Consolidated Financial Results
for the Fiscal Year Ended March 31, 2017
<under Japanese GAAP>May 2, 2017
Company Name: Olympus Corporation
Code Number: 7733
(URL: http://www.olympus.co.jp/)
Stock Exchange Listing: First Section of Tokyo Stock Exchange
Representative: Hiroyuki Sasa, Representative Director, President
Contact: Takayuki Aoyagi, General Manager, Accounting Department
Phone: 03-3340-2111
Scheduled date of General Meeting of Shareholders:June 28, 2017
Scheduled date to submit the Securities Report:
June 28, 2017
Scheduled date to commence dividend payments:
June 29, 2017
Presentation of supplementary material on financial results:
Yes
Holding of financial results presentation meeting:Yes (for analysts and institutional investors)(Figures are rounded off to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2017
(From April 1, 2016 to March 31, 2017)(1) Consolidated Results of Operations(% indicate changes from the previous fiscal year)
Net sales

Operating income

Net income attributable toowners of the parent(¥ million)%
78,191
24.9
62,594–

Ordinary income

Fiscal year ended(¥ million)%(¥ million)%
March 31, 2017
748,050(7.0)
76,487(26.8)March 31, 2016
804,578
5.2
104,46414.8
Note: Comprehensive income:Fiscal year ended March 31, 2017: ¥51,994 million
Fiscal year ended March 31, 2016: ¥30,346 million(¥ million)%
62,149(31.6)
90,89824.9[71.3%][17.6%]
Ratio of ordinary
Net income per
Fully diluted net
Return on equity
income to total
share
income per shareassetsFiscal year ended
(¥)
(¥)
%
%
March 31, 2017
228.47228.3819.3
6.2
March 31, 2016182.90182.8417.0
8.7
Note: Equity in earnings (losses) of affiliated companies:
Fiscal year ended March 31, 2017: ¥(1,254) million
Fiscal year ended March 31, 2016: ¥(2,675) million

Ratio of operating
income to net sales
%
10.2
13.0

(2) Consolidated Financial Position
Total assets
As of(¥ million)
March 31, 2017
991,062
March 31, 2016
1,000,614
Note: Equity as of March 31, 2017: ¥428,807 million

Net assets

Equity ratio(¥ million)
430,880
384,283
March 31, 2016: ¥382,359 million

Net assets per share
%
43.3
38.2

(¥)
1,252.96
1,117.24

Cash flows fromfinancing activities(¥ million)(44,244)(33,870)

Cash and cash equivalents
at end of year(¥ million)
199,431
166,323(3) Consolidated Cash Flows
Fiscal year ended
March 31, 2017
March 31, 2016

Cash flows fromoperating activities(¥ million)
90,194
48,621

Cash flows frominvesting activities(¥ million)(8,305)(52,897)

2. Dividends
Annual dividends per shareFirst
quarter(¥)

Secondquarter(¥)

Third
quarter
(¥)

–

0.00

–
–

Fiscal year ended
March 31, 2016
Fiscal year ended
March 31, 2017
Fiscal year ending
March 31, 2018
(Forecast)Year-end

Total amount ofcash dividends

Payout ratio(Annual)

Total

Ratio ofdividends to net
assets(Consolidated)(Consolidated)

(¥)

(¥)

(¥ million)

%

%

–

17.00

17.00

5,818

9.3

1.6

0.00

–

28.00

28.00

9,583

12.3

2.4

0.00

–

28.00

28.00

17.4

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2018
(From April 1, 2017 to March 31, 2018)
Profit attributable to
Basic earnings perowners of parent
share(¥ million)(¥ million)(¥ million)(¥ million)(¥)
Six months
366,000
35,00032,00027,00078.89
Full year
766,000
79,00072,00055,000160.71
Note: The Company intends to voluntarily apply the International Financial Reporting Standards (IFRS) with respect to the consolidated
financial statements beginning with the first quarter ending June 30, 2017 onward, and has accordingly prepared the forecast of
consolidated financial results for the fiscal year ending March 31, 2018 on the basis of the IFRS.
Revenue

Operating profit

Profit before tax* Notes(1) Changes in significant subsidiaries during the fiscal year under review (changes in specified subsidiaries
resulting in the changes in scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial
statements after error corrections
1) Changes in accounting policies due to revisions to accounting standards, and other regulations: No
2) Changes in accounting policies due to other reasons: No
3) Changes in accounting estimates: No4) Restatement of prior period financial statements after error corrections: No(3) Total number of issued shares (common stock)1) Total number of issued shares at the end of the period (including treasury stock)
As of March 31, 2017342,671,508 shares
As of March 31, 2016
342,671,508 shares2) Total number of treasury shares at the end of the period
As of March 31, 2017435,289 shares
As of March 31, 2016
436,607 shares
3) Average number of shares during the period
Fiscal year ended March 31, 2017342,236,163 sharesFiscal year ended March 31, 2016
342,235,989 sharesReference: Summary of Non-Consolidated Financial Results
Financial results for the Fiscal Year ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(1) Non-Consolidated Results of Operations(% indicate changes from the previous fiscal year)
Net sales
Fiscal year ended
March 31, 2017
March 31, 2016(¥ million)
367,111407,776%(10.0)
360.6

Net income per share
Fiscal year ended
March 31, 2017
March 31, 2016(¥)
290.37300.87

Operating income

Ordinary income(¥ million)
32,96577,583(¥ million)
78,543
66,386%(57.5)
804.2

Net income
%
18.3
68.0

(¥ million)
99,375102,968

%
(3.5)
201.3

Fully diluted net income
per share(¥)
290.25300.77(2) Non-Consolidated Financial Position
Total assets
As ofMarch 31, 2017
March 31, 2016

Net assets(¥ million)
805,327
787,249

Note: Equity as of March 31, 2017: ¥450,440 million

Equity ratio(¥ million)
450,993372,642

Net assets per share
%
55.9
47.3

(¥)
1,316.17
1,087.60

March 31, 2016: ¥372,214 million* Financial results reports are not required to be audited.
* Proper use of the forecast of financial results, and other special matters
The forward-looking statements, including forecast of financial results, contained in these materials include
predictions about the future based on assumptions, forecasts and plans as of the date of release of these materials.
Actual business and other results may differ substantially from the forecasts provided in these materials as a resultof risks and uncertainties associated with the global economy, the competitive environment, exchange rate trends
and other factors. For information on the forecast of financial results, please refer to page 5.

Attached Material
Contents

1.

Overview of Operating Results and Others .................................................................................................. 2(1)
Analysis of Business Results ................................................................................................................ 2(2)
Analysis of Financial Position .............................................................................................................. 6(3)
Basic Strategy for Profit Sharing and Dividend for the Current Fiscal Year and Following Fiscal
Year ...................................................................................................................................................... 7(4)
Business Risks ...................................................................................................................................... 7

2.

Basic Rationale for Selecting the Accounting Standards ........................................................................... 123.

