January 30, 2006 QUARTERLY REPORT Third Quarter Ended December 31, 2005 (Results for the Period from October 1, 2005 to December 31, 2005) Performance Outline (Consolidated) (1) Three Months Ended December 31, 2005 and 2004 Three months ended December 31, 2005 (Billions of yen) Three months ended Change December 31, 2004 Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income 230.8 244.8 475.7 201.1 37.0 38.7 23.0 231.3 212.4 443.7 192.1 38.7 34.6 22.2 -0.2% 15.3% 7.2% 4.7% -4.2% 11.7% 3.5% Exchange rate (Yen/US$) Exchange rate (Yen/EURO) 117.24 139.41 106.01 137.16 11.23 2.25 Net income per share (yen) 31.34 30.08 1.26 21.2 17.6 27.2 20.5 16.9 26.1 0.7 0.6 1.0 Capital expenditures Depreciation for tangible fixed assets R&D expenditures (2) Nine Months Ended December 31, 2005, 2004 and Year Ending March 31, 2006 Nine months ended December 31, 2005 Nine months ended December 31, 2004 (Results) (Results) Change (Billions of yen) Year ending March 31, 2006 Change (Forecast) Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income 711.8 686.9 1,398.7 589.4 103.9 108.1 65.8 700.4 619.3 1,319.8 555.9 96.4 94.7 58.0 1.6% 10.9% 6.0% 6.0% 7.8% 14.1% 13.5% 990.0 920.0 1,910.0 802.0 153.0 157.5 97.0 1.7% 9.4% 5.3% 6.3% 12.9% 16.3% 16.7% Exchange rate (Yen/US$) Exchange rate (Yen/EURO) 112.04 136.92 108.55 134.60 3.49 2.32 111.52 136.44 3.94 1.19 Net income per share (yen) 89.74 78.56 11.18 132.10 19.46 1,990.8 929.5 397.4 1,899.8 841.9 446.4 90.9 87.5 -49.0 - - 46.7 44.3 2.4 - - 1,265.83 1,139.87 125.96 - - 93.5 -91.2 -32.0 154.8 74.3 -90.5 -22.9 168.1 19.2 -0.6 -9.1 -13.3 - - 79.4 48.7 82.1 58.7 48.0 79.6 20.6 0.7 2.5 110.0 67.0 116.0 25.2 0.2 5.5 Total assets Shareholders' equity Interest-bearing debt Equity ratio (%) Shareholders' 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. * Ricoh bases the forecast estimates for the year ending March 31, 2006 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 The Ricoh groups' consolidated net sales for the third quarter of fiscal 2006 (the three months period from October 1 to December 31, 2005) increased by 7.2% as compared to the previous corresponding period, to ¥475.7 billion. During this quarter, the average yen exchange rates were ¥117.24 against the U.S. dollar (down ¥11.23) and ¥139.41 against the Euro (down ¥2.25). Net sales would increase by 4.2% excluding impact of such foreign currency exchange fluctuations. As for Japan, net sales of product categories such as PPCs (plain paper copiers), MFPs (multifunctional printers) and laser printers and net sales of solution business such as support service increased. Moreover, Industry Business and Other Business achieved steady sales growth. On the other hand, net sales of stand-alone products, and personal computers and PC servers decreased. As a result, domestic sales decreased by 0.2% as compared to the previous corresponding period. As for overseas, net sales of digital PPCs increased in the Americas and China. Net sales of MFPs and laser printers increased in each region. Net sales increased by 25.5% (13.4% excluding exchange fluctuation impact) in the Americas, 7.0% (5.0%) in Europe and 18.7% (11.9%) in Other area such as China and Asia. As a result for overseas, net sales increased by 15.3% as compared to the previous corresponding period and would increase by 9.0%, excluding impact of currency exchange fluctuations. Gross profit increased by 4.7% due primarily to increased sales in the Imaging Solution as our core business such as digital PPCs, MFPs and laser printers. As for operating income, it decreased by 4.2% as compared to the previous corresponding period, to ¥37.0 billion due primarily to an increase of selling, general and administrative expenses that consists of R&D expenses (increased ¥1.0 billion, 5.7% of net sales), the reorganization of domestic bases and integration of group companies in Japan and overseas. A gain from foreign currency exchange was included in the other (income) expenses. As a result, income before income taxes increased by 11.7% as compared to the previous corresponding period, to ¥38.7 billion. As for provision for income taxes, effective tax rate during this quarter raised temporarily due to the recognition of deferred income tax accompanied with integration of group companies. A decrease in minority interests in earnings of subsidiaries and equity in earnings of affiliates were due to decreased income of subsidiaries and affiliates. As a result, net income increased by 3.5% as compared to the previous corresponding period, to ¥23.0 billion. 