QUARTERLY REPORT 3rd Quarter ended December 31, 2002 (Results for the Period from October 1, 2002 to December 31, 2002) Index -Financial Highlights -Performance Page 1 2 -Consolidated Performance 1. Consolidated Statements of Income 2. Consolidated Sales by Product Category 3. Consolidated Balance Sheets 4. Consolidated Statements of Cash Flow 5. Consolidated Segment Information 6. Significant Accounting Policies (Consolidated) 11 12 14 15 16 19 -Appendix 1. Quarterly Performance Outline (Consolidated) 2. Quarterly Sales by Product Category (Consolidated) 3. Forecast (Consolidated) 21 22 23 Ricoh Company, Ltd. * The Company bases the estimates above on information currently available to management, which involves risks and uncertainties that would cause actual results to differ materially from those projected. Ricoh Company, Ltd. and Consolidated Subsidiaries Financial Highlights (3rd Quarter ended December 31, 2002) 1. Results for the Period from October 1, 2002 to December 31, 2002 (1) Operating Results (Millions of yen) Three months ended Three months ended December 31, 2002 December 31, 2001 Net sales 420,739 401,331 (% change from the previous corresponding period) 4.8 7.3 Operating income 33,394 29,729 (% change from the previous corresponding period) 12.3 15.0 Income before income taxes 29,987 25,872 (% change from the previous corresponding period) 15.9 12.9 Net income 17,801 14,891 (% change from the previous corresponding period) 19.5 19.4 Net income per share-basic (yen) 24.51 21.41 Net income per share-diluted (yen) 23.74 20.00 Notes: i. Equity in income of affiliates: ¥459 million (¥524 million in previous corresponding period) ii. Some changes have been made in accounting method iii. Percentage changes in net sales, operating income, income before income taxes, and net income based on the previous corresponding period. (2) Financial Position (Millions of yen) December 31, 2002 March 31, 2002 Total assets 1,807,267 1,832,928 Shareholders' equity 671,132 633,020 Equity ratio (%) 37.1 34.5 Equity per share (yen) 925.98 870.63 Note: Number of shares outstanding as of December 31, 2002: 724,777,428 shares (727,086,738 shares as of March 31, 2002) (3) Cash Flow Nine months ended (Millions of yen) Nine months ended December 31, 2002 December 31, 2001 112,173 33,757 -76,695 -64,190 -26,212 34,817 177,564 114,099 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period (4) Items relating to the scale of consolidation and the application of the equity method: Number of consolidated subsidiaries: 330; nonconsolidated subsidiaries: 40; affiliated companies: 26 (5) Changes in accounting method, etc.: Consolidated subsidiaries: 3 additions; 2 removals Companies accounted for by the equity method: no change Notes: i. Consolidated financial statements of the Company and its consolidated subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America. ii. Ricoh’s 3rd quarter financial statements are unaudited. 2. Forecast of operating results from April 1, 2002 to March 31, 2003 Net sales Operating income Income before income taxes Net income Note: Net income per share (Consolidated) 101.00 yen (Millions of yen) 1,738,000 138,000 125,100 73,200 In accordance with Japanese regulations, Ricoh has issued forecast for its financial results for the fiscal year ending March 2003. These forecast are forward-looking statements based on a number of assumptions and beliefs in light of the information currently available to management and subject to significant risks and uncertainties. 1 Performance (1) Overview Three months ended December 31, 2002, 2001 and half year ended September 30, 2002 Three months ended Three months ended December 31, 2002 December 31, 2001 Domestic sales 210.1 211.7 Overseas sales 210.5 189.5 Net sales 420.7 401.3 Gross profit 184.9 173.6 Operating income 33.3 29.7 Income before income taxes 29.9 25.8 Net income 17.8 14.8 Net income per share-basic (yen) 24.51 21.41 Net income per share-diluted (yen) 23.74 20.00 Return on equity (%) 2.7 2.5 Income before income taxes on total assets (%) 1.7 1.5 Income before income taxes on net sales (%) 7.1 6.4 Exchange rate (Yen/US$) 122.59 123.70 Exchange rate (Yen/EURO) 122.59 110.74 Expenditure for plant and equipment 16.7 16.8 Depreciation for tangible fixed assets 17.5 20.2 R&D Expenditure 20.8 18.6 2 Change -0.8% 11.1% 4.8% 6.5% 12.3% 15.9% 19.5% 3.10 3.74 0.2%point 0.2%point 0.7%point -1.11 11.85 -0.1 -2.7 2.1 (Billions of yen) Half year ended September 30, 2002 449.5 407.2 856.8 360.6 61.3 55.6 33.5 46.11 44.68 5.2 3.0 6.5 123.08 116.95 38.4 33.8 40.2 Nine months ended December 31, 2002, 2001 and year ended March 31, 2002. Nine months ended Nine months ended Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income Net income per share-basic (yen) Net income per share-diluted (yen) Return on equity (%) Income before income taxes on total assets (%) Income before income taxes on net sales (%) Total assets Shareholders’ equity Interest-bearing debt Equity ratio (%) Equity per share (yen) Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Exchange rate (Yen/US$) Exchange rate (Yen/EURO) Expenditure for plant and equipment Depreciation for tangible fixed assets R&D Expenditure Change (Billions of yen) Year ended December 31, 2002 December 31, 2001 March 31, 2002 659.7 664.5 -0.7% 902.6 617.7 556.9 10.9% 769.6 1,277.5 1,221.4 4.6% 1,672.3 545.5 515.5 5.8% 699.9 94.7 89.6 5.7% 129.6 85.6 78.3 9.3% 113.9 51.3 43.2 18.5% 61.6 70.62 62.38 8.24 88.27 68.42 58.24 10.18 82.46 7.9 7.5 0.4%point 10.4 4.7 4.5 0.2%point 6.4 6.7 6.4 0.3%point 6.8 1,807.2 1,760.3 46.8 1,832.9 671.1 601.2 69.8 633.0 541.2 586.0 -44.7 561.4 37.1 34.2 2.9%points 34.5 925.98 860.86 65.12 870.63 112.1 33.7 78.4 105.1 -76.6 -64.1 -12.5 -81.4 -26.2 34.8 -61.0 36.2 177.5 114.0 63.4 170.1 122.92 122.67 0.25 125.10 118.84 108.77 10.07 110.60 55.1 56.6 -1.5 75.6 51.4 53.3 -1.9 73.7 61.0 58.6 2.4 80.7 3 *Overview - In the third quarter of fiscal 2003, ended December 31, 2002, consolidated net sales increased by 4.8% as compared to the previous corresponding period, to ¥420.7 billion. The increase would have been 3.1% after factoring out the impact of foreign exchange. - Domestic sales were off 0.8%. Sales of the printing systems such as networkable MFPs (multifunctional printers) and laser printers, improved especially on the strength of demand for color models. Offsetting these gains was lower demand for standalone analog products amid the shift to digital offerings and sluggish information technology demand in Japan