Consolidated Financial Statements and Significant Notes Thereto............................................................ 13(1)
Consolidated Balance Sheets.............................................................................................................. 13(2)
Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ......... 15
Consolidated Statements of Income ................................................................................................... 15
Consolidated Statements of Comprehensive Income ......................................................................... 17(3)
Consolidated Statements of Changes in Net Assets ........................................................................... 18(4)
Consolidated Statements of Cash Flows ............................................................................................ 20(5)Notes Regarding Consolidated Financial Statements ......................................................................... 22(Notes on Premise of Going Concern) ............................................................................................... 22(Important Items That Form the Basis for Preparing the Consolidated Financial Statements) .......... 22(Consolidated Statements of Income) ................................................................................................ 23(Segment Information, etc.)................................................................................................................ 26(Per-Share Data) ................................................................................................................................. 30(Important Subsequent Event) ............................................................................................................ 31

1

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

1. Overview of Operating Results and Others(1)

Analysis of Business Results(Review of Operations)
Analysis of the overall operations(Millions of yen)
Net sales

Operating income Ordinary income

Net income
attributable toowners of theparent

Net income per
share

Fiscal year ended March 31, 2017

748,050

76,487

62,14978,191¥228.47

Fiscal year ended March 31, 2016

804,578

104,464

90,89862,594¥182.90(7.0)(26.8)(31.6)

24.9

24.9

Increase (Decrease) ratio (%)

Comparison Table of Average Exchange Rate

(Yen)

Current fiscal year

Previous fiscal year

Against the U.S. dollar

108.38120.14

Against the euro

118.79132.58In the global economy during the fiscal year under review, the U.S. economy continued to recover amid gains
in personal consumption and improvements in the employment situation, while the trend in both Europe andChina has also been one of moderate improvement. However, the outlook remains uncertain due to factorsthat include policy developments following on the change of government in the U.S. and the decision in the
United Kingdom to leave the EU. In the Japanese economy, the trend of moderate improvement has persisted
amid recovery in corporate earnings due mainly to depreciation of the yen that has taken place since thepresidential election in the U.S.
Amid this business environment, the Olympus Group newly formulated the 2016 Corporate Strategic Plan(“16CSP”) to act as a five-year medium-term management plan which took effect in the fiscal year ended
March 31, 2017, under which it has been pushing forward in developing a firmly grounded and aggressive
business portfolio geared to achieving sustainable growth under its “Business to Specialist” Company and
One Olympus basic policies.
In the Medical Business, we forged ahead with efforts geared to increasing numbers of employees needed tofortify production and maintenance systems and enhancing quality assurance (QA) and regulatory assurance(RA), while in the surgical field we promoted development of large-scale new products. In the Scientific
Solutions Business, we moved forward with organizational development efforts which involved shifting
toward strategies oriented to customer groups, and also released new products that included laser scanningconfocal microscopes and industrial videoscopes. In the Imaging Business, in addition to introducing new
products such as the flagship mirrorless camera “OLYMPUS OM-D E-M1 Mark II,” we also streamlined
operations by narrowing down our core sales areas and also moved a step further forward with cost cutting
and other structural reforms.
The Olympus Group’s overall consolidated net sales decreased to ¥748,050 million (down 7.0% year on year),due to appreciation of the yen and other factors that caused revenue to decline year on year in each of thethree main businesses of Medical, Scientific Solutions and Imaging. Operating income was ¥76,487 million(down 26.8% year on year), due mainly to the decline in sales. Ordinary income was ¥62,149 million (down
31.6% year on year), due mainly to the decline in operating income. The Company posted extraordinary
income of ¥27,757 million which included gain on sales of investment securities, and also incurred income
taxes of ¥3,471 million. Consequently, net income attributable to owners of the parent was ¥78,191 million(up 24.9% year on year), a considerable improvement from the previous fiscal year.
During the fiscal year under review, the Olympus Group invested ¥79,178 million on research anddevelopment, and spent ¥49,347 million on capital investments.
With respect to foreign exchange, the yen appreciated against both the U.S. dollar and the euro in comparison
with the previous fiscal year. The average exchange rate during the period was ¥108.38 against the U.S.
2

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

dollar (¥120.14 in the previous fiscal year) and ¥118.79 against the euro (¥132.58 in the previous fiscal year),which caused net sales and operating income to down by ¥74,281 million and ¥30,069 million, respectively,
year on year.
Analysis of the performance by segment(Millions of yen)
Net sales

Operating income (loss)

Previous fiscal
year

Current fiscal
year

Increase(Decrease)ratio (%)

Previous fiscal
year

Current fiscal
year

Increase(Decrease)ratio (%)

Medical608,927575,285(5.5)

140,220

115,482(17.6)

Scientific Solutions

101,608

93,227

(8.2)

8,482

5,280

(37.8)

Imaging

78,28465,574(16.2)(2,064)498–

Others15,75913,964(11.4)(5,800)(4,621)–

Subtotal

804,578

748,050(7.0)

140,838

116,639(17.2)–––(36,374)(40,152)–804,578

748,050(7.0)

104,464

76,487(26.8)

Elimination or
Unallocation
Consolidated total

Note: Businesses are segmented by adding similarities of sales market to the business established based on line of products.

Medical Business(Millions of yen)
Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

Increase (Decrease)

Increase (Decrease)ratio

Net sales

608,927575,285(33,642)(5.5)%

Operating income/loss

140,220

115,482(24,738)(17.6)%

Consolidated net sales in the Medical Business amounted to ¥575,285 million (down 5.5% year on year),while operating income amounted to ¥115,482 million (down 17.6% year on year).
Net sales in the Medical Business fell as a result of the stronger yen, but increased by 4% year on year on a
local currency basis which excludes the impact of the foreign exchange rate. In gastrointestinal endoscope
field, both sales of the endoscopy platform systems “EVIS EXERA III” and “EVIS LUCERA ELITE,” which
are our mainstay products, were strong. In the surgical field, surgical endoscopy systems equipped with 4K
technologies and 3D laparoscopy systems generated firm results, while sales of the “THUNDERBEAT”
integrated energy device with both advanced bipolar and ultrasonic energy continued to grow. In thetherapeutic devices field, sales of “VisiGlide 2” disposable guidewire for use in endoscopic diagnosis andtreatment of biliary and pancreatic ducts and others were strong.
Operating income in the Medical Business declined as a result of the stronger yen, but due to strong results inall fields rose by 1% year on year excluding the impact of the foreign exchange rate.

Scientific Solutions Business(Millions of yen)
Fiscal year ended
March 31, 2016
Net sales
Operating income/loss

Fiscal year ended
March 31, 2017

Increase (Decrease)

Increase (Decrease)ratio

101,608

93,227(8,381)(8.2)%

8,482

5,280

(3,202)(37.8)%

Consolidated net sales in the Scientific Solutions Business amounted to ¥93,227 million (down 8.2% year onyear), while operating income amounted to ¥5,280 million (down 37.8% year on year).
3

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

Net sales in the Scientific Solutions Business fell as a result of the stronger yen, but increased by 1% year on
year on a local currency basis which excludes the impact of the foreign exchange rate. While sales of
products for hospitals and life science research declined in Europe due to the impact of budget cuts anddelays in budget execution, sales were strong in Japan, the U.S. and Asia. Non-destructive testing equipment
was also strong, supported by the recovery of commodity prices in the second half of the year, despite having
experienced slowdown in sales of industrial microscopes for universities and research institutions.
Operating income in the Medical Business declined as a result of the stronger yen, but rose by 3% year on
year excluding the impact of the foreign exchange rate, as a result of controls placed on expenditures.

Imaging Business(Millions of yen)
Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

Increase (Decrease)

Increase (Decrease)ratio

Net sales

78,28465,574(12,710)(16.2)%

Operating income/loss(2,064)

498

2,562

–

Consolidated net sales in the Imaging Business amounted to ¥65,574 million (down 16.2% year on year),while operating income amounted to ¥498 million (compared with an operating loss of ¥2,064 million in theprevious fiscal year).
Ongoing moves to reduce the size of the Imaging Business to a scale more appropriate for the shrinking
market and the impact of the Kumamoto earthquake of April 2016, which caused delays in the supply ofsome products, resulted in lower sales for the Imaging Business.
The Imaging Business returned to profitability after having recorded a loss in the previous fiscal year due toprogress made in pushing down expenses combined with positive effects of introducing new products,
including the flagship mirrorless camera “OLYMPUS OM-D E-M1 Mark II.”
Others(Millions of yen)
Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

Increase (Decrease)

Increase (Decrease)ratio

Net sales

15,75913,964(1,795)(11.4)%

Operating income/loss(5,800)(4,621)

1,179–

Consolidated net sales for other businesses amounted to ¥13,964 million (down 11.4% year on year) andoperating loss was ¥4,621 million (compared with an operating loss of ¥5,800 million in the previous fiscal
year).
Net sales for other businesses declined as a result of having reorganized our non-core business domains
through initiatives that included transferring shares in Nippon Outsourcing Corporation, a subsidiary of theCompany, on October 31, 2016. Also, operating loss for other businesses decreased, reflecting a reduction of
expenses.

