Fujitsu Ld. FUJ First-Half Results

  Fujitsu Ld. (FUJ) - First-Half Results

RNS Number : 9619P
Fujitsu Ld
31 October 2012




                                                               Fujitsu Limited

Explanation of Financial Results



1. Overview of FY2012 Second-Quarter Consolidated Financial Results



Business Environment



During the first half of fiscal 2012 (April 1, 2012 - September 30, 2012),  as 
the economic  slowdown  spread,  recovery  in the  global  economy  was  weak. 
Progress was made in building a framework of economic assistance for countries
in southern Europe,  although financial  markets remained  unstable. The  real 
economy also continued to deteriorate as a result of fiscal austerity measures
put in  place  by  governments  and  rising  unemployment.  With  unemployment 
remaining stubbornly high in  the US, there was  a further easing of  monetary 
policy,  but  concerns   over  fiscal  policy   have  resulted  in   continued 
uncertainty. Economic growth  in emerging  market countries  has moderated  as 
exports have declined due to the European recession.



Economic conditions in Japan continued to be bolstered by an uptick in  demand 
on  the  back  of  reconstruction  efforts  following  the  Great  East  Japan 
Earthquake, but overall growth remains weak  as a result of the expiration  of 
subsidies for hybrid car purchases and slowdown in global economic growth.



Spending on information and communication  technology (ICT) in Japan has  been 
solid  as   investments  that   were  previously   put  off   were  made   and 
telecommunications  carriers   invested  to   keep   up  with   increases   in 
communications traffic. Outside of Japan, primarily in Europe, where  economic 
conditions continue to  deteriorate, companies  are making  stronger moves  to 
control investment spending.



FY 2012 Second-Quarter Financial Results  (Billion Yen)

                     2Q       1Q        2Q       1Q      Change vs.
                                                         2Q FY 2011
                   FY2012   FY2012    FY2011   FY2011                  Change
                                                              Change   (%)
                  7/1/12-  4/1/12-   7/1/11-  4/1/11-
                                                               (%)   Constant
                  9/30/12  6/30/12   9/30/11  6/30/11
                                                                      Currency
Net Sales          1,114.4    957.3   1,106.2    986.0     8.1    0.7    2
Cost of Sales        804.8    706.7     796.9    721.5     7.9    1.0
Gross Profit         309.5    250.6     309.3    264.5     0.2    0.1
[Gross Profit     [ 27.8%] [ 26.2%]  [ 28.0%] [ 26.8%]       [
Margin]                                                 -0.2%]
Selling, General
and                  276.8    275.6     285.1    281.7    -8.3   -2.9
Administrative
Expenses
Operating Income      32.7    -25.0      24.1    -17.1     8.5   35.3
(Loss)
[Operating Income  [ 2.9%] [ -2.6%]   [ 2.2%] [ -1.7%] [ 0.7%]
Margin]
Other Income and      -4.6      0.1      -8.0     -9.2     3.4      -
Expense
Income (Loss)
Before Income
Taxes and             28.0    -24.9      16.1    -26.3    11.9   74.2
Minority
Interests
Income Taxes          14.4     -1.8      -9.0     -3.0    23.5      -
Income (Loss)
Before Minority       13.5    -23.0      25.1    -23.3   -11.5  -46.0
Interests
Minority               0.8      0.7      -1.0     -2.9     1.8      -
Interests (Loss)
Net Income (Loss)     12.7    -23.7      26.1    -20.4   -13.4  -51.3

FY 2012 First-Half Financial Results  (Billion Yen)

               First Half First Half   Change vs.
                FY 2012    FY 2011                  Change (%)
                                     First Half FY             Change vs. July
                4/1/12-    4/1/11-        2011       Constant       2012
                                             Change              projections
                9/30/12    9/30/11                   Currency
                                              (%)
Net Sales         2,071.8    2,092.3   -20.5   -1.0     0                 -8.1
Operating             7.6
Income                           7.0     0.6    9.1                        2.6
                     [
[Operating          0.4%]    [ 0.3%] [ 0.1%]                          [ 0.2%]
Income Margin]
Net Income          -11.0        5.7   -16.8      -                       -1.0



Quarterly Breakdown of Results
(Billion Yen)

                                 FY2011                 FY2012

                       1Q     2Q      3Q      4Q      1Q     2Q
Total Sales            986.0 1,106.2 1,079.7 1,295.5  957.3 1,114.4
      Operating Income -17.1    24.1     3.1    95.0  -25.0    32.7



[Results by Business Segment]

Technology Solutions Sales            659.1 726.2 686.1 863.3  627.1 713.3
                     Operating Income   2.5  43.1  25.9  99.6    0.8  46.2
   Services          Sales            534.0 584.6 559.1 693.4  513.6 575.6
                     Operating Income   2.0  27.9  22.1  71.8    4.9  32.4
   System Platforms  Sales            125.1 141.6 127.0 169.8  113.4 137.6
                     Operating Income   0.4  15.2   3.7  27.8   -4.0  13.7
Ubiquitous Solutions Sales            235.4 280.3 301.1 337.2  234.6 314.7
                     Operating Income  -0.0   4.3   2.0  13.5   -2.0  12.4
Device               Sales            140.8 147.5 138.1 158.0  130.3 138.3

Solutions            Operating Income  -1.0  -3.8  -8.4   3.0   -3.6  -3.3



2. Profit and Loss for the Second Quarter



Note: In these explanatory materials, the yen figures for net sales, operating
income, and  other  figures are  converted  into US$  amounts,  for  reference 
purposes, at  a rate  of $1=78  yen, the  approximate Tokyo  foreign  exchange 
market rate  on September  30,  2012. Figures  for  and comparisons  to  prior 
reporting periods  are provided  only  for reference.  The impact  of  foreign 
exchange fluctuations  has been  calculated by  using the  average US  dollar, 
euro, and  British pound  foreign exchange  rates for  the Second  quarter  of 
fiscal 2011 to  translate the current  period's net sales  outside Japan  into 
yen.



<Profit and Loss>

Consolidated net sales  for the second  quarter of fiscal  2012 were  1,114.4 
billion yen (US$14,287 million), essentially unchanged from the second quarter
of fiscal 2011.

Net sales in  Japan rose  by 4.5%.  Sales of  LSI devices  and PCs  declined, 
although sales of mobile phones and network products increased.

Sales outside  of Japan  fell by  6.4%. On  a constant  currency basis,  sales 
declined by  3%. Sales  of infrastructure  services were  lower, primarily  in 
Europe, on account of  the impact of  the deteriorating economic  environment, 
and as well as for optical transmission systems to North America and for  UNIX 
servers.

For the second quarter of fiscal 2012, the average yen exchange rates against
major currencies were 79 yen for the US dollar (representing yen  depreciation 
of 1 yen), 98 yen for the euro  (appreciation of 12 yen), and 124 yen for  the 
British pound (appreciation  of 1 yen)  compared with the  same period of  the 
previous fiscal year. As a result, the impact of foreign exchange fluctuations
for the first quarter was to reduce net sales by approximately 10 billion  yen 
compared to the second quarter of  fiscal 2011. Sales generated outside  Japan 
as a percentage of total sales were 31.8%, a decrease of 2.5 percentage points
compared to the second quarter of the previous fiscal year.



Gross profit was  309.5 billion  yen, roughly  unchanged yen  from the  second 
quarter of fiscal  2011. Despite the  positive impact of  higher mobile  phone 
sales, overall gross profit was essentially unchanged because of the impact of
lower sales of LSI devices and PCs, in addition to higher procurement costs in
Europe for components and materials denominated  in US dollars because of  the 
depreciation of  the euro  against the  dollar. The  gross profit  margin  was 
27.8%, a decline of 0.2 of a  percentage point from the second quarter of  the 
prior fiscal year.



Selling, general and administrative expenses were 276.8 billion yen, a decline
of 8.3 billion  yen from the  second quarter  of fiscal 2011,  primarily as  a 
result of  efforts across  the group  to generate  cost efficiencies  and  the 
impact of yen appreciation. There was, however, continued upfront  development 
spending in network-related technologies and other areas.