that dampened sales growth in personal computers and servers. - Overseas sales increased by 11.1%, as demand remained favorable for core printing systems and other products in all regions. Excluding the foreign exchange effect, overseas sales would have increased by 7.4%. Operating income increased by 12.3%. This owed mainly to increased sales of such high-value-added offerings as MFPs and color printers. On top of that, new products were popular, while Ricoh continued its cost-cutting drive, allowing the Company to absorb the expenses of restructuring efforts at subsidiaries and affiliates. Ricoh also benefited from a lower yen. The Company endeavored to lower total other expenses by reducing interest expense in line with decrease on borrowings, thus compensating for higher foreign exchange losses and decreases in interest and dividend income because of adverse conditions in financial markets. Income before income taxes, minority interests and equity in earnings of affiliates thus increased by 15.9%. - As the result of these factors, net income increased by 19.5% as compared to the previous corresponding period. *Financial Position - The Ricoh Group is pursuing an ongoing drive to improve revenues, earnings, and free cash flow to reinforce its financial position. - At the end of the third quarter, net cash provided by operating activities was ¥112.1 billion, up ¥78.4 billion from the previous corresponding period. This was due primarily to higher net income and increased depreciation and amortization. - Net cash used in investing activities was ¥76.6 billion, mainly because of higher spending on facilities for new manufacturing lines or product development, and securities investments. - As a result of the above factors, free cash flow totaled ¥35.4 billion. - Ricoh again strove during the period to switch from short-term loans to long-term indebtedness while slashing interestbearing debt. Net cash used in financing activities, including cash dividends paid, was ¥26.2 billion. As the end of the third quarter, cash and cash equivalents were ¥7.3 billion higher year on year, at ¥177.5 billion. - At the start of fiscal 2003, Ricoh has included short-term investment securities, which are always available-for-sale, such as MMF (Money Management Funds), in cash equivalents. The effects of this change were as follows. (Millions of yen) Cash and cash equivalents at term-end December 31, 2002 Under previous accounting policy Under new accounting policy Change 86,673 177,564 90,891 4 December 31, 2001 63,856 114,099 50,243 March 31, 2002 142,508 170,172 27,664 Consolidated Performance Net sales （Billions of yen） Net sales (left axis) 450.9 450 411.9 408.1 Net income (Billions of yen) Net income (right axis) 428.2 428.5 401.3 50 420.7 40 300 30 18.3 14.8 150 13.5 19.5 14.8 17.8 20 14.0 10 0 0 Three months ended Jun. 30, '01 (1Q) Three months Three months Three months ended Sept. 30, ended Dec. 31, ended Mar. 31, '02 (4Q) '01 (3Q) '01 (2Q) Three months ended Jun. 30, '02 (1Q) Three months Three months ended Sept. 30, ended Dec. 31, '02 (3Q) '02 (2Q) （Yen） （%） Net income per share (left axis) Return on equity (right axis) 30 Return on assets (right axis) 6 26.85 25.89 21.47 24.51 21.41 19.50 19.26 20 3.0 2.6 2.3 3.0 4 2.7 2.5 2.1 2 10 2.0 1.6 1.5 1.5 1.8 1.7 1.3 0 0 Three months Three months Three months Three months Three months Three months Three months ended Jun. 30, ended Sept. 30, ended Dec. 31, ended Mar. 31, ended Jun. 30, ended Sept. 30, ended Dec. 31, '02 (3Q) '02 (2Q) '02 (1Q) '02 (4Q) '01 (3Q) '01 (2Q) '01 (1Q) 5 *Consolidated Sales by Category Imaging Solutions (sales down 9.1%, to ¥208.3 billion) *Digital Imaging Solutions (sales down 6.5%, to ¥151.4 billion) In core digital PPCs, the Company strengthened everything in its lineup from low-end models to high-speed machines. Sales growth rose, particularly for the strategically focused products, Imagio Neo C240/C320 series. Domestic sales were down, however, amid sluggish demand. Overseas, sales were lower than in the previous corresponding period despite the inroads made by PPCs and MFPs and orders from large accounts. *Other Imaging Solutions (sales down 15.5%, to ¥56.8 billion) The sales decreased stemmed from the continued shift away from analog PPCs to digital models and MFPs. Network Input/Output Systems (sales up 41.1%, to ¥117.4 billion) *Printing Systems (sales up 45.9%, to ¥102.9 billion) In Japan and internationally, the Company further augmented its lineup of fast, networkable, and color models, expanding sales of printing equipment to meet customer requirements. During the third quarter, the Company increased sales of MFPs and laser printers, notably color offerings. *Other Input/Output Systems (sales up 14.4%, to ¥14.4 billion) This business benefited from strong exports of DVD drives and media based on new standards. Network System Solutions (sales down 11.1%, to ¥40.0 billion) Ricoh continued to strengthen its useware, document management, and other solutions businesses to lower customers’ total costs of ownership while enhancing performance. The sales decline stemmed from reduced purchases of personal computers and servers owing to corporate constrains on information technology spending. Other Businesses (sales up 25.4%, to ¥54.9 billion) The recovery of the semiconductor business and steady gains in leasing and other operations offset lower sales of metering equipment. Consolidated Sales by Category （Billions of yen） Other Businesses Network system solutions Networking I/O systems Imaging solutions 450 43.8 45.0 54.9 54.5 40.0 40.0 117.4 114.8 208.3 204.3 300 83.2 150 229.2 0 Three months ended December 31, '01 Three months ended December 31, '02 Three months ended December 31, '02* *Sales amount excluding exchange impact 6 * Consolidated Sales by Geographic Area Japan (sales down 0.8%, to ¥210.1 billion) Demand for traditional analog offerings remained low amid the stagnant domestic economy. Still, Ricoh continued to build sales in new areas through customer-focused product and sales strategies. As part of these efforts, the Company strengthened its capabilities in the printing systems such as MFPs and printers and in its solutions business, which encompasses useware and document management. Overall sales were slightly down, however, in keeping with the shift away from analog equipment toward MFPs and color models and sluggish demand for personal computers and servers. The Americas (sales up 1.9%, to ¥84.1 billion) The Company further improved its sales