February 3, 2005 QUARTERLY REPORT Third Quarter Ended December 31, 2004 (Results for the Period from October 1, 2004 to December 31, 2004) Performance Outline (Consolidated) (1) Three Months Ended December 31, 2004 and 2003 Three months ended December 31, 2004 (Billions of yen) Three months ended Change December 31, 2003 Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income 231.3 212.4 443.7 192.1 38.7 34.6 22.2 212.9 207.9 420.9 185.7 36.2 33.2 19.6 8.6% 2.2% 5.4% 3.4% 6.9% 4.2% 13.0% Exchange rate (Yen/US$) Exchange rate (Yen/EURO) 106.01 137.16 108.92 129.58 -2.91 7.58 Net income per share (yen) 30.08 26.53 3.55 20.5 16.9 26.1 15.5 15.7 24.2 4.9 1.2 1.9 Capital expenditures Depreciation for tangible fixed assets R&D expenditures (2) Nine Months Ended December 31, 2004, 2003 and Year Ending March 31, 2005 Nine months ended December 31, 2004 Nine months ended December 31, 2003 (Results) (Results) Change (Billions of yen) Year ending March 31, 2005 Change (Forecast) Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income 700.4 619.3 1,319.8 555.9 96.4 94.7 58.0 661.5 647.4 1,308.9 573.8 113.4 104.6 61.9 5.9% -4.3% 0.8% -3.1% -15.0% -9.5% -6.3% 972.9 842.1 1,815.0 764.0 147.0 141.0 85.0 6.4% -2.8% 2.0% -0.2% -2.0% -1.4% -7.4% Exchange rate (Yen/US$) Exchange rate (Yen/EURO) 108.55 134.60 115.00 132.17 -6.45 2.43 107.67 133.45 -5.42 0.80 Net income per share (yen) 78.56 83.32 -4.76 115.07 -8.56 1,899.8 841.9 446.4 1,922.1 708.8 513.1 -22.2 133.1 -66.6 - - 44.3 36.9 7.4 - - 1,139.87 958.20 181.67 - - 74.3 -90.5 -22.9 168.1 81.6 -40.4 9.2 238.3 -7.3 -50.1 -32.1 -70.2 - - 58.7 48.0 79.6 51.8 49.4 68.4 6.8 -1.3 11.1 79.0 67.5 107.0 0.4 -0.1 14.4 Total assets Shareholders' equity Interest-bearing debt Equity ratio (%) Shareholder's 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 Capital expenditures Depreciation for tangible fixed assets R&D expenditures Ricoh Company, Ltd. * The Company bases the forecast estimates for the year ending March 31, 2005 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 1 Performance *Overview Consolidated net sales for the third quarter of fiscal 2005 (the three months period from October 1 to December 31, 2004) increased by 5.4% as compared to the previous corresponding period, to ¥443.7 billion. During this quarter, the average yen exchange rates were at ¥106.01 against the U.S. dollar (up ¥2.91) and ¥137.16 against the euro (down ¥7.58). Net sales would rise 4.8% excluding impacts of such foreign currency exchange fluctuations. In Japan, Printing Systems such as MFPs (multifunctional printers) and laser printers increased its sales, and also solution business such as support and service continued its sales raised. Moreover, Ricoh Printing Systems, Ltd. which is a newly acquired printing company contributed substantially to our sales. In the result of taking effective countermeasures against the changes in terms of multifunction, networking and colorizing, net sales was 8.6% up from the previous corresponding period. As for overseas, product categories such as color PPCs (plain paper copiers), MFPs and laser printers, especially color models, increased its sales in each region. Although sales in the Americas increased by 3.0% (5.9% increase excluding currency exchange impact) and in Europe also increased by 8.2% as compared to the previous corresponding period, sales in other region such as China, Asian and Oceania countries decreased by 18.4% due primarily to sales decline of optical disc business and the sale of certain consolidated subsidiaries in optical related business. As a result, net sales was 2.2% up from the previous corresponding period. Excluding the impact of the currency exchange fluctuations, it figures net sales would be increased by 0.9%. Operating income increased by 6.9% as compared to the previous corresponding period, to ¥38.7 billion. It was provided positive effect by increasing of sales on high value-added products such as color PPCs, MFPs and printers that yield a high profit, launching new products and ongoing cost-cutting activities, in spite of expansion of strategic costs such as research and development and establishment of core operating system. As a result, income before income taxes increased by 4.2% as compared to the previous corresponding period, to ¥34.6 billion, although foreign exchange losses incurred in other expense. The effective tax rate consequently dropped down due to the amount of tax exemption on research and development expenses which was expanded by the change of the Corporate Tax Law in Japan, and overall profitability improvement has been executed. As a result, net income increased by 13.0% as compared to the previous corresponding period, to ¥22.2 billion. 