As a result of  the above factors, Fujitsu  recorded operating income of  32.7 
billion yen (US$419 million), an increase of 8.5 billion yen from the previous
fiscal year's second quarter.



In other income  and expenses,  Fujitsu recorded a  loss of  4.6 billion  yen, 
representing an improvement  of 3.4  billion yen, primarily  on lower  foreign 
exchange losses.



Fujitsu reported consolidated net income of 12.7 billion yen (US$163 million),
a decline of 13.4 billion yen from the second quarter of fiscal 2011. Although
income before  income  taxes  and minority  interests  increased,  net  income 
declined because,  in the  second  quarter of  fiscal  2011, the  decision  to 
liquidate a subsidiary in  Europe and a stock  transfer executed in line  with 
group reorganization that had the effect of lowering tax expenses.



3. Results by Business Segment



Information on fiscal  2012 second-quarter consolidated  net sales  (including 
intersegment sales) and  operating income  broken out by  business segment  is 
presented as follows.



Technology Solutions



                                                                           (Billion
          Yen)
                    Second Quarter                        Change vs. 2Q

                        FY 2012                              FY 2011
Net Sales                                 713.3                              -1.8 %
  Japan                                   478.2                               1.3 %
  Outside                                 235.1                              -7.6 %
  Japan
Operating                                  46.2                                 3.0
Income

Consolidated net sales in the  Technology Solutions segment amounted to  713.3 
billion yen (US$9,145 million),  down 1.8% from the  second quarter of  fiscal 
2011. Sales in Japan increased 1.3%. While server-related sales fell due to  a 
decline in  large-scale  system  deals primarily  in  the  financial  services 
sector, overall  sales  increased  on  account  of  higher  sales  of  network 
products, including mobile phone base stations, as a result of higher spending
by telecommunications carriers to deal  with larger volumes of  communications 
traffic and  to expand  LTE  coverage area.  In system  integration  services, 
despite the  impact of  fewer  large-scale system  deals  and a  shift  toward 
spending  on  hardware  by  telecommunications  carriers,  sales  as  a  whole 
increased mainly  due  to  a  recovery  in  manufacturing  and  public  sector 
spending. Infrastructure service sales also  climbed as a result of  increased 
demand related to  network services against  a backdrop of  telecommunications 
carriers trying  to keep  up with  higher volumes  of communications  traffic. 
Sales outside Japan declined 7.6%. On a constant currency basis, sales fell by
5%. Contributing factors included lower sales of optical transmission  systems 
impacted by a  shift toward spending  on wireless networks  by North  American 
telecommunications carriers, as well  as a decline in  sales of UNIX  servers, 
primarily to Europe and the US, prior to the introduction of new models. Other
server related sales declined  on account of the  economic downturn in  Europe 
and the US.



The segment posted operating income of  46.2 billion yen (US$592 million),  up 
3.0 billion  yen compared  to the  second quarter  of fiscal  2011. In  Japan, 
despite the  impact of  fewer large-scale  system deals,  in addition  to  the 
increment of upfront  R&D spending  mainly for network  products, income  rose 
overall on the back  of higher network-related sales  and the impact of  lower 
x86 server costs. Outside Japan,  improvements were made to the  profitability 
of the infrastructure services business, but income deteriorated on the impact
of lower sales of optical transmission  systems to North America and for  UNIX 
servers, as well as other server-related sales that also fell.





(a) Services

                                                                           (Billion
          Yen)
                    Second Quarter                        Change vs. 2Q

                        FY 2012                              FY 2011
Net Sales                                 575.6                              -1.5 %
  Japan                                   376.0                               1.7 %
  Outside                                 199.5                              -7.1 %
  Japan
Operating                                  32.4                                 4.4
Income



Net sales  in  the  Services  sub-segment were  575.6  billion  yen  (US$7,379 
million), down  1.5% from  the same  period a  year earlier.  In Japan,  sales 
increased 1.7%. For system integration  services, despite the impact of  fewer 
large-scale system  deals  primarily  in the  financial  services  sector,  in 
addition to a shift toward spending on hardware by telecommunications carriers
to deal  with higher  communications traffic,  sales as  a whole  were  higher 
mainly due to a recovery in spending in the manufacturing and public  sectors. 
Infrastructure services were  impacted by a  shift in the  ISP business,  from 
packaged products  that  include  connection  fees  to  stand-alone  products, 
although overall sales rose  on higher demand related  to network services  as 
telecommunications carriers  endeavored  to keep  up  with higher  volumes  of 
communications traffic.  Sales  outside Japan  declined  7.1%. On  a  constant 
currency basis, sales declined  5%. The datacenter  business in Australia  and 
North America  is growing  steadily, although  sales were  hit by  constrained 
corporate investments against the backdrop of the economic downturn in Europe,
as well as  the impact of  fiscal austerity policies  put in place  by the  UK 
government.



Operating income for  the Services  sub-segment was 32.4  billion yen  (US$415 
million), up 4.4 billion yen compared to the second quarter of fiscal 2011. In
Japan, income increased due  to a rise in  sales of network services,  despite 
the impact of fewer large-scale system deals. Outside Japan, earnings improved
as a  result  of  the effect  of  increased  sales and  cost  efficiencies  in 
Australia and North America.





(b) System Platforms



                                                                           (Billion
          Yen)
                    Second Quarter                        Change vs. 2Q

                        FY 2012                              FY 2011
Net Sales                                 137.6                              -2.8 %
  Japan                                   102.1                               0.0 %
  Outside                                  35.5                             -10.1 %
  Japan
Operating                                  13.7                                -1.4
Income

Net sales in the System Platforms sub-segment were 137.6 billion yen (US$1,764
million), a decrease of 2.8% from the second quarter of fiscal 2011. Sales  in 
Japan were essentially unchanged. Server-related  sales fell due to a  decline 
in large-scale system deals, particularly in the financial services  industry. 
Sales of network products,  including mobile phone  base stations, climbed  on 
account of increased investments  to deal with higher  network traffic and  to 
expand the  LTE  coverage area.  Sales  outside  Japan declined  10.1%.  On  a 
constant  currency   basis,  sales   decreased  by   7%.  Sales   of   optical 
communications systems declined  due to  a shift toward  spending on  wireless 
networks by North American telecommunications carriers. Sales of UNIX  servers 
primarily to Europe and the US also fell in advance of the introduction of new
models.



The System Platforms sub-segment posted  operating income of 13.7 billion  yen 
(US$176 million), representing  a deterioration  of 1.4 billion  yen from  the 
same  period  of   the  previous   year.  In  Japan,   although  income   from 
server-related products declined, in addition  to higher upfront R&D  spending 
mainly in  network products,  overall  operating income  remained  essentially 
unchanged due to the  effect of increased sales  of network products and  cost 
reductions for x86 servers.  Outside Japan, income  was adversely impacted  by 
lower sales of  optical transmission  systems to  North America  and for  UNIX 
servers.





Ubiquitous Solutions



                                                                           (Billion
          Yen)
                    Second Quarter                        Change vs. 2Q

                        FY 2012                              FY 2011
Net Sales                                 314.7                              12.3 %
  Japan                                   250.2                              19.9 %
  Outside                                  64.5                              -9.9 %
  Japan
Operating                                  12.4                                 8.0
Income

Net sales in the Ubiquitous Solutions segment were 314.7 billion yen (US$4,035
million), an increase of 12.3% from  the second quarter of fiscal 2011.  Sales 
in Japan rose by 19.9%. Overall units of PCs shipped increased on large-volume
orders received from  corporations, although sales  declined on weak  consumer 
demand and lower sales prices. Sales of mobile phones increased as a result of
the  introduction  of  many  new  models  such  as  Raku-Raku  ("easy-to-use") 
smartphones and an expansion in the market for tablets computer market.  Sales 
of the  Mobilewear sub-segment's  car audio  and navigation  systems  declined 
compared to the  higher production  of automobiles  in the  second quarter  of 
fiscal 2011  when automobile  production picked  up following  the Great  East 
Japan Earthquake. Sales outside Japan declined by 9.9%. On a constant currency
basis, sales declined by 4%. Although unit  sales of PCs increased in EMEA,  a 
fall in market sales prices left net sales essentially unchanged from the same
period of the previous fiscal year. Sales of mobilewear devices also declined,
primarily in North America.



