for any
anticipated recovery in fair value, the financial condition of the issuer, the extent of decline in fair value, and thelength of time that the decline in fair value below cost has existed. Interest and dividends on investment
securities are reported in Interest income. Dividends are recognized when the shareholder right to receive thedividend is established. Gains and losses on disposition of investment securities are computed using the average
cost method and are recognized on the trade date.
Derivative Financial Instruments—The MUFG Group engages in derivative activities involving swaps,
forwards, futures, options, and other types of derivative contracts. Derivatives are used in trading activities togenerate trading revenues and fee income for its own account and to respond to the customers’ financial needs.
Derivatives are also used to manage counterparty credit risk and its market risk exposures to fluctuations ininterest and foreign exchange rates, equity and commodity prices.
Derivatives entered into for trading purposes are carried at fair value and are reported as Trading accountassets or Trading account liabilities, as appropriate. The fair values of derivative contracts executed with thesame counterparty under legally enforceable master netting agreements are presented on a gross basis. Changes
in the fair value of such contracts are recognized currently in Foreign exchange gains—net with respect toforeign exchange contracts and in Trading account profits—net with respect to interest rate contracts and othertypes of contracts.
Embedded features that are not clearly and closely related to the host contracts and meet the definition ofderivatives are separated from the host contracts and measured at fair value unless the contracts embedding thederivatives are measured at fair value in their entirety.
Derivatives are also used to manage exposures to fluctuations in interest and foreign exchange rates arisingfrom mismatches of asset and liability positions. Certain of those derivatives are designated as hedging
instruments and qualify for hedge accounting. The MUFG Group designates a derivative as a hedging instrument
at the inception of each such hedge relationship, and it documents, for such individual hedging relationships, therisk management objective and strategy, including the item being hedged, the specific risk being hedged and themethod used to assess the hedge effectiveness. In order for a hedging relationship to qualify for hedge
accounting, the changes in the fair value of the derivative instruments must be highly effective in achieving
offsetting changes in fair values or variable cash flows of the hedged items attributable to the risk being hedged.
Any ineffectiveness, which arises during the hedging relationship, is recognized in Non-interest income or
expense in the period in which it arises. All qualifying hedging derivatives are valued at fair value and includedin Other assets or Other liabilities, as appropriate. For cash flow hedges, the unrealized changes in fair value tothe extent effective are recognized in Accumulated other changes in equity from nonowner sources. Amounts
realized on cash flow hedges related to variable rate loans are recognized in Net interest income in the period
when the cash flow from the hedged item is realized. The fair value of cash flow hedges related to forecasted
transactions, if any, is recognized in Non-interest income or expense in the period when the forecasted
transaction occurs. Any difference that arises from gains or losses on hedging derivatives offsetting
corresponding gains or losses on the hedged items, and gains and losses on derivatives attributable to the risks
excluded from the assessment of hedge effectiveness are recognized in Non-interest income or expense.
Loans—Loans originated by the MUFG Group (“originated loans”) are carried at the principal amountoutstanding, adjusted for unearned income and deferred net nonrefundable loan fees and costs. Originated loans

F-18

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
held and intended for dispositions or sales in secondary markets are transferred to the held-for-sale classificationand carried at the lower of cost or estimated fair value generally on an individual loan basis. Loan origination
fees, net of certain direct origination costs, are deferred and recognized over the contractual life of the loan as an
adjustment of yield using a method that approximates the interest method. Interest income on loans that are not
impaired is accrued and credited to interest income as it is earned. Unearned income and discounts or premiums
on purchased loans are deferred and recognized over the remaining contractual terms of the loans using a methodthat approximates the interest method when such purchased loans are outside the scope of the guidance on loans
and debt securities acquired with deteriorated credit quality as described below.
The MUFG Group divides its loan portfolio into the following segments—Commercial, Residential, Cardand UnionBanCal Corporation (“UNBC”) based on the segments used by the MUFG Group to determine theallowance for credit losses. The MUFG Group further divides the Commercial segment into classes based on
initial measurement attributes, risk characteristics, and its method of monitoring and assessing credit risk.
Originated loans are considered impaired when, based on current information and events, it is probable that
the MUFG Group will be unable to collect all the scheduled payments of principal or interest when due
according to the contractual terms of the loan agreement. Past due status is determined based on the contractual
terms of the loan and the actual number of days since the last payment date, and is considered in determining
impairment. Originated loans that experience insignificant payment delays and payment shortfalls generally are
not classified as impaired. Management determines the significance of payment delays and payment shortfalls on
a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower,
including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amountof the shortfall in relation to the principal and interest owed. Impairment is generally evaluated on a loan-by-loanbasis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, theloan’s observable market price, or the fair value of the collateral if the loan is collateral dependent.
Originated loans are generally placed on nonaccrual status when substantial doubt exists as to the full andtimely collection of either principal or interest, specifically when principal or interest is contractually past due
one month or more with respect to loans within all classes of the Commercial segment, three months or morewith respect to loans within the Card and UNBC segments, and six months or more with respect to loans within
the Residential segment. A nonaccrual loan may be restored to an accrual status when interest and principal
payments become current and management expects that the borrower will make future contractual payments asscheduled. When a loan is placed on nonaccrual status, interest accrued but not received is generally reversed
against interest income. Cash receipts on nonaccrual loans, for which the ultimate collectibility of principal isuncertain, are applied as principal reductions; otherwise, such collections are credited to income. The MUFG
Group does not capitalize any accrued interest in the principal balances of impaired loans at each balance sheet
date.
Once a loan is classified as a nonaccrual loan, the MUFG Group will generally not modify the terms of theloan as a modification would have little likelihood of resulting in the recovery of the loan in view of the severityof the financial difficulty of the borrower. If a nonaccrual loan has been restructured and the borrower is notdelinquent under the restructured terms, and demonstrates that its financial condition has been improved, the
MUFG Group may reclassify the loan to accrual status. This determination is generally performed once a year
through a detailed internal credit rating review process. Once a restructured nonaccrual loan is deemed to be atroubled debt restructuring (“TDR”), the MUFG Group will continue to designate the loan as a TDR even if theloan is reclassified to accrual status.

F-19

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In accordance with the guidance on loans and debt securities acquired with deteriorated credit quality,
impaired loans acquired for which it is probable that the MUFG Group will be unable to collect all contractual
receivables are initially recorded at the present value of amounts expected to be received. For these impairedloans, the related valuation allowances are not carried over or created initially. Accretable yield is limited to theexcess of the investor’s estimate of undiscounted cash flows over the investor’s initial investment in the loan.
Subsequent increases in cash flows expected to be collected are recognized prospectively through adjustment of
the loan’s yield over its remaining life after reduction of any remaining allowance for credit losses for the loanestablished after its acquisition, if any, while any decrease in such cash flows below those initially expected atacquisition plus additional cash flows expected to be collected arising from changes in estimate after acquisition
are recognized as impairments.
Loan Securitization—The MUFG Group securitizes and services commercial, industrial, and residential
loans in the normal course of business. The MUFG Group accounts for a transfer of loans in a securitizationtransaction as a sale if it meets relevant conditions for the surrender of control. Otherwise, the transfer isaccounted for as a collateralized borrowing transaction. Interests in loans sold through a securitization accounted
for as a sale may be retained in the form of subordinated tranches or beneficial interests. These retained interests
are primarily recorded in Securities available for sale. The previous carrying amount of the loans involved in thetransfer is allocated between the loans sold and the retained interests based on their relative fair values at the dateof the securitization. Since quoted market prices are generally not available, the MUFG Group usually estimatesfair value of these retained interests based on the present value of future expected cash flows by using modelingtechniques that involve management’s best estimates of key assumptions, which may include default ratio,
recovery rates, and discount rates. See Note 29 for details of fair value measurements.
Allowance for Credit Losses—The MUFG Group maintains an allowance for credit losses to absorb
probable losses inherent in the loan portfolio. Actual credit losses (amounts deemed uncollectible, in whole or inpart), net of recoveries, are generally determined based on detailed loan reviews and a credit assessment bymanagement at each balance sheet date, and are deducted from the allowance for credit losses as net charge-offs.
The MUFG Group generally applies its charge-off policy to all loans in its portfolio regardless of the type ofborrower. Management believes that the provision for credit losses is adequate and the allowance is at theappropriate amount to absorb probable losses inherent in the loan portfolio. During the fiscal year, the MUFG
Group did not make any significant changes to the methodologies or policies used to determine its allowance for
credit losses.
Key elements relating to the policies and discipline used in determining the allowance for credit losses are
credit classification and the related borrower categorization process. The categorization is based on conditions
that may affect the ability of borrowers to service their debt, taking into consideration current financial
information, historical payment experience, credit documentation, public information, analyses of relevant
industry segments or existing economic conditions. In determining the appropriate level of the allowance, the
MUFG Group evaluates the probable loss by collateral value, historical loss experience, probability of insolvency
and category of loan based on its type and characteristics. The MUFG Group updates these conditions andprobable loss on a regular basis and upon the occurrence of unexpected change in the economic environment.
The methodologies used to estimate the allowance and the charge-off policy for each portfolio segment are
as follows.
Commercial segment
In the Commercial segment, the methodology for assessing the appropriateness of the allowance consists ofseveral key elements, which include the allocated allowance for individual loans specifically identified forevaluation, the formula allowance, the allocated allowance for country risk exposure, and the allocated allowance
for large groups of smaller-balance homogeneous loans.
F-20

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The allocated allowance for individual loans specifically identified for evaluation represents the impairment
allowance determined in accordance with the guidance on accounting by creditors for impairment of a loan. The
factors considered by management in determining impairment are the internal credit rating assigned to eachborrower which represents the borrower’s creditworthiness determined based on payment status, number ofdelinquencies, and the probability of collecting principal and interest payments when due. The impairment of aloan is measured based on the present value of expected future cash flows discounted at the loan’s effective
interest rate, or on the loan’s observable market price, or based on the fair value of the collateral if the loan iscollateral dependent.
The formula allowance is applied to loans that are categorized as Normal or Close Watch, excluding loans
identified as a TDR, based on the internal credit rating and historical loss factors which are based on the loss
experience. See Note 4 for the information on loans to borrowers categorized based on the internal borrower rating.
Estimated losses inherent in the loans at the balance sheet date are calculated by multiplying the default ratio by thenonrecoverable ratio (determined as a complement of the recovery ratio). The default ratio is determined by eachinternal credit rating, taking into account the historical number of defaults of borrowers within each internal credit
rating divided by the total number of borrowers. The recovery ratio is mainly determined by the historical experienceof collections against loans in default. The default ratio, the recovery ratio and other indicators are continuallyreviewed to determine the appropriate level of the allowance. Because the evaluation of inherent loss for these loans
involves a high degree of uncertainty, subjectivity and judgment, the estimation of the formula allowance is backtested by comparing the allowance with the actual results subsequent to the balance sheet date. The results of suchback-testing are evaluated by management to determine whether the manner and level of formula allowance needs tobe changed in subsequent years.
The allocated allowance for country risk exposure is a country-specific allowance for Normal and Close
Watch loans, excluding loans identified as a TDR. The allowance is established to supplement the formula
allowance for these loans, based on an estimate of probable losses relating to the exposure to countries that are
identified by management to have a high degree of transfer risk. The measurement is based on a function ofdefault probability and the recovery ratio with reference to external credit ratings. For the allowance forindividual cross-border loans specifically identified for evaluation, the MUFG Group incorporates transfer risk in
its determination of the related allowance.
The allocated allowance for large groups of smaller-balance homogeneous loans is established through aprocess that begins with estimates of probable losses inherent in the portfolio. These estimates are based uponvarious analyses, including historical delinquency and historical loss experience.
In relation to loans categorized as Legally/Virtually Bankrupt, the amount of loans less estimated value ofthe collateral and guaranteed amount is generally considered uncollectible, and is charged off.
Residential segment
In the Residential segment, the loans are comprised of smaller-balance homogeneous loans that are pooledby their internal credit ratings based on the number of delinquencies. The loans in this segment are generally
secured by collateral. Collateral values are based on internal valuation sources, and the allowance is determined
for unsecured amounts. The allowance for the nondelinquent group of loans is determined based on historicalloss experience. For delinquent groups of loans, the MUFG Group determines the allowance based on theprobability of insolvency by the number of actual delinquencies and historical loss experience.
In relation to loans that are in past due status over a certain period of time and deemed uncollectible, theamount of loans less estimated value of the collateral and guaranteed amount is generally considered
uncollectible, and is charged off.
F-21

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Card segment
In the Card segment, the loans are smaller-balance homogeneous loans that are pooled by their internal
credit rating based on the number of delinquencies. The allowance for loans in this segment is basicallydetermined based on the probability of insolvency by the number of actual delinquencies and historical loss
experience. For calculating the allocated allowance for loans specifically identified for evaluation, impaired loans
are aggregated for the purpose of measuring impairment using historical loss factors.
In relation to loans that are in past due status over a certain period of time and deemed uncollectible, theamount of loans is generally fully charged off.
UNBC segment
In the UNBC segment, the methodology for assessing the appropriateness of the allowance consists ofseveral key elements, which include the allocated allowance for individual loans specifically identified forevaluation, the formula allowance, the allocated allowance for large groups of smaller-balance homogeneousloans, and the unallocated allowance.
The allocated allowance for individual loans specifically identified for evaluation is established for loans
when management determines that the MUFG Group will be unable to collect all amounts due according to thecontractual terms of the loan agreement, including interest payments. Impaired loans are carried at the lower ofthe recorded investment in the loan, the present value of expected future cash flows discounted at the loan’s
effective rate, the loan’s observable market price, or the fair value of the collateral, if the loan is collateraldependent.
The formula allowance is calculated by applying historical loss factors to outstanding loans. Historical loss
factors are based on the historical loss experience and may be adjusted for significant factors that, inmanagement’s judgment, affect the collectibility of the portfolio as of the balance sheet date.
The allocated allowance for large groups of smaller-balance homogeneous loans is established for consumer
loans as well as for smaller balance commercial loans. These loans are managed by a pool basis, and loss factors
are based on expected net charge-off ranges.
The unallocated allowance represents an estimate of additional losses inherent in the loan portfolio and iscomposed of attribution factors, which are based upon management’s evaluation of various conditions that are
not directly measured in the determination of the allocated allowance. The conditions used for consideration of
the unallocated allowance at each balance sheet date include factors such as, existing general economic andbusiness conditions affecting the key lending areas and products of the MUFG Group, credit quality trends andrisk identification, collateral values, loan volumes, underwriting standards and concentrations, specific industry
conditions, recent loss experience and the duration of the current business cycle. The MUFG Group reviews
these conditions and has an internal discussion with senior credit officers on a quarterly basis.
Commercial loans are generally considered uncollectible based on an evaluation of borrower financial
condition as well as the value of any collateral and, when considered to be uncollectible, loans are charged off inwhole or in part. Consumer loans are generally considered uncollectible based on past due status and the value ofany collateral and, when considered to be uncollectible, loans are charged off in whole or in part.
Allowance for Off-Balance Sheet Credit Instruments—The MUFG Group maintains an allowance for credit
losses on off-balance sheet credit instruments, including commitments to extend credit, guarantees, standby
F-22

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
letters of credit and other financial instruments. The allowance is recorded as a liability in Other liabilities. The
MUFG Group adopts the same methodology used in determining the allowance for credit losses on loans.
Potential credit losses related to derivatives are considered in the fair value of the derivatives.
Net changes in the allowance for off-balance sheet credit instruments are accounted for as Other
non-interest expenses.
Premises and Equipment—Premises and equipment are stated at cost less accumulated depreciation andamortization. Depreciation is charged to operations over the estimated useful lives of the related assets.
Leasehold improvements are depreciated over the terms of the respective leases or the estimated useful lives of
the improvements, whichever is shorter. MUFG, BTMU and MUTB apply the declining-balance method in
depreciating their premises and equipment, while other subsidiaries mainly apply the straight-line method, at
rates principally based on the following estimated useful lives:
Years

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 to 50
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 to 20
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 to 39
Maintenance, repairs and minor improvements are charged to operations as incurred. Major improvements
are capitalized. Net gains or losses on dispositions of premises and equipment are included in Other non-interest
income or expense, as appropriate.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate thatthe carrying amount of an asset may not be recoverable. Recoverability of an asset to be held and used ismeasured by a comparison of the carrying amount to future undiscounted net cash flows expected to be generated
by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amountby which the carrying amount of the asset exceeds the fair value. For purposes of recognition and measurementof an impairment loss, a long-lived asset or assets are grouped with other assets and liabilities at the lowest levelwith independent and identifiable cash flows. Assets to be disposed of by sale are reported at the lower of thecarrying amount or fair value less estimated cost to sell.
Asset retirement obligations related to restoration of certain leased properties upon lease termination arerecorded in Other liabilities with a corresponding increase in leasehold improvements. The amounts represent thepresent value of expected future cash flows associated with returning such leased properties to their original
condition. The difference between the gross and present value of expected future cash flows is accreted over thelife of the related leases as a non-interest expense.
Goodwill—The MUFG Group recognizes goodwill, as of the acquisition date, measured as the excess of fairvalue, including that of noncontrolling interests, over net assets of the acquiree. Goodwill related to investmentsin equity method investees is included in Other assets as a part of the carrying amount of investments in equity
method investees.
Goodwill arising from a business combination is not amortized but is tested at least annually for
impairment. Goodwill is recorded at a designated reporting unit level for the purpose of assessing impairment. A
reporting unit is an operating segment, or an identified business unit one level below an operating segment. An
impairment loss is recognized to the extent that the carrying amount of goodwill exceeds its implied fair value.

F-23

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Intangible assets—Intangible assets consist of software, core deposit intangibles, customer relationships,
trade names and other intangible assets. These are amortized over their estimated useful lives unless they haveindefinite useful lives. Amortization of intangible assets is computed in a manner that best reflects the economic
benefits of the intangible assets as follows:
Useful lives(years)Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Core deposit intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 to 105 to 19
9 to 27
8 to 40

Amortization method

Straight-line
Declining-balance
Declining-balance
Straight-line

Intangible assets having indefinite useful lives are not amortized but are subject to annual impairment tests.
An impairment exists if the carrying value of an indefinite-lived intangible asset exceeds its fair value. For otherintangible assets subject to amortization, an impairment is recognized if the carrying amount is not recoverable
and the carrying amount exceeds the fair value of the intangible asset.
The MUFG Group capitalizes certain costs associated with the acquisition or development of internal-use
software. Costs subject to capitalization are salaries and employee benefits for employees who are directly
associated with and who devote time to the internal-use computer software project, to the extent of time spent
directly on the project. Once the software is ready for its intended use, the MUFG Group begins to amortize
capitalized costs on a straight-line basis.
Accrued Severance and Pension Liabilities—The MUFG Group has defined benefit pension plans and otherpostretirement benefit plans, including severance indemnities plans. The liabilities related to these plans arecomputed and recognized based on actuarial computations. Net actuarial gains and losses that arise fromdifferences between actual experience and assumptions are generally amortized over the average remaining
service period of participating employees if it exceeds the corridor, which is defined as the greater of 10% of plan
assets or the projected benefit obligation. Under the guidance related to employers’ accounting for defined
benefit pension and other postretirement plans, the MUFG Group recognizes a net liability or asset to report thefunded status of its defined benefit pension and other postretirement plans in the consolidated balance sheets andrecognizes changes in the funded status of defined benefit pension and other postretirement plans in the year inwhich the changes occur in Accumulated other changes in equity from nonowner sources. The costs of the plans,
based on actuarial computations of current and future employee benefits, were charged to Salaries and employee
benefits. The MUFG Group measures plan assets and benefit obligations as of the date of the consolidatedbalance sheets.
Long-Term Debt—Premiums, discounts and issuance costs of long-term debt are amortized based on themethod that approximates the interest method over the terms of the long-term debt.
Obligations under Guarantees—The MUFG Group provides customers with a variety of guarantees andsimilar arrangements, including standby letters of credit, financial and performance guarantees, credit
protections, and liquidity facilities. The MUFG Group recognizes guarantee fee income over the guarantee period
based on the contractual terms of the guarantee contracts. It is the MUFG Group’s business practice to receive aguarantee fee at the inception of the guarantee, which approximates market value of the guarantee and is initially
recorded as a liability, which is then recognized as guarantee fee income ratably over the guarantee period.
Allowance for Repayment of Excess Interest—The MUFG Group maintains an allowance for repayment ofexcess interest based on an analysis of past experience of reimbursement of excess interest, borrowers’ profile,
F-24

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
recent trend of borrowers’ claims for reimbursement, and appropriate management’s future forecasts. The
allowance is recorded as a liability in Other liabilities. In relation to the estimate of this allowance, see Note 1“Change in Accounting Estimates” section for the details.
Fees and Commissions—Revenue recognition of major components of fees and commissions is as follows:‰

Fees on funds transfer and collection services, service charges on deposit accounts, fees andcommissions on securities business, fees on real estate business, insurance commissions, fees andcommissions on stock transfer agency services, fees on investment funds business, and fees andcommissions from other services are generally recognized as revenue when the related services are
performed or recognized over the period that the service is provided.

‰

Fees from trade-related financing services are recognized over the period of the financing.

‰

Trust fees are recognized on an accrual basis, generally based on the volume of trust assets undermanagement and/or the operating performance for the accounting period of each trust account. With
respect to trust accounts with guarantee of trust principal, trust fees are determined based on the profits
earned by individual trust account during the trust accounting period, less deductions, including
provision for reserve, impairment for individual investments and dividends paid to beneficiary
certificate holders. The trust fees for these trust accounts are accrued based on the amounts expected tobe earned during the accounting period of each trust account.

‰

Annual fees and royalty and other service charges related to credit card business are recorded on astraight-line basis as services are provided.

‰Interchange income from the credit card business is recognized as billed.

‰

Fees on guarantees are generally recognized over the contractual periods of the respective guarantees.
Amounts initially recorded as a liability corresponding to the obligations at fair value are generally
recognized as revenue over the terms of the guarantees as the MUFG Group is deemed to be released
from the risk under guarantees.

Income Taxes—The provision for income taxes is determined using the asset and liability method of
accounting for income taxes. Under this method, deferred income taxes reflect the net tax effects of(1) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes, and (2) operating loss and tax credit carryforwards. A valuation
allowance is recognized for any portion of the deferred tax assets where it is considered more likely than not that
it will not be realized. The provision for deferred taxes is based on the change in the net deferred tax asset or
liability during the fiscal year.
Free Distributions of Common Shares—As permitted by the Company Law, Japanese companies, upon
approval by the Board of Directors, may make a free distribution of shares, in the form of a “stock split” asdefined, to shareholders. In accordance with generally accepted accounting practice in Japan, such distribution
does not give rise to any change in capital stock or capital surplus accounts. Common shares distributed arerecorded as shares issued on the distribution date. See Note 16 for further information.
Earnings per Common Share—Basic earnings per share (“EPS”) excludes dilutive effects of potential
common shares and is computed by dividing net income available to common stock shareholders by the weighted
average number of common shares outstanding for the period, while diluted EPS gives effect to all dilutive
potential common shares that were outstanding during the period. See Note 20 for the computation of basic anddiluted EPS.
F-25

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Treasury Stock—The MUFG Group presents its treasury stock, including shares of MUFG owned by its
subsidiaries and affiliated companies, as a reduction of equity on the consolidated balance sheets at cost andaccounts for treasury stock transactions under an average cost method. Gains (losses) on sales of treasury stock
are charged to capital surplus, and unappropriated retained earnings.
Comprehensive Income (Loss)—Comprehensive income (loss) includes net income (loss) before attribution
to noncontrolling interests and other changes in equity from nonowner sources. All changes in unrealized gains
and losses on investment securities, unrealized gains and losses on derivatives qualifying for cash flow hedges,
pension liability adjustments and foreign currency translation adjustments constitute changes in equity fromnonowner sources and are presented, with related income tax effects, in the consolidated statements of changes inequity from nonowner sources.
Stock-Based Compensation—MUFG and certain of its subsidiaries have stock-based compensation plans.
Stock-based compensation expenses are recognized based on the grant date fair value of share based
compensation over the period during which an employee is required to provide service in accordance with theterms of the plans. See Note 30 for further discussion of stock-based compensation plans.
Reclassifications
Certain reclassifications and format changes have been made to the consolidated financial statements for the fiscal
years ended March 31, 2010 and 2011 to conform to the presentation for the fiscal year ended March 31, 2012.
These reclassifications and format changes include 1) the presentation of “Employee benefit cost forseverance indemnities and pension plans,” “Amortization of premiums on investment securities” and “Increase inunearned income, unamortized premiums and deferred loan fees” as a separate line item which had previously
been presented as “Other—net” in cash flows from operating activities, and 2) the presentation of “Proceedsfrom sales and dispositions of investments in equity method investees” as a separate line item which had
previously been presented as “Other—net” in cash flows from investing activities in the consolidated statementsof cash flows for the fiscal years ended March 31, 2010 and 2011.
These reclassifications and format changes did not result in a change to previously reported financial
positions and results of operations.
Change in Accounting Estimates
Prior to the fiscal year ended March 31, 2011, Mitsubishi UFJ NICOS, a consumer finance subsidiary of
MUFG, had estimated the allowance for repayment of excess interest (see Note 24 for the details of thisallowance) based primarily on historical reimbursement rates of excess interest. For the fiscal year ended
March 31, 2011, Mitsubishi UFJ NICOS revised its estimate by updating management’s future forecast to reflect
new reimbursement claims information and other data following various legal and industry developments that
occurred during the fiscal year. For the fiscal year ended March 31, 2011, the effect from the changes had anegative impact on Income before income tax expense and Net income attributable to Mitsubishi UFJ Financial
Group of ¥61 billion and ¥49 billion, respectively, and a corresponding impact on both basic and diluted earnings
per common share of ¥3.45 per share.
The MUFG Group evaluates the remaining useful life of an intangible asset at each reporting period todetermine whether events and circumstances warrant a revision to the remaining useful life. When the useful lifeof intangible assets not subject to amortization is no longer determined to be indefinite, such as whenunanticipated competition enters a market, the intangible asset is amortized over the remaining period that it isexpected to contribute to positive cash flows. At September 30, 2011, the MUFG Group reevaluated the useful
F-26

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
lives of its intangible assets related to its customer relationships from fund contracts, which had been recorded as
intangible assets not subject to amortization. Due to the global financial downturn, including the recent financial
market disruption in Europe and the downgrade of the US treasury bonds’ credit rating, the downward trend ofcustomer assets under management, which was previously on an upward trend, is not expected to recover in thenear future and therefore is no longer expected to support indefinite useful lives of the intangible assets
associated with the customer relationships from fund contracts. As a result of the reevaluation, the MUFG Group
reclassified its intangible assets related to the customer relationships of ¥42,224 million from intangible assets
not subject to amortization to those subject to amortization. See Note 6 for the details of these intangible assets.
Accounting Changes
Recognition and Presentation of Other-Than-Temporary Impairments—In April 2009, the FASB staff
issued guidance, which amends the other-than-temporary impairment model for debt securities. This guidance
requires an entity to recognize an other-than-temporary impairment of a debt security if the entity has the intent
to sell the debt security or if it is more likely than not the entity will be required to sell the debt security before
recovery of its amortized cost basis. In addition, this guidance requires an entity to recognize the credit
component of an other-than-temporary impairment of a debt security in earnings or the noncredit component inaccumulated other changes in equity from nonowner sources when the entity does not intend to sell the debt
security and if it is more likely than not that the entity will not be required to sell the debt security before
recovery of its amortized cost basis. This guidance also requires additional disclosures, such as the calculationof credit losses, as well as factors considered in reaching a conclusion that an investment is not other than
temporarily impaired by major security types. This guidance is effective for interim and annual reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The MUFG
Group adopted this guidance on April 1, 2009. The cumulative effect of the change included a decrease in the
opening balance of Accumulated deficit at April 1, 2009 of ¥118,210 million, net of taxes with a corresponding
adjustment to accumulated other changes in equity from nonowner sources. See Note 3 for a further discussion
on this guidance.
Amendment of Accounting for Consolidation of Variable Interest Entities—In June 2009, the FASB issued
new guidance which amends the accounting for consolidation of VIEs. This guidance changes the previous
guidance by modifying the characteristics for assessing a primary beneficiary to include entities that have thepower to direct the activities of the VIE which significantly impact its economic performance and the obligation
to absorb losses or the right to receive benefits that could potentially be significant to the entity. The primary
beneficiary determination must be reassessed on an ongoing basis. In addition, this guidance amends theidentification of VIEs by eliminating the scope exception for qualified special purpose entities and adding an
additional reconsideration event for determining whether an entity is a VIE. This guidance was effective from
April 1, 2010 for the MUFG Group.
In February 2010, the FASB issued further guidance which defers the requirements of the consolidation
guidance for determining the primary beneficiary of VIEs for certain investment funds including mutual funds,
private equity funds, hedge funds, venture capital funds, mortgage real estate investment funds, and certain realestate investment funds.
The MUFG Group has elected to apply the above new guidance prospectively. Accordingly, financial
statements for prior periods have not been restated. The net increase in the MUFG Group’s consolidated assets,
liabilities and shareholders’ equity attributable to noncontrolling interests was ¥237,008 million,¥214,887 million and ¥19,551 million, respectively, as of April 1, 2010. The cumulative effect on retained
earnings was an increase of ¥1,408 million upon adoption. See Note 23 for further disclosures required by the
new guidance.
F-27

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Disclosure about Fair Value Measurements—In January 2010, the FASB issued new guidance which
requires a new disclosure and clarifies existing disclosure requirements on fair value measurements. The
guidance requires additional disclosure of significant transfers in and out of Level 1 and Level 2 fair value
measurements and activity in Level 3 fair value measurement. This guidance also clarifies existing disclosure
requirements regarding the level of disaggregation and valuation inputs and techniques. This guidance iseffective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosureof the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which is effective forinterim and annual reporting periods beginning after December 15, 2010 with early application permitted. The
MUFG Group adopted this guidance on April 1, 2010, except for the disclosure in regard to the Level 3 activity.
For the disclosure in regard to the Level 3 activity, the MUFG Group adopted this guidance on April 1, 2011.
This guidance affected the MUFG Group’s disclosures about fair value measurements, but did not affect its
financial position and results of operations. See Note 29 for details of disclosures required by this guidance.
Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses—In
July 2010, the FASB issued new guidance which requires additional disclosures and amends existing disclosure
requirements on allowances for credit losses and the credit quality of financial receivables. The guidance requires
additional disclosures on credit quality indicators of financing receivables, aging of past due financing
receivables, nature and extent of TDR and modifications, and significant purchases and sales of financing
receivables on a disaggregated basis. The existing guidance is amended to require disclosure of financing
receivables on a more disaggregated basis. This guidance is effective for interim and annual reporting periods
ending on or after December 15, 2010. Specific items regarding activity that occurs during a reporting period,
such as the allowance roll-forward disclosures, is effective for interim and annual reporting periods beginning on
or after December 15, 2010. The MUFG Group adopted this guidance on March 31, 2011, except for thedisclosures about items regarding activity that occurs during a reporting period. For the disclosures about items
regarding activity that occurs during a reporting period, the MUFG Group adopted this guidance on April 1,
2011. This guidance affected the MUFG Group’s disclosures about the credit quality of financing receivables andallowances for credit losses, but did not affect its financial position and results of operations. See Note 4 fordetails of disclosures required by this guidance.
In January 2011, the FASB decided to defer the effective date for disclosures about TDRs by creditors until
the FASB finalizes its project on determining what constitutes a TDR for a creditor. The MUFG Group adopted
this guidance immediately upon issuance, which had no impact on its financial position and results of operations.
In April 2011, the FASB issued further guidance which finalizes its project on determining what constitutes
a TDR for a creditor. Under this guidance, the deferred date for disclosures about TDRs by creditors is effective
for the first interim and annual periods beginning on or after June 15, 2011. See Recently Issued Accounting
Pronouncements—Amendment to Accounting for a Creditor’s Determination of Whether a Restructuring Is a
Troubled Debt Restructuring for details.
Amendments to Accounting Scope of Embedded Credit Derivatives—In March 2010, the FASB issued new
guidance which clarifies the scope exception related to embedded credit derivatives. This guidance addresses
how to determine which embedded credit derivative features, including those in collateralized debt obligations(“CDOs”) and synthetic CDOs, are considered to be embedded derivatives that are exempt from potential
bifurcation and separate accounting requirement. This guidance is effective for the first interim reporting period
beginning after June 15, 2010 with early application permitted at the beginning of the first interim reporting
period beginning after the issuance of this new guidance. In initially adopting this new guidance, an entity may
elect the fair value option for any investment in a beneficial interest in a securitized financial asset. The electionof the fair value option is irrevocable and should be determined on an instrument-by-instrument basis at the
F-28

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
beginning of the reporting period of initial adoption. The MUFG Group adopted this guidance on April 1, 2011,
and recorded a ¥135 million increase to retained earnings as a cumulative effect adjustment.
Amendments to Disclosures about an Employer’s Participation in a Multiemployer Plan—In September
2011, the FASB issued new guidance intended to create greater transparency in financial reporting by requiring
additional disclosures about an employer’s participation in a multiemployer pension plan. This guidance requires
companies to provide additional quantitative and qualitative disclosures about the significant multiemployer
plans in which they participate. This guidance is effective for annual periods for fiscal years ending after
December 15, 2011. The MUFG Group adopted this guidance on March 31, 2012, which had no impact on its
financial position and results of operations. The guidance did not affect the MUFG Group’s disclosures about themultiemployer pension plans since it did not participate in significant multiemployer pension plans.
Recently Issued Accounting Pronouncements
Amendment to Accounting for a Creditor’s Determination of Whether a Restructuring Is a Troubled Debt
Restructuring—In April 2011, the FASB issued new guidance on a creditor’s evaluation of whether amodification or restructuring of a receivable is a TDR. This clarifies the guidance on a creditor’s evaluation ofwhether the creditor has granted a concession and whether the debtor is experiencing financial difficulties. This
guidance also clarifies that a creditor is precluded from using the borrower’s effective rate test when assessing
whether a concession has been granted to the borrower. This guidance is effective for the first interim or annual
reporting period beginning on or after June 15, 2011. An entity is required to apply this guidance retrospectively
for all modifications and restructuring activities that have occurred from the beginning of the annual period of
adoption. For receivables that are newly considered impaired under the guidance on accounting by creditors for
impairment of a loan, an entity should measure the impairment of those receivables prospectively in the first
period of adoption and disclose the total amount of receivables and the related allowance for credit losses as ofthe end of the period of adoption. Early adoption is permitted. The MUFG Group has not completed the study ofwhat effect this guidance will have on its financial position and results of operations.
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and
IFRSs—In May 2011, the FASB issued new guidance, which amends certain accounting and disclosure
requirements related to fair value measurements, that result in common fair value measurement and disclosure
requirements between US GAAP and International Financial Reporting Standards (“IFRS”). Some of theamendments clarify the application of existing fair value measurement requirements, while other amendmentschange a particular principle or requirement for measuring fair value or for disclosing information about fairvalue measurements. This guidance is effective during interim and annual periods beginning after December 15,
2011. The MUFG Group has not completed the study of what effect this guidance will have on its financial
position and results of operations.
Amendments to the Presentation of Comprehensive Income—In June 2011, the FASB issued new guidance
which amends presentation and disclosure requirements of other comprehensive income. This guidance
eliminates the option to present the components of other comprehensive income as part of the statement ofchanges in stockholders’ equity and requires that all nonowner changes in stockholders’ equity be presented
either in a single continuous statement of comprehensive income or in two separate but consecutive statements.
This guidance is effective retrospectively for fiscal years, and interim periods within those years, beginning after
December 15, 2011. Early adoption of this guidance is permitted.
In December 2011, the FASB issued further guidance which indefinitely defers the specific requirement topresent items that are reclassified from accumulated other comprehensive income to net income separately with
their respective components of net income and other comprehensive income. This does not defer the effective
date of the other disclosure requirements within the new guidance.
F-29

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The new guidance will only affect the presentation of other comprehensive income, and will not affect the
MUFG Group’s financial position and results of operations.
Amendments to Testing Goodwill for Impairment—In September 2011, the FASB issued new guidance
which simplifies goodwill impairment testing. This guidance permits an entity to first assess qualitative factors todetermine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amountas a basis for determining whether it is necessary to perform the two-step goodwill impairment test which
includes calculating the fair value of the reporting unit. This guidance is effective for goodwill impairment tests
performed in interim and annual periods for fiscal years beginning after December 15, 2011. Early adoption ofthis guidance is permitted. The MUFG Group does not expect that the adoption of this guidance will have amaterial impact on its financial position and results of operations.
Scope Clarification of Accounting for Derecognition of in Substance Real Estate—In December 2011, the
FASB issued new guidance, which resolves the diversity in practice about whether the guidance of real estate
sales in property, plant, and equipment applies to a parent that ceases to have a controlling financial interest in a
subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. Under theamendments in this guidance, when a parent ceases to have a controlling financial interest in a subsidiary that isin substance real estate as a result of default on the subsidiary’s nonrecourse debt, the reporting entity should
apply the guidance of real estate sales in property, plant, and equipment to determine whether it should
derecognize the in substance real estate. For public entities, the amendments in this guidance are effective forfiscal years, and interim periods within those years, beginning on or after June 15, 2012. Early adoption ispermitted. The MUFG Group does not expect that the adoption of the guidance will have a material impact on its
financial position and results of operations.
Disclosures about Offsetting Assets and Liabilities—In December 2011, the FASB issued new guidance whichfacilitates comparison between those entities that prepare their financial statements on the basis of US GAAP and
those entities that prepare their financial statements on the basis of IFRS. This guidance requires that entities
disclose both gross information and net information about both instruments and transactions eligible for offset in thestatement of financial position and instruments and transactions subject to an agreement similar to a master netting
arrangement. This scope would include derivatives, sale and repurchase agreements, reverse sale and repurchaseagreements, and securities borrowing and securities lending arrangements. This guidance is effective for annual
periods for fiscal years beginning on or after January 1, 2013 and interim periods within those annual periods. An
entity should provide the disclosures required by those amendments retrospectively for all comparative periods
presented. This new guidance will only affect the MUFG Group’s disclosures about offsetting assets and liabilities,
and will not affect the MUFG Group’s financial position and results of operations.
2.

BUSINESS DEVELOPMENTS

Mitsubishi UFJ NICOS Co., Ltd.
On March 30, 2011, MUFG and The Norinchukin Bank (“Norinchukin”) increased the capital of Mitsubishi
UFJ NICOS through allotment to existing shareholders. MUFG and Norinchukin acquired ¥85 billion and ¥15
billion of new common shares in Mitsubishi UFJ NICOS, respectively, with no change of ownership in the sharesof Mitsubishi UFJ NICOS between MUFG and Norinchukin (i.e., approximately 85% owned by MUFG and 15%
owned by Norinchukin).
UnionBanCal Corporation
On April 16 and 30, 2010, Union Bank, N.A. (“Union Bank”), a subsidiary of UNBC, entered into Purchase
and Assumption Agreements with the Federal Deposit Insurance Corporation (“FDIC”) to acquire certain assets
F-30

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
and assume certain liabilities of Tamalpais Bank and Frontier Bank and thereby recorded goodwill and core
deposit intangible assets of ¥8,068 million and ¥1,648 million, respectively. In connection with the acquisition,
Union Bank also entered into two loss share agreements with the FDIC—one for single-family residential
mortgage loans and another for commercial loans, the related unfunded commitments and other covered assets.
Investment in Morgan Stanley
On September 29, 2008, the MUFG Group and Morgan Stanley completed a final agreement to enter into a
strategic capital alliance aiming to build a global strategic alliance primarily in the corporate and investmentbank fields. On October 13, 2008, the MUFG Group purchased shares of preferred stock issued by Morgan
Stanley. The investment in Morgan Stanley’s preferred stock consisted of Series B Non-cumulative Non-voting
Perpetual Convertible Preferred Stock (“Series B Preferred Stock”) and Series C Non-cumulative Non-voting
Perpetual Preferred Stock. On April 21, 2011, the MUFG Group and Morgan Stanley entered into an agreement
to convert the Series B Preferred Stock with a face value of ¥808,266 million, into Morgan Stanley’s common
stock. On June 30, 2011, the MUFG Group converted the Series B Preferred Stock for approximately 385 million
shares of Morgan Stanley’s common stock, including approximately 75 million additional shares resulting fromthe adjustment to the conversion rate pursuant to the agreement. The adjustment to the conversion rate wasrecognized as a gain of ¥139,320 million, which was included in Gain on conversion rate adjustment of
convertible preferred stock in Interest income on investment securities in the consolidated statement of income
for the fiscal year ended March 31, 2012.
Prior to the conversion, the MUFG Group held approximately 3.0% of Morgan Stanley’s common stock andthe investment was included in Investment securities available for sale. As a result of the conversion, the MUFG
Group held approximately 22.4% of Morgan Stanley’s common stock, giving the MUFG Group the ability to
exercise significant influence over the operations of Morgan Stanley. Accordingly, the MUFG Group has
adopted the equity method of accounting for its investment in Morgan Stanley for the year ended March 31,
2012. Furthermore, the MUFG Group’s investments, results of operations and retained earnings have beenadjusted retroactively on a step-by-step basis as if the equity method of accounting had been in effect during all
previous periods. The MUFG Group’s retroactive adjustment was applied to the existing approximately 3.0%
investment in Morgan Stanley’s common stock through June 30, 2011. Following the conversion, the MUFG
Group began recognizing its approximately 22.4% interest in Morgan Stanley’s common stock as an investment
in an equity method investee included in Other assets.
The previously reported amounts and the adjusted amounts are as follows:
March 31, 2011
As previously reported
As adjusted(in millions)

Investment securities—Securities available for sale . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings—Unappropriated retained earnings . . . . . . . . . . . . . . . . . .
Accumulated other changes in equity from nonowner sources, net oftaxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-31¥54,435,634
5,226,412
4,844,901
254,411¥54,329,881
5,321,120
4,841,981
254,103(620,844)(628,661)

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fiscal years ended March 31,
2010
2011
As previously
As previously
reported
As adjusted
reported
As adjusted(in millions, except per share data)

Interest income—Investment securities—Dividends . . . . . .
Equity in losses of equity method investees—net . . . . . . . . .
Other non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per common share—net income available tocommon shareholders of Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per common share—net income available
to common shareholders of Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 168,500(104,098)
195,966
407,040¥167,862(83,893)
191,307413,105¥170,470(90,628)
140,766
439,900¥ 169,667(113,017)
148,532
433,625

859,819

868,662

461,796452,645

68.01

68.72

31.20

30.55

67.87

68.59

31.08

30.43

Upon qualifying for the equity method of accounting on June 30, 2011, the MUFG Group performed avaluation of its Morgan Stanley investment. As a result of the valuation, the carrying amount of the MUFG
Group’s investment in common stock differed from the underlying equity in net assets of Morgan Stanley and thedifference was recognized as goodwill.
At September 30, 2011, the quoted market price of Morgan Stanley’s common stock had declined 41% fromthe quoted market price at June 30, 2011. The quoted market price at September 30, 2011 represented less thanhalf of the MUFG Group’s carrying amount on a per share basis. The MUFG Group evaluated this stock pricedecline to determine whether the investment in Morgan Stanley was other than temporarily impaired. The MUFG
Group determined that the decline in the stock price was other than temporary in light of the increasingly
stringent regulatory environment and the existing adverse economic events in Europe. More specifically, newand pending regulations, such as the US Dodd-Frank Wall Street Reform and Consumer Protection Act (“theDodd-Frank Act”) and the global regulatory framework often referred to as “Basel III,” were expected to impose
significant constraints on the business activities of financial institutions, including the prohibition on certaintransactions, the enhancement of risk management frameworks, and the increase in capital adequacy
requirements. Rules designed to further regulate the business operations of financial institutions were being
adopted, or were at the time scheduled soon to be adopted, by government agencies, including the rules relating
to resolution plans and rules generally referred to as the Volcker Rule under the Dodd-Frank Act. Furthermore,
the impact of the prolonged European economic crisis had resulted in negative long-term prospects for the global
financial market. The events in Europe have had an immediate effect on financial institutions holding sovereign
securities and are also expected to have long-term consequences for financial institutions with operations in
Europe. Given these uncertain economic environment and increasing regulatory challenges, and the significant
difference between the carrying amount per share and the quoted market price of Morgan Stanley’s common
stock, the MUFG Group recorded an other-than-temporary impairment loss of ¥579,468 million at September 30,
2011. The MUFG Group’s investment in Morgan Stanley’s common stock was adjusted to the quoted market
price of Morgan Stanley’s common stock as of September 30, 2011, and the impairment loss was reflected in
Equity in losses of equity method investees-net in the consolidated statement of income. The MUFG Group
recorded no additional other-than-temporary impairment loss at March 31, 2012. See Note 14 for more
information.

F-32

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Securities Joint Venture with Morgan Stanley
On March 30, 2010, the MUFG Group and Morgan Stanley entered into a securities joint venture agreement tointegrate their securities business. The purpose of the joint venture is to collaborate in providing capital markets
services to investment banking clients of the MUFG Group and Morgan Stanley and in offering a wide range of
products and services, including Morgan Stanley’s global products and services, to the MUFG Group’s retail andmiddle market customers in Japan as well as to investment banking clients of both parties. The two joint venturecompanies will continue to offer products and services in sales and trading and research areas separately.
In relation to the integration of the securities companies in Japan, the former Mitsubishi UFJ Securities Co.,
Ltd. (“MUS”) was restructured into an intermediate holding company, MUSHD, and a securities businesssubsidiary, MUS. On May 1, 2010, MUS changed its name to MUMSS and the MUFG Group’s ownership interest
in MUMSS also changed from 100% to 60%, with Morgan Stanley holding the remaining 40% voting andeconomic interest. Since the MUFG Group has retained control of MUMSS, the change in the MUFG Group’s
ownership interest has been accounted for as an equity transaction and the MUFG Group has recorded ¥127 billionand ¥21 billion of noncontrolling interests and capital surplus, respectively. MUMSS continues the existing Japan
based retail, middle markets, capital markets and sales and trading businesses of the former MUS while integrating
the investment banking team of the former Morgan Stanley Japan Securities Co., Ltd. (“MSJS”).
Also, on May 1, 2010, MSJS was renamed to Morgan Stanley MUFG Securities Co., Ltd. (“MSMS”).
MSMS continues to provide the existing sales and trading and capital markets operations of the former MSJS.
The MUFG Group holds a 49% voting interest and a 60% economic interest in MSMS while Morgan Stanley
holds the remaining 51% voting interest and 40% economic interest. The MUFG Group applies the equity
method of accounting to MSMS due to its significant influence.
Per the shareholders’ agreement between the MUFG Group and Morgan Stanley, to the extent that losses
incurred by MUMSS or MSMS result in a requirement to restore its capital, the controlling shareholder is solely
responsible for providing additional capital to a minimum level and the noncontrolling shareholder is not
obligated to contribute additional capital.
On April 22, 2011, due to losses incurred by MUMSS in the fiscal year ended March 31, 2011, the MUFG
Group contributed ¥30 billion of new capital to MUMSS by acquiring newly issued shares of MUMSS. In
October 2011, MUMSS implemented an early retirement program to reduce expenditures and improve operating
performance. MUMSS recorded employee termination expenses of ¥20 billion in the second half of the fiscal
year ended March 31, 2012. On November 24, 2011, the MUFG Group contributed ¥20 billion of new capital to
MUMSS by acquiring newly issued shares of MUMSS in order to restore its capital adversely affected by the
expenses during the fiscal year ended March 31, 2012. The additional capital in MUMSS improves andstrengthens its capital base and restores its capital adequacy level. The new MUMSS shares have no voting rights
and do not change the proportion of voting interests in MUMSS or change the right to participate in MUMSS’earnings. In order to reflect the existing 60% economic interest in MUMSS after the MUFG Group’s capital
contribution, 40% of the new share issuance on April 2011 and November 2011, or ¥12 billion and ¥8 billion,
respectively, was recognized as an increase in noncontrolling interest and a reduction of capital surplus, giventhat the rights to participate in the residual assets of MUMSS will be distributed to the MUFG Group and Morgan
Stanley in proportion to their percentage ownership interests.
To the extent that MUMSS is required to increase its capital level due to factors other than losses, such as
future regulatory capital changes, both the MUFG Group and Morgan Stanley are required to contribute thenecessary capital based upon their economic interests as set forth above. In this context, to meet an anticipatedchange in regulatory capital requirements for MUMSS, the MUFG Group contributed ¥15 billion and Morgan
Stanley contributed ¥10 billion of additional proportionate capital investments on November 24, 2011, and thecontribution by Morgan Stanley was recognized as an increase of noncontrolling interest.
F-33

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3.

INVESTMENT SECURITIESThe amortized cost, gross unrealized gains and losses and estimated fair value of investment securities
available for sale and being held to maturity at March 31, 2011 and 2012 were as follows:
Amortized
cost

At March 31, 2011:

Securities available for sale:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . .
Japanese prefectural and municipal bonds . . . . .
Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . .
Commercial mortgage-backed securities . . . . . .
Asset-backed securities . . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥44,756,826
193,712

Gross
Gross
unrealized
unrealized
gains
losses(in millions)¥

75,017
6,578¥112,2219¥44,719,622
200,281

973,175
3,058,698
1,140,271
31,485452,280960
2,642,287

16,472
84,262
11,593181
665—
1,073,797

856
3,418
13,293
1,276
555—
56,750988,791
3,139,542
1,138,571
30,390452,390960
3,659,334¥53,249,694¥1,268,565¥188,378¥54,329,881¥¥ 1,034,430
22,845

Securities being held to maturity:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . . ¥ 1,026,443 ¥Japanese prefectural and municipal bonds . . . . .
22,667
Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
893,316
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
138,810
Asset-backed securities . . . . . . . . . . . . . . . . . . .
935,876
Other debt securities . . . . . . . . . . . . . . . . . . . . . .
77
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Estimated
fair value¥ 3,017,189

¥

7,987
178
6,758
1,165
32,144
4
48,236

—
—
2,451
46
3,930(1)
—

¥

6,427

897,623
139,929
964,09081¥ 3,058,998

Note:(1) UNBC reclassified collateralized loan obligations (“CLOs”), which totaled ¥111,895 million at fair value, from securities available forsale to securities being held to maturity during the fiscal year ended March 31, 2010. As a result of the reclassification, the unrealized
losses as of the date of reclassification remaining in accumulated other changes in equity from nonowner sources in the accompanying
consolidated balance sheets was ¥39,915 million before taxes at March 31, 2011 and is not included in the table above.

F-34

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amortized
cost

At March 31, 2012:

Securities available for sale:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . . ¥48,736,276
Japanese prefectural and municipal bonds . . . . .
173,028
Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
953,364
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
2,460,263
Residential mortgage-backed securities . . . . . . .
1,129,948
Commercial mortgage-backed securities . . . . . .
96,502
Asset-backed securities . . . . . . . . . . . . . . . . . . . .
503,011
Other debt securities . . . . . . . . . . . . . . . . . . . . . .
964
Marketable equity securities . . . . . . . . . . . . . . . . . . . .
2,315,374
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥56,368,730
Securities being held to maturity:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . . ¥ 590,147
Japanese prefectural and municipal bonds . . . . .
3,531
Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
626,871
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
59,857
Asset-backed securities . . . . . . . . . . . . . . . . . . . .
1,104,890
Other debt securities . . . . . . . . . . . . . . . . . . . . . .
72
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,385,368

Gross
Gross
unrealized
unrealized
gains
losses(in millions)

Estimated
fair value¥ 155,010
7,750¥ 8,624—¥48,882,662
180,778

18,606
68,933
14,2392,512
401—
1,129,136

742
2,639
5,602
684
891
—
5,734

971,228
2,526,557
1,138,585
98,330502,521964
3,438,776¥1,396,587¥24,916¥57,740,401

¥

¥

¥

4,370
6
3,691
201
39,4471¥

47,716——169
142,212(1)—¥ 2,395

594,5173,537
630,393
60,044
1,142,12573¥ 2,430,689

Note:(1) As a result of the reclassification mentioned above, the unrealized losses at the date of reclassification remaining in accumulated otherchanges in equity from nonowner sources in the accompanying consolidated balance sheets was ¥29,539 million before taxes at
March 31, 2012 and is not included in the table above.

Investment securities other than securities available for sale or being held to maturity (i.e., nonmarketable
equity securities presented in Other investment securities) were primarily carried at cost of ¥1,667,220 millionand ¥876,333 million, at March 31, 2011 and 2012, respectively, because their fair values were not readily
determinable.
At March 31, 2011, the cost-method investments included preferred stock issued by Morgan Stanley of¥808,266 million. On June 30, 2011, MUFG converted Morgan Stanley’s Series B Preferred Stock into Morgan
Stanley’s common stock, and applied the equity method of accounting to the investment in Morgan Stanley’scommon stock due to its resulting significant influence over Morgan Stanley. The MUFG Group’s investment inMorgan Stanley’s common stock was included in Other assets as an investment in an equity method investee atMarch 31, 2012. See Notes 2 and 14 for more information relating to investments in Morgan Stanley.
The remaining balances were investment securities held by certain subsidiaries subject to specialized
industry accounting principles for investment companies and brokers and dealers and carried at fair valueof ¥37,024 million and ¥33,432 million at March 31, 2011 and 2012, respectively. See Note 29 for the
methodologies and assumptions used to estimate the fair values.
F-35

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
With respect to cost-method investments of ¥1,119,292 million and ¥302,318 million at March 31, 2011 and2012, respectively, the MUFG Group has estimated a fair value using commonly accepted valuation models todetermine if the investment is impaired in each reporting period. These cost-method investments are primarily
comprised of nonmarketable equity securities issued by public companies which are convertible to marketablecommon stock in the future. See Note 29 for the details of these commonly accepted valuation models. If the fairvalue of the investment is less than the cost of the investment, the MUFG Group proceeds to evaluate whether
the impairment is other than temporary.
With respect to cost-method investments of ¥ 547,928 million and ¥574,015 million at March 31, 2011 and2012, respectively, the MUFG Group performed a test to determine whether any impairment indicator exists withrespect to each cost-method investment in each reporting period. If an impairment indicator exists, the MUFG
Group estimates the fair value of the cost-method investment. If the fair value of the investment is less than thecost of the investment, the MUFG Group proceeds to conduct the other-than-temporary impairment evaluation.
The primary method the MUFG Group uses to identify impairment indicators is a comparison of the MUFG
Group’s share in an investee’s net assets to the carrying amount of the MUFG Group’s investment in theinvestee. The MUFG Group also considers whether significant adverse changes in the regulatory, economic ortechnological environment have occurred with respect to the investee. The MUFG Group periodically monitors
the status of each investee including the credit ratings, which are generally updated once a year based on theannual financial statements of issuers. In addition, if an event that could impact the credit rating of an issuer
occurs, the MUFG Group reassesses the appropriateness of the credit rating assigned to the issuer in order tomaintain an updated credit rating. The MUFG Group did not estimate the fair value of those cost-method
investments, which had aggregated costs of ¥515,263 million and ¥570,122 million at March 31, 2011 and 2012,
respectively, since it was not practical and the MUFG Group identified no impairment indicators.
Based on its other-than-temporary impairment evaluation, the impairment losses on cost-method
investments the MUFG Group recognized were ¥24,751 million for the fiscal year ended March 31, 2010. This
impairment loss mainly resulted from impairment of a limited number of companies categorized in the financial
institution and transportation industries. For the fiscal years ended March 31, 2011 and 2012, the MUFG Groupalso recognized impairment losses on cost-method investments of ¥2,882 million and ¥5,829 million,
respectively. Each impairment loss did not include any significant impairment losses from specific companies.
Those impairment losses were recognized based on those companies’ particular circumstances.
The amortized cost and estimated fair values of debt securities being held to maturity and the estimated fairvalues of debt securities available for sale at March 31, 2012 by contractual maturity are shown below. Expectedmaturities may differ from contractual maturities because borrowers may have the right to call or prepay
obligations with or without penalties. Securities not due at a single maturity date and securities embedded withcall or prepayment options, such as mortgage-backed securities, are included in the table below based on their
original final maturities.
Held-to-maturity
Available for sale
Amortized
Estimated
Estimatedcost
fair value
fair value(in millions)Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 729,168 ¥ 732,666
Due from one year to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
588,159
596,852
Due from five years to ten years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
696,287
722,033
Due after ten years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
371,754379,138¥15,218,529
29,800,171
5,634,612
3,648,313

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥54,301,625

F-36¥2,385,368¥2,430,689

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the fiscal years ended March 31, 2010, 2011 and 2012, gross realized gains on sales of investment
securities available for sale were ¥344,353 million, ¥270,384 million and ¥233,253 million, respectively, and grossrealized losses on sales of investment securities available for sale were ¥47,117 million, ¥35,966 million and¥56,226 million, respectively. In the second half of the fiscal year ended March 31, 2012, the MUFG Group
determined that it no longer had the intent to hold a certain security, which had a carrying value of ¥7,856 million,
to maturity in response to a significant deterioration in the issuer’s creditworthiness. As a result, the MUFG Grouptransferred from Securities being held to maturity to Securities available for sale. The MUFG Group sold all amountof such security until March 31, 2012. The realized losses resulting from the sale of the security were ¥691 million
in the second half of the fiscal year ended March 31, 2012.
For the fiscal years ended March 31, 2010, 2011 and 2012, losses resulting from impairment of investment
securities to reflect the decline in value considered to be other than temporary were ¥117,485 million,¥139,020 million and ¥195,684 million, respectively, which were included in Investment securities gains—net in
the consolidated statements of income. The losses of ¥117,485 million for the fiscal year ended March 31, 2010
included losses of ¥29,822 million from debt securities available for sale mainly classified as corporate bondsand ¥62,912 million from marketable equity securities. The losses of ¥139,020 million for the fiscal year ended
March 31, 2011 included losses of ¥20,488 million from debt securities available for sale mainly classified ascorporate bonds, and ¥115,650 million from marketable equity securities. The losses of ¥195,684 million for the
fiscal year ended March 31, 2012 included losses of ¥13,782 million from debt securities available for sale
mainly classified as corporate bonds, and ¥176,073 million from marketable equity securities.
The following tables show the unrealized gross losses and estimated fair values of investment securities
available for sale and being held to maturity at March 31, 2011 and 2012 by length of time that individual
securities in each category have been in a continuous loss position:

At March 31, 2011:
Securities available for sale:
Debt securities:
Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . .
Japanese prefectural andmunicipal bonds . . . . . . . . . .
Foreign governments andofficial institutions bonds . . .
Corporate bonds . . . . . . . . . . . .
Residential mortgage-backed
securities . . . . . . . . . . . . . . . .
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . .
Asset-backed securities . . . . . . .
Marketable equity securities . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . .
Securities being held to maturity:
Debt securities:
Foreign governments andofficial institutions bonds . . .
Corporate bonds . . . . . . . . . . . .
Asset-backed securities . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . .

Less than 12 months
Estimated Unrealized
fair value
losses

12 months or more
Estimated Unrealized
fair value
losses(in millions)

Estimated
fair value

Total
Unrealized
lossesNumber of
securities¥24,169,306¥ 95,292¥ 998,080¥16,929¥25,167,386¥112,221

136

10,111

9——

10,1119

696,431
309,067

855
2,051

524
148,667

1
1,367

96,955
457,734

856
3,418

43
3,155

528,791

10,281

32,1393,012

560,930

13,293281—
16,708504,958—
56
56,604

22,23635,961
542

1,276
499
146

22,236
52,669505,500

1,276
555
56,75013
23
122¥25,635,372¥165,148¥1,238,149¥23,230¥26,873,521¥188,378

3,779¥

191,1097,120
259,446

¥

1,255
46
3,840

¥

47,145—
126,948¥ 1,196—90¥

238,254
7,120
386,394

¥

2,451
46
3,930

23
4
247

¥

457,675¥

5,141¥ 174,093¥ 1,286¥

631,768

¥

6,427

274

F-37

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2012:
Securities available for sale:
Debt securities:
Japanese national
government and Japanese
government agency
bonds . . . . . . . . . . . . . . .
Foreign governments andofficial institutions
bonds . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . .
Residential mortgagebacked securities . . . . . .
Commercial mortgagebacked securities . . . . . .
Asset-backed securities . . .
Marketable equity securities . . . .
Total . . . . . . . . . . . . . . . . . . . . . .
Securities being held to maturity:
Debt securities:
Foreign governments andofficial institutions
bonds . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . .
Asset-backed securities . . .
Total . . . . . . . . . . . . . . . . . . . . . .

Less than 12 months
Estimated
Unrealized
fair value
losses

12 months or more
Estimated Unrealized
fair value
losses(in millions)

Estimated
fair value

Total
Unrealized
lossesNumber of
securities¥15,976,426¥ 3,035¥794,870¥ 5,589¥16,771,296¥ 8,624

65

27,255273,322

674
1,709

3,923
87,77068
930

31,178361,092

742
2,639

42
2,077

128,824

2,071

27,536

3,531

156,360

5,602

162

9,683
9,425
102,018

253
891
5,570

12,664
—
528

431
—
164

22,347
9,425
102,546

684
891
5,734

20
10
56

¥16,526,953¥14,203¥927,291¥10,713¥17,454,244¥24,916

2,432

¥

8,229
4,104
220,509

¥

2
2
1,964

¥ 60,813
1,388
119,165

¥

167
12
248

¥

69,042
5,492
339,674

¥

169
14
2,212

5
3
222

¥

232,842¥ 1,968¥181,366

¥

427

¥

414,208¥ 2,395

230

The following describes the nature of the MUFG Group’s investments and the conclusions reached on thetemporary or other-than-temporary status of the unrealized losses.
Japanese national government and Japanese government agency bonds, Foreign governments and official
institutions bonds
As of March 31, 2012, the unrealized losses associated with Japanese national government bonds, Japanese
government agency bonds, foreign governments bonds and foreign official institutions bonds are not expected tohave any credit losses due to the creditworthiness of sovereign countries and related entities which are
guaranteed by the governments, and such unrealized losses are primarily driven by changes in interest rates, notdue to credit losses. Therefore, the MUFG Group expects to recover the entire amortized cost basis of thesesecurities and as such has not recorded any impairment losses in the accompanying consolidated statements ofincome.
Residential and commercial mortgage-backed securities
As of March 31, 2012, the unrealized losses associated with federal agency residential mortgage-backed
securities, which are issued by Government-Sponsored Enterprises (“GSE”) of the United States andcollateralized by residential mortgage loans, are expected to be primarily driven by changes in interest rates andnot due to credit losses. The unrealized losses associated with other non-agency residential and commercial
mortgage-backed securities issued by financial institutions with no guarantee from GSEs are expected to be
primarily driven by rated investment grade, and with consideration of other factors, such as expected cash flow
F-38

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
analysis, the MUFG Group expects to recover the entire amortized cost basis of these securities. As such, no
impairment was recorded in the accompanying consolidated statements of income.
Asset-backed securities
As of March 31, 2012, the unrealized losses associated with asset-backed securities are primarily related tocertain CLOs, which are structured finance products that securitize a diversified pool of loan assets into multiple
classes of notes from the cash flows generated by such loans, and pay the note holders through the receipt ofinterest and principal repayments from the underlying loans. Certain of these CLOs are highly illiquid securities
for which fair values are difficult to obtain. Unrealized losses arise from widening credit spreads, credit qualityof the underlying collateral, uncertainty regarding the valuation of such securities and the market’s opinion of theperformance of the fund managers. Cash flow analysis of the underlying collateral provides an estimate ofother-than-temporary impairment, which is performed when the fair value of a security is lower than its
amortized cost. Any security with a change in credit rating is also subject to cash flow analysis to determine
whether or not an other-than-temporary impairment exists. The MUFG Group monitored performance of
securities and performed expected cash flow analysis, which indicated no observable credit quality issues on suchsecurities at March 31, 2012. As a result, although the fair value of the CLOs portfolio declined during the years
ended March 31, 2011 and 2012, no other-than-temporary impairment was recorded in the accompanying
consolidated statements of income.
Corporate bonds
As of March 31, 2012, the unrealized losses associated with corporate bonds are primarily related to private
placement bonds issued by Japanese non-public companies. The credit loss component recognized in earnings is
identified as the amount of principal cash flows not expected to be received over the remaining terms of thebonds as estimated using the MUFG Group’s cash flow projections using its base assumptions. The key
assumptions include probability of default based on credit ratings of the bond issuers and a loss given default.
The following table presents a roll-forward of the credit loss component recognized in earnings. The balanceat the beginning of each fiscal year represents the credit loss component for which an other-than-temporary
impairment occurred on debt securities in prior periods. The additions represent the first time a debt security wascredit impaired or when subsequent credit impairments have occurred. The credit loss component is reduced
when the corporate bonds are sold or matured. Additionally, the credit loss component is reduced if the MUFG
Group receives or expects to receive cash flows in excess of what the MUFG Group previously expected toreceive over the remaining life of the credit impaired debt securities.
2010

2011
(in millions)

2012

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 40,556¥ 36,591¥ 35,458

Additions:
Initial credit impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent credit impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,587
5,235

14,087
6,401

8,596
5,186

Reductions:
Securities sold or matured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(33,787)(21,621)(19,174)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 36,591¥ 35,458¥ 30,066

The cumulative decline in fair value of the credit impaired debt securities, which were mainly corporate
bonds, held at March 31, 2011 and 2012 was ¥23,708 million and ¥18,334 million, respectively. Of which, the
F-39

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
credit loss component recognized in earnings was ¥35,458 million and ¥30,066 million, and the remaining
amount related to all other factors recognized in accumulated other changes in equity from nonowner sources
before taxes was ¥11,750 million and ¥11,732 million at March 31, 2011 and 2012, respectively.
Marketable equity securities
The MUFG Group determines whether unrealized losses on marketable equity securities are temporary
based on its ability and positive intent to hold the investments for a period of time sufficient to allow for any
anticipated recovery and the results of its review conducted to identify and evaluate investments that haveindications of possible impairments. Impairment is evaluated considering various factors, and their relative
significance varies from case to case. The MUFG Group’s review includes, but is not limited to, consideration of
the following factors:
The length of time that fair value of the investment has been below cost—The MUFG Group generally
deems a continued decline of fair value below cost for six months or more to be other than temporary.
The extent to which the fair value of investments has been below cost as of the end of the reporting
period—The MUFG Group’s investment portfolio is exposed to volatile equity prices affected by many factors
including investors’ perspectives as to future economic factors and the issuers’ performance. The MUFG Groupgenerally deems the decline in fair value below cost of 20% or more as an indicator of an other-than-temporary
decline in fair value.
The financial condition and near-term prospects of the issuer—The MUFG Group considers the financial
condition and near-term prospects of the issuer primarily based on the credit standing of the issuers as
determined by its credit rating system.
At March 31, 2012, unrealized losses on marketable equity securities which have been in a continuous loss
position are considered temporary based on the evaluation as described above, since the MUFG Group primarily
makes these investments for strategic purposes to maintain long-term relationships with its customers.

F-40

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
4.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans at March 31, 2011 and 2012, by domicile and type of industry of borrower are summarized below.
Classification of loans by industry is based on the industry segment loan classifications as defined by the Bank ofJapan.
20112012(in millions)

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,248,033
1,280,899
11,660,798
3,417,689
8,443,580
3,421,419
1,249,272
8,410,092
18,420,864¥11,451,720
1,155,926
11,035,029
3,239,688
8,492,234
3,511,055
1,284,585
10,390,191
17,636,553

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,552,646

68,196,981

Foreign:
Governments and official institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

516,637
3,565,502
13,116,390
2,853,671

554,933
4,722,587
15,675,995
3,238,830

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,052,200

24,192,345

Unearned income, unamortized premiums—net and deferred loan fees—net . . . . . .

(102,871)(91,083)

Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥87,501,975¥92,298,243

Notes:(1) Loans to the so-called non-bank finance companies are generally included in the “Banks and other financial institutions” category.
Non-bank finance companies are primarily engaged in consumer lending, factoring and credit card businesses.
(2) The above table includes loans held for sale of ¥65,162 million and ¥46,634 million at March 31, 2011 and 2012, respectively, which arecarried at the lower of cost or estimated fair value.

Nonaccrual and restructured loans were ¥2,008,729 million and ¥2,112,964 million at March 31, 2011 and2012, respectively. Had interest on these loans been accrued pursuant to the original terms, gross interest incomeon such loans for the fiscal years ended March 31, 2011 and 2012 would have been approximately ¥101.1 billionand ¥93.8 billion, respectively, of which approximately ¥46.0 billion and ¥44.8 billion, respectively, were
included in interest income on loans in the accompanying consolidated statements of income. Accruing loans
contractually past due 90 days or more were ¥55,748 million and ¥65,577 million at March 31, 2011 and 2012,
respectively.
The MUFG Group provided commitments to extend credit to customers with restructured loans. The
amounts of such commitments were ¥13,796 million and ¥15,729 million at March 31, 2011 and 2012,
respectively. See Note 22 for further discussion of commitments to extend credit.

F-41

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nonaccrual Loans
The nonaccrual status of loans by class at March 31, 2011 and 2012 is shown below:
2011
2012
(in millions)

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 686,084 ¥ 808,757
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
137,275
199,608
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,33839,959Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128,282
104,690
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74,23484,753Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
171,870
237,380
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,238
7,802
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,97833,233
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36,16347,931
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,70653,401
Foreign-excluding UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102,869
69,361
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
129,777
122,270
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
141,445
113,450
UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78,62349,651
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,138,798¥1,163,489

Note:(1) The above table does not include loans held for sale of ¥548 million and nil at March 31, 2011 and 2012, respectively, and loans acquiredwith deteriorated credit quality of ¥29,833 million and ¥26,346 million at March 31, 2011 and 2012, respectively.

F-42

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Impaired Loans
The MUFG Group’s impaired loans primarily include nonaccrual loans and restructured loans. The
following table shows information about impaired loans by class at March 31, 2011:

At March 31, 2011:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . .
Foreign-excluding UNBC . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recorded Loan Balance
Requiring
Not Requiring
an Impairment an Impairment
Allowance
Allowance(1)Total(in millions)

UnpaidPrincipal
Balance

RelatedAllowance¥ 943,041
257,443
51,092
118,840
136,659
235,655¥265,039
45,04622,24464,13936,06649,312¥1,208,080
302,489
73,336
182,979
172,725
284,967¥1,282,887
311,359
78,027
207,373
186,939
295,069¥521,797
139,522
31,62656,09968,946
144,049

3,592

6,266

9,858

11,993

1,658

45,35343,02851,379132,442

12,572
8,246
21,148
1,157

57,92551,274
72,527
133,599

59,482
51,98180,664
134,294

26,41630,931
22,55066,06637,125
277,704
149,953
51,530147
29,527
1,766
3,667

37,272
307,231
151,719
55,19760,799393,742
173,568
68,452

11,82687,45046,963
9,793¥1,591,795¥301,303¥1,893,098¥2,113,742¥743,895

Notes:(1) These loans do not require an allowance for credit losses under the guidance on accounting by creditors for impairment of a loan since
the fair values of the impaired loans equal or exceed the recorded investments in the loans.
(2) In addition to impaired loans presented in the above table, there were loans held for sale that were impaired of ¥4,726 million.

The average recorded investments in impaired loans were approximately ¥1,717 billion and ¥1,866 billion,
respectively, for the fiscal years ended March 31, 2010 and 2011.
For the fiscal years ended March 31, 2010 and 2011, the MUFG Group recognized interest income of
approximately ¥33.4 billion and ¥42.0 billion, respectively, on impaired loans.
Interest income on nonaccrual loans for all classes was recognized on a cash basis when ultimate
collectibility of principal was certain. Otherwise, cash receipts were applied as principal reductions. Interest
income on accruing impaired loans, including restructured loans, was recognized on an accrual basis to the extent
that the collectibility of interest income was reasonably certain based on management’s assessment.

F-43

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows information about impaired loans by class at March 31, 2012 and average
recorded loan balance and recognized interest income on impaired loans for the fiscal year ended March 31,
2012:
Fiscal year ended
March 31, 2012

At March 31, 2012
Recorded Loan Balance
Requiring
Not Requiring
an Impairment an Impairment
Allowance
Allowance(1)Commercial
Domestic . . . . . . . . . . . . . ¥ 1,045,342
Manufacturing . . . . .
302,210
Construction . . . . . .
33,802
Real estate . . . . . . . .
112,357
Services . . . . . . . . . .
140,228
Wholesale andretail . . . . . . . . . . .
299,637
Banks and otherfinancial
institutions . . . . . .
9,418
Communication andinformation
services . . . . . . . .
39,077
Other industries . . . .
54,183
Consumer . . . . . . . .
54,430Foreign-excluding
UNBC . . . . . . . . . . . . .
154,249
Loans acquired withdeteriorated credit
quality . . . . . . . . . . . . .
34,472
Residential . . . . . . . . . . . . . . .
303,449
Card . . . . . . . . . . . . . . . . . . . .
145,123
UNBC . . . . . . . . . . . . . . . . . . .
29,554

Total . . . . . . . . . . . . . . . . . . ¥1,712,189¥ 279,330
56,26822,03450,98236,378

UnpaidPrincipal
Total
Balance(in millions)

RelatedAllowance

Average
Recorded
Loan
Balance

RecognizedInterest
Income¥ 1,324,672 ¥ 1,387,029 ¥ 616,769 ¥ 1,270,856 ¥ 21,356
358,478
376,393 187,081
333,409
5,656
55,83660,49819,986
63,215
1,370
163,339
176,520
52,165
173,7392,476
176,606
182,044
74,707
176,047
3,203

69,051

368,688375,464

192,671

326,440

5,239

253

9,671

11,777

2,314

9,812

85

12,534
8,918
22,912

51,611
63,101
77,34254,063
63,33686,934

23,27840,48424,08355,38757,61275,195

1,152
927
1,248

177

154,426

155,433

89,049138,900

1,016

78
23,513
1,666
14,91534,550326,962
146,789
44,46956,054
406,740
164,659
49,974

10,704
102,892
47,4185,321

35,307
318,512149,255
45,297

1,983
6,549
6,972
1,354

¥319,679¥2,031,868 ¥2,219,889 ¥872,153 ¥1,958,127 ¥39,230

Note:(1) These loans do not require an allowance for credit losses under the guidance on accounting by creditors for impairment of a loan since
the fair values of the impaired loans equal or exceed the recorded investments in the loans.

F-44

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Credit Quality Indicator
Credit quality indicators of loans by class at March 31, 2011 and 2012 are shown below:
At March 31, 2011:

Likely to become
Bankrupt or
Close
Legally/Virtually
Watch
Bankrupt(in millions)

NormalCommercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥45,354,265
Manufacturing . . . . . . . . . . . . . . . . . . . . . .
9,957,029
Construction . . . . . . . . . . . . . . . . . . . . . . . .
1,007,788
Real estate . . . . . . . . . . . . . . . . . . . . . . . . .
9,793,308
Services . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,878,813
Wholesale and retail . . . . . . . . . . . . . . . . . .
7,411,408
Banks and other financial institutions . . . .
3,110,731
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . . . . .
1,074,367
Other industries . . . . . . . . . . . . . . . . . . . . .
8,210,660
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . .
1,910,161
Foreign-excluding UNBC . . . . . . . . . . . . . . . . .
14,992,355
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,144
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥60,387,764¥4,357,196
1,141,101
223,791
1,023,691
445,863829,277
298,554¥686,431
137,275
48,306
128,401
74,234
171,870
7,238¥50,397,892
11,235,405
1,279,885
10,945,400
3,398,910
8,412,555
3,416,523

140,614156,090
98,215
1,006,010

32,97836,16349,96639,4901,247,959
8,402,913
2,058,342
16,037,855

56,201

22,119119,464¥5,419,407¥748,040¥66,555,211

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total(1)AccrualNonaccrual(in millions)

Total(1)¥16,015,242¥ 727,880¥134,773¥144,163¥16,150,015¥ 872,043

Risk Ratings Based on
the Number of Delinquencies
AccrualNonaccrual

Risk Ratings Based on
Internal Credit Ratings
Pass
Criticized(in millions)¥1,715,853¥1,767,355¥21,595¥275,762

Total(1)(2)¥3,780,565

Notes:(1) Total loans in the above table do not include loans held for sale.
(2) Total loans of UNBC do not include FDIC covered loans and small business loans which are not individually rated totaling ¥181,850
million. See Note 2 for more information on FDIC covered loans.

F-45

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At March 31, 2012:

Likely to become
Bankrupt or
Close
Legally/Virtually
Watch
Bankrupt(in millions)

NormalCommercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥46,609,922
Manufacturing . . . . . . . . . . . . . . . . . . . . . .
10,139,970
Construction . . . . . . . . . . . . . . . . . . . . . . . .
901,366
Real estate . . . . . . . . . . . . . . . . . . . . . . . . .
9,366,628
Services . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,713,378
Wholesale and retail . . . . . . . . . . . . . . . . . .
7,434,212
Banks and other financial institutions . . . .
3,065,589
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . . . . .
1,137,182
Other industries . . . . . . . . . . . . . . . . . . . . .
10,185,274
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . .
1,666,323
Foreign-excluding UNBC . . . . . . . . . . . . . . . . .
18,779,012
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,714
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥65,421,648¥4,324,321
1,100,059
213,648
972,220425,694
788,769
433,192¥808,836
199,608
39,928104,757
84,753
237,3807,803¥51,743,079
11,439,637
1,154,942
10,443,605
3,223,825
8,460,361
3,506,584

113,561
152,041
125,137
1,099,549

33,23347,96453,41065,715

1,283,976
10,385,279
1,844,870
19,944,276

54,86321,057

108,634¥5,478,733¥895,608¥71,795,989

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total(1)AccrualNonaccrual(in millions)

Total(1)¥15,461,203¥ 642,578¥125,715¥115,295¥15,586,918¥ 757,873

Risk Ratings Based on
the Number of Delinquencies
AccrualNonaccrual

Risk Ratings Based on
Internal Credit Ratings
Pass
Criticized(in millions)¥1,784,444¥2,083,976¥24,022¥149,261

Total(1)(2)¥4,041,703

Notes:(1) Total loans in the above table do not include loans held for sale.
(2) Total loans of UNBC do not include FDIC covered loans and small business loans which are not individually rated totaling ¥160,209
million. See Note 2 for more information on FDIC covered loans.

The MUFG Group categorizes loans into risk categories based on relevant information about the ability ofborrowers to service their debt, including, but not limited to, historical and current financial information,
historical and current payment experience, credit documentation, public and non-public information aboutborrowers and current economic trends as deemed appropriate to each segment.
The primary credit quality indicator for loans within all classes of the Commercial segment is the internal
credit rating assigned to each borrower based on the MUFG Group’s internal borrower ratings of 1 through 15
with the rating of 1 assigned to a borrower with the highest quality of credit. When assigning a credit rating to aborrower, the MUFG Group evaluates the borrower’s expected debt-service capability based on various
information, including financial and operating information of the borrower as well as information on the industry
in which the borrower operates, and the borrower’s business profile, management and compliance system. In
evaluating a borrower’s debt-service capability, the MUFG Group also conducts assessment on the level of
earnings and an analysis of the borrower’s net worth. Based on the internal borrower rating, loans within the
F-46

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Commercial segment are categorized as Normal (internal borrower ratings of 1 through 9), Close Watch (internalborrower ratings of 10 through 12), and Likely to become Bankrupt or Legally/Virtually Bankrupt (internalborrower ratings of 13 through 15). Loans to borrowers categorized as Normal represent those that are notdeemed to have collectability issues.
Loans to borrowers categorized as Close Watch represent those that require close monitoring as theborrower has begun to exhibit elements of potential concern with respect to its business performance andfinancial condition, the borrower has begun to exhibit elements of serious concern with respect to its businessperformance and financial condition, including business problems requiring long-term solutions, or the
borrower’s loans have been deemed restructured loans or loans contractually past due 90 days or more for special
reasons. Loans to borrowers categorized as Likely to Become Bankrupt or Legally/Virtually Bankrupt represent
those that have a higher probability of default than those categorized as Close Watch due to serious debt
repayment problems with poor progress in achieving restructuring plans, the borrower being considered virtuallybankrupt with no prospects for an improvement in business operations, or the borrower being legally bankrupt
with no prospects for continued business operations because of non-payment, suspension of business, voluntaryliquidation or filing for legal liquidation.
The accrual status is a primary credit quality indicator for loans within the Residential segment, the Card
segment and consumer loans within the UNBC segment. The accrual status of these loans is determined by the
number of delinquent payments. See Note 1 for further details of categorization of Accrual and Nonaccrual.
Commercial loans within the UNBC segment are categorized as either Pass or Criticized based on theinternal credit rating assigned to each borrower. Criticized loans include those loans that are potentially weak, as
the borrower has begun to exhibit deteriorating trends, well-defined weaknesses, which, if not corrected, could
jeopardize the full satisfaction of the debt, and critical weaknesses that make full collection improbable on thebasis of currently existing facts and conditions.
For the Commercial, Residential and Card segments, credit quality indicators are based on March 31
information. For the UNBC segment, credit quality indicators are basically based on December 31 information.

F-47

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Past Due Analysis
Age analysis of past due loans by class at March 31, 2011 and 2012 are shown below:

At March 31, 2011:

Commercial
Domestic . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . .
Construction . . . . . . . . . . .
Real estate . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . .
Wholesale and retail . . . . .
Banks and other financial
institutions . . . . . . . . . . .
Communication andinformation services . . .
Other industries . . . . . . . . .
Consumer . . . . . . . . . . . . .
Foreign-excluding UNBC . . .
Residential . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . .
UNBC . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .

Total
Loans(1)(2)

Recorded
Investment>
90 Days andAccruing¥50,244,567
11,215,565
1,269,083
10,901,347
3,382,088
8,388,860¥50,397,892
11,235,405
1,279,885
10,945,400
3,398,910
8,412,555¥ 8,640
30
42
3,182
457
116

6,237

3,410,286

3,416,523

6

5,047
4,496
8,602
74,05455,48579,196
27,951

10,861
5,983
15,03275,122
148,685
113,30352,561

1,237,098
8,396,930
2,043,310
15,962,733
15,978,909
742,264
3,786,856

1,247,959
8,402,913
2,058,342
16,037,855
16,127,594
855,567
3,839,417

15
4
4,788
—
46,265—163¥334,911¥542,996¥86,715,329¥87,258,325¥55,068

1-3 months
Past DueGreaterThan
3 months

Total
Past Due¥ 55,100
10,355
6,346
6,365
6,505
11,774¥ 98,225
9,485
4,456
37,688
10,317
11,921¥153,325
19,84010,80244,053
16,822
23,695

24

6,213

5,814
1,487
6,430
1,068
93,20034,107
24,610¥208,085

Current(in millions)

Notes:(1) Total loans in the above table do not include loans held for sale and loans acquired with deteriorated credit quality.
(2) Total loans of UNBC do not include ¥9,450 million of FDIC covered loans which are not subject to the guidance on loans and debt
securities acquired with deteriorated credit quality. See Note 2 for more information on FDIC covered loans.

F-48

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2012:

Commercial
Domestic . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . .
Construction . . . . . . . . . . .
Real estate . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . .
Wholesale and retail . . . . .
Banks and other financial
institutions . . . . . . . . . . .
Communication andinformation services . . .
Other industries . . . . . . . . .
Consumer . . . . . . . . . . . . .
Foreign-excluding UNBC . . .
Residential . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . .
UNBC . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .

Total
Loans(1)(2)

Recorded
Investment>
90 Days andAccruing¥51,638,177
11,427,987
1,150,612
10,420,641
3,215,355
8,439,890¥51,743,079
11,439,637
1,154,942
10,443,605
3,223,825
8,460,361¥ 8,064
19
63
2,735
200
71

187

3,506,397

3,506,584

—

5,939
9,644
11,026
26,60657,871
46,69523,011

10,6579,800
16,37329,065
149,480
76,44652,7081,273,319
10,375,479
1,828,497
19,915,211
15,417,904
666,978
4,075,429

1,283,976
10,385,279
1,844,870
19,944,276
15,567,384
743,424
4,128,137

15
8
4,953
—
56,522—
77¥222,611¥412,601¥91,713,699¥92,126,300¥64,663

1-3 months
Past DueGreaterThan
3 months

Total
Past Due¥ 36,474
3,874
1,856
6,551
3,739
10,225¥ 68,428
7,776
2,474
16,413
4,731
10,246¥104,902
11,6504,330
22,9648,470
20,471

8

179

4,718
156
5,347
2,459
91,60929,751
29,697¥189,990

Current(in millions)

Notes:(1) Total loans in the above table do not include loans held for sale and loans acquired with deteriorated credit quality.
(2) Total loans of UNBC do not include ¥3,690 million of FDIC covered loans which are not subject to the guidance on loans and debt
securities acquired with deteriorated credit quality. See Note 2 for more information on FDIC covered loans.

Allowance for Credit Losses
Changes in the allowance for credit losses for the fiscal years ended March 31, 2010 and 2011 are shown
below:
2010
2011(in millions)

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,156,638
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
647,793
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
520,772
Less—Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52,372¥1,315,615
292,035
385,770
43,670Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

468,400(20,416)

342,100(25,094)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,315,615¥1,240,456

Note:(1) Others principally include losses (gains) from foreign exchange translation. In addition, for the fiscal year ended March 31, 2010, others
include adjustments related to restructuring of business operations.

F-49

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Allowance for credit losses and recorded investment in loans by portfolio segment at March 31, 2011 areshown below:
At March 31, 2011:

Allowance for credit losses:
Balance at end of fiscal year:
Individually evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Collectively evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . . . . .
Allowance for credit losses total . . . . . . . .
Loans:
Balance at end of fiscal year:
Individually evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Collectively evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . . . . .
Total loans(1) . . . . . . . . . . . . . . . . . . . .

Commercial¥¥

587,863

Residential¥

Card(in millions)

UNBC

¥

9,793

Total

86,514¥ 46,963¥

731,133

277,130

76,73435,26585,209474,338

30,618

1,967

379

2,021

34,985

895,611¥

165,215¥ 82,607¥

97,023¥ 1,240,456¥ 1,341,679¥

300,756¥150,716¥

55,197¥ 1,848,348

65,094,068

15,826,839

704,851

3,793,669

85,419,427

119,464

22,42016,476

113,549

271,909¥66,555,211¥16,150,015¥872,043¥3,962,415¥87,539,684

Note:(1) Total loans in the above table do not include loans held for sale and represent balances without adjustments in relation to unearned
income, unamortized premiums and deferred loan fees.

F-50

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Changes in the allowance for credit losses by portfolio segment for the fiscal year ended March 31, 2012
and recorded investment in loans by portfolio segment at March 31, 2012 are shown below:
Fiscal year ended March 31, 2012:

Allowance for credit losses:
Balance at beginning of fiscal year: . . . . . .
Provision for credit losses . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . .

Commercial¥

Net charge-offs . . . . . . . . . . . . . . . . . . . . . .
Others(2) . . . . . . . . . . . . . . . . . . . . . . . . . . .

895,611
181,449
126,157
36,043

Balance at end of fiscal year:
Individually evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Collectively evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . . . . .
Allowance for credit losses total . . . . . . . .
Loans:
Balance at end of fiscal year:
Individually evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Collectively evaluated for
impairment . . . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . . . . .
Total loans(1) . . . . . . . . . . . . . . . . . . . . . . . .

Residential¥

22,859—41,587—

101,773¥ 47,418

245,916

67,855

21,15853,857

388,786

32,574

2,209

327

1,281

36,391

¥

¥

Total

¥ 82,607
27,88343,073
1,486

705,818¥

UNBC

165,215
29,481
23,075
216

90,114(2,638)¥Card(in millions)

97,023 ¥ 1,240,456(15,004)
223,809
24,494
216,799
5,684
43,42918,810(2,750)¥5,321

173,370(5,388)¥860,330

984,308¥

171,837¥ 68,903¥

60,459¥ 1,285,507¥ 1,479,098¥

321,074¥145,805¥

44,469¥ 1,990,446

70,208,257

15,246,310

597,619

4,087,358

90,139,544

108,634

19,534

14,44970,085

212,702¥71,795,989¥15,586,918¥757,873¥4,201,912¥92,342,692

Notes:(1) Total loans in the above table do not include loans held for sale and represent balances without adjustments in relation to unearned
income, unamortized premiums and deferred loan fees.
(2) Others principally include gains from foreign exchange translation.

Nonperforming loans were actively disposed of by sales during recent years. The allocated allowance for
credit losses for such loans was removed from the allowance for credit losses and transferred to the valuation
allowance for loans held for sale upon a decision to sell. Net charge-offs in the above table include a decrease in
the allowance for credit losses due to loan disposal activity amounting to ¥6.8 billion, ¥0.6 billion and¥1.2 billion for the fiscal years ended March 31, 2010, 2011 and 2012, respectively.
The MUFG Group sold ¥706 billion of commercial loans during the fiscal year ended March 31, 2012.

F-51

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Loans Acquired in a Transfer
In accordance with the guidance on loans and debt securities acquired with deteriorated credit quality, thefollowing table sets forth information regarding loans acquired in connection with mergers, for which it isprobable, at acquisition, that the MUFG Group will be unable to collect all contractually required payments
receivable.
2011
2012
(in millions)

Loans acquired during the fiscal year:
Contractually required payments receivable at acquisitions . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows expected to be collected at acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of loans at acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretable yield for loans within the scope of the guidance on loans and debt securities
acquired with deteriorated credit quality:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassifications from nonaccretable difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥341,843
181,663
152,263¥ 29,483
2,854
2,854

¥ 60,925 ¥ 84,728
29,401—(27,321) (34,373)——
23,18437,793(1,461)(1,271)¥ 84,728¥ 86,877

Loans within the scope of the guidance on loans and debt securities acquired withdeteriorated credit quality:
Outstanding balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥522,015 ¥662,369
Outstanding balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
662,369
493,111
Carrying amount at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
188,719
271,909
Carrying amount at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
271,909
212,702
Nonaccruing loans within the scope of the guidance on loans and debt securities acquiredwith deteriorated credit quality:
Carrying amount at acquisition date during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . ¥760 ¥ 2,854
Carrying amount at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,833
26,346
Provisions within the scope of the guidance on loans and debt securities acquired withdeteriorated credit quality:
Balance of allowance for loan losses at beginning of fiscal year . . . . . . . . . . . . . . . . . ¥ 25,906 ¥ 34,985
Additional provisions during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,516
5,620
Reductions of allowance during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,202
1,658
Balance of allowance for loan losses at end of fiscal year . . . . . . . . . . . . . . . . . . . . . .
34,98536,391The MUFG Group considered prepayments in the determination of contractual cash flows and cash flows
expected to be collected based on historical results.
Lease Receivables
As part of its financing activities, the MUFG Group enters into leasing arrangements with customers. The
MUFG Group’s leasing operations are performed through leasing subsidiaries and consist principally of direct
financing leases involving various types of data processing equipment, office equipment and transportationequipment.
F-52

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of March 31, 2011 and 2012, the components of the investment in direct financing leases were as
follows:
2011
2012(in millions)

Minimum lease payments receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated residual values of leased property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less—unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥638,287 ¥565,967
26,713
17,653(59,333) (43,840)

Net investment in direct financing leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥605,667¥539,780

Future minimum lease payment receivables under noncancelable leasing agreements as of March 31, 2012were as follows:
Directfinancingleases(in millions)Fiscal year ending March 31:
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥190,504
147,01396,016
58,641
26,99946,794

Total minimum lease payment receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥565,967

Government-led Loan Restructuring Program
Under the legislation enacted by the Japanese Diet in June 1996, which incorporates the restructuring
program for the loans of seven failed housing-loan companies (the “Jusen”), the Deposit Insurance Corporation(“DIC”) established a Housing Loan Administration Corporation (“HLAC”) to collect and dispose of the loans of
the liquidated Jusen. In 1999, HLAC merged with the Resolution and Collection Bank Limited to create the
Resolution and Collection Corporation (“RCC”), which is wholly owned by the DIC.
Financial institutions, including the MUFG Group, waived the repayment of substantial amounts of theloans to the Jusen and transferred the remaining balances to HLAC. Financial institutions were requested to makeloans to HLAC to finance its collection activities, and in the fiscal year ended March 31, 1997, the MUFG Groupmade loans of ¥407,078 million with an original maturity term of 15 years. The 15-year term loans to HLAC,
which are guaranteed by the DIC under the legislation and the loan agreements, mature in 2011 and earn interest
at TIBOR (Tokyo Interbank Offered Rate) plus 0.125%. On October 1, 2005, the MUFG Group acquired, at fairvalue, loans of the UFJ Holdings Group to HLAC in connection with the merger with UFJ Holdings. During the
fiscal years ended March 31, 2011 and 2012, certain of these loans were repaid before maturity. At March 31,
2011 and 2012, outstanding loans to RCC were ¥169,559 million and nil, respectively.
Under this restructuring program, a Financial Stabilization Fund (the “Special Fund”) was establishedwithin the DIC, and the Bank of Japan and other financial institutions established another fund (the “NewFund”). These funds are principally invested in Japanese government bonds. The MUFG Group madenon-interest-earning deposits of ¥176,089 million with the Special Fund and the New Fund in the fiscal year
ended March 31, 1997, and expected all collection activities to be completed by December 2011, after 15 yearsof collection activities of the Jusen loans by RCC.
F-53

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As the end of RCC’s operations was approaching, the amount of the loss (so-called “stage two loss”), whichmight have ultimately been incurred through the collection activities, had been becoming clearer. In May 2011,
the Japanese Diet enacted a law to partially revise the Deposit Insurance Law. Although it has already been
decided that the loss should be shared equally between the Japanese government and private financial
institutions, the revised law clarified the details of how the Japanese government will absorb the half of the loss.
On the other hand, the second half of the loss, which has to be absorbed by private financial institutions, would
be covered by the investment income earned by the Special Fund during the 15 years. However, if the loss
exceeds the total of investment income earned by the Special Fund, such an excess loss would be covered by thedeposits with the Special Fund. As a possibility of such an excess loss became higher, the MUFG Group
recognized impairment losses for the deposits with the Special Fund of ¥22,705 million, which are included in
Other non-interest expenses, for the fiscal year ended March 31, 2011.
The deposit balances with the New Fund and the Special Fund as of March 31, 2011 and 2012, which areincluded in Other assets, were ¥362,695 million and ¥204,956 million, respectively, reflecting a present value
discount and subsequent accretion of the discount during the period until the expected maturity date.
In September 2011, the deposits of ¥161,435 million with the New Fund were fully collected according totheir terms. In December 2011, the Policy Board Meeting of DIC announced a decision that it would return theSpecial Fund in full by the end of June 2012.
Subsequent to March 31, 2012, in June 2012, deposits of ¥204,956 million with the Special Fund, were fullycollected according to the decision made in December 2011.
Sales of Loans
The MUFG Group originates various types of loans to corporate and individual customers in Japan andoverseas in the normal course of its business. In order to improve its loan quality, BTMU and MUTB actively
disposed of nonperforming loans. Most of such nonperforming loans were disposed of by sales to third parties
without any continuing involvement. Management of BTMU and MUTB generally approves disposals after
significant sales terms, including prices, are negotiated. As such, loans are disposed of by sales shortly after theloans are transferred to the held-for-sale classification. The net gains on the sales of loans were ¥17,764 million,¥10,382 million and ¥16,256 million for the fiscal years ended March 31, 2010, 2011 and 2012, respectively.
Loan Securitization
During the fiscal year ended March 31, 2009, the MUFG Group securitized commercial loans without
recourse to a special purpose entity which was accounted for as a trust. The MUFG Group’s retained interests
consisted of senior beneficial interests which were recorded as investment securities. The subordinated beneficial
interests were sold and the gains or losses recognized were not material. The MUFG Group had no significant
securitization transactions accounted for as sales for the fiscal years ended March 31, 2010, 2011 and 2012.
The initial fair value of the senior beneficial interests at the date of the securitization was estimated based on
the present value of future expected cash flows using inputs which are observable for the asset or liability either
directly or indirectly. The key inputs and assumptions used in measuring the initial fair value were one monthforward rates and anticipated credit spreads. A possibility of prepayment was not considered in measuring fairvalue because it was not assumed to occur for commercial loans.
The carrying amount of the investment securities was allocated between the senior beneficial interests andthe subordinated beneficial interests based on their relative fair values at the date of the securitization. The senior
F-54

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
beneficial interests are carried at their fair values, and the unrealized holding gains and losses are excluded from
earnings and reported as a net amount in a separate component of shareholders’ equity until realized. The fairvalue of the senior beneficial interests was ¥22,032 million and ¥12,133 million at March 31, 2011 and 2012,
respectively. The purpose of the special purpose entity is to hold and manage only loans without recourse. The
following table reflects principal amounts related to assets and liabilities of the special purpose entity at
March 31, 2011 and 2012:
2011
2012
(in millions)

Principal amounts of commercial loans in trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥25,638¥15,165

Senior beneficial interests retained by the MUFG Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated beneficial interests sold to investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥22,8542,784¥12,559
2,606

Total beneficial interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥25,638¥15,165

The MUFG Group provides servicing for beneficial interests in the securitized loans. However, no servicing
assets or liabilities were recorded as a result of this transaction since the MUFG Group received adequate
compensation. The MUFG Group has never provided contractual or noncontractual financial support to thespecial purpose entity or subordinated beneficial interests holders during or before the present period. Also, there
were no liquidity arrangements, guarantees or other commitments provided by third parties related to thetransferred financial assets. At March 31, 2011 and 2012, key economic assumptions used in measuring the fairvalue of the senior beneficial interests were as follows:
One month forward rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2011

2012

(0.22) - 0.79%
2.80 - 7.20%(0.28) - 0.78%
2.49 - 7.16%

At March 31, 2011 and 2012, the sensitivities of the fair value of the senior beneficial interests to an
immediate adverse change of 10 basis points (“bp”) and 20bp, and 10% and 20% were as follows:
One month forward rate:
Impact of 10bp adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 20bp adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit spread:
Impact of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2011

2012

99.85 - 99.92%
99.70 - 99.84%

99.86 - 99.88%
99.72 - 99.77%

99.02 - 99.79%
98.04 - 99.57%

99.15 - 99.71%
98.30 - 99.42%

The sensitivities are hypothetical. In this table, the effect of a variation in a particular assumption on the fairvalue of the senior beneficial interests was calculated without changing any other assumptions; in reality,changes could be correlated and changes in one factor may result in changes in another, which might magnify or
counteract the sensitivities.
The table below summarizes certain cash flows between the MUFG Group and the special purpose entity forthe fiscal years ended March 31, 2011 and 2012:
2011
2012
(in millions)

Cash flows from collections received on senior beneficial interests . . . . . . . . . . . . . . . . . . . .
Cash flows from dividends on senior beneficial interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Servicing fees collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-55¥17,937209
4¥10,295
119
2

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
There were no other loans that were managed with the securitized loans, and both the transferred assets andthe retained assets had no delinquencies at March 31, 2011 and 2012. No credit losses were incurred from thoseloans for the fiscal years ended March 31, 2011 and 2012.
Related Party Loans
In some cases, the banking subsidiaries of MUFG make loans to related parties, including their directors andexecutive officers, in the course of their normal commercial banking business. At March 31, 2011 and 2012,
outstanding loans to such related parties were not material.
In the opinion of management, these related party loans were made on substantially the same terms,
including interest rates and collateral requirements, as those terms prevailing at the date these loans were made.
For the fiscal years ended March 31, 2010, 2011 and 2012, there were no loans to related parties that werecharged-off. Additionally, at March 31, 2010, 2011, and 2012, there were no loans to related parties that wereimpaired.
5.

PREMISES AND EQUIPMENT
Premises and equipment at March 31, 2011 and 2012 consisted of the following:
2011
2012
(in millions)Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 391,602 ¥ 381,977
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
694,384
708,223
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
667,073
687,228
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
225,407
233,123
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,007
19,330Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,993,473
1,030,925

2,029,881
1,042,407

Premises and equipment-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 962,548¥ 987,474

Premises and equipment include capitalized leases, principally related to data processing equipment, whichamounted to ¥66,006 million and ¥45,883 million at March 31, 2011 and 2012, respectively. Accumulated
depreciation on such capitalized leases at March 31, 2011 and 2012 amounted to ¥52,223 million and¥31,090 million, respectively.
BTMU has entered into sales agreements to sell its buildings and land and, under separate agreements,
leased those properties back for its business operations, including bank branches. BTMU either provided
nonrecourse financings to the buyers for the sales proceeds or invested in the equities of the buyers. As a result,
BTMU was considered to have continuing involvement with the properties. For accounting and reporting
purposes, these transactions were accounted for under the financing method with the sales proceeds recognized
as a financing obligation. The properties were reported on the consolidated balance sheets and depreciated. The
financing obligation at March 31, 2011 and 2012 was ¥50,875 million and ¥48,500 million, respectively.
For the fiscal years ended March 31, 2010, 2011 and 2012, the MUFG Group recognized ¥9,198 million,¥11,332 million and ¥10,913 million, respectively, of impairment losses for long-lived assets, primarily realestate which was either formerly used for its banking operations and is no longer used or real estate that is being
used where recovery of the carrying amount is doubtful. In addition, ¥1,350 million, ¥199 million and
F-56

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)¥5,209 million of impairment losses were recognized for real estate held for sale for the fiscal years ended
March 31, 2010, 2011 and 2012, respectively. These losses are included in Other non-interest expenses. In
computing the amount of impairment losses, fair value was determined primarily based on market prices, if
available, or the estimated price based on an appraisal.
6.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill
The table below presents the changes in the carrying amount of goodwill by business segment during the
fiscal years ended March 31, 2011 and 2012:
Integrated Integrated Integrated
Integrated Global Business
RetailCorporate
Trust
Group
Banking
Banking
AssetsBusiness Business Business Other than
Group
Group
Group
UNBC
UNBC
Total
(in millions)

Balance at March 31, 2010:
Goodwill . . . . . . . . . . . . . . . . . . . . . . 840,055 885,234
22,527
Accumulated impairment losses . . . . (840,055) (885,234) (14,735)¥
Goodwill acquired during the fiscal
year(2) . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation
adjustments and other . . . . . . . . . .

¥152,203 219,735 371,938 2,300
(532)
—
(532)
—

2,122,054(1,740,556)— ¥ 7,792 ¥151,671 ¥219,735 ¥371,406 ¥2,300 ¥

—

—

—

—

—

—

—

—

8,068

381,498

8,068

—

8,068

(26,174) (26,174)—(26,174)

152,203 201,629 353,832 2,300
(532)
—
(532)
—

2,103,948(1,740,556)— ¥— ¥ 7,792 ¥151,671 ¥201,629 ¥353,300 ¥2,300 ¥

363,392———(9,109)152,203 192,520 344,723 2,300
(532)
—
(532)
—

2,094,839(1,740,556)—

Balance at March 31, 2012:
Goodwill . . . . . . . . . . . . . . . . . . . . . . 840,055 885,234
22,527
Accumulated impairment losses . . . . (840,055) (885,234) (14,735)
¥

Total

— ¥

Balance at March 31, 2011:
Goodwill . . . . . . . . . . . . . . . . . . . . . . 840,055 885,234
22,527
Accumulated impairment losses . . . . (840,055) (885,234) (14,735)
Foreign currency translation
adjustments and other . . . . . . . . . .

GlobalMarkets— ¥—(9,109)(9,109)— ¥ 7,792 ¥151,671 ¥192,520 ¥344,191 ¥2,300 ¥

354,283

Notes:(1) See Note 27 for the business segment information of the MUFG Group.
(2) See Note 2 for the goodwill acquired in connection with various acquisitions.

A goodwill impairment loss of ¥461 million was recognized for the fiscal year ended March 31, 2010. There
were no impairment losses recognized for the fiscal years ended March 31, 2011 and 2012. The reporting unit for
which an impairment loss was recognized is as follows:Business Segment

Reporting Unit

Integrated Corporate Banking Business Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-57

BTMU-Corporate

Impairment loss
2010
(in millions)

¥

461

¥

461

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The fair value of the reporting unit noted above was estimated using the present value of expected future
cash flows.
Other Intangible Assets
The table below presents the gross carrying amount, accumulated amortization and net carrying amount, in
total and by major class of intangible assets at March 31, 2011 and 2012:
2011
Gross
carrying
amountIntangible assets subject to amortization:
Software . . . . . . . . . . . . . . . . . . . . . . .
Core deposit intangibles . . . . . . . . . . .
Customer relationships . . . . . . . . . . . .
Trade names . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . .

2012

Accumulated
amortization

Net
Gross
carrying
carrying
amountamount(in millions)

Accumulated
amortization

Net
carrying
amount¥1,374,334
632,533
207,670
51,5794,173¥ 839,872
377,325
113,435
10,2092,648¥534,462
255,208
94,23541,370
1,525¥1,486,013
629,933
231,20951,2494,263¥ 959,829
418,315
125,260
12,261
2,805¥526,184
211,618
105,949
38,9881,458¥2,270,289¥1,343,489

926,800¥2,402,667¥1,518,470

884,197

Intangible assets not subject toamortization:
Indefinite-lived customer
relationships . . . . . . . . . . . . . . . . . .
Indefinite-lived trade names . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . .

42,224
4,459
18,038

—
3,037
9,249

Total . . . . . . . . . . . . . . . . . . . . . .

64,721

12,286

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥991,521¥896,483

Intangible assets subject to amortization acquired during the fiscal year ended March 31, 2011 amounted to¥153,887 million, which primarily consisted of ¥151,992 million of software. The weighted average amortization
period for these assets is 6 years. There is no significant residual value estimated for these assets. Intangible
assets not subject to amortization acquired during the fiscal year ended March 31, 2011 amounted to¥332 million.
Intangible assets subject to amortization acquired during the fiscal year ended March 31, 2012 amounted to¥163,961 million, which primarily consisted of ¥163,060 million of software. The weighted average amortization
period for these assets is 5 years. There is no significant residual value estimated for these assets. Intangible
assets not subject to amortization acquired during the fiscal year ended March 31, 2012 amounted to¥545 million.
For the fiscal years ended March 31, 2010, 2011 and 2012, the MUFG Group recognized ¥12,400 million,¥26,566 million and ¥30,986 million, respectively, of impairment losses for intangible assets whose carrying
amounts exceeded their fair value. In computing the amount of impairment losses, fair value was determinedprimarily based on the present value of expected future cash flows, the estimated value based on appraisals, ormarket prices.
The impairment loss for the fiscal year ended March 31, 2010 included a loss of ¥9,239 million relating to
the contractual rights of a business alliance, which was reported under the Integrated Retail Banking Business
F-58

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Group. The intangible asset was not subject to amortization and was aggregated in Other intangible assets. The
fair value of the intangible asset was calculated based on the present value of expected future cash flows.
Estimated future cash flows were revised downwards due to a change in the business environment within ourcredit card business. Accordingly, the MUFG Group reevaluated the intangible asset and recognized an
impairment loss.
The impairment loss for the fiscal year ended March 31, 2011 included a loss of ¥19,267 million relating tocustomer relationships under the Integrated Trust Assets Business Group and a loss of ¥6,226 million relating to
the contractual rights of a business alliance reported under the Integrated Retail Banking Business Group. These
intangible assets were not subject to amortization. The intangible assets were valued based on discounted
expected future cash flows. Estimated future cash flows of the above customer relationships were revised
downwards due to the global financial environment where low interest rates were expected to continue, and theappreciation of Japanese yen against major currencies, and its adverse impact to the growth prospect of trust
assets. The estimated future cash flows of the above contractual rights were revised downwards due to the severe
environment of the credit card business. Accordingly, the MUFG Group reevaluated the intangible assets andrecognized impairment losses.
The impairment loss for the fiscal year ended March 31, 2012 included a loss of ¥8,334 million relating to
the contractual rights of a business alliance reported under the Integrated Retail Banking Business Group, whichwere not subject to amortization, and a loss of ¥18,554 million relating to the customer relationships from fundcontracts under the Integrated Trust Assets Business Group, which were reclassified from intangible assets not
subject to amortization to those subject to amortization at September 30, 2011. The intangible assets were valued
based on discounted expected future cash flows. The MUFG Group incorporated the recent further deteriorated
business environment of the credit card business into its future cash flows projection of the above contractual
rights. Also, the estimated future cash flows of the above customer relationships from fund contracts wererevised downward due to the recent global financial market instability and its adverse impact on the expected
growth prospects of trust assets. Accordingly, the MUFG Group reevaluated the intangible assets and recognizedimpairment losses. In relation to the estimate of useful lives of the customer relationships, see Note 1 “Change in
Accounting Estimates” section for the details.
Also, for the fiscal year ended March 31, 2011, the MUFG Group recognized a loss of ¥16,370 million in
Other non-interest expenses in the consolidated statements of income from the disposal of software for internal
use due to a suspension of the system integration project by one of MUFG’s subsidiaries.
The estimated aggregate amortization expense for intangible assets for the next five fiscal years is asfollows:(in millions)Fiscal year ending March 31:
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-59¥206,774
164,765
130,556
102,12175,527

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
7.

INCOME TAXESThe detail of current and deferred income tax expense for the fiscal years ended March 31, 2010, 2011 and2012 were as follows:
2010

2011
(in millions)2012

Current:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 36,993
53,659¥ 52,982
70,292¥156,764
79,313

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90,652

123,274

236,077

Deferred:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

304,054
18,399293,450
16,901

171,889
21,225

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322,453

310,351

193,114

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) reported in equity relating to:Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives qualifying for cash flow hedges . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . .

413,105

433,625

429,191

344,757(3,295)
157,720
1,085(185,069)(2,250)(69,139)(2,032)

116,997
235(66,573)
13,230Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

500,267(258,490)

63,889Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥913,372¥ 175,135¥493,080

On November 30, 2011, the Japanese Diet enacted two tax related laws: “Amendment to the 2011 Tax
Reform” and “Special Measures to Secure the Financial Resources to Implement the Restoration from The Great
East Japan Earthquake.” The changes under the new laws include a limitation on the use of net operating loss
carryforwards to 80% of taxable income, a two-year increase in the carryforward period of certain net operating
loss carryforwards to a nine-year period, and an approximately 5% reduction in the effective statutory rate ofcorporate income tax from 40.6% to 35.6%. While the reduction in the effective statutory rate was effective forfiscal years beginning on or after April 1, 2012, a temporary surtax levied on corporate income taxes to fund theearthquake recovery efforts caused the effective statutory rate of corporate income tax to be approximately
38.0% for the three year period between April 1, 2012 and March 31, 2015. The change in tax laws resulted in an
increase of ¥77,997 million in income tax expense for the fiscal year ended March 31, 2012.
Reconciliation of Effective Income Tax Rate
Income taxes in Japan applicable to the MUFG Group are imposed by the national, prefectural andmunicipal governments, and in the aggregate resulted in a normal effective statutory rate of approximately
40.6% for the fiscal years ended March 31, 2010, 2011 and 2012. Foreign subsidiaries are subject to income
taxes of the countries in which they operate.