network, especially in North America, while expanding sales of such new printing systems as MFPs and printers. On top of that, sales were solid for DVD drives and media based on new standards. Europe (sales up 13.5%, to ¥88.3 billion) Overall performance was strong on the back of new printing systems, notably MFPs and printers. Others (sales up 30.4%, to ¥37.9 billion) Sales in China, the rest of Asia, and other regions benefited from the shift to digital, networkable, and color systems. Sales by Geographic Area （Billions of yen） 450 Others Europe The Americas Japan 37.9 37.2 77.8 88.3 81.4 82.5 84.1 84.9 211.7 210.1 210.1 Three months ended December 31, '01 Three months ended December 31, '02 29.1 300 150 0 Three months ended December 31, '02* *Sales amount excluding exchange impact 7 *Segment Information Business Segment Office Equipment In Japan and overseas, sales of high-value-added MFPs and laser printers were increased, especially on color systems. With the contribution of ongoing efforts to reduce manufacturing costs and lower yen impact, sales and operating income increased. Other Businesses While results in the metering equipment business deteriorated, semiconductor demand turned around and leasing and other operations performed favorably. Both sales and operating income in this segment were increased as compared to the previous corresponding period. Business Segment (Office Equipment) Business Segment (Other Businesses) Net Sales Operating income Operating income on net sales （Billions of yen） （%） 14.0 400 12.1 Net Sales Operating income Operating income on net sales （Billions of yen） （%） 14.0 400 12.0 12.0 11.9 300 10.0 10.0 300 8.0 8.0 365.8 357.5 200 6.0 200 6.0 4.0 4.0 100 2.1 100 2.0 2.0 -0.1 0.0 0.0 42.3 44.3 55.5 44.7 0.0 0 -2.0 Three months ended December 31, '01 -2.0 Three months ended December 31, '01 Three months ended December 31, '02 8 1.1 0 Three months ended December 31, '02 Geographic Segment Japan Exports of such high-value-added offerings as MFPs and laser printers drove gains in office equipment, helping boost overall sales in that business area despite a decline in Japan. Operating income remained flat, as Ricoh increased overseas production under its policy of optimally locating manufacturing operations closer to customer markets and because of the lower sales in Japan. The Americas Despite intense competition, sales of highly profitable printing systems were increased, particularly for strategic MFPs and laser printers. Both regional sales and operating income improved as compared to the previous corresponding period. Europe The Company continued to do well, increasing sales of MFPs and laser printers, while maintaining high productivity rates at local plants, causing overall sales and operating income to improve. Others Sales remained strong in China and elsewhere in Asia and Oceania in line with the shift to MFPs and other digital equipment. In addition, higher production in China helped increase regional sales and operating income. Japan (Billions of yen) Net sales, including intersegment Operating income Operating income on net sales The Americas （Billions of yen） (%) 10 350 Net sales, including intersegment Operating income Operating income on net sales （%） 10 350 8.7 8.4 300 300 8 8 250 250 6 200 6 200 310.9 150 302.4 150 4 4 100 100 2.2 2 83.8 50 50 26.1 Three months ended December 31, '01 Three months ended December 31, '02 Net sales, including intersegment Operating income Operating income on net sales Europe （Billions of yen） Others （Billions of yen） （%） 10 350 1.7 0.7 0 0 2 83.3 26.1 0 Three months ended December 31, '01 0.8 0 Three months ended December 31, '02 Net sales, including intersegment Operating income Operating income on net sales （%） 10 350 300 300 8 8 250 250 6 200 6.9 6 5.1 200 5.2 5.1 150 150 4 100 100 50 4 4.0 2 2 88.2 78.2 50 36.3 4.5 0 0 Three months ended December 31, '01 0 Three months ended December 31, '02 1.8 Three months ended December 31, '01 9 44.3 3.0 0 Three months ended December 31, '02 (2) Expectations A sluggish domestic economy and the yen's recent appreciation has prompted management to lower the fiscal 2003 net sales forecast it announced in October 2002, from ¥1,750.0 billion, to ¥1,738.0 billion. On the positive side, earnings in the third quarter were solidly above expectations, and Ricoh anticipates further income improvements. Management has thus increased its operating income forecast from the ¥134.0 billion, to ¥138.0 billion. Income before income taxes, minority interests and equity in earnings of affiliates is forecasted to reach ¥125.1 billion, compared with the previous forecast of ¥121.5 billion. Similarly, net income is forecasted ¥73.2 billion, against the earlier estimate of ¥71.0 billion. Exchange Rate Assumptions for the three month ended March 31, 2003 US$ 1 = ¥118.00 (¥132.50 in the previous corresponding period) EURO 1 = ¥125.00 (¥116.21 in the previous corresponding period) Exchange Rate Assumptions for the full year ended March 31, 2003 US$ 1 = ¥121.70 (¥125.10 in previous fiscal year) EURO 1 = ¥120.37 (¥110.60 in previous fiscal year) (Billions of yen) Year ended March 31, 2003 (Forecast) 895.0 843.0 1,738.0 741.0 138.0 125.1 73.2 Year ended March 31, 2002 Change Domestic sales 902.6 -0.8% Overseas sales 769.6 9.5% Net sales 1,672.3 3.9% (*1) Gross profit 699.9 5.9% Operating income 129.6 6.4% Income before income taxes 113.9 9.8% Net income 61.6 18.8% (*2) Notes: *1…Net sales would be ninth consecutive year of growth. *2…Net income would be eleventh consecutive year of growth and ninth consecutive year of record high. * Ricoh bases the estimates above on information currently available to management, which involves risks and uncertainties that would cause actual results to differ materially from those projected. 