4

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Forecast for the Fiscal Year Ending March 31, 2018)
Forecast for the overall business and analysis of its preconditions
Looking ahead with respect to the global economy, concerns of a downturn in business conditions are likely
to intensify despite an overall trend of economic recovery, amid developments that include policy moves
undertaken by the U.S. government and issues with respect to the United Kingdom’s decision to leave the EU.
In the Japanese economy, despite the likelihood of ongoing recovery on the back of improved corporate
earnings, prospects ahead remain uncertain amid negative factors that include growing uncertainties
regarding the global economy and volatility in financial and capital markets.
Given this environment, the Olympus Group will steadily press forward with the 2016 Corporate Strategic
Plan (“16CSP”), which is our five-year medium-term management plan drawn up during the fiscal year ended
March 31, 2016.
In the Medical Business, we aim to expand the scale of our operations primarily by providing value in termsof both early diagnosis and minimally invasive therapies, by proactively investing in each of this segment’s
business units, namely GI (gastrointestinal), Res (respiratory), GS (general surgery), Uro/Gyn(urology/gynecology), ENT (ear nose throat), and Medical Services. We will work to achieve dramatic
growth in both the therapeutic devices and surgical fields while maintaining our overwhelming competitive
strengths in the gastrointestinal endoscope field, while furthermore taking steps to improve profitability in the
Medical Business also by strengthening business involving single-use devices. In the Scientific Solutions
Business, we will establish an earnings platform by promoting strategies oriented to customer groups, while
also taking steps geared to enhancing shared business functions and streamlining operations through globally
integrated management. In the Imaging Business, we will establish a profitable operating structure by further
boosting business efficiency, while also pursuing initiatives geared to improving our responsiveness to thechanging market and further reducing inventory risks.
The forecast for consolidated financial results in the fiscal year ending March 31, 2018 is as follows.

(IFRS)
Fiscal year ending March 31, 2018

Revenue

Operating profit

Profit before tax

79,00072,000766,000(Millions of yen)
Profit attributable toowners of parent
55,000

The Company intends to voluntarily apply the IFRS with respect to the consolidated financial statements
beginning with the fiscal year ending March 31, 2018 onward, and has accordingly prepared the forecast of
consolidated financial results on the basis of the IFRS.
Due to the transition to the IFRS, revenue is expected to decrease compared to net sales under Japanese
GAAP applied through this fiscal year because part of the promotion expenses relating to sale of the products
will be deemed as substantial discounts and deducted from revenue.
The operating profit under the IFRS, by its concept, includes non-operating income or loss, and part ofextraordinary income or loss (non-financial transaction) on top of the operating income under the Japanese
GAAP. Under the IFRS, suspension of amortization of goodwill will cause operating profit to increase while
impacts of reclassification of items and depreciation of development cost that has been recognized as assets
and also change of calculation method for expenses relating to defined benefit will lead to decrease, andtherefore operating profit is likely to be around the same level compared with the relevant figures stated inaccordance with the Japanese GAAP used hitherto.
Profit before tax and profit attributable to owners of parent are expected to be higher than the relevant figures
stated in accordance with the Japanese GAAP used hitherto due mainly to the suspension of amortization of
goodwill.
Foreign exchange rates for the fiscal year ending March 31, 2018, which are a precondition for the forecast,are expected to be ¥110 per U.S. dollar and ¥115 per euro.

5

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(2)

Analysis of Financial Position(Analysis of the Status of Assets, Liabilities, Net Assets, and Cash Flows in the Current Fiscal Year)
Analysis of assets, liabilities and net assets
As of March 31, 2016

As of March 31, 2017

Increase (Decrease)(Millions of yen)
Increase (Decrease)ratio (%)

Total assets

1,000,614

991,062(9,552)(1.0)

Net assets

384,283

430,880

46,597

12.1

Equity ratio

38.2%

43.3%

5.1%

As of the end of the fiscal year under review, total assets decreased ¥9,552 million compared to the end of theprevious fiscal year to ¥991,062 million.
Current assets decreased ¥9,552 million compared to the end of the previous fiscal year to ¥991,062 million
due mainly to an increase in cash and time deposits of ¥32,877 million and decreases in investment securitiesof ¥42,195 million and in goodwill of ¥10,526 million.
Total liabilities decreased ¥56,149 million compared to the end of the previous fiscal year to ¥560,182
million due mainly to an increase in short-term borrowings of ¥42,196 million and decreases in current
maturities of bonds of ¥30,000 million and in long-term borrowings of ¥46,977 million.
Net assets increased ¥46,597 million compared to the end of the previous fiscal year to ¥430,880 million,
primarily due to an increase in net income of ¥78,215 million and a decrease in accumulated othercomprehensive income of ¥26,210 million arising from fluctuations in foreign exchange and stock prices.
As a result of the foregoing, equity ratio increased from 38.2% as of the end of the previous fiscal year to43.3%.

Analysis of cash flows(Millions of yen)
Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

Increase (Decrease)

Cash flows from operating activities

48,621

90,194

41,573

Cash flows from investing activities(52,897)(8,305)44,592

Cash flows from financing activities(33,870)(44,244)(10,374)

Cash and cash equivalents at end of year

166,323

199,431

33,108“Cash flows from operating activities” increased by ¥90,194 million due to the adjustments for noncash items
mainly included the recordings of ¥81,686 million in income before provision for income taxes, ¥44,658
million in depreciation and amortization, ¥8,642 million in amortization of goodwill, and ¥6,922 million inloss related to securities litigation. Decreasing factors mainly included ¥23,879 million in gain on sales ofinvestment securities and an increase in inventories of ¥14,801 million.
“Cash flows from investing activities” decreased by ¥8,305 million. Decreasing factors mainly included¥43,542 million in purchase of property, plant and equipment and ¥7,358 million in payments for loans
receivable. Increasing factors mainly included ¥42,239 million in sales and redemption of investment
securities.
“Cash flows from financing activities” decreased by ¥44,244 million. Decreasing factors mainly included¥30,000 million in redemption of bonds and ¥20,217 million in repayments of long-term debt. Increasing
factors mainly included ¥20,000 million in proceeds from long-term debt.
As a result, cash and cash equivalents at the end of the current fiscal year reached ¥199,431 million, an
increase of ¥33,108 million compared to the end of the previous fiscal year.
6Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Cash Flows Indicators)
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

Equity ratio

32.1

32.9

38.2

43.3

Market value equity ratio (%)

109.6

141.4

149.6

147.8

Interest-bearing debt to cash flows ratio(years)

5.7

5.3

6.6

3.0

Interest coverage ratio (times)

6.1

7.4

6.1

12.4

Notes:

Equity ratio: Shareholders’ equity/Total assets
Market value equity ratio: Total market capitalization/Total assets
Interest-bearing debt to cash flows ratio: Interest-bearing debt/Cash flow
Interest coverage ratio: Cash flow/Interest payment
1. Each index was calculated by financial index of consolidated basis.
2. Total market capitalization is calculated on the basis of the number of issued shares excluding treasury stock.
3. Cash flows from operating activities are used as “Cash flow” for calculation purposes.
4. Interest-bearing debts include all of those debts reported on the consolidated balance sheets on which interest is
paid.