2 *Conditions by Product Line Office Solution Business (Sales up 7.4% to ¥407.9 billion) Net sales in the Imaging Solution as our core business increased as compared to the previous corresponding period due primarily to a continuously sales increase of color PPCs, MFPs and laser printers in Japan and overseas. On the other hand, net sales in the Network System Solution decreased due primarily to a decrease in sales of personal computers and PC servers. As a result, net sales in the Office Solution Business increased by 7.4% to ¥407.9 billion. Imaging Solution (Sales up 8.6% to ¥367.2 billion) - Although domestic sales of digital PPCs decreased due primarily to a shift in customer demands to MFPs from stand-alone products, overseas sales of digital PPCs continued performing well. - Color PPCs increased by introducing a new series of products to the market in responding to an increase of customer demands. - In response to customer demands for high speed, networking and coloration, sales of MFPs continued to increase by offering new product lineups in Japan and overseas. MFPs: Imagio Neo 250, Imagio Neo 453 in Japan Aficio 2020/2020D series overseas Color MFPs: Imagio Neo C246 in Japan Aficio 3260C overseas - Sales of laser printers continued to increase. - As a result, sales in this category increased by 8.6%. Network System Solution (Sales down 2.6% to ¥40.7 billion) - Net sales in this category decreased due primarily to a decline in sales of personal computers and PC servers as compared to the previous corresponding period, although net sales of solution business such as support service increased. Operating income in this segment decreased by 6.2% as compared to the previous corresponding period, to ¥51.3 billion. Despite the profit effect of increased sales and new product offering, it was offset by R&D expenses and costs incurred by the reorganization of domestic bases and integration of group companies. Industry Business (Sales up 13.9% to ¥29.7 billion) Net sales in the Industry Business increased by 13.9% as compared to the previous corresponding period, to ¥29.7 billion. Despite a decrease in demand of optical equipments business, sales in thermal business and electronic component business increased, and semiconductor business also increased its sales as compared to the previous corresponding period. However, the Industry Business resulted losses of ¥0.7 billion in operating income due primarily to countermeasures to the market of measuring equipments business. Other Business (Sales up 0.8% to ¥38.0 billion) Net sales in the Other Business increased by 0.8% as compared to the previous corresponding period, to ¥38.0 billion. Despite decreased sales of optical discs business in overseas and sales of non-core business subsidiary, financing and logistics businesses performed well and contributed in profits. As a result, operating income in this segment increased to ¥2.4 billion. Note: Effective from the year ending March 31, 2006, our business segment is changed into three categories such as "Office Solution", "Industry" and "Other". *Cash Flows (Nine months ended December 31, 2005) Net cash provided by operating activities increased ¥19.2 billion as compared to the previous corresponding period, to ¥93.5 billion. It was due mainly to the fact that net income and depreciation increased and trade receivables were collected, despite a decrease in trade payables and increase in finance receivables. Net cash used in investing activities increased ¥0.6 billion to ¥91.2 billion, due to capital expenditure on research and development facilities and new plants. As a result, free cash flows generated by operating and investing activities increased ¥18.5 billion as compared to the previous corresponding period, to ¥2.2 billion. Net cash used in financing activities amounted to ¥32.0 billion due primarily to the repayment of interest-bearing debt and dividend payments. As a result, cash and cash equivalents at the end of this third quarter decreased by ¥32.0 billion as compared to the end of the preceding fiscal year, to ¥154.8 billion. 3 *Forecast for the entire fiscal year As for consolidated operating results forecast for the fiscal year ending March 31, 2006, we have revised our sales forecast as announced in October 2005, up to ¥1,910.0 billion in view of increased sales for nine months ended December 31, 2005. Assumed foreign exchange rates for the fourth quarter of ¥110.00 to the U.S. dollar and ¥135.00 to the Euro have been unchanged. As for income, we revised downward our forecast to operating income of ¥153.0 billion and income before income taxes of ¥ 157.5 billion, from ¥160.0 billion and ¥160.0 billion of which we announced in October 2005, respectively. It is due primarily to the activities of which include production and sales promotion for new core products in the Imaging Solutions in the second half of this fiscal year, additional spending for the integration of domestic bases and group companies, and building of core operating system. Net income forecast of ¥97.0 billion has been unchanged. Our performance forecasts for fiscal 2006 are as follows: Exchange rate assumptions for the fiscal year ending March 31, 2006 US$ 1 = ¥111.52 (¥107.58 