10 1. Consolidated Statements of Income Three months ended December 31, 2002 and 2001. Net sales Cost of sales Percentage of net sales (%) Gross Profit Percentage of net sales (%) Selling, general and administrative expenses Percentage of net sales (%) Operating income Percentage of net sales (%) Other (income) expense Interest and dividend income Percentage of net sales (%) Interest expense Percentage of net sales (%) Other, net Percentage of net sales (%) Income before income taxes, equity income and minority interests Percentage of net sales (%) Provision for income taxes Percentage of net sales (%) Minority interests in earnings of subsidiaries Percentage of net sales (%) Equity in earnings of affiliates Percentage of net sales (%) Net income Percentage of net sales (%) Reference: Exchange rate US$ 1 EURO 1 (Millions of yen) Three months ended Three months ended December 31, 2002 December 31, 2001 420,739 401,331 235,802 227,700 56.0 56.7 184,937 173,631 44.0 43.3 151,543 143,902 36.1 35.9 33,394 29,729 7.9 7.4 603 0.1 1,298 0.3 2,712 0.6 1,159 0.3 2,001 0.5 3,015 0.8 29,987 7.1 12,729 3.0 -84 0.0 459 0.1 17,801 4.2 25,872 6.4 10,969 2.7 536 0.1 524 0.1 14,891 3.7 Three months ended December 31, 2002 ¥122.59 ¥122.59 Nine months ended December 31, 2002 ¥122.92 ¥118.84 11 % 4.8 3.6 11,306 6.5 7,641 5.3 3,665 12.3 -556 -48.0 -703 -35.1 -303 -10.0 4,115 15.9 1,760 16.0 -620 － -65 -12.4 2,910 19.5 Three months ended December 31, 2001 ¥123.70 ¥110.74 Nine months ended December 31, 2002, 2001 and year ended March 31, 2002. Nine months ended Nine months ended December 31, 2002 December 31, 2001 Net sales 1,277,560 1,221,418 Cost of sales 731,978 705,891 Percentage of net sales (%) 57.3 57.8 Gross Profit 545,582 515,527 Percentage of net sales (%) 42.7 42.2 Selling, general and administrative expenses 450,860 425,894 Percentage of net sales (%) 35.3 34.9 Operating income 94,722 89,633 Percentage of net sales (%) 7.4 7.3 Other (income) expense Interest and dividend income 2,638 4,055 Percentage of net sales (%) 0.2 0.3 Interest expense 5,328 6,563 Percentage of net sales (%) 0.4 0.5 Other, net 6,372 8,729 Percentage of net sales (%) 0.5 0.7 Income before income taxes, equity income and minority interests 85,660 78,396 Percentage of net sales (%) 6.7 6.4 Provision for income taxes 36,749 34,488 Percentage of net sales (%) 2.9 2.8 Minority interests in earnings of subsidiaries -348 2,149 Percentage of net sales (%) 0.0 0.2 Equity in earnings of affiliates 2,067 1,540 Percentage of net sales (%) 0.2 0.1 Net income 51,326 43,299 Percentage of net sales (%) 4.0 3.5 Reference: Exchange rate US$ 1 EURO 1 Change 19,408 8,102 Nine months ended December 31, 2001 ¥122.67 ¥108.77 Change 56,142 26,087 30,055 24,966 5,089 (Millions of yen) Year ended ％ March 31, 2002 4.6 1,672,340 3.7 972,394 58.1 5.8 699,946 41.9 5.9 570,251 34.1 5.7 129,695 7.8 -1,417 -34.9 -1,235 -18.8 -2,357 -27.0 7,264 9.3 2,261 6.6 -2,497 － 527 34.2 8,027 18.5 Year ended March 31, 2002 ¥125.10 ¥110.60 4,753 0.3 8,233 0.5 12,265 0.8 113,950 6.8 51,147 3.0 3,080 0.2 1,891 0.1 61,614 3.7 2. Consolidated Sales by Product Category Three months ended December 31, 2002 and 2001. (Millions of yen) Three months ended Three months ended December 31, ’02 December 31, ’01 <Office Equipment> Imaging Solutions: Digital Imaging Systems Percentage of net sales (%) Domestic Overseas Other Imaging Systems Percentage of net sales (%) Domestic Overseas Total Imaging Solutions Percentage of net sales (%) Domestic Overseas Networking input/output systems: Printing Systems Percentage of net sales (%) Domestic Overseas Other Input/Output Systems Percentage of net sales (%) Domestic Overseas Total Networking input/output systems Percentage of net sales (%) Domestic Overseas Network system solutions Percentage of net sales (%) Domestic Overseas Office Equipment Total Percentage of net sales (%) Domestic Overseas < Other Businesses > Other Businesses Percentage of net sales (%) Domestic Overseas Grand Total Percentage of net sales (%) Domestic Percentage of net sales (%) Overseas Percentage of net sales (%) The Americas Percentage of net sales (%) Europe Percentage of net sales (%) Other Percentage of net sales (%) Each category includes the following products: Digital Imaging Systems Other Imaging Systems Printing Systems Other Input/Output Systems Network System Solutions Other Businesses Reference: Exchange rate US$ 1 EURO 1 151,471 36.0 63,618 87,853 56,852 13.5 20,737 36,115 208,323 49.5 84,355 123,968 161,938 40.4 69,631 92,307 67,295 16.8 24,442 42,853 229,233 57.2 94,073 135,160 102,972 24.5 44,451 58,521 14,449 3.4 2,274 12,175 117,421 27.9 46,725 70,696 40,073 9.5 39,324 749 365,817 86.9 170,404 195,413 70,597 17.6 35,286 35,311 12,636 3.1 3,937 8,699 83,233 20.7 39,223 44,010 45,054 11.2 44,331 723 357,520 89.1 177,627 179,893 54,922 13.1 39,793 15,129 420,739 100.0 210,197 50.0 210,542 50.0 84,177 20.0 88,381 21.0 37,984 9.0 43,811 10.9 34,159 9,652 401,331 100.0 211,786 52.8 189,545 47.2 82,575 20.6 77,849 19.4 29,121 7.2 Change % Change excluding exchange impact -10,467 -6.5 -13,099 -8.1 -6,013 -4,454 -10,443 -8.6 -4.8 -15.5 -6,013 -7,086 -11,737 -8.6 -7.7 -17.4 -3,705 -6,738 -20,910 -15.2 -15.7 -9.1 -3,705 -8,032 -24,836 -15.2 -18.7 -10.8 -9,718 -11,192 -10.3 -8.3 -9,718 -15,118 -10.3 -11.2 32,375 45.9 29,955 42.4 9,165 23,210 1,813 26.0 65.7 14.4 9,165 20,790 1,660 26.0 58.9 13.1 -1,663 3,476 34,188 -42.2 40.0 41.1 -1,663 3,323 31,615 -42.2 38.2 38.0 7,502 26,686 -4,981 19.1 60.6 -11.1 7,502 24,113 -5,004 19.1 54.8 -11.1 -5,007 26 8,297 -11.3 3.6 2.3 -5,007 3 1,775 -11.3 0.4 0.5 -7,223 15,520 -4.1 8.6 -7,223 8,998 -4.1 5.0 11,111 25.4 10,715 24.5 5,634 5,477 19,408 16.5 56.7 4.8 5,634 5,081 12,490 16.5 52.6 3.1 -1,589 -0.8 -1,589 -0.8 20,997 11.1 14,079 7.4 1,602 1.9 2,335 2.8 10,532 13.5 3,574 4.6 8,863 30.4 8,170 28.1 Digital PPCs, color PPCs, digital duplicators, facsimile machines, related supplies and services Analog PPCs, diazo copiers, and related supplies including thermal paper, and services MFPs(multifunctional printers), laser printers, related supplies, services and software Optical discs and system scanners Personal computers, PC servers, network systems, network related software, and service/support Digital cameras, analog cameras, semiconductors Three months ended December 31, 2002 ¥122.59 ¥122.59 Three months ended December 31, 2002 ¥123.70 ¥110.74 12 % Nine months ended December 31, 2002, 2001 and year ended March 31, 2002. Nine months ended December 31, ’02 <Office Equipment> Imaging Solutions: Digital Imaging Systems Percentage of net sales (%) Domestic Overseas Other Imaging Systems Percentage of net sales (%) Domestic Overseas Total Imaging Solutions Percentage of net sales (%) Domestic Overseas Networking input/output systems: Printing Systems Percentage of net sales (%) Domestic Overseas Other Input/Output Systems Percentage of net sales (%) Domestic Overseas Total Networking input/output systems Percentage of net sales (%) Domestic Overseas Network system solutions Percentage of net sales (%) Domestic Overseas Office Equipment Total Percentage of net sales (%) Domestic Overseas < Other Businesses > Other Businesses Percentage of net sales (%) Domestic Overseas Grand Total Percentage of net