The Ubiquitous Solutions segment posted  operating income of 12.4 billion  yen 
(US$159 million), an increase  of 8.0 billion yen  from the second quarter  of 
fiscal 2011. Operating income in Japan  benefited from higher sales of  mobile 
phones, even  though there  was  a decline  in the  sales  prices of  PCs.  In 
addition, the impact of lower sales  of mobilewear devices was offset by  cost 
efficiencies and  improvements  from  structural reforms.  Outside  of  Japan, 
operating income was adversely  affected by lower PC  sales prices and  higher 
procurement costs in  Europe for  components and materials  denominated in  US 
dollars because of the depreciation of the euro against the dollar.  Operating 
income from mobilewear devices was essentially unchanged.





Device Solutions



Note:  LSI  Devices  sales  include  intrasegment  sales  to  the   electronic 
components business.

                                                                           (Billion
          Yen)
                    Second Quarter                        Change vs. 2Q

                        FY 2012                              FY 2011
Net Sales                                 138.3                              -6.3 %
  Japan                                    78.1                             -11.5 %
  Outside                                  60.1                               1.5 %
  Japan
Operating                                  -3.3                                 0.4
Income



Net sales  in  Device  Solutions  amounted  to  138.3  billion  yen  (US$1,773 
million), a decline  of 6.3% compared  to the second  quarter of fiscal  2011. 
Sales in  Japan  fell 11.5%.  LSI  device  sales decreased  on  lower  demand, 
primarily  for  LSI  devices  used  in  digital  audio-visual  equipment   and 
industrial  equipment.  Sales  of   electronic  components,  particularly   of 
batteries, also fell. Sales  outside Japan increased  by 1.5%. For  electronic 
components, sales of batteries,  primarily to the US,  declined, but sales  of 
semiconductor packages, mainly to Asia, increased.



The Device Solutions  segment recorded an  operating loss of  3.3 billion  yen 
(US$42 million),  representing an  improvement  of 0.4  billion yen  from  the 
second quarter of fiscal 2011. In  Japan, earnings were adversely affected  by 
lower sales of LSI devices, although the deterioration in earnings was limited
on account of a decline in expenses. Outside Japan, operating income  improved 
for electronic  components  as  a  result of  higher  sales  of  semiconductor 
packages.



The Fujitsu Group has been continuously working to optimize its  manufacturing 
resources in accordance with changes in the economic and business environment.
As part  of  these  efforts, in  LSI  device  business, the  Group  signed  an 
agreement in  April  2012  to  transfer ownership  of  Iwate  Plant  to  DENSO 
Corporation, and the transfer was completed  as scheduled on October 1,  2012. 
In addition,  in  August  2012  the Group  signed  an  agreement  to  transfer 
ownership of LSI assembly and test facilities to J-Devices Corporation. It  is 
expected that  a  conclusive agreement  will  be signed  and  the  transaction 
completed by the end of this year.



4. Overview of FY2012 First-Half Consolidated Results



Note: In these explanatory materials, the yen figures for net sales, operating
income, and  other  figures are  converted  into US$  amounts,  for  reference 
purposes, at  a rate  of $1=78  yen, the  approximate Tokyo  foreign  exchange 
market rate  on September  30,  2012. Figures  for  and comparisons  to  prior 
reporting periods  are provided  only  for reference.  The impact  of  foreign 
exchange fluctuations  has been  calculated by  using the  average US  dollar, 
euro, and British pound  foreign exchange rates for  the first half of  fiscal 
2011 to translate the current period's net sales outside Japan into yen.



<Profit and Loss>



Consolidated net sales for the first  half of fiscal 2012 amounted to  2,071.8 
billion yen (US$26,562

million), essentially unchanged from the first half of fiscal 2011.



Net  sales  in  Japan  rose  by   2.4%.  Sales  revenues  stemming  from   the 
next-generation supercomputer system,  for which deliveries  peaked in  fiscal 
2011, declined,  and sales  of LSI  devices were  adversely affected  by  weak 
demand. Sales of mobile  phones, however, increased,  primarily in the  second 
quarter, as did sales of network products also increased.



Sales outside  of Japan  fell by  7.0%. On  a constant  currency basis,  sales 
declined by  3%. Sales  of infrastructure  services were  lower, primarily  in 
Europe, on account  of the  deteriorating economic environment,  and sales  of 
optical transmission systems to North America and for UNIX servers decreased.



For the first  half of  fiscal 2012, the  average yen  exchange rates  against 
major currencies were 79 yen for the US dollar (representing yen  appreciation 
of 1 yen), 101 yen for the euro (appreciation of 13 yen), and 126 yen for  the 
British pound (appreciation  of 3 yen)  compared with the  same period of  the 
previous fiscal year. As a result, the impact of foreign exchange fluctuations
for the first half was to reduce  net sales by approximately 30.0 billion  yen 
compared to the first half of fiscal 2011. Sales generated outside Japan as  a 
percentage of total  sales were  33.5%, a  decrease of  2.1 percentage  points 
compared to the first half of the previous fiscal year.



Gross profit was 560.1  billion yen, a  decline of 13.7  billion yen from  the 
first half of fiscal 2011. The decline  was the result of the impact of  lower 
sales of LSI devices and optical  transmission systems, in addition to  higher 
procurement costs in  Europe for  components and materials  denominated in  US 
dollars on  depreciation of  the euro  against the  dollar. The  gross  profit 
margin was 27.0%, a decrease of 0.4 of a percentage point from the first  half 
of the previous fiscal year.



Selling, general and administrative expenses were 552.4 billion yen, a decline
of 14.3 billion yen from the first half of fiscal 2011, primarily as a  result 
of group-wide efforts  to generate  cost efficiencies  and the  impact of  yen 
appreciation. There was,  however, continued upfront  development spending  in 
network-related technologies and other areas.



As a result  of the above  factors, Fujitsu recorded  operating income of  7.6 
billion yen (US$97 million), an increase of 0.6 billion yen from the  previous 
fiscal year's first half.



Income before  income  taxes  and  minority interests  was  3.1  billion  yen, 
representing an  improvement of  13.3 billion  yen. The  main reason  for  the 
improvement was in  the first  half of  the previous  fiscal year,  a loss  on 
disaster of 7.5  billion yen was  recorded as a  result of the  impact of  the 
earthquake. Exchange losses were also lower.



Fujitsu reported a consolidated net loss of 11.0 billion yen (US$141 million),
representing a deterioration of 16.8 billion yen from the first half of fiscal
2011. Although income  before income taxes  and minority interests  increased, 
there was deterioration  in net income  because, in the  first half of  fiscal 
2011, the decision to  liquidate a subsidiary in  Europe and a stock  transfer 
executed in line  with group  reorganization had  the effect  of lowering  tax 
expenses.



Comparison to Consolidated Earnings Projections Announced in July 2012



Net sales and operating income amounted  to 2,071.8 billion yen and  operating 
income  were  7.6  billion  yen,  respectively,  essentially  unchanged   from 
projections announced on July 27, 2012.  Service business in Japan was  steady 
due to  a  mild recovery  to  ICT  investments. Mobile  phone  sales  exceeded 
projections on account of strong smartphone sales. LSI devices and  electronic 
components were adversely impacted by  weak demand. In addition, the  services 
business in Europe were affected by the economic downturn, and PC sales inside
and outside Japan fell short of projections due to decline in sales prices.



