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- Report of Foreign Issuer (6-K)

Date : 05/15/2012 @ 6:14AM
Source : Edgar (US Regulatory)
Stock : Mitsubishi Ufj Financial Grp. (MTU)
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- Report of Foreign Issuer (6-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of May 2012

 

 

MITSUBISHI UFJ FINANCIAL GROUP, INC.

(Translation of registrant’s name into English)

 

 

7-1, Marunouchi 2-chome, Chiyoda-ku

Tokyo 100-8330, Japan

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or

will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F       X       Form 40-F               

Indicate by check mark whether the registrant by furnishing the information

contained in this Form is also thereby furnishing the information to the Commission

pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes                  No        X    

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 15, 2012

 

Mitsubishi UFJ Financial Group, Inc.
By:  

/s/ Manabu Ishii

Name:   Manabu Ishii
Title:   Chief Manager, General Affairs
  Corporate Administration Division


LOGO

Consolidated Summary Report

<under Japanese GAAP>

for the fiscal year ended March 31, 2012

May 15, 2012

 

Company name:

   Mitsubishi UFJ Financial Group, Inc.

Stock exchange listings:

   Tokyo, Osaka, Nagoya, New York

Code number:

   8306

URL

   http://www.mufg.jp/

Representative:

   Katsunori Nagayasu, President & CEO

For inquiry:

  

Naoki Muramatsu, General Manager - Financial Planning Division / Financial Accounting  Office

   TEL (03) 3240-7200

General meeting of shareholders:

   June 28, 2012
Dividend payment date:    June 28, 2012

Securities report issuing date:

   June 28, 2012
Trading accounts:    Established

Supplemental information for financial statements:

   Available

Investor meeting presentation:

   Scheduled (for investors and analysts)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Data for the Fiscal Year ended March 31, 2012

(1)    Results of Operations

 

     (% represents the change from the previous fiscal year)  
     Ordinary Income     Ordinary Profits      Net Income  
     million yen          %         million yen          %          million yen          %      
Fiscal year ended                 

March 31, 2012

     4,951,095         9.3        1,471,991         127.7         981,331         68.3   

March 31, 2011

     4,528,933         (10.1     646,432         18.5         583,079         50.0   

 

(*) Comprehensive income

                   March 31, 2012: 1,310,584 million yen         - %                 ;          March 31, 2011: (37,079) million yen         -%

 

     Net Income
per  Common Stock
     Diluted Net Income
per Common Stock
     Net Income to Net Assets
Attributable to
MUFG shareholders
     Ordinary Profits  to
Total Assets
     Ordinary Profits  to
Ordinary Income
 
     yen      yen      %      %      %  
Fiscal year ended               

March 31, 2012

     68.09         67.94         10.6         0.7         29.7   

March 31, 2011

     39.95         39.89         6.6         0.3         14.3   

(Reference) Income from investment in affiliates (Equity method)

                   March 31, 2012: 377,515 million yen;      March 31, 2011: 11,371 million yen

(2)    Financial Conditions

 

     Total Assets      Total Net Assets      Net Assets Attributable to
MUFG Shareholders
to Total Assets (*1)
     Total Net  Assets
per Common Stock
     Risk-adjusted
Capital  Ratio (*2)
 
     million yen      million yen      %      yen      %  
As of               

March 31, 2012

     218,861,616         11,675,784         4.6         678.25         14.91   

March 31, 2011

     206,227,081         10,814,425         4.3         604.58         14.89   

(Reference) Shareholders’ equity as of      March 31, 2012: 9,993,029 million yen;      March 31, 2011: 8,948,948 million yen

 

  (*1) “Net assets attributable to MUFG shareholders to total assets” is computed under the formula shown below (Total net assets - Subscription rights to shares - Minority interests) / Total assets

 

  (*2) “Risk-adjusted Capital Ratio” is computed in accordance with the “Standards for Consolidated Capital Adequacy Ratio of Bank Holding Company under Article 52-25 of the Banking Law” (the Notification of the Financial Services Agency No. 20, 2006).