sales (%) Domestic Percentage of net sales (%) Overseas Percentage of net sales (%) The Americas Percentage of net sales (%) Europe Percentage of net sales (%) Other Percentage of net sales (%) Each category includes the following products: Digital Imaging Systems Other Imaging Systems Printing Systems Other Input/Output Systems Network System Solutions Other Businesses Reference: Exchange rate US$ 1 EURO 1 Nine months ended December 31, ’ 01 460,856 36.1 199,484 261,372 177,829 13.9 61,698 116,131 638,685 50.0 261,182 377,503 473,906 38.8 222,153 251,753 213,648 17.5 76,028 137,620 687,554 56.3 298,181 389,373 292,380 22.9 126,467 165,913 43,984 3.4 8,232 35,752 336,364 26.3 134,699 201,665 140,125 11.0 138,078 2,047 1,115,174 87.3 533,959 581,215 219,003 17.9 101,186 117,817 32,532 2.7 11,325 21,207 251,535 20.6 112,511 139,024 148,004 12.1 146,335 1,669 1,087,093 89.0 557,027 530,066 162,386 12.7 125,813 36,573 1,277,560 100.0 659,772 51.6 617,788 48.4 254,610 20.0 254,550 19.9 108,628 8.5 134,325 11.0 107,484 26,841 1,221,418 100.0 664,511 54.4 556,907 45.6 245,241 20.1 225,984 18.5 85,682 7.0 (Millions of yen) Change % Change excluding exchange impact -13,050 -2.8 -22,207 -4.7 -22,669 9,619 -35,819 -10.2 3.8 -16.8 -22,669 462 -40,409 -10.2 0.2 -18.9 -14,330 -21,489 -48,869 -18.8 -15.6 -7.1 -14,330 -26,079 -62,616 -18.8 -19.0 -9.1 -36,999 -11,870 -12.4 -3.0 -36,999 -25,617 -12.4 -6.6 73,377 33.5 66,247 30.2 25,281 48,096 11,452 25.0 40.8 35.2 25,281 40,966 11,062 25.0 34.8 34.0 -3,093 14,545 84,829 -27.3 68.6 33.7 -3,093 14,155 77,309 -27.3 66.7 30.7 22,188 62,641 -7,879 19.7 45.1 -5.3 22,188 55,121 -7,972 19.7 39.6 -5.4 -8,257 378 28,081 -5.6 22.6 2.6 -8,257 285 6,721 -5.6 17.1 0.6 -23,068 51,149 -4.1 9.6 -23,068 29,789 -4.1 5.6 28,061 20.9 26,888 20.0 18,329 9,732 56,142 17.1 36.3 4.6 18,329 8,559 33,609 17.1 31.9 2.8 -4,739 -0.7 -4,739 -0.7 60,881 10.9 38,348 6.9 9,369 3.8 8,868 3.6 28,566 12.6 9,244 4.1 22,946 26.8 20,236 23.6 Digital PPCs, color PPCs, digital duplicators, facsimile machines, related supplies and services Analog PPCs, diazo copiers, and related supplies including thermal paper, and services MFPs(multifunctional printers), laser printers, related supplies, services and software Optical discs and system scanners Personal computers, PC servers, network systems, network related software, and service/support Digital cameras, analog cameras, semiconductors Nine months ended December 31, 2002 ¥122.92 ¥118.84 Nine months ended December 31, 2001 ¥122.67 ¥108.77 13 % Year ended March 31, 2002 ¥125.10 ¥110.60 Year ended March 31, ’02 654,425 39.1 294,827 359,598 279,755 16.7 97,356 182,399 934,180 55.8 392,183 541,997 299,231 17.9 141,273 157,958 45,016 2.7 14,966 30,050 344,247 20.6 156,239 188,008 206,962 12.4 204,631 2,331 1,485,389 88.8 753,053 732,336 186,951 11.2 149,602 37,349 1,672,340 100.0 902,655 54.0 769,685 46.0 341,747 20.4 311,312 18.6 116,626 7.0 3. Consolidated Balance Sheets December 31, 2002 and March 31, 2002 Assets December 31, 2002 Current Assets Cash and time deposits Trade receivables Marketable securities Inventories Other current assets Total Current Assets Fixed Assets Tangible fixed assets Finance receivable Other Investments Total Fixed Assets Total Assets Note: Contents of cash and time deposits: Cash and cash equivalents (*) Time deposits March 31, 2002 (Millions of yen) Change 184,715 406,553 217 149,348 54,530 795,363 182,650 442,399 22,935 162,176 53,508 863,668 2,065 -35,846 -22,718 -12,828 1,022 -68,305 249,253 463,281 299,370 1,011,904 1,807,267 259,380 447,829 262,051 969,260 1,832,928 -10,127 15,452 37,319 42,644 -25,661 177,564 7,151 170,172 12,478 *…Effective from April 1, 2002, Ricoh changed its policy for definition of cash and cash equivalents on its consolidated balance sheets and consolidated statements of cash flow. Results for prior years are restated. (See 6. Significant Accounting Policies (Consolidated) (6)) Liabilities and Shareholders’ Investment December 31, 2002 Current Liabilities Trade payables Short-term borrowings Other current liabilities Total Current Liabilities Fixed Liabilities Long-term indebtedness Retirement benefit obligation Other fixed liabilities Total Fixed Liabilities Total Liabilities Minority Interest Shareholders’ Investment Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Treasury stock Total Shareholders’ Investment Total Liabilities and Shareholders’ Investment Note: Other comprehensive income; Net unrealized holding gains on available-for-sale securities Pension liability adjustments Net unrealized gains (losses) on derivative instruments Cumulative translation adjustments Reference: Exchange rate US$ 1 EURO 1 (Millions of yen) Change 252,030 180,998 142,753 575,781 277,753 228,408 159,540 665,701 -25,723 -47,410 -16,787 -89,920 360,209 118,394 27,780 506,383 1,082,164 53,971 332,995 119,572 30,592 483,159 1,148,860 51,048 27,214 -1,178 -2,812 23,224 -66,696 2,923 120,573 171,740 426,888 -42,739 -5,330 671,132 1,807,267 120,461 171,628 385,741 -44,376 -434 633,020 1,832,928 112 112 41,147 1,637 -4,896 38,112 -25,661 8,606 -35,198 -181 -15,966 10,566 -39,710 -207 -15,025 -1,960 4,512 26 -941 December 31, 2002 ¥119.90 ¥125.08 14 March 31, 2002 March 31, 2002 ¥133.25 ¥116.14 4. Consolidated Statements of Cash Flow Nine months ended December 31, 2002, 2001 and year ended March 31, 2002. (Millions of yen) Nine months ended December 31, 2002 I. Cash Flows from Operating Activities: 1. Net income 2. Adjustments to reconcile net income to net cash provided by operating activities— Depreciation and amortization Equity in earnings of affiliates, net of dividends received Deferred income taxes Loss on disposal and sales of tangible fixed assets Changes in assets and liabilities— Decrease (increase) in trade receivables Decrease in inventories Increase in finance receivables Decrease in trade payables Decrease in accrued income taxes and accrued expenses and other Retirement benefit obligation, net Other, net Net cash provided by operating activities II. Cash Flows from Investing Activities: 1. Proceeds from sales of plant and equipment 2. Expenditures for tangible fixed assets 3. Payments for purchases of available-for-sale securities 4. Proceeds from sales of available-for-sale securities 5. Decrease in investments in and advances to affiliates 6. Decrease (increase) in time deposits 7. Other, net Net cash used in investing activities III. Cash Flows from Financing Activities: 1. Proceeds from long-term indebtedness 2. Repayment of long-term