A       net       loss       of        11.0       billion       yen        was 
recorded
(Billion Yen)

                    First Half     July 2012   First Half Change vs. July 2012
                                                              Projections
                      FY2011    Projections    FY2012            Change (%)
Net Sales              2,092.3         2,080.0    2,071.8    -8.1         -0.4
Operating Income           7.0            5.0        7.6     2.6         53.8

[Operating Income      [  [ 0.2%]    [   [            
Margin]                  0.3%]                      0.4%]   0.2%]
Net Income                 5.7           -10.0      -11.0    -1.0            -



Results by Business Segment



Information on  fiscal  2012  first-half  consolidated  net  sales  (including 
intersegment sales) and  operating income  broken out by  business segment  is 
presented as follows.



Technology Solutions

                                                                           (Billion
          Yen)
                     First Half                          Change vs. 1H

                       FY 2012                              FY 2011
Net Sales                             1,340.4                                -3.2 %
  Japan                                 880.4                                 0.7 %
  Outside                               459.9                                -9.9 %
  Japan
Operating                                47.0                                   1.3
Income



Consolidated net sales in the Technology Solutions segment amounted to 1,340.4
billion yen (US$17,185 million), down 3.2% from the first half of fiscal 2011.
In Japan,  sales were  essentially  unchanged. Server-related  sales  declined 
compared to  the  same period  in  fiscal  2011, when  there  was  high-volume 
production of dedicated servers for use  in the K computer, a  next-generation 
supercomputer, in  addition, there  was  an adverse  impact  by a  decline  in 
large-scale system deals.  Sales of  network products  including mobile  phone 
base stations increased due to higher spending by telecommunications  carriers 
to deal  with larger  volumes  of communications  traffic  and to  expand  LTE 
coverage.  In  system  integration  services,  despite  the  impact  of  fewer 
large-scale  system  deals  and  a  shift  toward  spending  on  hardware   by 
telecommunications carriers,  sales as  a  whole grew  due  to a  recovery  in 
spending, primarily  in  the  manufacturing, retailing,  and  public  sectors. 
Infrastructure service sales were weak. Sales outside Japan declined 9.9%.  On 
a constant currency  basis, sales  fell by 6%.  Contributing factors  included 
lower sales of optical transmission systems due to a shift toward spending  on 
wireless network by North American  telecommunications carriers, as well as  a 
decline in sales of UNIX servers, primarily to Europe and the US, prior to the
introduction of new models. Other server-related sales declined on account  of 
the economic downturn in Europe and the US.



The segment posted operating income of  47.0 billion yen (US$603 million),  up 
1.3 billion yen compared to the first  half of fiscal 2011. In Japan,  despite 
the impact of lower sales of large-scale system integration and server-related
system deals, in addition to higher  upfront R&D spending, mainly for  network 
products, income rose overall on the back of higher network-related sales  and 
the impact of  cost reductions  for x86 servers.  Outside Japan,  improvements 
were made  to  the  profitability of  the  infrastructure  services  business, 
although income  deteriorated  on the  impact  of lower  optical  transmission 
systems to North America and for UNIX servers, and other server-related  sales 
also declined.





(a) Services



          (Billion
          Yen)
                     First Half                          Change vs. 1H

                       FY 2012                              FY 2011
Net Sales                             1,089.2                                 -2.6%
  Japan                                 691.8                                  0.6%
  Outside                               397.3                                 -7.8%
  Japan
Operating                                37.3                                   7.3
Income

Net sales  in  the  Services  sub-segment  amounted  to  1,089.2  billion  yen 
(US$13,964 million), down 2.6% from the same period a year earlier. In  Japan, 
sales were  essentially unchanged  from the  first half  of fiscal  2011.  For 
system integration services,  despite the impact  of fewer large-scale  system 
deals, primarily in  the financial  services sector,  in addition  to a  shift 
toward spending on hardware by telecommunications carriers to deal with higher
communications traffic, sales increased due to  a recovery in spending in  the 
manufacturing, retailing,  and public  sectors. Infrastructure  services  were 
weak due to  a shift in  the ISP  business, away from  packaged products  that 
include connection fees  to stand-alone products,  although demand related  to 
network services rose against a backdrop of telecommunications carriers trying
to keep up with higher volumes of communications traffic. Sales outside  Japan 
declined 7.8%. On  a constant  currency basis,  sales declined  4%. While  the 
datacenter business in Australia and North America is growing steadily,  sales 
were adversely affected by lower corporate spending stemming from the economic
downturn in Europe, as well as the impact of fiscal austerity policies put  in 
place by the UK government.



Operating income for  the Services  sub-segment was 37.3  billion yen  (US$478 
million), an increase of 7.3 billion yen compared to the same period of fiscal
2011. In Japan, income increased due to a rising in sales of network services,
despite the impact of fewer large-scale system deals. Outside Japan,  earnings 
were adversely impacted by  a decline in  sales in Europe  and an increase  in 
expenses related  to  retirement benefit  obligations  in the  UK,  but  sales 
increased and cost efficiencies were generated in Australia and North America,
and there was improved profitability of the European services business.





(b) System Platforms



                                                                           (Billion
          Yen)
                     First Half                          Change vs. 1H

                       FY 2012                              FY 2011
Net Sales                               251.1                                 -5.8%
  Japan                                 188.5                                  0.9%
  Outside                                62.5                                -21.7%
  Japan
Operating                                 9.6                                  -5.9
Income

Net sales in the System Platforms sub-segment were 251.1 billion yen (US$3,219
million), a decline of 5.8% from the first half of fiscal 2011. Sales in Japan
were  essentially  unchanged.  Sales  of  server-related  products,   declined 
compared to  the  first  half  of fiscal  2011,  when  there  was  high-volume 
production of dedicated servers for use  in the K computer, a  next-generation 
supercomputer. In addition, there was  an adverse impact of fewer  large-scale 
system deals. Sales of  network product including  mobile phone base  stations 
climbed on  account  of increased  investments  to deal  with  higher  network 
traffic and  to  expand  LTE coverage  bytelecommunications  carriers.  Sales 
outside Japan declined 21.7%.  On a constant  currency basis, sales  decreased 
18%. Sales of optical  communications systems declined due  to a shift  toward 
spending on wireless networks  by North American telecommunications  carriers. 
Sales of UNIX servers, primarily to Europe and the US also fell, prior to  the 
introduction of new models.



The System Platforms sub-segment  posted operating income  of 9.6 billion  yen 
(US$123 million), down 5.9  billion yen compared to  the first half of  fiscal 
2011. In  Japan, although  income from  server-related products  declined,  in 
addition to higher upfront R&D  spending, mainly in network products,  overall 
operating income remained essentially unchanged due to the effect of increased
sales of network products and cost reductions for x86 servers. Outside  Japan, 
income was adversely impacted by  lower sales of optical transmission  systems 
to North America and for UNIX servers.





Ubiquitous Solutions



                                                                           (Billion
          Yen)
                     First Half                          Change vs. 1H

                       FY 2012                              FY 2011
Net Sales                               549.3                                  6.5%
  Japan                                 426.0                                  9.9%
  Outside                               123.3                                 -3.9%
  Japan
Operating                                10.4                                   6.0
Income

Net sales in the Ubiquitous Solutions segment were 549.3 billion yen (US$7,042
million), up 6.5% compared to the first  half of 2011. Sales in Japan rose  by 
9.9%. Overall unit shipments of  PCs increased because of large-volume  orders 
received from corporations, particularly in the financial services sector, but
sales of consumer  PCs fell on  weak consumer  demand and a  decline in  sales 
prices. Sales of mobile  phones increased as a  result of the introduction  of 
many new models such as Raku-Raku ("easy-to-use") smartphones and an expansion
in the market for tablet computers. Sales of the mobilewear sub-segment's  car 
audio and navigation  systems also  increased compared to  last fiscal  year's 
first half, when  automobile production was  suspended due to  the Great  East 
Japan Earthquake. Sales outside  Japan declined 3.9%.  On a constant  currency 
basis, sales rose by 4%. Although unit sales of PCs increased, particularly in
Europe, a fall in market prices left sales essentially unchanged from the same
period of the previous fiscal year. Sales of mobilewear rose as the result  of 
the suspension of automobile manufacturing outside Japan in the first half  of 
fiscal 2011.