F-60

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A reconciliation of the effective income tax rate reflected in the accompanying consolidated statements ofincome to the combined normal effective statutory tax rate for the fiscal years ended March 31, 2010, 2011 and2012 are as follows:
2010

2011

2012

Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.6% 40.6% 40.6%
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.2
0.3
0.2
Dividends from foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.0
0.1
0.1
Foreign tax credit and payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
3.3
(2.1)
Lower tax rates applicable to income of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . (0.7) (0.6) (0.5)
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.8) 10.6
2.3
Realization of previously unrecognized tax effects of subsidiaries . . . . . . . . . . . . . . . . (0.9) (3.7)
0.0
Nontaxable dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1) (2.7) (3.4)
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) (1.5)
0.2
Tax and interest expense for uncertainty in income taxes . . . . . . . . . . . . . . . . . . . . . . .
0.6
0.2
0.1
Expiration of loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.2
6.4
4.8
Effect of changes in tax laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——9.1
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.3) (0.2) (0.9)
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31.9% 52.8% 50.5%

Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are computed for each tax jurisdiction using currently enacted tax rates
applicable to periods when the temporary differences are expected to reverse. The tax effects of the items
comprising the MUFG Group’s net deferred tax assets at March 31, 2011 and 2012 were as follows:
2011
2012
(in millions)Deferred tax assets:
Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 887,531 ¥ 759,199
Operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
259,183
186,800
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,785
9,031
Accrued liabilities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
438,045
461,323
Premises and equipment, including sale-and-leaseback transactions . . . . . . . . . . .
126,905
112,185
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,31267,752
Investment securities (including trading account assets at fair value under fairvalue option) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
209,673—
Accrued severance indemnities and pension plans . . . . . . . . . . . . . . . . . . . . . . . . .
169,349
206,329
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(728,347)(644,701)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,432,436

1,157,918

Deferred tax liabilities:
Investment securities (including trading account assets at fair value under fairvalue option) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—164,291
51,23950,41837,876
123,027
48,12439,509Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

265,948248,536

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,166,488¥ 909,382

F-61

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The valuation allowance was provided primarily against deferred tax assets recorded at MUFG and its
subsidiaries with operating loss carryforwards. The amount of valuation allowance is determined based on future
reversals of existing taxable temporary differences and future taxable income exclusive of reversing temporary
differences. Future taxable income is developed from forecasted operating results, based on recent historical
trends and approved business plans, the eligible carryforward periods and other relevant factors. For certain
subsidiaries where strong negative evidence exists, such as the existence of significant amounts of operating loss
carryforwards, cumulative losses and the expiration of unused operating loss carryforwards in recent years, avaluation allowance was recognized against the deferred tax assets as of March 31, 2011 and 2012 to the extent
that it is more likely than not that they will not be realized.
Income taxes are not provided on undistributed earnings of certain foreign subsidiaries that are considered
to be indefinitely reinvested in the operations of such subsidiaries. At March 31, 2011 and 2012, theundistributed earnings of such foreign subsidiaries amounted to approximately ¥26,378 million and¥26,637 million, respectively. Determination of the amount of unrecognized deferred tax liabilities with respect
to these undistributed earnings is not practicable because of the complexity associated with its hypothetical
calculation including foreign withholding taxes and foreign tax credits. MUFG has neither plans nor the intention
to dispose of investments in such foreign subsidiaries and, accordingly, does not expect to record capital gains orlosses, or otherwise monetize the undistributed earnings of such foreign subsidiaries.
Operating Loss and Tax Credit Carryforwards
At March 31, 2012, the MUFG Group had operating loss carryforwards for corporate tax of¥519,777 million and tax credit carryforwards of ¥1,324 million for tax purposes. Such carryforwards, if not
utilized, are scheduled to expire as follows:
Operating loss
Tax credit
carryforwards carryforwards(in millions)Fiscal year ending March 31:
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
No definite expiration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥178,010
27,904
11,567——
37,574245,367
19,355¥

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥519,777¥1,324

F-62

—
—
—
—
—
103
1,221
—

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Uncertainty in Income Tax
The following is a roll-forward of the MUFG Group’s unrecognized tax benefits for the fiscal years ended
March 31, 2010, 2011 and 2012:
2010

2011
(in millions)

2012

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥72,857 ¥75,479 ¥61,297
Gross amount of increases for current year’s tax positions . . . . . . . . . . . . . . .
2,771
406
455
Gross amount of decreases for current year’s tax positions . . . . . . . . . . . . . . .
—(1,482)(339)
Gross amount of increases for prior years’ tax positions . . . . . . . . . . . . . . . . .
15,2089,113
2,887
Gross amount of decreases for prior years’ tax positions . . . . . . . . . . . . . . . .
(5,506) (8,698)(312)
Net amount of changes relating to settlements with tax authorities . . . . . . . .
(6,695) (4,434) (2,515)
Decreases due to lapse of applicable statutes of limitations . . . . . . . . . . . . . .
(1,281) (1,479) (1,123)
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,875) (7,608) (1,762)
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥75,479¥61,297¥58,588

The total amount of unrecognized tax benefits at March 31, 2010, 2011 and 2012 that, if recognized, would
affect the effective tax rate are ¥27,192 million, ¥24,639 million and ¥9,170 million, respectively. The remainderof the uncertain tax positions have offsetting amounts in other jurisdictions or are temporary differences.
The MUFG Group classifies interest and penalties, if applicable, related to income taxes as Income tax
expense. Accrued interest and penalties (not included in the “unrecognized tax benefits” above) are a component
of Other liabilities. The following is a roll-forward of the interest and penalties recognized in the consolidated
financial statements for the fiscal years ended March 31, 2010, 2011 and 2012:
2010

2011
(in millions)

2012

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total interest and penalties in the consolidated statements of income . . . . . . . . . . . . .
Total cash settlements and foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,842 ¥7,273 ¥7,033
4,490
585
27
(3,059)
(825)
(126)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,273¥7,033¥6,934The MUFG Group is subject to ongoing tax examinations by the tax authorities of the various jurisdictions
in which it operates. The following are the major tax jurisdictions in which the MUFG Group operates and thestatus of years under audit or open to examination:
Jurisdiction

Tax years

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—New York City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2011 and forward
2007 and forward
2005 and forward
2001 and forward
2001 and forward

The MUFG Group is currently under continuous examinations by the tax authorities in various domestic andforeign jurisdictions and many of these examinations are resolved every year. It is reasonably possible that theunrecognized tax benefits will decrease by approximately ¥16.6 billion during the next twelve months, sinceresolved items will be removed from the balance whether their resolution results in payment or recognition.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income (loss) before Income Tax Expense
Income (loss) before income tax expense by jurisdiction for the fiscal years ended March 31, 2010, 2011
and 2012 was as follows:
2010

2011
(in millions)2012

Domestic income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 870,192
426,832¥443,304
378,508¥1,037,891(187,949)(1)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,297,024¥821,812¥ 849,942

Note:(1) An other-than-temporary impairment loss of Morgan Stanley’s common stock was included in Foreign income (loss). See Note 2 forfurther details of an other-than-temporary impairment loss of Morgan Stanley’s common stock.

8.

PLEDGED ASSETS AND COLLATERAL

Pledged Assets
At March 31, 2012, assets mortgaged, pledged, or otherwise subject to lien were as follows:2012(in millions)

Trading account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,832,084
5,653,930
8,243,786
65,106

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥24,794,906

The above pledged assets were classified by type of liabilities to which they related as follows:2012(in millions)

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 258,780
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
535,139
Payables under repurchase agreements and securities lending transactions . . . . . . . . . . . . . . . . . . . .
13,468,050
Other short-term borrowings and long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,471,528
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,409Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥24,794,906

In addition, at March 31, 2012, certain investment securities, principally Japanese national government andJapanese government agency bonds, loans, and other assets aggregating ¥16,277,464 million were pledged ascollateral for acting as a collection agent of public funds, for settlement of exchange at the Bank of Japan and theTokyo Bankers Association, for derivative transactions and for certain other purposes.
The MUFG Group engages in on-balance sheet securitizations. These securitizations of mortgage andapartment loans, which do not qualify for sales treatment, are accounted for as secured borrowings. The amountof loans in the table above represents, the carrying amount of these transactions with the carrying amount of theassociated liabilities included in other short-term borrowings and long-term debt.
Under Japanese law, Japanese banks are required to maintain certain reserves on deposit with the Bank ofJapan based on the amount of deposit balances and certain other factors. There are similar reserve deposit
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
requirements for foreign offices engaged in banking businesses in foreign countries. At March 31, 2011 and 2012
the reserve funds maintained by the MUFG Group, which are included in Cash and due from banks and Interestearning deposits in other banks, were ¥4,128,505 million and ¥3,562,136 million, respectively. Average reserves
during the fiscal years ended March 31, 2011 and 2012 were ¥2,301,810 million and ¥2,875,129 million,
respectively.
Collateral
The MUFG Group accepts and provides financial assets as collateral for transactions, principallycommercial loans, repurchase agreements and securities lending transactions, call money, and derivatives.
Financial assets eligible for such collateral include, among others, marketable equity securities, trade and notes
receivable and certificates of deposit.
Secured parties, including creditors and counterparties to certain transactions with the MUFG Group, may
sell or repledge financial assets provided as collateral. Certain contracts, however, may not be specific about the
secured party’s right to sell or repledge collateral under the applicable statutes and, therefore, whether or not the
secured party is permitted to sell or repledge collateral would differ depending on the interpretations of specificprovisions of the existing statutes, contract or certain market practices. If the MUFG Group determines, based on
available information, that a financial asset provided as collateral might not be sold or repledged by the secured
parties, such collateral is not separately reported in the consolidated balance sheets. If a secured party ispermitted to sell or repledge financial assets provided as collateral by contract or custom under the existing
statutes, the MUFG Group reports such pledged financial assets separately on the face of the consolidatedbalance sheets. At March 31, 2012, the MUFG Group pledged ¥24,361 billion of assets that may not be sold or
repledged by the secured parties.
Certain banking subsidiaries accept collateral for commercial loans and certain banking transactions under astandardized agreement with customers, which provides that these banking subsidiaries may require thecustomers to provide collateral or guarantees with respect to the loans and other banking transactions. Financial
assets pledged as collateral are generally negotiable and transferable instruments, and such negotiability andtransferability is authorized by applicable legislation. In principle, Japanese legislation permits these banking
subsidiaries to repledge financial assets accepted as collateral unless otherwise prohibited by contract or relevant
statutes. Nevertheless, the MUFG Group did not sell or repledge nor does it plan to sell or repledge suchcollateral accepted in connection with commercial loans before a debtor’s default or other credit events specified
in the agreements as it is not customary within the banking industry in Japan to dispose of collateral before adebtor’s default and other specified credit events. Derivative agreements commonly used in the marketplace do
not prohibit a secured party’s disposition of financial assets received as collateral, and in resale agreements andsecurities borrowing transactions, securities accepted as collateral may be sold or repledged by the secured
parties. At March 31, 2011 and 2012, the fair value of the collateral accepted by the MUFG Group that ispermitted to be sold or repledged was ¥12,352 billion and ¥11,721 billion, respectively, of which ¥8,227 billionand ¥8,530 billion, respectively, was sold or repledged.
At March 31, 2011 and 2012, the cash collateral paid for derivative transactions, which is included in Other
assets, was ¥766,617 million and ¥1,334,968 million, respectively, and the cash collateral received for derivativetransactions, which is included in Other liabilities, was ¥337,192 million and ¥272,806 million, respectively.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
9.

DEPOSITS

The balances of time deposits, including certificates of deposit (“CDs”), issued in amounts of ¥10 million(approximately US$121 thousand at the Federal Reserve Bank of New York’s noon buying rate on March 30,2012) or more with respect to domestic deposits and issued in amounts of US$100,000 or more with respect toforeign deposits were ¥26,960,090 million and ¥13,898,728 million, respectively, at March 31, 2011, and¥26,882,261 million and ¥17,553,275 million, respectively, at March 31, 2012.
The maturity information at March 31, 2012 for domestic and foreign time deposits, including CDs, issummarized as follows:
Domestic
Foreign(in millions)Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥35,498,871
Due after one year through two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,119,161
Due after two years through three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,163,459
Due after three years through four years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
766,624
Due after four years through five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
739,301
Due after five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
146,472
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

¥46,433,888¥17,396,644
225,816
59,652
54,13455,173
48,790¥17,840,209

CALL LOANS AND FUNDS SOLD, AND CALL MONEY AND FUNDS PURCHASED
A summary of funds transactions for the fiscal years ended March 31, 2010, 2011 and 2012 is as follows:
2010

2011
2012
(in millions, except percentages and days)

Average balance during the fiscal year:
Call money and funds purchased . . . . . . . . . . ¥Call loans and funds sold . . . . . . . . . . . . . . . .

2,349,445
651,778¥

2,173,923
656,322¥2,424,014
571,430

Net funds purchased position . . . . . . . . . . . . . . . . .

1,697,667¥

1,517,601¥

1,852,584¥

Call money and funds purchased:
Outstanding at end of fiscal year:
Amount . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,883,824¥
2,313,487¥
2,796,221
Principal range of maturities . . . . . . . . .
1 day to 30 days
1 day to 30 days
1 day to 30 days
Weighted average interest rate . . . . . . . .
0.28%
0.29%
0.28%
Maximum balance at any month-end during
the fiscal year . . . . . . . . . . . . . . . . . . . . . . . ¥2,611,306¥
2,488,885¥
3,808,763
Weighted average interest rate paid during
the fiscal year . . . . . . . . . . . . . . . . . . . . . . .
0.24%
0.27%
0.34%
Average balances are generally based on a daily average while a month-end average is used for certain
average balances when it is not practicable to obtain applicable daily averages.
11.

DUE TO TRUST ACCOUNTMUTB holds assets on behalf of its customers in an agent, fiduciary or trust capacity. Such trust accountassets are not the MUFG Group’s proprietary assets and are managed and accounted for separately.

F-66

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
However, excess cash funds of individual trust accounts are often placed with MUTB which manages thefunds together with its own funds in its proprietary account. Due to trust account reflects a temporary placementof the excess funds from individual trust accounts and, in view of the MUFG Group’s funding, due to trust
account is similar to short-term funding, including demand deposits and other overnight funds purchased. Thebalance changes in response to the day-to-day changes in the excess funds placed by the trust accounts. A
summary of due to trust account transactions for the fiscal years ended March 31, 2010, 2011 and 2012 is asfollows:
2010
2011(1)
2012(in millions, except percentages)

Average balance outstanding during the fiscal year . . . . . . . . . . . . . . . . . .
Maximum balance at any month-end during the fiscal year . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . . . . . .

¥1,683,607 ¥674,622 ¥ 608,061
1,795,280
752,244
1,117,699
0.36%
0.12%
0.11%

Note
(1) Effective April 1, 2010, the MUFG Group adopted new guidance that amends the accounting for consolidation of VIEs. As a result, theamount of average balance outstanding, the maximum balance at any month-end and weighted average interest rate during the fiscal year
ended March 31, 2011 decreased. See Note 1 for further discussion of the adoption of the new guidance.

12.

SHORT-TERM BORROWINGS AND LONG-TERM DEBTAt March 31, 2011 and 2012, the MUFG Group had unused lines of credit for short-term financing
amounting to ¥19,984,360 million and ¥11,527,432 million, respectively. The amounts principally consist of thelines of collateralized intraday overdrafts without interest charges and collateralized overnight loans on bills at
the official discount rate granted by the Bank of Japan, which are used to cover shortages in the Bank of Japanaccount and to meet liquidity needs. The MUFG Group may borrow from the Bank of Japan on demand up to thetotal amount of collateral eligible for credit extension.
Other short-term borrowings at March 31, 2011 and 2012 were comprised of the following:
2011
2012
(in millions, except percentages)

Domestic offices:
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,262,885
Borrowings from the Bank of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,513,650
Borrowings from other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
175,951
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65,843¥ 1,560,552
7,189,750
201,139
70,998

Total domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,018,329

9,022,439

Foreign offices:
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings from other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

732,910
730,479
6,595

1,359,900
472,01027,276

Total foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,469,984

1,859,186

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less unamortized discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,488,313
116

10,881,625
100

Other short-term borrowings—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,488,197¥10,881,525

Weighted average interest rate on outstanding balance at end of fiscal year . . . . . . . .

F-67

0.24%

0.23%

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Long-term debt (with original maturities of more than one year) at March 31, 2011 and 2012 was comprisedof the following:
2011
2012
(in millions)
MUFG:
Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥22
Subordinated debt(1):Adjustable rate bonds, payable in Japanese yen, no stated maturity, principally 3.92%-4.42% . . . . . . . . .
380,500
Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally 3.42%-4.78% . . . .
2,500
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 6.25% . . . . . . . . . . . .
416
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17% . . . . . . . . . . .
1,176
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, and Euro,402
no stated maturity, principally 6.20%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, no stated maturity, principally 3.05%-3.17% . . . . . .
16,209Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥380,500
1,500
411
1,098
394
—

401,225

BTMU:
Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 17,937
Obligation under sale-and-leaseback transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,875
Unsubordinated debt(1):Fixed rate bonds, payable in Japanese yen, due 2012-2027, principally 0.26%-2.69% . . . . . . . . . . . . . . . 1,485,402
Fixed rate bonds, payable in US dollars, due 2012-2017, principally 1.60%-3.85% . . . . . . . . . . . . . . . . .
400,561
Fixed rate bonds, payable in other currencies excluding Japanese yen, and US dollars, due 2012-2016,
principally 4.23%-5.58%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64,496
Fixed rate borrowings, payable in Japanese yen, due 2012-2026, principally 0.10%-0.50% . . . . . . . . . . .
7,428
Fixed rate borrowings, payable in US dollars, due 2018, principally 7.49% . . . . . . . . . . . . . . . . . . . . . . .
462
Fixed rate borrowings, payable in other currencies excluding Japanese yen, and US dollars, due 20122013, principally 2.22%-5.65%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,294
Adjustable rate bonds, payable in Japanese yen, due 2014, principally 1.67% . . . . . . . . . . . . . . . . . . . . . .
20,000Floating rate bonds, payable in US dollars, due 2014, principally 1.15% . . . . . . . . . . . . . . . . . . . . . . . . . .
41,575
Floating rate bonds, payable in other currencies excluding Japanese yen, and US dollars, due 2015,
principally 5.78% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Floating rate borrowings, payable in US dollars, due 2014-2018, principally 0.79%-1.13% . . . . . . . . . . .
424,06528

383,931¥

17,55448,5001,518,900
513,689
98,337
7,238
395
320
20,00040,89825,635457,190

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt(1):Fixed rate bonds, payable in Japanese yen, due 2012-2031, principally 1.10%-2.91% . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in Japanese yen, due 2012-2035, principally 0.70%-2.52% . . . . . . . . . . .
Fixed rate bonds, payable in US dollars, due 2011, principally 7.40% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in US dollars, due 2013, principally 6.76% . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds, payable in Japanese yen, due 2018-2019, principally 0.91%-1.74% . . . . . . . . . . .
Adjustable rate borrowings, payable in Japanese yen, due 2014-2028, principally 0.40%-2.90% . . . . . . .
Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally 1.06%-4.78% . . . .
Adjustable rate borrowings, payable in US dollars, due 2017, principally 0.97% . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 1.29%-6.25% . . . . . .
Adjustable rate borrowings, payable in Euro, due 2017, principally 1.58% . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17% . . . . . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, and Euro,due 2017, principally 1.30%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, and Euro,no stated maturity, principally 6.20%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, due 2020-2027, principally 0.51%-1.01% . . . . . . . . .

2,445,283

2,682,602

1,910,698
216,940
167,380
108,393
93,700574,500
1,083,800
145,928
207,875
11,757
154,605

2,135,169
225,737—
105,260
93,700535,600
901,100
41,095201,366
10,980144,387

36,820—75,648
38,10074,207
41,900Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations under loan securitization transaction accounted for as secured borrowings, due 2012-2044,
principally 0.38%-5.90% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,826,144

4,510,501

2,640,007

1,977,785

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,980,246

9,236,942

F-68

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2011
2012
(in millions)
Other subsidiaries:
Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥11,398 ¥11,489Unsubordinated debt(1):Fixed rate borrowings, bonds and notes, payable in Japanese yen, due 2012-2041, principally 0.00%8.80% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
378,528
444,346
Fixed rate borrowings, bonds and notes, payable in US dollars, due 2012-2038, principally 0.00%10.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,573
18,869Fixed rate borrowings, bonds and notes, payable in Euro, due 2011, principally 1.75% . . . . . . . . . . . . . .
436—
Fixed rate borrowings, bonds and notes, payable in other currencies excluding Japanese yen, US dollars,and Euro, due 2012-2038, principally 0.50%-10.95%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,389
4,945
Floating/Adjustable rate borrowings, bonds and notes, payable in Japanese yen, due 2012-2042,
principally 0.00%-20.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,231,674
1,090,919
Floating/Adjustable rate borrowings, bonds and notes, payable in US dollars, due 2012-2038,
principally 0.00%-6.03% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
401,646
476,431
Floating rate bonds and notes, payable in Euro, due 2012-2014, principally 0.00%-0.50% . . . . . . . . . . . .
228
1,212
Floating rate borrowings, bonds and notes, payable in other currencies excluding Japanese yen, US
dollars, and Euro, due 2012-2038, principally 0.00%-6.00%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,07914,843
Other institutions, due 2035, principally 1.64%-3.58% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,812—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt(1):Fixed rate borrowings, bonds and notes, payable in Japanese yen, due 2012-2030, principally 0.93%3.04% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate bonds and notes, payable in US dollars, due 2013-2016, principally 5.25%-11.33% . . . . . . . .
Adjustable rate borrowings, bonds and notes, payable in Japanese yen, due 2018-2020, principally
0.93%-2.70% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, bonds and notes, payable in Japanese yen, no stated maturity, principally
1.93%-3.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, bonds and notes, payable in Japanese yen, due 2012-2017, principally 0.64%1.74% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,059,365

2,051,565

349,62997,085412,931
90,11697,30086,300104,118

101,496

161,823

195,030

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations under loan securitization transaction accounted for as secured borrowings, due 2012-2019,principally 0.44%-7.29% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

809,955

885,873

94,53923,262

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,975,257

2,972,189

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥13,356,728 ¥12,593,062
Notes:(1) Adjustable rate debts are debts where interest rates are reset in accordance with the terms of the debt agreements, and floating rate debts
are debts where interest rates are repriced in accordance with movements of markets indices.
(2) Minor currencies, such as British pound, Russian Ruble, Chinese yuan, Indonesian rupiah, Hong Kong dollar, Australian dollar etc, havebeen summarized into the “Other currencies” classification.

The MUFG Group uses derivative financial instruments for certain debts to manage its interest rate andcurrency exposures. The derivative financial instruments include swaps, forwards, options and other types ofderivatives. As a result of these derivative instruments, the effective rates reflected in the table above may differ
from the coupon rates. The interest rates for the adjustable and floating rate debt shown in the above table arethose in effect at March 31, 2011 and 2012.
Certain debt agreements permit the MUFG Group to redeem the related debt, in whole or in part, prior tomaturity at the option of the issuer on terms specified in the respective agreements.

F-69

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a summary of maturities of long-term debt subsequent to March 31, 2012:

Fiscal year ending March 31:
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.

Other
subsidiaries(in millions)

MUFG

BTMU

Total

¥

11
8
5
2
1
383,904¥ 966,835
1,009,996
997,425
679,883
534,639
5,048,164¥ 542,702 ¥ 1,509,548
493,242
1,503,246
362,817
1,360,247
183,517
863,402242,210
776,850
1,147,701
6,579,769¥383,931¥9,236,942¥2,972,189¥12,593,062

SEVERANCE INDEMNITIES AND PENSION PLANS

Defined Benefit Pension Plans
The MUFG Group has funded contributory and non-contributory defined benefit pension plans (“pension
benefits”), which cover substantially all of their employees and provide for lifetime annuity paymentscommencing at age 65 based on eligible compensation at the time of severance, rank, years of service and otherfactors.
BTMU and certain domestic subsidiaries, MUSHD, Mitsubishi UFJ NICOS and some subsidiaries of
MUFG have non-contributory Corporate Defined Benefit Pension plans (“CDBPs”) which provide benefits to all
their domestic employees. MUTB has a contributory CDBP similar to these non-contributory CDBPs.
In December 2011, in accordance with the Defined Benefit Corporate Pension Plan Act, which permits each
employer and employees’ pension fund plan to separate the substitutional portion of the employees’ pension fundfrom the rest of the fund and transfer the related obligation and assets to the Japanese government, MUTB
obtained an approval from the Minister of Health, Labor and Welfare for an exemption from the obligation to
pay benefits for future employee services related to the substitutional portion of the governmental welfare
pension program. It is also in the process to submit an application to transfer the benefit obligation for past
employee services related to the substitutional portion and the related government-specified portion assets. Afterthe application is approved by the Japanese government, the benefit obligation for past employee services related
to the substitutional portion and the related plan assets will be transferred to the Japanese government. The
guidance, which addresses the accounting for the transfer to the Japanese government of a substitutional portionof employee pension fund liabilities, requires employers to account for the entire separation process of a
substitutional portion from an entire plan upon completion of the transfer of the substitutional portion of thebenefit obligation for both the past and the future employee services and the related plan assets to the government
in a single settlement transaction. In accordance with the guidance, no accounting for the transfer was recorded
for the fiscal year ended March 31, 2012.
In addition to the CDBPs, BTMU and MUTB had non-contributory closed Tax-Qualified Pension Plans(“closed TQPPs”), which were defined benefit pension plans that provide benefits to certain retired employees,
excluding directors in Japan, based on eligible compensation at the time of severance, years of service and otherfactors. MUTB also had a contributory closed TQPP in addition to the non-contributory closed TQPPs. On
March 2012, Tax-Qualified Pension Plans were abolished pursuant to the Amendment to the 2011 Tax Reform
enacted on 2011. Prior to the abolishment, the contributory and non-contributory closed TQPPs held by BTMU
F-70

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
and MUTB were integrated into their non-contributory CDBPs. The balances of projected benefit obligations andplan assets of the closed TQPPs were directly transferred with no impact on the MUFG Group’s financial
position and results of operations.
The MUFG Group also offers qualified and nonqualified defined benefit pension plans in foreign offices
and subsidiaries for their employees. The qualified plans are non-contributory defined pension plans, which
provide benefits upon retirement based on years of service and average compensation and cover substantially allof the employees of such foreign offices and subsidiaries. With respect to the offices and subsidiaries in the
United States of America, the qualified plans are funded on a current basis in compliance with the requirement of
the Employee Retirement Income Security Act of the United States of America. The nonqualified plans are
non-contributory defined benefit pension plans, under which certain employees earn pay and interest credits oncompensation amounts above the maximum stipulated by applicable laws under the qualified plans.
Severance Indemnities Plans
The MUFG Group has severance indemnities plans (“SIP”s) under which their employees in Japan, otherthan those who are directors, are entitled, under most circumstances, upon mandatory retirement at normal
retirement age or earlier termination of employment, to lump-sum severance indemnities based on eligible
compensation at the time of severance, rank, years of service and other factors. Under SIPs, benefit payments inthe form of a lump-sum cash payment with no option to receive annuity payments, upon mandatory retirement at
normal retirement age or earlier termination of employment, are provided. When a benefit is paid in a single
payment to a benefit payee under the plans, the payment represents final relief of the obligation.
Other Postretirement Plans
The MUFG Group’s foreign offices and subsidiaries, primarily in the United States of America, provide
their employees with certain postretirement medical and life insurance benefits (“other benefits”).
Net periodic cost of pension benefits and other benefits for the fiscal years ended March 31, 2010, 2011 and2012 include the following components:
Domestic subsidiaries
2010
2011
2012
Pension Pension Pension
benefits benefits benefits
and SIP and SIP and SIP

2010

Foreign offices and subsidiaries
2011

Pension Other
benefits benefits(in millions)

Pensionbenefits

2012

Other Pension Other
benefits benefits benefits

Service cost—benefits earned
during the fiscal year . . . . . . . . . ¥ 41,823 ¥ 39,713 ¥ 39,709 ¥ 6,414 ¥ 872 ¥ 6,092 ¥ 909 ¥6,328 ¥ 968
Interest costs on projected benefit
obligation . . . . . . . . . . . . . . . . . . 29,071 33,184 31,509 10,587 1,226 10,900 1,335 10,649 1,192
Expected return on plan assets . . . . (49,826) (56,105) (55,336) (15,309) (936) (16,220) (1,086) (14,216) (1,106)
Amortization of net actuarial
loss . . . . . . . . . . . . . . . . . . . . . . . 51,980 15,600 29,424
2,682
678
1,386
516 6,221
514
Amortization of prior service
cost . . . . . . . . . . . . . . . . . . . . . . . (9,801) (10,576) (11,534)
39
(67)
51
(61)
35
(57)
Amortization of net obligation attransition . . . . . . . . . . . . . . . . . .
(1)
—
—
—
123
—
115
—
105
Loss on settlements andcurtailment . . . . . . . . . . . . . . . . .
3,037
3,706
4,378
—
—
—
—
40
—
Net periodic benefit cost . . . . . . . . ¥ 66,283 ¥ 25,522 ¥ 38,150 ¥ 4,413 ¥1,896 ¥ 2,209 ¥1,728 ¥9,057 ¥1,616

F-71

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the assumptions used in computing the present value of the projected
benefit obligations and the net periodic benefit cost:
Domestic subsidiaries
Foreign offices and subsidiaries
2010
2011
2012
2010
2011
2012
Pension Pension Pension
benefits benefits benefits Pension Other Pension Other Pension Other
and SIP and SIP and SIP benefits benefits benefits benefits benefits benefits

Weighted-average assumptions used:
Discount rates in determining
expense . . . . . . . . . . . . . . . . . . .
Discount rates in determining
benefit obligation . . . . . . . . . . .
Rates of increase in futurecompensation level for
determining expense . . . . . . . . .
Rates of increase in futurecompensation level for
determining benefit
obligation . . . . . . . . . . . . . . . . .
Expected rates of return on plan
assets . . . . . . . . . . . . . . . . . . . . . . .

1.66% 2.05% 1.91% 5.70% 5.77% 6.10% 6.04% 5.67% 5.36%
2.05

1.91

1.55

6.10

6.04

5.67

5.36

4.73

4.70

3.07

3.06

3.23

4.64

—

4.72

—

4.67

—

3.06

3.23

3.31

4.72

—

4.67

—

4.60

—

3.02

2.98

3.11

7.50

8.00

7.49

8.00

7.49

8.00

The following tables present the assumed health care cost trend rates for foreign offices and subsidiaries,
which are used to measure the expected cost of benefits for the next year, and the effect of a one-percentagepoint change in the assumed health care cost trend rate:
UNBC
2011(1)

Initial trend rate . . . . . . . . . . . . . . . . . . . . . . . .
Ultimate trend rate . . . . . . . . . . . . . . . . . . . . . .
Year the rate reaches the ultimate trend rate . .

9.12%
5.00%
2018

2012(1)Other than UNBC
2011(1)
2012(1)

8.90%
5.00%
2018

7.50%
5.00%
2016

7.50%
4.50%
2018

UNBC
Other than UNBC
One-percentage- One-percentage- One-percentage- One-percentagepoint increase
point decrease
point increase
point decrease(in millions)

Effect on total of service and interest cost
components . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect on postretirement benefit obligation . . .

¥ 284
2,394

¥ (234)(2,027)

¥

85
1,104

¥ (65)(875)

Note:(1) Fiscal years of UNBC and foreign subsidiaries end on December 31. Therefore, the above tables present the rates and amounts at
December 31, 2010 and 2011, respectively.

F-72

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth the combined funded status and amounts recognized in the accompanying
consolidated balance sheets at March 31, 2011 and 2012:
Domestic subsidiaries
2011

Foreign offices and subsidiaries
2012

2011

Non-contributory Contributory Non-contributory Contributory
pension benefits
pensionpension benefits
pensionand SIPbenefits
and SIPbenefits

Pensionbenefits

2012

Other
benefits

Pensionbenefits

Other
benefits¥193,008 ¥23,552 ¥195,080
6,092
909
6,328
10,9001,335
10,649¥ 23,653
968
1,192(in millions)

Change in benefit obligation:
Benefit obligation at beginningof fiscal year . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . .
Plan participants’contributions . . . . . . . . . . .
Acquisitions/ Divestitures . .
Amendments . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . .
Lump-sum payment . . . . . . .
Translation adjustments andother . . . . . . . . . . . . . . . . .

¥1,303,012
34,32025,608¥367,501
5,393
7,576

¥1,328,152
33,60524,394¥381,457
6,104
7,115

—
(577)
8,242
26,935(52,583)(16,805)

1,061——
13,353(13,427)——(268)(27,159)
86,204(63,968)(15,613)726——
26,491(14,043)
—

12
439
19
—
1
—
14,2901,944(6,377) (1,714)
(194)
(10)

13
—
98
30,020(6,845)
(754)

420
—
—
958
(1,655)———

18,586(1)(18,586)(1) (22,671) (2,802)(9,228)(835)

1,328,152

381,457

1,383,933

389,264

195,080

23,653

225,361

24,701

1,436,335

474,487

1,348,510

451,373

183,445

14,240190,130

14,043(61,992)
26,737
13(17,535)
6,787—(18,132)
28,135(36)

1,574
16,645—23,418
11,728
26

1,679
1,168
—

4,528
2,835
—

78
1,128
—

—
(52,583)

1,061(13,427)—(63,968)726(14,043)12
439(6,377) (1,714)

13(6,845)420(1,655)——22,565(1)(22,565)(1) (22,122) (1,769)(7,870)(644)

1,348,510

451,373

1,317,074

433,710

182,791

13,370¥71,972(51,614)¥ 69,916—¥

17,969(84,828)¥ 44,446—¥¥

20,358¥ 69,916¥ (66,859)¥ 44,446¥ (4,950) ¥ (9,610) ¥ (42,570) ¥(11,331)

Benefit obligation at end of
fiscal year . . . . . . . . . . . . . . .
Change in plan assets:
Fair value of plan assets at
beginning of fiscal year . . . .
Actual return (loss) on plan
assets . . . . . . . . . . . . . . . .
Employer contributions . . . .
Acquisitions/ Divestitures . .
Plan participants’contributions . . . . . . . . . . .
Benefits paid . . . . . . . . . . . .
Translation adjustments andother . . . . . . . . . . . . . . . . .
Fair value of plan assets at endof fiscal year . . . . . . . . . . . . .
Amounts recognized in the
consolidated balance sheets:
Prepaid benefit cost . . . . . . .
Accrued benefit cost . . . . . . .
Net amount recognized . . . .

Note:(1) Represents a transfer from contributory closed TQPP to non-contributory CDBP in MUTB.

F-73

190,130

14,043

9,947 ¥
— ¥ 3,175 ¥—(14,897) (9,610) (45,745) (11,331)

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The aggregated accumulated benefit obligations of these plans at March 31, 2011 and 2012 were as follows:
Domestic
Foreign offices
subsidiaries
and subsidiaries
2011
2012
2011
2012
(in millions)Aggregated accumulated benefit obligations . . . . . . . . . . . . . .

¥1,685,442¥1,747,624¥181,239¥209,145

The projected benefit obligations, accumulated benefit obligations and fair value of plan assets for the plans
with accumulated benefit obligations in excess of plan assets at March 31, 2011 and 2012 were as follows:
Domestic
Foreign offices
subsidiaries
and subsidiaries
2011
2012
2011
2012
(in millions)

Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥115,835
110,342
69,059¥1,332,424
1,308,177
1,247,873¥27,588
26,927
12,750¥209,930
193,899
164,314

BTMU, MUTB, MUSHD, Mitsubishi UFJ NICOS and other subsidiaries paid special lump-sum termination
benefits which are not a part of pension plans to certain early-terminated employees. The amounts charged tooperations for such early termination benefits for the fiscal years ended March 31, 2010, 2011 and 2012 were¥13,617 million, ¥17,098 million and ¥34,600 million, respectively. The ¥34,600 million charged to operations
for the fiscal year ended March 31, 2012 mainly consisted of ¥20,512 million related to MUSHD.
The following table presents the amounts recognized in accumulated other changes in equity from nonownersources of the MUFG Group at March 31, 2011 and 2012:
Domestic subsidiaries
2011
2012
PensionPensionbenefits
benefits
and SIPand SIP

Foreign offices and subsidiaries
2011
2012
PensionOther
benefits
benefits(in millions)

Pensionbenefits

Other
benefits

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . ¥ 493,526 ¥ 644,335 ¥ 54,427 ¥ 6,709 ¥ 85,384 ¥ 7,982
Prior service cost . . . . . . . . . . . . . . . . . . . . . .
(43,264)(58,889)
172
(181)
127
(148)
Net obligation at transition . . . . . . . . . . . . . .
—
—
—
245
—
102
Gross pension liability adjustments . . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

450,262(180,954)

585,446(235,331)

54,599(21,486)

6,773(2,675)85,511(33,581)

7,936(3,126)

Net pension liability adjustments . . . . . . . . .

¥ 269,308¥ 350,115¥ 33,113¥ 4,098¥ 51,930¥ 4,810

F-74

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the changes in equity from nonowner sources in the fiscal years ended
March 31, 2011 and 2012:
Domestic subsidiaries
2011
2012
PensionPensionbenefits
benefits
and SIPand SIP

Foreign offices and subsidiaries
2011
2012
PensionOther
benefits
benefits(in millions)

Pensionbenefits

Other
benefits

Net actuarial loss arising during the year . . . . . . . . ¥175,922 ¥184,611 ¥ 7,129 ¥1,360 ¥40,553 ¥2,093
Prior service cost arising during the year . . . . . . . .
8,243(27,159)
28
34
(3)
(29)
Losses (gains) due to amortization:
Net actuarial loss . . . . . . . . . . . . . . . . . . . . . .
(15,600) (29,424) (1,386)(516) (6,221)(514)
Prior service cost . . . . . . . . . . . . . . . . . . . . . .
10,576
11,534
(51)
61
(35)
57
Net obligation at transition . . . . . . . . . . . . . .
—
—
—
(115)
—
(105)
Curtailment and settlement . . . . . . . . . . . . . . . . . .
(3,706)(4,378)——(40)—
Foreign currency translation adjustments . . . . . . .
——(6,804)(800) (3,342)(339)
Total changes in Accumulated other changes inequity from nonowner sources . . . . . . . . . . . . . .

¥175,435¥135,184¥(1,084) ¥24¥30,912¥1,163

The following table presents the expected amounts that will be amortized from accumulated other changes
in equity from nonowner sources as components of net periodic benefit cost, before taxes, for the fiscal year
ending March 31, 2013:
Domestic
Foreign offices
subsidiaries
and subsidiaries
Pensionbenefits
Pension
Other
and SIPbenefits benefits(in millions)

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net obligation at transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 37,759 ¥7,578(12,311)
30
—
—

¥698
(54)
78

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 25,448¥722¥7,608Investment policies
MUFG’s investment policy for plan assets is based on an asset liability matching strategy which is intended
to maintain adequate liquidity for benefit payments and to achieve a stable increase in the plan assets in themedium and long term through proper risk control and return maximization. As a general rule, investment
policies for plan assets are reviewed periodically for some plans and in the following situations for all plans:(1) large fluctuations in pension plan liabilities caused by modifications to pension plans, or (2) changes in themarket environment. The plan assets allocation strategies are the principal determinant in achieving expected
investment returns on the plan assets. Actual asset allocations may fluctuate within acceptable ranges due tomarket value variability. Plan assets are managed by a combination of internal and external asset managementcompanies and are rebalanced when market fluctuations cause an asset category to fall outside of its strategic
asset allocation range. Performance of each plan asset category is compared against established indices andsimilar plan asset groups to evaluate whether the risk associated with the portfolio is appropriate for the level ofreturn.
F-75

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The weighted-average target asset allocation of plan assets for the pension benefits and other benefits at
March 31, 2012 was as follows:
Domestic
subsidiaries
Pensionbenefits
and SIP

Asset category

Foreign offices
and subsidiaries
Pensionbenefits

Other
benefits

Japanese equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Japanese equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37.0%
37.3
11.4
6.2
—
8.1

0.3%
—
58.0
30.9
8.0
2.8

—%
—
70.0
30.0
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0%

100.0%

100.0%

Basis and procedure for estimating long-term return of each asset category
MUFG’s expected long-term rate of return on plan assets for domestic defined benefit pension plans and
SIPs is based on a building-block methodology, which calculates the total long-term rate of return of the plan
assets by aggregating the weighted rate of return derived from both long-term historical performance andforward-looking return expectations from each asset category.
MUFG has determined the expected long-term rate of return for each asset category as below:‰

Japanese equity securities: the rate for Japanese debt securities plus a premium for the risk associatedwith Japanese equity securities‰

Japanese debt securities: economic growth rate of Japan‰

Non-Japanese equity securities: the rate for non-Japanese debt securities plus a premium for the risk
associated with non-Japanese equity securities‰

Non-Japanese debt securities: global economic growth rate

Foreign offices and subsidiaries periodically reconsider the expected long-term rate of return for their plan
assets. They evaluate the investment return volatility of different asset categories and compare the liability
structure of their pension and other benefits to those of other companies, while considering their funding policy
to maintain a funded status sufficient to meet participants’ benefit obligations, and reduce long-term funding
requirements and pension costs. Based on this information, foreign offices and subsidiaries update the expectedlong-term rate of return.
Cash flows
The MUFG Group expects to contribute to the plan assets for the fiscal year ending March 31, 2013 based
upon its current funded status and expected asset return assumptions as follows:
For the pension benefits of domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the pension benefits of foreign offices and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the other benefits of foreign offices and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-76¥40.5 billion
14.0 billion
1.2 billion

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Estimated future benefit payments
The following table presents benefit payments expected to be paid, which include the effect of expected
future service for the fiscal years indicated:
Domestic
Foreign offices
subsidiaries
and subsidiaries
Pensionbenefits
Pension
Other
and SIPbenefits
benefits(in millions)Fiscal year ending March 31:
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter (2018-2022) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 80,353
82,78684,872
86,12087,102434,603¥ 6,876
7,614
7,976
8,780
9,244
59,505¥1,310
1,409
1,493
1,581
1,667
9,069

Fair value measurement of the plan assets
The following is a description of the valuation methodologies used for plan assets measured at fair value aswell as the classification of the plan assets pursuant to the valuation hierarchy described in Note 29.
Government bonds and other debt securities
When quoted market prices are available in an active market, the MUFG Group adopts the quoted market
prices to measure the fair value of securities and such securities are classified in Level 1 of the valuation
hierarchy. Level 1 securities include Japanese government bonds, most of non-Japanese government bonds andcertain corporate bonds. When quoted market prices are available but not traded actively, such securities areclassified in Level 2 of the valuation hierarchy. When quoted prices are not available, the MUFG Groupgenerally estimates fair values by using non-binding prices obtained from independent pricing vendors. Suchsecurities are generally classified in Level 2 of the valuation hierarchy. Level 2 securities include certain
non-Japanese government bonds, official institutions bonds and corporate bonds. When there is lack of liquidity
for securities or significant inputs adopted to the fair value measurements are unobservable, such securities areclassified in Level 3 of the valuation hierarchy. Such Level 3 securities mainly consist of non-Japanese corporate
bonds.
Marketable equity securities
When quoted market prices are available in an active market, the MUFG Group adopts the quoted market
prices to measure the fair value of marketable equity securities and such securities are classified in Level 1 of thevaluation hierarchy. When quoted market prices are available but not traded actively, such securities areclassified in Level 2 of the valuation hierarchy.
Japanese pooled funds
Japanese pooled funds are investment fund vehicles designed for Japanese pension plan investments underJapanese pension trust fund regulations. Based upon the nature of the funds’ investments, Japanese pooled funds
are categorized into four major fund types; Japanese marketable equity securities type, Japanese debt securities
F-77

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
type, Non-Japanese marketable equity securities type and Non-Japanese debt securities type. The other types offunds invest in short-term financial instruments or loans receivable. Japanese pooled funds are generally readily
redeemable at their net asset values. The fair values of Japanese pooled funds are measured at their net asset
values and generally classified in Level 2 of the valuation hierarchy. Japanese pooled funds classified in Level 3of the valuation hierarchy have underlying investments in non-Japanese debt securities and loans receivable
whose fair values are measured by using significant unobservable inputs and there is inherent lack of the funds’
liquidity.
Other investment funds
Other investment funds include mutual funds, private investments funds, common collective funds, private
equity funds and real estate funds. The listed investment funds or mutual funds are valued at quoted market
prices and classified in Level 1 or Level 2 of the valuation hierarchy. When there is no available market
quotation, the fair values are generally determined at net asset values. The funds for which the fair values aremeasured at their net asset value are classified either in Level 2 or Level 3 depending on the nature of any
restrictions on the investor’s ability to redeem its investments at the measurement date or in the near future.
Other investment funds classified in Level 3 of the valuation hierarchy mainly consist of certain private
investment funds and real estate funds whose fair values are not measured at their net asset values but by using
significant unobservable inputs and there is inherent lack of the funds’ liquidity.
Japanese general accounts of life insurance companies
These instruments are contracts with life insurance companies that guarantee return of a certain level of
fixed income, which are mainly invested in assets with low market risk such as Japanese debt securities. They aremeasured at conversion value and classified in Level 2 in the valuation hierarchy.
Other investments
Other investments mainly consist of call loans and the rest consist of miscellaneous accounts such as
deposits with banks and short term investments. These instruments are generally classified in Level 1 or Level 2of the valuation hierarchy depending on observability of the inputs to measure their fair values.

F-78

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the fair value of each major category of plan assets as of March 31, 2011 and2012:
Pension benefits and SIP Investments:
At March 31, 2011
Assets category

Level 1

Domestic subsidiaries
Level 2
Level 3Foreign offices and subsidiaries
Total
Level 1
Level 2
Level 3Total
(in millions)Japanese government
bonds . . . . . . . . . . . . . . . . . ¥ 81,695 ¥— ¥— ¥ 81,695 ¥— ¥— ¥Non-Japanese government
bonds . . . . . . . . . . . . . . . . .
41,3972,406—
43,803
3,304
4,693
Other debt securities(1) . . . . . .
4,294
53,8296,356
64,479—
8,794Japanese marketable equity
securities(2) . . . . . . . . . . . . . 620,056
86—
620,142——
Non-Japanese marketable
equity securities . . . . . . . . .
21,755446
93
22,294
14,350—Japanese pooled funds:
Japanese marketable
equity securities(2) . . . .
—87,472—87,472——
Japanese debt
securities(1) . . . . . . . . .
— 236,111—
236,111——
Non-Japanese marketable
equity securities . . . . .
— 158,832—
158,832——
Non-Japanese debt
securities . . . . . . . . . . .
—72,564
6,313
78,877——
Other . . . . . . . . . . . . . . . .
—
9,058
2,501
11,559
—
—

— ¥

—

—
—

7,997
8,794

—

—

—

14,350

—

—

—

—

—

—

—
—

—
—
—

Total pooled funds . . . . .

—564,0378,814

572,851———

Other investment funds . . . . .
Japanese general account oflife insurancecompanies(3) . . . . . . . . . . . .
Other investments . . . . . . . . . .

—102,855

37,694

140,549

84,31563,551

9,982

157,848(4)

—
2,053

150,583
101,434——

150,583
103,487

—
72

—
713

—
356

—
1,141

Total . . . . . . . . . . . . . . . . . . . . ¥771,250 ¥975,676 ¥52,957 ¥1,799,883 ¥102,041 ¥77,751 ¥10,338 ¥190,130

F-79

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At March 31, 2012
Assets category

Level 1

Domestic subsidiaries
Level 2
Level 3Foreign offices and subsidiaries
Total
Level 1 Level 2 Level 3
Total(in millions)Japanese government
bonds . . . . . . . . . . . . . . . . . ¥ 72,752 ¥— ¥— ¥ 72,752 ¥— ¥— ¥Non-Japanese government
bonds . . . . . . . . . . . . . . . . . 42,290
590—
42,880 1,551 5,895
Other debt securities(1) . . . . .
1,169
34,474 5,995
41,638— 10,382
Japanese marketable equity
securities(2) . . . . . . . . . . . . 546,179
14—
546,193——
Non-Japanese marketable
equity securities . . . . . . . . 19,048
532
87
19,667 11,372—
Japanese pooled funds:
Japanese marketable
equity securities(2) . . .
—61,569—61,569——Japanese debt
securities(1) . . . . . . . .
—267,889—
267,889——
Non-Japanesemarketable equity
securities . . . . . . . . . .
—164,195—
164,195——
Non-Japanese debt
securities . . . . . . . . . .
—75,554 5,807
81,361——Other . . . . . . . . . . . . . . .
—38,741 2,501
41,242
—
—
—

—

—

—

11,372

—

—

—

—

—

—

—
—

—
—

—

—

607,948

Other investment funds . . . .
Japanese general account oflife insurancecompanies(3) . . . . . . . . . . .
Other investments . . . . . . . . .

—92,731 41,097

133,828 74,530 65,582 12,282

166,184
108,966

166,184
111,386

—
68

—

—
785

—
7,446
10,382———616,256¥——

Total pooled funds . . . .

—
2,420

8,308

—

152,394(4)

—
344

—
1,197

Total . . . . . . . . . . . . . . . . . . . ¥683,858 ¥1,011,439 ¥55,487 ¥1,750,784 ¥87,521 ¥82,644 ¥12,626¥182,791

Notes:(1) These debt securities include debt securities issued by the MUFG Group in the amount of ¥1,821 million (0.10% of plan assets) and¥828 million (0.05% of plan assets) to the pension benefits and SIPs at March 31, 2011 and 2012, respectively.
(2) Japanese marketable equity securities include common stocks issued by the MUFG Group in the amount of ¥5,522 million (0.31% ofplan assets) and ¥5,152 million (0.29% of plan assets) to the pension benefits and SIPs at March 31, 2011 and 2012, respectively.
(3) “Japanese general accounts of life insurance companies” is a contract with life insurance companies that guarantees a return ofapproximately 1.24% (from April 1, 2010 to March 31, 2011) and 1.17% (from April 1, 2011 to March 31, 2012).
(4) Other investment funds of the foreign offices and subsidiaries are mainly comprised of ¥79,520 million of mutual funds and¥19,829 million of common collective funds, and of ¥69,643 million of mutual funds and ¥20,706 million of common collective funds,
which were held by UNBC at December 31, 2010 and 2011, respectively.

Other post retirement plan investments:

Assets category

Level 1Other investment funds(1) . . . . . .

¥7,980Foreign offices and subsidiaries
March 31, 2011
March 31, 2012
Level 2 Level 3
Total
Level 1
Level 2 Level 3(in millions)(in millions)¥6,063¥—¥14,043

Note:(1) Other investment funds mainly consist of mutual funds and common collective funds.

F-80¥7,491¥5,879¥—Total¥13,370

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present a reconciliation of plan assets measured at fair value using significant
unobservable inputs (Level 3) during the fiscal years ended March 31, 2011 and 2012:
Pension benefits and SIP Investments:

Assets category

Domestic subsidiaries
Realized Unrealized Purchase, Transfer Transfer
March 31, gains
gains
sales andinto
out of March 31,
2010(losses)(losses)settlements Level 3 Level 3
2011(in millions)

Other debt securities . . . . . . . . . . . . . . . . . . . ¥ 2,813
Non-Japanese marketable equity
securities . . . . . . . . . . . . . . . . . . . . . . . . . .
—Japanese pooled funds:
Non-Japanese debt securities . . . . . . . .
6,209
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,501

¥(25)

¥ (117)¥ 4,222¥ —¥(537) ¥ 6,356

—

(24)

117

—

—

93

—
—

104
—

—
—

—
—

—
—

6,313
2,501

Total pooled funds . . . . . . . . . . . . . . . .

8,710

—

104

—

—

—

8,814

Other investment funds . . . . . . . . . . . . . . . .

26,934

(41)

1,845

8,956

—

—

37,694

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥38,457¥(66)¥1,808¥13,295¥ —Assets category¥(537) ¥52,957

Foreign offices and subsidiaries
Realized Unrealized Purchase, Transfer Transfer
March 31, gains
gains
sales andinto
out of March 31,
2010(losses)(losses)settlements Level 3 Level 3
2011(in millions)

Other investment funds . . . . . . . . . . . . . . . . ¥ 5,085
Other investments . . . . . . . . . . . . . . . . . . . . .
563

¥—
—

¥ 129
(28)

¥ 4,366
(179)

¥402
—

¥ —
—

¥ 9,982356

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 5,648

¥—

¥ 101

¥ 4,187¥402¥ —¥10,338

Assets category

Domestic subsidiaries
Realized Unrealized Purchase, Transfer Transfer
March 31, gains
gains
sales andinto
out of March 31,
2011(losses)(losses)settlements Level 3 Level 3
2012(in millions)

Other debt securities . . . . . . . . . . . . . . . . . . .
Non-Japanese marketable equity
securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese pooled funds:
Non-Japanese debt securities . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,356

¥ 45

¥ 298

¥ (637)

¥108

93

—

(6)

—

—

—

87

6,313
2,501

12
—

444
—

(962)
—

—
—

—
—

5,807
2,501

Total pooled funds . . . . . . . . . . . . . . . .

8,814

12

444

(962)

—

—

8,308

Other investment funds . . . . . . . . . . . . . . . .

37,694

1

917

2,073

412

—

41,097

Other investments . . . . . . . . . . . . . . . . . . . . .

—

7

(1)

(72)

66

—

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥52,957¥ 65¥1,652

402

¥586

F-81

¥

¥(175) ¥ 5,995¥(175) ¥55,487

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assets category

March 31,2011

Realized
gains(losses)

Other investment funds . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,982356¥10,338¥——¥—

Foreign offices and subsidiaries
Unrealized
Purchase,
Transfer
gains
sales andinto(losses)settlements
Level 3(in millions)

¥577
(35)
¥542

¥1,72323¥1,746¥——¥—

Transferout ofLevel 3

March 31,
2012

¥—
—
¥—

¥12,282344¥12,626

Defined Contribution Plans
The MUFG Group maintains several qualified defined contribution plans in its domestic and foreign offices
and subsidiaries, all of which are administered in accordance with applicable local laws and regulations. Eachoffice and subsidiary matches eligible employee contributions up to a certain percentage of benefits-eligible
compensation per pay period, subject to plan and legal limits. Terms of the plan, including matching percentage
and vesting periods, are individually determined by each office and subsidiary.
The cost of these defined contribution plans charged to operations for the fiscal years ended March 31,
2010, 2011 and 2012 were ¥4,735 million, ¥5,525 million and ¥5,775 million, respectively.
14.

OTHER ASSETS AND LIABILITIES
Major components of other assets and liabilities at March 31, 2011 and 2012 were as follows:
2011
2012
(in millions)

Other assets:
Accounts receivable:
Receivables from brokers, dealers and customers for securities
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 885,842 ¥2,028,601
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
757,942829,548
Investments in equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
770,537
1,130,640
Non-interest-earning deposits with the Special Fund and the New Fund
(Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
362,695
204,956
Prepaid benefit cost (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
151,835
65,590Cash collateral paid (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
766,617
1,334,968
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,625,652
1,735,535
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥5,321,120 ¥7,329,838
Other liabilities:
Accounts payable:
Payables to brokers, dealers and customers for securities transactions . . . . . ¥1,361,773
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
900,446
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118,525
Allowance for off-balance sheet credit instruments . . . . . . . . . . . . . . . . . . . . . . . .
73,616
Accrued benefit cost (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76,121
Guarantees and indemnifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46,965
Cash collateral received (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
337,192
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,927,343
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,841,981

F-82¥1,897,972
1,064,692
41,01360,481
141,904
48,092272,806
2,025,671¥5,552,631

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Investments in equity method investees include marketable equity securities carried at ¥208,497 million and¥625,800 million at March 31, 2011 and 2012, respectively. Corresponding aggregated market values were¥332,162 million and ¥945,983 million, respectively. Investments in equity method investees also include
investments in MSMS at ¥183,054 million and ¥171,690 million, and in Morgan Stanley at ¥94,708 million and¥497,363 million at March 31, 2011 and 2012, respectively. As of March 31, 2012, the MUFG Group held
approximately 21.8% of Morgan Stanley’s common stock.
The MUFG Group periodically evaluates whether a loss in value of investments in equity method investees
is other than temporary. As a result of evaluations, the MUFG Group recognized other-than-temporary declines
in the value of an investment and recorded impairment losses related to certain affiliated companies of¥104,045 million, ¥46,804 million and ¥580,474 million for the fiscal years ended March 31, 2010, 2011 and2012, respectively. The impairment losses are included in Equity in losses of equity method investees—net in the
consolidated statements of income. See Note 2 for further details of the impairment losses recorded oninvestments in Morgan Stanley for the fiscal year ended March 31, 2012.
Summarized Financial Information of the MUFG Group’s equity method investees
Summarized financial information of Morgan Stanley, the largest portion of the MUFG Group’s equity
method investees, as of March 31, 2011 and 2012, and for each of the three years in the period ended March 31,
2012 is as follows:
2011
2012
(in billions)

Financial instruments owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal funds sold and securities purchased under agreements to resell . . . . . . . . . . . . . . . . .
Securities borrowed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial instruments sold, not yet purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities sold under agreements to repurchase and Securities loaned . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010(1)¥25,620
13,547
11,88569,52911,331
13,04516,30963,999692¥22,884
11,215
11,63964,193
10,765
8,821
14,52558,391680

2011(in billions)2012

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,216 ¥2,561 ¥2,517
Total non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,772
2,164
2,084
Income from continuing operations before income tax expense . . . . . . . . . . . . . . . . . .
444
397
433
Net income applicable to Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
288
335
244
Note:
(1) Summarized financial information for the 9 months period ended March 31, 2010 is presented, since the MUFG Group retroactively
applied equity method accounting for the investment in Morgan Stanley’s common stock since July 1, 2009. See Note 2 for more
information.

F-83

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Summarized financial information of the MUFG Group’s equity method investees, other than Morgan
Stanley as of March 31, 2011 and 2012, and for each of the three years in the period ended March 31, 2012 is asfollows:
20112012(in billions)

Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.

¥11,753
18,4486,604
14,172
164¥11,214
17,657
6,830
13,973
140

2010

2011
2012
(in billions)

¥599
134
465
161
63
24

¥ 538 ¥475
109
98
429
377
126
51
(83) 128(118)
75

PREFERRED STOCK

Pursuant to the Articles of Incorporation, MUFG was authorized to issue 120,000,000 shares of Class 3
Preferred Stock, 400,000,000 shares of Class 5 Preferred Stock, 200,000,000 shares of Class 6 Preferred Stock,200,000,000 shares of Class 7 Preferred Stock and 1,000 share of Class 11 Preferred Stock without par value.
All classes of preferred stock are non-voting and have preference over common stock for the payment ofdividends and the distribution of assets in the event of a liquidation or dissolution of MUFG. They are all
non-cumulative and non-participating with respect to dividend payments. Shareholders of Class 5 and Class 11
Preferred Stock have the right to receive a liquidation distribution at ¥2,500 and ¥1,000 per share, respectively,
and do not have the right to participate in any further liquidation distributions.
The number of shares of preferred stock issued and outstanding at March 31, 2010, 2011 and 2012 was asfollows:
Outstanding at
March 31, 2010

Net change

Outstanding at
March 31, 2011
(number of shares)

Net change

Outstanding at
March 31, 2012

Preferred stock:
Class 3 . . . . . . . . . . . . . . . . . . . . .
Class 5 . . . . . . . . . . . . . . . . . . . . .
Class 11 . . . . . . . . . . . . . . . . . . . .

