Business Segment and Geographic Information

12 Months Ended

Mar. 31, 2011

Business Segment and Geographic Information [Abstract]

Business Segment and Geographic Information

22. Business Segment and Geographic Information

Komatsu has two operating segments: 1) Construction, Mining and Utility Equipment 2) Industrial Machinery and Others.

Segment profit is determined by subtracting the cost of sales and selling, general and administrative expenses from net sales attributed to the operating segment. Segment profit excludes certain general corporate administration and finance expenses, such as costs of executive management, corporate development, corporate finance, human resources, internal audit, investor relations, legal and public relations. Segment profit also excludes certain charges which may otherwise relate to operating segments, including impairments of long lived assets and goodwill.

The following tables present certain information regarding Komatsu’s operating segments and geographic information at March 31, 2011, 2010 and 2009, and for the years then ended:

										Thousands of
	Millions of yen									U.S. dollars
Operating segments:	2011			2010			2009			2011
Net sales:
Construction, Mining and Utility Equipment—
External customers	¥	1,615,689		¥	1,268,575		¥	1,744,733		$	19,466,132
Intersegment		2,392			2,690			4,653			28,819
Total		1,618,081			1,271,265			1,749,386			19,494,951
Industrial Machinery and Others—
External customers		227,438			162,989			277,010			2,740,217
Intersegment		10,916			15,619			26,389			131,518
Total		238,354			178,608			303,399			2,871,735
Elimination		(13,308	)		(18,309	)		(31,042	)		(160,337	)
Consolidated	¥	1,843,127		¥	1,431,564		¥	2,021,743		$	22,206,349
Segment profit:
Construction, Mining and Utility Equipment	¥	220,830		¥	83,061		¥	180,455		$	2,660,603
Industrial Machinery and Others		20,965			2,998			12,891			252,590
Total segment profit		241,795			86,059			193,346			2,913,193
Corporate expenses and elimination		(6,823	)		(5,340	)		(4,688	)		(82,205	)
Total		234,972			80,719			188,658			2,830,988
Impairment loss on long-lived assets		5,142			3,332			16,414			61,952
Impairment loss on goodwill		—			—			2,003			—
Other operating income (expenses)		(6,901	)		(10,352	)		(18,293	)		(83,145	)
Operating income		222,929			67,035			151,948			2,685,891
Interest and dividend income		4,493			6,158			8,621			54,133
Interest expense		(6,475	)		(8,502	)		(14,576	)		(78,012	)
Other-net		(1,138	)		288			(17,211	)		(13,711	)
Consolidated income before income taxes and equity in earnings of affiliated companies	¥	219,809		¥	64,979		¥	128,782		$	2,648,301
Segment assets:
Construction, Mining and Utility Equipment	¥	1,859,004		¥	1,682,542		¥	1,639,720		$	22,397,638
Industrial Machinery and Others		270,736			207,551			254,200			3,261,880
Corporate assets and elimination		19,397			68,962			75,139			233,699
Consolidated	¥	2,149,137		¥	1,959,055		¥	1,969,059		$	25,893,217
Depreciation and amortization:
Construction, Mining and Utility Equipment	¥	80,780		¥	82,508		¥	87,260		$	973,253
Industrial Machinery and Others		7,662			7,707			9,981			92,313
Consolidated	¥	88,442		¥	90,215		¥	97,241		$	1,065,566
Capital investment:
Construction, Mining and Utility Equipment	¥	92,049		¥	92,979		¥	152,803		$	1,109,024
Industrial Machinery and Others		5,689			3,212			9,709			68,542
Consolidated	¥	97,738		¥	96,191		¥	162,512		$	1,177,566

Business categories and principal products and services included in each operating segment are as follows:

a)	Construction, Mining and Utility Equipment Excavating equipment, loading equipment, grading and roadbed preparation equipment, hauling equipment, forestry equipment, tunneling machines, recycling equipment, industrial vehicles, other equipment, engines and components, casting products and logistics
b)	Industrial Machinery and Others Metal forging and stamping presses, sheet-metal machines, machine tools, defense systems, temperature-control equipment and others

Transfers between segments are made at estimated arm’s length prices.

Segment assets are those assets used in the operations of each segment. Unallocated corporate assets consist primarily of cash and cash equivalents and marketable investment securities maintained for general corporate purposes.

Amortization for the years ended March 31, 2011, 2010 and 2009 does not include amortization of long-term prepaid expenses of ¥1,025 million ($12,349 thousand), ¥1,104 million and ¥1,113 million. The term “Capital investment” should be distinguished from the term “Capital expenditures” as used in the consolidated statements of cash flows. The term “Capital investment” is defined to refer to the acquisition of property, plant and equipment including properties under capital leases on an accrual basis which reflects the effects of timing differences between acquisition dates and payment dates.

Impairment loss on long-lived assets and goodwill recorded in each segment asset for the years ended March 31, 2011, 2010 and 2009 are as follows:

							Thousands of
	Millions of yen						U.S. dollars
	2011		2010		2009		2011
Impairment loss on long-lived assets
Construction, Mining and Utility Equipment	¥	4,969	¥	3,063	¥	13,998	$	59,868
Industrial Machinery and Others		173		269		2,416		2,084
Total	¥	5,142	¥	3,332	¥	16,414	$	61,952
Impairment loss on goodwill
Construction, Mining and Utility Equipment	¥	—	¥	—	¥	2,003	$	—
Industrial Machinery and Others		—		—		—		—
Total	¥	—	¥	—	¥	2,003	$	—

Geographic information:

Net sales to external customers recognized by sales destination for the years ended March 31, 2011, 2010 and 2009 are as follows:

							Thousands of
	Millions of yen						U.S. dollars
	2011		2010		2009		2011
Net sales to external customers:
Japan	¥	349,184	¥	323,813	¥	452,172	$	4,207,036
The Americas		397,427		323,984		503,450		4,788,277
Europe and CIS		165,418		127,377		284,029		1,992,988
China		428,208		270,870		236,226		5,159,133
Asia (excluding Japan, China) and Oceania		398,366		299,864		335,574		4,799,590
Middle East and Africa		104,524		85,656		210,292		1,259,325
Consolidated net sales	¥	1,843,127	¥	1,431,564	¥	2,021,743	$	22,206,349

Net sales recognized by geographic origin and property, plant and equipment at March 31, 2011, 2010 and 2009, and for the years then ended are as follows:

							Thousands of
	Millions of yen						U.S. dollars
	2011		2010		2009		2011
Net sales to external customers:
Japan	¥	641,502	¥	498,568	¥	831,569	$	7,728,939
U.S.A.		391,380		311,170		469,047		4,715,422
Europe and CIS		175,217		141,510		269,139		2,111,048
China		332,581		238,102		174,466		4,007,000
Others		302,447		242,214		277,522		3,643,940
Total	¥	1,843,127	¥	1,431,564	¥	2,021,743	$	22,206,349
Property, plant and equipment:
Japan	¥	354,797	¥	380,592	¥	400,554	$	4,274,663
U.S.A.		63,972		62,637		68,170		770,747
Europe and CIS		29,868		35,811		28,207		359,855
Others		59,750		46,060		28,531		719,879
Total	¥	508,387	¥	525,100	¥	525,462	$	6,125,144

No individual country within Europe and CIS or Others had a material impact on net sales.

There were no sales to a single major external customer for the years ended March 31, 2011, 2010 and 2009.