(3)

Basic Strategy for Profit Sharing and Dividend for the Current Fiscal Year and Following Fiscal Year

Aiming to boost the corporate value, premised on securing stable financial base, the Company places priority
on investing in growth fields, particularly the Medical Business. Based on this, our basic strategy is toimplement dividend distribution in consideration of performance, in order to respond to the expectations of
our shareholders.
In accordance with the above policy and in consideration of comprehensive factors that include ourconsolidated financial results for the fiscal year ended March 31, 2017, the Company’s financial standing andfuture investment in operations, we intend to pay a year-end dividend of ¥28 per share for the fiscal year
under review. The annual dividend will therefore amount to ¥28 per share, which is an increase of ¥11 pershare in comparison with that of the previous fiscal year.
With respect to shareholder returns, our objective regarding the total return ratio has been bolstered to 30%.
Accordingly, we intend to pay a dividend of ¥28 per share for the fiscal year ending March 31, 2018,
unchanged from that of the fiscal year under review (year-end dividend of ¥28).
(4)

Business Risks

The business performances of the Olympus Group may be materially influenced by various factors which
may occur in the future. Listed below are principal business risk factors, aside from managerial decisions
made by the Olympus Group, which may give rise to changes in Olympus Group’s business performances.
The Olympus Group is aware of the possibilities of these risks, will strive to prevent them from occurring,
and will deal conscientiously and diligently with any risk that may occur.
The future events described below are based on the judgment of the Olympus Group made as of the end of
the fiscal year under review.
(Risks Associated with Selling Activities)(i) In the Medical Business, if healthcare policy is amended in an unforeseeable and material manner as aresult of a healthcare system reform or another change occurs in relation to the medical sector, and the
Olympus Group finds it difficult to adapt to such an environmental change, or if the Olympus Group isunable to obtain the licenses and approvals in various countries necessary for its business activities in atimely manner, the Olympus Group’s ability to secure its earnings may be adversely affected.
7

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017(ii) In the Scientific Solutions Business, system provision to research activities funded by national budgetsof countries accounts for a high proportion of earnings of the Olympus Group. Therefore, if suchnational budgets are curtailed in the wake of unfavorable macroeconomic fluctuations, the Olympus
Group’s ability to secure its earnings may be adversely affected.
(iii) In the digital camera field of the Imaging Business, market conditions are becoming harsher. If themarket contracts more sharply than anticipated, the Olympus Group may be unable to adequately counterthe resulting sales decline with the restructuring measures it is currently implementing, and this may
adversely affect the Olympus Group’s ability to secure its earnings.
(Risks Associated with Production/Development Activities)(i) In the Imaging Business, core production bases center on China and Vietnam. Therefore, depending
upon exchange rate trends and other factors, operating costs may increase substantially, and the Olympus
Group’s ability to secure its earnings may be adversely affected. Also, depending upon how serious or
unstable the state of affairs including anti-Japanese activities may grow or how badly public safety may
deteriorate in China, the Olympus Group’s production activities may be adversely affected.
(ii) The Olympus Group relies on certain specific suppliers to consistently develop and produce those
products and parts which it cannot develop or produce internally. Hence, if the Group is subjected toconstraints on procurement of such products and parts according to the said suppliers’ convenience, theOlympus Group’s ability to produce and supply them may be adversely affected.
(iii) The Olympus Group and its manufacturing contractors manufacture their products in accordance withexacting quality standards. However, if any product deficiency occurs, not only substantial costs
including those of a recall would be incurred but also the market’s confidence in the Olympus Groupwould be undermined, and the Olympus Group’s ability to secure its earnings may be adversely affected.
(iv) The Olympus Group is continuing to advance development of products using cutting-edge technologies.
However, if technological progress occurs so fast and market changes cannot be predicted adequately,that the Group is unable to develop new products adequately meeting customers’ needs in a timely
manner, the Olympus Group’s ability to secure its earnings may be adversely affected.
(v) The Olympus Group, in conducting R&D and production activities, uses various intellectual property
rights, and believes that the Group lawfully owns or is licensed to use such rights. However, if any third
party asserts that the Group has unknowingly infringed any of these intellectual property rights and if
any litigation occurs, the Olympus Group’s ability to secure its earnings may be adversely affected.

(Risks Associated with Business Collaborations and Corporate Acquisitions)(i) The Olympus Group has built long-term strategic partnerships with advanced enterprises in the industry
on technologies and product development. If the Group can no longer maintain such partnerships due tooccurrence of a financial or any other business-related problem or change of its goals, the businessactivities of the Group may be adversely affected.
(ii) The Olympus Group may acquire a business enterprise in order to expand its business. If the Group isunable to integrate the acquired business in line with the Group’s management strategy or utilize
management resources in an efficient manner as to the existing business or the acquired business, theGroup’s business may be adversely affected or its business performances and financial position may be
adversely affected due to impairment of goodwill, loss on business sale or liquidation resulting frombusiness restructuring and the like, or other related expenses.
(iii) The Olympus Group holds investment securities and other such instruments for policy investment
purposes which include facilitating business alliances. As such, the Group’s business performance and8Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017financial position could be adversely affected under a situation involving considerable volatility withrespect to stock prices and valuations of such investments brought about by developments that include
market fluctuations and changes in the financial position of entities targeted for investment.

(Risks Associated with Financing)Since the Olympus Group carries out financing by borrowing from financial institutions, etc., changes inthe environment for the financial markets may have an impact on the Group’s financing. Furthermore, if
the Group’s financing costs rise as a result of such factors as deterioration in its business performances,
this may also have an adverse impact on the Group’s financing.

(Risks Associated with Leakage of Information)
The Olympus Group possesses important confidential information regarding such matters as technology,
as well as the personal information of its customers and other related parties. In order to prevent external
leakages of this information, the Group takes various countermeasures including the establishment ofinternal regulations, the thorough promotion of employee training, and the strengthening of security
systems. Even so, in the case that such information is leaked due to unanticipated circumstances, theGroup’s business performances and financial position may be adversely affected by such factors asdamage to the Group’s corporate value, loss of social credibility, and payment of compensation tocustomers and related parties affected by such information leakage.
(Risks Associated with Past Postponing of Recognition of Losses)
As a result of inappropriate financial reporting by the Company, the Company’s shareholders and others
claimed compensation for damages from the Company or filed lawsuits. These actions could have an
adverse impact on the Olympus Group’s business performance and financial position. The inappropriate
financial reporting relates to the Company’s postponing of recognition of losses on securities
investments, etc. in past times since around the 1990s, and the Company’s use, by means such as going
through multiple funds, of both the fees paid to financial advisors and funds to buy back preferred stock
in relation to the acquisition of Gyrus Group PLC, as well as the acquisition funds of three domestic
companies (Altis Co., Ltd., NEWS CHEF, Inc. and Humalabo Co., Ltd.), partly to resolve unrealized
losses on investment securities by such postponing of the recognition of these losses. The total amount ofclaims against the Company in pending lawsuits at the time of disclosure of the financial results report is¥29,407 million. The following major lawsuits have been filed against the Company.
Out of the pending lawsuits in the fiscal year under review, the Company reported ¥217 million asprovision for loss on litigation in current liabilities, considering the state of progress of the lawsuits.
On April 7, 2014 (the date of the service of the complaint was April 17, 2014), a total of six banks
including Mitsubishi UFJ Trust and Banking Corporation and five other trust banks filed a lawsuit
against the Company seeking compensation for damages by payment of ¥27,915 million and the interest
accrued to the damages incurred relating to each of the shares at the rate of 5% per annum for the period
from the day immediately following the share acquisition trade date of each of the shares that incurred
losses up to the payment of the incurred losses of the shares.
(Risks Associated with Internal Control System)
The Olympus Group has developed a system for ensuring appropriate and reliable financial reportingand valid and efficient work processes, which it operates and continuously improves. However, it cannot
be ignored that no matter how effective the internal control system constructed by the Group, actions
arising from malicious intent or gross negligence on the part of employees, or changes in the business
9Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017environment that were not envisaged at the time of the internal control system’s construction, or various
other factors, could cause the system to fail. Therefore, there is the potential for an issue arises in the
future with regard to violation of laws and regulations. If such an issue were to arise, the Company may
be obliged to pay fines due to administrative action, penalties due to criminal proceedings, or damages
and so forth due to civil lawsuits. Moreover, the Company may suffer an adverse impact on its businessfrom a loss of social trust. Such events could have an adverse impact on the Company’s operating results.
(Risks Relating to Laws and Regulations)
We operate our businesses globally, including our medical business, which is a regulated business. We
are subject to various laws, including the Antimonopoly Act of Japan and the laws on medical care ofJapan and similar laws in other countries and jurisdictions, as well as the anti-bribery provisions of the
U.S. Foreign Corrupt Practices Act of 1977 (FCPA), the U.K. Anti-Bribery Act and other anti-bribery
laws in other countries and jurisdictions. We are also subject to various laws targeting fraud and abuse in
the healthcare industry, including the Act Against Unjustifiable Premiums and Misleading
Representations in Japan and the Anti-Kickback Statute and the False Claims Act in the United States.
With respect to the medical business, because government-sponsored healthcare systems have developedaround the world, our group companies and many of their distributors and suppliers do business withgovernment affiliated entities, healthcare providers and officials. Our group companies and theirdistributors and suppliers operate in countries or jurisdictions where there has been governmental
corruption in the past, and in certain circumstances strict compliance with anti-bribery laws may conflictwith local customs and practices. In addition, the various laws and regulations targeting fraud and abusein the healthcare industry are wide-ranging and subject to changing interpretation and application, which
could restrict our sales or marketing practices.
Violations of these laws may be punishable by criminal or civil fines, imprisonment and/or exclusionfrom participation in certain national healthcare programs. Furthermore, since many of our customers
rely on reimbursement from public health insurance and other government programs to subsidize their
medical expenditures, if our participation in such programs would be restricted as a result of a violationof these laws, that could adversely affect the demand for our products and the number of procedures
performed using our devices.
We strive to fully comply with these laws, but if we engaged in conduct that violated them, regardless ofwhether we intentionally violated them or not, that may affect our business, financial condition, resultsof operations and cash flows as well as the price of shares of our common stock.
Furthermore, an overseas subsidiary of the Company, in February 2016, agreed to enter into a Deferred
Prosecution Agreement with the DOJ in connection with suspicion of violation of the Anti-Kickback
Statute, the U.S. False Claims Act, and the FCPA, concerning past activities related to the Medical
Business. Moving forward, if we engage in conduct that violates these laws, we will not only receive
sanctions related to said violation, but also prosecution will be carried out related to the past case inwhich the Company was subject to deferred prosecution, and this may affect our business, financial
condition, results of operations and cash flows as well as the price of shares of our common stock.
(Risks Relating to Duodenoscopes)
In March and August 2015, a subpoena was issued to Olympus Medical Systems Corp., a subsidiary ofours by the U.S. Department of Justice, seeking information relating to duodenoscopes that the Olympus
Group manufactures and sells, and the Department continues investigation of the facts. In addition, theOlympus Group has been named as defendants in civil lawsuits in the United States alleging that theplaintiffs were harmed by our group’s duodenoscopes at the time of disclosure of the financial results
report. Depending on the developments in these matters, our consolidated results of operations and10