100,000,000
156,000,000
1,000(100,000,000)—— 156,000,000
—
1,000

—
—
—

—
156,000,000
1,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

256,001,000(100,000,000) 156,001,000—

156,001,000

None of the Class 6 and 7 Preferred Stock has been issued.

F-84

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The aggregate liquidation preference of preferred stock issued and outstanding at March 31, 2010, 2011 and2012 was as follows:
Aggregate amount at
March 31, 2010

Net change

Aggregate amount at
March 31, 2011
(in millions)

Net change

Aggregate amount at
March 31, 2012

Preferred stock:
Class 3 . . . . . . . . . . . .
Class 5 . . . . . . . . . . . .
Class 11 . . . . . . . . . . .

¥250,000
390,000
1¥(250,000)——¥—
390,000
1

¥—
—
—

¥
—
390,000
1

Total . . . . . . . . . . . . . . . . . .

¥640,001¥(250,000)¥390,001¥—¥390,001

Preferred stock included in Capital stock on the consolidated balance sheets at March 31, 2010, 2011 and2012 was ¥442,100 million, which consisted of ¥122,100 million of Class 1, ¥125,000 million of Class 3 and¥195,000 million of Class 5 Preferred Stock.
The portion of proceeds from the sale of shares that is designated as capital stock is determined byresolution of the Board of Directors of MUFG, however, at least 50% of the issue price of newly issued shares isrequired to be designated as capital stock at the time of incorporation or share issuance under the Company Law.
Proceeds in excess of amounts designated as capital stock are designated as capital surplus. However, theseprovisions are not applied in a company reorganization, such as a merger, company split and share exchange.
Preferred Stock Classes 8 through 12 were issued in exchange for UFJ Holdings’ preferred stock and recorded in
Capital surplus.
On April 1, 2010, MUFG acquired 100,000,000 shares of Class 3 Preferred Stock. On the same day, these
100,000,000 shares of Class 3 Preferred Stock were cancelled.
Preferred Stock Outstanding as of March 31, 2012
Class 5 Preferred StockClass 5 Preferred Stock is redeemable at the option of MUFG. At the time of issuance, the Board of
Directors determines an issue price, an annual dividend (not to exceed ¥250 per share), and redemption terms,
including a redemption price.
Class 5 Preferred Stock was issued by means of a third-party allocation to Nippon Life Insurance Company,
Meiji Yasuda Life Insurance Company, TAIYO LIFE INSURANCE COMPANY, DAIDO LIFE INSURANCECOMPANY, Tokio Marine & Nichido Fire Insurance Co., Ltd., NIPPONKOA Insurance Company, Limited andAioi Nissay Dowa Insurance Company, Limited. The preferred stock does not have voting rights at any general
meetings of shareholders, unless otherwise provided by applicable laws and regulations. Preferred dividends are
set to be ¥115 per share annually, except as of March 31, 2009. Preferred dividends were ¥43 per share as ofMarch 31, 2009.
Class 11 Preferred StockClass 11 preferred stockholders are entitled to receive annual non-cumulative dividends of ¥5.30 per sharewith priority over common stockholders.

F-85

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Class 11 Preferred Stock is convertible into fully paid shares of MUFG common stock at the election ofholders from establishment of MUFG to July 31, 2014, except during certain excluded periods, at an initialconversion price of ¥918.70 per share of common stock, subject to anti-dilution adjustments. The conversion
price was subject to reset annually on July 15 from 2006 to 2013 to the average market price of the common
stock for the 30 trading day period, if the average market price was less than the conversion price prior to thereset but not less than ¥918.70 per share. The acquisition price and the acquisition floor price of Class 11
Preferred Stock were adjusted as ¥889.60 per share on December 15, 2008, ¥888.40 per share on January 14,
2009, ¥867.60 per share on December 21, 2009, and ¥865.90 per share on December 25, 2009, in accordancewith the provisions relating to the adjustment of the acquisition price set forth in the terms and conditions ofClass 11 Preferred Stock.
All Class 11 Preferred Stock outstanding on August 1, 2014 will be mandatorily converted into shares ofcommon stock at a conversion ratio of ¥1,000 divided by the higher of the average market price of the common
stock for the 30 trading day period beginning 45 trading days prior to August 1, 2014 or ¥802.60.
16.

COMMON STOCK AND CAPITAL SURPLUS

The changes in the number of issued shares of common stock during the fiscal years ended March 31, 2010,2011 and 2012 were as follows:
2010

2011
(shares)

2012

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by way ofOffering (Public Offering) . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by way of ThirdParty Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by way of
exercise of the stock acquisition rights . . . . . . . . . . . . . .

11,648,360,720

14,148,414,920

14,150,894,620

2,337,000,000——

163,000,000——

54,2002,479,700

3,639,600

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . .

14,148,414,920

14,150,894,620

14,154,534,220

Under the Company Law, issuances of common stock, including conversions of bonds and notes, arerequired to be credited to the common stock account for at least 50% of the proceeds and to the legal capitalsurplus account (“legal capital surplus”) for the remaining amounts.
The Company Law permits Japanese companies, upon approval by the Board of Directors, to issue shares in
the form of a “stock split,” as defined in the Company Law. Also, prior to April 1, 1991, Japanese companies
were permitted to issue free share distributions. BTMU and MUTB from time to time made free share
distributions. These free distributions usually ranged from 5% to 10% of outstanding common stock andpublicly-owned corporations in the United States issuing shares in similar transactions would be required toaccount for them as stock dividends as of the shareholders’ record date by reducing retained earnings andincreasing the appropriate capital accounts by an amount equal to the fair value of the shares issued. The
application of such United States accounting practice to the cumulative free distributions made by BTMU and
MUTB at March 31, 2012, would have increased capital accounts by ¥1,910,106 million with a corresponding
decrease in unappropriated retained earnings.
The Company Law permits that common stock, legal reserve, additional paid-in capital, and other capitalsurplus and retained earnings can be transferred among these accounts under certain conditions upon the approvalof a shareholders’ meeting. The Company Law limits the increase of paid in capital in case disposition oftreasury stock and issuance of common stock are performed at the same time.
F-86

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Common Stock Issued during the fiscal year ended March 31, 2010
On December 21, 2009, MUFG issued 2,337,000,000 shares of common stock by way of offering. This typeof stock was offered at ¥412.53 per share (issue price and selling price at ¥428.00 per share) for ¥964,082
million. As a result, ¥482,041 million was included in Capital stock, and the same amount was also included in
Capital surplus.
On December 22, 2009, MUFG sold 163,000,000 shares of common stock through a secondary offering ofshares by way of over-allotment, in which an underwriter borrows securities from certain shareholder(s) of
MUFG to sell the shares, at a selling price of ¥428.00 per shares for ¥69,764 million. In connection with thesecondary offering by way of over-allotment, on December 25, 2009, MUFG issued 163,000,000 new shares ofcommon stock by way of third-party allotment at ¥412.53 per share for ¥67,242 million. As a result,¥33,621 million was included in Capital stock, and the same amount was also included in Capital surplus.
As for Capital surplus, the fee retained by MUFG’s subsidiary as underwriting compensation, net of stock
issue expense, was included in the total Capital surplus balance in addition to the balance mentioned above.
Treasury Stock
The Company Law permits Japanese companies to effect purchases of their own shares pursuant to a
resolution by the shareholders at an annual general meeting until the conclusion of the following ordinary general
meeting of shareholders, and to hold such shares as their treasury stock indefinitely regardless of purpose.
However, the Company Law requires the amount of treasury stock purchased should be within the amount ofretained earnings available for dividends. Disposition of treasury stock is subject to the approval of the Board of
Directors and is to follow the procedures similar to a public offering of shares for subscription.
Parent Company Shares Held by Subsidiaries and Affiliated Companies
At March 31, 2012, certain subsidiaries and affiliated companies owned shares of common stock of MUFG.
Such shares are included in treasury stock in the consolidated balance sheets and deducted from the MUFG’sshareholders’ equity.
17.

RETAINED EARNINGS, LEGAL RESERVE AND DIVIDENDS

In addition to the Company Law, Japanese banks, including BTMU and MUTB, are required to comply with
the Banking Law of Japan (the “Banking Law”).
Legal Reserve Set Aside as Appropriation of Retained Earnings and Legal Capital Surplus
Under the Company Law
The Company Law provides that an amount at least equal to 10% of the aggregate amount of cash dividends
and certain appropriations of retained earnings associated with cash outlays applicable to each period shall beappropriated and set aside as a legal reserve until the aggregate amount of legal reserve set aside as an
appropriation of retained earnings and the legal capital surplus equals 25% of stated capital as defined in the
Company Law.
Under the Banking Law
The Banking Law provides that an amount at least equal to 20% of the aggregate amount of cash dividends
and certain appropriations of retained earnings associated with cash outlays applicable to each fiscal year shall beappropriated and set aside as a legal reserve until the aggregate amount of legal reserve set aside as appropriationof retained earnings and the legal capital surplus equals 100% of stated capital as defined in the Company Law.
F-87

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Transfer of Legal Reserve
Under the Company Law
Under the Company Law, Japanese companies, including MUFG, were permitted, pursuant to a resolution
by the shareholders at a general meeting, to make legal reserve set aside as appropriation of retained earnings andlegal capital surplus available for dividends until the aggregate amount of the legal reserve and legal capitalsurplus equals 25% of stated capital as defined in the Company Law.
Under the Company Law, Japanese companies, including MUFG, BTMU and MUTB, are permitted,
primarily pursuant to a resolution by the shareholders at a general meeting, to transfer legal capital surplus andlegal reserve to stated capital and/or retained earnings without limitations of thresholds, thereby effectively
removing the thresholds provided for in the Company Law and Banking Law at the company’s discretion.
Under the Banking Law
Under the Banking Law, Japanese banks, including BTMU and MUTB, were permitted, pursuant to a
resolution by the shareholders at a general meeting, to make legal reserve set aside as an appropriation ofretained earnings and legal capital surplus available for dividends until the aggregate amount of the legal reserve
and legal capital surplus equals 100% of stated capital as defined in the Company Law.
Unappropriated Retained Earnings and Dividends
In addition to the provision that requires an appropriation for legal reserve as described above, the Company
Law and the Banking Law impose certain limitations on the amount available for dividends.
Under the Company Law, the amount available for dividends is based on the amount recorded in MUFG’s
general books of account maintained in accordance with accounting principles generally accepted in Japan(“Japanese GAAP”). The adjustments included in the accompanying consolidated financial statements but notrecorded in MUFG’s general books of account, as explained in Note 1, have no effect on the determination ofretained earnings available for dividends under the Company Law. Under the Banking Law, MUFG, BTMU and
MUTB have to meet the minimum capital adequacy requirements and distributions of retained earnings of
MUFG, BTMU and MUTB, which are otherwise distributable to shareholders, are restricted in order to maintainthe minimum 4.0% Tier I capital for capital adequacy purposes.
MUFG was established on April 2, 2001 with common stock of ¥924,400 million, preferred stock of¥222,100 million, legal capital surplus of ¥2,838,693 million and no retained earnings in accordance with theCode and Japanese GAAP.
On October 1, 2005, MUFG started with common stock and preferred stock of ¥1,383,052 million, legal
capital surplus of ¥3,577,570 million and retained earnings of ¥757,458 million in accordance with the Code andJapanese GAAP.
MUFG’s amount available for dividends, at March 31, 2012, was ¥4,376,963 million, which is based on theamount recorded in MUFG’s general books of account under Japanese GAAP.
Annual dividends, including those for preferred stock, are approved by the shareholders at an annual general
meeting held subsequent to the fiscal year to which the dividends are applicable. In addition, a semi-annualinterim dividend payment may be made by resolution of the Board of Directors, subject to limitations imposed by
the Company Law and the Banking Law.
F-88

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In the accompanying consolidated statements of equity, dividends and appropriations to legal reserve shownfor each fiscal year represent dividends approved and paid during the fiscal year and the related appropriation tolegal reserve.
18.

NONCONTROLLING INTERESTS

Deconsolidation of Subsidiaries
The amounts of gains (losses) recognized due to deconsolidation of subsidiaries for the fiscal years ended
March 31, 2010, 2011 and 2012 were ¥32,420 million, ¥(10,323) million and ¥(9,492) million, respectively,
and gains related to the remeasurement of retained investments for the fiscal years ended March 31, 2010,2011 and 2012 were ¥18,782 million, nil and nil, respectively. These gains and losses were recognized under“Other non-interest income” and “Other non-interest expenses,” respectively in the consolidated statements ofincome.
On October 1, 2009, Senshu Bank Ltd., a former consolidated subsidiary of the MUFG Group, and The
Bank of Ikeda Ltd. (“Bank of Ikeda”) incorporated Senshu Ikeda Holdings, Inc. through a share exchangetransaction based on the business integration agreement entered into by BTMU, Senshu Bank and Bank of Ikeda
on May 25, 2009. As a result of the business integration, the MUFG Group acquired shares of Senshu Ikeda
Holdings, Inc. in exchange for the MUFG Group’s shares of Senshu Bank and ceased to have controlling
financial interests in Senshu Bank. Senshu Bank was deconsolidated, and Senshu Ikeda Holdings, Inc. became an
equity method investee of MUFG from October 1, 2009. MUFG recorded the retained investment at fair value, as
measured by the quoted market price of Senshu Ikeda Holdings, Inc. and recognized a gain of ¥29,004 million in
the consolidated statement of income.
Changes in MUFG’s Ownership Interests in Subsidiaries
The following table presents the effect on the MUFG’s shareholders’ equity from changes in ownership ofsubsidiaries resulting from transactions with the noncontrolling interest shareholders during the fiscal years
ended March 31, 2010, 2011 and 2012:
2010

2011
(in millions)2012

Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . ¥868,662 ¥452,645 ¥416,231
Transactions between Mitsubishi UFJ Financial Group and the noncontrollinginterest shareholders:Conversion of preferred stock to common stock issued by a
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(641)
—
—
Change in ownership interest in Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd. in connection with the securities joint venture(Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—20,550—Issuance of new shares of Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——(20,000)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
221
3,859
759
Net transfers from (to) noncontrolling interest shareholders . . . . . . . . . . . . . . .

(420)

24,409(19,241)

Change from net income attributable to Mitsubishi UFJ Financial Group andtransactions between Mitsubishi UFJ Financial Group and thenoncontrolling interest shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥868,242¥477,054¥396,990

F-89

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
19.

REGULATORY CAPITAL REQUIREMENTSJapan
MUFG, BTMU, MUTB and MUSHD are subject to various regulatory capital requirements promulgated by
the regulatory authorities of the countries in which they operate. Failure to meet minimum capital requirements
will initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on
MUFG’s consolidated financial statements.
In Japan, MUFG, BTMU, and MUTB are subject to regulatory capital requirements promulgated by the
Financial Services Agency of Japan (“FSA”) in accordance with the provisions of the Banking Law and related
regulations. A banking institution is subject to the minimum capital requirements both on a consolidated basis
and a stand-alone basis, and is required to maintain the minimum capital irrespective of whether it operates
independently or as a subsidiary under the control of another company. When a bank holding company manages
operations of its banking subsidiaries, it is required to maintain the minimum capital adequacy ratio on aconsolidated basis in the same manner as its subsidiary banks. The FSA provides two sets of capital adequacy
guidelines. One is a set of guidelines applicable to Japanese banks and bank holding companies with foreign
offices conducting international operations, as defined, and the other is applicable to Japanese banks and bankholding companies that are not engaged in international operations conducted by foreign offices.
Under the capital adequacy guidelines applicable to a Japanese banking institution with international
operations conducted by foreign offices, a minimum capital ratio of 8.0% is required.
The Basel Committee on Banking Supervision of the Bank for International Settlements (“BIS”) sets capital
adequacy standards for all internationally active banks to ensure minimum level of capitals.
The Basel Committee worked over recent years to revise the 1988 Accord, and in June 2004, “International
Convergence of Capital Measurement and Capital Standards: A Revised Framework” called Basel II was
released. MUFG calculated capital ratios as of March 31, 2011 and 2012 in accordance with Basel II.
Basel II is based on “three pillars”: (1) minimum capital requirements, (2) the self-regulation of financial
institutions based on supervisory review process, and (3) market discipline through the disclosure of information.
The framework of the 1988 Accord, Basel I, is improved and expanded to be included in “minimum capitalrequirements” as the first pillar of Basel II.
As for the denominator of the capital ratio, retaining the Basel I Framework, Basel II provides more risksensitive approaches and a range of options for determining the risk-weighted assets.
“Credit Risk”
The revised Framework provides options for determining the risk-weighted assets for credit risk to allowbanks to select approaches that are most appropriate for their level of risk assessment while the Basel I
Framework provided a sole measurement approach. Banks choose one of three approaches: “Standardized
Approach,” “Foundation Internal Ratings-Based Approach (“FIRB”)” or “Advanced Internal Ratings-BasedApproach (“AIRB”).”“Market Risk”
In the “Amendment to the Capital Accord to incorporate market risks” of the year 1996, a choice between
two methodologies “the Standardized Methodology” and “Internal Models Approach” is permitted.
“Combination of Internal Models Approach and the Standardized Methodology” is also allowed undercertain conditions. This is unchanged in Basel II.
F-90

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)“Operational Risk”
Operational risk, which is defined as the risk of loss resulting from inadequate or failed internal processes,
people and systems or from external events, is newly added in Basel II. Basel II presents three methods forcalculating operational risk capital charges: (i) the Basic Indicator Approach; (ii) the Standardized
Approach; or (iii) Advanced Measurement Approaches (“AMA”). Banks adopt one of the three approaches
to determine the risk-weighted assets for operational risk.
Banks need to obtain approval from their supervisors prior to adopting the following approaches to calculate
capital requirements for each risk:‰

the Internal Ratings-Based (“IRB”) Approach for credit risk‰

the Internal Models Approach for market risk‰

the Standardized Approach and AMA for operational risk

On the other hand, as for the numerator of the capital ratio, Basel II takes over in principle the eligible
regulatory capital stipulated in Basel I.
Capital is classified into three tiers, referred to as Tier I, Tier II and Tier III capital and deductions from
capital.
Tier I capital generally consists of equity items, including common stock, preferred stock, capital surplus,
noncontrolling interests and retained earnings, less any recorded goodwill and other items such as treasury stock.
Tier II capital generally consists of general reserves for credit losses up to 1.25% of risk-weighted assets, 45% of theunrealized gains on investment securities available for sale, 45% of the land revaluation excess, the balance of
perpetual subordinated debt and the balance of subordinated term debt with an original maturity of over five years
subject to some limitations, up to 50% of Tier I capital. Preferred stock is includable in Tier I capital unless thepreferred stock has a fixed maturity, in which case, such preferred stock will be a component of Tier II capital. Tier
III capital generally consists of short-term subordinated debt with an original maturity of at least two years, subject
to certain limitations. At least 50% of a bank’s capital base must be maintained in the form of Tier I capital.
Deductions include a banks’ holdings of capital issued by other banks, or deposit-taking institutions andinvestments in subsidiaries engaged in banking and financial activities which are not consolidated in accordancewith Japanese GAAP.
Due to a change in credit risk measurement by adopting Basel II, general provisions for credit losses can be
included in Tier II capital according to the proportion of credit risk-weighted assets subject to the Standardized
Approach only. Under the IRB approach, the capital is adjusted by the amount of the difference between totaleligible provisions and total expected losses calculated within the IRB approach. Under certain conditions, banks
are also required to deduct from regulatory capital securitization exposure, any increase in equity capital resulting
from a securitization transaction and expected losses on equity exposures under the Probability of Default/Loss
Given Default approach.
If a banking institution is not engaged in international operations conducted by foreign offices, it is subject
to another set of capital adequacy requirements with a minimum capital ratio of 4.0%. Such guidelines
incorporate measures of risk under the risk-weighted approach similar to the guidelines applicable to banking
institutions with international operations. Qualifying capital is classified into Tier I and Tier II capital.
The Banking Law and related regulations require that one of three categories be assigned to banks and bankholding companies, based on its risk-adjusted capital adequacy ratio if the bank fails to meet the minimum target
capital adequacy ratio. These categories indicate capital deterioration, which may be subject to certain prompt
corrective action by the FSA.
F-91

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
MUFG, BTMU and MUTB have international operations conducted by foreign offices, as defined, and are
subject to the 8.0% capital adequacy requirement.
The MUFG Group’s proprietary assets do not include trust assets under management and administration in acapacity of agent or fiduciary and, accordingly trust account assets are generally not included in the capital
measure. However, guarantees for trust principal are counted as off-balance sheet items requiring a capital chargein accordance with the capital adequacy guidelines.
In Basel II, MUFG and most of its major subsidiaries adopt AIRB to calculate capital requirements for
credit risk. As of March 31, 2012, MUFG and most of its major subsidiaries adopted the AMA to calculate
capital requirements for operational risk while MUFG and most of its major subsidiaries had adopted theStandardized Approach as of March 31, 2011. As for market risk, MUFG and most of its major subsidiaries
adopt the Internal Models Approach mainly to calculate general market risk and adopt the Standardized
Methodology to calculate specific risk.
The risk-adjusted capital amounts and ratios of MUFG, BTMU and MUTB presented in the following table
are based on amounts calculated in accordance with Japanese GAAP as required by the FSA:
For capital
Actualadequacy purposes
AmountRatio
AmountRatio(in millions, except percentages)

Consolidated:
At March 31, 2011:
Total capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At March 31, 2012:
Total capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stand-alone:
At March 31, 2011:
Total capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At March 31, 2012:
Total capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-92¥13,080,826
11,469,704
1,704,267
9,953,332
8,284,108
1,392,725

14.89% ¥7,024,396
15.82
5,798,844
15.93
855,483

8.00%
8.00
8.00

11.33
11.42
13.02

4.00
4.00
4.00

3,512,198
2,899,422
427,742¥12,742,525
11,716,158
1,869,189

14.91% ¥6,836,528
16.27
5,759,478
15.74
949,729

8.00%
8.00
8.00

10,522,282
8,473,187
1,470,672

12.31
11.76
12.38

4.00
4.00
4.00

¥11,238,512
1,706,845

16.61% ¥5,410,825
16.01
852,749

8.00%
8.00

12.09
12.64

4.00
4.00

8,179,095
1,347,399¥11,514,330
1,899,969
8,333,966
1,410,875

3,418,264
2,879,739
474,864

2,705,413
426,374

17.41% ¥5,290,104
15.76
963,872

8.00%
8.00

12.60
11.71

4.00
4.00

2,645,052
481,936

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
MUMSS and other securities subsidiaries in Japan and overseas are also subject to regulatory capitalrequirements of the countries or jurisdictions in which they operate. In Japan, the Financial Instruments andExchange Law and related ordinance require financial instruments firms to maintain a minimum capital ratio of
120% calculated as a percentage of capital accounts less certain fixed assets, as determined in accordance withJapanese GAAP, against amounts equivalent to market, counterparty credit and operations risks. Specificguidelines are issued as a ministerial ordinance which details the definition of essential components of the capitalratios, including capital, deductible fixed asset items and risks, and related measures. Failure to maintain aminimum capital ratio will trigger mandatory regulatory actions. A capital ratio of less than 140% will call for
regulatory reporting and a capital ratio of less than 100% may lead to a suspension of all or part of the businessfor a period of time and cancellation of a registration.
At March 31, 2011 and 2012, MUMSS’s capital accounts less certain fixed assets of ¥250,421 million and¥387,677 million, were 219.3% and 328.6% of the total amounts equivalent to market, counterparty credit andoperations risks, respectively.
Management believes, as of March 31, 2012, that MUFG, BTMU, MUTB and other regulated securities
subsidiaries met all capital adequacy requirements to which they are subject.
Note:
MUMSS’s capital ratio calculated as a percentage of capital accounts less certain fixed assets against amounts equivalent to market,
counterparty credit and operations risks at March 31, 2011 has been restated from 219.4% to 219.3%.

United States of America
In the United States of America, UNBC and its banking subsidiary Union Bank, BTMU’s largest
subsidiaries operating outside Japan, are subject to various regulatory capital requirements administered by US
Federal banking agencies, including minimum capital requirements. Under the capital adequacy guidelines andthe regulatory framework for prompt corrective action, UNBC and Union Bank must meet specific capital
guidelines that involve quantitative measures of UNBC’s and Union Bank’s assets, liabilities, and certain
off-balance sheet items as calculated under US regulatory accounting practices. UNBC’s and Union Bank’s
capital amounts and Union Bank’s prompt corrective action classification are also subject to qualitative
judgments by the regulators about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require UNBC and Union Bank
to maintain minimum ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations)
to risk-weighted assets (as defined) and of Tier I capital (as defined) to quarterly average assets (as defined).

F-93

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The figures on the tables below are calculated according to Basel I as UNBC and Union Bank do not meetthe criteria in the new US rules which would make adoption of the new Basel II rules mandatory. UNBC’s andthe Union Bank’s actual capital amounts and ratios are presented as follows:
For capital
Actualadequacy purposes
AmountRatio
AmountRatio(in millions, except percentages)

UNBC:
At December 31, 2010:
Total capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . . . . . . . . . . . .
At December 31, 2011:
Total capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . . . . . . . . . . . .

$ 9,685 15.01% $5,161
8,029 12.44
2,581
8,029 10.34
3,106

8.00%
4.00
4.00

$11,142
9,641
9,641

8.00%
4.00
4.00

15.98% $5,579
13.82
2,790
11.44
3,372

Note:
(1) Excludes certain intangible assets.
Ratios OCC
For capitalrequires to be
Actualadequacy purposes “well capitalized”
AmountRatio
AmountRatio
AmountRatio(in millions, except percentages)

Union Bank:At December 31, 2010:
Total capital (to risk-weighted assets) . . . . . . . .
Tier I capital (to risk-weighted assets) . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . .
At December 31, 2011:
Total capital (to risk-weighted assets) . . . . . . . .
Tier I capital (to risk-weighted assets) . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . .

$ 8,866
7,377
7,377

13.85% $5,119
11.53
2,560
9.55
3,089

8.00% $6,399
4.00
3,840
4.00
3,861

10.00%
6.00
5.00$10,004 14.43% $5,546
8,588 12.39
2,773
8,588 10.25
3,352

8.00% $6,933
4.00
4,160
4.00
4,190

10.00%
6.00
5.00

Note:
(1) Excludes certain intangible assets.

Management believes, as of December 31, 2011, that UNBC and Union Bank met all capital adequacy
requirements to which they are subject.
As of December 31, 2010 and 2011, the most recent notification from the U.S. Office of the Comptroller of
the Currency (“OCC”) categorized Union Bank as “well capitalized” under the regulatory framework for prompt
corrective action. To be categorized as “well capitalized,” Union Bank must maintain a minimum total risk-based
capital ratio of 10%, a Tier I risk-based capital ratio of 6%, and a Tier I leverage ratio of 5% as set forth in thetable. There are no conditions or events since that notification that management believes have changed
Union Bank’s category.

F-94

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
20.

EARNINGS PER COMMON SHARE APPLICABLE TO COMMON SHAREHOLDERS OF
MUFG

Reconciliations of net income and weighted average number of common shares outstanding used for thecomputation of basic EPS to the adjusted amounts for the computation of diluted EPS for the fiscal years ended
March 31, 2010, 2011 and 2012 are as follows:

Income (Numerator):
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . .
Income allocable to preferred shareholders:Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

2010

2011
(in millions)

868,662¥452,6452012¥

416,231(21,678)(20,940)(17,940)

Net income available to common shareholders of Mitsubishi UFJ
Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

846,984

431,705

398,291

Effect of dilutive instruments:
Convertible preferred stock—Mitsubishi UFJ Merrill Lynch PB
Securities Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock options—kabu.com Securities . . . . . . . . . . . . . . . . . . . . . . . . .

(1,123)(1)(1,232)—(589)—

Net income available to common shareholders of Mitsubishi UFJ
Financial Group and assumed conversions . . . . . . . . . . . . . . . . . . .

¥845,860
2010

Shares (Denominator):
Weighted average common shares outstanding . . . . . . . . . . . . . . . . .
Effect of dilutive instruments:
Convertible preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥430,473¥

2011(thousands of shares)

397,7022012

14,131,567

14,140,136

1
8,365

1
13,1691
16,683

12,332,681

14,144,737

14,156,820

2010

2011
(in yen)2012

Weighted average common shares for diluted computation . . . . . . . .

12,324,315

Earnings per common share applicable to common shareholders
of Mitsubishi UFJ Financial Group:
Basic earnings per common share:
Net income available to common shareholders of Mitsubishi
UFJ Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

68.72

¥

30.55

¥

28.17

Diluted earnings per common share:
Net income available to common shareholders of Mitsubishi
UFJ Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

68.59

¥

30.43

¥

28.09

For the fiscal year ended March 31, 2010, stock options issued by MU Hands-on Capital Ltd. could
potentially dilute earnings per common share but were not included in the computation of diluted earnings percommon share due to their antidilutive effects.

F-95

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the fiscal year ended March 31, 2012, stock options and restricted stock units issued by Morgan Stanley
could potentially dilute earnings per common share but were not included in the computation of diluted earnings
per common share due to their antidilutive effects.
In computing the number of the potentially dilutive common shares for the fiscal years ended March 31,
2010, 2011 and 2012, Class 11 Preferred Stock has been based on the conversion price of ¥865.9 at March 31,
2010, 2011 and 2012.
21.

DERIVATIVE FINANCIAL INSTRUMENTS

The MUFG Group uses various derivative financial instruments both for trading purposes and for purposes
other than trading (primarily risk management purposes) in the normal course of business to meet the financial
needs of its customers, as a source of revenue and to manage its exposures to a variety of risks. Market risk is thepossibility that future changes in market indices make the financial instruments less valuable. The MUFG Groupis a party to derivatives, including swaps, forwards, options and other types of derivatives, dealing primarily withmarket risk associated with interest rates, foreign currencies, equity and commodity prices, and credit risk
associated with counterparty’s nonperformance of transactions.
Credit risk is the possibility that a loss may result from a counterparty’s failure to perform according to theterms and conditions of the contract, which may exceed the value of underlying collateral. To reduce credit risk,
the MUFG Group may require collateral or guarantees based on a case-by-case assessment of creditworthiness ofeach customer and evaluation of the instrument. The MUFG Group also uses master netting agreements in orderto mitigate overall counterparty credit risk.
Trading Activities
The MUFG Group’s trading activities include dealing and customer accommodation activities. As part of its
trading activities, the MUFG Group offers a variety of derivative financial instruments and debt instruments for
managing interest rate and foreign exchange risk to its domestic and foreign corporate and financial institution
customers. The MUFG Group also enters into other types of derivative transactions, including equity and creditrelated contracts, for its own account.
Risk Management Activities
As part of the MUFG Group’s risk management activities, asset and liability management is viewed as oneof the methods for the MUFG Group to manage its interest rate exposures on interest-bearing assets andliabilities. The MUFG Group uses certain derivative financial instruments in order to minimize significant
unplanned fluctuations in earnings that are caused by interest rate volatility. For example, an increase or adecrease of interest income and interest expense on hedged variable rate assets and liabilities as a result ofinterest rate fluctuations are expected to substantially offset the variability in earnings by gains and losses on thederivative instruments that are linked to these hedged assets and liabilities.
The MUFG Group enters into interest rate swaps and other contracts primarily to manage the interest rate
volatility of its loans, investment securities and deposit liabilities. Interest rate contracts, which are generally
non-leveraged generic interest rate and basis swaps, options and futures, allow the MUFG Group to effectively
manage its interest rate risk position. Option contracts primarily consist of caps, floors, swaptions and options on
index futures. Futures contracts used for asset and liability management activities are primarily index futures
providing for cash payments based upon the movement of an underlying rate index. The MUFG Group enters
F-96

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
into forward exchange contracts, currency swaps and other contracts in response to currency exposures resulting
from on-balance sheet assets and liabilities denominated in foreign currencies in order to limit the net foreignexchange position by currency to an appropriate level.
Derivatives Designated as Hedges
The MUFG Group adopts hedging strategies and applies hedge accounting to certain derivative transactions
entered by UNBC whose fiscal years end on December 31.
Cash Flow Hedges
Hedging Strategies for Variable Rate Loans, Borrowings and Certificates of Deposit (“CDs”) and Other Time
Deposits
UNBC engages in several types of cash flow hedging strategies related to forecasted future interest
payments, with the hedged risk being the changes in cash flows attributable to changes in the designatedbenchmark rate (i.e., US dollar LIBOR). In these strategies, the hedging instruments are matched with groups ofsimilar variable rate instruments such that the reset tenor of the variable rate instruments and that of the hedging
instrument are identical at inception. Cash flow hedging instruments currently being utilized include purchased
caps and interest rate swaps. At December 31, 2011, the weighted average remaining life of the currently active
cash flow hedges was approximately 2.0 years.
In the first quarter of 2011, UNBC terminated ¥77.7 billion notional amount of interest rate swaps
concurrent with the issuance of ¥77.7 billion of fixed rate debt. The swaps were accounted for as a cash flow
hedge and were used to mitigate the changes in cash flows on the forecasted fixed rate debt. At termination,
UNBC had a related unrealized gain of ¥1.1 billion, which is being amortized into interest expense over the lifeof the debt. The hedge ineffectiveness that was recognized in earnings upon the termination of the interest rate
swap was not significant.
UNBC used purchased interest rate caps with a notional amount of ¥77.7 billion to hedge the risk of changes
in cash flows attributable to changes in the designated benchmark interest rate on LIBOR indexed borrowings.
Payments received under the cap contract offset the increase in borrowing interest expense if the relevant LIBOR
index rises above the cap’s strike rate.
UNBC used interest rate swaps with a notional amount of ¥89.4 billion to hedge the risk of changes in cash
flows attributable to changes in the designated benchmark interest rate on LIBOR indexed other borrowings andlong-term debt. Payments received (or paid) under the swap contract offset fluctuations in other borrowings andlong-term debt interest expense caused by changes in the relevant LIBOR index.
UNBC used purchased interest rate caps with a notional amount of ¥233.2 billion to hedge the risk ofchanges in cash flows attributable to changes in the designated benchmark interest rate component of forecasted
issuances of short-term, fixed rate CDs. Net payments to be received under the cap contract offset increases ininterest expense if the relevant LIBOR index rises above the cap’s strike rate.
UNBC used interest rate swaps with a notional amount of ¥174.9 billion to hedge the risk of changes in cash
flows attributable to changes in the designated benchmark interest rate on LIBOR indexed loans. Payments
received (or paid) under the swap contract offset fluctuations in interest income on loans caused by changes in
the relevant LIBOR index.

F-97

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Hedging transactions are structured at inception so that the notional amounts of the hedging instruments arematched to an equal principal amount of loans, CDs, or borrowings, the index and repricing frequencies of thehedging instruments match those of the loans, CDs, or borrowings and the period in which the designated hedged
cash flows occurs is equal to the term of the hedge instruments. As such, most of the ineffectiveness in thehedging relationship results from the mismatch between the timing of reset dates on the hedging instruments
versus those of the loans, CDs or borrowings.
For cash flow hedges, the effective portion of the gain or loss on the hedging instruments is reported as acomponent of other comprehensive income and reclassified into earnings in the same period or periods during
which the hedged cash flows are recognized in net interest income. Gains and losses representing hedge
ineffectiveness or hedge components excluded from the assessment of hedge effectiveness are recognized innoninterest expense in the period in which they arise. At December 31, 2011, UNBC expects to reclassify
approximately ¥0.8 billion of net losses from accumulated other comprehensive income to net interest income forthe fiscal year ending December 31, 2012. This amount could differ from amounts actually realized due tochanges in interest rates and the addition of other hedges subsequent to December 31, 2011.
Notional Amounts of Derivative Contracts
The following table summarizes the notional amounts of derivative contracts at March 31, 2011 and 2012:
Notional amounts(1)
2011
2012
(in trillions)Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 967.6 ¥ 933.5
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121.6
128.0
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1
2.4
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.0
1.8
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.1
6.5
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
1.2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note:(1) Includes both written and purchased position.

F-98¥1,101.6¥1,073.4

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Impact of Derivatives on the Consolidated Balance Sheets
The following tables summarize fair value information on derivative instruments that are recorded on the
MUFG Group’s consolidated balance sheets at March 31, 2011 and 2012:
Fair value of derivative instruments(1)(5)
Not designated DesignatedTotal
as hedges(2)as hedges(3)derivatives(4)(in billions)

At March 31, 2011:

Derivative assets:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,420
2,315
82
171
45

¥ 2
—
—
—
—

¥ 7,422
2,315
82
171
45

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,033¥ 2¥10,035

Derivative liabilities:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,330
2,279
85
137
47
(117)

¥—
—
—
—
—
—

¥ 7,330
2,279
85
137
47
(117)

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,761¥—¥ 9,761Fair value of derivative instruments(1)(5)
Not designated DesignatedTotal
as hedges(2)as hedges(3)derivatives(4)(in billions)

At March 31, 2012:

Derivative assets:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,064
2,259
58
122
55

¥—
—
—
—
—

¥ 9,064
2,259
58
122
55

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,558¥—¥11,558

Derivative liabilities:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,062
2,458
124
99
50
(83)

¥ 1
—
—
—
—
—

¥ 9,063
2,458
124
99
50
(83)

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,710¥ 1¥11,711

Notes:(1) The fair value of derivative instruments is presented on a gross basis even when derivative instruments are subject to master netting
agreements. Cash collateral payable and receivable associated with derivative instruments are not added to or netted against the fair value
amounts.

F-99

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) The derivative instruments which are not designated as a hedging instrument are held for trading and risk management purposes, and arepresented in Trading account assets/liabilities except for (6).
(3) The MUFG Group adopts hedging strategies and applies hedge accounting to certain derivative transactions entered by UNBC. The
derivative instruments which are designated as a hedging instrument are presented in Other assets or Other liabilities.
(4) This table does not include contracts with embedded derivatives for which the fair value option has been elected.
(5) For more information about fair value measurement and assumptions used to measure the fair value of derivatives, see Note 29.
(6) Others include bifurcated embedded derivatives carried at fair value, which are presented in Deposits and Long-term debt.

Impact of Derivatives and Hedged Items on the Consolidated Statements of Income and on Accumulated
Other Changes in Equity from Nonowner Sources
The following tables reflect more detailed information regarding the derivative-related impact on the
consolidated statements of income by accounting designation for the fiscal years ended March 31, 2010, 2011
and 2012:
Gains and losses for trading and risk management derivatives (not designated as hedging instruments)
Trading and risk management derivatives gains and losses(Not designated as hedging instruments)
Foreign exchange
Trading accountgains (losses)—net
profits (losses)—net
Total(in billions)

For the fiscal year ended March 31, 2010:

Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ —
33
—
—
—
(2)
¥ 31

¥ 213
—
(217)
(9)
(97)
22
¥ (88)

¥ 213
33
(217)
(9)
(97)
20
¥ (57)

Trading and risk management derivatives gains and losses(Not designated as hedging instruments)
Foreign exchange
Trading accountgains (losses)—net
profits (losses)—net
Total(in billions)

For the fiscal year ended March 31, 2011:

Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-100

¥ —
80
—
—
—
—
¥ 80

¥(27)
—
21
2
(6)
7
¥ (3)

¥(27)
80
21
2
(6)
7
¥ 77

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Trading and risk management derivatives gains and losses(Not designated as hedging instruments)
Foreign exchange
Trading accountgains (losses)—net
profits (losses)—net
Total(in billions)

For the fiscal year ended March 31, 2012:

Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

—
(94)
—
—
—
(1)
(95)

¥

160
—
(47)
(1)
2
(36)
78

¥

¥

160
(94)
(47)
(1)
2
(37)
(17)

¥

Gains and losses for derivatives designated as cash flow hedges
Gains and losses for derivatives designated as cash flow hedges
Gains (Losses)
The amount ofreclassified from
Gains (Losses)
gains (losses)
Accumulated
recognized inrecognized inother changes
income on
Accumulated
in equity fromderivative instruments
other changes
nonowner sources(Ineffective portion andin equity from
into income
amount excluded fromnonowner sources on(Effective portion)effectiveness testing)derivative instruments(Effective portion)
Classification
Amount Classification Amount(in billions)

For the fiscal year ended March 31, 2010:
Interest rate contracts . . . . . . . . . . . . . . . . . .

¥4Interest income ¥

12

¥

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

4

¥

12

¥

—

For the fiscal year ended March 31, 2011:
Interest rate contracts . . . . . . . . . . . . . . . . . .

¥—Interest income ¥

6

¥

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

—

¥

6

¥

—

For the fiscal year ended March 31, 2012:
Interest rate contracts . . . . . . . . . . . . . . . . . .

¥—Interest income ¥

(1)

¥

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

—

¥

(1)

¥

—

Embedded Derivatives
Features embedded in other non-derivative hybrid contracts are separated from the host contracts andmeasured at fair value when they are not clearly and closely related to the host contracts and meet the definitionof a derivative. The change in the fair value of such an embedded derivative is recognized currently in earnings,
unless it qualifies as a hedge. The fair value of the embedded derivative is presented in the consolidated balance
sheets with the host contract. The MUFG Group accounts for credit-linked notes as host contracts with embedded
derivatives and measures the entire contracts at fair value.

F-101

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Credit Derivatives
The MUFG Group enters into credit derivatives to manage credit risk exposures, to facilitate clienttransactions, and for proprietary trading purpose, under which they provide counterparty protection against therisk of default on a set of debt obligations issued by a specified reference entity or entities. Types of these credit
derivatives include primarily single name credit default swaps, index and basket credit default swaps and creditlinked notes. The MUFG Group will have to perform under a credit derivative if a credit event as defined under
the contract occurs. Such credit events include bankruptcy, dissolution or insolvency of the referenced entity,default and restructuring of the obligations of the referenced entity. The MUFG Group’s counterparties arebanks, broker-dealers, insurance and other financial institutions. The contractual or notional amounts of these
instruments represent the maximum potential amounts of future payments without consideration of possible
recoveries under recourse provisions or from collateral held or pledged. The table below summarizes certain
information regarding protection sold through credit default swaps and credit-linked notes as of March 31, 2011
and 2012:
Protection soldMaximum potential/Notional amountby expiration periodLess than
1-5Over
1 yearyears
5 years
Total(in millions)

Estimated
fair value(Asset)/Liability(1)Single name credit default swaps:
Investment grade(2) . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥611,719
108,045
9,872¥1,876,565
179,289
13,505¥ 73,711
249—¥2,561,995
287,583
23,377¥ (10,589)(1,611)(60)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

729,636

2,069,359

73,9602,872,955(12,260)

Index and basket credit default swaps held by
BTMU:
Investment grade(2) . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93,121
3,520—

47,75536,908
8,847

86,016——

226,892
40,428
8,847

(661)
15
(184)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index and basket credit default swaps held by
MUSHD:
Investment grade(2) . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . .

96,641

93,51086,016276,167(830)

30,669——367,549
30,155
6,939

2,000
—
—

400,218
30,155
6,939(7,247)(383)
240

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,669404,6432,000

437,312(7,390)Total index and basket credit default swaps
sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127,310498,153

88,016

713,479(8,220)Total credit default swaps sold . . . . . . . . . . . . . . .

¥856,946¥2,567,512¥161,976¥3,586,434¥ (20,480)

Credit-linked notes(3) . . . . . . . . . . . . . . . . . . . . . . .

¥¥¥174,436¥ 207,653¥(117,870)

At March 31, 2011:

—

F-102

33,217

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Protection soldMaximum potential/Notional amountby expiration periodLess than
1-5Over
1 yearyears
5 years
Total(in millions)

Estimated
fair value(Asset)/Liability(1)Single name credit default swaps:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥738,815
111,916
15,692¥1,496,719
122,896
10,390¥130,926
1,503—¥2,366,460
236,315
26,082¥ 2,389
4,205(19)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

866,423

1,630,005

132,4292,628,857

6,575

Index and basket credit default swaps held by
BTMU:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,12935,413
7,824

119,132940—

44,238——

180,499
36,353
7,824

772
45
(68)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index and basket credit default swaps held by
MUSHD:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,366

120,072

44,238

224,676

749

51,6005,950—

358,506
10,082
12,251

4,000——

414,106
16,032
12,251(4,025)(161)
838

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,550380,8394,000

442,389(3,348)

Total index and basket credit default swaps
sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117,916

500,911

48,238667,065(2,599)Total credit default swaps sold . . . . . . . . . . . . . . . .

¥984,339¥2,130,916¥180,667¥3,295,922¥ 3,976

Credit-linked notes(3) . . . . . . . . . . . . . . . . . . . . . . . .

¥ 15,000¥¥ 13,997¥¥(32,514)

At March 31, 2012:12,10941,106

Notes:(1) Fair value amounts are shown on a gross basis prior to cash collateral or counterparty netting.
(2) The MUFG Group considers ratings of Baa3/BBB- or higher to meet the definition of investment grade.
(3) Fair value amounts shown represent the fair value of the hybrid instruments.

Single name credit default swaps—A credit default swap protects the buyer against the loss of principal on abond or loan in case of a default by the issuer. The protection buyer pays a periodic premium over the life of thecontracts and is protected for the period. The MUFG Group in turn will have to perform under a credit default
swap if a credit event as defined under the contracts occurs. In order to provide an indication of the current
payment/performance risk of the credit default swaps, the external credit ratings, primarily Moody’s andStandard & Poor’s (“S&P”) credit ratings, of the underlying reference entity of the credit default swaps aredisclosed.
Index and basket credit default swaps—Index and basket credit default swaps are credit default swaps thatreference multiple names through underlying baskets or portfolios of single name credit default swaps. Typically,in the event of a default on one of the underlying names, the MUFG Group will have to pay a pro rata portion of
the total notional amount of the credit default index or basket contract. In order to provide an indication of thecurrent payment/performance risk of these credit default swaps, BTMU and MUSHD rating scale based upon theentity’s internal ratings, which generally correspond to ratings defined by primarily Moody’s and S&P, of theunderlying reference entities comprising the basket or index were calculated and disclosed.
F-103

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Credit-linked notes (“CLNs”)—The MUFG Group has invested in CLNs, which are hybrid instruments
containing embedded derivatives, in which credit protection has been sold to the issuers of the notes. If there is acredit event of a reference entity underlying the CLN, the principal balance of the note may not be repaid in fullto the MUFG Group. As part of its financing activities, MUSHD and other securities subsidiaries in Japan andoverseas issue CLNs.
The MUFG Group may economically hedge its exposure to credit derivatives by entering into offsetting
derivative contracts. The carrying value and notional amounts of credit protection sold in which the MUFG
Group held purchased protection with identical underlying referenced entities were approximately ¥19 billionand ¥2,848 billion, respectively, at March 31, 2011, and approximately ¥2 billion and ¥2,535 billion,
respectively, at March 31, 2012.
Collateral is held by the MUFG Group in relation to these instruments. Collateral requirements are
determined at the counterparty level and cover numerous transactions and products as opposed to individual
contracts.
Credit Risk, Liquidity Risk and Credit-risk-related Contingent Features
Certain of the MUFG Group’s derivative instruments contain provisions that require the MUFG Group’s
debt to maintain an investment grade credit rating from each of the major credit rating agencies. If the MUFG
Group’s debt were to fall below investment grade, it would be in violation of these provisions, and thecounterparties to the derivative instruments could request payments on early termination or demand immediateand ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fairvalue of all derivative instruments with credit-risk-related contingent features that were in a liability position atMarch 31, 2011 and 2012 was approximately ¥3.8 trillion and ¥3.6 trillion, respectively, for which the MUFG
Group has posted collateral of approximately ¥346 billion and ¥612 billion, respectively, in the normal course ofbusiness. The amount of additional collateral and early termination amount which could be requested if the
MUFG Group’s debt falls below investment grade was ¥218 billion and ¥147 billion, respectively, as ofMarch 31, 2011 and ¥125 billion and ¥99 billion, respectively, as of March 31, 2012.
Note:
The balances of aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position,
posted collateral and additional collateral which could be requested if the MUFG Group’s debt falls below investment grade at March 31,
2011 have been restated as follows:
March 31, 2011
As previously
reported
As restated(in trillions)Aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in aliability position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Posted collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional collateral which could be requested if the MUFG Group’s debt falls below investment grade . . . . .

22.

¥ 3.5
¥ 3.8
(in billions)
¥329
¥346
204
218

OBLIGATIONS UNDER GUARANTEES AND OTHER OFF-BALANCE SHEET INSTRUMENTS

Obligations under Guarantees
The MUFG Group provides customers with a variety of guarantees and similar arrangements, including
standby letters of credit, financial and performance guarantees, credit protections, liquidity facilities, otheroff-balance sheet credit-related support and similar instruments, in order to meet the customers’ financial andbusiness needs. The tables below present the contractual or notional amounts of such guarantees at March 31,
F-104

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2011 and 2012. The contractual or notional amounts of these instruments represent the maximum potential
amounts of future payments without consideration of possible recoveries under recourse provisions or fromcollateral held or pledged.
For certain types of derivatives, such as written interest rate options and written currency options, themaximum potential future payments are unlimited. Accordingly, it is impracticable to estimate the maximum
potential amount of future payments. As such, the notional amounts of the related contracts, other than the
maximum potential payments, are included in the table.
The MUFG Group mitigates credit risk exposure resulting from guarantees by utilizing various techniques,
including collateralization in the form of cash, securities, and real properties based on management’s credit
assessment of the guaranteed parties and the related credit profile. In order to manage the credit risk exposure,the MUFG Group also enters into sub-participation contracts with third parties who will fund a portion of thecredit facility and bear its share of the loss to be incurred in the event that the borrower fails to fulfill its
obligations. The following table includes guarantees of ¥147.3 billion and ¥168.8 billion at March 31, 2011 and2012, respectively, which are participated out to third parties. The contractual or notional amounts summarized in
the following table do not necessarily bear any direct relationship to the future actual credit exposure, primarily
because of those risk management techniques.
Maximum
potential/
Contractualor Notionalamount

At March 31, 2011:

Standby letter of credit and financial guarantees . . . . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

3,592
2,213
152,6634,931
130¥ 1,636
1,524
55,4694,066
130¥ 1,052 ¥ 904
537
152
86,586
10,608326
539——¥163,529¥62,825¥88,501

Maximum
potential/
Contractualor Notionalamount

At March 31, 2012:

Standby letter of credit and financial guarantees . . . . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note:(1) Credit derivatives sold by the MUFG Group are excluded from this presentation.

F-105

Amount by expiration periodLess thanOver
1 year
1-5 years
5 years(in billions)¥¥12,203

Amount by expiration periodLess thanOver
1 year
1-5 years
5 years(in billions)

3,502
2,089
155,7205,250
96¥ 1,897
1,480
90,8164,428
96¥884 ¥ 721
521
88
54,592
10,312324
498——¥166,657¥98,717¥56,321¥11,619

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nature of Guarantee Contracts
Standby letters of credit and financial guarantees generally include an obligation of an issuer or a designatedthird-party to guarantee the performance of the customer to the beneficiary under the terms of contracts such as
lending contracts and other similar financial transactions. The MUFG Group is required to make payments to theguaranteed parties in the event that the customers fail to fulfill the obligations under the contracts. The guarantees
whose contractual maturities are over 5 years are mainly comprised of guarantees of housing loans.
Performance guarantees are the contracts that contingently require the MUFG Group to make payments to
the guaranteed party based on another party’s failure to perform under an obligating agreement, except financial
obligation. For example, performance guarantees include guarantees of completion of construction projects.
Derivative instruments that are deemed to be included within the definition of guarantees as prescribed in
the guidance on guarantees include certain written options and credit default swaps. In order for the MUFG
Group to determine if those derivative instruments meet the definition of guarantees as prescribed in the guidanceon guarantees, the MUFG Group tracks whether the counterparties are actually exposed to the losses that will
result from the adverse change in the underlyings. Accordingly, the MUFG Group has disclosed information on
all credit default swaps and certain written options for which there is a possibility of meeting the definition ofguarantees as prescribed in the guidance on guarantees, regardless of whether the counterparties have assets or
liabilities related to the underlyings of the derivatives. However, credit derivatives sold by the MUFG Group at
March 31, 2011 and 2012 are excluded from this presentation, as they are disclosed in Note 21.
Liabilities of trust accounts represent the trustee’s potential responsibility for temporary payments tocreditors of liabilities of trust accounts making use of funds of the MUFG Group, unless there are the certain
agreements with trust creditors that have provisions limiting the MUFG Group’s responsibility as a trustee to thetrust account assets. A trust may incur external liabilities to obtain certain services during the terms of the trust
arrangement. While, in principle, any liabilities of a trust are payable by the trust account and its beneficiaries, atrustee’s responsibility may be interpreted to encompass temporary payments for the trust account liabilities
when the trust account does not maintain sufficient liquidity available for such liabilities unless the agreementwith trust creditors limits the trustee’s responsibility to the trust account assets. At March 31, 2011 and 2012,
there were liabilities of ¥4,931 billion and ¥5,250 billion, respectively, in the segregated records of trust accounts
including the amounts related to liabilities with provisions limiting trustee responsibility. Liabilities of trust
accounts principally included obligations to return collateral under security lending transactions. The MUFG
Group has experienced no significant losses on such responsibilities and its exposure to the risk associated withthe temporary payments is judged to be remote because trust account liabilities are generally covered by thecorresponding trust account assets; the MUFG Group continuously monitors the liabilities of trust accounts andassesses the trust account’s ability to perform its obligations to prevent any unfavorable outcomes; and the
MUFG Group claims its recourse for its temporary payments against the trust account assets and thebeneficiaries.
Other includes security lending indemnifications. Security lending indemnifications are the indemnifications
for institutional customers of securities lending transactions against counterparty default. All lending transactions
are collateralized, primarily by cash.
Carrying AmountAt March 31, 2011 and 2012, the carrying amounts of the liabilities related to guarantees and similar
instruments set forth above were ¥1,904,425 million and ¥1,576,404 million, respectively, which are included in
Other liabilities and Trading account liabilities. The guarantees and similar instruments comprising the largest
components of the total were options sold in the amount of ¥1,857,441 million and ¥1,528,190 million as of
F-106

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2011 and 2012, respectively. Credit derivatives sold by the MUFG Group at March 31, 2011 and 2012
are excluded from this presentation, as they are disclosed in Note 21. In addition, Other liabilities also include anallowance for off-balance sheet instruments of ¥38,582 million and ¥33,998 million at March 31, 2011 and 2012,
respectively, related to these transactions.
Performance Risk
The MUFG Group monitors performance risk of its guarantees using the same credit rating system utilized
for estimating probabilities of default within its loan portfolio. The MUFG Group’s credit rating system isconsistent with both the method of evaluating credit risk under Basel II and those of third-party credit rating
agencies. On certain underlying referenced credits or entities, ratings are not available. Such referenced credits
are included in the “Not rated” category in the following tables.
Presented in the tables below is the maximum potential amount of future payments classified based uponinternal credit ratings as of March 31, 2011 and 2012. The determination of the maximum potential future
payments is based on the notional amount of the guarantees without consideration of possible recoveries underrecourse provisions or from collateral held or pledged. Such amounts bear no relationship to the anticipatedlosses, if any, on these guarantees.

Maximum
potential/
Contractualor Notionalamount

At March 31, 2011:

Amount by borrower grade
Likely to
becomeBankrupt
or Legally/
Close
VirtuallyNot(1)Normal watch
Bankrupt(2) rated(in billions)Standby letters of credit and financial guarantees . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,592
2,213¥3,356
2,147

¥215
49

¥13
2

¥ 8
15

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,805¥5,503

¥264

¥15

¥23

Maximum
potential/
Contractualor Notionalamount

At March 31, 2012:

Amount by borrower grade
Likely to
becomeBankrupt
or Legally/
Close
VirtuallyNot(1)Normal watch
Bankrupt(2) rated(in billions)Standby letters of credit and financial guarantees . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,502
2,089¥3,297
2,032

¥185
42

¥12
1

¥ 8
14

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,591¥5,329

¥227

¥13

¥22

Notes:(1) Borrowers classified as Close watch represent those that require close monitoring as the borrower has begun to exhibit elements ofpotential concern with respect to its business performance and financial condition, the borrower has begun to exhibit elements of serious
concern with respect to its business performance and financial condition, including business problems requiring long-term solutions, orthe borrower’s loans have been deemed restructured loans or loans contractually past due 90 days or more for special reasons.
(2) Borrowers classified as Likely to become Bankrupt or Legally/Virtually Bankrupt represent those that have a higher probability ofdefault than those categorized as Close watch due to serious debt repayment problems with poor progress in achieving restructuring
plans, the borrower being considered virtually bankrupt with no prospects for an improvement in business operations, or the borrower
being legally bankrupt with no prospects for continued business operations because of non-payment, suspension of business, voluntaryliquidation or filing for legal liquidation.