The Ubiquitous Solutions segment posted  operating income of 10.4 billion  yen 
(US$133 million), an increase of 6.0 billion  yen from the same period of  the 
previous fiscal year. Operating income in  Japan benefited from the impact  of 
higher sales of mobile phones and mobilewear, and impact of restructuring  for 
mobilewear, even  though there  was a  decline  in the  sales prices  of  PCs. 
Outside Japan, earnings were adversely affected  by lower PC sales prices  and 
higher procurement costs in Europe for components and materials denominated in
US dollars because of the depreciation of the euro against the dollar.





Device Solutions



                                                                           (Billion
          Yen)
                     First Half                          Change vs. 1H

                       FY 2012                              FY 2011
Net Sales                               268.6                                 -6.8%
  Japan                                 150.1                                -11.5%
  Outside                               118.5                                 -0.3%
  Japan
Operating                                -7.0                                  -2.2
Income

Net sales  in  Device  Solutions  amounted  to  268.6  billion  yen  (US$3,444 
million), a decline of 6.8% compared to  the first half of fiscal 2011.  Sales 
in Japan declined 11.5%. LSI device  sales decreased as shipments of CPUs  for 
the next-generation supercomputer system were completed during the first  half 
of fiscal 2011, and sales of LSI devices for use in Fujitsu's own servers were
sluggish.  In  addition,   sales  of  LSI   devices,  primarily  for   digital 
audio-visual equipment, were  adversely impacted  by the  delayed recovery  in 
market conditions. Sales of electronic components, particularly of  batteries, 
also fell. Sales outside Japan were essentially unchanged from the first  half 
of fiscal 2011. On a constant currency basis, sales rose 1%. LSI device  sales 
declined, mainly to  Europe. For  electronic components,  sales of  batteries, 
particularly to  the  US,  declined,  but  sales  of  semiconductor  packages, 
primarily to Asia, increased.



The Device Solutions  segment recorded an  operating loss of  7.0 billion  yen 
(US$90 million), representing a deterioration  of 2.2 billion yen compared  to 
the first half of fiscal 2011.  In Japan, earnings were adversely affected  by 
lower sales  of  LSI  devices  and  a  decline  in  production  line  capacity 
utilization  rates.  Production  lines   for  300mm  wafers  maintained   high 
utilization rates,  although basic  product  lines remained  at a  low  level. 
Outside  Japan,  electronic   components  were  adversely   impacted  by   yen 
appreciation,  but  results  benefited  from  higher  sales  of  semiconductor 
packages.





Other/Elimination and Corporate

This segment recorded an operating loss of 42.7 billion yen (US$547  million), 
a deterioration of 4.6 billion  yen from the first  half of fiscal 2011.  This 
was on  account of  up-front  costs associated  with  the development  of  new 
businesses and other factors.





Overall operational testing of  the K computer,  which is the  next-generation 
supercomputer jointly developed by  Fujitsu and RIKEN,  was completed in  June 
2012. After undergoing operational  environment configuration, adjustment  and 
user registration, on September 28 the system began full-scale operations  for 
shared use among a wide range of academic organizations and industries.



<Geographic Information>



Sales and  operating  income for  Fujitsu  and its  consolidated  subsidiaries 
according to country and region are as follows.



Net Sales (Billion Yen)

              First Quarter FY 2012
Japan                          1,586.5   <1.6%>
Outside Japan                    701.4  <-6.1%>
 EMEA                            349.3 <-11.7%>
 The Americas                    126.6 <-13.4%>
 APAC &China                     225.4   <9.9%>

< > Indicates % Change Over Same Period in Previous Year

Operating Income (Billion Yen)

             Second Quarter Change vs. 2Q  First Half  Change vs. 1H
                                FY 2011       FY 2012      FY 2011
                FY 2012
Japan              56.4          12.6          62.3         13.8

                  [6.5%]        [1.3%]        [3.9%]       [0.8%]
Outside            -2.9          -4.5          -15.4        -12.0

Japan            [-0.8%]        [-1.2%]      [-2.2%]   [ -1.7%]
 EMEA              -5.1          -4.7         -16.0        -8.9

                 [-2.9%]        [-2.7%]       [-4.6%]      [-2.8%]
 The Americas      -0.2          -0.2          -2.5         -3.6

                 [-0.5%]        [-0.5%]       [-2.0%]      [-2.7%]
 APAC &            2.4            0.4           3.2          0.5

 China            [2.1%]        [0.2%]        [1.4%]       [0.1%]

Note: Numbers inside brackets indicate operating income margin.



5. Financial Condition



[Assets, Liabilities and Net Assets]
(Billion Yen)

                                                  Year end            Second
                             Second Quarter                           Quarter
                                                  FY 2011
                          FY 2012                Change  FY 2011
                           (at sept 30, 2012)  (at March 31,
                                                   2012)             (at sept
                                                                     30, 2011)
  Assets
   Current assets                     1,562.7        1,701.7 -138.9   1,634.6
  (Cash and time deposits
  and Marketable
  securities)                            281.2          273.9    7.3     349.6
  (Notes and accounts
  receivable, trade)                     736.7          901.3 -164.6     722.6
  (Inventories)                          361.2          334.1   27.1     366.8
   Non-current assets                 1,209.5        1,243.7  -34.2   1,221.3
   (Property, plant
  and equipment)                         631.8          640.9   -9.0     630.2
  (Intangible assets)                    218.5          230.2  -11.7     234.2
  (Investment securities
  and other non-current
  assets)                                359.1          372.4  -13.3     356.4
Total Assets                           2,772.2        2,945.5 -173.2   2,855.9
 Liabilities

 Current liabilities                 1,334.4        1,417.4  -82.9   1,401.9
   (Notes and accounts
  payable, trade)
                                         528.4          617.7  -89.3     534.9
  (Short-term borrowings
                                         210.4          128.9   81.4     271.8
  and Current portion of
  bonds payable)                                                          
   (Accrued expenses)                 314.2  342.5         -28.2     302.5
   Long-term liabilities                      
                                         509.0 561.4           -52.4     534.1
   (Long-term debt)
                                         238.1          252.2  -34.3     246.4
   (Accrued retirement
  benefits)                              171.4          180.4  -10.4     173.5
  Total Liabilities                    1,843.3        1,978.9 -135.3   1,936.1
  Net Assets

  Shareholders' equity                   904.7          926.0  -21.2     899.4
  Accumulated other
  comprehensive income                   -99.5          -85.0  -14.5    -106.1
   Minority interests in
  consolidated
  subsidiaries                           123.4          125.4   -2.0     126.4
Total Net Assets                         928.7          966.5  -37.8     919.8
Total Liabilities and Net
Assets                                 2,772.2        2,945.5 -173.2   2,855.9





[Cash Flows]



                                         First Half       First Half
                                                                          
                                          FY 2012          FY 2011
                                                                        Change
                                      (4/1/12~9/30/12) (4/1/11~6/30/11)
I.   Cash   flows   from    operating 
activities:
 Income (loss) before income taxes

and minority interests                             3.1            -10.2   13.3
 Depreciation and amortization,

 including goodwill
amortization                                      95.4            102.1   -6.6
 (Increase) decrease in
receivables, trade                               148.9            124.4   24.4
 (Increase) decrease in
inventories                                      -32.1            -34.3    2.2
 Increase (decrease) in payables,
trade                                            -79.1            -49.1  -30.0

 Income tax paid                               -8.2            -18.1    9.8
Net cash used in operating activities             60.2             55.2    5.0
II.   Cash   flows   from   investing 
activities:
 Purchases of property, plant and
equipment                                        -53.1            -68.7   15.6
 Purchases of intangible assets               -28.0            -25.6   -2.3
Net cash used in investing activities            -77.7            -92.6   14.8
I + II Free Cash Flow                           -17.5            -37.4   19.8
III.  Cash   flows   from   financing 
activities:

  Net   increase   in   borrowings 
(decrease)                                      106.1            92.0   14.0
 Bond issue and redemption                    -56.9            -39.4  -17.4
 Dividends paid                               -11.5            -11.3   -0.2
Net cash provided by financing
activities                                        28.4             27.5    0.9
Cash and cash equivalents at end of
period                                           274.1            343.2  -69.1



Explanation of Assets, Liabilities and Net Assets



Consolidated total  assets at  the  end of  the  second quarter  were  2,772.2 
billion yen (US$35,541 million), a decrease of 173.2 billion yen from the  end 
of fiscal 2011. Current  assets decreased by 138.9  billion yen compared  with 
the end of fiscal 2011, to  1,562.7 billion yen, reflecting the collection  of 
notes and accounts receivable associated with the large concentration of sales
at the end  of previous  fiscal year.  In preparation  for anticipated  sales, 
particularly in the services business  and mobile phone business,  inventories 
at the end of the quarter increased to 361.2 billion yen, an increase of  27.1 
billion yen from  the ending  balance of  fiscal 2011.  The monthly  inventory 
turnover ratio, which is  an indication of  asset utilization efficiency,  was 
0.93 times, essentially unchanged from the end of the second quarter of fiscal
2011.



Non-current assets declined by 34.2 billion  yen from the end of fiscal  2011, 
to 1,209.5 billion yen. The net  balances of property, plant and equipment  as 
well as intangible assets decreased as depreciation and amortization  exceeded 
the level of capital expenditures during the first half.



Consolidated total  liabilities amounted  to  1,843.5 billion  yen  (US$23,635 
billion), a decrease of 135.3 billion yen compared to the end of fiscal  2011, 
reflecting the payment  of trade notes  and accounts payable  relating to  the 
concentration of sales at  the end of  the prior fiscal  year. The balance  of 
interest-bearing loans was 428.2 billion yen, an increase of 47.1 billion  yen 
from the end of fiscal 2011. The company redeemed 60.0 billion yen in straight
corporate bonds at maturity, but short-term borrowings increased to finance  a 
portion of working  capital. As a  result, the  D/E ratio was  0.53 times,  an 
increase of 0.08 of a percentage point compared to the end of fiscal 2011, and
the net D/E ratio was  0.19 times, an increase of  0.05 of a percentage  point 
compared to the end of fiscal 2011. Owners' equity has improved since the  end 
of the second quarter of the previous fiscal year because of the efforts  made 
to repay interest-bearing loans and the net income posted.



Net assets were  928.7 billion  yen (US$11,906  million), a  decrease of  37.8 
billion yen from the end of fiscal 2011. The decline in net assets reflects  a 
decrease in shareholders' equity of 21.2 billion yen resulting mainly from the
net loss recorded in the half and  the payment of year-end dividends, as  well 
as a decline in  accumulated other comprehensive income  of 14.5 billion  yen, 
primarily as  a  result of  yen  appreciation.  The decline  in  total  assets 
increased the owners' equity  ratio by 0.4 of  a percentage point compared  to 
the end of fiscal 2011, to 29.0%.

                                                                 (Billion Yen)

                                 2Q FY 2012    FY 2011            2Q FY 2011
                                                        Change
                               (September 30,  (March          (September 30,
                                   2012)      31, 2012)             2011)
Cash and cash equivalents at            274.1     266.6    7.4           343.2
end of period
                                                                          
Interest-bearing loans
                                        428.2     381.1   47.1           518.2
Net interest-bearing loans
                                        154.0     114.4   39.6           174.9
Owners' equity
                                        805.2     841.0  -35.7           793.3



D/E ratio (times)                                 0.53   0.45   0.08    0.65

Net D/E ratio (times)                             0.19   0.14   0.05    0.22

Shareholders' equity ratio Owners' equity ratio 32.6 % 31.4 %  1.2 %  31.5 %

                                                29.0 % 28.6 % 0.4 %  27.8 %

1. D/E ratio: Interest-bearing loans/Owners' equity.

2. Net D/E ratio: (Interest-bearing loans  - Cash and cash equivalents at  end 
of period)/Owners' equity.





Summary of Cash Flows



Net cash provided by operating activities  in the first half amounted to  60.2 
billion yen (US$772 million). This represents  an increase in cash inflows  of 
5.0 billion yen compared to  the first half of  fiscal 2011. The increase  was 
attributable to improved income before income taxes and minority interests, as
a loss on disaster stemming  from the impact of  the earthquake was posted  in 
the first half of fiscal 2011, and a lower amount of corporate taxes paid  due 
to the liquidation of a European subsidiary which reduced the previous  fiscal 
year's corporate tax liability.



Net cash used in investing activities  was 77.7 billion yen (US$996  million). 
Outflows mainly consisted of the acquisition of property, plant and  equipment 
amounting to  53.1 billion  yen,  primarily related  to datacenters,  and  the 
acquisition of  intangible assets  amounting to  28.0 billion  yen,  primarily 
software. Compared to the same period  in fiscal 2011, net outflows  decreased 
by 14.8 billion yen, reflecting lower capital expenditures on property,  plant 
and equipment.



Free cash flow, the sum of cash flows from operating and investing activities,
was negative 17.5 billion yen (US$224 million), representing a decrease in net
cash outflows  of  19.8 billion  yen  compared with  the  same period  in  the 
previous fiscal  year. Free  cash  flow was  positive  in the  second  quarter 
although it was negative  in the first quarter  as income before income  taxes 
and minority interests amounted to a loss.



Net cash  provided  by  financing  activities was  28.4  billion  yen  (US$364 
million). Cash  on  hand was  used  to redeem  60.0  billion yen  in  straight 
corporate bonds  at  maturity, but  short-term  borrowings were  increased  to 
finance a portion of working capital. This represents an increase in net  cash 
inflows of 0.9 billion yen compared to the first half of fiscal 2011.



As a result of the above factors, cash and cash equivalents at the end of  the 
first half  of fiscal  2012  were 274.1  billion  yen (US$3,514  million),  an 
increase of 7.4 billion yen compared to the end of fiscal 2011.



To replenish cash on hand, which had temporarily declined because it was  used 
to redeem  60.0  billion  yen  in straight  corporate  bonds  at  maturity  in 
September 2012,  the  company  newly  issued  60.0  billion  yen  in  straight 
corporate bonds in October 2012.






(Billion Yen)

                                          FY 2012         Change vs. FY 2011
                                    First  Second  First  First  Second  First
                                   Quarter Quarter Half          Quarter Half
                                                         Quarter
    Cash flows from operating        -10.0    70.2  60.2     0.6     4.3   5.0
            activities
    Cash flows from investing        -34.3   -43.4 -77.7     2.2    12.6  14.8
            activities
          Free cash flow             -44.3    26.8 -17.5     2.9    16.9  19.8
    Cash flows from financing        147.4  -118.9  28.4    87.7   -86.8   0.9
            activities
              Total                  103.0   -92.1  10.8    90.6   -69.8  20.8



6. FY2012 Consolidated Earnings Projections



For the first half of fiscal 2012, both net sales and operating income were in
line with the  projections announced on  July 27, 2012.  Services business  in 
Japan was steady due  to mild recovery of  ICT investment. Mobile phone  sales 
exceeded projections on account of strong smartphone sales. On the other hand,
LSI devices and electronic components were adversely impacted by weak  demand. 
In addition,  services  business  in  Europe  was  affected  by  the  economic 
downturn, and PC sales inside and outside Japan fell short of projections  due 
to decline in sales prices. The net loss was also in line with projections.



Taking into consideration  the expectation  that the downward  trend for  LSI, 
electronic components and services business  in Europe will continue,  Fujitsu 
will revise  its  fiscal 2012  projections  announced  on July  27,  2012,  as 
follows.