(3)    Cash Flows

 

     Cash Flows  from
Operating Activities
     Cash Flows  from
Investing Activities
    Cash Flows  from
Financing Activities
    Cash and Cash Equivalents
at the end of the period
 
     million yen      million yen     million yen     million yen  
Fiscal year ended          

March 31, 2012

     7,585,524         (7,514,157     (468,710     4,486,753   

March 31, 2011

     10,495,808         (8,587,988     (948,646     4,919,083   

2. Dividends on Common Stock

 

    Dividends per Share     Total
dividends
    Dividend
payout ratio
(Consolidated)
    Dividend on
net assets ratio
(Consolidated)
 
    1st
quarter-end
    2nd
quarter-end
    3rd
quarter-end
    Fiscal
year-end
    Total        
    yen     yen     yen     yen     yen     million yen     %     %  
Fiscal year                

ended March 31, 2011

    —          6.00        —          6.00        12.00        169,809        30.0        2.0   

ended March 31, 2012

    —          6.00        —          6.00        12.00        169,853        17.6        1.9   

ending March 31, 2013 (Forecast)

    —          6.00        —          6.00        12.00        ——        26.0        ——   

 

(*) The information in the above table is only for dividends on common stocks. Please refer to “Dividends on preferred stocks” with regard to dividends on other type of (unlisted) stocks issued by us.

3. Earnings Target for the Fiscal Year ending March 31, 2013 (Consolidated)

MUFG has set an earnings target of 670.0 billion yen of consolidated net income for the fiscal year ending March 31, 2013.

MUFG is engaged in financial service businesses such as banking business, trust banking business, securities business and credit card/loan businesses. Because there are various uncertainties caused by economic situation, market environments and other factors in these businesses,

MUFG discloses a target of its consolidated net income instead of a forecast of its performance. Please see “3. Management Policy (4) Management Targets”, for further information of the target.


ø Notes

 

(1) Changes in significant subsidiaries during the period: No

 

(2) Changes in accounting policies, changes in accounting estimates and restatements

(A) Changes in accounting policies due to revision of accounting standards: Yes

(B) Changes in accounting policies due to reasons other than (A): No

(C) Changes in accounting estimates: No

(D) Restatements: No

 

(3) Number of common stocks outstanding at the end of the period

 

(A) Total stocks outstanding including treasury stocks:

   March 31, 2012      14,154,534,220 shares   
   March 31, 2011      14,150,894,620 shares   

(B) Treasury stocks:

   March 31, 2012      9,553,750 shares   
   March 31, 2011      9,413,730 shares   

(C) Average outstanding stocks:

   Fiscal year ended March 31, 2012      14,144,183,615 shares   
   Fiscal year ended March 31, 2011      14,140,858,163 shares   

(Reference) Summary of non-consolidated financial data

1. Non-consolidated Financial Data for the Fiscal Year ended March 31, 2012

(1)  Results of Operations

 

     (% represents the change from the previous fiscal year)  
     Operating Income     Operating Profits     Ordinary Profits     Net Income  
     million yen      %     million yen      %     million yen      %     million yen      %  

Fiscal year ended

                    

March 31, 2012

     272,114         (34.2     257,031         (35.5     234,840         (36.5     238,437         (30.9

March 31, 2011

     413,611         42.2        398,756         45.4        369,982         56.9        344,931         244.6   
     Net Income
per Common Stock
    Diluted Net Income
per Common Stock
                           
     yen     yen                            

Fiscal year ended

              

March 31, 2012

     15.58        15.56             

March 31, 2011

     23.11        23.09             

(2)  Financial Conditions

 

     Total Assets      Total Net Assets      Net Assets Ratio      Total Net Assets
per Common Stock
 
     million yen      million yen      %      yen  

As of

           

March 31, 2012

     10,918,957         8,667,823         79.3         583.63   

March 31, 2011

     10,991,515         8,612,722         78.3         579.94   

 

(Reference) Shareholders’ equity as of March 31, 2012: 8,659,889 million yen;      March 31, 2011: 8,605,534 million yen

*Disclosure regarding the execution of the audit process

This “Consolidated Summary Report” (“Tanshin”) is outside the scope of the external auditor’s audit procedure which is required by “Financial Instruments and Exchange Act”. Therefore, the audit process has not been completed as of this disclosure in the “Consolidated Summary Report”.

*Notes for using forecasted information etc.