in previous fiscal year) EURO 1 = ¥136.44 (¥135.25 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, 2006 (Forecast) 990.0 920.0 1,910.0 802.0 153.0 157.5 97.0 Year ended March 31, 2005 (Results) 972.9 841.1 1,814.1 754.5 135.5 135.3 83.1 Change 1.7% 9.4% 5.3% 6.3% 12.9% 16.3% 16.7% * Ricoh bases the forecast estimates for the year ending March 31, 2006 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, 2005 (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: 2 additions; 13 removals Companies accounted for by the equity method: No change 2. Results for the Period from October 1, 2005 to December 31, 2005 (1) Operating Results Three months ended Three months ended December 31, 2005 December 31, 2004 Net sales 475,770 443,799 (% change from the previous corresponding period) 7.2 5.4 Operating income 37,086 38,709 (% change from the previous corresponding period) -4.2 6.9 Income before income taxes 38,707 34,661 (% change from the previous corresponding period) 11.7 4.2 Net income 23,000 22,223 (% change from the previous corresponding period) 3.5 13.0 Net income per share-basic (yen) 31.34 30.08 Net income per share-diluted (yen) Note: Equity in earnings of affiliates: ¥762 million (¥1,532 million in previous corresponding period) (2) Financial Position Total assets Shareholders' equity Equity ratio (%) Equity per share (yen) December 31, 2005 1,990,802 929,508 46.7 1,265.83 December 31, 2004 1,899,898 841,998 44.3 1,139.87 (Millions of yen) March 31, 2005 1,953,669 862,998 44.2 1,175.67 Nine months ended December 31, 2005 93,524 -91,252 -32,063 154,840 Nine months ended December 31, 2004 74,318 -90,576 -22,949 168,173 (Millions of yen) Year ended March 31, 2005 132,780 -96,198 -56,439 186,857 Cash Flows 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, 2005 1,814,108 1.9 135,506 -9.7 135,383 -5.4 83,143 -9.4 112.64 - 3. Forecast of Operating Results from April 1, 2005 to March 31, 2006 Net sales Operating income Income before income taxes Net income Note: Net income per share (Consolidated) ¥132.10 (Millions of yen) 1,910,000 153,000 157,500 97,000 In accordance with Japanese regulations, Ricoh has issued forecast for its financial results for the fiscal year ending March 31, 2006. 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, 2005 and 2004) 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, 2005 December 31, 2004 475,770 443,799 274,616 251,696 56.7 57.7 201,154 192,103 42.3 43.3 164,068 153,394 34.5 34.6 37,086 38,709 7.8 8.7 886 0.2 1,450 0.3 -2,185 -0.4 358 0.1 1,276 0.3 3,130 0.7 38,707 8.1 15,470 3.3 999 0.2 762 0.2 23,000 4.8 34,661 7.8 12,500 2.8 1,470 0.3 1,532 0.3 22,223 5.0 ¥117.24 ¥139.41 ¥106.01 ¥137.16 (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) Nine months ended Nine months ended December 31, 2005 December 31, 2004 Net sales 1,398,790 1,319,802 Cost of sales 809,383 763,819 Percentage of net sales (%) 57.9 57.9 Gross Profit 589,407 555,983 Percentage of net sales (%) 42.1 42.1 Selling, general and administrative expenses 485,414 459,516 34.8 Percentage of net sales (%) 34.7 Operating income 103,993 96,467 Percentage of net sales (%) 7.4 7.3 Other (income) expense Interest and dividend income 2,270 1,431 Percentage of net sales (%) 0.2 0.1 Interest expense 3,645 3,592 Percentage of net sales (%) 0.3 0.3 Other, net -5,496 -419 Percentage of net sales (%) -0.4 -0.1 Income before income taxes, equity income and minority interests 108,114 94,725 7.2 Percentage of net sales (%) 7.7 Provision for income taxes 40,255 36,279 Percentage of net sales (%) 2.8 2.7 Minority interests in earnings of subsidiaries 3,689 3,368 Percentage of net sales (%) 0.3 0.3 Equity in earnings of affiliates 1,697 2,966 Percentage of net sales (%) 0.1 0.2 Net income 65,867 58,044 Percentage of net sales (%) 4.7 4.4 Reference : Exchange rate US$ 1 EURO 1 ¥112.04 ¥136.92 6 ¥108.55 ¥134.60 Change 31,971 22,920 % 7.2 9.1 9,051 4.7 10,674 7.0 -1,623 -4.2 528 147.5 174 13.6 -5,315 - 4,046 11.7 2,970 23.8 -471 -32.0 -770 -50.3 777 3.5 Change 78,988 45,564 33,424 25,898 7,526 (Millions of yen) Year ended March 31, 2005 % 6.0 1,814,108 6.0 1,059,531 58.4 6.0 754,577 41.6 5.6 619,071 34.1 7.8 135,506 7.5 839 58.6 53 1.5 -5,077 - 13,389 14.1 3,976 11.0 321 9.5 -1,269 -42.8 7,823 13.5 2,240 0.1 4,684 0.3 -2,321 -0.2 135,383 7.5 50,634 2.8 4,726 0.3 3,120 0.2 83,143 4.6 ¥107.58 ¥135.25 2-1. Consolidated Sales by Product Category (Three months ended December 31, 2005 and 2004) Three months ended Three months ended December 31, 2005 December 31, 2004 <Office Solution Business> Imaging Solution Business 367,207 338,074 Percentage of net sales (%) 77.2 76.2 Network System Solution Business 40,779 41,852 Percentage of net sales (%) 8.6 9.4 Total Office Solution Business 407,986 379,926 Percentage of net sales (%) 85.8 85.6 <Industry Business> Industry Business 29,715 26,091 Percentage of net sales (%) 6.2 