2 *Conditions by Product Line Office Equipment (Sales up 6.7% to ¥393.1 billion) Customer demands have been shifting more to digital, networked and color models from standalone analog products both in Japan and overseas market place. Ricoh enforced a solution proposal to customers for the optimization of their total printing costs in order to assist their efficient management of TDV (Total Document Volume). As a result, sales of color PPCs and Printing Systems such as MFPs and laser printers continued to grow and sales of Network System Solutions such as support and service increased while sales of Imaging Solutions decreased. Sales of optical disc business decreased as per continuous reduction in key module business such as independent developed disc drive and its related component, except media. Imaging Solutions (Sales down 5.7% to ¥178.3 billion) Digital Imaging Systems - Sales of color PPCs increased by new product in response to growth in customer demand. - Shift from standalone products to MFPs all over the world - As a result, sales in this category decreased by 2.1%. Other Imaging Systems - Sales were down by 17.1% due to the shift from analog products to MFPs and color products. Network Input/Output Systems (Sales up 24.2% to ¥171.3 billion) Printing Systems - Continuous sales growth by introducing new offering products to cope with the shift to networked and color models both in Japan and overseas. MFPs: Imagio Neo 352 and Imagio Neo 602 in Japan Aficio 2035/2045 series and Aficio 2105/2090 series overseas Color MFPs: Imagio Neo C245 and Imagio Neo C385 in Japan Aficio 2232C/2238C series overseas - Sales volume of printers increased especially color laser printer and color printers for office use utilizing Ricoh’s original ‘GELJET’ technology with strategic low price. - Ricoh Printing Systems, Ltd. became a subsidiary and contributed to our performances. - As a result, sales in this category increased by 35.9%. Other Input/Output Systems - Optical disc business that advanced to focus on media decreased its sales. Network System Solutions (Sales up 4.6% to ¥43.5 billion) - Solution business such as support and service continued to increase due primarily to customer acceptance of our solution proposal to optimize their total printing cost. Consequently, net sales of Office Equipment segment increased by 6.7% as compared to the previous corresponding period, to ¥ 393.1 billion. Operating income increased by 9.1% to ¥54.5 billion. It was particularly resulted from sales increase and new products of Printing Systems and continuous cost reduction. Other Businesses (Sales down 3.2% to ¥50.6 billion) Net sales of Other Business segment decreased by 3.2% as compared to the previous corresponding period, to ¥50.6 billion, due primarily to the sales of certain consolidated subsidiaries in optical related business and sluggish demand cycle of semiconductor business. As a result, operating income in this segment decreased to ¥0.1 billion. *Cash Flows (Nine months from April 1, 2004 to December 31, 2004) Net cash provided by operating activities decreased ¥7.3 billion as compared to the previous corresponding period, to ¥74.3 billion. Although the collection of trade receivables progressed, inventories increased in response to sales expansion in overseas markets. Income tax and bonus were paid, and retirement benefit obligation decreased due to the maintenance of the pension plan last fiscal year. Net cash used in investing activities was ¥90.5 billion due to capital investment in new product lines, product development and the acquisition of new printer company, Ricoh Printing Systems, Ltd. As a result, free cash flow generated by operating and investing activities, which provided ¥41.2 billion in the previous corresponding period, used ¥16.2 billion. Net cash used in financing activities amounted to ¥22.9 billion due primarily to cutback interest-bearing debt by means of reinforcement of cash management in each region and payment of dividends. As a result, cash and cash equivalents at the end of the third quarter decreased ¥34.8 billion as compared to the end of the preceding year, to ¥168.1 billion. 3 *Forecast for the entire fiscal year As for the forecast of business results for the fiscal year ending March 31, 2005, we have revised our sales forecast as announced in October 2004, up to ¥1,815.0 billion with 2.0% growth as compared to the previous fiscal year. We forecast the sales volume of Office Equipment will increase both in Japan and overseas in consideration of positive effect showed up in regard to the promotion for color models and the reform of non-core businesses, which were conducted during this first half of fiscal year. For the fourth quarter, we predict an exchange rate of ¥105.00 against the US dollar, and of ¥130.00 against the euro, without change. As for income, we revised downward our forecast to operating income of ¥147.0 billion and income before income taxes of ¥141.0 billion, from ¥151.0 billion and ¥145.5 billion of which we announced in October 2004, respectively. It is due primarily to strategic investment for 15th medium-term plan that will start from next fiscal year. Forecast net income of ¥85.0 billion has not been revised and same as announced in October 2004. Our performance forecasts for fiscal 2005 are as follows: Exchange Rate Assumptions for the full year ending March 31, 2005 US$ 1 = ¥107.67 (¥113.09 in previous fiscal year) EURO 1 = ¥133.45 (¥132.65 in previous fiscal year) (Billions of yen) Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income Year ending March 31, 2005 (Forecast) 972.9 842.1 1,815.0 764.0 147.0 141.0 85.0 Year ended March 31, 2004 (Results) 914.0 866.1 1,780.2 765.6 150.0 143.0 91.7 Change 6.4% -2.8% 2.0% -0.2% -2.0% -1.4% -7.4% *Note *Note: As for net income for the year ended March 31, 2004, ¥7.3 billion