F-107

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The guarantees the MUFG Group does not classify based upon internal credit ratings are as follows.
The MUFG Group records all derivative contracts at fair value. Aggregate market risk limits have been
established, and market risk measures are routinely monitored against these limits. The MUFG Group also
manages its exposure to these derivative contracts through a variety of risk mitigation strategies, including, but
not limited to, offsetting economic hedge positions. The MUFG Group expects the risk of loss to be remote andbelieves that the notional amounts of the derivative contracts generally exceed its exposure.
Liabilities of trust accounts represent the trustee’s potential responsibility for temporary payments tocreditors of liabilities of trust accounts making use of funds of the MUFG Group. The MUFG Group has
experienced no significant losses on such responsibilities and its exposure to the risk associated with thetemporary payments is judged to be remote because trust account liabilities are generally covered by thecorresponding trust account assets.
The MUFG Group conducts securities lending transactions for institutional customers as a fully disclosed
agent. At times, securities lending indemnifications are issued to guarantee that a security lending customer will
be made whole in the event the borrower does not return the security subject to the lending agreement andcollateral held is insufficient to cover the market value of the security. All lending transactions are collateralized,
primarily by cash. At March 31, 2012, the MUFG Group had no exposure that would require it to pay under thissecurities lending indemnification, since the collateral market value exceeds the securities lent.
Other Off-balance Sheet Instruments
In addition to obligations under guarantees and similar arrangements set forth above, the MUFG Groupissues other off-balance sheet instruments to meet the financial needs of its customers and for purposes other than
trading. Such off-balance sheet instruments consist of lending-related commitments, including commitments toextend credit and commercial letters of credit that the MUFG Group provides to meet the financing needs of its
customers. Once the MUFG Group issues these financial instruments, the MUFG Group is required to extend
credit to or make certain payments to the customers or beneficiaries specified pursuant to the underlying
contracts unless otherwise provided in the contracts. Since many of these commitments expire without being
drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At March 31,
2012, approximately 76% of these commitments will expire within one year, 22% from one year to five years
and 2% after five years. The table below presents the contractual amounts with regard to such instruments at
March 31, 2011 and 2012:
2011
2012
(in billions)

Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to make investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥62,141641
113
16¥62,754682
117
16

Commitments to extend credit, which generally have fixed expiration dates or other termination clauses, arelegally binding agreements to lend to customers. Commitments are different from guarantees in that thecommitments are generally revocable or have provisions that enable the MUFG Group to avoid payments in theevent of violations of any conditions of the contracts and certain deterioration of the potential borrowers’
financial condition.

F-108

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Commercial letters of credit, generally used for trade transactions, are typically secured by the underlying
goods. The MUFG Group continually monitors the type and amount of collateral and other security, and requires
counterparties to provide additional collateral or guarantors as necessary.
Commitments to make investments are legally binding contracts to make additional contributions tocorporate recovery or private equity investment funds in accordance with limited partnership agreements. Someof these funds, in which the MUFG Group has significant variable interests, are described in Note 23.
23.

VARIABLE INTEREST ENTITIESIn the normal course of its business, the MUFG Group has financial interests and other contractual
obligations in various entities which may be deemed to be VIEs such as asset-backed conduits, various
investment funds, special purpose entities created for structured financing, repackaged instruments, entities
created for the securitization of the MUFG Group’s assets, and trust arrangements.
The following tables present the assets and liabilities of consolidated VIEs recorded on the consolidatedbalance sheets at March 31, 2011 and 2012:
Consolidated VIEs

At March 31, 2011:

Total

Consolidated assets
Cash and Interest-earning Trading
due from
deposits inaccount
Investment
banksother banks
assetssecurities(in millions)

Asset-backed conduits . . . . . . . . ¥ 5,080,030 ¥33,432
Investment funds . . . . . . . . . . . . 1,342,526 9,872
Special purpose entities createdfor structured financing . . . . .
171,509
273
Repackaged instruments . . . . . .
46,014—
Securitization of the MUFG
Group’s assets . . . . . . . . . . . . 2,456,025—
Trust arrangements . . . . . . . . . . 1,030,902—
Others . . . . . . . . . . . . . . . . . . . .
147,657307¥38,418
20,102

Total . . . . . . . . . . . . . . . . . . ¥10,274,663 ¥43,884¥92,089¥569 ¥391,751 ¥4,603,010 ¥ 12,850
1,113,959 15,637
654 182,302

1,524
—

14,20029,360209
4,778
27,058

—
33
—

2,025
—

146,287
16,654

7,200—— 2,359,936
83,609938,21373
85,273

95,8804,269
34,946¥1,158,121 ¥493,095 ¥8,150,027 ¥337,447

Consolidated liabilities
Other short-term
Deposits
borrowings(in millions)

Total

Asset-backed conduits . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . .
Special purpose entities created forstructured financing . . . . . . . . . . . . . . . .
Repackaged instruments . . . . . . . . . . . . . . .
Securitization of the MUFG Group’s
assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust arrangements . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,085,180
69,270Total . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

Loans

All
other
assetsLong-termdebt

All other
liabilities——¥4,434,957
1,187¥ 227,120
17,898¥423,103
50,185

156,387
46,082——

17,077—

138,577
45,680733
402

2,458,876
1,030,686
147,008—
1,017,160—

27,400—88,6832,429,956—
31,932

1,520
13,526
26,393¥8,993,489¥1,017,160¥4,569,304¥2,891,163¥515,862

F-109

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Consolidated VIEs

At March 31, 2012:

Total

Consolidated assets
Cash and Interest-earning
Trading
due from
deposits inaccount
Investment
banksother banks
assetssecurities(in millions)

Asset-backed conduits . . . . . ¥ 5,408,549 ¥34,260
Investment funds . . . . . . . . .
1,795,862 19,556
Special purpose entities
created for structured
financing . . . . . . . . . . . . .
161,353
828
Repackaged instruments . . .
57,603—
Securitization of the MUFG
Group’s assets . . . . . . . . .
2,131,526—
Trust arrangements . . . . . . .
971,787—
Others . . . . . . . . . . . . . . . . . .
124,807254¥ 46,684
56,359Total . . . . . . . . . . . . . . . ¥10,651,487 ¥54,898¥108,116

Loans

All
other
assets¥2,181 ¥435,800 ¥4,846,147 ¥ 43,477
1,526,547
11,550172 181,678

1,755
—

—
50,983——

148,764
6,620

10,006
—

—
2,621
697

—
64
—

—
82,631107

2,050,818
882,499
89,95280,7083,972
33,797

Total¥1,579,775 ¥530,088 ¥8,024,972 ¥353,638
Consolidated liabilities
Other
short-termLong-term
Deposits
borrowings
debt(in millions)

All other
liabilities

Asset-backed conduits . . . . . . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . . . . . .
Special purpose entities created for structured
financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repackaged instruments . . . . . . . . . . . . . . . . . . .
Securitization of the MUFG Group’s assets . . . .
Trust arrangements . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,421,716
215,030¥——¥4,741,258
1,580¥ 222,635
12,989¥457,823
200,461

159,637
57,9862,133,087
970,437
124,239———
965,003—

10,635—
26,200—89,390147,868
56,9292,105,666—
34,661

1,134
1,057
1,221
5,434
188

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥9,082,132¥965,003¥4,869,063¥2,580,748¥667,318

The assets and liabilities of consolidated VIEs presented in the table above include intercompany
transactions between consolidated VIEs and the MUFG Group, the primary beneficiary. In consolidation, theeliminated amounts of assets were ¥36,244 million of Cash and due from banks, ¥77,083 million of Interestearning deposits in other banks, ¥858 million of Trading account assets, ¥10 million of Investment securities,¥993,204 million of Loans and ¥7,701 million of All other assets at March 31, 2011, and ¥52,669 million of Cashand due from banks, ¥51,841 million of Interest-earning deposits in other banks, ¥3,050 million of Trading
account assets, ¥9 million of Investment securities, ¥923,508 million of Loans and ¥53,430 million of All otherassets at March 31, 2012. The eliminated amounts of liabilities were ¥3,179,780 million of Other short-termborrowings, ¥1,220,590 million of Long-term debt and ¥65,341 million of All other liabilities at March 31, 2011,and ¥3,104,796 million of Other short-term borrowings, ¥1,183,281 million of Long-term debt and¥16,080 million of All other liabilities at March 31, 2012.
In general, the creditors or beneficial interest holders of consolidated VIEs have recourse only to the assetsof those VIEs and do not have recourse to other assets of the MUFG Group, except where the MUFG Group is
only contractually required to provide credit enhancement or program-wide liquidity.

F-110

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present the total assets of non-consolidated VIEs, the maximum exposure to loss
resulting from the MUFG Group’s involvement with non-consolidated VIEs and the assets and liabilities of
non-consolidated VIEs at March 31, 2011 and 2012:
Non-consolidated VIEs

At March 31, 2011:

AssetsMaximum
exposure

Total

On-balance sheet assets
Tradingaccount Investment
assetssecurities
Loans(in millions)

Asset-backed
conduits . . . . . . . . . ¥ 4,938,696 ¥1,681,550 ¥1,161,889 ¥596 ¥Investment funds . . . . 12,787,846
441,844434,767 132,280
Special purpose
entities created forstructured
financing . . . . . . . . 13,503,700 2,183,868 1,854,368
20,313
Repackaged
instruments . . . . . . . 15,424,831 1,069,179 1,008,013 104,612
Trust arrangements . . .
29,90828,28527,252—Others . . . . . . . . . . . . . 10,456,456 1,319,938 1,051,194
13,348On-balance sheet
liabilities
All
other
assetsTotal

All other
liabilities

144,946 ¥1,016,347 ¥— ¥115,281
178,808
8,398——

71,8401,758,754

3,461

—

—

561,876—
302,544

341,525
27,252735,302

—
—
—

—
5,791
1

—
5,791
1

Total . . . . . . . . . . ¥57,141,437 ¥6,724,664 ¥5,537,483 ¥271,149 ¥1,196,487 ¥4,057,988 ¥11,859 ¥5,792¥5,792

Non-consolidated VIEs

At March 31, 2012:

AssetsMaximum
exposure

Total

On-balance sheet assets
Tradingaccount Investment
assetssecurities
Loans(in millions)¥——On-balance sheet
liabilities
All
other
assets

Total

Asset-backed
conduits . . . . . . . . . ¥ 9,565,475 ¥2,425,746 ¥1,798,190 ¥ 12,460 ¥ 207,361 ¥1,578,369 ¥— ¥ —Investment funds . . . .
2,423,629
291,889283,273
12,261
91,220179,792——
Special purpose
entities created forstructured
financing . . . . . . . . 17,110,493 2,431,871 2,044,138
72,14041,510 1,928,409
2,079—
Repackaged
instruments . . . . . . . 13,362,168 1,199,028 1,154,691
48,851
769,109336,731——
Trust arrangements . . .
23,451
24,87523,940——23,940— 5,919
Others . . . . . . . . . . . . . 17,578,176 1,658,832 1,341,960
4,917
291,283 1,045,760—
524
Total . . . . . . . . . . ¥60,063,392 ¥8,032,241 ¥6,646,192 ¥150,629 ¥1,400,483 ¥5,093,001 ¥ 2,079 ¥6,443

All other
liabilities

¥

—
—

—
—
5,919
524
¥6,443

Maximum exposure to loss on each type of entity is determined, based on the carrying amount, whichapproximates the fair value, of any on-balance sheet assets and any off-balance sheet liability held, net of any
recourse liabilities. Therefore, the maximum exposure to loss represents the maximum loss the MUFG Group
could possibly incur at each balance sheet date and does not reflect the likelihood of such a loss being incurred.
The difference between the amount of on-balance sheet assets and the maximum exposure to loss primarily
comprises the remaining undrawn commitments.

F-111

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Analysis of Each Transaction Category
Asset-Backed Conduits
This category primarily comprises the following:Multi-Seller Conduits (MUFG-sponsored Asset-Backed Commercial Paper (“ABCP”) Conduits and OtherABCP Conduits)
The MUFG Group administers several conduits under asset-backed financing programs under which theconduits purchase financial assets, primarily trade accounts receivable, from the MUFG Group’s customers by
issuing short-term financing instruments, primarily commercial paper, to third-party investors. Under theasset-backed financing programs, the MUFG Group acts as an agent for the conduits, which enter into
agreements with the MUFG Group’s customers where the customers transfer financial assets to the conduits in
exchange for monetary consideration. The MUFG Group also underwrites commercial paper for the conduits thatis secured by the assets held by them and provides program-wide liquidity and credit enhancement facilities tothe conduits. The MUFG Group receives fees related to the services it provides to the conduits and the programwide liquidity and credit enhancement. The MUFG Group considers itself to be the primary beneficiary of themulti-seller conduits because, as an agent and sponsor, the MUFG Group has the power to direct activities of the
conduits that most significantly impact the conduits’ economic performance and also has the obligation to absorb
losses of the conduits that could potentially be significant to the conduits through the program-wide liquidity andcredit enhancement. Consequently, the MUFG Group consolidates the conduits.
In addition to the entities described above, the MUFG Group participates as a provider of financing toseveral conduits that are administered by third parties. Most of these conduits are established under a multi-seller
asset-backed financing program and the MUFG Group provides financing along with other financial institutions.
With respect to these conduits, the MUFG Group is not considered as the primary beneficiary because the MUFG
Group’s participation to the conduits is only to provide financing along with other third-party financial
institutions and it does not have the power to direct the activities of the conduits. Consequently, the MUFG
Group does not consolidate the conduits.
Asset-Backed Conduits (MUFG-sponsored Asset-Backed Loan (“ABL”) Programs and Other Programs)
The MUFG Group administers several conduits under asset-backed financing programs where the MUFG
Group provides financing to fund the conduits’ purchases of financial assets, comprising primarily trade accounts
receivable, from its customers. The MUFG Group acts as an agent and sponsor for the conduits, which enter into
agreements with the MUFG Group’s customers where the customers transfer assets to the conduits in exchange
for monetary consideration. In most cases the MUFG Group is the sole provider of financing that is secured by
the assets held by the conduits. The MUFG Group considers itself to be the primary beneficiary of the conduits
because, as an agent and sponsor for the conduits, the MUFG Group has the power to direct activities of the
conduits, such as selection of the assets to be purchased and condition for purchases, and debt collection from theoriginal obligors, that most significantly impact the conduits’ economic performance, and also has the obligation
to absorb losses of the conduits that could potentially be significant to the conduits through financing it provides.
Consequently, the MUFG Group consolidates the conduits.
In addition, the MUFG Group is involved with entities, which take in most cases the form of a trust, where
originators of financial assets, which primarily comprise lease receivables, entrust the assets with trust banks andreceive beneficial certificates in trusts in exchange. The originators then transfer the beneficiary certificates tothe MUFG Group in exchange for cash. The originators of the financial assets entrusted continue to be involvedin the assets as servicers. Because the originators are deemed to have the power to direct activities of the entities
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)that most significantly impact the entities’ economic performance through their role as a servicer, the MUFG
Group is not considered as the primary beneficiary of these entities. Consequently, the MUFG Group does notconsolidate these entities.
The MUFG Group also participates as a provider of financing to the ABL programs that are managed bythird parties. The MUFG Group is not considered as the primary beneficiary of the entities used in these
programs as the MUFG Group’s participation to the entities is only to provide financing with other third parties
and it does not have the power to direct the activities of the conduits. Consequently, the MUFG Group does notconsolidate the entities used in these programs.
Investment Funds
On February 2010, the FASB issued an accounting standards update that indefinitely defers the applicationof the current guidance for consolidation of VIEs on entities that are deemed as investment companies, which
include most of corporate recovery funds, private equity funds, and investment trusts. For VIEs that areconsidered investment companies, the MUFG Group determines whether it is the primary beneficiary by
evaluation of whether it absorbs a majority of expected losses, receives a majority of expected residual returns, or
both.
This category primarily comprises the following:
Corporate Recovery Funds
These entities are established by fund managers, which are unrelated to the MUFG Group, for the purposeof investing in debt or equity instruments issued by distressed companies. After investment, the fund managers
work closely with the management of the issuers and attempt to enhance corporate value by various means
including corporate restructuring and reorganization. Their exit strategies include, among others, sales to others
and initial public offerings.
Typically, these entities take the form of a limited partnership which is entirely funded by general andlimited partner interests. In some cases, the general partners of the partnerships are entities that have no
substantive decision making ability. The fund managers that establish these partnerships assume investment
management and day-to-day operation by entering into asset management contracts with the general partners.
These partnerships are, therefore, financing vehicles and as such are considered as VIEs. In other cases, thegeneral partners have substantive decision making ability but the partnerships are considered as VIEs when thegeneral partners’ equity investments in the partnerships are considered as non-substantive, usually based on thepercentage interest held, and they do not have substantive limited partner interests.
The MUFG Group mostly serves as a limited partner in corporate recovery funds. While the MUFG Group’s
share in partnership interest is generally insignificant, in certain cases, the MUFG Group is the only limited
partner and it consolidates these partnerships as the primary beneficiary.
Private Equity Funds
The MUFG Group is involved in venture capital funds that are established by either the MUFG Group’s
entities or fund managers unrelated to the MUFG Group. These entities have specific investment objectives inconnection with their acquisition of equity interests, such as providing financing and other support to start-up
businesses, medium and small entities in a particular geographical area, and to companies with certain
technology or companies in a high-growth industry.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
These entities typically take the form of a limited partnership and usually are entirely funded by general andlimited partner interests. The general partners of the partnerships in some cases are entities that have no
substantive decision making ability. The fund managers that establish these partnerships assume investment
management and day-to-day operation by entering into asset management contracts with the general partners.
These partnerships are, therefore, financing vehicles and as such are considered as VIEs. In other cases, thegeneral partners have substantive decision making ability but the partnerships are considered VIEs because thegeneral partners’ equity investments in the partnerships are disproportionate to their voting rights and the limited
partners have the majority of the economics without any voting rights. The MUFG Group consolidates theprivate equity funds when it owns a majority of the interests issued by the private equity funds.
The MUFG Group participates in these partnerships as a general partner or limited partner. While the
MUFG Group’s share in partnership interests is generally limited, in certain cases, the MUFG Group provides
most of the financing to the partnership. It consolidates these funds as the primary beneficiary because the
MUFG Group absorbs a majority of the expected losses or receives a majority of the expected residual returns.
Investment Trusts
The MUFG Group invests in investment trusts that are professionally managed collective investment
schemes which pool money from many investors and invest in, among others, equity and debt securities. Most ofthese funds take the form of a trust where there is a separation in investment decisions, which is assumed by aninvestment manager who has no investment in a trust, and ownership through beneficiary interests issued by atrust are owned by investors. Therefore, these investment trusts are considered as VIEs. Based on the deferral
requirements of the current guidance, the MUFG Group consolidates investment trusts when it absorbs a majorityof the expected losses or receives a majority of the expected residual returns.
Buy-out Financing Vehicles
The MUFG Group provides financing to buy-out vehicles. The buy-out vehicles are established by equity
investments from, among others, private equity funds or the management of target companies for the purpose ofpurchasing the equity shares of target companies. Along with other financial institutions, the MUFG Group
provides financing to the buy-out vehicles in the form of loans. While the buy-out vehicles’ equity is normally
substantive in its amount and the rights and obligations associated with it, in some cases, the vehicles have equity
that is insufficient to absorb expected variability primarily because the amount provided by equity investors isnominal in nature. These vehicles engage in non-investment activities, and are considered as VIEs. Assessment
as to whether the MUFG Group is the primary beneficiary is required under the current guidance. In most cases,
the MUFG Group’s participation to these vehicles is only to provide financing to the vehicles, and the power todirect the activities that most significantly impact the economic performance of the vehicles is held by the
management of target companies. As a result, the MUFG Group is not considered as the primary beneficiary ofthese vehicles and does not consolidate them.
Other Investment Funds
The MUFG Group’s investments in VIEs through UNBC primarily consist of equity investments in low
income housing credit (“LIHC”) structures, designed to generate a return primarily through the realization offederal tax credits. UNBC considers itself as the primary beneficiary of certain types of LIHC investments.
LIHC Unguaranteed Syndicated Investment Funds
UNBC creates the investment funds, serves as the managing investor member, and sells limited investor
member interests to third parties. UNBC receives benefits through income from the structuring of these funds,
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
servicing fees for managing the funds and, as an investor member, tax benefits and tax credits to reduce the
UNBC tax liability. UNBC considers itself to be the primary beneficiary and consolidated them upon adoption of
the current guidance because, as a sponsor and managing member of the funds, it has the power to direct
activities that most significantly impact the funds’ economic performance and also has the obligation to absorb
losses of the funds that could potentially be significant to the funds.
LIHC Guaranteed Syndicated Investment Funds
UNBC also forms limited liability companies, which in turn invest in LIHC operating partnerships, to create
LIHC guaranteed syndicated investment funds. Interests in these funds are sold to third parties who pay a
premium for a guaranteed return. UNBC earns structuring fees from the sale of these funds and asset
management fees. UNBC serves as the funds’ sponsor and non-member asset manager, and also guarantees aminimum rate of return throughout the investment term, therefore, it directs the activities that most significantly
impact the funds’ economic performance and also has an obligation to absorb losses pertaining to its minimum
rate of return guarantee to investors. Therefore, the MUFG Group is considered as the primary beneficiary ofthese funds and consolidates them.
Special Purpose Entities Created for Structured Financing
This category primarily comprises the following:
Leveraged Leasing Vehicles
These entities are established to raise funds to purchase or build equipment and machinery including, among
others, commercial vessels, passenger and cargo aircraft, and production equipment for the purpose of leasing
them to lessees who use the equipment and machinery as part of their business operations. These entities
typically take the form of a limited partnership or a special purpose company where they fund their purchases ofequipment and machinery via senior and subordinate financing. In some cases, the entities are funded only by
senior financing or there is a guarantee provided to the senior financing by parties unrelated to those providing
the senior financing. In most cases, the MUFG Group participates in the senior financing and does not participate
in the subordinate financing or provide guarantees. Generally, because the MUFG Group’s participation in these
entities is only to provide financing, it does not have the power to direct the activities of the entities that mostsignificantly impact the economic performance of the entities. Therefore, the MUFG Group does not consider
itself to be the primary beneficiary of these entities, except for limited circumstances where the MUFG Group is
directly involved with the structuring of the transaction and has the power to direct the activities of the entities
that most significantly impact the economic performance of the entities, and does not consolidate them.
Project Financing Vehicles
These entities are established to raise funds in connection with, among others, production of natural
resources, construction and development of urban infrastructure (including power plants and grids, highways andports), and the development of real estate properties or complexes. These projects typically involve special
purpose companies which issue senior and subordinate financing to raise funds in connection with the various
projects. The subordinate financing is usually provided by parties that will ultimately make use of the assets
constructed or developed. By contrast, the senior financing is typically provided by financial institutions,
including the MUFG Group. Because the MUFG Group’s participation to these entities is only to provide
financing, it does not have the power to direct the activities that most significantly impact the economic
performance of these entities. Therefore, the MUFG Group is not considered as the primary beneficiary of these
entities and does not consolidate them.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Sale and Leaseback Vehicles
The MUFG Group is involved with vehicles that acquire assets, primarily real estate, from the MUFG
Group’s clients and other unrelated parties where the sellers of the assets continue to use the assets throughleaseback agreements. These vehicles typically take the form of a limited partnership where the general partner
effectively has no power to direct the activities that most significantly impact the economic performance because
an equity holder of the general partner serves a perfunctory role. Therefore, these vehicles are considered as
VIEs. The subordinated financing of these vehicles is usually provided by the sellers of the assets, with the
MUFG Group providing senior financing for the vehicles. Because the MUFG Group’s participation to thesevehicles is only to provide financing, it does not have the power to direct the activities that most significantly
impact the economic performance of these entities. Therefore, the MUFG Group is not considered as the primary
beneficiary and does not consolidate them.
Securitization of Client Real Estate Properties
These entities are established for the purpose of securitizing real estate properties held by the MUFG
Group’s customers. In most cases, these entities take the form of a limited partnership or a special purpose
company. These entities are designed to have non-substantive power to direct the activities that mostsignificantly impact the economic performance because the general partner or an equity holder serves aperfunctory role. The entities are typically funded by senior and subordinated financing where the original
owners of the properties provide the subordinated financing, primarily in the form of partnership interests or
subordinated notes, and financial institutions, including the MUFG Group, provide senior financing in the formof senior loans. Because the MUFG Group’s participation to these vehicles is only to provide financing, it does
not have the power to direct the activities that most significantly impact the economic performance of these
entities. Therefore, the MUFG Group is not considered as the primary beneficiary and does not consolidate these
entities.
Repackaged Instruments
This category primarily comprises the following:
Investments in Financially-Engineered Products
The MUFG Group is involved in special purpose entities that have been established to issue financial
products through the engineering and repackaging of existing financial instruments, such as collateralized debt
obligations (“CDOs”) and synthetic CDOs. These special purpose entities are considered as VIEs because
holders of equity investment at risks do not have the power to direct the activities that most significantly impact
the economic performance. These special purpose entities are generally arranged and managed by parties that are
not related to the MUFG Group. The MUFG Group’s involvement with the entities arranged and managed bythird parties is for investment purposes. In these cases, the MUFG Group participates as one of many otherinvestors and the MUFG Group typically holds investments in senior tranches or tranches with high credit
ratings. Therefore, the MUFG Group does not have the power to direct activities of the entities that mostsignificantly impact the entities’ economic performance, and thus is not considered as the primary beneficiary ofthese entities and does not consolidate these entities.
In certain instances, special purpose entities have been established and are managed by the MUFG Group.
The MUFG Group’s involvement includes establishing and arranging the transaction and underwriting securities
issued by the entities to general investors. For these entities, the MUFG Group has the power to direct activities
that most significantly impact the economic performance and it has the obligation to absorb losses or receive
benefits that could potentially be significant to the entities. As such, the MUFG Group considers itself as theprimary beneficiary of these entities and consolidates them.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Investments in Securitized Financial Instruments
The MUFG Group holds investments in special purpose entities that issue securitized financial products.
The assets held by the special purpose entities include credit card receivables and residential mortgage loans.
These entities are established and managed by parties that are unrelated to the MUFG Group and the MUFG
Group’s involvement with these entities is for its own investment purposes. In all cases, the MUFG Groupparticipates as one of many other investors and the MUFG Group does not have the power to direct activities ofthe entities that most significantly impact the entities’ economic performance. Therefore, the MUFG Group is notconsidered as the primary beneficiary of these entities and does not consolidate them.
Securitization of the MUFG Group’s Assets
The MUFG Group establishes entities to securitize its own financial assets that include, among others,
corporate and retail loans and lease receivables. The entities used for securitization, which typically take the formof a special purpose company or a trust, are established by the MUFG Group and, in most cases, issue senior andsubordinate interests or financing. After securitization, the MUFG Group typically continues to service
securitized assets as a servicer. The MUFG Group may also retain subordinate interests or financing or otherinterests. The MUFG Group is considered as the primary beneficiary and consolidates the entities used for
securitization since it has the obligation to absorb losses through subordinate interests, and also has the power for
determining and implementing of policies as servicer that give it the ability to manage the entities assets that
become delinquent or are in default in order to improve the economic performance of the entity.
Trust Arrangements
The MUFG Group offers, primarily through its wholly-owned trust banking subsidiary, MUTB, a variety oftrust products and services including securities investment trusts, pension trusts and trusts used as securitization
vehicles. In a typical trust arrangement, however, the MUFG Group manages and administers assets on behalf ofthe customers in an agency, fiduciary and trust capacity and does not assume risks associated with the entrusted
assets. The trusts are generally considered as VIEs because the trust beneficiaries, who provide all of the equity
at risk, usually do not have power to direct the activities that most significantly impact its economic performancein the arrangements. The MUFG Group, however, is not considered as the primary beneficiary, except for thecase mentioned below, because it merely receives fees for compensation of its services on terms that are
customary for these activities and the fees are insignificant relative to the total amount of the entities’ economic
performance and variability. Therefore, the MUFG Group does not consolidate these entities.
With respect to the jointly operated designated money in trusts, MUTB pools money from investors or trust
beneficiaries and determines how best to invest it. MUTB typically invests in high-quality financial assets,
including government bonds, corporate bonds and corporate loans including loans to MUTB and receives fees ascompensation for services. In this role as a sponsor of these products, MUTB provides guarantees under which itis required to compensate a loss on the stated principal of the trust beneficial interests. MUTB is considered as
the primary beneficiary of these products because it is exposed to a potentially significant amount of losses andalso has the power to direct activities of these products that most significantly impact the economic performance.
Upon consolidation of the jointly operated designated money in trusts, the certificates issued to the trust
beneficiaries are accounted for as deposit liabilities as the products are structured and marketed to customers
similar to MUTB’s term deposit products.
MUTB considers the likelihood of incurring losses on the face value guarantee to be highly remote. In thetrusts’ operational history that extends over decades, the face value guarantee has never been called upon. The
variability in fair value of the net assets of jointly operated designated money in trusts has been primarily affectedby the fluctuations in interest rates, and the majority of such variability has been absorbed by general investors.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
OthersThis category primarily comprises the following:
Financing Vehicles of the MUFG Group’s Customers
The MUFG Group is involved with several entities that are established by the MUFG Group’s customers.
These entities borrow funds from financial institutions and extend loans to their group entities. These entities
effectively work as fund-raising vehicles for their respective group companies and enable the groups to achieve
efficient financing by integrating their financing activities into a single entity. In all cases the MUFG Group is
not considered as the primary beneficiary because the MUFG Group’s participation to these entities is only toprovide financing, and the customers effectively hold the power to direct activities of these entities that mostsignificantly impact the economic performance of the entities. Consequently, the MUFG Group does notconsolidate these entities.
Funding Vehicles
The MUFG Group has established several wholly-owned, off-shore vehicles which issue securities,
typically preferred stock that is fully guaranteed by the MUFG Group, to investors unrelated to the MUFG Groupto fund purchases of debt instruments issued by the MUFG Group. These entities are considered as VIEs because
the MUFG Group’s investment in the vehicles’ equity is not considered at risk and substantive as the entire
amount raised by the vehicles was used to purchase debt instruments issued by the MUFG Group. Because the
MUFG Group does not have variable interests in these financing vehicles, these financing vehicles are notconsidered as the MUFG Group’s subsidiaries.
Troubled Borrowers
During the normal course of business, the borrowers from the MUFG Group may experience financial
difficulties and sometimes enter into certain transactions that require the MUFG Group to assess whether theywould be considered as VIEs due to their difficult financial position. While in most cases such borrowers are notconsidered as VIEs when the transactions take place, in limited circumstances they are considered as VIEs due toinsufficient equity investment at risk. In all cases, however, the MUFG Group is not considered as the primary
beneficiary because the power to direct activities that most significantly impact the economic performance of thetroubled borrowers resides with management of the troubled borrowers, and the MUFG Group, as a lender, does
not have power over or assume any role in management. Therefore, the MUFG Group does not consolidate thesetroubled borrowers.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
24.

COMMITMENTS AND CONTINGENT LIABILITIES

Lease Commitments
The MUFG Group leases certain technology systems, office space and equipment under noncancelable
agreements expiring through the fiscal year 2046.
Future minimum rental commitments for noncancelable leases at March 31, 2012 were as follows:
Capitalized Operatingleasesleases(in millions)Fiscal year ending March 31:
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,948
8,249
5,065
2,157
1,189
3,253

¥ 76,085
65,16256,29053,16450,195361,971

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,861¥662,867(1)Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,790)Present value of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥29,071

Note:(1) One of MUFG’s subsidiaries has entered into non-cancelable operating lease agreements and commenced them after April 1, 2012. The
total minimum lease payments of ¥57,186 million under these commitments have been included in the above table.

Total rental expense for the fiscal years ended March 31, 2010, 2011 and 2012 was ¥108,591 million,¥109,471 million and ¥97,105 million, respectively.
Repayment of Excess Interest
The Japanese government implemented regulatory reforms affecting the consumer lending industry. In
December 2006, the Diet passed legislation to reduce the maximum permissible interest rate under theInvestment Deposit and Interest Rate Law from 29.2% per annum to 20% per annum. The reduction in interest
rates was implemented in June 2010. The regulatory reforms also included amendments to the Law Concerning
Lending Business which, effective June 18, 2010, abolished the so-called “gray-zone interest.” Gray-zone
interest refers to interest rates exceeding the limits stipulated by the Interest Rate Restriction Law (between
15% per annum to 20% per annum depending on the amount of principal). Under the regulatory reforms, allinterest rates for loans originated after this reform are subject to the lower limits imposed by the Interest Rate
Restriction Law. Furthermore, the new regulations require stringent review procedures for consumer financecompanies before lending, and with the exception of certain provisions, one of those new regulations introduces alimit on aggregate credit extensions to one-third of the borrower’s annual income.
Formerly, consumer finance companies were able to charge interest rates exceeding the limits stipulated by
the Interest Rate Restriction Law so long as the payment was made voluntarily by the borrowers, and the lendercomplied with various notice and other requirements. Accordingly, MUFG’s consumer finance subsidiaries andequity method investees offered loans at interest rates above the Interest Rate Restriction Law. Upon theimplementation of the regulatory reforms in June 2010, they lowered the interest rates for loans originated after
this reform to below the Interest Rate Restriction Law.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In 2006, the Supreme Court of Japan passed decisions in a manner more favorable to borrowers requiring
reimbursement of previously paid interest exceeding the limits stipulated by the Interest Rate Restriction Law incertain circumstances. Borrowers’ claims for reimbursement of excess interest arose after such decisions andother regulatory changes. The MUFG Group maintains an allowance for repayment of excess interest based on an
analysis of past experience of reimbursement of excess interest, borrowers’ profile, recent trend of borrowers’
claims for reimbursement, and management future forecasts. In relation to the estimate of the allowance, seeNote 1 “Change in Accounting Estimates” section for the details. Management believes that the provision for
repayment of excess interest is adequate and the allowance is at the appropriate amount to absorb probablelosses, so that the impact of future claims for reimbursement of excess interest will not have a material adverse
effect on the MUFG Group’s financial position and results of operations. The allowance for repayment of excessinterest established by MUFG’s consumer finance subsidiaries, which was included in Other liabilities, was¥136,906 million and ¥99,437 million as of March 31, 2011 and 2012, respectively. The expenses recognized
relating to the allowance are shown as Provision for repayment of excess interest in the consolidated statements
of income. For the fiscal years ended March 31, 2010, 2011 and 2012, an MUFG’s equity method investee had anegative impact of ¥23,109 million, ¥96,399 million and ¥19,326 million, respectively, on Equity in losses of
equity method investees—net in the consolidated statements of income.
Litigation
The MUFG Group is involved in various litigation matters. Based upon the current knowledge and theresults of consultation with counsel, liabilities for losses from litigation matters are recorded when they are
determined to be both probable in their occurrences and can be reasonably estimated. Management believes thatthe eventual outcome of such litigation matters will not have a material adverse effect on the MUFG Group’s
financial position, results of operations or cash flows.
25.

FEES AND COMMISSIONS INCOME

Details of fees and commissions income for the fiscal years ended March 31, 2010, 2011 and 2012 were as
follows:
2010

2011(in millions)2012

Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on funds transfer and service charges for collections . . . . . . . . . . . .
Fees and commissions on international business . . . . . . . . . . . . . . . . . . .
Fees and commissions on credit card business . . . . . . . . . . . . . . . . . . . . .
Service charges on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on securities business . . . . . . . . . . . . . . . . . . . . . .
Fees on real estate business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on stock transfer agency services . . . . . . . . . . . . .
Guarantee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on investment funds business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 107,175
145,865
61,201
137,394
27,420129,730
19,87622,86953,04070,489127,329
237,155¥ 100,519
142,459
58,462
146,570
22,169138,868
22,593
27,46651,92664,347130,402
222,577¥

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,139,543¥1,128,358¥1,099,963

95,037
139,840
57,688
149,946
18,216
128,436
23,61033,68649,28358,393
126,601
219,227

Trust fees consist primarily of fees earned by fiduciary asset management and administration services forcorporate pension plans, investment funds, etc. Fees on funds transfer and service charges for collection are
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
earned by providing settlement services such as domestic fund remittances and domestic collection services. Fees
and commissions on international business primarily consist of fees from international fund transfer andcollection services, and trade-related financing services. Fees and commissions on credit card business arecomposed of interchange income, annual fees, royalty and other service charges from franchisees. Service
charges on deposits are fees charged for deposits such as checking account deposits. Fees and commissions on
securities business include underwriting, brokerage and advisory services and arrangement fees on
securitizations. Fees on real estate business primarily consist of fees from real estate agent services. Insurance
commissions are earned by acting as agent for insurance companies to sell insurance products. Fees andcommissions on stock transfer agency services consist of fees earned primarily by stock title transfers and agency
services for the calculation and payment of dividends. Guarantee fees are earned by providing guarantees on
residential mortgage loans. Fees on investment funds business primarily consist of management fees forinvestment funds. Other fees and commissions include various arrangement fees and agent fees excluding thefees mentioned above.
26.

TRADING ACCOUNT PROFITS AND LOSSESThe MUFG Group performs trading activities through market-making, sales and arbitrage, while
maintaining risk levels within appropriate limits in accordance with its risk management policy.
The MUFG Group has trading account securities and trading derivative assets and liabilities for thispurpose. In addition, the trading account securities include foreign currency-denominated debt securities such as
foreign government or official institution bonds, corporate bonds and mortgage-backed securities, which aremainly comprised of securities measured at fair value under the fair value option.
Net trading gains for the fiscal years ended March 31, 2010, 2011 and 2012 were comprised of thefollowing:
2010

2011
(in millions)2012

Interest rate and other derivative contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account securities, excluding derivatives . . . . . . . . . . . . . . . . . . . . . . .

¥ (88,486) ¥ (3,095) ¥ 77,698
849,958
137,000
589,587

Trading account profits—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange derivative contracts(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

761,472
31,154

133,905
79,840667,285(94,853)

Net trading gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥792,626¥213,745¥572,432

Note:(1) Gains (losses) on foreign exchange derivative contracts are included in Foreign exchange gains—net in the accompanying consolidated
statements of income. Foreign exchange gains—net in the accompanying consolidated statements of income are also comprised offoreign exchange gains other than derivative contracts and foreign exchange gains (losses) related to the fair value option.

For further information on the methodologies and assumptions used to estimate fair value, see Note 29,
which also shows fair values of trading account securities by major category. Note 21 discloses further
information regarding the derivative-related impact on Trading account profits—net by major category.
27.

BUSINESS SEGMENTS

The business segment information, set forth below, is derived from the internal management reporting
system used by management to measure the performance of the MUFG Group’s business segments. In addition,
the business segment information is based on the financial information prepared in accordance with Japanese
GAAP as adjusted in accordance with internal management accounting rules and practices. Accordingly, the
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
format and information is not consistent with the consolidated financial statements prepared on the basis of US
GAAP. A reconciliation is provided for the total amounts of segments’ total operating profit with income before
income tax expense under US GAAP.
See Note 28 for financial information relating to the MUFG Group’s operations by geographic area. The
geographic financial information is consistent with the basis of the accompanying consolidated financial
statements.
The following is a brief explanation of the MUFG Group’s business segments:
Integrated Retail Banking Business Group—Covers all domestic retail businesses, including commercial
banking, trust banking and securities businesses. This business group integrates the retail business of BTMU,
MUTB, MUMSS, Mitsubishi UFJ NICOS and other subsidiaries as well as retail product development,
promotion and marketing in a single management structure. At the same time, the business group has developedand implemented MUFG Plaza, a one-stop, comprehensive financial services concept that provides integratedbanking, trust and securities services.
Integrated Corporate Banking Business Group—Covers all domestic corporate businesses, includingcommercial banking, investment banking, trust banking and securities business. Through the integration of thesebusiness lines, diverse financial products and services are provided to the MUFG Group’s corporate clients. The
business group has clarified strategic domains, sales channels and methods to match the different growth stages
and financial needs of the MUFG Group’s corporate customers.
Integrated Trust Assets Business Group—Covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and theglobal network of BTMU. The business group provides a full range of services to corporate and other pension
funds, including stable and secure pension fund management and administration, advice on pension schemes, andpayment of benefits to scheme members.
Integrated Global Business Group (“MUFG Global”)—Covers businesses outside Japan, includingcommercial banking such as loans, deposits and cash management services, investment banking, retail banking,trust banking and securities businesses (with the retail banking and trust assets businesses being conducted
through Union Bank), through a global network of more than 500 offices outside Japan to provide customers
with financial products and services that meet their increasingly diverse and sophisticated financing needs. Union
Bank is one of the largest commercial banks in California by both total assets and total deposits. Union Bank
provides a wide range of financial services to consumers, small businesses, middle market companies and major
corporations, primarily in California, Oregon and Washington but also nationally and internationally. Union
Bank’s parent company is UNBC, which is a bank holding company in the United States.
Global Markets—Covers asset and liability management and strategic investment of BTMU and MUTB,
and sales and trading of financial products of BTMU, MUTB and MUMSS.
Other—Consists mainly of the corporate centers of MUFG, BTMU, MUTB and MUMSS. The eliminationof duplicated amounts of net revenue among business segments is also reflected in Other.
Management does not use information on segments’ total assets to allocate resources and assess
performance. Accordingly, business segment information on total assets is not presented.
Effective March 24, 2011, there were changes made in the managerial accounting methods due to thetransfer of the sales and trading business of MUMSS from the Integrated Corporate Banking Business Groupsegment to the Global Markets. In addition, effective July 1, 2011, the MUFG Group added MUFG Global as a
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
fourth area by shifting most of the MUFG Group’s global operations mainly from the Integrated Corporate
Banking Business Group. This change in the MUFG Group’s business segments was implemented to change theprevious practice of each group entity’s individual promotion of global businesses to a more group-wide
approach. The new approach is designed to enable the MUFG Group to exercise its comprehensive expertise to
more effectively provide the MUFG Group’s customers with value-added services outside of Japan.
Effective October 1, 2011, there was a change in the MUFG Group’s managerial accounting method applied
mainly to fees and commissions, which mainly affected the Integrated Trust Assets Business Group, resulting in
an increase in operating profit of ¥0.3 billion and ¥0.6 billion for the fiscal years ended March 31, 2010 and2011, respectively.
The table set forth below has been reclassified to enable comparisons between the relevant amounts for the
fiscal years ended March 31, 2010, 2011 and 2012, respectively:
Global Business
Integrated Integrated Integrated IntegratedGroup
RetailCorporate
Trust
Banking
Banking
AssetsOther
Business
Business
Businessthan
Global
Group
Group
Group
UNBC UNBC Total Markets(in billions)Fiscal year ended March 31,
2010:
Net revenue: . . . . . . . . . . . . . . .
BTMU and MUTB: . . . . . .
Net interest income . .
Net fees . . . . . . . . . . .
Other . . . . . . . . . . . . .
Other than BTMU and
MUTB(1) . . . . . . . . . . . .
Operating expenses . . . . . . . . . .
Operating profit (loss) . . . . . . . .
Fiscal year ended March 31,
2011:
Net revenue: . . . . . . . . . . . . . . .
BTMU and MUTB: . . . . . .
Net interest income . .
Net fees . . . . . . . . . . .
Other . . . . . . . . . . . . .
Other than BTMU and
MUTB(1) . . . . . . . . . . . .
Operating expenses . . . . . . . . . .
Operating profit (loss) . . . . . . . .
Fiscal year ended March 31,
2012:
Net revenue: . . . . . . . . . . . . . . .
BTMU and MUTB: . . . . . .
Net interest income . .
Net fees . . . . . . . . . . .
Other . . . . . . . . . . . . .
Other than BTMU and
MUTB(1) . . . . . . . . . . . .
Operating expenses . . . . . . . . . .
Operating profit (loss) . . . . . . . .

Other

Total

¥1,436.6
661.4
541.2
108.7
11.5

¥896.5
790.4
441.6
338.2
10.6

¥152.3
61.2
—
61.2
—

¥341.0
222.9
126.5
105.0
(8.6)

¥265.3————¥606.3
222.9
126.5
105.0
(8.6)

¥597.4520.6
355.1(13.1)
178.6¥ (89.0)(97.7)(12.7)(49.8)(35.2)¥3,600.1
2,158.8
1,451.7
550.2
156.9

775.2
988.3

106.1
473.1

91.1
86.3

118.1
203.9

265.3
166.7

383.4
370.6

76.8
113.6

8.7
167.3

1,441.3
2,199.2¥ 448.3¥423.4¥ 66.0¥137.1¥ 98.6¥235.7¥483.8¥(256.3)¥1,400.9¥1,348.4
636.4
511.8
117.4
7.2

¥900.7
800.3
431.8
310.8
57.7

¥148.6
59.5
—
59.5
—

¥338.1
241.5
122.6
104.9
14.0

¥267.2————¥605.3
241.5
122.6
104.9
14.0

¥560.7
620.9
314.7
(9.8)
316.0

¥ (40.7)(46.4)
5.8(50.3)(1.9)¥3,523.0
2,312.2
1,386.7
532.5
393.0

712.0
945.1

100.4
464.2

89.1
88.1

96.6
200.7

267.2
173.3

363.8
374.0

(60.2)
105.7

5.7
150.9

1,210.8
2,128.0¥ 403.3¥436.5¥ 60.5¥137.4¥ 93.9¥231.3¥455.0¥(191.6)¥1,395.0¥1,274.1
617.6
479.2
131.6
6.8

¥884.8
792.3
420.1
306.2
66.0

¥140.5
55.7
—
55.7
—

¥401.1
291.1
156.4
122.6
12.1

¥252.0————¥653.1
291.1
156.4
122.6
12.1

¥690.7638.6
274.0(11.1)
375.7¥ (49.7)(51.0)
12.6(61.7)(1.9)¥3,593.5
2,344.3
1,342.3
543.3
458.7

656.5
903.6

92.5
447.7

84.8
87.3

110.0
225.1

252.0
173.0

362.0
398.1

52.1
96.6

1.3
165.4

1,249.2
2,098.7¥ 370.5¥437.1¥ 53.2¥176.0¥ 79.0¥255.0¥594.1¥(215.1)¥1,494.8

Note: (1) Includes MUFG and its subsidiaries other than BTMU and MUTB.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reconciliation
As set forth above, the measurement bases and the income and expense items of the internal management
reporting system are different from the accompanying consolidated statements of income. Therefore, it isimpracticable to present reconciliations of all of the business segments’ information, other than operating profit,
to corresponding items in the accompanying consolidated statements of income.
A reconciliation of operating profit under the internal management reporting system for the fiscal years
ended March 31, 2010, 2011 and 2012 above to income before income tax expense shown on the consolidated
statements of income is as follows:
2010

2011
(in billions)2012

Operating profit: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,401 ¥1,395 ¥1,495
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(648)
(292)
(224)
Trading account profits (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
387
(70)
372
Equity investment securities gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . .
207
8
(95)
Debt investment securities losses—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11)
(105)
(153)
Foreign exchange gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118
146
21
Equity in losses of equity method investees—net . . . . . . . . . . . . . . . . . . . . . . . . .
(84)
(113)
(499)
Impairment of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(12)
(27)
(31)
Provision for repayment of excess interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(45)
(86)
—
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16)
(34)
(36)
Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.

¥1,297

¥ 822

¥ 850

FOREIGN ACTIVITIESForeign operations include the business conducted by overseas offices, as well as international businessconducted from domestic offices, principally several international banking-related divisions of BTMU’s and
MUTB’s Head Office in Tokyo, and involve various transactions with debtors and customers residing outside
Japan. Close integration of the MUFG Group’s foreign and domestic activities makes precise estimates of theamounts of assets, liabilities, income and expenses attributable to foreign operations difficult and necessarily
subjective. Assets, income and expenses attributable to foreign operations are allocated to geographical areas
based on the domicile of the debtors and customers.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Generally, interest rates with respect to funds borrowed and loaned between domestic and foreign operations
are based on prevailing money market rates appropriate for the transactions. In general, the MUFG Group has
allocated all direct expenses and a proportionate share of general and administrative expenses to income derived
from foreign loans and other transactions by the MUFG Group’s foreign operations. The following table sets
forth estimated total assets at March 31, 2010, 2011 and 2012, and estimated total revenue, total expense, income(loss) before income tax expense (benefit) and net income (loss) attributable to Mitsubishi UFJ Financial Groupfor the respective fiscal years then ended:
Domestic

Japan

UnitedStates ofAmerica

ForeignAsia/Oceania
excluding
EuropeJapan(in millions)

Total
Other
areas(1)Fiscal year ended March 31, 2010:
Total revenue(2) . . . . . . . . . . . . . . ¥ 3,604,965 ¥ 619,303 ¥ 355,005 ¥ 482,588 ¥ 165,416 ¥ 5,227,277
Total expense(3) . . . . . . . . . . . . .
3,065,026
396,009130,576
209,560
129,082
3,930,253
Income before income tax
expense . . . . . . . . . . . . . . . . . .
539,939
223,294
224,429
273,028
36,334
1,297,024
Net income attributable to
Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . .
189,751
201,813
199,093
241,445
36,560868,662
Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . 149,023,436 21,621,462 15,804,022
8,421,156 5,211,386 200,081,462
Fiscal year ended March 31, 2011:
Total revenue(2) . . . . . . . . . . . . . . ¥ 2,969,012 ¥ 431,095 ¥ 238,658 ¥ 470,868 ¥ 135,333 ¥ 4,244,966
Total expense(3) . . . . . . . . . . . . . .
2,782,950
266,549
130,533
238,735
4,387
3,423,154
Income before income tax
expense . . . . . . . . . . . . . . . . . .
186,062
164,546
108,125
232,133
130,946
821,812Net income (loss) attributable to
Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . .
(103,003)
162,687
90,032
193,422
109,507452,645
Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . 145,778,973 23,470,398 17,044,207 10,908,164 5,648,501 202,850,243
Fiscal year ended March 31, 2012:
Total revenue(2)(4) . . . . . . . . . . . . ¥ 2,936,875 ¥ 192,775 ¥ 290,482 ¥ 450,651 ¥ 165,749 ¥ 4,036,532
Total expense(3) . . . . . . . . . . . . . .
2,438,729
284,557
151,077
223,253
88,974
3,186,590
Income (loss) before income tax
expense (benefit) . . . . . . . . . . .
498,146(91,782)
139,405
227,398
76,775849,942
Net income (loss) attributable to
Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . .
163,334(119,829)
113,593
192,753
66,380416,231
Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . 148,702,461 28,457,027 18,620,484 12,410,540 7,012,002 215,202,514
Notes:(1) Other areas primarily include Canada, Latin America, the Caribbean and the Middle East.
(2) Total revenue is comprised of Interest income and Non-interest income.
(3) Total expense is comprised of Interest expense, Provision for credit losses and Non-interest expense.
(4) For the fiscal year ended March 31, 2012, Total revenue of United States of America includes an other-than-temporary impairment lossof Morgan Stanley’s common stock. See Note 2 for further details of an other-than-temporary impairment loss of Morgan Stanley’scommon stock.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is an analysis of certain asset and liability accounts related to foreign activities at March 31,
2011 and 2012:
2011

2012
(in millions)

Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 304,188 ¥ 380,452
Interest-earning deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,132,127
4,545,991
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,436,315¥ 4,926,443

Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥18,393,393¥24,433,087

Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,897,677¥ 5,087,060

Loans—net of unearned income, unamortized premiums and deferred loan fees . . .

¥19,962,692¥24,119,872

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥20,918,476¥24,589,627

Funds borrowed:
Call money, funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 213,930 ¥ 364,044
Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,870,083
5,767,721
Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . .
270,189
72,327
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,469,984
1,859,186
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,430,606
2,943,884
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,254,792¥11,007,162

Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,338,947¥ 5,276,219

29.

FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date under the applicable accounting
guidance. The guidance also specifies a fair value hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted
prices in active markets and the lowest priority to unobservable data, for example, the reporting entity’s own
data. Based on the observability of the inputs used in the valuation techniques, the following three-level
hierarchy is specified by the guidance:‰

Level 1—Unadjusted quoted prices for identical instruments in active markets.

‰

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar instruments inactive markets; quoted prices for identical or similar instruments in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data for substantially the fullterm of the instruments.