Exchange rate projections are also revised to 77 yen for the US dollar and 125
yen to  the British  pound. The  euro remains  at 100  yen, the  same as  July 
projections.



Fujitsu will  revise  its net  sales  projections  for the  full  fiscal  year 
downward by 110.0 billion yen from  projections announced in July, to  4,420.0 
billion yen.  Projected  sales  for Technology  Solutions  are  being  revised 
downward by  60.0 billion  yen.  The downward  revision reflects  the  adverse 
impact on  the  services business  outside  Japan due  to  economic  downturn, 
primarily in  Europe, and  delayed recovery  of investment  by North  American 
telecommunications carriers in  network products. An  exchange rate impact  of 
15.0 billion yen was factored in.  The services business in Japan was  stable. 
Projected sales for Ubiquitous  Solutions are being  revised downward by  10.0 
billion yen,  reflecting the  impact of  deteriorating market  conditions  and 
lower sales prices on the PC business both in and outside of Japan as well  as 
the impact of a decline in  automobile production on the mobilewear  business. 
Sales of mobile phones are expected to exceed previous projections.  Projected 
sales for Device  Solutions are also  being revised downward  by 65.0  billion 
yen, with sales lower by 30.0 billion yen for LSI devices and by 35.0  billion 
yen for  electronic components.  The lower  sales projection  for LSI  devices 
reflects a  significant demand  drop for  LSI devices,  primarily in  consumer 
equipment, with the exception of  smartphones, and the lower sales  projection 
for electronic components  reflects the  impact of weak  demand primarily  for 
components used in PCs.



Fujitsu will revise its full-year projection for operating income downward  by 
35.0 billion yen,  to 100.0 billion  yen. Device Solutions  accounts for  27.0 
billion yen of  the downward revision,  reflecting the fall  in demand,  while 
Ubiquitous  Solutions  accounts  for  5.0  billion  yen.  For  the  technology 
Solutions segment, no changes will be made to the previous projection.  Steady 
growth of  the  services  business  in Japan  offset  the  adverse  impact  of 
declining revenue on the services business outside Japan.



Fujitsu will also revise its full-year  projection for net income downward  by 
35.0 billion  yen, reflecting  downward of  operating income  and expenses  of 
about 10 billion yen related to the transfer of ownership of LSI assembly  and 
test facilities.





FY 2012 Full-Year Consolidated Forecast
(Billion Yen)



                   Fiscal               Fiscal     Change vs.      Change vs.
                    2011                 2012         July
                               July                                 FY 2011
                  Full-Year            Full-Year    Forecast
                             Forecast                   Change          Change
                   Results             Forecast
                                                          (%)             (%)
Net Sales           4,467.5    4,530.0   4,420.0  -110.0   -2.4    -47.5  *-1.1
Operating Income      105.3      135.0     100.0   -35.0  -25.9     -5.3   -5.0
[Operating Income    [2.4%]     [3.0%]    [2.3%] [-0.7%]         [-0.1%]
Margin]
Net Income             42.7       60.0      25.0   -35.0  -58.3    -17.7  -41.5
                                            * Change (%) Constant Currency; -0
Operating Income by Business Segment
Technology            171.2      180.0     180.0       -             8.7    5.1
Solutions
    Services          124.0      130.0     130.0       -             5.9    4.8
    System             47.2       50.0      50.0       -             2.7    5.8
    Platforms
Ubiquitous             19.9       25.0      20.0    -5.0             0.0    0.3
Solutions
Device Solutions      -10.1       15.0     -12.0   -27.0            -1.8      -
Other/Elimination
and                   -75.7      -85.0     -88.0    -3.0           -12.2      -

Corporate
                                                                                



Note: The impact of exchange rate fluctuation has been calculated by using the
average U.S. dollar, euro and British pound exchange rates for fiscal 2011  to 
translate the current period's net sales outside Japan into yen.



[Reference]



Breakdown of annual dividend payments



                   Dividend Per Share
Record Date        End of First Half End of Fiscal Year Annual Basis
Payment for FY2011 5 yen             5 yen              10 yen
Payment for FY2012 5 yen *           5 yen (planned)    10 yen (planned)

*Effective Date: November 22, 2012





7. Segment Information



I. Segment Overview



Fujitsu's reportable business  segments consist of  components of the  Fujitsu 
group  for  which  discrete  financial  information  is  available  and  whose 
operating  results   are  regularly   reviewed   by  the   group's   executive 
decision-making body  to  make  decisions about  resource  allocation  to  the 
segments and assess their performance.



In  the  field  of  information  and  communication  technology  (ICT),  while 
delivering  wide  varieties  of  services,  the  group  offers   comprehensive 
solutions, from the development, manufacturing, and sales, to the  maintenance 
and operations of  cutting-edge, high-performance  and high-quality  products, 
and  electronic  devices  that  support  services.  The  group's  business  is 
organized into  three  reportable  segments-Technology  Solutions,  Ubiquitous 
Solutions, and  Device Solutions-based  on the  group's managerial  structure, 
characteristics of  the products  and services,  and the  similarities of  the 
sales market within each operating  segment. Managerial structure and  product 
and service classification in each reportable segment are as follows.



(1)Technology Solutions

To optimally deliver to customers services that integrate products,  software, 
and services,  the  segment is  organized  in a  matrix  management  structure 
comprised of business departments  that are organized  by product and  service 
type, in order  to manage  costs and  devise global  business strategies,  and 
sales departments that are organized along industry and geographic lines.

This reportable segment consists  of Solutions/Systems Integration, which  are 
services for  the  construction  of  information  and  communication  systems, 
Infrastructure Services,  which  are  primarily  outsourcing  and  maintenance 
services, System Products, which covers mainly the servers and storage systems
that comprise ICT  platforms, and Network  Products, which are  used to  build 
communications infrastructure, such as mobile phone base stations and  optical 
transmission systems.



(2)Ubiquitous Solutions

The segment  is organized  into independent  business management  units  along 
product lines and includes the sales departments.



This  reportable  segment  contains  ubiquitous  terminals-including  personal 
computers and mobile  phones, as  well as  car audio  and navigation  systems, 
mobile  communication  equipment,  and  automotive  electronic  equipment-that 
collect various  information  and  knowledge  generated  from  the  behavioral 
patterns of people and organizations needed to achieve the group's vision of a
"Human Centric Intelligent Society" (a society that enjoys the benefits of the
value generated  by  ICT without  requiring  anyone  to be  conscious  of  the 
technological complexities involved).



(3)Device Solutions

The segment is organized by  product in independent business management  units 
which include  the  respective  sales departments  and  contains  cutting-edge 
technologies,  including  LSI  devices   used  in  digital  home   appliances, 
automobiles, mobile phones and servers, as well as electronic components, such
as semiconductor packages and batteries.



II. First Half of Fiscal 2012 (April 1, 2012 to September 30, 2012)



1.Amounts of Net Sales, Profit or Loss by Reportable Segments



                                                                 (Million Yen)
                               Reportable Segments            Other
                    Technology Ubiquitous  Device   Sub-Total (*)    Total
                    Solutions  Solutions  Solutions
Net Sales
   External          1,314,193    494,988   241,987 2,051,168 12,741 2,063,909
   customers
   Inter-segment        26,249     54,400    26,704   107,353 22,966   130,319
  Total net sales   1,340,442    549,388   268,691 2,158,521 35,707 2,194,228
Operating    Income     47,094     10,428    -7,039    50,483 -3,152    47,331
(Loss)

* The  "Other"  segment consists  of  operations not  included  in  reportable 
segments, such  as  Japan's Next-Generation  Supercomputer  project,  facility 
services and  development  of information  systems  for group  companies,  and 
welfare benefits for group employees.