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017financial condition may be affected.
(Other Comprehensive Risks)Through its domestic and overseas subsidiaries and affiliates, etc., the Company operates its various
businesses globally. These may be the subject of various investigations, as needed, by domestic andoverseas authorities, and may have consultations with or report to authorities with respect to compliancewith laws and regulations (for example in response to the examination regarding compliance with
antimonopoly acts and acts related to pharmaceutical and medical device or in voluntary disclosure to
the U.S. Department of Justice regarding compliance with the Foreign Corrupt Practices Act). As such,
the Company’s ability to secure its earnings may be adversely affected depending upon the results ofsuch investigations and consultations. In addition, if any natural disaster, disease, war, or terrorist attack
occurs, or if interest rates rise or exchange rates fluctuate beyond its expectations, the Olympus Group’s
ability to secure its earnings may be adversely affected.

11

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

2. Basic Rationale for Selecting the Accounting Standards
The Olympus Group intends to voluntarily apply the International Financial Reporting Standards (IFRS)
beginning with the first quarter ending March 31, 2018 onward, with the aim of improving theinternational comparability of financial information in the capital market, improving the effectiveness ofcorporate management by applying one unified accounting rule in the Group, and reinforcing governance.

12

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

3. Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated Balance Sheets(Millions of yen)

ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable
Lease receivables and lease investment assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred income taxes

Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Net property, plant and equipment
Intangible assets
Goodwill
OthersTotal intangible assets
Investments and other assets
Investment securities
Deferred income taxes
Net defined benefit asset

Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

13

As of March 31, 2016

As of March 31, 2017

166,554
140,666
33,56554,24521,99335,32038,461
36,478(6,590)520,692

199,431
137,924
35,33851,257
21,83050,97736,72925,226(5,720)552,992

136,344(79,864)
56,48054,804(42,521)
12,283205,084(149,996)
55,08822,832
19,200(9,618)9,582
9,799
166,064

149,131(84,267)
64,86455,986(41,588)
14,398202,339(147,270)
55,06922,966
21,133(11,839)
9,294
4,761
171,352

97,19053,607150,797

86,66444,426
131,090

71,141
11,421
24,74964,804(9,054)
163,061
479,9221,000,614

28,94624,942
24,762
66,994(10,016)
135,628
438,070991,062Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Millions of yen)

LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term borrowings
Current maturities of bonds
Other payable
Accrued expenses
Income taxes payable
Provision for product warranties
Provision for points
Provision for loss on business liquidation
Provision for loss on litigation
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term bonds, less current maturities
Long-term borrowings, less current maturities
Deferred income taxes
Net defined benefit liability
Provision for retirement benefits for directors and audit& supervisory board members
Other non-current liabilities
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized holding gains (losses) on available-forsale securities, net of taxes
Net unrealized gains (losses) on hedging derivatives, netof taxes
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

14

As of March 31, 2016

As of March 31, 2017

40,59726,65630,00036,76290,438
9,120
6,314
207
298
567
25,666
266,625

41,596
68,852
32,59580,944
11,657
8,474
223
190
217
29,981
274,729

25,000239,482
28,386
38,64525,000
192,505
18,89537,73738

21

18,155
349,706
616,331

11,295285,453
560,182

124,520
90,940172,989(1,122)
387,327

124,520
91,225245,362(1,122)459,985

24,947

9,556

(7)

–

(8,686)(21,222)(4,968)428
1,496
384,283
1,000,614(20,681)(20,053)(31,178)554
1,519
430,880
991,062–Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Millions of yen)

Fiscal year ended
March 31, 2016
Net sales
Costs of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
OthersTotal non-operating income
Non-operating expenses
Interest expense
Foreign currency exchange loss
Net loss of investment in affiliated companies carried on
the equity method
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of investments in subsidiaries and affiliates
Legal settlement compensation
Total extraordinary income
Extraordinary losses
Impairment loss on fixed assets
Loss on sales of investment securities
Loss on sales of investments in subsidiaries and affiliates
Loss on liquidation of businessBusiness restructuring expenses
Loss related to securities litigation
Loss related to the U.S. Anti-kickback Statute
Loss on step acquisitions
Total extraordinary losses

15

Fiscal year ended
March 31, 2017804,578
269,341535,237
430,773
104,464

748,050
256,708491,342
414,855
76,487

1,085
1,277
3,178
5,540

774
1,178
2,046
3,998

7,892
3,704

7,610
2,480

2,675

1,254

4,835
19,10690,898

6,992
18,336
62,149

2,297
–
72
2,369

23,8793,844
34
27,757

–
183
–
189
1,209
2,072
18,814–
22,467

230
–
760
–
–
6,922
–
308
8,220

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Millions of yen)

Fiscal year ended
March 31, 2016
Income before provision for income taxes
Income taxes, current
Income taxes for prior periods
Income taxes, deferred
Total
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

70,80010,944
3,172(5,967)
8,149
62,651
57
62,59416

Fiscal year ended
March 31, 201781,686
16,992
1,332(14,853)
3,471
78,21524
78,191Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

Consolidated Statements of Comprehensive Income(Millions of yen)