‰

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant
to the fair value of the instruments.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of
input that is significant to the fair value measurement.
The MUFG Group has an established and documented process for determining fair values in accordancewith the guidance. When available, quoted market prices are used to determine fair value. If quoted market prices
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
are not available, fair value is based upon valuation techniques that use, where possible, current market-based or
non-market-based parameters, such as interest rates, yield curves, foreign exchange rates, volatilities and credit
curves. The fair values of liabilities are determined by discounting future cash flows at a rate which incorporates
the MUFG Group’s own creditworthiness. In addition, valuation adjustments may be made to ensure the financial
instruments are recorded at fair value. These adjustments include, but are not limited to, amounts that reflect
counterparty credit quality, liquidity risk and model risk.
The following section describes the valuation methodologies adopted by the MUFG Group to measure fairvalues of certain financial instruments. The discussion includes the general classification of such financial
instruments in accordance with the valuation hierarchy, a brief explanation of the valuation techniques, thesignificant inputs to those models, and any additional significant assumptions.
Interest-earning Deposits in Other Banks
Certain interest-earning deposits are measured at fair value by using discounted cash flows due to electionof the fair value option. Cash flows are estimated based on the terms of the contracts and discounted by markets
rates applicable to the maturity of the contracts, which are adjusted to reflect credit risks on counterparties. As
the inputs into the valuation are readily observable, these deposits are classified in Level 2 of the valuation
hierarchy.
Receivables Under Resale Agreements
Certain receivables under resale agreements are measured at fair value by using discounted cash flows due
to election of the fair value option. Cash flows are estimated based on the terms of the contracts and discounted
by the interest rates applicable to the maturity of the contracts, which are adjusted to reflect credit risks on
counterparties. These receivables are classified in Level 2 of the valuation hierarchy.
Trading Account Assets and Liabilities—Trading Account Securities
When quoted prices are available in an active market, the MUFG Group adopts the quoted market prices tomeasure the fair values of securities and such securities are classified in Level 1 of the valuation hierarchy.
Examples of Level 1 securities include certain Japanese and foreign government bonds, residential mortgagebacked securities and marketable equity securities.
When quoted market prices are available but not traded actively, such securities are classified in Level 2 ofthe valuation hierarchy. These securities include certain Japanese government agency bonds, Japanese prefecturaland municipal bonds, foreign governments and official institutions bonds, corporate bonds, residential mortgagebacked securities and equity securities.
When quoted market prices are not available, the MUFG Group estimates fair values by using internalvaluation techniques, quoted prices of securities with similar characteristics or non-binding prices obtained fromindependent pricing vendors. Such securities include certain commercial papers, corporate bonds, asset-backed
securities and residential mortgage-backed securities. For commercial papers, the MUFG Group estimates fairvalue by using discounted cash flow techniques. The cash flows are estimated in accordance with the terms ofcontracts and discounted using a discount rate based on yield curve estimated from market rates appropriate to
the securities. Commercial papers are generally classified in Level 2 of the valuation hierarchy. For corporate
bonds, the MUFG Group estimates fair value by using the internal models. Key inputs of the internal models
include estimated cash flows based on the terms of the contracts, yield curves based on the market rates andvolatilities. Corporate bonds which are valued using such methods are generally classified in Level 2 of the
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
valuation hierarchy. If any such key inputs are unobservable, they are classified in Level 3 of the valuation
hierarchy. Certain investments in funds valued at net assets value are classified in Level 2 if they can beredeemed at their net asset value at the measurement date.
When there is less liquidity for securities or significant inputs adopted in the fair value measurements areless observable, such securities are classified in Level 3 of the valuation hierarchy. Examples of such Level 3
securities include CLOs backed by general corporate loans, which are classified in asset-backed securities. Those
CLOs are measured by weighting the estimated amounts from the internal models and the non-binding quotes
from the independent broker-dealers. The weight of the broker-dealer quote is determined based on the result of
inquiries to the broker-dealers for their basis of the fair value calculation with consideration of activity level ofthe market. Key inputs of the internal models include projected cash flows through an analysis of underlying
loans, probability of default which incorporates market indices such as LCDX which is an index of loan credit
default swaps, repayment rates and discount rates reflecting liquidity premiums based on historical market data.
Trading Account Assets and Liabilities—Derivatives
Exchange-traded derivatives valued using quoted prices are classified in Level 1 of the valuation hierarchy.
Examples of Level 1 derivative include security future transactions and interest rate future transactions.
However, the majority of the derivative contracts entered into by the MUFG Group are traded over the counterand valued using internally developed techniques as there are no quoted market prices for such instruments. The
valuation models and inputs vary depending on the types and contractual terms of the derivative instruments. The
principal models adopted to value those instruments include discounted cash flows, the Black-Scholes model andthe Hull-White model. The key inputs include interest rate yield curve, foreign currency exchange rate, volatility,
credit quality of the counterparty or the MUFG Group and spot price of the underlying. These models arecommonly accepted in the financial industry and key inputs to the models are readily observable from an actively
quoted market. Derivative instruments valued by such models and inputs are generally classified in Level 2 of thevaluation hierarchy. Examples of such Level 2 derivatives include plain-vanilla interest rate swaps, foreign
currency forward contracts and currency option contracts.
Derivatives that are valued based on models with significant unobservable input are classified in Level 3 ofthe valuation hierarchy. Examples of Level 3 derivatives include long-term interest rate or currency swaps andcertain credit derivatives, where significant inputs such as volatility, credit curves and correlation of such inputs
are unobservable.
Investment Securities
Investment securities include available for sale debt and equity securities, whose fair values are measured
using the same methodologies as the trading securities described above except for certain private placement
bonds issued by Japanese non-public companies. Fair values of private placement bonds issued by Japanese
non-public companies are measured based on discounted cash flow methods by using discount rate applicable tothe maturity of the bonds, which are adjusted to reflect credit risk of issuers. Credit risk of issuers are reflected in
the future cash flows being discounted by the interest rates applicable to the maturity of the bonds. The private
placement bonds are generally utilized to finance medium or small size non-public companies. These bonds areclassified in either Level 2 or Level 3 of the valuation hierarchy, depending on the significance of theadjustments for unobservable input of credit worthiness. This account also includes investments innonmarketable equity securities which are subject to specialized industry accounting principles. The valuation ofsuch nonmarketable equity securities involves significant management judgment due to the absence of quoted
market prices, lack of liquidity and the long-term nature of these investments. Further, there may be restriction oftransfer on nonmarketable equity securities. The MUFG Group values such securities initially at transaction price
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
and subsequently adjusts valuations, considering evidence such as current sales transactions of similar securities,
initial public offerings, recent equity issuances and change in financial condition of an investee company.
Nonmarketable equity securities are included in Level 3 of the valuation hierarchy.
Other Assets
Other assets measured at fair value mainly consist of securities received as collateral that may be sold or
repledged under securities lending transactions, money in trust for segregating cash deposited by customers on
security transactions and derivative assets designated as hedging instruments. The securities received as collateral
under lending transaction mainly consist of certain Japanese and foreign government bonds which are valued
using the methodologies described in the “Trading Account Assets and Liabilities—Trading Account Securities”
above.
Money in trust for segregating cash deposited by customers on security transactions mainly consists ofcertain Japanese government bonds which are valued using the methodologies described in the “Trading Account
Assets and Liabilities—Trading Account Securities” above and is included in Level 1 or Level 2 of the valuation
hierarchy depending on the component assets.
The fair values of derivatives designated as hedging instruments are measured using the methodologies
described in the “Trading Account Assets and Liabilities—Derivatives” above.
Obligations to Return Securities Received as Collateral
Obligations to return securities received as collateral under securities lending transactions are measured atfair values of securities received as collateral. The securities received as collateral consist primarily of certain
Japanese and foreign government bonds, whose fair values are measured using the methodologies described in
the “Trading Account Assets and Liabilities—Trading Account Securities” above.
Other Short-term Borrowings and Long-term Debt
Certain short-term borrowings and long-term debt are measured at fair values due to election of the fairvalue option. These instruments under the fair value option are measured principally using internally developedmodels such as the discounted cash flow method. Where the inputs into the valuation are mainly based on
observable inputs, these instruments are classified in Level 2 of the valuation hierarchy. Where significant inputs
are unobservable, they are classified in Level 3 of the valuation hierarchy.
Market Valuation Adjustments
Counterparty credit risk adjustments are applied to certain financial assets such as over-the-counter
derivatives. As not all counterparties have the same credit rating, it is necessary to take into account the actual
credit rating of a counterparty to arrive at the fair value. In addition, the counterparty credit risk adjustment takes
into account the effect of credit risk mitigations such as pledged collateral and legal right of offsets with thecounterparty.
For own credit risk adjustments, the MUFG Group takes into consideration all the facts and circumstances,including its own credit rating, the proximity of its funding rate to market interest rate, and the existence ofcollateralization or netting agreements. As a result of these analyses, the MUFG Group considered that own
credit risk adjustments for financial liabilities were not material.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Liquidity adjustments are applied mainly to the instruments classified in Level 3 of the valuation hierarchy
when recent prices of such instruments are unobservable in inactive or less active markets. The liquidity
adjustments are based on the facts and circumstances of the markets including the availability of external quotes
and the time since the latest available quote.
Model valuation adjustments such as unobservable parameter valuation adjustments may be provided when
the fair values of instruments are determined based on internally developed models. Examples of suchadjustments include adjustments to the model price of certain derivative financial instruments where parameterssuch as correlation are unobservable. Unobservable parameter valuation adjustments are applied to mitigate thepossibility of error in the model based estimate value.
Investments in Certain Entities That Calculate Net Asset Value per Share
The MUFG Group has interests in investment funds mainly including hedge funds, private equity funds, andreal estate funds included in items subject to both recurring and nonrecurring fair value measurement.
Hedge funds are primarily multi-disciplinary hedge funds that employ a fundamental bottom-up investment
approach across various asset classes and strategies. The MUFG Group’s investments in these funds are
generally redeemable on a monthly-quarterly basis with 30-90 days notice.
Private equity funds have specific investment objectives in connection with their acquisition of equity
interests, such as providing financing and other support to start-up businesses, medium and small entities in aparticular geographical area, and to companies with certain technology or companies in a high-growth industry.
Generally, these investments cannot be redeemed with the funds, and the return of invested capital and its gains
are derived from distributions received upon the liquidation of the underlying assets of the fund. It is estimatedthat the underlying assets of the fund would be liquidated within a ten-year period.
Real estate funds invest globally and primarily in real estate companies, debt recapitalizations and direct
property. These investments are generally not redeemable with the funds. Distributions from each fund will bereceived as the underlying investments of the funds are liquidated. It is estimated that the underlying assets of thefunds would be liquidated within a five-year period.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present the financial instruments carried at fair value by level within the fair value
hierarchy as of March 31, 2011 and 2012:
Level 1March 31, 2011
Level 2
Level 3(in millions)

Fair Value

AssetsTrading account assets:
Trading securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,644,634 ¥ 5,009,610 ¥1,137,411 ¥18,791,655
Debt securities
Japanese national government and Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,739,773
132,582—
2,872,355
Japanese prefectural and municipal bonds . . . . . . . . . . . . . . . . . . . .
—70,279—70,279Foreign governments and official institutions bonds . . . . . . . . . . . .
6,857,423
1,042,185
115,557
8,015,165
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1,277,076
554,364
1,831,440
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
2,151,410
310,459
53,6882,515,557
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . . . . .
——39,076
39,076
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—86,468353,835
440,303
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
6,896
—
6,896
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1,457,637—
1,457,637
Equity securities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
896,028
626,028
20,891
1,542,947
Trading derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76,5149,854,646
101,980 10,033,140
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,201
7,391,719
14,6187,420,538
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
169
2,232,386
81,9452,314,500
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,101
32,266
1,411
81,778
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,043
154,768
2,512
171,323
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—43,5071,494
45,001
Investment securities:
Securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,073,048
4,053,521 2,203,312 54,329,881
Debt securities
Japanese national government and Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,813,364
906,258— 44,719,622
Japanese prefectural and municipal bonds . . . . . . . . . . . . . . . . . . . .
—199,227
1,054
200,281
Foreign governments and official institutions bonds . . . . . . . . . . . .
723,020
135,362
130,409988,791
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1,131,570 2,007,972
3,139,542
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
2,587
1,112,201
23,783
1,138,571
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . . . . .
—22,2438,147
30,390Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—421,598
30,792452,390
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
960
960
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,534,077
125,062195
3,659,334
Other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1,116
35,90837,024
Others(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
432,154229,825
15,303
677,282
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥61,226,350 ¥19,148,718 ¥3,493,914 ¥83,868,982
Liabilities
Trading account liabilities:
Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥27,988 ¥2,580 ¥
— ¥30,568
Trading derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,647
9,708,928
138,8319,878,406
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,116
7,253,626
74,576
7,330,318
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
279
2,229,960
49,034
2,279,273
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,581
52,87011,892
84,343
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,671
127,065
1,533
137,269
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—45,407
1,796
47,203Obligation to return securities received as collateral . . . . . . . . . . . . . . . . . . . . . . . .
3,069,717
198,058—
3,267,775
Others(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—442,946
18,183
461,129
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 3,128,352 ¥10,352,512 ¥ 157,014 ¥13,637,878

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Level 1March 31, 2012
Level 2
Level 3(in millions)

Fair Value

AssetsTrading account assets:
Trading securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥17,002,246 ¥ 5,316,198 ¥1,076,657 ¥23,395,101
Debt securities
Japanese national government and Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,519,918
167,661—
3,687,579
Japanese prefectural and municipal bonds . . . . . . . . . . . . . . . . . . . .
—113,798—
113,798
Foreign governments and official institutions bonds . . . . . . . . . . . .
9,009,412
1,581,343
149,731 10,740,486
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1,736,774
501,895
2,238,669
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
3,548,998
304,413
10,124
3,863,535
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—52,576395,198447,774
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—10,725—
10,725
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—947,451—
947,451
Equity securities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
923,918
401,457
19,7091,345,084
Trading derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,335 11,424,275
85,534 11,558,144
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,558
9,038,950
14,9209,063,428
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212
2,192,691
66,264
2,259,167
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,98739,8772,617
58,481
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,57898,424939
121,941
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—54,333794
55,127
Investment securities:
Securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,896,943
4,170,071 1,673,387 57,740,401
Debt securities
Japanese national government and Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,880,896
1,001,767— 48,882,663
Japanese prefectural and municipal bonds . . . . . . . . . . . . . . . . . . . .
—180,778—
180,778
Foreign governments and official institutions bonds . . . . . . . . . . . .
699,034
141,473
130,720971,227
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1,066,068 1,460,489
2,526,557
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
—1,116,234
22,351
1,138,585
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . . . . .
—94,5283,802
98,330Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—447,574
54,947
502,521
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
964
964
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,317,013
121,649114
3,438,776
Other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—1,111
32,32133,432Others(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
588,753
218,652
10,368
817,773
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥69,536,277 ¥21,130,307 ¥2,878,267 ¥93,544,851
Liabilities
Trading account liabilities:
Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 172,000 ¥2,018 ¥
— ¥ 174,018
Trading derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
112,961 11,567,211
112,992 11,793,164
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,546
8,969,752
59,824
9,062,122
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
105
2,415,311
42,3572,457,773
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,41356,424
9,636
124,473
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,89776,044
777
98,718Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—49,680398
50,078
Obligation to return securities received as collateral . . . . . . . . . . . . . . . . . . . . . . . .
3,441,984
197,854—
3,639,838
Others(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—428,460
43,536471,996
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 3,726,945 ¥12,195,543 ¥ 156,528 ¥16,079,016
Notes:(1) Includes securities under fair value option.
(2) Includes investments valued at net asset value of ¥193,249 million and ¥124,627 million at March 31, 2011 and 2012, respectively. The
unfunded commitments related to these investments at March 31, 2011 and 2012 were ¥5,780 million and ¥5,841 million, respectively.
These investments were mainly hedge funds.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) Includes interest-earning deposits in other banks, receivables under resale agreements, securities received as collateral under lendingtransactions, money in trust for segregating cash deposited by customers on security transactions and derivatives designated as hedging
instruments.
(4) Includes investments valued at net asset value of real estate funds, hedge funds and private equity funds, whose fair values at March 31,
2011 were ¥7,332 million, ¥3,986 million and ¥3,220 million, respectively, and those at March 31, 2012 were ¥6,046 million,¥4,724 million and ¥3,182 million, respectively. The amounts of unfunded commitments related to these real estate funds, hedge funds
and private equity funds at March 31, 2011 were ¥1,940 million, ¥2,542 million and ¥2,901 million, respectively, and those at March 31,
2012 were ¥1,589 million, ¥1,743 million and ¥2,125 million, respectively.
(5) Includes other short-term borrowings, long-term debt, bifurcated embedded derivatives carried at fair value and derivative liabilities
designated as hedging instruments.

Transfers Between Level 1 and Level 2
During the fiscal years ended March 31, 2011 and 2012, the transfers between Level 1 and Level 2 were notsignificant.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Changes in Level 3 Recurring Fair Value Measurements
The following tables present a reconciliation of the assets and liabilities measured at fair value on arecurring basis using significant unobservable inputs (Level 3) during the fiscal years ended March 31, 2011 and2012. When a determination is made to classify a financial instrument within Level 3, the determination is based
upon the significance of the unobservable parameters to the overall fair value measurement. However,Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components,
observable components (that is, components that are actively quoted and can be validated to external sources).
Accordingly, the gains and losses in the tables below include changes in fair value due in part to observablefactors that are part of the valuation methodology.
Total realized/
unrealized gains (losses)

March 31,2010

Includedinearnings

Includedin otherchangesin equity Purchases,
issuances Transfer
from
and
into
nonownersources settlements Level 3(5)Transferout ofLevel 3(5)Change inunrealized
gains (losses)
included inearnings for
assets andliabilities
still held at
March 31, March 31,
2011
2011

(in millions)

AssetsTrading account assets:
Trading securities(1) . . . . . . . . . . . . . . . ¥1,166,538 ¥ 2,077(2) ¥— ¥ (98,921) ¥ 87,162 ¥ (19,445) ¥1,137,411 ¥(10,933)(2)
Debt securities
Foreign governments and official
institutions bonds . . . . . . . . . .
171,534(1,720)—(64,468) 10,211—
115,557(6,688)
Corporate bonds . . . . . . . . . . . . .
494,987 (12,756)—
9,697
76,949(6) (14,513)(6) 554,364(7,892)
Residential mortgage-backed
securities . . . . . . . . . . . . . . . . .
56,4685,963—(8,743)——53,688
5,062
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . . .
17,315
3,425—
18,336——
39,076
2,890
Asset-backed securities . . . . . . . .
389,061(632)—(29,662)—(4,932)353,835(4,306)Equity securities . . . . . . . . . . . . . . .
37,173
7,797—(24,081)
2—
20,891
1
Trading derivatives—net . . . . . . . . . . .
(28,612) (9,821)(2)
5,948(23,117) 31,005(12,254)(36,851)(4,571)(2)Interest rate contracts—net . . . . . . .
(45,467) (4,991)—(14,513) 14,212(9,199)(59,958)
6
Foreign exchange contracts—net . .
6,440
46
5,963
(5,245) 16,826
8,881
32,911(2,201)Equity contracts—net . . . . . . . . . . .
(8,272)(982)(15)(1,212)——(10,481)(2,417)
Commodity contracts—net . . . . . . .
14,003276—(1,331)(33)(11,936)979
434
Credit derivatives—net . . . . . . . . . .
4,684(4,170)
—
(816)
—
—
(302)
(393)
Investment securities:
Securities available for sale . . . . . . . . . 2,363,609(431)(3)7,476 (354,656) 503,817 (316,503) 2,203,312(16,526)(3)
Debt securities
Japanese prefectural andmunicipal bonds . . . . . . . . . . .
3,069
9
3
(2,027)——1,054
2Foreign governments and official
institutions bonds . . . . . . . . . .
87,597(378)
1,888
41,302——
130,409(296)
Corporate bonds . . . . . . . . . . . . . 2,163,465
3,844
6,150 (371,409) 503,817(6) (297,895)(6) 2,007,972(14,699)
Residential mortgage-backed
securities . . . . . . . . . . . . . . . . .
26,827(1,629)180(1,595)——23,783(1)
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . . .
14,475(1,522)863(5,669)——8,147(1,522)
Asset-backed securities . . . . . . . .
67,095(733)(1,612)(15,350)—(18,608)
30,792
11
Other debt securities . . . . . . . . . .
990
(20)
—
(10)
—
—
960
(20)
Marketable equity securities . . . . . .
91
(2)
4
102
—
—
195
(1)
Other investment securities . . . . . . . . .
33,904384(4)
(337)
2,670
—
(713)
35,908(131)(4)Others . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,217(1,489)(4)
—
(425)
—
—
15,303(1,182)(4)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,552,656 ¥ (9,280)
Liabilities
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥¥13,087 ¥(474,449) ¥621,984 ¥(348,915) ¥3,355,083¥(33,343)

45,347 ¥ 2,453(4) ¥21,184 ¥(3,905) ¥

378 ¥

—

¥

18,183¥(14,902)(4)45,347 ¥ 2,453(3,905) ¥

378 ¥

—

¥

18,183¥(14,902)¥21,184 ¥F-134

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Total realized/
unrealized
gains (losses)
Includedin otherchangesin equity
from
Included
March 31,
nonownerin2011
earnings sources Purchases Issuances

Sales

Transfer Transfer
into
out ofSettlements Level 3(5) Level 3(5)Change inunrealized
gains (losses)
included inearnings for
assets andliabilities
still held at
March 31, March 31,
2012
2012

(in millions)
AssetsTrading account assets:
Trading securities(1) . . . . . . . ¥1,137,411 ¥ 12,230(2) ¥— ¥651,440 ¥— ¥(439,127) ¥ (362,779) ¥138,929 ¥ (61,447) ¥1,076,657 ¥ 7,412(2)Debt securities
Foreign governments
and official
institutions bonds . .
115,557 10,062— 180,506— (143,431)(38,654) 25,691—
149,7313,385
Corporate bonds . . . . .
554,364
4,595— 182,004—(72,379) (224,908) 113,206(6) (54,987)(6) 501,895
3,526
Residential mortgagebacked securities . . .
53,688 (2,041)—
30,362—(65,705)(6,180)——10,124(44)
Commercial mortgagebacked securities . . .
39,076 (2,412)
—
3,590
—
(37,502)(2,752)————
Asset-backed
securities . . . . . . . . .
353,835(499)— 254,096— (116,052)(89,722)—(6,460)395,198(260)
Equity securities . . . . . . .
20,891
2,525
—
882
—
(4,058)(563)
32—
19,709805
293 (2,894)—(25,587) 69,757(14,574)(27,458) (27,094)(2)
Trading derivatives—net . .
(36,851) (19,907)(2) 2,305
Interest rate contracts—
net . . . . . . . . . . . . . . . .
(59,958) 16,410
(92)
—
(22)
—
(7,110)6,692(824)(44,904)
12,483Foreign exchange
contracts—net . . . . . . .
32,911 (42,595)
2,372
278 (2,850)—(17,335) 64,141(13,015)
23,907(43,490)
Equity contracts—net . . .
(10,481) 6,030
33
—
(5)
—
(1,260) (1,336)—(7,019)4,502
Commodity contracts—
net . . . . . . . . . . . . . . . .
979
(131)
—
15
(17)
—
(31)
82
(735)
162
(149)
Creditderivatives—net . . . . .
(302)
379
(8)
—
—
—
149
178
—
396
(440)
Investment securities:
Securities available forsale . . . . . . . . . . . . . . . . . 2,203,312
4,491(3) (1,999) 268,123—(39,480) (723,693) 193,510 (230,877) 1,673,387(9,983)(3)Debt securities
Japanese prefecturaland municipal
bonds . . . . . . . . . . . .
1,054
3
(2)
—
—
—
(1,055)————
Foreign governments
and official
institutions bonds . .
130,409
(229)
2,258
3,660
—
(92)
(5,286)——
130,720(65)
Corporate bonds . . . . . 2,007,972
4,984(2,421) 185,960—(39,120) (659,580) 193,510(6) (230,816)(6) 1,460,489(9,732)
Residential mortgagebacked securities . . .
23,783
(24)
66
3,000
—
(206)
(4,268)——22,351(2)
Commercial mortgagebacked securities . . .
8,147
127
343
—
—
—
(4,815)——
3,802—
Asset-backed
securities . . . . . . . . .
30,792(374) (2,249)
75,467——(48,689)——
54,947(191)
Other debt
securities . . . . . . . . .
960
4
—
—
—
—
—
—
—
964
7
Marketable equity
securities . . . . . . . . . . .
195
—
6
36
—
(62)
—
—
(61)
114
—
Other investment
securities . . . . . . . . . . . . .
35,908 (1,897)(4)
(68)
4,102
—
(5,289)
(16)
—
(419)
32,321(1,537)(4)
Others . . . . . . . . . . . . . . . . . . .
15,303 (1,353)(4)
—
698
—
(1)
(11)
—
(4,268)10,368(1,361)(4)

Total . . . . . . . . . . . . . . . . . . . . ¥3,355,083 ¥ (6,436) ¥238 ¥924,656 ¥(2,894) ¥(483,897) ¥(1,112,086) ¥402,196 ¥(311,585) ¥2,765,275¥(32,563)

Liabilities
Others . . . . . . . . . . . . . . . . . . . ¥18,183 ¥(42,231)(4)¥ 6,864 ¥— ¥ 6,220 ¥— ¥(17,450) ¥1,640 ¥

(424) ¥

43,536¥(34,071)(4)

Total . . . . . . . . . . . . . . . . . . . . ¥18,183 ¥(42,231) ¥ 6,864 ¥— ¥ 6,220 ¥— ¥(17,450) ¥1,640 ¥

(424) ¥

43,536¥(34,071)

Notes:(1) Includes Trading securities under fair value option.
(2) Included in Trading account profits—net and in Foreign exchange gains—net.
(3) Included in Investment securities gains—net.
(4) Included in Trading account profits—net.
(5) All transfers out of Level 3 or into Level 3 were assumed to have occurred at the beginning of the period.
(6) Transfers out of and transfer into Level 3 for corporate bonds were due principally to changes in the impact of unobservable credit
worthiness inputs of the private placement bonds.

F-135

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain assets and liabilities may be measured at fair value on a nonrecurring basis in periods subsequent totheir initial recognition. These assets are subject to fair value adjustments that result from the application of thelower of cost or fair value accounting or write-downs of individual assets. The following table presents the
carrying value of assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy asof March 31, 2011 and 2012:
March 31, 2011
Level 1

Level 2

Level 3

AssetsInvestment
securities(1) . . . . . . ¥— ¥— ¥ 5,185
Loans . . . . . . . . . . . . 12,243 14,843 343,696
Loans held forsale . . . . . . . .
— 1,901
4,726
Collateraldependentloans . . . . . . 12,243 12,942 338,970
Premises andequipment . . . . . .
—— 10,371
Intangible assets . . .
—— 32,833
Other assets . . . . . . . 145,791— 20,128
Investments inequitymethodinvestees(1) . . 145,791— 13,853
Other . . . . . . . .
—
—
6,275
Total . . . . ¥158,034 ¥14,843 ¥412,213

March 31, 2012
Total
carrying value Level 1(in millions)

¥

5,185
370,782
6,627¥

Level 2

Level 3— ¥— ¥ 32,400
10,888 19,692 332,963
—

1,898

Total
carrying value¥ 32,400
363,54378

1,976

364,155

10,888 17,794 332,885

361,567

10,371
32,833
165,919——464,819———

18,74034,72911,66518,74034,729476,484

159,6446,275

464,819
—

—
—

6,223
5,442

471,042(2)5,442¥585,090¥475,707 ¥19,692 ¥430,497¥925,896

Notes:(1) Includes investments valued at net asset value of ¥14,098 million and ¥8,400 million at March 31, 2011 and 2012, respectively. The
unfunded commitments related to these investments are ¥5,407 million and ¥4,324 million at March 31, 2011 and 2012, respectively.
These investments are private equity funds.
(2) Reflected impairment losses on Morgan Stanley’s common stock, which were converted from Morgan Stanley convertible preferredstock on June 30, 2011. See Note 2 for the details.

F-136

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the nonrecurring changes in fair value which have been recorded during the
fiscal years ended March 31, 2011 and 2012:
Losses (Gains) for
the fiscal year ended
March 31, 2011 March 31, 2012
(in millions)

Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral dependent loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,364
160,862
1,263
159,599
11,497
26,56651,32649,394(1)1,932¥ 6,060
173,24282
173,160
11,98330,986584,843581,649(1)3,194

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥253,615¥807,114

Note:(1) Includes impairment losses on Morgan Stanley’s common stock, which was converted from Morgan Stanley convertible preferred stockon June 30, 2011. See Note 2 for the details on the impairment losses for the fiscal year ended March 31, 2012.

Investment securities include mainly impaired cost-method investments which were written down to fairvalue during the period. The fair values are determined based on recent financial position and projected future
cash flows of investees.
Loans include loans held for sale and collateral dependent loans. Loans held for sale are recorded at thelower of cost or estimated fair value. The fair value of the loans held for sale is based on secondary market,
recent transactions or discounted cash flows. These loans are principally classified in Level 3 of the valuation
hierarchy, and when quoted prices are available but not traded actively, such loans held for sale are classified in
Level 2 of the valuation hierarchy. Collateral dependent loans are measured at fair value of the underlying
collateral. Collaterals are comprised mainly of real estate and exchange traded equity securities. The MUFG
Group maintains an established process for internally determining the fair value of real estate, using thefollowing valuation techniques and assumptions. Collateral dependent loans that are measured based onunderlying real estate collateral are classified in Level 3 of the valuation hierarchy.
‰

Replacement cost approach. The replacement cost approach is primarily used for buildings and land
they are built on. This approach calculates the collateral value based on the replacement cost of theproperty as of the valuation date. Replacement cost tables and useful life tables used for this approach
are developed by appraising subsidiaries.

‰

Sales comparison approach. The sales comparison approach is mainly used for land. The collateralvalue is based on Japanese government official land prices and standard land prices, considering theresults of comparison analysis between the official roadside value which is used for tax purposes and therelated government official land and standard land prices.

‰

Income approach. The income approach is, as a general rule, applied to all rental properties. Thisapproach calculates the collateral value using expected future cash flows. In this approach, the expectedannual net operating income is discounted by the related capitalization yield. The significant
assumptions within the income approach are the expected annual net operating income andcapitalization yield. The expected annual net operating income is estimated based on rental income of
F-137

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the property. The capitalization yield is determined based on the location and use of the property byappraising subsidiaries. The capitalization yield may be adjusted to reflect the trends in locations,occupancy rates and rent level and other factors.
Premises and equipment consist of those assets which were written down to fair value. The fair values are
determined based on price obtained from an appraiser or discounted cash flows. These impaired premises andequipment are classified as Level 3 of the valuation hierarchy.
Intangible assets consist of those assets which were written down to fair values. The fair values are
determined based on discounted cash flows. These impaired intangible assets are classified as Level 3 of thevaluation hierarchy.
Other assets mainly consist of investments in equity method investees which were written down to fair value
due to impairment. The MUFG Group records impairment losses when a decline in fair value below cost is otherthan temporary. The impairment losses are included in Equity in losses of equity method investees-net in the
consolidated statements of income. When investments in equity method investees are marketable equity
securities, the fair values are determined based on quoted market prices. Impaired investments in equity method
investees which are marketable equity securities are classified in either Level 1 or Level 2 of the valuation
hierarchy. When investments in equity method investees are nonmarketable equity securities, the fair values are
determined using the same methodologies as impaired nonmarketable equity securities described above.
Impaired investments in equity method investees which are nonmarketable equity securities are classified in
Level 3 of the valuation hierarchy. For the fiscal years ended March 31, 2011 and 2012, the MUFG Group
recorded impairment losses on investments in Morgan Stanley. See Note 2 for the details on the impairment
losses for the fiscal year ended March 31, 2012.
Fair Value Option
The MUFG Group elected the fair value option for foreign currency-denominated debt securities and equity
securities held by BTMU and MUTB. The election was made to mitigate accounting mismatches related tofluctuations of foreign exchange rates as the gains and losses on translation of these securities were reflected inother changes in equity from nonowner sources, while the gains and losses on translation of foreign
currency-denominated financial liabilities were included in current earnings.
The MUFG Group also elected the fair value option for certain financial instruments held by MUSHD’s
foreign subsidiaries because those financial instruments are managed on a fair value basis, and these exposures
are considered to be trading-related positions. These financial assets are included in Interest-earning deposits inother banks and Receivables under resale agreements. These financial liabilities are included in Other short-termborrowings and Long-term debt. Unrealized gains and losses on such financial instruments are recognized in the
consolidated statements of income.

F-138

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the gains or losses recorded during the fiscal years ended March 31, 2011 and2012 related to the eligible instruments for which the MUFG Group elected the fair value option:

Tradingaccount
profits (losses)

Financial assets:
Interest-earning deposits inother banks . . . . . . . . . . .
Receivables under resaleagreements(1) . . . . . . . . .
Trading accountsecurities . . . . . . . . . . . .
Total . . . . . . . . . . . . . .
Financial liabilities:
Other short-termborrowings(1) . . . . . . . . .
Long-term debt(1) . . . . . . . .
Total . . . . . . . . . . . . . .

¥243

For the fiscal year ended March 31,
2011
2012
Foreign
Total
Trading
Foreignexchangechanges inaccount
exchange
gains (losses)
fair value
profits (losses) gains (losses)(in millions)

¥

—

¥

243

¥

17

¥

Total
changes infair value

—

¥

17

4,736

—

4,736

1,332

—

1,332

68,618(837,459)(768,841)

439,854

57,055496,909¥ 73,597¥(837,459) ¥(763,862)¥441,203¥57,055¥498,258¥(454)(114,528)

¥

—
—

¥

(454)
(114,528)¥ (1,310)(35,336)¥——¥ (1,310)(35,336)¥(114,982)¥—¥(114,982)¥ (36,646)¥—¥ (36,646)

Note:(1) Change in value attributable to the instrument-specific credit risk related to those financial assets and liabilities are not material.

The following table presents the differences between the aggregate fair value and the aggregate remaining
contractual principal balance outstanding as of March 31, 2011 and 2012 for long-term receivables and debt
instruments for which the fair value option has been elected:
2011

2012
Fair value
over (under)
remaining
Remaining
aggregate
aggregate
contractual
contractual
amounts
amounts
outstanding
outstanding(in millions)

Fair value

Fair value
over (under)
remaining
aggregate
contractual
amounts
outstanding¥ 26,000¥ 26,056

¥

56

192

¥ 26,000¥ 26,056¥

56¥575,969¥(146,783)¥664,095¥524,758¥(139,337)¥575,969¥(146,783)¥664,095¥524,758¥(139,337)

Remaining
aggregate
contractual
amounts
outstanding

Fair value

Financial assets:
Receivables under resaleagreements . . . . . . . . . . . . . .

¥ 26,000¥ 26,192¥

192

Total . . . . . . . . . . . . . . . . .

¥ 26,000¥ 26,192¥

Financial liabilities:
Long-term debt . . . . . . . . . . . .

¥722,752

Total . . . . . . . . . . . . . . . . .

¥722,752

F-139

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest income and expense and dividend income related to the assets and liabilities for which the fair value
option is elected are measured based on the contractual rates specified in the transactions and reported in the
consolidated statements of income as either interest income or expense, depending on the nature of the related
asset or liability.
Estimated Fair Value of Financial Instruments
In addition to financial instruments measured and disclosed on a fair value basis, the disclosure of theestimated fair value of financial instruments that are not carried at fair value is also required. The following is asummary of carrying amounts and estimated fair values of financial instruments at March 31, 2011 and 2012:
2011
2012
Carrying
Estimated
Carrying
Estimatedamountfair value
amountfair value(in billions)

Financial assets:
Cash and due from banks, Interest-earning deposits in otherbanks, Call loans and funds sold, and Receivables underresale agreements and Receivable under securities
borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets, excluding derivatives . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for credit losses . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments:
Trading activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Activities qualifying for hedges . . . . . . . . . . . . . . . . . . .
Financial liabilities:
Non-interest-bearing deposits, Call money and funds
purchased, and Payables under repurchase agreements andPayables under securities lending transactions . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities, excluding derivatives . . . . . . . . .
Obligations to return securities received as collateral . . . . . .
Due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments:
Trading activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Activities qualifying for hedges . . . . . . . . . . . . . . . . . . .

¥ 19,486
18,79258,53686,262
4,677¥ 19,486
18,79259,00287,054
4,677¥ 17,344
23,39560,46591,0136,459¥ 17,344
23,39560,704
92,083
6,459

10,033
2

10,033
2

11,558—

11,558—¥ 35,544
117,894
31
3,268
634
8,488
13,357
4,635¥ 35,544
117,960
31
3,268
634
8,488
13,557
4,635¥ 39,036
121,805
174
3,640
627
10,882
12,5935,250¥ 39,036
121,876
174
3,640
627
10,882
12,823
5,250

9,878
—

9,878
—

11,793
1

11,793
1

Not all of the financial instruments held by the MUFG Group are recorded at fair value on the consolidatedbalance sheets. The methodologies and assumptions used to estimate fair value of financial instruments that are
not recorded at fair value on the consolidated balance sheets are summarized below:
Cash and due from banks, Interest-earning deposits in other banks, Call loans and funds sold,Receivables under resale agreements and Receivable under securities borrowing transactions—For cash anddue from banks including interest-earning deposits in other banks, call loans and funds sold, receivables underresale agreements and receivable under securities borrowing transactions, the carrying amounts are a reasonableestimate of the fair values because of their short-term nature and limited credit risk.
F-140

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Investment securities—The fair values of investment securities other than those classified as available forsale or being held to maturity (i.e., nonmarketable equity securities) are not readily determinable as they do nothave quoted market prices or secondary market prices available. The fair values of certain nonmarketable equity
securities, such as preferred stock convertible to marketable common stock in the future, issued by publiccompanies are determined by utilizing commonly accepted valuation models, which applies a logic to derive afair value using the present value of dividend cash flows and option prices. For option prices, the Trinomial Tree
Method determines possible paths of future stock prices using a forward rate for a common stock, and the price iscalculated by multiplying the possible paths of future stock prices by the expected cash flows generated from theprobability of exercising options or upon exercising of the options. Parameters used for the valuation include but
are not limited to stock price, volatility and credit spread. The valuation is performed on a quarterly basis. At thetime of any sale, the MUFG Group generally separately calculates a valuation to be used in sales pricenegotiations with the counterparty. The price agreed between the MUFG Group and a counterparty is also used
as a reference for validating the appropriateness of previous valuations of the investment. The MUFG Group
performs periodic validation of the valuation models. Specifically, the sensitivity and appropriateness ofparameters are verified by using different valuation models employed by the MUFG Group. It is not practicablefor the MUFG Group to estimate the fair value of other nonmarketable securities issued by nonpublic companies
for which a quoted market price is not available. For these securities, the MUFG Group is unable to estimate fairvalue without incurring undue cost because they comprise investments in numerous unlisted companies and each
investment represents an insignificant percentage relative to each company. Therefore, the above summary does
not include the carrying amounts of such investment securities. The amounts not included in the above summaryare ¥515 billion and ¥570 billion at March 31, 2011 and 2012, respectively.
Loans—The fair value of loans are estimated by discounting expected future cash flows based on types ofloans, internal ratings and possibility of prepayment using the discount rates which include adjustments to reflect
the expectations about possible variations to the current market rates. For certain residential loans with variableinterest rates provided to individual home owners, the carrying amount is presented as the fair value since suchcarrying amount approximates the fair value, unless the creditworthiness of the borrower has changed
significantly since the loan origination. Where quoted market prices or estimated fair values are available,
primarily for loans to refinancing countries, loans held for sales and certain other foreign loans, the fair values
are based on such market prices and estimated fair values, including secondary market prices. For receivablesfrom bankrupt, virtually bankrupt, and likely to become bankrupt borrowers, credit loss is estimated based on thepresent value of expected future cash flows or the expected amount to be collected from collaterals andguarantees. The carrying amount is presented as the fair value since the fair value approximates such carrying
amount.
Other financial assets—The estimated fair values of other financial assets, which primarily include accrued
interest receivable, customers’ acceptance liabilities and accounts receivable, approximate their carrying
amounts. The above summary does not include the carrying amounts of investments in equity method investees
amounting to ¥771 billion and ¥1,131 billion at March 31, 2011 and 2012, respectively.
Non-interest-bearing deposits, Call money and funds purchased, Payables under repurchase agreements
and Payable under securities lending transactions—For non-interest-bearing deposits, the amount payable on
demand as of the consolidated balance sheet date (i.e., the carrying amount) is considered to be the fair value. For
call money and funds purchased, payables under repurchase agreements and payable under securities lendingtransactions, the carrying amount are reasonable estimate of the fair value because of their short-term nature andlimited credit risk.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest–bearing deposits—For variable rate time deposits, the carrying amount is presented as the fairvalue because the market interest rate is reflected in such deposits within a short time period. Fixed rate time
deposits are grouped by certain maturity lengths. The fair value of such deposits are estimated by discounting
expected future cash flows using the discount rates that would be applied to newly accepted deposits.
Due to trust account—Since these are cash deposits with no maturity, the carrying amount is presented as
the fair value as the fair value approximates such carrying amount.
Other short-term borrowings—For most other short-term borrowings, the carrying amount is presented as
the fair value since such carrying amount approximates the fair value because of their short-term nature andlimited credit risk.
Long-term debt—The fair value of corporate bonds issued by the MUFG Group is determined based onmarket price of those corporate bonds. The fair value of fixed rate corporate bonds without market prices is thepresent value of expected future cash flow from these borrowings, which is discounted at an interest rate
generally applicable to similar borrowings reflecting premium applicable to the MUFG Group. For variable rate
corporate bonds without market prices, the carrying amount of such bonds is presented as the fair value sincesuch carrying amount approximates the fair value. This is on the basis that the market interest rate is reflected in
the fair value of such corporate bonds because such bond terms were set within a short time period and that there
has been no significant impact on the fair value of those bonds.
Other financial liabilities—The estimated fair values of other financial liabilities, which primarily include
accrued interest payable, bank acceptances, accounts payable and obligations under standby letters of credit andguarantees, approximate their carrying amounts. The fair values of obligations under standby letters of credit andguarantees are based on fees received or receivable by the MUFG Group.
The fair values of certain off-balance sheet financial instruments held for purposes other than trading,including commitments to extend credit and commercial letters of credit, are estimated using the fees currently
charged to enter into similar agreements, taking into account the remaining terms of the agreements and thecredit quality. The aggregate fair value of such instruments at March 31, 2011 and 2012 was not material.
The fair value estimates presented herein are based on pertinent information available to management at
March 31, 2011 and 2012. These amounts have not been comprehensively reevaluated since that date and,
therefore, current estimates of fair values may have changed significantly from the amounts presented herein.
30.

STOCK-BASED COMPENSATION

The following describes the stock-based compensation plans of MUFG, BTMU, MUTB, MUSHD, MUMSSand UNBC.
MUFG, BTMU, MUTB, MUSHD and MUMSS
MUFG, BTMU, MUTB, MUSHD and MUMSS elected to introduce a stock-based compensation plan for
directors, executive officers and corporate auditors (“officers”) and obtained the necessary shareholder approvalat their respective ordinary general meetings.
Following the approval, MUFG resolved at the meeting of the Board of Directors to issue stockcompensation type stock options (“Stock Acquisition Rights”) to officers of MUFG, BTMU, MUTB, MUSHD
and MUMSS. Usually, the Stock Acquisition Rights would be issued and granted to these officers once a year.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The class of shares to be issued or transferred on exercise of the Stock Acquisition Rights is common stockof MUFG. The number of shares to be issued or transferred on exercise of each Stock Acquisition Right(“number of granted shares”) is 100 shares. In the event of stock split or stock merger of common stock of
MUFG, the number of granted shares shall be adjusted in accordance with the ratio of stock split or stock merger.
If any events occur that require the adjustment of the number of granted shares (e.g., mergers, consolidations,
corporate separations or capital reductions of MUFG), MUFG shall appropriately adjust the number of granted
shares to a reasonable extent.
The contractual term of the Stock Acquisition Rights is approximately 30 years from the date of grant. Someof the Stock Acquisition Rights vest on the date of grant and the rest of the rights graded-vest depending on theholders’ service periods as officers. The Stock Acquisition Rights are only exercisable after the date on which thefollowing conditions are met: (1) holder as a director or an executive officer loses the status of both director andexecutive officer, and (2) a holder as a corporate auditor loses the status of a corporate auditor. The exercise priceis ¥1 per share.
The following is a summary of the Stock Acquisition Rights transactions of MUFG, BTMU, MUTB,
MUSHD and MUMSS for the fiscal year ended March 31, 2012:

Number ofsharesFiscal year ended March 31, 2012
Weighted average
Weighted averageremaining
exercise pricecontractual term(in years)

Outstanding, beginning of fiscal year . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited or Expired . . . . . . . . . . . . . . . . . . .

14,857,200
8,323,100(3,639,600)(166,500)

¥

1
1
1
1

Outstanding, end of fiscal year . . . . . . . . . . . . . .

19,374,200

¥

1

28.33

Exercisable, end of fiscal year . . . . . . . . . . . . . . .

—

¥

—

—

Aggregate
intrinsic value(in millions)¥7,963¥—

The fair value of the Stock Acquisition Rights is estimated on the date of grant using the Black-Scholes
option pricing model that uses the assumptions described in the following table. The risk-free rate is based on theJapanese government bonds yield curve in effect at the date of grant based on the expected term. The expectedvolatility is based on the historical data from traded common stock of MUFG. The expected term is based on the
average service period of officers of MUFG, BTMU, MUTB, MUSHD and MUMSS, which represents the
expected outstanding period of the Stock Acquisition Rights granted. The expected dividend yield is based on thedividend rate of common stock of MUFG at the date of grant.
Fiscal year
ended March 31,
2011
2012

Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.23%
43.97%
4
2.91%

0.29%
44.96%
4
3.13%

The weighted-average grant date fair value of the Stock Acquisition Rights granted for the fiscal years
ended March 31, 2011 and 2012 was ¥36,600 and ¥33,700 per 100 shares, respectively.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The MUFG Group recognized ¥2,839 million and ¥2,771 million of compensation costs related to the Stock
Acquisition Rights with ¥1,155 million and ¥1,127 million of the corresponding tax benefit for the fiscal years
ended March 31, 2011 and 2012, respectively. As of March 31, 2012, the total unrecognized compensation cost
related to the Stock Acquisition Rights was ¥547 million and it is expected to be recognized over a period of
three months.
Cash received from the exercise of the Stock Acquisition Rights for the fiscal year ended March 31, 2012was ¥4 million. The actual tax benefit realized for the tax deductions from exercise of the Stock Acquisition
Rights was ¥821 million for the fiscal year ended March 31, 2012.
UNBC
UnionBanCal Corporation Stock Bonus Plan (Stock Bonus Plan)
Effective as of April 27, 2010, UNBC adopted the Stock Bonus Plan. Under the Stock Bonus Plan, UNBC
grants restricted stock units settled in American Depositary Receipts (ADRs) representing shares of common
stock of UNBC’s indirect parent company, MUFG, to key employees at the discretion of the Executive
Compensation and Benefits Committee of the Board of Directors (the Committee). The Committee determines
the number of shares, vesting requirements and other features and conditions of the restricted stock units. Under
the Stock Bonus Plan, MUFG ADRs are purchased in the open market upon the vesting of the restricted stock
units, through a revocable trust. There is no amount authorized to be issued under the Plan since all shares arepurchased in the open market. These awards generally vest pro-rata on each anniversary of the grant date andbecome fully vested three years from the grant date, provided that the employee has completed the specified
continuous service requirement. Generally, the grants vest earlier if the employee dies, is permanently and totallydisabled, retires under certain grant, age and service conditions, or terminates employment under certain
conditions.
Under the Stock Bonus Plan, the restricted stock unit participants do not have dividend rights, voting rights
or other stockholder rights. The grant date fair value of these awards is equal to the closing price of the MUFG
ADRs on date of grant.
The following table is a summary of UNBC’s management stock plan:
Grant Date

Units
GrantedFair Valueof Stock

Vesting
Duration

Pro-rata
Vesting Date

Grant Date
November 15, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 15, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 15, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,995,505
4,754,105
180,740

$4.72
4.69
4.94

3 years
3 years
3 years

April 15
April 15
July 15

The following table is a rollforward of the restricted stock units under the Stock Bonus Plan for the fiscal
years ended December 31, 2010 and 2011:
Restricted Stock Units
2010
2011

Units outstanding, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
— 3,943,590
Activity during the year:
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,995,505 4,934,845
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,595 1,435,268
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,320304,833
Units outstanding, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-144

3,943,590

7,138,334

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table is a summary of UNBC’s compensation costs, the corresponding tax benefit for the
fiscal years ended December 31, 2010 and 2011, and unrecognized compensation costs as of December 31, 2010
and 2011:
December 31,(in millions)
2010
2011

Compensation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3 $Tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Unrecognized compensation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16
31.

15
6
22

PARENT COMPANY ONLY FINANCIAL INFORMATION

Distributions of retained earnings of BTMU and MUTB are restricted in order to meet the minimum capital
adequacy requirements under the Banking Law. Also, retained earnings of these banking subsidiaries are
restricted, except for ¥4,409,177 million, in accordance with the statutory reserve requirements under theCompany Law at March 31, 2012 (see Notes 17 and 19).
The following table presents the parent company only financial information of MUFG:
Condensed Balance Sheets
2011

2012
(in millions)

Assets:Cash and interest-earning deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 151,531 ¥ 132,431
Investments in subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . .
9,607,046
10,788,927
Investment in Morgan Stanley(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
956,576—(1)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,43566,227
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,812,588¥10,987,585

Liabilities and Shareholders’ equity:
Short-term borrowings from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,566,981
Long-term debt from subsidiaries and affiliated companies . . . . . . . . . . . . . . . .
792,203
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117,683¥ 1,849,072
383,90328
171,424

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,476,889

2,404,427

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,335,699

8,583,158

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,812,588¥10,987,585

Note:(1) Investment in Morgan Stanley at March 31, 2012 is included in Investments in subsidiaries and affiliated companies since Morgan
Stanley became an affiliated company on June 30, 2011. See Note 2 for more information.

F-145

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Condensed Statements of Income
2010

2011
(in millions)2012

Income:Dividends from subsidiaries and affiliated companies . . . . . . . . . . . . . . . ¥203,443 ¥341,687 ¥270,923
Dividends from Morgan Stanley(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78,244
71,216—(1)
Gain on conversion rate adjustment of Morgan Stanley’s convertible
preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——139,320
Management fees from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,522
16,51016,708Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
810299
Foreign exchange gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43,461
93,31032,237
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,946
1,923
5,614
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

348,624

524,748464,901

Expense:Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense to subsidiaries and affiliated companies . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,29641,921
4,087
1,326

13,98142,752
2,856
934

14,51537,905
1,196
923

Total expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,63060,52354,539Equity in undistributed net income of subsidiaries and affiliatedcompanies—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

622,10752,751

55,139

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

908,101
39,439516,976
64,331

465,501
49,270Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥868,662¥452,645¥416,231

Note:(1) Dividends from Morgan Stanley for the fiscal year ended March 31, 2012 are included in Dividends from subsidiaries and affiliatedcompanies since Morgan Stanley became an affiliated company on June 30, 2011. See Note 2 for more information.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Condensed Statements of Cash Flows2010

Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2011(in millions)2012

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . .

868,662 ¥ 452,645 ¥ 416,231(643,734) (111,730) (133,368)
224,928

340,915

282,863

Investing activities:
Proceeds from sales and redemption of stock investment in
subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . . . .
Purchases of equity investments in subsidiaries and affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of other investment securities . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in interest-earning deposits with banks . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,526

250,000

17,371(1,453,127)(5)(49,663)(5,833)(89,042)—(70,502)(1,486)(20,000)—
18,696(7,245)

Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . .

(1,507,102)

88,9708,822

143,403531,197

66,600380,499(100,007)—(230,025)—(8)

Financing activities:
Net increase in short-term borrowings from subsidiaries . . . . . . . . . .
Proceeds from issuance of long-term debt to subsidiaries andaffiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt to subsidiaries and affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of common stock, net of stock issue
expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisition of preferred stock . . . . . . . . . . . . . . . . . . . .
Payments to acquire treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12,800)(295,652)(169,710)

1,026,341
30
—
(246)
(149,551)(2,269)—4(250,000)(30)(190,455)
(386)

—
3
—
(12)
(187,616)(1,346)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . .

1,285,400(435,347)(292,089)

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of fiscal year . . . . . . . . . . . . . . . .

3,226
13,262(5,462)
16,488(404)
11,026

16,488¥ 11,026¥ 10,622

Cash and cash equivalents at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

32.

¥

SEC REGISTERED FUNDING VEHICLES ISSUING NON-DILUTIVE PREFERREDSECURITIESIn February 2006, MUFG established MUFG Capital Finance 1 Limited, MUFG Capital Finance 2 Limited
and MUFG Capital Finance 3 Limited, wholly owned funding vehicles in the Cayman Islands, for the issuance ofpreferred securities to enhance the flexibility of its capital management.
On March 17, 2006, MUFG Capital Finance 1 Limited, MUFG Capital Finance 2 Limited and MUFG
Capital Finance 3 Limited registered with the SEC and issued $2,300,000,000 in 6.346% non-cumulative
preferred securities, €750,000,000 in 4.850% non-cumulative preferred securities and ¥120,000,000,000 in
F-147

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2.680% non-cumulative preferred securities (collectively, the “Preferred Securities”), respectively. Total net
proceeds before expenses were approximately $4.17 billion. All of the ordinary shares of MUFG Capital
Finance 1 Limited, MUFG Capital Finance 2 Limited and MUFG Capital Finance 3 Limited are owned by
MUFG. MUFG fully and unconditionally guarantees the payment of dividends and payments on liquidation orredemption of the obligations under the Preferred Securities.
The Preferred Securities entitle holders to receive a non-cumulative preferential cash dividend starting on
July 25, 2006 and on January 25 and July 25 of each year thereafter. These funding vehicles will not be obligatedto pay dividends on the Preferred Securities upon the occurrence of certain events relating to the financial
condition of MUFG. From July 25, 2016, dividends on the Preferred Securities will be re-calculated at a floating
rate per annum.
The dollar-denominated and euro-denominated preferred securities are subject to redemption on any
dividend payment date on or after July 25, 2016. All the Preferred Securities are subject to redemption in whole(but not in part) at any time upon the occurrence of specified events, in each case at the option of each of thefunding vehicles and subject to necessary government approvals.
The Preferred Securities are non-dilutive and not convertible into MUFG’s common shares. The Preferred
Securities were included as part of MUFG’s Tier I capital at March 31, 2011 and 2012 under its capital adequacy
requirements.
These funding vehicles are not consolidated as the MUFG Group’s subsidiaries. See Note 23 for discussion.
The funds raised through such funding vehicles are primarily loaned to the MUFG Group and presented as Longterm debt in the consolidated balance sheet at March 31, 2011 and 2012.
On July 25, 2011, MUFG redeemed a total of ¥120,000,000,000 of non-cumulative and non-dilutive
perpetual preferred securities issued by MUFG Capital Finance 3 Limited.
33.

SUBSEQUENT EVENTSMUFG has evaluated subsequent events requiring recognition or disclosure in the consolidated financial
statements through the date these consolidated financial statements were issued.
Approval of Dividends
On June 28, 2012, the shareholders approved the payment of cash dividends to the shareholders of record on
March 31, 2012, of ¥57.50 per share of Class 5 Preferred Stock, ¥2.65 per share of Class 11 Preferred Stock,
totaling ¥8,970 million, and ¥6.00 per share of Common stock, totaling ¥84,927 million.
Stock Compensation Type Stock Options (Stock Acquisition Rights)
On July 18, 2012, MUFG allotted the directors, executive officers, corporate auditors and senior fellows of
MUFG, BTMU, MUTB, MUSHD and MUMSS stock acquisition rights to acquire an aggregate amount of
8,373,600 shares of MUFG’s common stock. The stock acquisition rights have an exercise price of ¥1 percommon share, and are exercisable until July 17, 2042.
*****

F-148

Signature
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this Annual Report on its behalf.
MITSUBISHI UFJ FINANCIAL GROUP, INC.
By:
Name:
Title:

Date: July 23, 2012/s/

KATSUNORI NAGAYASU

Katsunori Nagayasu
President & Chief Executive Officer

EXHIBIT INDEXExhibitDescription

1(a)Articles of Incorporation of Mitsubishi UFJ Financial Group, Inc., as amended on June 26,
2009. (English translation)*1(b)Board of Directors Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(c)Corporation Meetings Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(d)Share Handling Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on June 26,
2009. (English Translation)*2(a)Form of American Depositary Receipt.

2(b)Form of Deposit Agreement, amended and restated as of December 22, 2004, among
Mitsubishi Tokyo Financial Group, Inc. (subsequently renamed Mitsubishi UFJ Financial
Group, Inc.), The Bank of New York Mellon and the holders from time to time of American
Depositary Receipts issued thereunder.

4(a)Transaction Agreement, dated as of April 21, 2011, between Morgan Stanley and Mitsubishi
UFJ Financial Group, Inc.**4(b)Amended and Restated Investor Agreement, dated as of June 30, 2011, between Morgan
Stanley and Mitsubishi UFJ Financial Group, Inc.**8

Subsidiaries of the Company—see “Item 4.C. Information on the Company—Organizational
Structure.”

11

Ethical framework and code of conduct, compliance rules, compliance manual and rules of
employment of Mitsubishi UFJ Financial Group, Inc. applicable to its directors and managing
officers, including its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions. (English translationof relevant sections)**

12

Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a)(17 CFR 240.15d-14(a)).

13

Certifications required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b)(17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code
(18 U.S.C. 1350).

101.INSXBRL Instance Document

101.SCHXBRL Schema Document

101.CALXBRL Calculation Linkbase Document

101.DEFXBRL Definition Linkbase Document

101.LABXBRL Label Linkbase Document

101.PREXBRL Presentation Linkbase Document

Notes:*
Incorporated by reference to our annual report on Form 20-F (File No. 333-98061-99) filed on September 2, 2009.
** Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 28, 2011.

Exhibit 2(a)Effective October 1, 2007 the Company’s American Depositary Share (“ADS”) Ratio Changed from 1,000:1(One Thousand ADSs Representing One Ordinary Share) to 1:1 (One ADS Representing One Ordinary Share)
THE BANK OF NEW YORKAMERICAN DEPOSITARY RECEIPTFOR ORDINARY SHARES OF
MITSUBISHI UFJ FINANCIAL GROUP, INC.
(INCORPORATED UNDER THE LAWS OF JAPAN)
The Bank of New York, as depositary (hereinafter called the “Depositary”), hereby certifies that, or registered assigns IS THE OWNER OFAMERICAN DEPOSITARY SHARES
representing deposited ordinary Shares (herein called “Shares”) of Mitsubishi UFJ Financial Group, Inc.
incorporated under the laws of Japan (herein called the “Company”). At the date hereof, each American
Depositary Share represents one-thousandth of one Share deposited under the deposit agreement at the Tokyo,
Japan office of The Bank of Tokyo-Mitsubishi, Ltd. (herein called the “Custodian”). The Depositary’s Corporate
Trust Office is located at a different address than its principal executive office. Its Corporate Trust Office islocated at 101 Barclay Street, New York, N.Y. 10286, and its principal executive office is located at One WallStreet, New York, N.Y. 10286.

THE DEPOSITARY’S CORPORATE TRUST OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, N.Y. 10286
1.

THE DEPOSIT AGREEMENT.

This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued
upon the terms and conditions set forth in the deposit agreement, dated as of September 19, 1989, as amended
and restated April 2, 2001, as further amended and restated December 22, 2004 (herein called the “Deposit
Agreement”), by and among the Company, the Depositary, and all Owners (as defined below) and holders fromtime to time of Receipts issued thereunder, each of whom by accepting a Receipt agrees to become a party
thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights ofOwners and holders of the receipts and the rights and duties of the Depositary in respect of the Shares deposited
thereunder and any and all other securities, property and cash from time to time received in respect of such
Shares and held thereunder (such Shares, securities, property, and cash are herein called “Deposited Securities”).
Copies of the Deposit Agreement are on file at the Depositary’s Corporate Trust Office in New York City and at
the office of the Custodian.
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the
Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, towhich reference is hereby made. For the purposes of this Receipt, the term “Owner” shall mean the person inwhose name a Receipt is registered on the books of the Depositary maintained for such purpose.
2.

SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.