of net realized gains of the certain marketable securities, which were contributed to the employee retirement benefit trust, were incorporated as cumulative effect of accounting change. * Ricoh bases the forecast estimates for the year ending March 31, 2005 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 4 Ricoh Company, Ltd. and Consolidated Subsidiaries Financial Highlights for the Third Quarter Ended December 31, 2004 (U.S. GAAP Financial Information) 1. Items Relating to Third Quarter Financial Statements (1) No change in accounting method has been made. (2) Change relating to the scale of consolidation and the application of the equity method: Consolidated subsidiaries: 12 additions; No change Companies accounted for by the equity method: 2 additions; 1 removal 2. Results for the Period from October 1, 2004 to December 31, 2004 (1) Operating Results Three months ended Three months ended December 31, 2003 December 31, 2004 Net sales 443,799 420,903 (% change from the previous corresponding period) 5.4 0.0 Operating income 38,709 36,214 (% change from the previous corresponding period) 6.9 8.4 Income before income taxes 34,661 33,266 (% change from the previous corresponding period) 4.2 10.9 Net income 22,223 19,664 (% change from the previous corresponding period) 13.0 10.5 Net income per share-basic (yen) 30.08 26.53 Net income per share-diluted (yen) Note: Equity in earnings of affiliates: ¥1,532 million (¥932 million in previous corresponding period) (2) Financial Position Total assets Shareholders' equity Equity ratio (%) Equity per share (yen) December 31, 2004 1,899,898 841,998 44.3 1,139.87 December 31, 2003 1,922,150 708,888 36.9 958.20 (Millions of yen) March 31, 2004 1,852,793 795,131 42.9 1,076.11 Nine months ended December 31, 2004 74,318 -90,576 -22,949 168,173 Nine months ended December 31, 2003 81,698 -40,400 9,223 238,389 (Millions of yen) Year ended March 31, 2004 154,911 -63,383 -74,835 203,039 Cash Flow Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period (Millions of yen) Year ended March 31, 2004 1,780,245 2.4 150,006 12.2 143,063 15.9 91,766 26.6 123.63 - 3. Forecast of Operating Results from April 1, 2004 to March 31, 2005 Net sales Operating income Income before income taxes Net income Note: Net income per share (Consolidated) ¥115.07 (Millions of yen) 1,815,000 147,000 141,000 85,000 In accordance with Japanese regulations, Ricoh has issued forecast for its financial results for the fiscal year ending March 31, 2005. 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. 5 Consolidated Performance 1. Consolidated Statements of Income (Three months ended December 31, 2004 and 2003) 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, 2004 December 31, 2003 443,799 420,903 251,696 235,124 56.7 55.9 192,103 185,779 43.3 44.1 153,394 149,565 34.6 35.5 38,709 36,214 8.7 8.6 358 0.1 1,276 0.3 3,130 0.7 434 0.1 1,337 0.3 2,045 0.5 34,661 7.8 12,500 2.8 1,470 0.3 1,532 0.3 22,223 5.0 33,266 7.9 13,473 3.2 1,061 0.2 932 0.2 19,664 4.7 ¥106.01 ¥137.16 ¥108.92 ¥129.58 (Nine months ended December 31, 2004 and 2003 and Year ended March 31, 2004) Nine months ended Nine months ended December 31, 2004 December 31, 2003 Net sales 1,319,802 1,308,993 Cost of sales 763,819 735,107 Percentage of net sales (%) 57.9 56.2 Gross Profit 555,983 573,886 Percentage of net sales (%) 42.1 43.8 Selling, general and administrative expenses 459,516 460,417 Percentage of net sales (%) 34.8 35.1 Operating income 96,467 113,469 Percentage of net sales (%) 7.3 8.7 Other (income) expense Interest and dividend income 1,431 1,747 Percentage of net sales (%) 0.1 0.1 Interest expense 3,592 4,200 Percentage of net sales (%) 0.3 0.3 Other, net -419 6,334 Percentage of net sales (%) -0.1 0.5 Income before income taxes, equity income and minority interests 94,725 104,682 Percentage of net sales (%) 7.2 8.0 Provision for income taxes 36,279 41,897 Percentage of net sales (%) 2.7 3.2 Minority interests in earnings of subsidiaries 3,368 2,760 Percentage of net sales (%) 0.3 0.2 Equity in earnings of affiliates 2,966 1,904 Percentage of net sales (%) 0.2 0.1 Income before cumulative effect 58,044 61,929 of accounting changes Percentage of net sales (%) 4.4 4.7 Cumulative effect of accounting change, net of tax Percentage of net sales (%) Net income 58,044 61,929 Percentage of net sales (%) 4.4 4.7 Reference : Exchange rate US$ 1 EURO 1 ¥108.55 ¥134.60 ¥115.00 ¥132.17 6 Change 22,896 16,572 % 5.4 7.0 6,324 3.4 3,829 2.6 2,495 6.9 -76 -17.5 -61 -4.6 1,085 53.1 1,395 4.2 -973 -7.2 409 38.5 600 64.4 2,559 13.0 Change 10,809 28,712 % 0.8 3.9 -17,903 -3.1 -901 -0.2 -17,002 -15.0 -316 -18.1 -608 -14.5 -6,753 - -9,957 -9.5 -5,618 -13.4 608 22.0 1,062 55.8 -3,885 -6.3 - - -3,885 -6.3 (Millions of yen) Year ended March 31, 2004 1,780,245 1,014,619 57.0 765,626 43.0 615,620 34.6 150,006 8.4 1,925 0.1 5,290 0.3 3,578 0.2 143,063 8.0 56,641 3.2 4,094 0.2 2,065 0.1 84,393 4.7 7,373 0.5 91,766 5.2 ¥113.09 ¥132.65 2-1. Consolidated Sales by Product Category (Three months ended December 31, 2004 and 2003) (Millions of yen) Three months ended December 31, 2004 <Office Equipment> Imaging Solutions: Digital Imaging Systems Percentage of net sales (%) Other Imaging Systems Percentage of net sales (%) Total Imaging Solutions Percentage