Fiscal year ended
March 31, 2016
Net income
Other comprehensive income
Net unrealized holding gains (losses) on available-forsale securities, net of taxes
Net unrealized gains (losses) on hedging derivatives, netof taxes
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of taxes
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests

17

Fiscal year ended
March 31, 2017

62,651

78,215

183(15,391)1

7(24,008)(8,477)(12,020)(1,169)(4)

14(32,305)
30,346(26,221)51,99430,33051,98116

13

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017(3) Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)(Millions of yen)
Shareholders’ equity

Balance at the
beginning of the year
Changes during theyear
Dividends from
Surplus
Net income
attributable toowners of the parent
Acquisition oftreasury stock
Disposal of treasury
stock
Change inownership interestof parent due totransactions with
non-controllinginterests
Net changes in
items other thanshareholders’ equity
Net changes during
the year
Balance at the end of
the yearCommon stock

Capital surplus

Retained earnings

Treasury stock,at cost124,520

90,940113,817(1,111)

Total shareholders’equity328,166(3,422)(3,422)62,59462,594

0

(12)

(12)

1

1

–

–

0

59,172(11)

59,161

124,520

90,940172,989(1,122)

387,327

Accumulated other comprehensive incomeNet
unrealized
Net
Total
NonSubscription
holding gains unrealized
Foreign
Remeasureaccumulated
controllingrights toments of(losses) on gains (losses) currency
otherinterests
sharesdefinedavailable-for- on hedging translation
comprehensale
derivatives, adjustments benefit plans
sive income
securities, net net of taxesof taxes
Balance at the
beginning of the year
Changes during theyear
Dividends from
Surplus
Net income
attributable toowners of the parent
Acquisition oftreasury stock
Disposal of treasury
stock
Change inownership interestof parent due totransactions with
non-controllinginterests
Net changes in
items other thanshareholders’ equity
Net changes during
the year
Balance at the end of
the year

24,764(8)

15,285(12,745)

27,296260

1,532

Total net
assets357,254(3,422)62,594
(12)
1

–

183

1

(23,971)(8,477)(32,264)

168

(36)

(32,132)183

1(23,971)(8,477)(32,264)

168

(36)

27,02924,947(7)(8,686)(21,222)(4,968)

428

1,496

384,283

18

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

Fiscal year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Millions of yen)
Shareholders’ equity

Balance at the
beginning of the year
Changes during theyear
Dividends from
Surplus
Net income
attributable toowners of the parent
Acquisition oftreasury stock
Disposal of treasury
stock
Change inownership interestof parent due totransactions with
non-controllinginterests
Net changes in
items other thanshareholders’ equity
Net changes during
the year
Balance at the end of
the yearCommon stock

Capital surplus

Retained earnings

124,520

90,940172,989

Treasury stock, at cost

Total shareholders’equity(1,122)

387,327(5,818)(5,818)78,191

78,191

3

(8)

(8)

8

11

282

282

–

285

72,373072,658

124,520

91,225245,362(1,122)459,985

Accumulated other comprehensive incomeNet
unrealizedNet
holding
unrealized
Total
Subscription
NonForeign
Remeasuregains
gains
accumulated
controllingrights tocurrency
ments of(losses) on (losses) on
otherinterests
sharestranslation
definedavailablehedging
comprehenadjustments benefit plansfor-salesive income
derivatives,securities, net of taxes
net of taxes
Balance at the
beginning of the year
Changes during theyear
Dividends from
Surplus
Net income
attributable toowners of the parent
Acquisition oftreasury stock
Disposal of treasury
stock
Change inownership interestof parent due totransactions with
non-controllinginterests
Net changes in
items other thanshareholders’ equity
Net changes during
the year
Balance at the end of
the year

24,947(7)(8,686)(21,222)(4,968)

428

1,496

Total net
assets384,283(5,818)78,191(8)
11

282(15,391)

7(11,995)

1,169(26,210)126

23(26,061)(15,391)

7(11,995)

1,169(26,210)126

23

46,597

9,556–(20,681)(20,053)(31,178)

554

1,519

430,880

19

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017(4) Consolidated Statements of Cash Flows(Millions of yen)

Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

Cash flows from operating activities
Income before provision for income taxes
Depreciation and amortization
Impairment loss on fixed assets
Amortization of goodwill
Loss (gain) on step acquisitions
Legal settlement compensation
Loss related to securities litigation
Loss related to the U.S. Anti-kickback Statute
Increase (decrease) in net defined benefit liabilities
Decrease (increase) in net defined benefit assets
Increase (decrease) in provision for product warranties
Interest and dividend income
Interest expense
Net loss (gain) of investment in affiliated companies
carried equity method
Increase (decrease) in provision for loss on businessliquidation
Loss (gain) on sales of investments in subsidiaries andaffiliates
Loss (gain) on sales of investment securities
Decrease (increase) in accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
Increase (decrease) in other payable
Increase (decrease) in accrued expense
Decrease (increase) in fixed lease receivables
Other
Sub-totalInterest and dividend received
Interest payments
Legal settlement compensation received
Loss related to securities litigation paid
Loss related to the US Anti-kickback Statute paid
Income taxes paid

Net cash provided by operating activities

20

70,80039,912
–
9,867
–
–
2,072
18,814
2,712(5,500)1,420(2,362)
7,892

81,68644,658
230
8,642
308
(34)
6,922
–
(511)
798
2,438
(1,952)
7,610

2,675

1,254

(177)

(107)

–

(3,084)(2,114)2,006(7,008)
1,965(1,572)
5,179(5,083)12,011
153,509
2,362(7,987)–(13,975)(72,455)(12,833)
48,621(23,879)(660)(14,801)
1,204
(353)
(2,904)(1,517)
9,615
115,563
1,952(7,648)106(7,902)(4,714)(7,163)90,194Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Millions of yen)

Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

Cash flows from investing activities
Deposits in time deposits
Withdrawals from time deposits
Purchase of property, plant and equipment
Purchases of intangible assets
Purchases of investment securities
Sales and redemption of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Net increase from sales of investment in subsidiaries
related to changes in scope of consolidation
Payments for loans receivable
Proceeds from loans receivable
Other

Net cash used in investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Proceeds from long-term debt
Repayments of long-term debt
Redemption of bonds
Purchase of treasury stock
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Dividends paid

Dividends paid to non-controlling interests
Other

Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

21

(217)
35
(50,422)(5,987)
(271)
3,214

(46)
192
(43,542)(3,708)(8)42,239

–

(41)

–

3,443

–
25
726
(52,897)(7,358)19505(8,305)(23,820)73,886(78,240)–(13)(3,933)20,000(20,217)(30,000)
(8)

–

(86)

(3,422)(53)(2,208)(33,870)(5,818)(59)(4,123)(44,244)(5,340)(4,537)(43,486)
209,809
166,323

33,108166,323
199,431Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017(5) Notes Regarding Consolidated Financial Statements(Notes on Premise of Going Concern)
No items to report(Important Items That Form the Basis for Preparing the Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 105
All the shares held in Nippon Outsourcing Corporation, which was a subsidiary of the Company, havebeen sold during the fiscal year under review, leading to said company being excluded from the scopeof consolidation.
OLYMPUS-RMS CORP., previously an affiliated company accounted for under the equity method, hasbeen included as a consolidated subsidiary due to the Company’s additional acquisition of its shares
during the fiscal year ended March 31, 2017.
(2) Name of non-consolidated subsidiaries
Non-consolidated subsidiaries are as follows:
Olympus-Supportmate Corp. and another company
Reason of excluding from the scope of consolidation
The 2 non-consolidated subsidiaries are all small and not material when measured by the impact of total
amounts of assets, net sales, net income, and retained earnings (based on the Company’s ownership
percentage) of those companies on consolidated financial statements. They have therefore been
excluded from the scope of consolidation.
2. Application of the equity method(1) Number of affiliated companies accounted for under the equity method: 2
Olympus Opto Systems India Private Limited
Sony Olympus Medical Solutions Inc.
All the shares held in Adachi Co., Ltd., which was an affiliated company accounted for under the equity
method, have been sold during the fiscal year under review, leading to said company being excluded
from the scope of the equity method.
(2) Olympus-Supportmate Corp. and another non-consolidated subsidiary have not been accounted forunder the equity method because the impact of all those companies on consolidated net income/loss andretained earnings is not material.
(Additional Information)(Application of ASBJ Guidance on Recoverability of Deferred Tax Assets)
Effective from the fiscal year ended March 31, 2017, the Company has applied the “Guidance on
Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016).