5.9 <Other Business> Other Business 38,069 37,782 Percentage of net sales (%) 8.0 8.5 Grand Total 475,770 443,799 Percentage of net sales (%) 100.0 100.0 Reference : Exchange rate US$ 1 EURO 1 ¥117.24 ¥139.41 Change % 29,133 8.6 -1,073 -2.6 28,060 7.4 3,624 13.9 287 0.8 31,971 7.2 ¥106.01 ¥137.16 (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) Nine months ended Nine months ended December 31, 2005 December 31, 2004 <Office Solution Business> Imaging Solution Business 1,060,337 977,130 Percentage of net sales (%) 75.8 74.0 Network System Solution Business 133,930 137,458 Percentage of net sales (%) 9.6 10.5 Total Office Solution Business 1,194,267 1,114,588 Percentage of net sales (%) 85.4 84.5 <Industry Business> Industry Business 88,174 84,851 Percentage of net sales (%) 6.3 6.4 <Other Business> Other Business 116,349 120,363 Percentage of net sales (%) 8.3 9.1 Grand Total 1,398,790 1,319,802 Percentage of net sales (%) 100.0 100.0 Reference : Exchange rate US$ 1 EURO 1 (Millions of yen) ¥112.04 ¥136.92 Change (Millions of yen) Year ended March 31, 2005 % 83,207 8.5 -3,528 -2.6 79,679 7.1 3,323 3.9 119,408 6.6 -4,014 -3.3 78,988 6.0 163,272 9.0 1,814,108 100.0 ¥108.55 ¥134.60 Note: Effective from the year ending March 31, 2006, our business segment is changed into three categories such as "Office Solution", "Industry" and "Other". Accordingly, information for the previous corresponding period has been reclassified to conform with the current classification. Each category includes the following product line: Imaging Solution Business Network System Solution Business Industry Business Other Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Personal computers, PC servers, network systems and network related software Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Optical discs and digital camera 7 1,332,299 73.4 199,129 11.0 1,531,428 84.4 ¥107.58 ¥135.25 2-2. Consolidated Sales by Geographic Area (Three months ended December 31, 2005 and 2004) Three months ended December 31, 2005 <Domestic> 230,885 Percentage of net sales (%) 48.5 <Overseas> 244,885 Percentage of net sales (%) 51.5 The Americas 98,176 Percentage of net sales (%) 20.6 Europe 115,109 Percentage of net sales (%) 24.2 Other 31,600 Percentage of net sales (%) 6.7 Grand Total 475,770 Percentage of net sales (%) 100.0 Reference : Exchange rate US$ 1 EURO 1 (Millions of yen) Three months ended December 31, 2004 231,321 52.1 212,478 47.9 78,246 17.6 107,610 24.2 26,622 6.1 443,799 100.0 ¥117.24 ¥139.41 % -0.2 32,407 15.3 19,930 25.5 7,499 7.0 4,978 18.7 31,971 7.2 ¥106.01 ¥137.16 (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) Nine months ended Nine months ended December 31, 2005 December 31, 2004 <Domestic> 711,802 700,497 Percentage of net sales (%) 50.9 53.1 <Overseas> 686,988 619,305 Percentage of net sales (%) 49.1 46.9 The Americas 282,091 239,576 Percentage of net sales (%) 20.2 18.2 Europe 316,508 300,597 Percentage of net sales (%) 22.6 22.8 Other 88,389 79,132 Percentage of net sales (%) 6.3 5.9 Grand Total 1,398,790 1,319,802 Percentage of net sales (%) 100.0 100.0 Reference : Exchange rate US$ 1 EURO 1 Change -436 ¥112.04 ¥136.92 ¥108.55 ¥134.60 8 Change 11,305 % 1.6 67,683 10.9 42,515 17.7 15,911 5.3 9,257 11.7 78,988 6.0 (Millions of yen) Year ended March 31, 2005 972,975 53.6 841,133 46.4 325,597 17.9 408,906 22.5 106,630 6.0 1,814,108 100.0 ¥107.58 ¥135.25 3. Consolidated Balance Sheets (December 31, 2005 and March 31, 2005) Assets December 31, 2005 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 March 31, 2005 156,552 622,651 159 171,703 56,536 1,007,601 188,311 620,568 138 167,365 53,365 1,029,747 -31,759 2,083 21 4,338 3,171 -22,146 264,192 415,063 303,946 983,201 1,990,802 247,410 391,947 284,565 923,922 1,953,669 16,782 23,116 19,381 59,279 37,133 154,840 1,712 186,857 1,454 Liabilities and Shareholders’ Investment December 31, 2005 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, 2005 (Millions of yen) Change 311,927 158,703 154,892 625,522 336,499 183,518 151,497 671,514 -24,572 -24,815 3,395 -45,992 238,745 95,503 48,776 383,024 1,008,546 52,748 226,567 92,672 48,767 368,006 1,039,520 51,151 12,178 2,831 9 15,018 -30,974 1,597 135,364 186,450 634,204 -5,616 -20,894 929,508 1,990,802 135,364 186,551 584,515 -21,963 -21,469 862,998 1,953,669 -101 49,689 16,347 575 66,510 37,133 7,855 -13,953 67 415 4,791 -14,652 117 -12,219 3,064 699 -50 12,634 December 31, 2005 ¥118.07 ¥139.83 9 (Millions of yen) Change March 31, 2005 ¥107.39 ¥138.87 4. Consolidated Statements of Cash Flows (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) Nine months ended Nine months ended December 31, 2005 December 31, 2004 I. Cash Flows from Operating Activities: 1. Net income 65,867 58,044 2. Adjustments to reconcile net income to net cash provided by operating activities— Depreciation and amortization 62,275 57,498 Equity in