of net sales (%) Network Input/Output Systems: Printing Systems Percentage of net sales (%) Other Input/Output Systems Percentage of net sales (%) Total Network Input/Output Systems Percentage of net sales (%) Network System Solutions Percentage of net sales (%) Office Equipment Total Percentage of net sales (%) < Other Businesses > Other Businesses Percentage of net sales (%) Grand Total Percentage of net sales (%) Reference : Exchange rate US$ 1 EURO 1 Three months ended December 31, 2003 140,909 31.8 37,408 8.4 178,317 40.2 143,882 34.2 45,151 10.7 189,033 44.9 169,281 38.1 2,043 0.5 171,324 38.6 43,531 9.8 393,172 88.6 124,564 29.6 13,372 3.2 137,936 32.8 41,623 9.9 368,592 87.6 50,627 11.4 443,799 100.0 52,311 12.4 420,903 100.0 ¥106.01 ¥137.16 ¥108.92 ¥129.58 Change % -2,973 -2.1 -7,743 -17.1 -10,716 -5.7 44,717 35.9 -11,329 -84.7 33,388 24.2 1,908 4.6 24,580 6.7 -1,684 -3.2 22,896 5.4 (Millions of yen) (Nine months ended December 31, 2004 and 2003 and Year ended March 31, 2004) Nine months ended December 31, 2004 <Office Equipment> Imaging Solutions: Digital Imaging Systems Percentage of net sales (%) Other Imaging Systems Percentage of net sales (%) Total Imaging Solutions Percentage of net sales (%) Network Input/Output Systems: Printing Systems Percentage of net sales (%) Other Input/Output Systems Percentage of net sales (%) Total Network Input/Output Systems Percentage of net sales (%) Network System Solutions Percentage of net sales (%) Office Equipment Total Percentage of net sales (%) < Other Businesses > Other Businesses Percentage of net sales (%) Grand Total Percentage of net sales (%) Reference : Exchange rate US$ 1 EURO 1 Each category includes the following product line: Digital Imaging Systems Other Imaging Systems Printing Systems Other Input/Output Systems Network System Solutions Other Businesses Nine months ended December 31, 2003 416,440 31.6 118,482 8.9 534,922 40.5 453,040 34.6 151,087 11.6 604,127 46.2 470,624 35.7 11,022 0.8 481,646 36.5 142,569 10.8 1,159,137 87.8 160,665 12.2 1,319,802 100.0 ¥108.55 ¥134.60 Change -36,600 -8.1 -32,605 -21.6 -69,205 -11.5 358,021 27.4 43,097 3.2 401,118 30.6 138,855 10.6 1,144,100 87.4 112,603 31.5 -32,075 -74.4 80,528 20.1 3,714 2.7 15,037 1.3 164,893 12.6 1,308,993 100.0 -4,228 -2.6 10,809 0.8 ¥115.00 ¥132.17 Digital PPCs, color PPCs, digital duplicators and facsimile machines Analog PPCs, diazo copiers, and thermal paper MFPs(multifunctional printers), laser printers and software Optical discs and system scanners Personal computers, PC servers, network systems and network related software Optical equipments, metering equipments and semiconductors 7 Year ended March 31, 2004 % 606,270 34.1 197,304 11.0 803,574 45.1 509,212 28.6 49,025 2.8 558,237 31.4 195,822 11.0 1,557,633 87.5 222,612 12.5 1,780,245 100.0 ¥113.09 ¥132.65 2-2. Consolidated Sales by Geographic Area (Three months ended December 31, 2004 and 2003) (Millions of yen) Three months ended December 31, 2004 <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 (%) Grand Total Percentage of net sales (%) Reference : Exchange rate US$ 1 EURO 1 Three months ended December 31, 2003 231,321 52.1 212,478 47.9 78,246 17.6 107,610 24.2 26,622 6.1 443,799 100.0 212,908 50.6 207,995 49.4 75,933 18.0 99,422 23.6 32,640 7.8 420,903 100.0 ¥106.01 ¥137.16 ¥108.92 ¥129.58 Change % 18,413 8.6 4,483 2.2 2,313 3.0 8,188 8.2 -6,018 -18.4 22,896 5.4 (Millions of yen) (Nine months ended December 31, 2004 and 2003 and Year ended March 31, 2004) Nine months ended December 31, 2004 <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 (%) Grand Total Percentage of net sales (%) Reference : Exchange rate US$ 1 EURO 1 Nine months ended December 31, 2003 700,497 53.1 619,305 46.9 239,576 18.2 300,597 22.8 79,132 5.9 1,319,802 100.0 661,544 50.5 647,449 49.5 243,597 18.6 296,373 22.6 107,479 8.3 1,308,993 100.0 ¥108.55 ¥134.60 ¥115.00 ¥132.17 8 Change Year ended March 31, 2004 % 38,953 5.9 -28,144 -4.3 -4,021 -1.7 4,224 1.4 -28,347 -26.4 10,809 0.8 914,060 51.3 866,185 48.7 326,380 18.3 402,392 22.6 137,413 7.8 1,780,245 100.0 ¥113.09 ¥132.65 3. Consolidated Balance Sheets (December 31, 2004 and March 31, 2004) Assets December 31, 2004 Current Assets Cash and time deposits Trade receivables Marketable securities Inventories Other current assets Total Current Assets Fixed Assets Tangible fixed assets Finance receivables Other Investments Total Fixed Assets Total Assets Note: Contents of cash and time deposits: Cash and cash equivalents Time deposits 169,028 415,977 March 31, 2004 168,994 53,739 840,874 204,001 422,244 45,124 145,369 55,079 871,817 -34,973 -6,267 -11,988 23,625 -1,340 -30,943 245,061 545,697 268,266 1,059,024 1,899,898 238,712 514,047 228,217 980,976 1,852,793 6,349 31,650 40,049 78,048 47,105 168,173 855 203,039 962 33,136 Liabilities and Shareholders’ Investment December 31, 2004 Current Liabilities Trade payables Short-term borrowings Other current liabilities Total Current Liabilities Fixed Liabilities Long-term indebtedness Accrued pension and severance costs Other fixed liabilities Total Fixed Liabilities Total Liabilities Minority Interest Shareholders’ Investment Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) 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 March 31, 2004 (Millions of yen) Change 285,944 216,088 140,637 642,669 297,672 151,162 158,594 607,428 -11,728 64,926 -17,957 35,241 230,409 94,597 39,564 364,570 1,007,239 50,661 281,570 83,492 36,295 401,357 1,008,785 48,877 -51,161 11,105 3,269 -36,787 -1,546 1,784 135,364 186,599 559,416 -27,008 -12,373 841,998 1,899,898 135,364 186,599 515,372 -30,272 -11,932 795,131 1,852,793 0 44,044 3,264 -441 46,867 47,105 4,340 -16,953 -21 -14,374 4,026 -14,863 -24 -19,411 314 -2,090 3 5,037 December 31, 2004 ¥104.21 ¥141.61 9 (Millions of yen) Change March 31, 2004 ¥105.69 ¥128.88 4. Consolidated Statements of Cash Flow (Nine months ended December 31, 2004 and 2003 and Year ended March 31, 2004) Nine months ended Nine months ended December 31, 2004 December 31, 2003 I. Cash Flows from Operating Activities: 1. Net income 58,044 61,929 2. Adjustments to reconcile net income to net cash provided by operating activities— Depreciation and amortization 57,498 56,381 Equity in earnings of affiliates, net of dividends received -2,163 -1,162 Deferred income taxes 5,731 1,026 Losses on disposal and sales of tangible fixed assets 1,600 1,094 Cumulative effect of accounting change, net of tax Changes in assets and liabilities, net of effects from acquisition— (Increase) decrease in trade receivables 23,847 10,563 Increase in inventories -14,111 -21,209 Increase in finance receivables -19,659 -22,666 (Decrease) increase in trade payables -23,282 -6,111 Decrease in accrued income taxes and accrued expenses and other -24,387 -28,587 (Decrease) Increase in accrued pension and severance costs 2,454 15,455 Other, net 8,746 14,985 Net cash provided by operating activities 74,318 81,698 II. Cash Flows from Investing Activities: 1. Proceeds from sales of property, plant and equipment 1,631 134 2. Expenditures for tangible fixed assets -58,253 -51,830 3. Payments for purchases of available-for-sale securities -27,161 -25,200 4. Proceeds from sales of available-for-sale securities 39,024 34,047 5. Decrease in time deposits, net 108 10,192 6. Other, net -45,925 -7,743 Net cash used in investing activities -90,576 -40,400 III. Cash Flows from Financing Activities: 1. Proceeds from long-term indebtedness 45,053 1,104 2. Repayment of long-term indebtedness -37,522 -25,788 3. (Decrease) increase in short-term borrowings, net -1,628 68,169 4. Proceeds from issuance of long-term debt securities 9,000 1,000 5. Repayment of long-term debt securities -22,000 -14,000 6. Dividends paid -14,793 -11,136 7. Payment for purchase of treasury stock -480 -9,634 8. Other, net -579 -492 Net cash used in financing activities -22,949 9,223 IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents 1,866 -1,375 V. Net Increase (Decrease) in Cash and Cash Equivalents -37,341 49,146 VI. Cash and Cash Equivalents at Beginning of Year 203,039 189,243 VII. Adjustment for Change of Fiscal Period on Consolidated Subsidiaries 2,475 VIII. Cash and Cash Equivalents at End of Period 168,173 238,389 10 (Millions of yen) Year ended March 31, 2004 91,766 76,968 -1,001 3,338 2,035 -7,373 -11,367 -4,317 -32,650 21,316 -5,913 -609 22,718 154,911 190 -75,432 -35,518 45,464 9,915 -8,002 -63,383 13,349 -31,509 -10,728 1,000 -23,910 -11,136 -11,411 -490 -74,835 -2,897 13,796 189,243 203,039 5. Segment Information (1) Industry Segment Information (Three months ended December 31, 2004 and 2003) (Millions of yen) Three months ended December 31, 2004 Office Equipment: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on office equipment sales(%) Other Businesses: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in other businesses (%) Corporate and Eliminations: Net sales: Intersegment Total Operating expenses: Intersegment Corporate Total Operating income Consolidated: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on consolidated net sales(%) Three months ended December 31, 2003 393,172 393,172 338,656 54,516 368,592 368,592 318,629 49,963 13.9 13.6 50,627 596 51,223 51,119 104 52,311 575 52,886 51,878 1,008 0.2 1.9 -596 -596 Change % 24,580 24,580 20,027 4,553 6.7 6.7 6.3 9.1 -1,684 21 -1,663 -759 -904 -3.2 3.7 -3.1 -1.5 -89.7 -575 -575 -21 -21 - -592 15,907 15,315 -15,911 -569 14,751 14,182 -14,757 -23 1,156 1,133 -1,154 - 443,799 443,799 405,090 38,709 420,903 420,903 384,689 36,214 22,896 22,896 20,401 2,495 5.4 5.4 5.3 6.9 8.7 8.6 (Nine months ended December 31, 2004 and 2003 and Year ended March 31, 2004) Nine months ended December 31, 2004 Office Equipment: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on office equipment sales(%) Other Businesses: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in other businesses (%) Corporate and Eliminations: Net sales: Intersegment Total Operating expenses: Intersegment Corporate Total Operating income Consolidated: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on consolidated net sales(%) (Millions of yen) Nine months ended December 31, 2003 Change 1,159,137 1,159,137 1,022,415 136,722 1,144,100 1,144,100 991,438 152,662 11.8 13.3 160,665 1,862 162,527 161,166 1,361 164,893 1,740 166,633 162,639 3,994 0.8 2.4 -1,862 -1,862 -1,740 -1,740 -122 -122 - -2,462 -2,462 -1,860 41,614 39,754 -41,616 -1,764 43,211 41,447 -43,187 -96 -1,597 -1,693 1,571 - -2,494 59,038 56,544 -59,006 1,319,802 1,319,802 1,223,335 96,467 1,308,993 1,308,993 