22

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Consolidated Statements of Income)*1. Major items and amounts of selling, general and administrative expenses are as follows:(Millions of yen)
Fiscal year ended March 31, 2016
(April 1, 2015 - March 31, 2016)
Advertising and promotion expenses
Salaries and allowance
Bonuses
Retirement benefit expenses
Amortization of goodwill
Experiment and research expenses
Depreciation

Fiscal year ended March 31, 2017
(April 1, 2016 - March 31, 2017)

40,945
135,247
30,826
7,130
9,867
41,75330,55030,087
133,825
30,202
9,823
8,642
39,78431,436*2. Legal settlement compensation
Fiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
With respect to the issue involving deferred recognition of past losses, the Company previously filed
lawsuits against 19 former directors who were then serving as directors, and in the fiscal year ended March
31, 2016, settlement was reached with 13 of the former directors. Accordingly, the Company has recorded“legal settlement compensation” of ¥72 million as monetary settlement in the case.
Fiscal year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
With respect to the issue involving deferred recognition of past losses, the Company previously filed
lawsuits against five former audit & supervisory board members who were then serving as audit &supervisory board members, and in the fiscal year ended March 31, 2017, settlement was reached with all
five of the audit & supervisory board members. Accordingly, the Company has recorded “legal settlementcompensation” of ¥34 million as monetary settlement in the case.
*3. Impairment loss on fixed assets
Fiscal year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
The Group accounted for impairment losses with respect to the following asset groups.
(Millions of yen)
Application
Assets scheduled for
disposal

Type

Location

Impairment loss on fixed
assetsOther intangible assets

Tokyo

230
230

Total

In principle, the Group’s business assets are grouped mainly by segment, assets scheduled for disposal aregrouped by assets to be disposed of by abandonment, sale, etc., and idle assets are grouped by individual
asset.
During the fiscal year ended March 31, 2017, a decision with respect to assets scheduled for disposal has
been made to dispose. As a result, the book value of these assets is considered to be zero.
*4. Loss on liquidation of business
Fiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
The “loss on liquidation of business” of ¥189 million recorded under extraordinary losses represents losses
incurred in relation to the liquidation of business operations of Olympus Asset Management Limited, aconsolidated subsidiary of the Company.

23

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

*5. Business restructuring expenses
Fiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
The “business restructuring expenses” of ¥1,209 million represents expenses incurred in restructuring
operations in order to better cope with the shrinking market in which the Imaging Business operates, andother changes in that regard.
*6. Loss related to securities litigation
The Company has received claims for compensation for damages from several individual and institutional
investors, for losses sustained as a result of the Company’s false statements for the purpose of postponing
recognition of losses in the Annual Securities Reports, Semi-Annual Securities Reports and Quarterly
Securities Reports for the period from the fiscal year ended March 31, 2001 through the first quarter of the
fiscal year ended March 31, 2012. “Loss related to securities litigation” represents losses relating to theseclaims for compensation for damages. A breakdown of the losses is presented below.
(Millions of yen)

Fiscal year ended March
31, 2016 (April 1, 2015 March 31, 2016)
2,072
–
2,072

Settlement package
Provision for loss on litigation
Total

Fiscal year ended March
31, 2017 (April 1, 2016 March 31, 2017)
6,705
217
6,922

“Settlement package” included the amount of settlements paid for some of the claims for damages.
“Provision for loss on litigation” is a rational estimate of the amount considered likely to be required toprepare for losses related to litigation, etc., in light of the status of litigation proceedings.
*7. Loss related to the U.S. Anti-kickback StatuteFiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
Olympus Corporation of the Americas (“OCA”) had been the subject of an investigation by the DOJ relating
to potential issues concerning its medical business over the years 2006 to 2011, under the Anti-kickback
Statute and the U.S. False Claims Act. On February 29, 2016, Olympus Corporation of the Americas enteredinto a Deferred Prosecution Agreement and a Civil Settlement Agreement in that regard with the DOJ.
Moreover, beginning in October 2011, OCA had also been the subject of an investigation by the DOJ
relating to alleged violations of the U.S. Foreign Corrupt Practices Act (“FCPA”) concerning the medical
business of Olympus Latin America, Inc. (“OLA”), an indirect U.S. subsidiary of Olympus Corporation, andOlympus Optical do Brasil, Ltda., a Brazilian subsidiary of OLA (“OBL”). On February 29, 2016, OLA andsubsidiaries of Olympus Corporation (including OCA) entered into a Deferred Prosecution Agreement with
the DOJ in that regard.
The Company recorded ¥18,814 million for “Loss related to the U.S. Anti-kickback Statute” to reflectcriminal penalties, civil fines and interest in that regard in light of the agreements.
*8. Income taxes for prior periods
Fiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
When a consolidated subsidiary of the Company transacts business with the Company or other consolidated
subsidiaries, the Company records anticipated amounts of additional payment for corporate tax and othersuch obligations in “income taxes for prior periods,” on the basis of prior applications submitted forapproval regarding transfer price taxation.
Fiscal year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
When a consolidated subsidiary of the Company transacts business with the Company or other consolidated
24

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

subsidiaries, the Company records anticipated amounts of additional payment for corporate tax and othersuch obligations in “income taxes for prior periods,” on the basis of prior applications submitted forapproval regarding transfer price taxation.

25

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Segment Information, etc.)[Segment Information]
1. Overview of reportable segments
The reportable segments of the Olympus Group are components of the Company whose separate
financial information is available. These segments are periodically evaluated by the Board of Directors
in deciding how to allocate management resources and in assessing the performance.
Each business division of the Olympus Group formulates comprehensive strategies for Japan andabroad with respect to products and services handled and deploys business activities.
Accordingly, being composed of segments, based on these business divisions, that are categorizedaccording to products and services, the Olympus Group has the following four reportable segments:
Medical Business, Scientific Solutions Business, Imaging Business and Others.
The “Medical Business” manufactures and sells gastrointestinal endoscopes, surgical endoscopes,
endo-therapy devices, ultrasound endoscopes and other products. The “Scientific Solutions Business”
manufactures and sells biological microscopes, industrial microscopes, industrial endoscopes, nondestructive testing equipment and other products. The “Imaging Business” manufactures and sells
digital cameras, voice recorders and other products. The “Others” business manufactures and sells
biomedical materials, and conducts system development and other business activities.

2. Method of calculating amounts of net sales, income/loss, assets, liabilities and other items
The accounting methods for the reportable business segments are generally the same as the methods
described in “Important Items That Form the Basis for Preparing the Consolidated Financial
Statements.” Profits of reportable segments are values on an operating income base. The internal sales
or transfer among segments are based on actual market prices.