indebtedness 3. (Decrease) increase in short-term borrowings, net 4. Proceeds from issuance of long-term debt securities 5. Repayment of long-term debt securities 6. Cash dividends paid 7. Other, net Net cash provided by (used in) financing activities IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents V. Net Increase in Cash and Cash Equivalents VI. Cash and Cash Equivalents at Beginning of Year VII. Cash and Cash Equivalents at End of Period Nine months ended December 31, 2001 51,326 43,299 61,614 56,519 -1,129 -5,139 1,078 53,396 -1,081 -2,384 993 73,782 -1,260 -1,218 1,665 32,308 9,765 -20,517 -22,407 10,522 7,874 -18,119 -30,024 -20,006 21,194 -13,620 -19,535 -13,965 4,804 19,530 112,173 -33,866 9,646 -6,499 33,757 -13,592 8,374 7,740 105,138 201 -53,300 -52,142 24,148 46 4,882 -530 -76,695 697 -56,501 -8,607 18,141 49 -359 -17,610 -64,190 756 -75,231 -10,025 24,568 5 -477 -21,017 -81,421 57,685 -15,547 -52,257 11,000 -11,553 -10,174 -5,366 -26,212 -1,874 7,392 170,172 177,564 30,863 -55,966 35,234 43,500 -10,000 -8,318 -496 34,817 1,969 6,353 107,746 114,099 71,075 -79,640 -39,414 103,500 -10,000 -8,322 -964 36,235 2,474 62,426 107,746 170,172 Effective from April 1, 2002, Ricoh changed its policy for definition of cash and cash equivalents on its consolidated balance sheets and consolidated statements of cash flow. Results for prior years are restated. (See 6. Significant Accounting Policies (Consolidated) (6)) 15 Year ended March 31, 2002 5. Consolidated Segment Information (1) Industry Segment Information Three months ended December 31, 2002 and 2001. (Millions of yen) Three months ended December 31, 2002 Net sales: Office Equipment Other Businesses Intersegment Total Operating expenses Office Equipment Other Businesses Intersegment Corporate Total Operating income: Office Equipment Operating income on office equipment sales(%) Other Businesses Operating income on other business sales(%) Intersegment Corporate Consolidated operating income Other income(expenses) Income before income tax Three months ended December 31, 2001 Change % 365,817 55,579 -657 420,739 357,520 44,786 -975 401,331 8,297 10,793 318 19,408 2.3 24.1 -32.6 4.8 321,425 54,425 -666 12,161 387,345 315,121 44,823 -976 12,634 371,602 6,304 9,602 310 -473 15,743 2.0 21.4 -31.8 -3.7 4.2 44,392 42,399 1,993 4.7 12.1 11.9 0.2 1,154 -37 1,191 2.1 -0.1 2.2 9 -12,161 33,394 -3,407 29,987 1 -12,634 29,729 -3,857 25,872 Nine months ended December 31, 2002 and 2001. － 8 800.0 473 -3.7 3,665 12.3 450 -11.7 4,115 15.9 (Millions of yen) Nine months ended December 31, 2002 Net sales: Office Equipment Other Businesses Intersegment Total Operating expenses: Office Equipment Other Businesses Intersegment Corporate Total Operating income: Office Equipment Operating income on office equipment sales(%) Other Businesses Operating income on other business sales(%) Intersegment Corporate Consolidated operating income Other income(expenses) Income before income tax 16 Nine months ended December 31, 2001 Change % 1,115,174 164,535 -2,149 1,277,560 1,087,093 137,362 -3,037 1,221,418 28,081 27,173 888 56,142 2.6 19.8 -29.2 4.6 977,198 166,472 -2,153 41,321 1,182,838 960,248 136,039 -3,063 38,561 1,131,785 16,950 30,433 910 2,760 51,053 1.8 22.4 -29.7 7.2 4.5 137,976 12.4 -1,937 -1.2 4 -41,321 94,722 -9,062 85,660 126,845 11.7 1,323 1.0 26 -38,561 89,633 -11,237 78,396 11,131 0.7 -3,260 -2.2 -22 -2,760 5,089 2,175 7,264 8.8 － -84.6 7.2 5.7 -19.4 9.3 (2) Geographic Segment Information Three months ended December 31, 2002 and 2001. (Millions of yen) Three months ended December 31, ’02 Net sales: Japan Unaffiliated Customers Intersegment Total The Americas Unaffiliated Customers Intersegment Total Europe Unaffiliated Customers Intersegment Total Other Unaffiliated Customers Intersegment Total Intersegment Total Operating expenses: Japan The Americas Europe Other Corporate and eliminations Total Operating income: Japan Operating income on sales in Japan (%) The Americas Operating income on sales in The Americas (%) Europe Operating income on sales in Europe (%) Other Operating income on sales in other regions (%) Corporate and eliminations Consolidated operating income Other income(expenses) Income before income tax 17 Three months ended December 31, ’01 Change % 226,091 84,816 310,907 222,195 80,265 302,460 3,896 4,551 8,447 1.8 5.7 2.8 82,058 1,273 83,331 81,388 2,462 83,850 670 -1,189 -519 0.8 -48.3 -0.6 87,571 651 88,222 77,007 1,230 78,237 10,564 -579 9,985 13.7 -47.1 12.8 25,019 19,345 44,364 20,741 15,587 36,328 4,278 3,758 8,036 20.6 24.1 22.1 -106,085 420,739 -99,544 401,331 -6,541 19,408 6.6 4.8 284,768 81,538 83,717 41,298 -103,976 387,345 276,296 83,149 74,151 34,461 -96,455 371,602 8,472 -1,611 9,566 6,837 -7,521 15,743 3.1 -1.9 12.9 19.8 7.8 4.2 26,139 8.4 1,793 2.2 4,505 5.1 3,066 6.9 -2,109 33,394 -3,407 29,987 26,164 8.7 701 0.8 4,086 5.2 1,867 5.1 -3,089 29,729 -3,857 25,872 -25 -0.3 1,092 1.4 419 -0.1 1,199 1.8 980 3,665 450 4,115 -0.1 155.8 10.3 64.2 -31.7 12.3 -11.7 15.9 (Millions of yen) Nine months ended December 31, 2002 and 2001. Nine months ended December 31, 2002 Net sales: Japan Unaffiliated Customers Intersegment Total The Americas Unaffiliated Customers Intersegment Total Europe Unaffiliated Customers Intersegment Total Other Unaffiliated Customers Intersegment Total Intersegment Total Operating expenses: Japan The Americas Europe Other Corporate and eliminations Total Operating income: Japan Operating income on sales in Japan (%) The Americas Operating income on sales in The Americas (%) Europe Operating income on sales in Europe (%) Other Operating income on sales in other regions (%) Corporate and eliminations Consolidated operating income Other income(expenses) Income before income tax 18 Nine months ended December 31, 2001 Change % 704,905 237,214 942,119 689,465 230,859 920,324 15,440 6,355 21,795 2.2 2.8 2.4 246,998 3,810 250,808 243,527 5,827 249,354 3,471 -2,017 1,454 1.4 -34.6 0.6 253,239 2,083 255,322 224,793 3,390 228,183 28,446 -1,307 27,139 12.7 -38.6 11.9 72,418 54,175 126,593 63,633 44,766 108,399 8,785 9,409 18,194 13.8 21.0 16.8 -297,282 1,277,560 -284,842 1,221,418 -12,440 56,142 4.4 4.6 878,746 241,474 243,814 118,967 -300,163 1,182,838 841,193 246,432 219,393 103,859 -279,092 1,131,785 37,553 -4,958 24,421 15,108 -21,071 51,053 4.5 -2.0 11.1 14.5 7.5 4.5 63,373 6.7 9,334 3.7 11,508 4.5 7,626 6.0 2,881 94,722 -9,062 85,660 79,131 8.6 2,922 1.2 8,790 3.9 4,540 4.2 -5,750 89,633 -11,237 78,396 -15,758 -1.9 6,412 2.5 2,718 0.6 3,086 1.8 8,631 