1,195,524 113,469 10,809 10,809 27,811 -17,002 0.8 0.8 2.3 -15.0 1,780,245 1,780,245 1,630,239 150,006 7.3 8.7 11 15,037 15,037 30,977 -15,940 Year ended March 31, 2004 % 1.3 1.3 3.1 -10.4 1,557,633 1,557,633 1,353,304 204,329 13.1 -4,228 122 -4,106 -1,473 -2,633 -2.6 7.0 -2.5 -0.9 -65.9 222,612 2,462 225,074 220,391 4,683 2.1 8.4 (2) Geographic Segment Information (Three months ended December 31, 2004 and 2003) (Millions of yen) Three months ended December 31, 2004 Japan: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in Japan(%) The Americas: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in the Americas(%) Europe: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in Europe(%) Other: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in other(%) Corporate and Eliminations: Net sales: Intersegment Total Operating expenses: Operating income Consolidated: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on consolidated net sales(%) Three months ended December 31, 2003 236,003 104,719 340,722 311,668 29,054 224,398 83,101 307,499 286,985 20,514 8.5 6.7 78,146 1,327 79,473 77,846 1,627 72,323 872 73,195 71,067 2,128 2.0 2.9 108,085 747 108,832 103,620 5,212 98,864 1,036 99,900 93,998 5,902 4.8 5.9 21,565 21,501 43,066 39,925 3,141 25,318 20,227 45,545 42,923 2,622 7.3 5.8 -128,294 -128,294 -127,969 -325 Change % 11,605 21,618 33,223 24,683 8,540 5.2 26.0 10.8 8.6 41.6 5,823 455 6,278 6,779 -501 8.1 52.2 8.6 9.5 -23.5 9,221 -289 8,932 9,622 -690 9.3 -27.9 8.9 10.2 -11.7 -3,753 1,274 -2,479 -2,998 519 -14.8 6.3 -5.4 -7.0 19.8 -105,236 -105,236 -110,284 5,048 -23,058 -23,058 -17,685 -5,373 - 443,799 443,799 405,090 38,709 420,903 420,903 384,689 36,214 22,896 22,896 20,401 2,495 5.4 5.4 5.3 6.9 8.7 8.6 12 (Nine months ended December 31, 2004 and 2003 and Year ended March 31, 2004) Nine months ended December 31, 2004 Japan: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in Japan(%) The Americas: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in the Americas(%) Europe: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in Europe(%) Other: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in other(%) Corporate and Eliminations: Net sales: Intersegment Total Operating expenses: Operating income Consolidated: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on consolidated net sales(%) (Millions of yen) Nine months ended December 31, 2003 Change 717,476 294,539 1,012,015 943,269 68,746 703,320 267,432 970,752 893,451 77,301 6.8 8.0 237,330 6,141 243,471 235,711 7,760 234,288 3,864 238,152 228,341 9,811 3.2 4.1 302,026 2,536 304,562 288,388 16,174 295,424 2,807 298,231 282,817 15,414 5.3 5.2 62,970 65,319 128,289 119,713 8,576 75,961 69,452 145,413 138,225 7,188 6.7 4.9 -368,535 -368,535 -363,746 -4,789 -343,555 -343,555 -347,310 3,755 -24,980 -24,980 -16,436 -8,544 - -451,462 -451,462 -456,173 4,711 1,319,802 1,319,802 1,223,335 96,467 1,308,993 1,308,993 1,195,524 113,469 10,809 10,809 27,811 -17,002 0.8 0.8 2.3 -15.0 1,780,245 1,780,245 1,630,239 150,006 7.3 8.7 13 14,156 27,107 41,263 49,818 -8,555 Year ended March 31, 2004 % 2.0 10.1 4.3 5.6 -11.1 962,127 351,070 1,313,197 1,215,875 97,322 7.4 3,042 2,277 5,319 7,370 -2,051 1.3 58.9 2.2 3.2 -20.9 315,504 5,249 320,753 305,284 15,469 4.8 6,602 -271 6,331 5,571 760 2.2 -9.7 2.1 2.0 4.9 400,646 3,770 404,416 382,383 22,033 5.4 -12,991 -4,133 -17,124 -18,512 1,388 -17.1 -6.0 -11.8 -13.4 19.3 101,968 91,373 193,341 182,870 10,471 5.4 8.4 6. Significant Accounting Policies (Consolidated) 1. Change relating to the scale of consolidation and the application of the equity method from October 1, 2004 to December 31, 2004. Consolidated subsidiaries: 12 additions including Ricoh Printing Systems, Ltd. and Shanghai Ricoh Digital Equipment Co., Ltd. No removal Companies accounted for by the equity method: 2 additions including Santama Sougou Jimukiki Co., Ltd. Removal: Shanghai Ricoh Digital Equipment Co., Ltd. 2. Consolidated Accounting Policies (Summary) (1) Principles of Consolidation The consolidated financial statements include the accounts of Ricoh and its consolidated subsidiaries. Investments in 20% to 50% owned companies when the company has the ability to exercise significant influence are accounted for on the equity basis. All significant inter-company balances and transactions have been eliminated in consolidation. Certain overseas subsidiaries of the company changed their fiscal year end from December 31 to March 31, at the beginning of fiscal 2005. As a result, retained earnings increased by ¥777 million and other comprehensive income (loss) decreased by ¥1,665 million. (2) Securities In conformity with SFAS No.115, securities are mainly classified as available-for-sale securities. Available-for-sale securities 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 is 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 intangible asset determined to have an indefinite useful life are not amortized. SFAS No. 142 requires annual impairment testing thereof. (6) 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. 