26

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

3. Information regarding net sales, income/loss, assets, liabilities, and other items by reportable segment
Fiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)(Millions of yen)
Reportable Segment

Sales
Sales to outside customers
Internal sales or transfer among
segments
Total
Segment income (loss)
Segment assets
Other items
Depreciation cost
Amortization of goodwill
Increase in property, plant andequipment and intangible assets

MedicalScientific
Solutions

Imaging

Others

Total

Adjustment(Note 1)

Amount on
consolidated
financialstatements(Note 2)608,927

101,608

78,28415,759804,578－804,578

0

74

10

445

529

(529)

－

608,927
140,220642,788

101,682
8,482
80,86578,294(2,064)65,741

16,204(5,800)13,282805,107
140,838
802,676(529)(36,374)
197,938

804,578
104,464
1,000,614

30,416
9,252

4,472
598

1,685
–

517
17

37,090
9,867

2,822
–

39,912
9,867

46,430

5,645

3,091

888

56,054

8,391

64,445

Notes:
1. The adjustments are as follows:(1) The deduction of ¥529 million in internal sales or transfer among segments is elimination of transactions
among segments.
(2) The deduction of ¥36,374 million listed as an adjustment to segment profit includes corporate expenses of¥36,374 million not allocated to any reportable segment. These corporate expenses mostly consisted of
expenses related to the Corporate Group (management departments such as the Administrative Department)
and R&D Group of the parent company.
(3) The ¥197,938 million listed as an adjustment of segment assets mainly consists of corporate assets notallocated to any reportable segment.
(4) The ¥2,822 million listed as a segment depreciation cost mainly consists of depreciation cost relating tocorporate assets not allocated to any reportable segment.
(5) The ¥8,391 million listed as an increase in segment property, plant and equipment and intangible assets mainly
consists of increase in fixed assets relating to corporate assets not allocated to any reportable segment.
2. Segment profits are adjusted to agree with operating income on the consolidated financial statements.

27

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

Fiscal year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(Millions of yen)
Reportable Segment

Sales
Sales to outside customers
Internal sales or transfer among
segments
Total
Segment income (loss)
Segment assets
Other items
Depreciation cost
Amortization of goodwill
Increase in property, plant andequipment and intangible assets

MedicalScientific
Solutions

Imaging

Others

Total

Adjustment(Note 1)

Amount on
consolidated
financialstatements(Note 2)575,285

93,22765,574

13,964

748,050–

748,050

0

52

3

767

822

(822)

–

575,285
115,482
621,297

93,2795,280
79,371

65,577498
51,075

14,731(4,621)
11,748748,872
116,639
763,491(822)(40,152)
227,571748,050
76,487
991,062

33,999
8,124

4,323
508

1,930
–

854
10

41,106
8,642

3,552
–

44,658
8,642

32,877

5,726

2,805

1,176

42,584

6,763

49,347

Notes:
1. The adjustments are as follows:(1) The deduction of ¥822 million in internal sales or transfer among segments is elimination of transactions
among segments.
(2) The deduction of ¥40,152 million listed as an adjustment to segment income (loss) includes corporate
expenses of ¥40,152 million not allocated to any reportable segment. These corporate expenses mostly
consisted of expenses related to the Corporate Group (management departments such as the Administrative
Department) and R&D Group of the parent company.
(3) The ¥227,571 million listed as an adjustment of segment assets mainly consists of corporate assets notallocated to any reportable segment.
(4) The ¥3,552 million listed as a segment depreciation cost mainly consists of depreciation cost relating tocorporate assets not allocated to any reportable segment.
(5) The ¥6,763 million listed as an increase in segment property, plant and equipment and intangible assets mainly
consists of increase in fixed assets relating to corporate assets not allocated to any reportable segment.
2. Segment profits are adjusted to agree with operating income on the consolidated financial statements.

28

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

[Related Information]
The fiscal year ended March 31, 2016 (April 1, 2015 - March 31, 2016)
1. Information by product and service
Since similar information is disclosed in segment information, information by product and service
has been omitted.

2. Information by region(i) Net sales(Millions of yen)Japan

North America

163,070
Notes: 1.
2.

Europe282,108

Asia

195,606

145,986

Others17,808

Total
804,578

Net sales are based on the location of the customer, and are classified by country or region.
Major countries and regions other than Japan are as follows:(1) North America
USA, Canada(2) Europe
Germany, UK, France, etc.
Singapore, Hong Kong, China, Korea, Australia, etc.
(3) Asia
Central and South America, Africa, etc.
(4) Others

The fiscal year ended March 31, 2017 (April 1, 2016 - March 31, 2017)
1. Information by product and service
Since similar information is disclosed in segment information, information by product and service
has been omitted.

2. Information by region(i) Net sales(Millions of yen)Japan
159,610Notes: 1.
2.

North America
255,651

EuropeAsia

174,859

143,542

Others
14,388Net sales are based on the location of the customer, and are classified by country or region.
Major countries and regions other than Japan are as follows:(1) North
America USA, Canada(2) Europe
Germany, UK, France, etc.
Singapore, Hong Kong, China, Korea, Australia, etc.
(3) Asia(4) Others
Central and South America, Africa, etc.

29

Total
748,050Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Per-Share Data)
The fiscal year ended March 31, 2016
(April 1, 2015 - March 31, 2016)
Net assets per share

The fiscal year ended March 31, 2017
(April 1, 2016 - March 31, 2017)¥1,117.24¥1,252.96

Net income (loss) per share¥182.90¥228.47

Fully diluted net income pershare

182.84¥228.38

Note: The basis for calculating net income (loss) per share and fully diluted net income per share is as follows:

The fiscal year ended March 31, 2016 (April
1, 2015 - March 31, 2016)
Net income per share
Amount of net income(loss) attributable toowners of the parent
Amount not
attributable to commonshareholder
Net income (loss)
attributable to ownersof the parent
concerning common
stock
Average number ofshares of common
stock during the year
Fully diluted net income
per share
Adjustment for amountof net income
attributable to ownersof the parent
Increase in number ofshares of common
stock(Subscription rights toshares included therein)
Outline of the residual
securities excluded fromthe calculation of the
fully diluted net income
per share because they
have no dilutive effects(Millions of yen)
The fiscal year ended March 31, 2017
(April 1, 2016 - March 31, 2017)

62,59478,191––62,59478,191

342,235,989 shares

342,236,163 shares––

107,775 shares

144,296 shares(107,775 shares)(144,296 shares)

―

―

30

Olympus Corporation (7733) Financial Results for the Fiscal Year Ended March 31, 2017

(Important Subsequent Event)Corporate acquisition through share acquisition
The Company resolved at the Board of Directors meeting held on April 28, 2017, regarding the acquisition of
100% shares of Image Stream Medical, Inc. (Headquartered: Massachusetts, USA; CEO: Eddie Mitchell)(“ISM”), a U.S. operating room imaging systems integrator, through its wholly owned subsidiary, Olympus
Corporation of the Americas (“OCA”). Through the use of a special purpose vehicle (the “MergerSub”) andthe subsequent merger between the MergerSub and ISM, OCA will acquire the shares of surviving
corporation ISM, resulting in ISM becoming a wholly owned subsidiary of OCA (the “Transaction”). Afterthe resolution, OCA, ISM and the MergerSub entered into a mutual agreement for the Transaction on thesame day.
1. Purpose of equity acquisition
As outlined within the 2016 Corporate Strategic Plan (“16CSP”) announced on March 30, 2016, theCompany aims to improve corporate value by strengthening the company’s foundations and developing an
aggressive business portfolio for sustainable future growth.
Through this acquisition, Olympus seeks to acquire ISM’s technology and know-how, and consequently
strengthen its operating room systems integration business as described in the 16CSP, with the aim toprovide better medical environments, and thereby contributing to society by making the lives of people
around the world healthier, safer and more fulfilling.
2. Name of the company to be acquired, description of business, and size(1) Name: Image Stream Medical, Inc.
(2) Description of business: Proposing, selling, delivery and maintenance services for video management
equipment and system integration solutions for operating rooms(3) Turnover: Approx. US$31 million (fiscal year ended December 2016)
3. Schedule of equity acquisition
Early June, 2017 (provisional schedule)
4. Acquisition price and equity ratio after acquisition(1) Shares acquired: 100 shares(2) Acquisition price: US$ 78 million (maximum of US$ 87 million)
The acquisition price mentioned above is the valuation amount of the enterprise value of ISM. The
actual acquisition price is subject to certain adjustments, based on items (for example, net debt, net
working capital and others) of ISM as at the closing date of this Transaction. In addition, additional
consideration may be paid in the future up to this maximum amount, based on the performance,
progress of development and sales activities of ISM.
(3) Equity ratio after acquisition: 100%
5. Method of procurement of payment funds and payment
Funded by cash reserve31