earnings of affiliates, net of dividends received -872 -2,163 Deferred income taxes -3,149 5,731 Losses on disposal and sales of tangible fixed assets 1,794 1,600 Changes in assets and liabilities, net of effects from acquisition— (Increase) decrease in trade receivables 20,194 23,847 (Increase) decrease in inventories 913 -14,111 Increase in finance receivables -25,204 -19,659 (Decrease) increase in trade payables -31,404 -23,282 Decrease in accrued income taxes and accrued expenses and other -2,758 -24,387 Increase in accrued pension and severance costs 2,222 2,454 Other, net 3,646 8,746 Net cash provided by operating activities 93,524 74,318 II. Cash Flows from Investing Activities: 1. Proceeds from sales of property, plant and equipment 331 1,631 2. Expenditures for tangible fixed assets -79,267 -58,253 3. Payments for purchases of available-for-sale securities -114,519 -27,161 4. Proceeds from sales of available-for-sale securities 117,417 39,024 5. (Increase) decrease in time deposits, net -155 108 6. Acquisition of new subsidiaries, net of cash acquired − -41,673 7. Other, net -15,059 -4,252 Net cash used in investing activities -91,252 -90,576 III. Cash Flows from Financing Activities: 1. Proceeds from long-term indebtedness 61,160 45,053 2. Repayment of long-term indebtedness -67,833 -37,522 3. (Decrease) increase in short-term borrowings, net 43,887 -1,628 4. Proceeds from issuance of long-term debt securities − 9,000 5. Repayment of long-term debt securities -52,000 -22,000 6. Dividends paid -16,178 -14,793 7. Payment for purchase of treasury stock -487 -480 8. Other, net -612 -579 Net cash used in financing activities -32,063 -22,949 IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents -2,226 1,866 V. Net Decrease in Cash and Cash Equivalents -32,017 -37,341 VI. Cash and Cash Equivalents at Beginning of Year 186,857 203,039 2,475 VII. Adjustment for Change of Fiscal Period on Consolidated Subsidiaries − VIII. Cash and Cash Equivalents at End of Period 154,840 168,173 10 (Millions of yen) Year ended March 31, 2005 83,143 78,201 -1,966 11,353 4,056 -26,429 -12,885 -30,294 27,276 -13,719 4,307 9,737 132,780 721 -84,076 -79,431 118,120 -511 -43,214 -7,807 -96,198 72,206 -60,613 -38,052 18,000 -22,000 -14,793 -10,624 -563 -56,439 1,200 -18,657 203,039 2,475 186,857 5. Segment Information (1) Industry Segment Information (Three months ended December 31, 2005 and 2004) (Millions of yen) Three months ended December 31, 2005 Office Solution Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in Office Solution Business (%) Industry Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in Industry Business (%) Other Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in Other Business (%) 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, 2004 407,986 407,986 356,613 51,373 379,926 379,926 325,162 54,764 12.6 14.4 29,715 658 30,373 31,074 -701 26,091 596 26,687 27,179 -492 -2.3 -1.8 38,069 38,069 35,587 2,482 37,782 37,782 37,434 348 6.5 0.9 -658 -658 Change % 28,060 28,060 31,451 -3,391 7.4 7.4 9.7 -6.2 3,624 62 3,686 3,895 -209 13.9 10.4 13.8 14.3 - 287 287 -1,847 2,134 0.8 0.8 -4.9 613.2 -596 -596 -62 -62 - -662 16,072 15,410 -16,068 -592 15,907 15,315 -15,911 -70 165 95 -157 - 475,770 475,770 438,684 37,086 443,799 443,799 405,090 38,709 31,971 31,971 33,594 -1,623 7.2 7.2 8.3 -4.2 7.8 8.7 Note: Effective from the year ending March 31, 2006, our business segment is changed into three categories such as "Office Solution", "Industry" and "Other". Accordingly, information for the previous corresponding period has been reclassified to conform with the current classification. 11 (Millions of yen) (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) Nine months ended December 31, 2005 Office Solution Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Year ended March 31, 2005 % 1,114,588 1,114,588 975,903 138,685 11.9 12.4 88,174 1,902 90,076 90,948 -872 84,851 1,862 86,713 86,424 289 -1.0 0.3 116,349 116,349 111,739 4,610 120,363 120,363 121,254 -891 4.0 -0.7 -1,902 -1,902 -1,862 -1,862 -40 -40 - -2,506 -2,506 -1,941 41,589 39,648 -41,550 -1,860 41,614 39,754 -41,616 -81 -25 -106 66 - -2,475 56,715 54,240 -56,746 1,398,790 1,398,790 1,294,797 103,993 1,319,802 1,319,802 1,223,335 96,467 78,988 78,988 71,462 7,526 6.0 6.0 5.8 7.8 1,814,108 1,814,108 1,678,602 135,506 7.4 7.3 Operating income on sales in Office Solution Business (%) Operating income on sales in Industry Business (%) Operating income on sales in Other Business (%) 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 Change 1,194,267 1,194,267 1,052,462 141,805 Industry Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Other Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Nine months ended December 31, 2004 Operating income on consolidated net sales (%) 79,679 79,679 76,559 3,120 7.1 7.1 7.8 2.2 12.8 3,323 40 3,363 4,524 -1,161 3.9 2.1 3.9 5.2 - 119,408 2,506 121,914 121,872 42 0.0 -4,014 -4,014 -9,515 5,501 -3.3 -3.3 -7.8 - 163,272 163,272 167,431 -4,159 -2.5 Note: Effective from the year ending March 31, 2006, our business segment is changed into three categories such as "Office Solution", "Industry" and "Other". Accordingly, information for the previous corresponding period has been reclassified to conform with the current classification. 