2.Reconciliation of  Net Sales  and  Operating Income  or Loss  of  Reportable 
Segments with
those of the Consolidated Income Statements



                                             (Million Yen) 
          Reconciliation of Net Sales             Amount   
Total of Reportable Segments                    2,158,521 
Net Sales of "Other" Category                      35,707 
Elimination of Intersegment Transactions         -122,415 
Net Sales in Consolidated Income Statements     2,071,813 
                                             (Million Yen) 
    Reconciliation of Operating Income (Loss)      Amount  
Total of Reportable Segments                       50,483 
Operating Income of "Other" Category               -3,152 
Corporate Expenses *                              -37,085 
Elimination of Intersegment Transactions           -2,556 
Operating Income in Consolidated Income Statements   7,690 

* Corporate  Expenses  mainly consist  of  strategic expenses  such  as  basic 
research and development expenses
 which are not attributable to  the reportable segments and group  management 
shared expenses incurred by Fujitsu.



III. First Half of Fiscal 2011 (April 1, 2011 to September 30, 2011)



1.Amounts of Net Sales, Profit or Loss by Reportable Segments



                                                                 (Million Yen)
                               Reportable Segments            Other
                    Technology Ubiquitous  Device   Sub-Total (*)    Total
                    Solutions  Solutions  Solutions
Net Sales
   External          1,344,946    460,665   254,874 2,060,485 25,885 2,086,370
   customers
   Inter-segment        40,469     55,144    33,572   129,185 23,128   152,313
Total net sales      1,385,415    515,809   288,446 2,189,670 49,013 2,238,683
Operating   Income     45,722      4,335    -4,838    45,219 -1,099    44,120
(Loss)

* The  "Other"  segment consists  of  operations not  included  in  reportable 
segments, such  as  Japan's Next-Generation  Supercomputer  project,  facility 
services and  development  of information  systems  for group  companies,  and 
welfare benefits for group employees.



2.Reconciliation of  Net Sales  and  Operating Income  or Loss  of  Reportable 
Segments with
those of the Consolidated Income Statements



                                               (Million Yen)
           Reconciliation of Net Sales              Amount
Total of Reportable Segments                      2,189,670
Net Sales of "Other" Category                        49,013
Elimination of Intersegment Transactions           -146,366
Net Sales in Consolidated Income Statements       2,092,317
                                               (Million Yen)
    Reconciliation of Operating Income (Loss)       Amount
Total of Reportable Segments                         45,219
Operating Income of "Other" Category                 -1,099
Corporate Expenses *                                -36,534
Elimination of Intersegment Transactions               -535
Operating Income in Consolidated Income Statements     7,051

* Corporate  Expenses  mainly consist  of  strategic expenses  such  as  basic 
research and development expenses
 which are not attributable to  the reportable segments and group  management 
shared expenses incurred by Fujitsu.





IV.Second Quarter of Fiscal 2012 (July 1, 2012 to September 30, 2012)



1.Amounts of Net Sales, Profit or Loss by Reportable Segments







                                                                 (Million Yen)
                               Reportable Segments            Other
                    Technology Ubiquitous  Device   Sub-Total (*)    Total
                    Solutions  Solutions  Solutions
Net Sales
  External             699,821    283,187   123,955 1,106,963  3,434 1,110,397
  customers
  Inter-segment         13,501     31,587    14,361    59,449 12,582    72,031
    Total    713,322    314,774   138,316 1,166,412 16,016 1,182,428
net sales
Operating Income        46,219     12,463    -3,383    55,299 -1,675    53,624
(Loss)

* The  "Other"  segment consists  of  operations not  included  in  reportable 
segments, such  as  Japan's Next-Generation  Supercomputer  project,  facility 
services and  development  of information  systems  for group  companies,  and 
welfare benefits for group employees.



2.Reconciliation of  Net Sales  and  Operating Income  or Loss  of  Reportable 
Segments with
those of the Consolidated Income Statements



                                               (Million Yen) 
           Reconciliation of Net Sales              Amount   
Total of Reportable Segments                      1,166,412 
Net Sales of "Other" Category                        16,016 
Elimination of Intersegment Transactions            -67,985 
Net Sales in Consolidated Income Statements       1,114,443 
                                               (Million Yen) 
Reconciliation of Operating Income (Loss)           Amount   
Total of Reportable Segments                         55,299 
Operating Income of "Other" Category                 -1,675 
Corporate Expenses *                                -19,465 
Elimination of Intersegment Transactions            -1,426 
Operating Income in Consolidated Income Statements    32,733 

* Corporate  Expenses  mainly consist  of  strategic expenses  such  as  basic 
research and development expenses
 which are not attributable to  the reportable segments and group  management 
shared expenses incurred by Fujitsu.





V. Second Quarter of Fiscal 2011 (July 1, 2011 to September 30, 2011)



1.Amounts of Net Sales, Profit or Loss by Reportable Segments





                                                                  (Million Yen)
                                Reportable Segments            Other
                     Technology Ubiquitous  Device   Sub-Total (*)    Total
                     Solutions  Solutions  Solutions
Net Sales
    External            712,063    250,848   132,052 1,094,963  8,122 1,103,085
    customers
    Inter-segment        14,205     29,519    15,516    59,240 12,297    71,537
Total    726,268    280,367   147,568 1,154,203 20,419 1,174,622
net sales
Operating    Income     43,196      4,368    -3,810    43,754 -1,573    42,181
(Loss)

* The  "Other"  segment consists  of  operations not  included  in  reportable 
segments, such  as  Japan's Next-Generation  Supercomputer  project,  facility 
services and  development  of information  systems  for group  companies,  and 
welfare benefits for group employees.



2.Reconciliation of  Net Sales  and  Operating Income  or Loss  of  Reportable 
Segments with
those of the Consolidated Income Statements



                                             (Million Yen) 
          Reconciliation of Net Sales             Amount   
Total of Reportable Segments                    1,154,203 
Net Sales of "Other" Category                      20,419 
Elimination of Intersegment Transactions          -68,376 
Net Sales in Consolidated Income Statements     1,106,246 
                                             (Million Yen) 
    Reconciliation of Operating Income (Loss)      Amount  
Total of Reportable Segments                       43,754 
Operating Income of "Other" Category               -1,573 
Corporate Expenses *                              -19,263 
Elimination of Intersegment Transactions            1,272 
Operating Income in Consolidated Income Statements  24,190 

* Corporate  Expenses  mainly consist  of  strategic expenses  such  as  basic 
research and development expenses
 which are not attributable to  the reportable segments and group  management 
shared expenses incurred by Fujitsu.



[Related Information]



Geographical Information



Net Sales



First Half  of  Fiscal  2012  (April  1,  2012  to  September  30,    (Million
2012)                                                          Yen)
                                Outside Japan
    Japan        EMEA         The      APAC/China    Sub-total       Total
                           Americas
    1,378,540     339,559     135,587       218,127      693,273     2,071,813
 ( 66.5%)       (      (  ( 10.5%) ( 33.5%)  ( 100.0%)
                   16.4%)       6.6%)



First Half of Fiscal 2011  (April 1, 2011 to  September          (Million Yen)
30, 2011)
     Japan                         Outside Japan                      Total
                    EMEA     The Americas   APAC/China   Sub-total
      1,346,806      392,843       149,703      202,965     745,511  2,092,317
   ( 64.4%)  ( 18.8%)   ( 7.1%)  ( 9.7%) ( 35.6%)      (
                                                                       100.0%)
Second Quarter of Fiscal 2012 (July 1, 2012 to September 30,     (Million Yen)
2012)
     Japan                         Outside Japan                      Total
                    EMEA     The Americas   APAC/China   Sub-total
        759,560      170,964        70,659      113,260     354,883  1,114,443
   ( 68.2%)  ( 15.3%)   ( 6.3%) ( 10.2%) ( 31.8%)       (
                                                                       100.0%)
Second Quarter of  Fiscal 2011  (July 1, 2011  to September  30, (Million Yen)
2011)
     Japan                         Outside Japan                      Total
                    EMEA     The Americas   APAC/China   Sub-total
        727,130      200,710        74,401      104,005     379,116  1,106,246
   ( 65.7%)  ( 18.2%)   ( 6.7%)  ( 9.4%) ( 34.3%)      (
                                                                       100.0%)



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