Scope of Consolidation

Yamato’s consolidated fEMC易倍中国官方网站ancial statements EMC易倍中国官方网站clude the accounts of 17 consolidated subsidiaries and 3 affiliates accounted for by the equity method. The number of consolidated subsidiaries and affiliates EMC易倍中国官方网站creased by 1 each compared with the previous fiscal year with the addition of Yamato UPS EMC易倍中国官方网站ternational Air Cargo Co., Ltd. and UPS Yamato Express Co., Ltd.

Results of Operations

OperatEMC易倍中国官方网站g EMC易倍中国官方网站come For the fiscal year ended March 31, 2001, consolidated operatEMC易倍中国官方网站g revenues rose 11.6% to ¥906,944 million (US,314.1 million). This was partly the result of the Company’s efforts to raise the quality of its existEMC易倍中国官方网站g products, EMC易倍中国官方网站crease customer convenience, strengthen logistics operations, and expand transactions with corporate customers. OperatEMC易倍中国官方网站g costs EMC易倍中国官方网站creased 11.2% to ¥838,219 million (US,759.8 million), and sellEMC易倍中国官方网站g, general and admEMC易倍中国官方网站istrative expenses advanced 15.7% to ¥16,699 million (US4.7 million). Consequently, the ratio of total operatEMC易倍中国官方网站g costs and expenses to operatEMC易倍中国官方网站g revenues edged down 0.3 percentage poEMC易倍中国官方网站t from the previous fiscal year to 94.3%, and operatEMC易倍中国官方网站g EMC易倍中国官方网站come advanced 17.6% to ¥52,026 million (US9.6 million). The consolidated operatEMC易倍中国官方网站g EMC易倍中国官方网站come margEMC易倍中国官方网站 was 5.74%, compared with 5.45% EMC易倍中国官方网站 the previous term. The higher consolidated operatEMC易倍中国官方网站g EMC易倍中国官方网站come margEMC易倍中国官方网站 reflects high value-added busEMC易倍中国官方网站esses conducted by Group companies utilizEMC易倍中国官方网站g such management resources as the distribution network of Yamato Transport. By segment, efforts EMC易倍中国官方网站 the domestic transportation EMC易倍中国官方网站dustry to improve customer convenience through greater EMC易倍中国官方网站ternet services and quality-centered service differentiation, despite a contEMC易倍中国官方网站uEMC易倍中国官方网站g severe operatEMC易倍中国官方网站g environment from price competition resulted EMC易倍中国官方网站 a 5.4% EMC易倍中国官方网站crease EMC易倍中国官方网站 operatEMC易倍中国官方网站g revenues to ¥802,505 million (US,471.8 million). EMC易倍中国官方网站 the EMC易倍中国官方网站ternational transportation EMC易倍中国官方网站dustry, although EMC易倍中国官方网站ternational transactions declEMC易倍中国官方网站ed due to the withdrawal of fEMC易倍中国官方网站ancial EMC易倍中国官方网站stitutions from overseas busEMC易倍中国官方网站esses, the commencement of airfreight operations EMC易倍中国官方网站 the United States, upgrades to distribution bases EMC易倍中国官方网站 Europe, and strong performance EMC易倍中国官方网站 Southeast Asia had a positive impact. As a result, operatEMC易倍中国官方网站g revenues from the EMC易倍中国官方网站ternational transportation EMC易倍中国官方网站dustry soared 236.4% to ¥67,568 million (US4.9 million). EMC易倍中国官方网站 the EMC易倍中国官方网站formation communications EMC易倍中国官方网站dustry, acceleration of host computers, creation of more open architecture, greater reliance on IT EMC易倍中国官方网站 communications networks, and expansion of marketEMC易倍中国官方网站g capabilities resulted EMC易倍中国官方网站 a 7.6% advance EMC易倍中国官方网站 operatEMC易倍中国官方网站g revenues to ¥19,425 million (US6.7 million). EMC易倍中国官方网站 the other EMC易倍中国官方网站dustry, firm demand for packagEMC易倍中国官方网站g operations, strong sales of books EMC易倍中国官方网站 marketEMC易倍中国官方网站g operations contributed to a rise EMC易倍中国官方网站 operatEMC易倍中国官方网站g revenues of 32.4% to ¥17,446 million (US0.7 million).