12 1,531,428 1,531,428 1,335,059 196,369 7.5 (2) Geographic Segment Information (Three months ended December 31, 2005 and 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) Three months ended Three months ended December 31, 2005 December 31, 2004 237,143 104,330 341,473 313,960 27,513 236,003 104,719 340,722 311,668 29,054 8.1 8.5 98,122 5,405 103,527 101,728 1,799 78,146 1,327 79,473 77,846 1,627 1.7 2.0 116,178 869 117,047 112,612 4,435 108,085 747 108,832 103,620 5,212 3.8 4.8 24,327 25,335 49,662 46,029 3,633 21,565 21,501 43,066 39,925 3,141 7.3 7.3 -135,939 -135,939 -135,645 -294 Change 1,140 -389 751 2,292 -1,541 % 0.5 -0.4 0.2 0.7 -5.3 19,976 25.6 4,078 307.3 24,054 30.3 23,882 30.7 172 10.6 8,093 122 8,215 8,992 -777 7.5 16.3 7.5 8.7 -14.9 2,762 3,834 6,596 6,104 492 12.8 17.8 15.3 15.3 15.7 -128,294 -128,294 -127,969 -325 -7,645 -7,645 -7,676 31 - 475,770 475,770 438,684 37,086 443,799 443,799 405,090 38,709 31,971 31,971 33,594 -1,623 7.2 7.2 8.3 -4.2 7.8 8.7 13 (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) Nine months ended December 31, 2005 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, 2004 Change 732,761 308,643 1,041,404 966,641 74,763 717,476 294,539 1,012,015 943,269 68,746 7.2 6.8 280,441 7,158 287,599 279,335 8,264 237,330 6,141 243,471 235,711 7,760 2.9 3.2 315,747 3,315 319,062 304,660 14,402 302,026 2,536 304,562 288,388 16,174 4.5 5.3 69,841 73,354 143,195 132,963 10,232 62,970 65,319 128,289 119,713 8,576 7.1 6.7 -392,470 -392,470 -388,802 -3,668 -368,535 -368,535 -363,746 -4,789 -23,935 -23,935 -25,056 1,121 - -492,659 -492,659 -490,002 -2,657 1,398,790 1,398,790 1,294,797 103,993 1,319,802 1,319,802 1,223,335 96,467 78,988 78,988 71,462 7,526 6.0 6.0 5.8 7.8 1,814,108 1,814,108 1,678,602 135,506 7.4 7.3 14 15,285 14,104 29,389 23,372 6,017 Year ended March 31, 2005 % 2.1 4.8 2.9 2.5 8.8 994,499 392,216 1,386,715 1,298,640 88,075 6.4 43,111 1,017 44,128 43,624 504 18.2 16.6 18.1 18.5 6.5 322,975 7,486 330,461 316,651 13,810 4.2 13,721 779 14,500 16,272 -1,772 4.5 30.7 4.8 5.6 -11.0 412,333 3,310 415,643 391,271 24,372 5.9 6,871 8,035 14,906 13,250 1,656 10.9 12.3 11.6 11.1 19.3 84,301 89,647 173,948 162,042 11,906 6.8 7.5 -APPENDIX- (Third Quarter Ended December 31, 2005) 1. Consolidated Quarterly Performance Outline Fiscal 2006 (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) 452,982 194,722 37,282 38,095 23,723 32.32 1,899,986 879,665 1,198.48 Change(%) 3.8 2.9 -5.3 -7.8 -4.7 - 2Q 470,038 193,531 29,625 31,312 19,144 26.08 1,948,587 905,674 1,233.08 Change(%) 7.0 10.8 61.3 67.0 75.2 - 3Q 475,770 201,154 37,086 38,707 23,000 31.34 1,990,802 929,508 1,265.83 Change(%) 7.2 4.7 -4.2 11.7 3.5 - 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 Note: Fiscal year refers to Ricoh's fiscal year ended March 31. A1 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 - 4Q 494,306 198,594 39,039 40,658 25,099 34.08 1,953,669 862,998 1,175.67 Change(%) 4.9 3.6 6.8 5.9 -15.9 - 2. Consolidated Sales by Product Category (Three months ended December 31, 2005 and 2004) <Office Solution Business> Imaging Solution Business Percentage of net sales (%) Domestic Overseas Network System Solution Business Percentage of net sales (%) Domestic Overseas Office Solution Business Total Percentage of net sales (%) Domestic Overseas The Americas Europe Other <Industry Business> Industry Business Percentage of net sales (%) Domestic Overseas The Americas Europe Other <Other Business> Other Business 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 (Millions of yen) Three months ended Three months ended December 31, 2005 December 31, 2004 367,207 77.2 143,304 223,903 40,779 8.6 38,396 2,383 407,986 85.8 181,700 226,286 93,969 109,300 23,017 338,074 76.2 143,259 194,815 41,852 9.4 40,145 1,707 379,926 85.6 183,404 196,522 75,560 102,215 18,747 29,715 6.2 17,662 12,053 3,921 4,073 4,059 Change excluding Change % exchange impact % 29,133 8.6 16,659 4.9 45 29,088 -1,073 0.0 14.9 -2.6 45 16,614 -1,168 0.0 8.5 -2.8 -1,749 676 28,060 -4.4 39.6 7.4 -1,749 581 15,491 -4.4 34.0 4.1 -1,704 29,764 18,409 7,085 4,270 -0.9 15.1 24.4 6.9 22.8 -1,704 17,195 9,420 5,030 2,745 -0.9 8.7 12.5 4.9 14.6 26,091 5.9 16,725 9,366 2,409 3,873 3,084 3,624 13.9 3,147 12.1 937 2,687 1,512 200 975 5.6 28.7 62.8 5.2 31.6 937 2,210 1,104 143 963 5.6 23.6 45.8 3.7 31.2 38,069 8.0 31,523 6,546 286 1,736 4,524 475,770 100.0 230,885 48.5 244,885 51.5 98,176 20.6 115,109 24.2 31,600 6.7 37,782 8.5 31,192 6,590 277 