Upon surrender at the Corporate Trust office of the Depositary of this Receipt, and upon payment of the feeof the Depositary provided in this Receipt, and subject to the terms and conditions of the following two
paragraphs and of the Deposit Agreement, the Owner hereof is entitled to delivery, to him or upon his order, of
the Deposited Securities at the time represented by the American Depositary Shares for which this Receipt isissued. Delivery of such Deposited Securities may be made by the delivery of certificates in the name of theOwner hereof or as ordered by him. Such delivery will be made at the option of the Owner hereof, either at theoffice of the Custodian or at the corporate Trust Office of the Depositary, provided that the forwarding ofcertificates for Shares or other Deposited Securities for such delivery at the Corporate Trust Office of the
Depositary shall be at the risk and expense of the Owner hereof.
The delivery of Receipts against deposits of Shares generally or against deposits of particular Shares may besuspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer ofoutstanding Receipts generally may be suspended, during any period when the register of shareholders of theCompany or the transfer books of the Depositary are closed, or if any such action is deemed necessary oradvisable by the Depositary or the Company at any time or from time to time because of any requirement of law
or of any government or governmental body or commission, or under any provision of the Deposit Agreement, orfor any other reason. The surrender of outstanding Receipts and withdrawal of Deposited Securities may not besuspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or theCompany or the Deposit of Shares in connection with voting at a shareholders’ meeting, or the payment ofdividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws
or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities. Without
limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement
any Shares required to be registered under the provisions of the Securities Act of 1933, unless a registration
statement is in effect as to such Shares.
In all instances, the American Depositary Shares evidenced by this Receipt may only be presented forcancellation and release of the underlying Shares or other Deposited Securities in multiples of 1,000 American
Depositary Shares. Holders of Receipts representing less than 1,000 American Depositary Shares will not be
entitled to delivery of any underlying Shares or other Deposited Securities unless such Receipts, together withother Receipts presented by the same holder or Owner at the same time, represent in the aggregate at least 1,000
American Depositary Shares. If any American Depositary Shares are surrendered but not cancelled pursuant to
the preceding sentence, the Depositary shall execute and deliver a Receipt or Receipts evidencing the balance ofAmerican Depositary Shares not so cancelled to the person or persons surrendering the same.
3.

TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

The transfer of this Receipt is registrable on the books of the Depositary at its Corporate Trust Office by the
Owner hereof in person or by duly authorized attorney, upon surrender of this Receipt properly endorsed fortransfer or accompanied by proper instruments of transfer and funds sufficient to pay any applicable transfer
taxes and the fees and expenses of the Depositary and upon compliance with such regulations, if any, as the
Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be
combined with other such Receipts into one Receipt, evidencing the same aggregate number of American
Depositary Shares as the Receipt or Receipts surrendered. As a condition precedent to the execution and delivery,
registration of transfer, split-up, combination, or surrender of any Receipt, the delivery of any distribution
thereon, or withdrawal of any Deposited Securities, the Depositary or the Custodian (i) may require payment
from the depositor of Shares or the presenter of the Receipt of a sum sufficient to reimburse it for any tax or othergovernmental charge and any stock transfer or registration fee with respect thereto (including any such tax orcharge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees asprovided in this Receipt, (ii) may require the production of proof satisfactory to it as to the identity andgenuineness of any signature and (iii) may also require compliance with such regulations, if any, as the
Depositary may establish consistent with the provisions of the Deposit Agreement.
4.

LIABILITY OF OWNER FOR TAXES.

If any tax or other governmental charge shall become payable with respect to any Receipt or any Deposited
Securities represented hereby, such tax or other governmental charge shall be payable by the Owner hereof to the
Depositary. The Depositary may refuse to effect any transfer of this Receipt or any withdrawal of Deposited
Securities represented hereby until such payment is made, and may withhold any dividends or other distributions,or may sell for the account of the Owner hereof any part or all of the Deposited Securities represented by this

Receipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of suchtax or other governmental charge, the Owner hereof remaining liable for any deficiency.
5.

WARRANTIES OF DEPOSITORS.

Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent andwarrant that such Shares and each certificate therefor are validly issued, fully paid, non-assessable, and free ofany pre-emption rights of the holders of outstanding Shares and that the person making such deposit is duly
authorized so to do. Every such person shall also be deemed to represent that, to the best of such person’s
knowledge, the deposit of Shares and the sale of Receipts by that person are not restricted under the Securities
Act of 1933. Such representations and warranties shall survive the deposit of Shares and issuance of Receipts.
6.

FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Shares for deposit or any Owner of a Receipt may be required from time to time tofile such proof of citizenship or residence, exchange control approval, or such information relating to theregistration on the books of the Company (or the appointed agent of the Company for transfer and registration of
Shares) of the Shares presented for deposit or other information, to execute such certificates and to make such
representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold
the delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other
distribution or rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof orother information is filed or such certificates are executed.
7.

CHARGES OF DEPOSITARY.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party
surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock
dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited
Securities or a distribution of Receipts pursuant to Section 4.03 of the Deposit Agreement), whichever
applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be ineffect for the registration of transfers of Shares generally on the Share register of the Company or foreign
registrar and applicable to transfers of Shares to the name of the Depositary or its nominee or the Custodian or its
nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission
expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the
Depositary in the conversion of foreign currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of$5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts
pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of Receipts pursuant to
Section 2.05 or 6.02 of the Deposit Agreement, (6) to the extent permitted by any securities exchange on which
the American Depositary Shares may be listed for trading, a fee of $.02 or less per American Depositary Share(or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but not limited
to Sections 4.01 through 4.04 of the Deposit Agreement, and (7) a fee for the distribution of securities pursuant to
Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution anddelivery of American Depositary Shares referred to above which would have been charged as a result of thedeposit of such securities (for purposes of this clause 7 treating all such securities as if they were Shares) but
which securities are instead distributed by the Depositary to Owners.
8.

PRE-RELEASE OF RECEIPTS.

The Depositary may issue Receipts against the delivery by the Company (or any agent of the Company
recording Share ownership) of rights to receive Shares from the Company (or any such agent). No such issue of
Receipts will be deemed a “Pre-Release” that is subject to the restrictions of the following paragraph.
Unless requested in writing by the Company to cease doing so, the Depositary may, notwithstanding
Section 2.03 of the Deposit Agreement, execute and deliver Receipts prior to the receipt of Shares pursuant to
Section 2.02 of the Deposit Agreement (“Pre-Release”). The Depositary may, pursuant to Section 2.05 of theDeposit Agreement, deliver Shares upon the receipt and cancellation of Receipts which have been Pre-Released,
whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows thatsuch Receipt has been Pre-Released. The Depositary may receive Receipts in lieu of Shares in satisfaction of a
Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation and agreementfrom the person to whom Receipts are to be delivered (the “Pre-Releasee”) that the Pre-Releasee, or its customer,(i) owns the Shares or Receipts to be remitted, as the case may be, (ii) assigns all beneficial rights, title andinterest in such Shares or Receipts, as the case may be, to the Depositary in its capacity as such and for the
benefit of the Owners, and (iii) will not take any action with respect to such Shares or Receipts, as the case may
be, that is inconsistent with the transfer of beneficial ownership (including, without the consent of the
Depositary, disposing of such Shares or Receipts, as the case may be), other than in satisfaction of such
Pre-Release, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as
the Depositary determines, in good faith, will provide substantially similar liquidity and security, (c) terminable
by the Depositary on not more than five (5) business days notice, and (d) subject to such further indemnities andcredit regulations as the Depositary deems appropriate. The number of Shares not deposited but represented byAmerican Depositary Shares outstanding at any time as a result of Pre-Releases will not normally exceed thirty
percent (30%) of the Shares deposited under the Deposit Agreement; provided, however, that the Depositaryreserves the right to disregard such limit from time to time as it deems reasonably appropriate, and may, with theprior written consent of the Company, change such limit for purposes of general application. The Depositary will
also set Dollar limits with respect to Pre-Release transactions to be entered into under the Deposit Agreementwith any particular Pre-Releasee on a case-by-case basis as the Depositary deems appropriate. For purposes ofenabling the Depositary to fulfill its obligations to the Owners under the Deposit Agreement, the collateralreferred to in clause (b) above shall be held by the Depositary as security for the performance of the
Pre-Releasee’s obligations to the Depositary in connection with a Pre-Release transaction, including the
Pre-Releasee’s obligation to deliver Shares or Receipts upon termination of a Pre-Release transaction (and shallnot, for the avoidance of doubt, constitute Deposited Securities thereunder).
The Depositary may retain for its own account any compensation received by it in connection with theforegoing
9.

TITLE TO RECEIPTS.

It is a condition of this Receipt and every successive holder and Owner of this Receipt (and to the American
Depositary Shares evidenced hereby) by accepting or holding the same consents and agrees, that title to thisReceipt when properly endorsed or accompanied by proper instruments of transfer, is transferable by delivery
with the same effect as in the case of a negotiable instrument, provided, however, that the Depositary,
notwithstanding any notice to the contrary, may treat the Owner hereof as the absolute owner hereof for the
purpose of determining the person entitled to distribution of dividends or other distributions or to any noticeprovided for in the Deposit Agreement or for all other purposes.
10. VALIDITY OF RECEIPT.
This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory forany purpose, unless this Receipt shall have been executed by the Depositary by the manual or facsimile signatureof a duly authorized signatory of the Depositary and, if a registrar shall have been appointed, countersigned by
the manual or facsimile signature of a duly authorized officer of the Registrar.
11. REPORTS; INSPECTION OF TRANSFER BOOKS.
The Company currently furnishes the Securities and Exchange Commission (hereinafter called theCommission) with certain public reports and documents required by foreign law or otherwise under the
Securities Exchange Act of 1934. Such reports and Communications will be available for inspection and copying
by holders and Owners at the public reference facilities maintained by the Commission located at 450 Fifth
Street, N.W., Washington, D.C. 20549.

The Depositary will make available for inspection by Owners of Receipts at its Corporate Trust Office any
reports and communications, including any proxy soliciting material, received from the Company which are both(a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to theholders of such Deposited Securities by the Company. The Depositary will also send to Owners of Receipts
copies of such reports when furnished by the Company pursuant to the Deposit Agreement.
The Depositary will keep books for the registration of Receipts and transfers of Receipts which at allreasonable times shall be open for inspection by the Owners of Receipts, provided that such inspection shall not
be for the purpose of communicating with Owners of Receipts in the interest of a business or object other thanthe business of the Company or a matter related to the Deposit Agreement or the Receipts.
12. DIVIDENDS AND DISTRIBUTIONS.
Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities,
the Depositary will, if at the time of receipt thereof any amount received in a foreign currency can in the
judgment of the Depositary be converted on a reasonable basis into United States dollars (“Dollars”) transferable
to the United States, and subject to the Deposit Agreement, convert such dividend or distribution into Dollars andwill distribute the amount thus received to the Owners of Receipts entitled thereto, in proportion to the number ofAmerican Depositary Shares representing such Deposited Securities held by them, respectively, provided,
however, that in the event that the Company or the Depositary is required to withhold and does withhold fromany cash dividend or other cash distribution in respect of any Deposited Securities an amount on account oftaxes, the amount distributed to the Owners of Receipts for American Depositary Shares representing such
Deposited Securities shall be reduced accordingly.
Whenever the Depositary receives any distribution other than cash, Shares, or rights upon any Deposited
Securities, the Depositary will cause the securities or property received by it to be distributed to the Owners ofReceipts entitled thereto, in proportion to the number of American Depositary Shares representing such
Deposited Securities held by them, respectively, in any manner that the Depositary may deem equitable andpracticable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such
distribution cannot be made proportionately among the Owners of Receipts entitled thereto, or if for any otherreason (including any requirement that the Company or the Depositary withhold an amount on account of taxes)
the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem
equitable and practicable for the purpose of effecting such distribution, including the sale, at public or privatesale, of the securities or property thus received, or any part thereof, and the net proceeds of any such sale shall be
distributed by the Depositary to the Owners of Receipts entitled thereto as in the case of a distribution received in
cash.
If any distribution consists of a dividend in, or free distribution of, Shares, the Depositary may, and shall if
the Company shall so request, distribute to the Owners of outstanding Receipts entitled thereto, in proportion to
the number of American Depositary Shares representing such Deposited Securities held by them respectively,
additional Receipts for an aggregate number of American Depositary Shares representing the amount of Shares
received as such dividend or free distribution. In lieu of delivering Receipts for fractional American Depositary
Shares in any such case, the Depositary will sell the amount of Shares represented by the aggregate of such
fractions and distribute the net proceeds, all in the manner and subject to the conditions set forth in the Deposit
Agreement. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also
represent the additional Shares distributed upon the Deposited Securities represented thereby.
In the event that the Depositary determines that any distribution in property (including Shares and rights to
subscribe therefor) is subject to any tax which the Depositary is obligated to withhold, the Depositary may
dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts
and in such manner as the Depositary deems necessary and practicable to pay any such taxes, at public or privatesale, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes to the
Owners of Receipts entitled thereto.

13. RIGHTS.
In the event that the Company offers or causes to be offered to the holders of any Deposited Securities any
rights to subscribe for additional Shares or any rights of any other nature, the Depositary, after consultation with
the Company, will have discretion as to the procedure to be followed in making such rights available to the
Owners of Receipts or in disposing of such rights on behalf of such Owners and making the net proceeds
available in Dollars to such Owners; provided, however, that the Depositary will, if requested by the Company,
take action as follows:(i) if at the time of the offering of any rights the Depositary determines that it is lawful and feasible to makesuch rights available to Owners of Receipts by means of warrants or otherwise, the Depositary will distributewarrants or other instruments therefor in such form as it may determine to the Owners entitled thereto, in
proportion to the number of American Depositary Shares representing such Deposited Securities, or employ suchother method as it may deem feasible in order to facilitate the exercise, sale or transfer of rights by such Owners;or(ii) if at the time of the offering of any rights the Depositary determines that it is not lawful or not feasible to
make such rights available to Owners of Receipts by means of warrants or otherwise, or if the rights represented
by such warrants or such other instruments, are not exercised and appear to be about to lapse, the Depositary inits discretion may sell such rights or such warrants, or other instruments at public or private sale, at such place orplaces and upon such terms as it may deem proper, and may allocate the net proceeds of such sales for theaccount of the Owners of Receipts otherwise entitled to such rights, warrants, or other instruments, upon anaveraged or other practicable basis without regard to any distinctions among such Owners because of exchange
restrictions, or the date of delivery of any Receipt or Receipts, or otherwise.
If registration under the Securities Act of 1933 of the securities to which any rights relate is required inorder for the Company to offer such rights to Owners of Receipts and sell the securities represented by suchrights, the Depositary will not offer such rights to the Owners of Receipts unless and until such a registration
statement is in effect, or unless the offering and sale of such securities to the Owners of such Receipts are exempt
from registration under the provisions of such Act.
14. RECORD DATES.
Whenever any cash dividend or other cash distribution shall become payable or any distribution other thancash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever for
any reason the Depositary causes a change in the number of Shares that are represented by each American
Depositary Share or whenever the Depositary shall receive notice of any meeting of holders of Shares or other
Deposited Securities, the Depositary will fix a record date for the determination of the Owners of Receipts whowill be entitled to receive such dividend, distribution or rights, or the net proceeds of the sale thereof, or to give
instructions for the exercise of voting rights at any such meeting, or for fixing the date on or after which each
American Depositary Share will represent the changed number of Shares, subject to the provisions of the Deposit
Agreement.
15. VOTING OF DEPOSITED SECURITIES.
Upon receipt of notice of any meeting of holders of Shares or other Deposited Securities, the Depositary
shall, as soon as practicable thereafter, mail to the Owners a notice, which shall contain (a) such information as iscontained in such notice of meeting, (b) a statement that the Owners as of the close of business on a specified
record date will be entitled, subject to any applicable provision of Japanese law and of the Articles ofIncorporation of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining
to the amount of Shares or other Deposited Securities represented by their respective American Depositary
Shares and (c) a brief statement as to the manner in which such instructions may be given, including an express
indication that instructions may be given, or deemed given in accordance with the last sentence of this Article 15,
to the Depositary to give a discretionary proxy to a person designated by the Company. Upon the written requestof an Owner on the specified record date, received on or before the date established by the Depositary for such

purpose (the “Instruction Date”), the Depositary shall endeavor in so far as practicable to vote or cause to bevoted the amount of Shares or other Deposited Securities represented by such Receipt in accordance with the
instructions set forth in such request. So long as Japanese law provides that votes may only be cast with respect
to one or more whole Shares or other Deposited Securities, the Depositary shall aggregate voting instructions to
the extent such instructions are the same and vote such whole Shares or other Deposited Securities in accordancewith the Owners’ instructions. If after aggregation of all instructions to vote received by the Depositary, any
portion of which constitutes instructions with respect to less than a whole Share or other Deposited Security, theDepositary will not vote or cause to be voted the Shares or other Deposited Securities to which such portion of
the instructions apply. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the
Shares or other Deposited Securities, other than in accordance with such instructions or deemed instructions. If
no instructions are received by the Depositary from any Owner with respect to any of the Deposited Securities
represented by the American Depositary Shares evidenced by such Owner’s Receipts on or before the Instruction
Date, the Depositary shall deem such Owner to have instructed the Depositary to give a discretionary proxy to aperson designated by the Issuer with respect to such Deposited Securities and the Depositary shall give a
discretionary proxy to a person designated by the Issuer to vote such Deposited Securities provided, that no such
instruction shall be given with respect to any matter as to which the Issuer informs the Depositary (and the Issuer
agrees to provide such information as promptly as practicable in writing) that (x) the Issuer does not wish suchproxy given, (y) substantial opposition exists or (z) such matter materially and adversely affects the rights ofholders of shares.
16. CHANGES AFFECTING DEPOSITED SECURITIES.
Upon any change in nominal value, change in par value, split-up, consolidation, or any other reclassificationof Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets
affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a
Custodian in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent
the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered
pursuant to the following sentence. In any such case the Depositary may, and shall if the Company shall sorequest, execute and deliver additional Receipts as in the case of a dividend on the Shares, or call for thesurrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited
Securities.
17. LIABILITY OF THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.
None of the Depositary, the Custodian, or the Company shall incur any liability to any Owner or holder of
any Receipt, if by reason of any provision of any present or future law of the United States or any other country,
or of any other governmental authority, or by reason of any provision, present or future, of the Articles ofIncorporation of the Company, or by reason of any act of God or war or other circumstances beyond its control,
the Depositary, the Custodian or the Company shall be prevented or forbidden from doing or performing any act
or thing which by the terms of the Deposit Agreement it is provided shall be done or performed; nor shall the
Depositary, the Custodian, or the Company incur any liability to any Owner or holder of a Receipt by reason of
any non- performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of
the Deposit Agreement it is provided shall or may be done or performed, or by reason of any exercise of, or
failure to exercise, any discretion provided for in the Deposit Agreement. Where, by the terms of a distribution
pursuant to Sections 4.01, 4.02, or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to
Section 4.04 of the Deposit Agreement, or for any other reason, such distribution or offering is not and may not
lawfully be made available to Owners of Receipts, and the Depositary may not lawfully dispose of such
distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the
Depositary shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. The
Company assumes no obligation nor shall it be subject to any liability under the Deposit Agreement to Owners or
holders of Receipts, expect that it agrees to perform its obligations specifically set forth in the Deposit
Agreement without negligence or bad faith. Neither the Depositary nor the Custodian assumes any obligation nor
shall either of them be subject to any liability under the Deposit Agreement to any Owner or holder (including,
without limitation, liability with respect to the validity or worth of the Deposited Securities), except that theDepositary agrees to perform its obligations specifically set forth in the Deposit Agreement without negligenceor bad faith. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or
defend any action, suit, or other proceeding in respect of any Deposited Securities or in respect of the Receipts,
which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expenseand liability be furnished as often as may be required, and the Custodian shall not be under any obligation
whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary.
None of the Depositary, the Custodian, or the Company shall be liable for any action or nonaction by it inreliance upon the advice of or information from legal counsel, accountants, any person presenting Shares fordeposit, any Owner or holder of a Receipt, or any other person believed by it in good faith to be competent togive such advice or information or for any translation of any notice, report or other document made by atranslator believed by it to be competent. The Depositary shall not be responsible for any failure to carry out any
instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effectof any such vote, provided that any such action or nonaction is in good faith. The Depositary shall not be liable
for any acts or omissions made by a successor depositary whether in connection with a previous act or omissionof the Depositary or in connection with a matter arising wholly after the removal or resignation of the
Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary
performed its obligations without negligence or bad faith while it acted as Depositary. The Depositary may own
and deal in any class of securities of the Company and its affiliates and in Receipts. The Company has agreed in
the Deposit Agreement to indemnify the Depositary and any Custodian against, and hold each of them harmless
from, any liability or expense (including, but not limited to, the reasonable fees and expenses of counsel) which
may arise out of acts performed or omitted, in accordance with the provisions of the Deposit Agreement and of
the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the
Depositary or a Custodian, except for any liability or expense arising out of the negligence or bad faith of eitherof them, or (ii) by the Company or any of its agents. The indemnities contained in the preceding sentence shallnot extend to any liability or expense which arises solely and exclusively out of a Pre-Release (as defined in
Section 2.09 of the Deposit Agreement) of a Receipt or Receipts in accordance with Section 2.09 of the Deposit
Agreement and which would not otherwise have arisen had such Receipt or Receipts not been the subject of a
Pre-Release pursuant to Section 2.09 of the Deposit Agreement; provided, however, that the indemnities
provided in the preceding sentence shall apply to any such liability or expense (i) to the extent that such liability
or expense would have arisen had a Receipt or Receipts not been the subject of a Pre-Release, or (ii) which may
arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration
statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary
placement memorandum) relating to the offer or sale of American Depositary Shares, except to the extent any
such liability or expense arises out of (a) information relating to the Depositary or any Custodian (other than the
Company), as applicable, furnished in writing and not materially changed or altered by the Company expressly
for use in any of the foregoing documents, or, (b) if such information is provided, the failure to state a material
fact necessary to make the information provided not misleading. Any person entitled to indemnification pursuant
to the preceding sentence who seeks indemnification under the Deposit Agreement shall notify the Company of
the commencement of any indemnifiable action or claim promptly after such person becomes aware of suchcommencement and shall consult in good faith with the Company as to the conduct of the defense of such action
or claim (including the compromise or settlement thereof), which shall be reasonable in the circumstances. No
disclaimer of liability under the Securities Act of 1933 is intended by any provision of the Deposit Agreement.
18. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSORCUSTODIAN.
The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its
election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at
any time be removed by the Company by 120 days prior written notice of such removal, which shall become
effective upon the later to occur of (i) the 120th day after delivery of the notice to the Depositary or(ii) appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit
Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners ofReceipts to do so, it may appoint a substitute or additional custodian or custodians.

19. AMENDMENT.
The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time totime be amended by agreement between the Company and the Depositary in any respect which they may deem
necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes andother governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or othersuch expenses), or which shall otherwise prejudice any substantial existing right of Owners of Receipts, shall,
however, not become effective as to outstanding Receipts until the expiration of three months after notice of such
amendment shall have been given to the Owners of outstanding Receipts. Every Owner of a Receipt at the time
any amendment so becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree
to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any
amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the
Deposited Securities represented thereby.
20. TERMINATION OF DEPOSIT AGREEMENT.
The Depositary will at any time at the direction of the Company terminate the Deposit Agreement by
mailing notice of such termination to the Owners of all Receipts then outstanding at least 30 days prior to thedate fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement if
at any time 60 days shall have expired after the Depositary shall have delivered to the Company a written noticeof its election to resign and a successor depositary shall not have been appointed and accepted its appointment asprovided in the Deposit Agreement. If any Receipts shall remain outstanding after the date of termination, theDepositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution ofdividends to the Owners thereof, and shall not give any further notices or perform any further acts under the
Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell rights as provided in the Deposit Agreement, and shall continue todeliver Deposited Securities, together with any dividends or other distributions received with respect thereto andthe net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the
Depositary. At any time after the expiration of one year from the date of termination, the Depositary may sell the
Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceedsof any such sale, together with any other cash then held by it thereunder, without liability for interest, for the pro
rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon
becoming general creditors of the Depositary with respect to such net proceeds After making such sale, theDepositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net
proceeds and other cash. Upon the termination of the Deposit Agreement, the Company shall be discharged fromall obligations under the Deposit Agreement except for its obligations to the Depositary with respect toindemnification, charges, and expenses.
21. COMPLIANCE WITH U.S. SECURITIES LAWS.
Notwithstanding anything in the Deposit Agreement or this Receipt to the contrary, the Company and the
Depositary each agrees that it will not exercise any rights it has under the Deposit Agreement to permit thewithdrawal or delivery of Deposited Securities in a manner which would violate the U.S. securities laws,
including, but not limited to, Section I.A.(1) of the General Instructions to the Form F-6 Registration Statement,
as amended from time to time, under the Securities Act of 1933.
22. GOVERNING LAW.
This Receipt and all rights under the Deposit Agreement and provisions hereof shall be governed by andconstrued in accordance with the laws of the State of New York, United States of America. It is understood that
notwithstanding any present or future provision of the laws of the State of New York, the rights of holders of
Shares, and the duties and obligations of the Company in respect of such holders, as such, shall be governed by
the laws of Japan.

Exhibit 2(b)MITSUBISHI TOKYO FINANCIAL GROUP, INC.
(F/K/A THE BANK OF TOKYO-MITSUBISHI, LTD.)AND
THE BANK OF NEW YORKAs DepositaryAND
OWNERS AND HOLDERS OF AMERICAN DEPOSITARY RECEIPTS
Deposit Agreement
Dated as of September 19, 1989
Amended and Restated as of April 2, 2001
As further Amended and Restated as of December 22, 2004

TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.01. Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.02. Depositary; Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.03. Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.04. Deposit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.05. Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.06. Deposited Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.07. Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.08. American Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.09. Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.10. Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.11. Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.12. Delivery; Deposit; Surrender; Transfer; Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.13. Securities Act of 1933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.14. Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.15. Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.16. Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
4
4
4
4
5
5
5
5
5
5
5
5
6
6
6
6

ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, EXECUTION AND DELIVERY,
TRANSFER AND SURRENDER OF RECEIPTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.01. Form and Transferability of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.02. Deposit of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.03. Execution and Delivery of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.04. Transfer of Receipts; Combination and Split-up of Receipts . . . . . . . . . . . . . . . . . . . . .
SECTION 2.05. Surrender of Receipts and Withdrawal of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.06. Limitations on Execution and Delivery, Transfer and Surrender of Receipts . . . . . . . . .
SECTION 2.07. Lost Receipts, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.09. Pre-Release of Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6
6
7
8
8
8
9
10
10
10

ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS OF RECEIPTS . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.01. Filing Proofs, Certificates and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.02. Liability of Owner for Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.03. Warranties on Deposit of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11
11
11
11

ARTICLE 4. THE DEPOSITED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.01. Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.02. Distributions Other Than Cash, Shares or Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.03. Distributions in Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.04. Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.05. Conversion of Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.06. Fixing of Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.07. Voting of Deposited Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.08. Changes Affecting Deposited Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.09. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.10. Lists of Receipt Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.11. Withholding, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11
11
12
12
12
13
13
14
14
14
15
15

ARTICLE 5. THE DEPOSITARY, THE CUSTODIAN AND THE ISSUER . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.01. Maintenance of Office and Transfer Books by the Depositary . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.02. Prevention or Delay in Performance by the Depositary, the Custodian or the Issuer . . . 15
SECTION 5.03. Obligations of the Depositary, the Custodian and the Issuer . . . . . . . . . . . . . . . . . . . . . . 16
ii

SECTION 5.04. Resignation and Removal of the Depositary, Appointment of Successor Depositary . . .
SECTION 5.05. The Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.06. Notices and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.07. Issuance of Additional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.08. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.09. Charges of Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.10. Retention of Depositary Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.11. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.12. List of Restricted Securities Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.13. Withholding of Japanese Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16
17
17
18
18
18
19
19
19
19

ARTICLE 6. AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.02. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20
20
20

ARTICLE 7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.01. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.02. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.03. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.04. Holders and Owners as Parties; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.05. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.07. Compliance with U.S. Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20
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20
21
21
21
21
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iii

DEPOSIT AGREEMENTDEPOSIT AGREEMENT dated as of September 19, 1989, as amended and restated as of April 2, 2001, as
further amended and restated as of December 22, 2004, among MITSUBISHI TOKYO FINANCIAL GROUP,
INC., incorporated under the laws of Japan (herein called the Issuer), THE BANK OF NEW YORK, a New Yorkbanking corporation (herein called the Depositary), and all Owners and holders from time to time of American
Depositary Receipts issued hereunder.

W I T N E S S E T H:
WHEREAS, the Issuer desires to provide, as hereinafter set forth in this Deposit Agreement, for the depositof Shares of Common Stock (herein called Shares) of the Issuer from time to time with the Depositary or with theTokyo, Japan office of The Bank of Tokyo-Mitsubishi, Ltd. (in such capacity herein called the Custodian), as
agent of the Depositary for the purposes set forth in this Deposit Agreement, for the creation of American
Depositary Shares representing the Shares so deposited and for the execution and delivery of American
Depositary Receipts in respect of the American Depositary Shares; andWHEREAS, the American Depositary Receipts are to be substantially in the form of Exhibit A annexed
hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit
Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties hereto as
follows:
ARTICLE 1. DEFINITIONS.
The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the respective
terms used in this Deposit Agreement:
SECTION 1.01. Issuer.
The term “Issuer” shall mean Mitsubishi Tokyo Financial Group, Inc. incorporated under the laws of Japan,
and its successors.
SECTION 1.02. Depositary; Corporate Trust Office.
The term “Depositary” shall mean The Bank of New York, a New York banking corporation, and any
successor as depositary hereunder. The term “Corporate Trust Office”, when used with respect to the Depositary,shall mean the office of the Depositary which at the date of this Deposit Agreement is located at 101 Barclay
Street, New York, New York, 10286.
SECTION 1.03. Custodian.
The term “Custodian” shall mean the principal office of The Bank of Tokyo-Mitsubishi, Ltd., as agent of the
Depositary for the purposes of this Deposit Agreement, and any other firm or corporation which may hereafter be
appointed by the Depositary pursuant to the terms of Section 5.05, as substitute or additional custodian orcustodians hereunder, as the context shall require and the term “Custodians” shall mean all of them, collectively.
SECTION 1.04. Deposit Agreement.
The term “Deposit Agreement” shall mean this amended and restated Deposit Agreement, as the same may
be amended from time to time in accordance with the provisions hereof.
4

SECTION 1.05. Shares.
The term “Shares” shall mean Shares of Common Stock in registered form of the Issuer, par value
50,000 yen each, heretofore validly issued and outstanding and fully paid, non-assessable and free of any
pre-emption rights of the holders of outstanding Shares or hereafter validly issued and outstanding and fully paid,
non-assessable and free of any pre-emption rights of the holders of outstanding Shares or interim certificates
representing such Shares.
SECTION 1.06. Deposited Securities.
The term “Deposited Securities” as of any time shall mean Shares at such time deposited or deemed to bedeposited under this Deposit Agreement and any and all other securities, property and cash received by the
Depositary or the Custodian in respect thereof and at such time held hereunder, subject as to cash to theprovisions of Section 4.05.
SECTION 1.07. Receipts.
The term “Receipts” shall mean the American Depositary Receipts issued hereunder evidencing American
Depositary Shares.
SECTION 1.08. American Depositary Shares.
The term “American Depositary Shares” shall mean the rights represented by the Receipts issued hereunder
and the interests in the Deposited Securities represented thereby. Each American Depositary Share shallrepresent one-thousandth of one Share, until there shall occur a distribution upon Deposited Securities covered
by Section 4.03 or a change in Deposited Securities covered by Section 4.08 with respect to which additional
Receipts are not executed and delivered, and thereafter American Depositary Shares shall evidence the amount of
Shares or Deposited Securities specified in such Sections.
SECTION 1.09. Owner.
The term “Owner” shall mean the person in whose name a Receipt is registered on the books of the
Depositary maintained for such purpose.
SECTION 1.10. Registrar.
The term “Registrar” shall mean any bank or trust company having an office in the Borough of Manhattan,
The City of New York, which shall be appointed to register Receipts and transfers of Receipts as herein
provided.
SECTION 1.11. Dollars.
The term “Dollars” shall mean United States dollars.
SECTION 1.12. Delivery; Deposit; Surrender; Transfer; Withdrawal.
The terms “deliver”, “deposit”, “surrender”, “transfer” or “withdraw”, when used (i) with respect to Shares:(a) in the case of book-entry Shares, shall refer to an entry or entries in an account or accounts maintained byinstitutions authorized under applicable law to effect transfers of securities, or (b) in the case of certificatedShares, to the physical delivery, deposit, surrender, transfer or withdrawal of certificates representing the Sharesand (ii) with respect to American Depositary Shares evidenced by Receipts, (a) in the case of American
Depositary Shares available in book-entry form, shall refer to appropriate adjustments in the records maintained5

by (1) the Depositary, (2) the Depository Trust Company (“DTC”) or its nominee, or (3) institutions that haveaccounts with DTC, as applicable, or (b) otherwise, shall refer to the physical delivery, deposit, surrender,transfer or withdrawal of such American Depositary Shares evidenced by Receipts.
SECTION 1.13. Securities Act of 1933.
The term “Securities Act of 1933” shall mean the United States Securities Act of 1933, as from time to timeamended.
SECTION 1.14. Commission.
The term “Commission” shall mean the Securities and Exchange Commission of the United States or any
successor governmental agency in the United States.
SECTION 1.15. Restricted Securities.
The term “Restricted Securities” shall mean Shares as defined above, or Receipts representing such Shares,
which are acquired directly or indirectly from the Issuer or its affiliates (as defined in Rule 144 to the Securities
Act of 1933) in a transaction or chain of transactions not involving any public offering or which are subject toresale limitations under Regulation D under that Act or both, or which are held by an officer, director (or persons
performing similar functions) or other affiliate of the Issuer, or which are subject to other restrictions on sale ordeposit under the laws of the United States, Japan, or under a shareholder agreement or the Articles ofIncorporation and the Share Handling Regulations of the Issuer.
SECTION 1.16. Yen.
The term “yen” shall mean Japanese yen.
ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, EXECUTION AND DELIVERY,
TRANSFER AND SURRENDER OF RECEIPTS.
SECTION 2.01. Form and Transferability of Receipts.
Definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Such Receipts
shall be executed by the Depositary by the manual or facsimile signature of a duly authorized signatory of the
Depositary and, if a Registrar for the Receipts shall have been appointed, countersigned by the manual or
facsimile signature of a duly authorized officer of the Registrar. No Receipt shall be entitled to any benefits
under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been
executed by the Depositary by the manual or facsimile signature of a duly authorized signatory and, if a Registrar
shall have been appointed, countersigned by the manual or facsimile signature of a duly authorized officer of theRegistrar. The Depositary shall maintain books on which each Receipt so executed and delivered as hereinafter
provided and the transfer of each such Receipt shall be registered. Receipts bearing the manual or facsimile
signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the
Depositary shall bind the Depositary, notwithstanding that such signatory has ceased to hold such office prior to
the execution of such Receipts by the Registrar and their delivery or did not hold such office at the date of such
Receipts.
The Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals orchanges not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary or
required to comply with any applicable law or regulations thereunder or with the rules and regulations of any
securities exchange upon which Receipts may be listed or to conform with any usage with respect thereto, or to6

indicate any special limitations or restrictions to which any particular Receipts are subject by reason of the dateof issuance of the underlying Deposited Securities or otherwise.
Title to a Receipt (and to the American Depositary Shares evidenced thereby), when properly endorsed or
accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in thecase of a negotiable instrument; provided, however, that the Depositary, notwithstanding any notice to thecontrary, may treat the Owner thereof as the absolute owner thereof for the purpose of determining the person
entitled to distribution of dividends or other distributions or to any notice provided for in this Deposit Agreement
and for all other purposes.
SECTION 2.02. Deposit of Shares.
Subject to the terms and conditions of this Deposit Agreement, Shares or evidence of rights to receive
Shares may be deposited by delivery thereof to any Custodian hereunder, accompanied by any appropriate
instrument or instruments of transfer, or endorsement, in form satisfactory to the Custodian, together with all
such certifications as may be required by the Depositary or the Custodian in accordance with the provisions of
this Deposit Agreement and, if the Depositary requires, together with a written order directing the Depositary to
execute and deliver to, or upon the written order of, the person or persons stated in such order a Receipt or
Receipts for the number of American Depositary Shares representing such deposit. No Share shall be acceptedfor deposit unless accompanied by evidence satisfactory to the Depositary that any necessary approval has been
granted by the governmental body in Japan, if any, which is then performing the function of the regulation ofcurrency exchange if required by the Depositary. Shares presented for deposit at any time, whether or not thetransfer books of the Issuer (or the appointed agent of the Issuer for transfer and registration of Shares) areclosed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the
Depositary, which will provide for the prompt transfer to the Custodian of any dividend, or right to subscribe for
additional Shares or to receive other property which any person in whose name the Shares are or have beenrecorded may thereafter receive upon or in respect of such deposited Shares, or in lieu thereof, such agreement of
indemnity or other agreement as shall be satisfactory to the Depositary.
At the request and risk and expense of any person proposing to deposit Shares, and for the account of such
person, the Depositary may receive certificates for Shares to be deposited, together with the other instruments
herein specified, for the purpose of forwarding such Share certificates to the Custodian for deposit hereunder.
Subject to the terms and conditions of this Deposit Agreement, Shares may also be deposited hereunder inconnection with the delivery of Receipts to represent distributions under Section 4.03 or upon exercise of therights to subscribe referred to in Section 4.04; provided, however, that in such event if by operation of applicableprovisions of the Japanese Commercial Code or any other Japanese law no certificate for any number of Sharesissued upon such distribution or upon such exercise is issuable, such number of Shares which would form a partof the Deposited Securities in respect of the Receipts to be delivered pursuant to Section 4.03 or 4.04 shall bedeemed to be deposited hereunder without delivery of such certificate to the Custodian if such Shares areregistered in the name of the Depositary or its nominee or the Custodian or its nominee on the books of the Issuer
at the time of the issue of such Shares.
Upon each delivery to a Custodian of a certificate or certificates for Shares to be deposited hereunder,
together with the other documents above specified, such Custodian shall, as soon as transfer and recordation canbe accomplished, present such certificate or certificates to the Issuer (or the appointed agent of the Issuer fortransfer and registration of Shares), for transfer and recordation of the Shares being deposited in the name of the
Depositary or its nominee or such Custodian or its nominee.
Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order ofthe Depositary or at such other place or places as the Depositary shall determine.

7

SECTION 2.03. Execution and Delivery of Receipts.
Upon receipt by any Custodian of any deposit pursuant to Section 2.02 hereunder (and in addition, if thetransfer books of the Issuer (or the appointed agent of the Issuer for the transfer and registration of Shares) areopen, the Depositary may require a proper acknowledgment or other evidence from the Issuer satisfactory to the
Depositary that any Deposited Securities have been recorded upon the books of the Issuer (or the appointed agentof the Issuer for the transfer and registration of Shares) in the name of the Depositary or its nominee or such
Custodian or its nominee), together with the other documents required as above specified, such Custodian shallnotify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt
or Receipts are deliverable in respect thereof and the number of American Depositary Shares to be evidenced
thereby. Such notification shall be made by letter or, at the request and risk and expense of the person making thedeposit, by cable, telex or facsimile transmission. Upon receiving such notice from such Custodian, or upon thereceipt of Shares by the Depositary, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver at its Corporate Trust Office, to or upon the order of the person or persons
entitled thereto, a Receipt or Receipts, registered in the name or names and evidencing any authorized number ofAmerican Depositary Shares requested by such person or persons, but only upon payment to the Depositary of
the fee of the Depositary for the execution and delivery of such Receipt or Receipts, and of all taxes andgovernmental charges and fees payable in connection with such deposit and the transfer of the Deposited
Securities.
SECTION 2.04. Transfer of Receipts; Combination and Split-up of Receipts.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register transfers on its
transfer books from time to time of Receipts, upon any surrender of a Receipt, by the Owner in person or by duly
authorized attorney, properly endorsed or accompanied by proper instruments of transfer, and duly stamped as
may be required by the laws of the State of New York and of the United States of America. Thereupon the
Depositary shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person
entitled thereto.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall upon surrender of a
Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, executeand deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested,
evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.
The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers,
combinations and split-ups of Receipts at designated transfer offices on behalf of the Depositary. In the event a
co-transfer agent is appointed it shall carry out its functions on behalf of the Depositary in accordance with any
applicable laws, requirements of any stock exchange upon which the Receipts or the American Depositary Sharesare listed and in accordance with the instructions of the Depositary. In carrying out its functions, a co-transfer
agent may require evidence of authority and compliance with applicable laws and other requirements by holders
or Owners or persons entitled thereto and will be entitled to protection and indemnity to the same extent as the
Depositary.
SECTION 2.05. Surrender of Receipts and Withdrawal of Shares.
Upon surrender at the Corporate Trust Office of the Depositary of a Receipt for the purpose of withdrawalof the Deposited Securities represented thereby, and upon payment of the fee of the Depositary for thecancellation of Receipts, and subject to the terms and conditions of this Deposit Agreement, the Owner of such
Receipt shall be entitled to delivery, to him or upon his order, of the amount of Deposited Securities at the time
represented by such Receipt. Delivery of such Deposited Securities may be made by the delivery of certificates tosuch Owner or as ordered by him. Such delivery shall be made, as hereinafter provided, without unreasonable
delay.
8

A Receipt surrendered for such purposes may be required by the Depositary to be properly endorsed inblank or accompanied by proper instruments of transfer in blank, and if the Depositary requires, the Owner
thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited
Securities being withdrawn to be delivered to or upon the written order of a person or persons designated in suchorder. Thereupon the Depositary shall direct one (or more) of the Custodians to deliver at the Tokyo, Japan officeof such Custodian, subject to Sections 2.06, 3.01 and 3.02, and to the other terms and conditions of this Deposit
Agreement, to or upon the written order of the person or persons designated in the order delivered to the
Depositary if so required by the Depositary and as above provided, the amount of Deposited Securities
represented by such Receipt, except that the Depositary may make delivery to such person or persons at the
Corporate Trust Office of the Depositary of any dividends or distributions with respect to the Deposited
Securities represented by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which
may at the time be held by the Depositary.
At the request, risk and expense of any Owner so surrendering a Receipt, and for the account of such Owner,
the Depositary shall direct the Custodian to forward a certificate or certificates and other proper documents of
title for the Deposited Securities represented by such Receipt to the Depositary for delivery at the Corporate
Trust Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such
Owner, by cable, telex or facsimile transmission.
SECTION 2.06. Limitations on Execution and Delivery, Transfer and Surrender of Receipts.
As a condition precedent to the execution and delivery, registration, registration of transfer, split-up,
combination or surrender of any Receipt, the delivery of any distribution thereon, or the withdrawal of any
Deposited Securities, the Depositary or the Custodian (i) may require payment from the depositor of Shares or
the presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any
stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect toShares being deposited or withdrawn) and payment of any applicable fees as herein provided, (ii) may require theproduction of proof satisfactory to it as to the identity and genuineness of any signature and (iii) may also requirecompliance with such regulations, if any, as the Depositary may establish consistent with the provisions of thisDeposit Agreement.
The delivery of Receipts against deposits of Shares generally or against deposits of particular Shares may besuspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer ofoutstanding Receipts generally may be suspended, during any period when the register of shareholders of theIssuer or the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisableby the Depositary or the Issuer at any time or from time to time because of any requirement of law or of any
government or governmental body or commission, or under any provision of this Deposit Agreement; thesurrender of outstanding Receipts and withdrawal of Deposited Securities may not be suspended subject only to(i) temporary delays caused by closing the transfer books of the Depositary or the Issuer or the deposit of Sharesin connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes
and similar charges, and (iii) compliance with any United States or foreign laws or governmental regulations
relating to the Receipts or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, theDepositary shall not knowingly accept for deposit under this Deposit Agreement any Shares required to beregistered under the provisions of the Securities Act of 1933, unless a registration statement is in effect as to such
Shares.
In all instances, the American Depositary Shares evidenced by a Receipt may only be presented forcancellation and release of the underlying Shares or other Deposited Securities in multiples of 1,000 American
Depositary Shares. Holders of Receipts representing less than 1,000 American Depositary Shares will not be
entitled to delivery of any underlying Shares or other Deposited Securities unless such Receipts, together withother Receipts presented by the same holder or Owner at the same time, represent in the aggregate at least 1,000
American Depositary Shares. If any American Depositary Shares are surrendered but not cancelled pursuant to9the preceding sentence, the Depositary shall execute and deliver a Receipt or Receipts evidencing the balance ofAmerican Depositary Shares not so cancelled to the person or persons surrendering the same.
SECTION 2.07. Lost Receipts, etc.
In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a
new Receipt of like tenor, in exchange and substitution for such mutilated Receipt upon cancellation thereof, orin lieu of and in substitution for such destroyed or lost or stolen Receipt, upon the Owner thereof filing with the
Depositary (a) a request for such execution and delivery before the Depositary has notice that the Receipt has
been acquired by a bona fide purchaser and (b) a sufficient indemnity bond and satisfying any other reasonablerequirements imposed by the Depositary.
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is
authorized to destroy Receipts so cancelled.
SECTION 2.09. Pre-Release of Receipts.
The Depositary may issue Receipts against the delivery by the Issuer (or any agent of the Issuer recording
Share ownership) of rights to receive Shares from the Issuer (or any such agent). No such issue of Receipts will
be deemed a “Pre-Release” that is subject to the restrictions of the following paragraph.
Unless requested in writing by the Issuer to cease doing so, the Depositary may, notwithstanding
Section 2.03 hereof, execute and deliver Receipts prior to the receipt of Shares pursuant to Section 2.02(“Pre-Release”). The Depositary may, pursuant to Section 2.05, deliver Shares upon the receipt and cancellationof Receipts which have been Pre-Released, whether or not such cancellation is prior to the termination of such
Pre-Release or the Depositary knows that such Receipt has been Pre-Released. The Depositary may receive
Receipts in lieu of Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied
by a written representation and agreement from the person to whom Receipts are to be delivered (the “PreReleasee”) that the Pre-Releasee, or its customer, (i) owns the Shares or Receipts to be remitted, as the case maybe, (ii) assigns all beneficial rights, title and interest in such Shares or Receipts, as the case may be, to the
Depositary in its capacity as such and for the benefit of the Owners, and (iii) will not take any action with respect
to such Shares or Receipts, as the case may be, that is inconsistent with the transfer of beneficial ownership(including, without the consent of the Depositary, disposing of such Shares or Receipts, as the case may be),other than in satisfaction of such Pre-Release, (b) at all times fully collateralized with cash, U.S. government
securities or such other collateral as the Depositary determines, in good faith, will provide substantially similar
liquidity and security, (c) terminable by the Depositary on not more than five (5) business days notice, and(d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of
Shares not deposited but represented by American Depositary Shares outstanding at any time as a result of
Pre-Releases will not normally exceed thirty percent (30%) of the Shares deposited hereunder; provided,
however, that the Depositary reserves the right to disregard such limit from time to time as it deems reasonably
appropriate, and may, with the prior written consent of the Issuer, change such limit for purposes of generalapplication. The Depositary will also set Dollar limits with respect to Pre-Release transactions to be entered into
hereunder with any particular Pre-Releasee on a case-by-case basis as the Depositary deems appropriate. For
purposes of enabling the Depositary to fulfill its obligations to the Owners under the Deposit Agreement, thecollateral referred to in clause (b) above shall be held by the Depositary as security for the performance of the
Pre-Releasee’s obligations to the Depositary in connection with a Pre-Release transaction, including the
Pre-Releasee’s obligation to deliver Shares or Receipts upon termination of a Pre-Release transaction (and shallnot, for the avoidance of doubt, constitute Deposited Securities hereunder).
The Depositary may retain for its own account any compensation received by it in connection with theforegoing.
10

ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS OF RECEIPTS.
SECTION 3.01. Filing Proofs, Certificates and Other Information.
Any person presenting Shares for deposit or any Owner of a Receipt may be required from time to time tofile such proof of citizenship or residence, exchange control approval, or such information relating to theregistration on the books of the Issuer (or the appointed agent of the Issuer for transfer and registration of Shares)of the Shares presented for deposit or other information, to execute such certificates and to make such
representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold
the delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other
distribution or rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof orother information is filed or such certificates are executed.
SECTION 3.02. Liability of Owner for Taxes.
If any tax or other governmental charge shall become payable with respect to any Receipt or any Deposited
Securities represented by any Receipt, such tax or other governmental charge shall be payable by the Owner ofsuch Receipt to the Depositary. The Depositary may refuse to effect any transfer of such Receipt or any
withdrawal of Deposited Securities represented thereby until such payment is made, and may withhold any
dividends or other distributions, or may sell for the account of the Owner thereof any part or all of the Deposited
Securities represented by such Receipt, and may apply such dividends or other distributions or the proceeds ofany such sale in payment of such tax or other governmental charge, the Owner of such Receipt remaining liable
for any deficiency.
SECTION 3.03. Warranties on Deposit of Shares.
Every person depositing Shares under this Deposit Agreement shall be deemed thereby to represent andwarrant that such Shares and each certificate therefor are validly issued, fully paid, non-assessable and free ofany pre-emption rights of the holders of outstanding Shares and that the person making such deposit is duly
authorized so to do. Every such person shall also be deemed to represent that, to the best of such person’s
knowledge, the deposit of Shares and the sale of Receipts by that person are not restricted under the Securities
Act of 1933. Such representations and warranties shall survive the deposit of Shares and issuance of Receipts.
ARTICLE 4. THE DEPOSITED SECURITIES.
SECTION 4.01. Cash Distributions.
Whenever the Depositary shall receive any cash dividend or other cash distribution by the Issuer on any
Deposited Securities, the Depositary shall, subject to the provisions of Section 4.05, convert such dividend or
distribution into Dollars and shall distribute the amount thus received to the Owners entitled thereto, in
proportion to the number of American Depositary Shares representing such Deposited Securities held by them
respectively; provided, however, that in the event that the Issuer or the Depositary shall be required to withhold
and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities anamount on account of taxes, the amount distributed to the Owner for American Depositary Shares representing
such Deposited Securities shall be reduced accordingly. The Depositary shall distribute only such amount,however, as can be distributed without attributing to any Owner a fraction of one cent. Any such fractionalamounts shall be rounded to the nearest whole cent and so distributed to Owners entitled thereto. The Issuer or its
agent will remit to the appropriate governmental agency in Japan all amounts withheld and owing to suchagency. The Depositary will forward to the Issuer or its agent such information from its records as the Issuer may
reasonably request to enable the Issuer or its agent to file necessary reports with governmental agencies, andeither the Depositary or the Issuer or its agent may file any such reports necessary to obtain benefits under theapplicable tax treaties for the Owners of Receipts.
11

SECTION 4.02. Distributions Other Than Cash, Shares or Rights.
Whenever the Depositary shall receive any distribution other than a distribution described in Sections 4.01,
4.03 or 4.04, the Depositary shall cause the securities or property received by it to be distributed to the Owners
entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited
Securities held by them respectively, in any manner that the Depositary may deem equitable and practicable foraccomplishing such distribution; provided, however, that if in the opinion of the Depositary such distribution
cannot be made proportionately among the Owners entitled thereto, or if for any other reason (including any
requirement that the Issuer or the Depositary withhold an amount on account of taxes) the Depositary deems such
distribution not to be feasible, the Depositary may adopt such method as it may deem equitable and practicablefor the purpose of effecting such distribution, including the sale (at public or private sale) of the securities orproperty thus received, or any part thereof, and the net proceeds of any such sale shall be distributed by the
Depositary to the Owners entitled thereto as in the case of a distribution received in cash.
SECTION 4.03. Distributions in Shares.
If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares,
the Depositary may, and shall if the Issuer shall so request, distribute to the Owners of outstanding Receipts
entitled thereto, in proportion to the number of American Depositary Shares representing such Deposited
Securities held by them respectively, additional Receipts for an aggregate number of American Depositary
Shares representing the amount of Shares received as such dividend or free distribution. In lieu of delivering
Receipts for fractional American Depositary Shares in any such case, the Depositary shall sell the amount of
Shares represented by the aggregate of such fractions and distribute the net proceeds, all in the manner andsubject to the conditions described in Section 4.02. If additional Receipts are not so distributed, each American
Depositary Share shall thenceforth also represent the additional Shares distributed upon the Deposited Securities
represented thereby.
SECTION 4.04. Rights.
In the event that the Issuer shall offer or cause to be offered to the holders of any Deposited Securities any
rights to subscribe for additional Shares or any rights of any other nature, the Depositary, after consultation with
the Issuer, shall have discretion as to the procedure to be followed in making such rights available to the Ownersof Receipts or in disposing of such rights on behalf of such Owners and making the net proceeds available in
Dollars to such Owners; provided, however, that the Depositary will, if requested by the Issuer, take action as
follows:(i)

if at the time of the offering of any rights the Depositary determines that it is lawful and feasible to
make such rights available to Owners of Receipts by means of warrants or otherwise, the Depositary
shall distribute warrants or other instruments therefor in such form as it may determine to the Owners
entitled thereto, in proportion to the number of American Depositary Shares representing such
Deposited Securities, or employ such other method as it may deem feasible in order to facilitate theexercise, sale or transfer of rights by such Owners; or(ii) if at the time of the offering of any rights the Depositary determines that it is not lawful or not feasible
to make such rights available to Owners of Receipts by means of warrants or otherwise, or if the rights
represented by such warrants or such other instruments are not exercised and appear to be about tolapse, the Depositary in its discretion may sell such rights or such warrants or other instruments at
public or private sale, at such place or places and upon such terms as it may deem proper, and may
allocate the net proceeds of such sales for the account of the Owners of Receipts otherwise entitled tosuch rights, warrants or other instruments, upon an averaged or other practicable basis without regard
to any distinctions among such Owners because of exchange restrictions, or the date of delivery of any
Receipt or Receipts, or otherwise.

12

If registration under the Securities Act of 1933 of the securities to which any rights relate is required inorder for the Issuer to offer such rights to Owners of Receipts and sell the securities represented by such rights,
the Depositary will not offer such rights to the Owners of Receipts unless and until such a registration statement
is in effect, or unless the offering and sale of such securities to the Owners of such Receipts are exempt fromregistration under the provisions of such Act.
SECTION 4.05. Conversion of Foreign Currency.
Whenever the Depositary shall receive foreign currency, by way of dividends or other distributions or the
net proceeds from the sale of securities, property or rights, and if at the time of the receipt thereof the foreign
currency so received can in the judgment of the Depositary be converted on a reasonable basis into Dollars andthe resulting Dollars transferred to the United States, the Depositary shall convert or cause to be converted, bysale or in any other manner that it may determine, such foreign currency into Dollars, and such Dollars (net ofany conversion expenses of the Depositary) shall be distributed to the Owners entitled thereto or, if the
Depositary shall have distributed any warrants or other instruments which entitle the holders thereof to such
Dollars, then to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such
distribution may be made upon an averaged or other practicable basis without regard to any distinctions among
Owners on account of exchange restrictions or otherwise.
If such conversion or distribution can be effected only with the approval or license of any government or
agency thereof, the Depositary shall file such application for approval or license, if any, as it may deem desirable.
If at any time the Depositary shall determine that in its judgment any foreign currency received by the
Depositary is not convertible on a reasonable basis into Dollars transferable to the United States, or if any
approval or license of any government or agency thereof which is required for such conversion is denied or in theopinion of the Depositary is not obtainable, or if any such approval or license is not obtained within a reasonable
period as determined by the Depositary, the Depositary may distribute the foreign currency (or an appropriate
document evidencing the right to receive such foreign currency) received by the Depositary to, or in its discretion
may hold such foreign currency for the respective accounts of, the Owners entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot be effected for distribution to some
Owners entitled thereto, the Depositary may in its discretion make such conversion and distribution in Dollars to
the extent permissible to the Owners entitled thereto and may distribute the balance of the foreign currency
received by the Depositary to, or hold such balance for the respective accounts of, the Owners entitled thereto.
SECTION 4.06. Fixing of Record Date.
Whenever any cash dividend or other cash distribution shall become payable or any distribution other thancash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever for
any reason the Depositary causes a change in the number of Shares that are represented by each American
Depositary Share, or whenever the Depositary shall receive notice of any meeting of holders of Shares or other
Deposited Securities, the Depositary shall fix a record date for the determination of the Owners who shall beentitled to receive such dividend, distribution or rights, or the net proceeds of the sale thereof, or to give
instructions for the exercise of voting rights at any such meeting, or for fixing the date on or after which each
American Depositary Share will represent the changed number of Shares. Subject to the provisions ofSections 4.01 through 4.05 and to the other terms and conditions of this Deposit Agreement, the Owners on suchrecord date shall be entitled to receive the amount distributable by the Depositary with respect to such dividendor other distribution or such rights or the net proceeds of sale thereof in proportion to the number of American
Depositary Shares held by them respectively.