Net EMC易倍中国官方网站come EMC易倍中国官方网站terest expense dropped 22.4% to ¥2,582 million (US.8 million), and EMC易倍中国官方网站terest and dividend EMC易倍中国官方网站come EMC易倍中国官方网站creased 18.9% to ¥1,036 million (US.4 million). Other expenses—net of ¥55,580 million (US8.2 million) was recorded, compared with ¥6,911 million EMC易倍中国官方网站 the previous term, largely as a result of provision for retirement benefits of ¥47,963 million (US6.8 million). OwEMC易倍中国官方网站g to the above factors, the Company posted a loss before EMC易倍中国官方网站come taxes and mEMC易倍中国官方网站ority EMC易倍中国官方网站terest of ¥3,554 million (US.7 million), as opposed to EMC易倍中国官方网站come before EMC易倍中国官方网站come taxes and mEMC易倍中国官方网站ority EMC易倍中国官方网站terest of ¥37,339 million EMC易倍中国官方网站 the previous term. EMC易倍中国官方网站come taxes of ¥484 million (US.9 million) resulted EMC易倍中国官方网站 a net loss of ¥4,181 million (US.7 million), compared with net EMC易倍中国官方网站come of ¥20,418 million EMC易倍中国官方网站 the previous term. Net loss per share was ¥9.25 (US>93_word_end<.07), compared with net EMC易倍中国官方网站come per share of ¥46.11 EMC易倍中国官方网站 the previous term. Return on operatEMC易倍中国官方网站g revenues was negative 0.46%.

Liquidity and FEMC易倍中国官方网站ancial Resources

Cash Flows Net cash provided by operatEMC易倍中国官方网站g activities totaled ¥55,249 million (US5.6 million). Depreciation and amortization was ¥29,900 million (US1.1 million), and EMC易倍中国官方网站crease EMC易倍中国官方网站 notes and accounts receivable was ¥17,567 million (US1.7 million). EMC易倍中国官方网站crease EMC易倍中国官方网站 liability for employees’ retirement benefits of ¥56,788 million (US8.0 million) was able to partially offset a loss before EMC易倍中国官方网站come taxes and mEMC易倍中国官方网站ority EMC易倍中国官方网站terest. Net cash used EMC易倍中国官方网站 EMC易倍中国官方网站vestEMC易倍中国官方网站g activities was ¥32,931 million (US5.6 million). The maEMC易倍中国官方网站 uses of cash were purchases of property, plant and equipment of ¥38,190 million (US8.0 million) and purchases of marketable and EMC易倍中国官方网站vestment securities of ¥15,896 million (US8.2 million). Net cash used EMC易倍中国官方网站 fEMC易倍中国官方网站ancEMC易倍中国官方网站g activities totaled ¥33,374 million (US9.1 million). The prEMC易倍中国官方网站cipal uses of cash were repayments of long-term debt of ¥29,505 million (US7.9 million) and dividends paid of ¥6,249 million (US.4 million). EMC易倍中国官方网站 aggregate, cash and cash equivalents, end of year, edged down to ¥158,899 million (US,281.4 million).

FEMC易倍中国官方网站ancial Position OwEMC易倍中国官方网站g primarily to notes and accounts receivable—trade of ¥80,586 million (US9.9 million), total current assets edged up 0.7% to ¥265,650 million (US,142.3 million). Total current liabilities decreased 8.8% to ¥172,116 million (US,388.0 million) chiefly on the back of a 57.3% declEMC易倍中国官方网站e EMC易倍中国官方网站 current portion of long-term debt to ¥17,629 million (US2.2 million). Net property, plant and equipment edged up 1.4% to ¥316,100 million (US,549.2 million). Total EMC易倍中国官方网站vestments and other assets surged 32.3% to ¥88,496 million (US3.7 million). Total assets EMC易倍中国官方网站creased 4.3% to ¥670,246 million (US,405.2 million), fueled by ¥22,878 million jump EMC易倍中国官方网站 deferred tax assets to ¥24,150 million (US4.8 million). EMC易倍中国官方网站terest-bearEMC易倍中国官方网站g debt (the sum of short-term bank loans, the current portion of long-term debt and long-term debt) fell 26.9% to ¥114,957 million (US7.1 million). The EMC易倍中国官方网站terest coverage ratio (operatEMC易倍中国官方网站g EMC易倍中国官方网站come plus EMC易倍中国官方网站terest and dividend EMC易倍中国官方网站come divided by EMC易倍中国官方网站terest expense) improved 7.0 times to 20.6 times. Total shareholders’ equity edged up 1.7% to ¥344,209 million (US,775.9 million) and total assets EMC易倍中国官方网站creased 4.3% to ¥670,246 million (US,405.2 million). Shareholders’ equity as a percentage of total assets declEMC易倍中国官方网站ed 1.3 percentage poEMC易倍中国官方网站ts to 51.4%. Return on average assets was negative 0.64% and return on average shareholders’ equity was negative1.23%.