 

1. This financial summary report contains forward-looking statements regarding estimations, forecasts, targets and plans in relation to the results of operations, financial conditions and other overall management of the company and/or the group as a whole (the “forward-looking statements”). The forward-looking statements are made based upon, among other things, the company’s current estimations, perceptions and evaluations. In addition, in order for the company to adopt such estimations, forecasts, targets and plans regarding future events, certain assumptions have been made. Accordingly, due to various risks and uncertainties, the statements and assumptions are inherently not guarantees of future performance, may be considered differently from alternative perspectives and may result in material differences from the actual result. For the main factors that may effect the current forecasts, please see Consolidated Summary Report, Annual Securities Report, Disclosure Book, Annual Report, and other current disclosures that the company has announced.

 

2. The financial information included in this financial summary report is prepared and presented in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”). Differences exist between Japanese GAAP and the accounting principles generally accepted in the United States (“U.S. GAAP”) in certain material respects. Such differences have resulted in the past, and are expected to continue to result for this period and future periods, in amounts for certain financial statement line items under U.S. GAAP to differ significantly from the amounts under Japanese GAAP. For example, differences in consolidation basis or accounting for business combinations, including but not limited to amortization and impairment of goodwill, could result in significant differences in our reported financial results between Japanese GAAP and U.S. GAAP. Readers should consult their own professional advisors for an understanding of the differences between Japanese GAAP and U.S. GAAP and how those differences might affect our reported financial results. We will publish U.S. GAAP financial results in a separate disclosure document when such information becomes available.


(Dividends on preferred stocks)

Dividends per share relating to preferred stocks are as follows:

 

       Dividends per Share  
     1st quarter-end      2nd quarter-end      3rd quarter-end      Fiscal year-end      Total  
     yen      yen      yen      yen      yen  

Preferred Stock First Series of Class 5

              

Fiscal year ended March 31, 2011

     —           57.50         —           57.50         115.00   

Fiscal year ended March 31, 2012

     —           57.50         —           57.50         115.00   

Fiscal year ending March 31, 2013 (Forecast)

     —           57.50         —           57.50         115.00   
     Dividends per Share  
     1st quarter-end      2nd quarter-end      3rd quarter-end      Fiscal year-end      Total  
     yen      yen      yen      yen      yen  

Preferred Stock Class 11

              

Fiscal year ended March 31, 2011

     —           2.65         —           2.65         5.30   

Fiscal year ended March 31, 2012

     —           2.65         —           2.65         5.30   

Fiscal year ending March 31, 2013 (Forecast)

     —           2.65         —           2.65         5.30   


Mitsubishi UFJ Financial Group, Inc.

 

(Appendix)

Contents of Appendix

 

1.     Results of Operations and Financial Condition

     2   

(1) Analysis of results of operations

     2   

(2) Analysis of financial condition

     4   

(3) Basic policy regarding profit distribution and dividends for fiscal years 2011 and 2012

     4   

2.     Information on Mitsubishi UFJ Financial Group (MUFG Group)

     5   

3.     Management Policy

     7   

(1) Principal management policy

     7   

(2) Medium- and long-term management strategy

     7   

(3) Key issues

     8   

(4) Management Targets

     10   

4.     Consolidated Financial Statements

     11   

(1) Consolidated Balance Sheets

     11   

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

     13   

(3) Consolidated Statements of Changes in Net Assets

     16   

(4) Consolidated Statements of Cash Flows

     19   

Notes on Going-Concern Assumption

     21   

Significant Accounting Policies Applied in the Preparation of the Consolidated Financial Statements

     21   

Additional Information

     29   

Notes to the Consolidated Financial Statements

     30   

Consolidated Balance Sheet

  

Consolidated Statements of Income

  

Consolidated Statements of Changes in Net Assets

  

Consolidated Statements of Cash Flows

  

Financial Instruments

  

Securities

  

Money Held in Trust

  

Net Unrealized Gains (Losses) on Other Securities

  

Segment Information

  

Per Share Information

  

5.     Non-consolidated Financial Statements

     46   

(1) Non-consolidated Balance Sheets

     46   

(2) Non-consolidated Statements of Income

     48   

(3) Non-consolidated Statements of Changes in Net Assets

     49   

Notes on Going-Concern Assumption

     51   

6.     Other

     51   

(1) Changes of Directors and Corporate Auditors

     51   

Supplemental Information:

“Selected Financial Information under Japanese GAAP For the fiscal year ended March 31, 2012”

 

(*) The following is the schedule of internet conference and explanation for investors and analysts. You can confirm those contents over the internet. Materials distributed for those will be uploaded in our homepage soon after the internet conference or the explanation is held.