5,089 2,175 7,264 -19.9 219.4 30.9 68.0 － 5.7 -19.4 9.3 6. Significant Accounting Policies (Consolidated) 1. Items relating to the scale of consolidation and the application of the equity method Consolidated subsidiaries: 3 additions including Ricoh Logistics Corporation 2 removals including Finnoffice Companies accounted for by the equity method: (No change) 2. Consolidated Accounting Policies (Summary) (1) Principles of Consolidation The consolidated financial statements include the accounts of Ricoh. Investments in 20% to 50% owned companies are accounted for on the equity basis. All significant inter-company balances and transactions have been eliminated in consolidation. (2) Securities Ricoh conforms with SFAS No.115, "Accounting for Certain Investments in Debt and Equity Securities," which requires certain investments in debt and equity securities to be classified as either held-to-maturity, trading, or available-for-sale securities. Available-for-sale are reported at fair value with unrealized gains and losses, net of related taxes, excluded from earnings and reported in accumulated other comprehensive income (loss). The cost of the securities sold was computed based on the average cost of each security held at the time of sale. (3) Inventories Inventories are mainly stated at the lower of average cost or market. Inventory costs include raw materials, labor and manufacturing overheads. (4) Plant and Equipment Depreciation of plant and equipment is computed principally by using the declining-balance method over the estimated useful lives. Most of the foreign subsidiaries have adopted the straight-line method for computing depreciation. Certain leased buildings, machinery and equipment are accounted for as capital leases in conformity with SFAS No. 13, "Accounting for Leases." (5) Goodwill and Other Intangible Assets In conformity with SFAS No.142, "Goodwill and Other Intangible Assets." goodwill and certain other intangible assets that are determined to have indefinite life are not amortized. SFAS No. 142 requires to test for impairment at least annually. (6) Cash and Cash Equivalents Effective from April 1, 2002, Ricoh changed its policy for definition of cash and cash equivalents on its consolidated balance sheets and consolidated statements of cash flow. Cash and cash equivalents formerly included cash, negotiable certificates of deposit, time deposits with a maturity of three months or less at the date of purchase and so on. In addition to the above, Ricoh decided to include short-term investment securities into cash equivalents which are available-for-sale at any time and present insignificant risk of changes in value, such as Money Management Funds and Free Financial Funds. Ricoh believes this change to disclose a financial status more preferable, since such short-term investment securities increase in fund operation of Ricoh. Accompanied by this change, Ricoh restated consolidated balance sheet and consolidated statements of cash flow for prior years. The effect of this change was to increase cash and cash equivalents increased by ¥50,243 million and ¥27,664 million and to decrease equivalently Marketable securities on balance sheet as of December 31, 2001 and March 31, 2002, respectively, and net cash used in investing activities decrease by ¥6,954 million and increase by ¥15,629 million in consolidated statements of cash flow for nine months ended December 31, 2001 and year ended March 31, 2002. 19 (7) Use of Estimates Management of the Company has made a number of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, including impairment losses of long-lived assets and the disclosures of fair value of financial instruments and contingent assets and liabilities, to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. 3. Note New Accounting Standards From year ended March 31, 2003, Ricoh has adopted SFAS No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.”SFAS No. 141 requires the use of only the purchase method of accounting for business combinations and prohibits the use of the pooling of interests method. SFAS No. 142 eliminates the amortization of goodwill, requires annual impairment testing of goodwill. Ricoh has completed the transitional impairment test for existing goodwill as required by SFAS No. 142. Ricoh has determined that the fair value of each reporting unit which includes goodwill is in excess of its carrying amount. Accordingly, no impairment loss was recorded for goodwill upon the adoption of SFAS No. 142. 20 Ricoh Company, Ltd. QUARTERLY REPORT -APPENDIX- (3rd Quarter ended December 31, 2002) 1. Quarterly Performance Outline (Consolidated) Net sales (billions of yen) Gross profit (billions of yen) Operating income (billions of yen) Income before income taxes (billions of yen) Net income (billions of yen) Net income per share (yen) Capital expenditure (billions of yen) Depreciation for tangible fixed assets (billions of yen) R&D expenditure (billions of yen) Interest income (expenses) net (billions of yen) Exchange rate (Yen/US$) Exchange rate (Yen/EURO) 1st Quarter ended Change 2nd Quarter ended Change 3rd Quarter ended Change June 30, ’02 % September 30, ’02 % December 31, ’02 % 428.2 186.4 35.9 32.2 19.5 26.85 17.6 16.9 18.4 -0.7 127.01 116.56 21 4.0 7.2 13.6 18.7 31.2 - 428.5 174.1 25.4 23.4 14.0 19.26 20.8 16.9 21.7 -1.2 119.19 117.34 5.0 3.7 -10.2 -7.7 3.5 - 420.7 184.9 33.3 29.9 17.8 24.51 16.7 17.5 20.8 -0.6 122.59 122.59 4.8 6.5 12.3 15.9 19.5 - 2. Quarterly Sales by Product Category (Consolidated) (Billions of yen) 1Q ended June 30,'02 <Office Equipment> Imaging Solutions: Digital Imaging Systems Domestic Overseas Other Imaging Systems Domestic Overseas Total Imaging Solutions Domestic Overseas Networking input/output systems: Printing Systems Domestic Overseas Other Input/Output Systems Domestic Overseas Total Networking input/output systems Domestic Overseas Network system solutions Domestic Overseas Office Equipment Total Domestic Overseas < Other Businesses > Other Businesses Domestic Overseas Grand Total Domestic Overseas The Americas Europe Other Each category includes the following products: Digital Imaging Systems Other Imaging Systems Printing Systems Other Input/Output Systems Network System Solutions Other Businesses Reference: Exchange rate US$ 1 EURO 1 Change % Change excluding exchange impact % 2Q ended Sept. 30,'02 Change % Change excluding exchange impact % 3Q ended Dec. 31,'02 Change % Change excluding exchange impact % 156.2 70.9 85.3 63.6 22.4 41.2 219.9 93.3 126.5 