14 -APPENDIX- (Third Quarter Ended December 31, 2004) 1. Consolidated Quarterly Performance Outline Fiscal 2005 (Millions of yen) 1Q Net sales Gross profit Operating income Income before income taxes Net income Net income per share (yen) Total assets Shareholders' equity Shareholders' equity per share (yen) 436,550 189,171 39,387 41,319 24,894 33.69 1,855,745 812,915 1,100.24 Change(%) -0.2 -1.9 2.3 10.7 11.4 - 2Q 439,453 174,709 18,371 18,745 10,927 14.79 1,877,455 830,280 1,123.84 Change(%) -2.5 -10.6 -52.6 -45.0 -45.1 - 3Q 443,799 192,103 38,709 34,661 22,223 30.08 1,899,898 841,998 1,139.87 Change(%) 5.4 3.4 6.9 4.2 13.0 - Fiscal 2004 (Millions of yen) 1Q Net sales Gross profit Operating income Income before income taxes Net income Net income per share (yen) Total assets Shareholders' equity Shareholders' equity per share (yen) 437,453 192,752 38,484 37,317 22,355 30.04 1,924,631 685,730 920.97 Change(%) 2.1 3.4 7.1 15.6 14.5 - 2Q 450,637 195,355 38,771 34,099 19,910 26.75 1,912,162 703,075 946.38 A1 Change(%) 5.2 12.2 52.6 45.7 42.2 - 3Q 420,903 185,779 36,214 33,266 19,664 26.53 1,922,150 708,888 958.20 Change(%) 0.0 0.5 8.4 10.9 10.5 - 4Q 471,252 191,740 36,537 38,381 29,837 40.31 1,852,793 795,131 1,076.11 Change(%) 2.3 -4.0 -6.2 1.5 40.8 - 2. Consolidated Sales by Product Category (Three months ended December 31, 2004 and 2003) (Millions of yen) Three months ended December 31, 2004 <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 Network Input/Output Systems: Printing Systems Percentage of net sales (%) Domestic Overseas Other Input/Output Systems Percentage of net sales (%) Domestic Overseas Total Network 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 The Americas Europe Other < Other Businesses > Other Businesses Percentage of net sales (%) Domestic Overseas The Americas Europe Other 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 (%) Reference: Exchange rate US$ 1 EURO 1 Three months ended December 31, 2003 140,909 31.8 56,640 84,269 37,408 8.4 15,470 21,938 178,317 40.2 72,110 106,207 143,882 34.2 60,016 83,866 45,151 10.7 17,291 27,860 189,033 44.9 77,307 111,726 169,281 38.1 73,923 95,358 2,043 0.5 431 1,612 171,324 38.6 74,354 96,970 43,531 9.8 41,824 1,707 393,172 88.6 188,288 204,884 78,056 105,862 20,966 124,564 29.6 53,559 71,005 13,372 3.2 1,052 12,320 137,936 32.8 54,611 83,325 41,623 9.9 40,540 1,083 368,592 87.6 172,458 196,134 75,643 98,428 22,063 50,627 11.4 43,033 7,594 190 1,748 5,656 443,799 100.0 231,321 52.1 212,478 47.9 78,246 17.6 107,610 24.2 26,622 6.1 52,311 12.4 40,450 11,861 290 994 10,577 420,903 100.0 212,908 50.6 207,995 49.4 75,933 18.0 99,422 23.6 32,640 7.8 ¥106.01 ¥137.16 ¥108.92 ¥129.58 Change % Change excluding exchange impact -2,973 -2.1 -3,864 -2.7 -3,376 403 -7,743 -5.6 0.5 -17.1 -3,376 -488 -8,075 -5.6 -0.6 -17.9 -1,821 -5,922 -10,716 -10.5 -21.3 -5.7 -1,821 -6,254 -11,939 -10.5 -22.4 -6.3 -5,197 -5,519 -6.7 -4.9 -5,197 -6,742 -6.7 -6.0 44,717 35.9 43,403 34.8 20,364 24,353 -11,329 38.0 34.3 -84.7 20,364 23,039 -11,372 38.0 32.4 -85.0 -621 -10,708 33,388 -59.0 -86.9 24.2 -621 -10,751 32,031 -59.0 -87.3 23.2 19,743 13,645 1,908 36.2 16.4 4.6 19,743 12,288 1,879 36.2 14.7 4.5 1,284 624 24,580 3.2 57.6 6.7 1,284 595 21,971 3.2 54.9 6.0 15,830 8,750 2,413 7,434 -1,097 9.2 4.5 3.2 7.6 -5.0 15,830 6,141 4,577 2,559 -995 9.2 3.1 6.1 2.6 -4.5 -1,684 -3.2 -1,634 -3.1 2,583 -4,267 -100 754 -4,921 22,896 6.4 -36.0 -34.5 75.9 -46.5 5.4 2,583 -4,217 -95 695 -4,817 20,337 6.4 -35.6 -32.8 69.9 -45.5 4.8 18,413 8.6 18,413 8.6 4,483 2.2 1,924 0.9 2,313 3.0 4,482 5.9 8,188 8.2 3,254 3.3 -6,018 -18.4 -5,812 -17.8 ¥-2.91 ¥7.58 Each category includes the following product line: Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and facsimile machines Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper Printing Systems MFPs(multifunctional printers), laser printers and software Other Input/Output Systems Optical discs and system scanners Network System Solutions Personal computers, PC servers, network systems and network related software Other Businesses Optical equipments, metering equipments and semiconductors A2 % (Millions of yen) (Nine months ended December 31, 2004 and 2003 and Year ended March 31, 2004) Nine months ended December 31, 2004 <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 Network Input/Output Systems: Printing Systems Percentage of net sales (%) Domestic Overseas Other Input/Output Systems Percentage of net sales (%) Domestic Overseas Total Network 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 The Americas Europe Other < Other Businesses > Other Businesses Percentage of net sales (%) Domestic Overseas The Americas Europe Other 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 (%) Reference: Exchange rate US$ 1 EURO 1 416,440 31.6 170,564 245,876 118,482 8.9 46,382 72,100 534,922 40.5 216,946 317,976 Nine months ended December 31, 2003 % % -36,600 -8.1 -31,466 -6.9 -14,225 -22,375 -32,605 -7.7 -8.3 -21.6 -14,225 -17,241 -31,594 -7.7 -6.4 -20.9 -7,406 -25,199 -69,205 -13.8 -25.9 -11.5 -7,406 -24,188 -63,060 -13.8 -24.9 -10.4 -21,631 -47,574 -9.1 -13.0 -21,631 -41,429 -9.1 -11.3 470,624 35.7 201,898 268,726 11,022 0.8 1,921 9,101 481,646 36.5 203,819 277,827 142,569 10.8 137,939 4,630 1,159,137 87.8 558,704 600,433 239,000 297,051 64,382 358,021 112,603 27.4 153,910 47,988 204,111 64,615 43,097 -32,075 3.2 3,795 -1,874 39,302 -30,201 401,118 80,528 30.6 157,705 46,114 243,413 34,414 138,855 3,714 10.6 135,800 2,139 3,055 1,575 1,144,100 15,037 