 

Internet Conference:   May 15, 2012 (Tuesday)
Explanation for investors and analysts:   May 23, 2012 (Wednesday)

 

1


Mitsubishi UFJ Financial Group, Inc.

 

1. Results of Operations and Financial Condition

(1)   Analysis of results of operations

(Results of operations for the fiscal year ended March 31, 2012)

On the subject of the economic and financial environment for the fiscal 2011, the Euro-zone economy contracted considerably due to worsening sovereign debt crisis. Economic situation in the US improved in H2 but its pace remained relatively moderate under structural adjustment pressures. In emerging countries such as Asian countries, the slowing European economy caused exports—one of the main driving forces—to slow, and the region’s economy as a whole weakened as a result. Japan’s economy, on the other hand, posted negative growth before recovering from the March 11 earthquake over the summer as damaged capital stock and the supply-chains were restored. The Japanese economy marked negative growth again toward the end of 2011 as overseas economies deteriorated and the JPY appreciated. However, reconstruction and rebuilding demand, especially in the disaster-stricken areas, have gradually emerged, and positive movements have also appeared throughout the entire economy.

In the financial environment, the policy rates have been kept low in the US and UK, while in the Euro-zone, the European Central Bank raised its policy rate slightly in H1 before lowering it again and providing a huge amount of liquidity. Further, many emerging countries turned to monetary easing, lowering their policy rates. In Japan, the Bank of Japan increased the total size of the Asset Purchase Program three times during the fiscal year while conducting its virtually zero interest rate policy. The Bank also released its medium- to long-term price stability goal in February of 2012, announcing that it would conduct monetary policy to achieve the goal of 1% in terms of the year-on-year rate of increase in the Consumer Price Index. Short- and long-term interest rates both remained low despite a few temporary rises in long-term yields. The JPY appreciation trend persisted amid mounting concern over the worsening European sovereign debt crisis and slowing overseas economies, despite easing somewhat toward the end of the fiscal year. The stock market also struggled due to a number of negative factors but started to firm up toward the end of the fiscal year as the JPY strengthening pressures eased.

Under such business environment, consolidated gross profits for the fiscal year ended March 31, 2012 decreased by 20.4 billion yen from the previous fiscal year to 3,502.0 billion yen. This was mainly due to a decrease in net interest income such as income from consumer-finance segment due to revisions of Money Lending Business Act, and dividend income on preferred stock from Morgan Stanley, partially offset by an increase in net gains on sales of debt securities such as JGBs and a decrease in trading losses from securities subsidiary. General and administrative expenses decreased by 26.3 billion yen from the previous fiscal year due to the progress in an ongoing intensive corporate-wide cost reduction. As a result, net business profits were 1,507.4 billion yen, remained almost unchanged from the previous fiscal year.

Total credit costs for the fiscal year ended March 31, 2012 decreased by 160.6 billion yen from the previous fiscal year, mainly due to accounting of reversal of general allowance for credit losses and a decrease in losses on loan write-offs. However, net losses on equity securities increased by 31.5 billion yen from the previous fiscal year, primarily due to an increase in net losses on sales of equity securities and losses on write-down of equity securities. Other non-recurring gains and losses improved by 684.4 billion yen from the previous fiscal year, mainly due to the application of equity method accounting for our investment in Morgan Stanley by completion of conversion of the convertible preferred stock into their common stock and a decrease in provision for losses on interest repayment.

 

2


Mitsubishi UFJ Financial Group, Inc.

 

As a result, ordinary profits for the fiscal year ended March 31, 2012 were 1,471.9 billion yen, an increase of 825.5 billion yen from the previous fiscal year. Consolidated net income for the fiscal year ended March 31, 2012 was 981.3 billion yen, an increase of 398.2 billion yen from the previous fiscal year due to an increase in total of income taxes-current and income taxes-deferred reflecting tax system revisions and minority interests.