1,522 4,791 443,799 100.0 231,321 52.1 212,478 47.9 78,246 17.6 107,610 24.2 26,622 6.1 287 0.8 -36 -0.1 331 -44 9 214 -267 31,971 1.1 -0.7 3.1 14.1 -5.6 7.2 331 -367 -13 187 -541 18,602 1.1 -5.6 -4.6 12.3 -11.3 4.2 -436 -0.2 -436 -0.2 32,407 15.3 19,038 9.0 19,930 25.5 10,511 13.4 7,499 7.0 5,360 5.0 4,978 18.7 3,167 11.9 ¥117.24 ¥139.41 ¥106.01 ¥137.16 ¥11.23 ¥2.25 Each category includes the following product line: Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network System Solution Business Personal computers, PC servers, network systems and network related software Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Business Optical discs and digital camera A2 (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) <Office Solution Business> Imaging Solution Business Percentage of net sales (%) Domestic Overseas Network System Solution Business Percentage of net sales (%) Domestic Overseas Office Solution Business Total Percentage of net sales (%) Domestic Overseas The Americas Europe Other <Industry Business> Industry Business Percentage of net sales (%) Domestic Overseas The Americas Europe Other <Other Business> Other Business 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 Nine months ended Nine months ended December 31, 2005 December 31, 2004 1,060,337 75.8 432,545 627,792 133,930 9.6 127,380 6,550 1,194,267 85.4 559,925 634,342 268,342 300,364 65,636 977,130 74.0 411,029 566,101 137,458 10.5 132,828 4,630 1,114,588 84.5 543,857 570,731 229,287 283,691 57,753 88,174 6.3 53,740 34,434 12,142 11,546 10,746 84,851 6.4 56,429 28,422 7,525 11,087 9,810 116,349 8.3 98,137 18,212 1,607 4,598 12,007 1,398,790 100.0 711,802 50.9 686,988 49.1 282,091 20.2 316,508 22.6 88,389 6.3 120,363 9.1 100,211 20,152 2,764 5,819 11,569 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 ¥112.04 ¥136.92 ¥108.55 ¥134.60 (Millions of yen) Change excluding Change % Year ended exchange impact % 83,207 8.5 67,440 6.9 21,516 61,691 -3,528 5.2 10.9 -2.6 21,516 45,924 -3,666 5.2 8.1 -2.7 -5,448 1,920 79,679 -4.1 41.5 7.1 -5,448 1,782 63,774 -4.1 38.5 5.7 16,068 63,611 39,055 16,673 7,883 3.0 11.1 17.0 5.9 13.6 16,068 47,706 30,714 11,449 5,543 3.0 8.4 13.4 4.0 9.6 3,323 3.9 2,772 3.3 -2,689 6,012 4,617 459 936 -4.8 21.2 61.4 4.1 9.5 -2,689 5,461 4,240 279 942 -4.8 19.2 56.3 2.5 9.6 -4,014 -3.3 -4,422 -3.7 -2,074 -1,940 -1,157 -1,221 438 78,988 -2.1 -9.6 -41.9 -21.0 3.8 6.0 -2,074 -2,348 -1,178 -1,288 118 62,124 -2.1 -11.7 -42.6 -22.1 1.0 4.7 11,305 1.6 11,305 1.6 67,683 10.9 50,819 8.2 42,515 17.7 33,776 14.1 15,911 5.3 10,440 3.5 9,257 11.7 6,603 8.3 ¥3.49 ¥2.32 Each category includes the following product line: Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network System Solution Business Personal computers, PC servers, network systems and network related software Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Business Optical discs and digital camera A3 March 31, 2005 1,332,299 73.4 564,163 768,136 199,129 11.0 192,304 6,825 1,531,428 84.4 756,467 774,961 312,188 385,689 77,084 119,408 6.6 80,833 38,575 10,112 15,338 13,125 163,272 9.0 135,675 27,597 3,297 7,879 16,421 1,814,108 100.0 972,975 53.6 841,133 46.4 325,597 17.9 408,906 22.5 106,630 6.0 ¥107.58 ¥135.25 3. Consolidated Sales by Previous Product Category (for reference) (Three months ended December 31, 2005 and 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 Each category includes the following product line: Digital Imaging Systems Other Imaging Systems Printing Systems Other Input/Output Systems Network System Solutions Other Businesses (Millions of yen) Three months ended Three months ended December 31, 2005 December 31, 2004 140,060 29.4 54,789 85,271 38,019 8.0 15,277 22,742 178,079 37.4 70,066 108,013 140,909 31.8 56,640 84,269 37,408 8.4 15,470 21,938 178,317 40.2 72,110 106,207 200,082 42.1 76,198 123,884 2,020 0.4 768 1,252 202,102 42.5 76,966 125,136 42,305 8.9 39,922 2,383 422,486 88.8 186,954 235,532 97,074 113,323 25,135 169,281 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 53,284 11.2 43,931 9,353 1,102 1,786 6,465 475,770 100.0 230,885 48.5 244,885 51.5 98,176 20.6 115,109 24.2 31,600 6.7 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 ¥117.24 ¥139.41 ¥106.01 ¥137.16 Change % % -849 -0.6 -6,291 -4.5 -1,851 1,002 611 -3.3 1.2 1.6 -1,851 -4,440 -469 -3.3 -5.3 -1.3 -193 804 -238 -1.2 3.7 -0.1 -193 -276 -6,760 -1.2 -1.3 -3.8 -2,044 1,806 -2.8 1.7 -2,044 -4,716 -2.8 -4.4 30,801 18.2 24,494 14.5 2,275 28,526 -23 3.1 29.9 -1.1 2,275 22,219 -41 3.1 23.3 -2.0 337 -360 30,778 78.2 -22.3 18.0 337 -378 24,453 78.2 -23.4 14.3 2,612 28,166 -1,226 3.5 29.0 -2.8 2,612 21,841 -1,321 3.5 22.5 -3.0 -1,902 676 29,314 -4.5 39.6 7.5 -1,902 581 16,372 -4.5 34.0 4.2 -1,334 30,648 19,018 7,461 4,169 -0.7 15.0 24.4 7.0 19.9 -1,334 17,706 9,727 5,346 2,633 -0.7 8.6 12.5 5.0 12.6 2,657 5.2 2,230 4.4 898 1,759 912 38 809 31,971 2.1 23.2 480.0 2.2 