0.7 -12.7 15.4 -16.8 -19.8 -15.1 -5.1 -14.5 3.3 -2.3 -12.7 9.1 -19.8 -19.8 -19.8 -8.1 -14.5 -2.3 153.0 64.9 88.1 57.3 18.5 38.7 210.4 83.4 126.9 -2.4 -8.9 3.1 -17.9 -21.5 -16.1 -7.2 -12.1 -3.6 -3.6 -8.9 0.9 -19.4 -21.5 -18.2 -8.4 -12.1 -5.8 151.4 63.6 87.8 56.8 20.7 36.1 208.3 84.3 123.9 -6.5 -8.6 -4.8 -15.5 -15.2 -15.7 -9.1 -10.3 -8.3 -8.1 -8.6 -7.7 -17.4 -15.2 -18.7 -10.8 -10.3 -11.2 94.6 40.1 54.5 15.8 3.4 12.4 110.5 43.5 66.9 46.9 46.2 0.6 377.3 183.2 194.1 22.2 27.4 18.7 56.0 -13.2 100.7 26.1 22.8 28.4 -3.8 -4.3 60.8 2.5 -5.1 10.9 18.1 27.4 11.8 55.2 -13.2 99.4 22.4 22.8 22.2 -3.9 -4.3 49.6 -0.2 -5.1 5.1 94.7 41.9 52.8 13.6 2.4 11.1 108.4 44.4 64.0 53.1 52.4 0.6 371.9 180.3 191.6 33.5 21.8 44.6 40.5 -26.6 76.6 34.4 17.4 49.4 -2.0 -2.2 19.8 2.9 -3.2 9.4 31.4 21.8 40.4 38.9 -26.6 74.1 32.3 17.4 45.4 -2.0 -2.2 15.2 1.6 -3.2 6.8 102.9 44.4 58.5 14.4 2.2 12.1 117.4 46.7 70.6 40.0 39.3 0.7 365.8 170.4 195.4 45.9 26.0 65.7 14.4 -42.2 40.0 41.1 19.1 60.6 -11.1 -11.3 3.6 2.3 -4.1 8.6 42.4 26.0 58.9 13.1 -42.2 38.2 38.0 19.1 54.8 -11.1 -11.3 0.4 0.5 -4.1 5.0 50.9 41.6 9.2 428.2 224.8 203.4 84.1 83.2 35.9 15.9 16.5 13.2 4.0 -1.7 11.0 5.4 9.3 32.5 14.9 16.5 7.6 1.4 -1.7 5.2 1.8 1.0 27.0 56.5 44.3 12.1 428.5 224.7 203.8 86.2 82.9 34.6 21.4 18.0 35.3 5.0 0.3 10.7 4.2 15.2 17.9 20.7 18.0 31.7 3.8 0.3 8.0 6.2 6.8 16.1 54.9 39.7 15.1 420.7 210.1 210.5 84.1 88.3 37.9 25.4 16.5 56.7 4.8 -0.8 11.1 1.9 13.5 30.4 24.5 16.5 52.6 3.1 -0.8 7.4 2.8 4.6 28.1 Digital PPCs, color PPCs, digital duplicators, facsimile machines, related supplies and services Analog PPCs, diazo copiers, and related supplies including thermal paper, and services MFPs(multifunctional printers), laser printers, related supplies, services and software Optical discs and system scanners Personal computers, PC servers, network systems, network related software, and service/support Digital cameras, analog cameras, semiconductors 1Q ended Jun. 30, ’02 ¥127.01 ¥116.56 2Q ended Sept. 30, ’02 ¥119.19 ¥117.34 22 3Q ended Dec. 31, ’02 ¥122.59 ¥122.59 3. Forecast (Consolidated) (1) Performance Outline (Consolidated) Year ended March 31, 2002 Net sales (billions of yen) (% change from the previous corresponding period) Gross profit (billions of yen) (% change from the previous corresponding period) Operating income (billions of yen) (% change from the previous corresponding period) Income before income taxes (billions of yen) (% change from the previous corresponding period) Net income (billions of yen) (% change from the previous corresponding period) Net income per share (yen) Capital expenditure (billions of yen) Depreciation for tangible fixed assets (billions of yen) R&D expenditure (billions of yen) Interest income (expenses) net (billions of yen) Exchange rate (Yen/US$) Exchange rate (Yen/EURO) 1,672.3 8.7 699.9 14.1 129.6 23.4 113.9 16.6 61.6 15.8 88.27 75.6 73.7 80.7 -3.4 125.10 110.60 23 Nine months ended Three months ended December 31, March 31, 2002 2003 1,277.5 4.6 545.5 5.8 94.7 5.7 85.6 9.3 51.3 18.5 70.62 55.1 51.4 61.0 -2.6 122.92 118.84 (Forecast) 460.4 2.1 195.4 6.0 43.2 8.0 39.4 10.9 21.8 19.4 30.38 19.9 18.7 22.5 -0.4 118.00 125.00 Year ended March 31, 2003 (Forecast) 1,738.0 3.9 741.0 5.9 138.0 6.4 125.1 9.8 73.2 18.8 101.00 75.0 70.0 83.5 -3.1 121.70 120.37 (2) Sales by Product Category (Consolidated) (Billions of yen) Nine months ended <Office Equipment> Imaging Solutions: Digital Imaging Systems Domestic Overseas Other Imaging Systems Domestic Overseas Total Imaging Solutions Domestic Overseas Networking input/output systems: Printing Systems Domestic Overseas Other Input/Output Systems Domestic Overseas Total Networking input/output systems Domestic Overseas Network system solutions Domestic Overseas Office Equipment Total Domestic Overseas < Other Businesses > Other Businesses Domestic Overseas Grand Total Domestic Overseas The Americas Europe Other * Excluding foreign exchange impact Each category includes the following products: Digital Imaging Systems Other Imaging Systems Printing Systems Other Input/Output Systems Network System Solutions Other Businesses Three months ended March 31,2003 Change Change Forecast Forecast(*) % % Year ended March 31,2003 Change Forecast Forecast(*) % 460.8 199.4 261.3 177.8 61.6 116.1 638.6 261.1 377.5 173.8 66.5 107.3 55.6 17.8 37.8 229.5 84.3 145.1 -3.7 -8.5 -0.5 -15.8 -16.5 -15.4 -6.9 -10.3 -4.9 177.6 66.5 111.1 57.0 17.8 39.2 234.6 84.3 150.3 -1.6 -8.5 3.0 -13.8 -16.5 -12.4 -4.9 -10.3 -1.5 634.7 266.0 368.7 233.5 79.5 154.0 868.2 345.5 522.7 -3.0 -9.8 2.5 -16.5 -18.3 -15.6 -7.1 -11.9 -3.6 629.3 266.0 363.3 230.2 79.5 150.7 859.5 345.5 514.0 -3.8 -9.8 1.0 -17.7 -18.3 -17.4 -8.0 -11.9 -5.2 292.3 126.4 165.9 43.9 8.2 35.7 336.3 134.6 201.6 140.1 138.0 2.0 1,115.1 533.9 581.2 105.1 49.5 55.5 12.0 1.7 10.2 117.1 51.3 65.8 54.6 53.9 0.7 401.3 189.5 211.7 31.0 23.6 38.5 -3.7 -51.5 15.9 26.3 17.3 34.4 -7.3 -7.5 13.8 0.8 -3.3 4.7 107.0 49.5 57.5 12.3 1.7 10.6 119.4 51.3 68.1 54.7 53.9 0.7 408.8 189.5 219.2 33.5 23.6 43.4 -0.8 -51.5 20.0 28.9 17.3 39.2 -7.2 -7.5 17.8 2.6 -3.3 8.4 397.5 176.0 221.5 56.0 10.0 46.0 453.5 186.0 267.5 194.8 192.0 2.8 1,516.5 723.5 793.0 32.8 24.6 40.2 24.4 -33.2 53.1 31.7 19.0 42.3 -5.9 -6.2 20.1 2.1 -3.9 8.3 392.3 176.0 216.3 55.9 10.0 45.9 448.3 186.0 262.3 194.7 192.0 2.7 1,502.6 723.5 779.1 31.1 24.6 37.0 24.3 -33.2 53.0 30.2 19.0 39.5 -5.9 -6.2 17.3 1.2 -3.9 6.4 162.3 125.8 36.5 1,277.5 659.7 617.7 254.6 254.5 108.6 59.1 45.6 13.4 460.4 235.2 225.2 86.3 102.4 36.3 12.3 8.5 27.8 2.1 -1.2 5.8 -10.5 20.1 17.5 59.5 45.6 13.9 468.3 235.2 233.1 96.9 95.2 40.9 13.2 8.5 32.3 3.9 -1.2 9.6 0.5 11.7 32.2 221.5 171.5 50.0 1,738.0 895.0 843.0 341.0 357.0 145.0 18.5 14.6 33.9 3.9 -0.8 9.5 -0.2 14.7 24.3 220.8 171.5 49.3 1,723.4 895.0 828.4 351.0 330.5 146.8 18.1 14.6 32.0 3.1 -0.8 7.6 2.7 6.2 25.9 Digital PPCs, color PPCs, digital duplicators, facsimile machines, related supplies and services Analog PPCs, diazo copiers, and related supplies including thermal paper, and services MFPs(Multifunctional printers), laser printers, related supplies, services and software Optical discs and system scanners Personal computers, PC servers, network systems, network related software, and service/support Digital cameras, analog cameras, semiconductors Reference: Exchange rate US$ 1 EURO 1 Change % Year ended 1Q ended 2Q ended 3Q ended 4Q ended Year ended Mar. 31, ’02 Jun. 30, ’02 Sept. 30, ’02 Dec. 31, ’02 Mar. 31, ’03 Mar. 31, ’03 ¥125.10 ¥110.60 ¥127.01 ¥116.56 ¥119.19 ¥117.34 ¥122.59 ¥122.59 ¥118.00 ¥125.00 ¥121.70 ¥120.37 24