87.4 532,082 26,622 612,018 -11,585 242,443 -3,443 293,128 3,923 76,447 -12,065 31.5 115,581 32.3 31.2 31.7 -74.4 47,988 67,593 -32,100 31.2 33.1 -74.5 -49.4 -76.8 20.1 -1,874 -30,226 83,481 -49.4 -76.9 20.8 29.2 14.1 2.7 46,114 37,367 3,743 29.2 15.4 2.7 1.6 51.6 1.3 2,139 1,604 24,164 1.6 52.5 2.1 5.0 -1.9 -1.4 1.3 -15.8 26,622 -2,458 10,622 -2,532 -10,548 5.0 -0.4 4.4 -0.9 -13.8 160,665 12.2 141,793 18,872 576 3,546 14,750 1,319,802 100.0 700,497 53.1 619,305 46.9 239,576 18.2 300,597 22.8 79,132 5.9 164,893 12.6 129,462 35,431 1,154 3,245 31,032 1,308,993 100.0 661,544 50.5 647,449 49.5 243,597 18.6 296,373 22.6 107,479 8.3 -4,228 -2.6 -3,845 -2.3 12,331 -16,559 -578 301 -16,282 10,809 9.5 -46.7 -50.1 9.3 -52.5 0.8 12,331 -16,176 -542 243 -15,877 20,319 9.5 -45.7 -47.0 7.5 -51.2 1.6 38,953 5.9 38,953 5.9 -28,144 -4.3 -18,634 -2.9 -4,021 -1.7 10,080 4.1 4,224 1.4 -2,289 -0.8 -28,347 -26.4 -26,425 -24.6 ¥108.55 ¥134.60 453,040 34.6 184,789 268,251 151,087 11.6 53,788 97,299 604,127 46.2 238,577 365,550 Change Change excluding exchange impact ¥115.00 ¥132.17 ¥-6.45 ¥2.43 Each category includes the following product line: Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and facsimile machines Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper Printing Systems MFPs(multifunctional printers), laser printers and software Other Input/Output Systems Optical discs and system scanners Network System Solutions Personal computers, PC servers, network systems and network related software Other Businesses Optical equipments, metering equipments and semiconductors A3 Year ended March 31, 2004 606,270 34.1 253,830 352,440 197,304 11.0 70,762 126,542 803,574 45.1 324,592 478,982 509,212 28.6 218,165 291,047 49,025 2.8 4,981 44,044 558,237 31.4 223,146 335,091 195,822 11.0 191,302 4,520 1,557,633 87.5 739,040 818,593 325,106 398,109 95,378 222,612 12.5 175,020 47,592 1,274 4,283 42,035 1,780,245 100.0 914,060 51.3 866,185 48.7 326,380 18.3 402,392 22.6 137,413 7.8 ¥113.09 ¥132.65 3. Forecast of Consolidated Performance (Billions of yen) Half year ended Net sales Gross profit Operating income Income before income taxes Net income Net income per share (yen) Capital expenditure Depreciation for tangible fixed assets R&D expenditure Exchange rate (Yen/US$) Exchange rate (Yen/EURO) Three months ended Three months ending Year ending Sept. 30, 2004 Change Dec. 31, 2004 Change Mar. 31, 2005 Change Mar. 31, 2005 Change Results % Results % Forecast % Forecast % 876.0 363.8 57.7 60.0 35.8 48.48 38.2 31.0 53.4 109.83 133.31 -1.4 -6.2 -25.2 -15.9 -15.2 - 443.7 192.1 38.7 34.6 22.2 30.08 20.5 16.9 26.1 106.01 137.16 5.4 3.4 6.9 4.2 13.0 - 495.1 208.0 50.5 46.2 26.9 36.51 20.2 19.4 27.3 105.00 130.00 5.1 8.5 38.3 20.6 -9.7 - 1,815.0 764.0 147.0 141.0 85.0 115.07 79.0 67.5 107.0 107.67 133.45 2.0 -0.2 -2.0 -1.4 -7.4 - 4. Forecast of Consolidated Sales by Product Category (Billions of yen) Three months ending March 31, 2005 Change Change Forecast Forecast(*) % % <Office Equipment> Imaging Solutions: Digital Imaging Systems Domestic Overseas Other Imaging Systems Domestic Overseas Total Imaging Solutions Domestic Overseas Network Input/Output Systems: Printing Systems Domestic Overseas Other Input/Output Systems Domestic Overseas Total Network Input/Output Systems Domestic Overseas Network System Solutions Domestic Overseas Office Equipment Total Domestic Overseas The Americas Europe Other < Other Businesses > Other Businesses Domestic Overseas The Americas Europe Other Grand Total Domestic Overseas The Americas Europe Other * Excluding foreign exchange impact Year ending March 31, 2005 Change Forecast Forecast(*) % Change % 136.6 60.6 76.0 36.0 14.1 21.9 172.7 74.7 97.9 -10.8 -12.2 -9.7 -22.0 -16.8 -25.1 -13.4 -13.1 -13.6 137.3 60.6 76.6 36.7 14.1 22.5 174.0 74.7 99.2 -10.4 -12.2 -8.9 -20.6 -16.8 -22.8 -12.7 -13.1 -12.5 553.1 231.2 321.9 154.5 60.5 94.0 707.6 291.7 415.9 -8.8 -8.9 -8.7 -21.7 -14.5 -25.7 -11.9 -10.1 -13.2 558.9 231.2 327.7 156.2 60.5 95.7 715.1 291.7 423.4 -7.8 -8.9 -7.0 -20.8 -14.5 -24.4 -11.0 -10.1 -11.6 209.5 95.1 114.4 2.7 0.6 2.1 212.2 95.7 116.5 56.1 53.6 2.4 441.1 224.1 216.9 88.2 107.2 21.4 38.6 48.0 31.6 -52.9 -42.7 -55.4 35.1 46.4 27.1 -1.5 -3.3 66.8 6.7 8.3 5.0 6.7 2.1 13.5 213.4 95.1 118.3 2.8 0.6 2.1 216.2 95.7 120.4 56.2 53.6 2.5 446.4 224.1 222.2 90.1 110.6 21.5 41.2 48.0 36.1 -52.2 -42.7 -54.6 37.6 46.4 31.4 -1.3 -3.3 73.4 8.0 8.3 7.6 9.1 5.4 13.7 680.1 297.0 383.1 13.8 2.6 11.2 693.9 299.6 394.3 198.6 191.6 7.0 1,600.2 782.9 817.3 327.2 404.2 85.8 33.6 36.1 31.6 -71.8 -47.8 -74.5 24.3 34.3 17.7 1.5 0.2 56.5 2.7 5.9 -0.2 0.6 1.5 -10.0 687.0 297.0 390.0 13.8 2.6 11.2 700.8 299.6 401.2 198.8 191.6 7.2 1,614.7 782.9 831.8 343.2 401.2 87.4 34.9 36.1 34.0 -71.8 -47.8 -74.5 25.5 34.3 19.7 1.5 0.2 59.3 3.7 5.9 1.6 5.6 0.8 -8.3 54.0 48.2 5.8 0.6 1.4 3.7 495.1 272.4 222.7 88.8 108.6 25.2 -6.2 5.8 -51.2 463.3 41.2 -65.5 5.1 7.9 1.9 7.4 2.5 -15.7 54.2 48.2 6.0 0.6 1.5 3.8 500.7 272.4 228.3 90.8 112.1 25.3 -6.0 5.8 -50.3 475.8 45.7 -65.1 6.3 7.9 4.4 9.7 5.7 -15.2 214.8 190.0 24.8 1.2 5.0 18.5 1,815.0 972.9 842.1 328.4 409.2 104.4 -3.5 8.6 -47.9 -1.7 17.0 -55.9 2.0 6.4 -2.8 0.6 1.7 -24.0 215.3 190.0 25.3 1.3 5.0 19.0 1,830.0 972.9 857.1 344.5 406.2 106.4 -3.3 8.6 -46.8 2.0 16.7 -54.8 2.8 6.4 -1.0 5.6 0.9 -22.5 A4