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SECTION 4.07. Voting of Deposited Securities.
Upon receipt of notice of any meeting of holders of Shares or other Deposited Securities, the Depositary
shall, as soon as practicable thereafter, mail to the Owners a notice, which shall contain (a) such information as iscontained in such notice of meeting, (b) a statement that the Owners as of the close of business on a specified
record date will be entitled, subject to any applicable provision of Japanese law and of the Articles ofIncorporation of the Issuer, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to
the amount of Shares or other Deposited Securities represented by their respective American Depositary Sharesand (c) a brief statement as to the manner in which such instructions may be given, including an express
indication that instructions may be given, or deemed given in accordance with the last sentence of this paragraphif no instruction is received, to the Depositary to give a discretionary proxy to a person designated by the Issuer.
Upon the written request of an Owner on the specified record date, received on or before the date established by
the Depositary for such purpose (the “Instruction Date), the Depositary shall endeavor in so far as practicable tovote or cause to be voted the amount of Shares or other Deposited Securities represented by such Receipt inaccordance with the instructions set forth in such request. So long as Japanese law provides that votes may only
be cast with respect to one or more whole Shares or other Deposited Securities, the Depositary shall aggregate
voting instructions to the extent such instructions are the same and vote such whole Shares or other Deposited
Securities in accordance with the Owners’ instructions. If after aggregation of all instructions to vote received by
the Depositary, any portion of which constitutes instructions with respect to less than a whole Share or other
Deposited Security, the Depositary will not vote or cause to be voted the Shares or other Deposited Securities towhich such portion of the instructions apply. The Depositary shall not vote or attempt to exercise the right to votethat attaches to the Shares or other Deposited Securities, other than in accordance with such instructions ordeemed instructions. If no instructions are received by the Depositary from any Owner with respect to any of the
Deposited Securities represented by the American Depositary Shares evidenced by such Owner’s Receipts on or
before the Instruction Date, the Depositary shall deem such Owner to have instructed the Depositary to give a
discretionary proxy to a person designated by the Issuer with respect to such Deposited Securities and the
Depositary shall give a discretionary proxy to a person designated by the Issuer to vote such Deposited Securities
provided, that no such instruction shall be given with respect to any matter as to which the Issuer informs the
Depositary (and the Issuer agrees to provide such information as promptly as practicable in writing) that (x) theIssuer does not wish such proxy given, (y) substantial opposition exists or (z) such matter materially andadversely affects the rights of holders of shares.
SECTION 4.08. Changes Affecting Deposited Securities.
Upon any change in nominal value, par value, split-up, consolidation or any other reclassification of
Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation or sale of assets
affecting the Issuer or to which it is a party, any securities which shall be received by the Depositary or a
Custodian in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities under this Deposit Agreement, and American Depositary Shares shall thenceforth represent,in addition to existing Deposited Securities, the new Deposited Securities so received in exchange or conversion,
unless additional Receipts are delivered pursuant to the following sentence. In any such case the Depositary may,and shall if the Issuer shall so request, execute and deliver additional Receipts as in the case of a dividend on the
Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing
such new Deposited Securities.
SECTION 4.09. Reports.
The Depositary shall make available for inspection by Owners at its Corporate Trust Office any reports andcommunications, including any proxy soliciting material, received from the Issuer which are both (a) received by
the Depositary as the holder of the Deposited Securities and (b) made generally available to the holders of such
Deposited Securities by the Issuer. The Depositary shall also send to the Owners copies of such reports whenfurnished by the Issuer pursuant to Section 5.06.
14

SECTION 4.10. Lists of Receipt Owners.
Promptly upon request by the Issuer, the Depositary shall furnish to it a list, as of a recent date, of thenames, addresses and holdings of American Depositary Shares by all persons in whose names Receipts areregistered on the books of the Depositary.
SECTION 4.11. Withholding.
In the event that the Depositary determines that any distribution in property (including Shares and rights to
subscribe therefor) is subject to any tax which the Depositary is obligated to withhold, the Depositary may
dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts
and in such manner as the Depositary deems necessary and practicable to pay any such taxes, by public or privatesale, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes to the
Owners entitled thereto in proportion to the number of American Depositary Shares held by them respectively.
ARTICLE 5. THE DEPOSITARY, THE CUSTODIAN AND THE ISSUER.
SECTION 5.01. Maintenance of Office and Transfer Books by the Depositary.
Until termination of this Deposit Agreement in accordance with its terms, the Depositary shall maintain in
the Borough of Manhattan, The City of New York, facilities for the execution and delivery, registration,
registration of transfers and surrender of Receipts in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books for the registration of Receipts and transfers of Receipts which at allreasonable times shall be open for inspection by the Owners, provided that such inspection shall not be for the
purpose of communicating with Owners in the interest of a business or object other than the business of theIssuer or a matter related to this Deposit Agreement or the Receipts.
The Depositary may close the transfer books, at any time or from time to time, when deemed expedient by itin connection with the performance of its duties hereunder.
If any Receipts or the American Depositary Shares represented thereby are listed on one or more stock
exchanges in the United States, the Depositary shall act as Registrar or with the approval of the Issuer appoint a
Registrar or one or more co-registrars for registry of such Receipts in accordance with any requirements of suchexchange or exchanges. Such Registrar may be removed and a substitute Registrar appointed by the Depositary
upon the request and with the approval of the Issuer.
SECTION 5.02. Prevention or Delay in Performance by the Depositary, the Custodian or the Issuer.
None of the Depositary, the Custodian or the Issuer shall incur any liability to any Owner of any Receipt, if
by reason of any provision of any present or future law of the United States or any other country, or of any othergovernmental authority, or by reason of any provision, present or future, of the Articles of Incorporation of theIssuer, or by reason of any act of God or war or other circumstances beyond its control, the Depositary, theCustodian or the Issuer shall be prevented or forbidden from doing or performing any act or thing which by theterms of this Deposit Agreement it is provided shall be done or performed; nor shall the Depositary, theCustodian or the Issuer incur any liability to any Owner of a Receipt by reason of any non-performance or delay,caused as aforesaid, in the performance of any act or thing which by the terms of this Deposit Agreement it isprovided shall or may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion
provided for in this Deposit Agreement. Where, by the terms of a distribution pursuant to Sections 4.01, 4.02, or
4.03 of this Deposit Agreement, or an offering or distribution pursuant to Section 4.04 of this Deposit
Agreement, or for any other reason, such distribution or offering is not and may not lawfully be made available
to Owners, and the Depositary may not lawfully dispose of such distribution or offering on behalf of such
Owners and make the net proceeds available to such Owners, then the Depositary shall not make such
distribution or offering, and shall allow any rights, if applicable, to lapse.
15

SECTION 5.03. Obligations of the Depositary, the Custodian and the Issuer.
The Issuer assumes no obligation nor shall it be subject to any liability under this Deposit Agreement toOwners or holders of Receipts, except that it agrees to perform its obligations specifically set forth in thisDeposit Agreement without negligence or bad faith.
Neither the Depositary nor the Custodian assumes any obligation nor shall either of them be subject to any
liability under this Deposit Agreement to any Owner or holder of any Receipts (including, without limitation,
liability with respect to the validity or worth of the Deposited Securities), except that the Depositary agrees toperform its obligations specifically set forth in this Deposit Agreement without negligence or bad faith.
Neither the Depositary nor the Issuer shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts, which in its
opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required, and the Custodian shall not be under any obligation whatsoever withrespect to such proceedings, the responsibility of the Custodian being solely to the Depositary.
None of the Depositary, the Custodian or the Issuer shall be liable for any action or nonaction by it inreliance upon the advice of or information from legal counsel, accountants, any person presenting Shares fordeposit, any Owner, or any other person believed by it in good faith to be competent to give such advice orinformation or for any translation of any notice, report or other document made by a translator believed by it tobe competent.
The Depositary shall not be responsible for any failure to carry out any instructions to vote any of the
Deposited Securities, or for the manner in which any such vote is cast or effect of any such vote, provided thatany such action or nonaction is in good faith.
The Depositary shall not be liable for any acts or omissions made by a successor depositary whether inconnection with a previous act or omission of the Depositary or in connection with any matter arising wholly
after the removal or resignation of the Depositary, provided that in connection with the issue out of which suchpotential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as
Depositary.
The Depositary may own and deal in any class of securities of the Issuer and its affiliates and in Receipts.
No disclaimer of liability under the Securities Act of 1933 is intended by any provision of this Deposit
Agreement.
SECTION 5.04. Resignation and Removal of the Depositary, Appointment of Successor Depositary.
The Depositary may at any time resign as Depositary hereunder by written notice of its election so to dodelivered to the Issuer, such resignation to take effect upon the appointment of a successor depositary and its
acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Issuer by 120 days prior written notice of such removal,
which shall become effective upon the later to occur of (i) the 120th day after delivery of the notice to the
Depositary or (ii) appointment of a successor depositary and its acceptance of such appointment as hereinafter
provided.
In case at any time the Depositary acting hereunder shall resign or be removed, the Issuer shall use its best
efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Boroughof Manhattan, The City of New York. Every successor depositary shall execute and deliver to its predecessor and16

to the Issuer an instrument in writing accepting its appointment hereunder, and thereupon such successor
depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties andobligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on thewritten request of the Issuer shall execute and deliver an instrument transferring to such successor all rights andpowers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the
Deposited Securities to such successor, and shall deliver to such successor a list of the Owners of all outstanding
Receipts. Any such successor depositary shall promptly mail notice of its appointment to the Owners as provided
in Section 7.05.
Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of
the Depositary without the execution or filing of any document or any further act and the successor depositary
shall notify the Issuer of such event.
SECTION 5.05. The Custodian.
The Depositary has appointed the principal Tokyo, Japan office of The Bank of Tokyo-Mitsubishi, Ltd. as
custodian and agent of the Depositary for the purposes of this Deposit Agreement. The Custodian or its
successors in acting hereunder shall be subject at all times and in all respects to the directions of the Depositaryand shall be responsible solely to it. Any Custodian may resign and be discharged from its duties hereunder by
notice of such resignation delivered to the Depositary at least 30 days prior to the date on which such resignation
is to become effective. If upon such resignation there shall be no Custodian acting hereunder, the Depositary
shall, promptly after receiving such notice, with the approval of the Issuer, appoint a substitute custodian orcustodians, each of which shall thereafter be a Custodian hereunder. Whenever the Depositary in its discretion
determines that it is in the best interest of the Owners to do so, it may, with the approval of the Issuer, appoint a
substitute or additional custodian or custodians, which shall thereafter be one of the Custodians hereunder. Upon
demand of the Depositary any Custodian shall deliver such of the Deposited Securities held by it as are requestedof it to any other Custodian or such substitute or additional custodian or custodians. Each such substitute or
additional custodian shall deliver to the Depositary, forthwith upon its appointment, an acceptance of suchappointment satisfactory in form and substance to the Depositary.
Upon the appointment of any successor depositary hereunder, each Custodian then acting hereunder shallforthwith become, without any further act or writing, the agent hereunder of such successor depositary and theappointment of such successor depositary shall in no way impair the authority of each Custodian hereunder; but
the successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute anddeliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete
power and authority as agent hereunder of such successor depositary.
SECTION 5.06. Notices and Reports.
On or before the first date on which the Issuer gives notice, by publication or otherwise, of any meeting ofholders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of
any action in respect of any cash or other distributions or the offering of any rights, the Issuer agrees to transmit
to the Depositary and the Custodian a copy of the notice thereof in the form given or to be given to holders of
Shares or other Deposited Securities.
The Issuer will arrange for the prompt transmittal by the Issuer to the Depositary and the Custodian of such
notices and any other reports and communications which are made generally available by the Issuer to holders of
its Shares. If requested in writing by the Issuer, the Depositary will arrange for the mailing of copies of such
notices, reports and communications to all Owners. The Issuer will timely provide the Depositary with thequantity of such notices, reports, and communications as requested by the Depositary from time to time, in orderfor the Depositary to effect such mailings.

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SECTION 5.07. Issuance of Additional Shares.
The Issuer agrees that in the event of any issuance of (1) additional Shares, (2) rights to subscribe for
Shares, (3) securities convertible into Shares, or (4) rights to subscribe for such securities, the Issuer willpromptly furnish to the Depositary a written opinion from counsel for the Issuer in the United States, which
counsel shall be satisfactory to the Depositary, stating whether or not the circumstances of such issue are such as
to make it necessary for a Registration Statement under the Securities Act of 1933 to be in effect prior to thedelivery of the Receipts to be issued in connection with such securities or the issuance of such rights. If in theopinion of such counsel a Registration Statement is required, such counsel shall furnish to the Depositary awritten opinion as to whether or not there is a Registration Statement in effect which will cover such issuance of
securities or rights.
The Issuer agrees with the Depositary that neither the Issuer nor any company controlled by controlling or
under common control with the Issuer will at any time deposit any Shares, either upon original issuance or upona sale of Shares previously issued and reacquired by the Issuer or any such affiliate, unless a Registration
Statement is in effect as to such Shares under the Securities Act of 1933.
SECTION 5.08. Indemnification.
The Issuer agrees to indemnify the Depositary and any Custodian against, and hold each of them harmless
from, any liability or expense (including, but not limited to, the reasonable fees and expenses of counsel) which
may arise out of acts performed or omitted, in accordance with the provisions of this Deposit Agreement and of
the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the
Depositary or a Custodian, except for any liability or expense arising out of the negligence or bad faith of eitherof them, or (ii) by the Issuer or any of its agents.
The indemnities contained in the preceding paragraph shall not extend to any liability or expense whicharises solely and exclusively out of a Pre-Release (as defined in Section 2.09) of a Receipt or Receipts inaccordance with Section 2.09 and which would not otherwise have arisen had such Receipt or Receipts not been
the subject of a Pre-Release pursuant to Section 2.09; provided, however, that the indemnities provided in thepreceding paragraph shall apply to any such liability or expense (i) to the extent that such liability or expense
would have arisen had a Receipt or Receipts not been the subject of a Pre-Release, or (ii) which may arise out ofany misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxystatement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary placement
memorandum) relating to the offer or sale of American Depositary Shares, except to the extent any such liability
or expense arises out of (a) information relating to the Depositary or any Custodian (other than the Issuer), as
applicable, furnished in writing and not materially changed or altered by the Issuer expressly for use in any of theforegoing documents, or, (b) if such information is provided, the failure to state a material fact necessary to makethe information provided not misleading.
Any person entitled to indemnification under the first sentence of this section who seeks indemnification
hereunder shall notify the Issuer of the commencement of any indemnifiable action or claim promptly after such
person becomes aware of such commencement and shall consult in good faith with the Issuer as to the conduct ofthe defense of such action or claim (including the compromise or settlement thereof), which shall be reasonable
in the circumstances.
The Depositary agrees to indemnify the Issuer and hold it harmless from any liability or expense (including,but not limited to, the reasonable fees and expenses of counsel) which may arise out of acts performed or omitted
by the Depositary or its Custodian due to their negligence or bad faith.
SECTION 5.09. Charges of Depositary.
The Issuer agrees to pay the fees, reasonable expenses and out-of-pocket charges of the Depositary andthose of any Registrar only in accordance with agreements in writing entered into between the Depositary and the18Issuer from time to time. The Depositary shall present its statement for such charges and expenses to the Issuer
once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.
The following charges shall be incurred by any party depositing or withdrawing Shares or by any party
surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock
dividend or stock split declared by the Issuer or an exchange of stock regarding the Receipts or Deposited
Securities or a distribution of Receipts pursuant to Section 4.03), whichever applicable: (1) taxes and othergovernmental charges, (2) such registration fees as may from time to time be in effect for the registration oftransfers of Shares generally on the Share register of the Issuer or foreign registrar and applicable to transfers of
Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits orwithdrawals hereunder, (3) such cable, telex and facsimile transmission expenses as are expressly provided inthis Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion of foreign
currency pursuant to Section 4.05, (5) a fee of $5.00 or less per 100 American Depositary Shares (or portion
thereof) for the execution and delivery of Receipts pursuant to Section 2.03, 4.03 or 4.04 and the surrender ofReceipts pursuant to Section 2.05 or 6.02, (6) to the extent permitted by any securities exchange on which theAmerican Depositary Shares may be listed for trading, a fee of $.02 or less per American Depositary Share (orportion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but not limited to
Sections 4.01 through 4.04 hereof, and (7) a fee for the distribution of securities pursuant to Section 4.02, suchfee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred toabove which would have been charged as a result of the deposit of such securities (for purposes of this clause 7
treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to
Owners.
SECTION 5.10. Retention of Depositary Documents.
The Depositary is authorized to destroy those documents, records, bills and other data compiled during theterm of this Deposit Agreement at the times permitted by the governing statutes unless the Issuer requests thatsuch papers be retained for a longer period or turned over to the Issuer or to a successor depositary.
SECTION 5.11. Exclusivity.
The Issuer agrees not to appoint any other depositary for issuance of American Depositary Receipts so longas The Bank of New York is acting as Depositary hereunder.
SECTION 5.12. List of Restricted Securities Owners.
From time to time, the Issuer shall provide the Depositary a list setting forth, to the actual knowledge of theIssuer, those persons or entities who beneficially own Restricted Securities and the Issuer shall update that list ona regular basis. The Issuer agrees to advise in writing each of the persons or entities so listed that such Restricted
Securities are ineligible for deposit hereunder. The Depositary may rely on such a list or update but shall not beliable for any action or omission made in reliance thereon.
SECTION 5.13. Withholding of Japanese Tax.
In the event that the Issuer shall at any time be required by Japanese laws and regulations to withhold any
tax on any dividend or distribution made by it in respect of any Deposited Securities, it shall advise the
Depositary through the Custodian of the applicable withholding rate or rates and the total amount of yen so
withheld for each country and shall remit to the appropriate governmental agency all sums withheld and will
make all necessary reports and filings. The Depositary shall forward to the Custodian for delivery to the Issuer
such information from the Depositary’s records as the Issuer may reasonably request in connection with any suchwithholding by the Issuer within such period as will enable the Issuer to file the necessary reports with theappropriate governmental agencies to obtain benefits under applicable tax treaties.
19

ARTICLE 6. AMENDMENT AND TERMINATION.
SECTION 6.01. Amendment.
The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time totime be amended by agreement between the Issuer and the Depositary in any respect which they may deem
necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes andother governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or othersuch expenses), or which shall otherwise prejudice any substantial existing right of Owners, shall, however, notbecome effective as to outstanding Receipts until the expiration of three months after notice of such amendment
shall have been given to the Owners of outstanding Receipts. Every Owner at the time any amendment so
becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment
and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair theright of the Owner of any Receipt to surrender such Receipt and receive therefor the Deposited Securities
represented thereby.
SECTION 6.02. Termination.
The Depositary shall at any time at the direction of the Issuer terminate this Deposit Agreement by mailingnotice of such termination to the Owners of all Receipts then outstanding at least 30 days prior to the date fixedin such notice for such termination. The Depositary may likewise terminate this Deposit Agreement if at any time
60 days shall have expired after the Depositary shall have delivered to the Issuer a written notice of its election to
resign and a successor depositary shall not have been appointed and accepted its appointment as provided in
Section 5.04. If any Receipts shall remain outstanding after the date of termination, the Depositary thereafter
shall discontinue the registration of transfers of Receipts, shall suspend the distribution of dividends to the
Owners thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement,
except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited
Securities, shall sell rights as provided in this Deposit Agreement, and shall continue to deliver Deposited
Securities, together with any dividends or other distributions received with respect thereto and the net proceedsof the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary. At any timeafter the expiration of one year from the date of termination, the Depositary may sell the Deposited Securities
then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any othercash then held by it hereunder, without liability for interest, for the pro rata benefit of the Owners of Receipts
which have not theretofore been surrendered, such Owners thereupon becoming general creditors of the
Depositary with respect to such net proceeds. After making such sale, the Depositary shall be discharged from all
obligations under this Deposit Agreement, except to account for such net proceeds and other cash. Upon thetermination of this Deposit Agreement, the Issuer shall be discharged from all obligations under this Deposit
Agreement except for its obligations to the Depositary under Sections 5.08 and 5.09 hereof.
ARTICLE 7. MISCELLANEOUS.
SECTION 7.01. Counterparts.
This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an
original and all of such counterparts shall constitute one and the same instrument. Copies of this Deposit
Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any holder or
Owner of a Receipt during business hours.
SECTION 7.02. No Third Party Beneficiaries.
This Deposit Agreement is for the exclusive benefit of the parties hereto and shall not be deemed to give any
legal or equitable right, remedy or claim whatsoever to any other person.

20

SECTION 7.03. Severability.
In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of theremaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Holders and Owners as Parties; Binding Effect.
The holders and Owners of Receipts from time to time shall be parties to this Deposit Agreement and shallbe bound by all of the terms and conditions hereof and of the Receipts by acceptance thereof.
SECTION 7.05. Notices.
Any and all notices to be given to the Issuer shall be deemed to have been duly given if personally deliveredor sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to Mitsubishi Tokyo
Financial Group, Inc., Yurakucho Building, 10-1, Yurakucho 1-chome, Chiyoda-ku, Tokyo, 100-0006, Japan,
Attention: Corporate Administration Division, or any other place to which the Issuer may have transferred its
principal office.
Any and all notices to be given to the Depositary shall be deemed to have been duly given if personallydelivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to The Bank of
New York, 101 Barclay Street, New York, New York 10286, Attention: American Depositary Receipt
Administration, or any other place to which the Depositary may have transferred its Corporate Trust Office.
Any and all notices to be given to any Owner shall be deemed to have been duly given if personallydelivered or sent by mail or cable, telex or facsimile transmission confirmed by letter, addressed to such Ownerat the address of such Owner as it appears on the transfer books for Receipts of the Depositary, or, if such Owner
shall have filed with the Depositary a written request that notices intended for such Owner be mailed to someother address, at the address designated in such request.
Delivery of a notice sent by mail or cable, telex or facsimile transmission shall be deemed to be effected at
the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex
or facsimile transmission) is deposited, postage prepaid, in a post-office letter box. The Depositary or the Issuer
may, however, act upon any cable, telex or facsimile transmission received by it from the other or from any
Owner of a Receipt, notwithstanding that such cable, teletype or facsimile transmission shall not subsequently be
confirmed by letter as aforesaid.
SECTION 7.06. Governing Law.
This Deposit Agreement and the Receipts and all rights hereunder and provisions hereof shall be governedby and construed in accordance with the laws of the State of New York, United States of America. It is
understood that notwithstanding any present or future provision of the laws of the State of New York, the rights
of holders of Shares, and the duties and obligations of the Issuer in respect of such holders, as such, shall begoverned by the laws of Japan.
SECTION 7.07. Compliance with U.S. Securities Laws.
Notwithstanding anything in this Deposit Agreement to the contrary, the Issuer and the Depositary eachagrees that it will not exercise any rights it has under this Deposit Agreement to permit the withdrawal ordelivery of Deposited Securities in a manner which would violate the U.S. securities laws, including, but notlimited to, Section I.A.(l) of the General Instructions to the Form F-6 Registration Statement, as amended fromtime to time, under the Securities Act of 1933.
21

IN WITNESS WHEREOF, MITSUBISHI TOKYO FINANCIAL GROUP, INC. and THE BANK OF NEWYORK have duly executed this agreement as of the day and year first set forth above and all owners shallbecome parties hereto upon acceptance by them of Receipts issued in accordance with the terms hereof.
MITSUBISHI TOKYO FINANCIAL GROUP, INC.

By:
Name: Tatsunori Imagawa
Title: Deputy President and Chief Planning Officer
THE BANK OF NEW YORK
as Depositary
By:
Name:
Title:

22

IN WITNESS WHEREOF, MITSUBISHI TOKYO FINANCIAL GROUP, INC. and THE BANK OF NEWYORK have duly executed this agreement as of the day and year first set forth above and all owners shallbecome parties hereto upon acceptance by them of Receipts issued in accordance with the terms hereof.
MITSUBISHI TOKYO FINANCIAL GROUP, INC.
By:
Name:
Title:THE BANK OF NEW YORK
as Depositary

By:
Name:
Title:

23

Exhibit A to Deposit Agreement
No.
AMERICAN DEPOSITARY SHARES(Each American Depositary Share represents onethousandth of one Deposited Share)

THE BANK OF NEW YORKAMERICAN DEPOSITARY RECEIPTFOR ORDINARY SHARES OF THE
PAR VALUE OF 50,000 YEN EACH OF
MITSUBISHI TOKYO FINANCIAL GROUP, INC.
(INCORPORATED UNDER THE LAWS OF JAPAN)
The Bank of New York as depositary (hereinafter called the “Depositary”), hereby certifies that, or registered assigns IS THE OWNER OF.

AMERICAN DEPOSITARY SHARES
representing deposited ordinary Shares (herein called “Shares”) of Mitsubishi Tokyo Financial Group, Inc.,
incorporated under the laws of Japan (herein called the “Company”). At the date hereof, each American
Depositary Share represents one-thousandth of one Share deposited under the deposit agreement at the Tokyo,
Japan office of The Bank of Tokyo-Mitsubishi, Ltd. (herein called the “Custodian”). The Depositary’s Corporate
Trust Office is located at a different address than its principal executive office. Its Corporate Trust Office islocated at 101 Barclay Street, New York, N.Y. 10286, and its principal executive office is located at One WallStreet, New York, N.Y. 10286.

THE DEPOSITARY’S CORPORATE TRUST OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, N.Y. 10286

1.

THE DEPOSIT AGREEMENT.

This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued
upon the terms and conditions set forth in the deposit agreement, dated as of September 19, 1989, as amended
and restated April 2, 2001, as further amended and restated December 22, 2004 (herein called the “Deposit
Agreement”), by and among the Company, the Depositary, and all Owners (as defined below) and holders fromtime to time of Receipts issued thereunder, each of whom by accepting a Receipt agrees to become a party
thereto and become bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights ofOwners and holders of the receipts and the rights and duties of the Depositary in respect of the Shares deposited
thereunder and any and all other securities, property and cash from time to time received in respect of such
Shares and held thereunder (such Shares, securities, property, and cash are herein called “Deposited Securities”).
Copies of the Deposit Agreement are on file at the Depositary’s Corporate Trust Office in New York City and at
the office of the Custodian.
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the
Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, towhich reference is hereby made. For the purposes of this Receipt, the term “Owner” shall mean the person inwhose name a Receipt is registered on the books of the Depositary maintained for such purpose.
2.

SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.

Upon surrender at the Corporate Trust office of the Depositary of this Receipt, and upon payment of the feeof the Depositary provided in this Receipt, and subject to the terms and conditions of the following two
paragraphs and of the Deposit Agreement, the Owner hereof is entitled to delivery, to him or upon his order, of
the Deposited Securities at the time represented by the American Depositary Shares for which this Receipt isissued. Delivery of such Deposited Securities may be made by the delivery of certificates in the name of the
Owner hereof or as ordered by him. Such delivery will be made at the option of the Owner hereof, either at theoffice of the Custodian or at the corporate Trust Office of the Depositary, provided that the forwarding ofcertificates for Shares or other Deposited Securities for such delivery at the Corporate Trust Office of the
Depositary shall be at the risk and expense of the Owner hereof.
The delivery of Receipts against deposits of Shares generally or against deposits of particular Shares may besuspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer ofoutstanding Receipts generally may be suspended, during any period when the register of shareholders of theCompany or the transfer books of the Depositary are closed, or if any such action is deemed necessary oradvisable by the Depositary or the Company at any time or from time to time because of any requirement of law
or of any government or governmental body or commission, or under any provision of the Deposit Agreement, orfor any other reason. The surrender of outstanding Receipts and withdrawal of Deposited Securities may not besuspended subject only to (i) temporary delays caused by closing the transfer books of the Depositary or theCompany or the Deposit of Shares in connection with voting at a shareholders’ meeting, or the payment ofdividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws
or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities. Without
limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement
any Shares required to be registered under the provisions of the Securities Act of 1933, unless a registration
statement is in effect as to such Shares.
In all instances, the American Depositary Shares evidenced by this Receipt may only be presented forcancellation and release of the underlying Shares or other Deposited Securities in multiples of 1,000 American
Depositary Shares. Holders of Receipts representing less than 1,000 American Depositary Shares will not be
entitled to delivery of any underlying Shares or other Deposited Securities unless such Receipts, together withother Receipts presented by the same holder or Owner at the same time, represent in the aggregate at least 1,000
American Depositary Shares. If any American Depositary Shares are surrendered but not cancelled pursuant to2the preceding sentence, the Depositary shall execute and deliver a Receipt or Receipts evidencing the balance ofAmerican Depositary Shares not so cancelled to the person or persons surrendering the same.
3.

TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

The transfer of this Receipt is registrable on the books of the Depositary at its Corporate Trust Office by the
Owner hereof in person or by duly authorized attorney, upon surrender of this Receipt properly endorsed fortransfer or accompanied by proper instruments of transfer and funds sufficient to pay any applicable transfer
taxes and the fees and expenses of the Depositary and upon compliance with such regulations, if any, as the
Depositary may establish for such purpose. This Receipt may be split into other such Receipts, or may be
combined with other such Receipts into one Receipt, evidencing the same aggregate number of American
Depositary Shares as the Receipt or Receipts surrendered. As a condition precedent to the execution and delivery,
registration of transfer, split-up, combination, or surrender of any Receipt, the delivery of any distribution
thereon, or withdrawal of any Deposited Securities, the Depositary or the Custodian (i) may require payment
from the depositor of Shares or the presenter of the Receipt of a sum sufficient to reimburse it for any tax or othergovernmental charge and any stock transfer or registration fee with respect thereto (including any such tax orcharge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees asprovided in this Receipt, (ii) may require the production of proof satisfactory to it as to the identity andgenuineness of any signature and (iii) may also require compliance with such regulations, if any, as the
Depositary may establish consistent with the provisions of the Deposit Agreement.
4.

LIABILITY OF OWNER FOR TAXES.

If any tax or other governmental charge shall become payable with respect to any Receipt or any Deposited
Securities represented hereby, such tax or other governmental charge shall be payable by the Owner hereof to the
Depositary. The Depositary may refuse to effect any transfer of this Receipt or any withdrawal of Deposited
Securities represented hereby until such payment is made, and may withhold any dividends or other distributions,or may sell for the account of the Owner hereof any part or all of the Deposited Securities represented by thisReceipt, and may apply such dividends or other distributions or the proceeds of any such sale in payment of suchtax or other governmental charge, the Owner hereof remaining liable for any deficiency.
5.

WARRANTIES OF DEPOSITORS.

Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent andwarrant that such Shares and each certificate therefor are validly issued, fully paid, non-assessable, and free ofany pre-emption rights of the holders of outstanding Shares and that the person making such deposit is duly
authorized so to do. Every such person shall also be deemed to represent that, to the best of such person’s
knowledge, the deposit of Shares and the sale of Receipts by that person are not restricted under the Securities
Act of 1933. Such representations and warranties shall survive the deposit of Shares and issuance of Receipts.
6.

FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Shares for deposit or any Owner of a Receipt may be required from time to time tofile such proof of citizenship or residence, exchange control approval, or such information relating to theregistration on the books of the Company (or the appointed agent of the Company for transfer and registration of
Shares) of the Shares presented for deposit or other information, to execute such certificates and to make such
representations and warranties, as the Depositary may deem necessary or proper. The Depositary may withhold
the delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other
distribution or rights or of the proceeds thereof or the delivery of any Deposited Securities until such proof orother information is filed or such certificates are executed.

3

7.

CHARGES OF DEPOSITARY.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party
surrendering Receipts or to whom Receipts are issued (including, without limitation, issuance pursuant to a stock
dividend or stock split declared by the Company or an exchange of stock regarding the Receipts or Deposited
Securities or a distribution of Receipts pursuant to Section 4.03 of the Deposit Agreement), whichever
applicable: (1) taxes and other governmental charges, (2) such registration fees as may from time to time be ineffect for the registration of transfers of Shares generally on the Share register of the Company or foreign
registrar and applicable to transfers of Shares to the name of the Depositary or its nominee or the Custodian or its
nominee on the making of deposits or withdrawals hereunder, (3) such cable, telex and facsimile transmission
expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the
Depositary in the conversion of foreign currency pursuant to Section 4.05 of the Deposit Agreement, (5) a fee of$5.00 or less per 100 American Depositary Shares (or portion thereof) for the execution and delivery of Receipts
pursuant to Section 2.03, 4.03 or 4.04 of the Deposit Agreement and the surrender of Receipts pursuant to
Section 2.05 or 6.02 of the Deposit Agreement, (6) to the extent permitted by any securities exchange on which
the American Depositary Shares may be listed for trading, a fee of $.02 or less per American Depositary Share(or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but not limited
to Sections 4.01 through 4.04 of the Deposit Agreement, and (7) a fee for the distribution of securities pursuant to
Section 4.02 of the Deposit Agreement, such fee being in an amount equal to the fee for the execution anddelivery of American Depositary Shares referred to above which would have been charged as a result of thedeposit of such securities (for purposes of this clause 7 treating all such securities as if they were Shares) but
which securities are instead distributed by the Depositary to Owners.
8.

PRE-RELEASE OF RECEIPTS.

The Depositary may issue Receipts against the delivery by the Company (or any agent of the Company
recording Share ownership) of rights to receive Shares from the Company (or any such agent). No such issue of
Receipts will be deemed a “Pre-Release” that is subject to the restrictions of the following paragraph.
Unless requested in writing by the Company to cease doing so, the Depositary may, notwithstanding
Section 2.03 of the Deposit Agreement, execute and deliver Receipts prior to the receipt of Shares pursuant to
Section 2.02 of the Deposit Agreement (“Pre-Release”). The Depositary may, pursuant to Section 2.05 of the
Deposit Agreement, deliver Shares upon the receipt and cancellation of Receipts which have been Pre-Released,
whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows thatsuch Receipt has been Pre-Released. The Depositary may receive Receipts in lieu of Shares in satisfaction of a
Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation and agreementfrom the person to whom Receipts are to be delivered (the “Pre-Releasee”) that the Pre-Releasee, or its customer,(i) owns the Shares or Receipts to be remitted, as the case may be, (ii) assigns all beneficial rights, title andinterest in such Shares or Receipts, as the case may be, to the Depositary in its capacity as such and for the
benefit of the Owners, and (iii) will not take any action with respect to such Shares or Receipts, as the case may
be, that is inconsistent with the transfer of beneficial ownership (including, without the consent of the
Depositary, disposing of such Shares or Receipts, as the case may be), other than in satisfaction of such
Pre-Release, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as
the Depositary determines, in good faith, will provide substantially similar liquidity and security, (c) terminable
by the Depositary on not more than five (5) business days notice, and (d) subject to such further indemnities andcredit regulations as the Depositary deems appropriate. The number of Shares not deposited but represented byAmerican Depositary Shares outstanding at any time as a result of Pre-Releases will not normally exceed thirty
percent (30%) of the Shares deposited under the Deposit Agreement; provided, however, that the Depositaryreserves the right to disregard such limit from time to time as it deems reasonably appropriate, and may, with theprior written consent of the Company, change such limit for purposes of general application. The Depositary will
also set Dollar limits with respect to Pre-Release transactions to be entered into under the Deposit Agreementwith any particular Pre-Releasee on a case-by-case basis as the Depositary deems appropriate. For purposes of4enabling the Depositary to fulfill its obligations to the Owners under the Deposit Agreement, the collateralreferred to in clause (b) above shall be held by the Depositary as security for the performance of the
Pre-Releasee’s obligations to the Depositary in connection with a Pre-Release transaction, including the
Pre-Releasee’s obligation to deliver Shares or Receipts upon termination of a Pre-Release transaction (and shallnot, for the avoidance of doubt, constitute Deposited Securities thereunder).
The Depositary may retain for its own account any compensation received by it in connection with theforegoing
9.

TITLE TO RECEIPTS.

It is a condition of this Receipt and every successive holder and Owner of this Receipt (and to the American
Depositary Shares evidenced hereby) by accepting or holding the same consents and agrees, that title to thisReceipt when properly endorsed or accompanied by proper instruments of transfer, is transferable by delivery
with the same effect as in the case of a negotiable instrument, provided, however, that the Depositary,
notwithstanding any notice to the contrary, may treat the Owner hereof as the absolute owner hereof for the
purpose of determining the person entitled to distribution of dividends or other distributions or to any noticeprovided for in the Deposit Agreement or for all other purposes.
10. VALIDITY OF RECEIPT.
This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory forany purpose, unless this Receipt shall have been executed by the Depositary by the manual or facsimile signatureof a duly authorized signatory of the Depositary and, if a registrar shall have been appointed, countersigned by
the manual or facsimile signature of a duly authorized officer of the Registrar.
11. REPORTS; INSPECTION OF TRANSFER BOOKS.
The Company currently furnishes the Securities and Exchange Commission (hereinafter called the“Commission”) with certain public reports and documents required by foreign law or otherwise under the
Securities Exchange Act of 1934. Such reports and Communications will be available for inspection and copying
by holders and Owners at the public reference facilities maintained by the Commission located at 450 Fifth
Street, N.W., Washington, D.C. 20549.
The Depositary will make available for inspection by Owners of Receipts at its Corporate Trust Office any
reports and communications, including any proxy soliciting material, received from the Company which are both(a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to theholders of such Deposited Securities by the Company. The Depositary will also send to Owners of Receipts
copies of such reports when furnished by the Company pursuant to the Deposit Agreement.
The Depositary will keep books for the registration of Receipts and transfers of Receipts which at allreasonable times shall be open for inspection by the Owners of Receipts, provided that such inspection shall not
be for the purpose of communicating with Owners of Receipts in the interest of a business or object other thanthe business of the Company or a matter related to the Deposit Agreement or the Receipts.
12. DIVIDENDS AND DISTRIBUTIONS.
Whenever the Depositary receives any cash dividend or other cash distribution on any Deposited Securities,
the Depositary will, if at the time of receipt thereof any amount received in a foreign currency can in the
judgment of the Depositary be converted on a reasonable basis into United States dollars (“Dollars”) transferable
to the United States, and subject to the Deposit Agreement, convert such dividend or distribution into Dollars andwill distribute the amount thus received to the Owners of Receipts entitled thereto, in proportion to the number of5American Depositary Shares representing such Deposited Securities held by them, respectively, provided,
however, that in the event that the Company or the Depositary is required to withhold and does withhold fromany cash dividend or other cash distribution in respect of any Deposited Securities an amount on account oftaxes, the amount distributed to the Owners of Receipts for American Depositary Shares representing such
Deposited Securities shall be reduced accordingly.
Whenever the Depositary receives any distribution other than cash, Shares, or rights upon any Deposited
Securities, the Depositary will cause the securities or property received by it to be distributed to the Owners ofReceipts entitled thereto, in proportion to the number of American Depositary Shares representing such
Deposited Securities held by them, respectively, in any manner that the Depositary may deem equitable andpracticable for accomplishing such distribution; provided, however, that if in the opinion of the Depositary such
distribution cannot be made proportionately among the Owners of Receipts entitled thereto, or if for any otherreason (including any requirement that the Company or the Depositary withhold an amount on account of taxes)
the Depositary deems such distribution not to be feasible, the Depositary may adopt such method as it may deem
equitable and practicable for the purpose of effecting such distribution, including the sale, at public or privatesale, of the securities or property thus received, or any part thereof, and the net proceeds of any such sale shall be
distributed by the Depositary to the Owners of Receipts entitled thereto as in the case of a distribution received in
cash.
If any distribution consists of a dividend in, or free distribution of, Shares, the Depositary may, and shall if
the Company shall so request, distribute to the Owners of outstanding Receipts entitled thereto, in proportion to
the number of American Depositary Shares representing such Deposited Securities held by them respectively,
additional Receipts for an aggregate number of American Depositary Shares representing the amount of Shares
received as such dividend or free distribution. In lieu of delivering Receipts for fractional American Depositary
Shares in any such case, the Depositary will sell the amount of Shares represented by the aggregate of such
fractions and distribute the net proceeds, all in the manner and subject to the conditions set forth in the Deposit
Agreement. If additional Receipts are not so distributed, each American Depositary Share shall thenceforth also
represent the additional Shares distributed upon the Deposited Securities represented thereby.
In the event that the Depositary determines that any distribution in property (including Shares and rights to
subscribe therefor) is subject to any tax which the Depositary is obligated to withhold, the Depositary may
dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts
and in such manner as the Depositary deems necessary and practicable to pay any such taxes, at public or privatesale, and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes to the
Owners of Receipts entitled thereto.
13. RIGHTS.
In the event that the Company offers or causes to be offered to the holders of any Deposited Securities any
rights to subscribe for additional Shares or any rights of any other nature, the Depositary, after consultation with
the Company, will have discretion as to the procedure to be followed in making such rights available to the
Owners of Receipts or in disposing of such rights on behalf of such Owners and making the net proceeds
available in Dollars to such Owners; provided, however, that the Depositary will, if requested by the Company,
take action as follows:(i)

if at the time of the offering of any rights the Depositary determines that it is lawful and feasible to
make such rights available to Owners of Receipts by means of warrants or otherwise, the Depositary
will distribute warrants or other instruments therefor in such form as it may determine to the Owners
entitled thereto, in proportion to the number of American Depositary Shares representing such
Deposited Securities, or employ such other method as it may deem feasible in order to facilitate theexercise, sale or transfer of rights by such Owners; or6

(ii) if at the time of the offering of any rights the Depositary determines that it is not lawful or not feasible
to make such rights available to Owners of Receipts by means of warrants or otherwise, or if the rights
represented by such warrants or such other instruments, are not exercised and appear to be about tolapse, the Depositary in its discretion may sell such rights or such warrants, or other instruments at
public or private sale, at such place or places and upon such terms as it may deem proper, and may
allocate the net proceeds of such sales for the account of the Owners of Receipts otherwise entitled tosuch rights, warrants, or other instruments, upon an averaged or other practicable basis without regard
to any distinctions among such Owners because of exchange restrictions, or the date of delivery of any
Receipt or Receipts, or otherwise.
If registration under the Securities Act of 1933 of the securities to which any rights relate is required inorder for the Company to offer such rights to Owners of Receipts and sell the securities represented by suchrights, the Depositary will not offer such rights to the Owners of Receipts unless and until such a registration
statement is in effect, or unless the offering and sale of such securities to the Owners of such Receipts are exempt
from registration under the provisions of such Act.
14. RECORD DATES.
Whenever any cash dividend or other cash distribution shall become payable or any distribution other thancash shall be made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever for
any reason the Depositary causes a change in the number of Shares that are represented by each American
Depositary Share or whenever the Depositary shall receive notice of any meeting of holders of Shares or other
Deposited Securities, the Depositary will fix a record date for the determination of the Owners of Receipts whowill be entitled to receive such dividend, distribution or rights, or the net proceeds of the sale thereof, or to give
instructions for the exercise of voting rights at any such meeting, or for fixing the date on or after which each
American Depositary Share will represent the changed number of Shares, subject to the provisions of the Deposit
Agreement.
15. VOTING OF DEPOSITED SECURITIES.
Upon receipt of notice of any meeting of holders of Shares or other Deposited Securities, the Depositary
shall, as soon as practicable thereafter, mail to the Owners a notice, which shall contain (a) such information as iscontained in such notice of meeting, (b) a statement that the Owners as of the close of business on a specified
record date will be entitled, subject to any applicable provision of Japanese law and of the Articles ofIncorporation of the Company, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining
to the amount of Shares or other Deposited Securities represented by their respective American Depositary
Shares and (c) a brief statement as to the manner in which such instructions may be given, including an express
indication that instructions may be given, or deemed given in accordance with the last sentence of this Article 15,
to the Depositary to give a discretionary proxy to a person designated by the Company. Upon the written requestof an Owner on the specified record date, received on or before the date established by the Depositary for such
purpose (the “Instruction Date), the Depositary shall endeavor in so far as practicable to vote or cause to be voted
the amount of Shares or other Deposited Securities represented by such Receipt in accordance with the
instructions set forth in such request. So long as Japanese law provides that votes may only be cast with respect
to one or more whole Shares or other Deposited Securities, the Depositary shall aggregate voting instructions to
the extent such instructions are the same and vote such whole Shares or other Deposited Securities in accordancewith the Owners’ instructions. If after aggregation of all instructions to vote received by the Depositary, any
portion of which constitutes instructions with respect to less than a whole Share or other Deposited Security, theDepositary will not vote or cause to be voted the Shares or other Deposited Securities to which such portion of
the instructions apply. The Depositary shall not vote or attempt to exercise the right to vote that attaches to the
Shares or other Deposited Securities, other than in accordance with such instructions or deemed instructions. If
no instructions are received by the Depositary from any Owner with respect to any of the Deposited Securities
represented by the American Depositary Shares evidenced by such Owner’s Receipts on or before the Instruction7

Date, the Depositary shall deem such Owner to have instructed the Depositary to give a discretionary proxy to aperson designated by the Issuer with respect to such Deposited Securities and the Depositary shall give a
discretionary proxy to a person designated by the Issuer to vote such Deposited Securities provided, that no such
instruction shall be given with respect to any matter as to which the Issuer informs the Depositary (and the Issuer
agrees to provide such information as promptly as practicable in writing) that (x) the Issuer does not wish suchproxy given, (y) substantial opposition exists or (z) such matter materially and adversely affects the rights ofholders of shares.
16. CHANGES AFFECTING DEPOSITED SECURITIES.
Upon any change in nominal value, change in par value, split-up, consolidation, or any other reclassificationof Deposited Securities, or upon any recapitalization, reorganization, merger or consolidation, or sale of assets
affecting the Company or to which it is a party, any securities which shall be received by the Depositary or a
Custodian in exchange for or in conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities under the Deposit Agreement, and American Depositary Shares shall thenceforth represent
the new Deposited Securities so received in exchange or conversion, unless additional Receipts are delivered
pursuant to the following sentence. In any such case the Depositary may, and shall if the Company shall sorequest, execute and deliver additional Receipts as in the case of a dividend on the Shares, or call for thesurrender of outstanding Receipts to be exchanged for new Receipts specifically describing such new Deposited
Securities.
17. LIABILITY OF THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.
None of the Depositary, the Custodian, or the Company shall incur any liability to any Owner or holder of
any Receipt, if by reason of any provision of any present or future law of the United States or any other country,
or of any other governmental authority, or by reason of any provision, present or future, of the Articles ofIncorporation of the Company, or by reason of any act of God or war or other circumstances beyond its control,
the Depositary, the Custodian or the Company shall be prevented or forbidden from doing or performing any act
or thing which by the terms of the Deposit Agreement it is provided shall be done or performed; nor shall the
Depositary, the Custodian, or the Company incur any liability to any Owner or holder of a Receipt by reason of
any non-performance or delay, caused as aforesaid, in the performance of any act or thing which by the terms of
the Deposit Agreement it is provided shall or may be done or performed, or by reason of any exercise of, or
failure to exercise, any discretion provided for in the Deposit Agreement. Where, by the terms of a distribution
pursuant to Sections 4.01, 4.02, or 4.03 of the Deposit Agreement, or an offering or distribution pursuant to
Section 4.04 of the Deposit Agreement, or for any other reason, such distribution or offering is not and may not
lawfully be made available to Owners of Receipts, and the Depositary may not lawfully dispose of such
distribution or offering on behalf of such Owners and make the net proceeds available to such Owners, then the
Depositary shall not make such distribution or offering, and shall allow any rights, if applicable, to lapse. The
Company assumes no obligation nor shall it be subject to any liability under the Deposit Agreement to Owners or
holders of Receipts, expect that it agrees to perform its obligations specifically set forth in the Deposit
Agreement without negligence or bad faith. Neither the Depositary nor the Custodian assumes any obligation nor
shall either of them be subject to any liability under the Deposit Agreement to any Owner or holder (including,
without limitation, liability with respect to the validity or worth of the Deposited Securities), except that the
Depositary agrees to perform its obligations specifically set forth in the Deposit Agreement without negligenceor bad faith. Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or
defend any action, suit, or other proceeding in respect of any Deposited Securities or in respect of the Receipts,
which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expenseand liability be furnished as often as may be required, and the Custodian shall not be under any obligation
whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary.
None of the Depositary, the Custodian, or the Company shall be liable for any action or nonaction by it inreliance upon the advice of or information from legal counsel, accountants, any person presenting Shares fordeposit, any Owner or holder of a Receipt, or any other person believed by it in good faith to be competent to8

give such advice or information or for any translation of any notice, report or other document made by atranslator believed by it to be competent. The Depositary shall not be responsible for any failure to carry out any
instructions to vote any of the Deposited Securities, or for the manner in which any such vote is cast or the effectof any such vote, provided that any such action or nonaction is in good faith. The Depositary shall not be liable
for any acts or omissions made by a successor depositary whether in connection with a previous act or omissionof the Depositary or in connection with a matter arising wholly after the removal or resignation of the
Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary
performed its obligations without negligence or bad faith while it acted as Depositary. The Depositary may own
and deal in any class of securities of the Company and its affiliates and in Receipts. The Company has agreed in
the Deposit Agreement to indemnify the Depositary and any Custodian against, and hold each of them harmless
from, any liability or expense (including, but not limited to, the reasonable fees and expenses of counsel) which
may arise out of acts performed or omitted, in accordance with the provisions of the Deposit Agreement and of
the Receipts, as the same may be amended, modified or supplemented from time to time, (i) by either the
Depositary or a Custodian, except for any liability or expense arising out of the negligence or bad faith of eitherof them, or (ii) by the Company or any of its agents. The indemnities contained in the preceding sentence shallnot extend to any liability or expense which arises solely and exclusively out of a Pre-Release (as defined in
Section 2.09 of the Deposit Agreement) of a Receipt or Receipts in accordance with Section 2.09 of the Deposit
Agreement and which would not otherwise have arisen had such Receipt or Receipts not been the subject of a
Pre-Release pursuant to Section 2.09 of the Deposit Agreement; provided, however, that the indemnities provided
in the preceding sentence shall apply to any such liability or expense (i) to the extent that such liability or
expense would have arisen had a Receipt or Receipts not been the subject of a Pre-Release, or (ii) which may
arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration
statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary
placement memorandum) relating to the offer or sale of American Depositary Shares, except to the extent any
such liability or expense arises out of (a) information relating to the Depositary or any Custodian (other than the
Company), as applicable, furnished in writing and not materially changed or altered by the Company expressly
for use in any of the foregoing documents, or, (b) if such information is provided, the failure to state a material
fact necessary to make the information provided not misleading. Any person entitled to indemnification pursuant
to the preceding sentence who seeks indemnification under the Deposit Agreement shall notify the Company of
the commencement of any indemnifiable action or claim promptly after such person becomes aware of suchcommencement and shall consult in good faith with the Company as to the conduct of the defense of such action
or claim (including the compromise or settlement thereof), which shall be reasonable in the circumstances. No
disclaimer of liability under the Securities Act of 1933 is intended by any provision of the Deposit Agreement.
18. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSORCUSTODIAN.
The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its
election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at
any time be removed by the Company by 120 days prior written notice of such removal, which shall become
effective upon the later to occur of (i) the 120th day after delivery of the notice to the Depositary or(ii) appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit
Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Owners ofReceipts to do so, it may appoint a substitute or additional custodian or custodians.
19. AMENDMENT.
The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time totime be amended by agreement between the Company and the Depositary in any respect which they may deem
necessary or desirable. Any amendment which shall impose or increase any fees or charges (other than taxes andother governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other9such expenses), or which shall otherwise prejudice any substantial existing right of Owners of Receipts, shall,
however, not become effective as to outstanding Receipts until the expiration of three months after notice of such
amendment shall have been given to the Owners of outstanding Receipts. Every Owner of a Receipt at the time
any amendment so becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree
to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any
amendment impair the right of the Owner of any Receipt to surrender such Receipt and receive therefor the
Deposited Securities represented thereby.
20. TERMINATION OF DEPOSIT AGREEMENT.
The Depositary will at any time at the direction of the Company terminate the Deposit Agreement by
mailing notice of such termination to the Owners of all Receipts then outstanding at least 30 days prior to thedate fixed in such notice for such termination. The Depositary may likewise terminate the Deposit Agreement if
at any time 60 days shall have expired after the Depositary shall have delivered to the Company a written noticeof its election to resign and a successor depositary shall not have been appointed and accepted its appointment asprovided in the Deposit Agreement. If any Receipts shall remain outstanding after the date of termination, theDepositary thereafter shall discontinue the registration of transfers of Receipts, shall suspend the distribution ofdividends to the Owners thereof, and shall not give any further notices or perform any further acts under the
Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell rights as provided in the Deposit Agreement, and shall continue todeliver Deposited Securities, together with any dividends or other distributions received with respect thereto andthe net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the
Depositary. At any time after the expiration of one year from the date of termination, the Depositary may sell the
Deposited Securities then held under the Deposit Agreement and may thereafter hold uninvested the net proceedsof any such sale, together with any other cash then held by it thereunder, without liability for interest, for the pro
rata benefit of the Owners of Receipts which have not theretofore been surrendered, such Owners thereupon
becoming general creditors of the Depositary with respect to such net proceeds After making such sale, theDepositary shall be discharged from all obligations under the Deposit Agreement, except to account for such net
proceeds and other cash. Upon the termination of the Deposit Agreement, the Company shall be discharged fromall obligations under the Deposit Agreement except for its obligations to the Depositary with respect toindemnification, charges, and expenses.
21. COMPLIANCE WITH U.S. SECURITIES LAWS.
Notwithstanding anything in the Deposit Agreement or this Receipt to the contrary, the Company and the
Depositary each agrees that it will not exercise any rights it has under the Deposit Agreement to permit thewithdrawal or delivery of Deposited Securities in a manner which would violate the U.S. securities laws,
including, but not limited to, Section I.A.(l) of the General Instructions to the Form F-6 Registration Statement,
as amended from time to time, under the Securities Act of 1933.
22. GOVERNING LAW.
This Receipt and all rights under the Deposit Agreement and provisions hereof shall be governed by andconstrued in accordance with the laws of the State of New York, United States of America. It is understood that
notwithstanding any present or future provision of the laws of the State of New York, the rights of holders of
Shares, and the duties and obligations of the Company in respect of such holders, as such, shall be governed by
the laws of Japan.

10

Exhibit 12
CERTIFICATION
I, Katsunori Nagayasu, certify that:1.

I have reviewed this annual report on Form 20-F of Mitsubishi UFJ Financial Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of thecompany as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the company’s auditors and the audit committee of thecompany’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

July 23, 2012
/s/ KATSUNORI NAGAYASU
Name: Katsunori Nagayasu
Title: President & Chief Executive Officer

CERTIFICATION
I, Taihei Yuki, certify that:1.

I have reviewed this annual report on Form 20-F of Mitsubishi UFJ Financial Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of thecompany as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the company’s auditors and the audit committee of thecompany’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

July 23, 2012/s/ TAIHEI YUKI
Name: Taihei Yuki
Title: Senior Managing Director and Chief Financial Officer

Exhibit 13
MITSUBISHI UFJ FINANCIAL GROUP, INC.
CERTIFICATION REQUIRED BY
RULE 13a-14(b) OR RULE 15d-14(b)AND 18 U.S.C. Section 1350
In connection with the Annual Report of Mitsubishi UFJ Financial Group, Inc. (the “Company”) on
Form 20-F for the fiscal year ended March 31, 2012 as filed with the US Securities and Exchange Commission
on the date hereof (the “Report”), I, Katsunori Nagayasu, President & Chief Executive Officer of the Company,
hereby certify, pursuant to 18 U.S.C. Section 1350 that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Actof 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
/s/

KATSUNORI NAGAYASU

Name: Katsunori Nagayasu
Title: President & Chief Executive Officer
Dated: July 23, 2012

MITSUBISHI UFJ FINANCIAL GROUP, INC.
CERTIFICATION REQUIRED BY
RULE 13a-14(b) OR RULE 15d-14(b)AND 18 U.S.C. Section 1350
In connection with the Annual Report of Mitsubishi UFJ Financial Group, Inc. (the “Company”) on
Form 20-F for the fiscal year ended March 31, 2012 as filed with the US Securities and Exchange Commission
on the date hereof (the “Report”), I, Taihei Yuki, Senior Managing Director and Chief Financial Officer of theCompany, hereby certify, pursuant to 18 U.S.C. Section 1350 that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Actof 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
/s/

TAIHEI YUKI

Name: Taihei Yuki
Title: Senior Managing Director and Chief Financial Officer
Dated: July 23, 2012