14.3 7.2 898 1,332 784 14 534 18,602 2.1 17.5 412.6 0.8 9.4 4.2 -436 -0.2 -436 -0.2 32,407 15.3 19,038 9.0 19,930 25.5 10,511 13.4 7,499 7.0 5,360 5.0 4,978 18.7 3,167 11.9 ¥11.23 ¥2.25 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 A4 Change excluding exchange impact (Millions of yen) (Nine months ended December 31, 2005 and 2004 and Year ended March 31, 2005) <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 Nine months ended Nine months ended December 31, 2005 December 31, 2004 416,289 29.8 166,198 250,091 113,573 8.1 45,434 68,139 529,862 37.9 211,632 318,230 416,440 31.6 170,564 245,876 118,482 8.9 46,382 72,100 534,922 40.5 216,946 317,976 561,811 40.2 229,175 332,636 7,862 0.5 2,110 5,752 569,673 40.7 231,285 338,388 138,656 9.9 132,106 6,550 1,238,191 88.5 575,023 663,168 278,300 312,333 72,535 470,624 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 64,382 160,599 11.5 136,779 23,820 3,791 4,175 15,854 1,398,790 100.0 711,802 50.9 686,988 49.1 282,091 20.2 316,508 22.6 88,389 6.3 160,665 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 ¥112.04 ¥136.92 ¥108.55 ¥134.60 Change excluding Change % exchange impact -151 -0.0 -6,460 -1.6 -4,366 4,215 -4,909 -2.6 1.7 -4.1 -4,366 -2,094 -6,387 -2.6 -0.9 -5.4 -948 -3,961 -5,060 -2.0 -5.5 -0.9 -948 -5,439 -12,847 -2.0 -7.5 -2.4 -5,314 254 -2.4 0.1 -5,314 -7,533 -2.4 -2.4 91,187 19.4 82,777 17.6 27,277 63,910 -3,160 13.5 23.8 -28.7 27,277 55,500 -3,191 13.5 20.7 -29.0 189 -3,349 88,027 9.8 -36.8 18.3 189 -3,380 79,586 9.8 -37.1 16.5 27,466 60,561 -3,913 13.5 21.8 -2.7 27,466 52,120 -4,051 13.5 18.8 -2.8 -5,833 1,920 79,054 -4.2 41.5 6.8 -5,833 1,782 62,688 -4.2 38.5 5.4 16,319 62,735 39,300 15,282 8,153 2.9 10.4 16.4 5.1 12.7 16,319 46,369 30,679 9,871 5,819 2.9 7.7 12.8 3.3 9.0 -66 -0.0 -564 -0.4 -5,014 4,948 3,215 629 1,104 78,988 -3.5 26.2 558.2 17.7 7.5 6.0 -5,014 4,450 3,097 569 784 62,124 -3.5 23.6 537.7 16.0 5.3 4.7 11,305 1.6 11,305 1.6 67,683 10.9 50,819 8.2 42,515 17.7 33,776 14.1 15,911 5.3 10,440 3.5 9,257 11.7 6,603 8.3 ¥3.49 ¥2.32 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 A5 Year ended % March 31, 2005 559,023 30.8 231,526 327,497 156,074 8.6 59,371 96,703 715,097 39.4 290,897 424,200 655,328 36.1 283,141 372,187 15,508 0.9 3,247 12,261 670,836 37.0 286,388 384,448 205,895 11.3 199,070 6,825 1,591,828 87.7 776,355 815,473 324,853 403,574 87,046 222,280 12.3 196,620 25,660 744 5,332 19,584 1,814,108 100.0 972,975 53.6 841,133 46.4 325,597 17.9 408,906 22.5 106,630 6.0 ¥107.58 ¥135.25 4. 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, 2005 Change Dec. 31, 2005 Change Mar. 31, 2006 Change Mar. 31, 2006 Change Results % Results % Forecast % Forecast % 923.0 388.2 66.9 69.4 42.8 58.40 58.1 31.1 54.9 109.42 135.67 5.4 6.7 15.8 15.6 19.7 - 475.7 201.1 37.0 38.7 23.0 31.34 21.2 17.6 27.2 117.24 139.41 7.2 4.7 -4.2 11.7 3.5 - 511.2 212.5 49.0 49.3 31.1 42.36 30.5 18.2 33.8 110.00 135.00 3.4 7.0 25.5 21.5 24.0 - 1,910.0 802.0 153.0 157.5 97.0 132.10 110.0 67.0 116.0 111.52 136.44 5.3 6.3 12.9 16.3 16.7 - 5. Forecast of Consolidated Sales by Product Category (Billions of yen) Three months ending March 31, 2006 Change Change Forecast Forecast(*) % % <Office Solution Business> Imaging Solution Business Domestic Overseas Network System Solution Business Domestic Overseas Office Solution Business Total Domestic Overseas The Americas Europe Other <Industry Business> Industry Business Domestic Overseas The Americas Europe Other <Other Business> Other Business Domestic Overseas The Americas Europe Other Grand Total Domestic Overseas The Americas Europe Other Year ending March 31, 2006 Change Forecast Forecast(*) % Change % 373.6 162.2 211.3 64.6 62.2 2.4 438.2 224.4 213.7 90.1 103.4 20.2 5.2 5.9 4.6 4.7 4.6 9.3 5.1 5.6 4.7 8.7 1.4 5.0 371.1 162.2 208.8 64.6 62.2 2.4 435.7 224.4 211.2 85.8 105.2 20.2 4.5 5.9 3.4 4.7 4.6 9.3 4.5 5.6 3.5 3.5 3.1 5.0 1,433.9 594.7 839.1 198.5 189.5 8.9 1,632.4 784.3 848.1 358.4 403.7 85.9 7.6 5.4 9.2 -0.3 -1.4 31.1 6.6 3.7 9.4 14.8 4.7 11.5 1,415.6 594.7 820.9 198.3 189.5 8.8 1,614.0 784.3 829.7 345.8 400.3 83.5 6.3 5.4 6.9 -0.4 -1.4 29.1 5.4 3.7 7.1 10.8 3.8 8.4 31.6 19.0 12.6 4.0 4.5 4.1 -8.6 -22.1 24.1 54.6 5.9 23.7 31.5 19.0 12.5 3.8 4.6 4.1 -8.8 -22.1 23.1 46.9 8.2 23.7 119.7 72.7 47.0 16.1 16.0 14.8 0.3 -10.0 21.9 59.6 4.6 13.1 119.1 72.7 46.3 15.5 15.9 14.8 -0.2 -10.0 20.2 53.9 4.1 13.2 41.4 34.7 6.6 0.1 3.1 3.4 511.2 278.1 233.0 94.2 111.0 27.8 -3.5 -1.9 -11.1 -81.2 50.5 -29.5 3.4 2.1 5.0 9.5 2.5 1.2 41.3 34.7 6.6 0.1 3.1 3.4 508.5 278.1 230.3 89.7 112.9 27.7 -3.6 -1.9 -11.3 -81.2 50.5 -29.9 2.9 2.1 3.9 4.3 4.2 1.1 157.7 132.9 24.8 1.7 7.6 15.4 1,910.0 990.0 920.0 376.2 427.5 116.2 -3.4 -2.0 -10.0 -48.2 -2.3 -6.1 5.3 1.7 9.4 15.6 4.5 9.0 157.3 132.9 24.4 1.6 7.6 15.0 1,890.5 990.0 900.5 363.0 423.9 113.5 -3.6 -2.0 -11.6 -48.9 -3.1 -8.1 4.2 1.7 7.1 11.5 3.7 6.5 * Excluding foreign exchange impact A6