 

(in billions of Japanese yen)    For the fiscal  year
ended
March 31, 2012
    For the fiscal  year
ended
March 31, 2011
    Increase
(Decrease)
 

Gross Profits
before credit costs for trust accounts

     3,502.0        3,522.5        (20.4

General and administrative expenses

     1,994.5        2,020.8        (26.3

Net business profits
before credit costs for trust accounts and provision for general allowance for credit losses

     1,507.4        1,501.6        5.8   

Credit costs

     (257.5     (424.2     166.7   

Net gains (losses) on equity securities

     (88.6     (57.1     (31.5

Other non-recurring gains (losses)

     310.7        (373.7     684.4   

Profits (Losses) from investments in affiliates

     377.5        11.3        366.1   

Ordinary profits

     1,471.9        646.4        825.5   

Net extraordinary gains (losses)

     (23.8     (6.8     (16.9

Total of income taxes-current and income taxes-deferred

     (376.4     (175.4     (200.9

Minority interests

     (90.2     119.0        (209.3

Net income (losses)

     981.3        583.0        398.2   

Total credit costs *1

     (193.4     (354.1     160.6   

 

*1 Included gains on loans written-offs

(Earnings Target for the fiscal year ending March 31, 2013)

MUFG has set an earnings target of 670.0 billion yen of consolidated net income for the fiscal year ending March 31, 2013.

MUFG is engaged in financial service businesses such as banking business, trust banking business, securities business and credit card/loan businesses.

Because there are various uncertainties caused by economic situation, market environments and other factors in these businesses, MUFG discloses a target of its consolidated net income instead of a forecast of its performance.

Please see “3. Management Policy (4) Management Targets”, for further information of the target.

 

3


Mitsubishi UFJ Financial Group, Inc.

 

(2)  Analysis of financial condition

Total assets as of March 31, 2012 increased by 12,634.5 billion yen from March 31, 2011 to 218,861.6 billion yen, and total net assets as of March 31, 2012 increased by 861.3 billion yen from March 31, 2011 to 11,675.7 billion yen. The increase in total net assets reflected an increase in retained earnings and net unrealized gains on other securities.

With regard to major items of assets, securities as of March 31, 2012 increased by 7,241.0 billion yen from March 31, 2011 to 78,264.7 billion yen and loans and bills discounted as of March 31, 2012 increased by 4,497.6 billion yen from March 31, 2011 to 84,492.6 billion yen. With regard to major items of liabilities, deposits as of March 31, 2012 increased by 644.9 billion yen from March 31, 2011 to 124,789.2 billion yen.

MUFG’s consolidated risk-adjusted capital ratio based on the Basel 2 Standards as of March 31, 2012 was 14.91%, an improvement of 0.01 percentage points from March 31, 2011.

(3)  Basic policy regarding profit distribution and dividends for fiscal years 2011 and 2012

MUFG considers the return of earnings to shareholders to be one of the most important management priorities and makes it a basic policy to make efforts to continuously increase dividends while sustaining corporate value growth and further strengthening its corporate financial standing.

With respect to the year-end dividend for common stock for fiscal year 2011, MUFG plans to pay ¥6 per share in accordance with the previously announced dividend forecast. As a result, the annual dividend for fiscal year 2011, including the interim dividend of ¥6 per share, is expected to be ¥12 per share, which is the same amount as the annual dividend of ¥12 paid for the previous fiscal year. With respect to the year-end dividend for preferred stock for fiscal year 2011, MUFG plans to pay; for the first series of class 5 preferred stock, the prescribed amount of ¥57.50 per share (which, together with the interim dividend, is expected to result in the annual dividend being ¥115 per share for the fiscal year); and for class 11 preferred stock, the prescribed amount of ¥2.65 per share (which, together with the interim dividend, is expected to result in the annual dividend being ¥5.30 per share for the fiscal year).

The annual dividend forecast for common stock for fiscal year 2012 is ¥12 per share, which is the same amount as the annual dividend paid for fiscal year 2011. The annual dividend forecasts for preferred stock for fiscal year 2012 are: for the first series of class 5 preferred stock, the prescribed amount of ¥115 per share; and for class 11 preferred stock, the prescribed amount of ¥5.30 per share.

 

4


Mitsubishi UFJ Financial Group, Inc.

 

2.  Information on Mitsubishi UFJ Financial Group (MUFG Group)

MUFG Group comprises the holding company, 224 consolidated subsidiaries, and 59 equity-method affiliates. The Group is engaged primarily in the banking business and also conducts trust banking business, securities business, credit card / loan business, leasing business and other businesses. The Group conducts reporting of its main entities (on a consolidated basis) on a segmental basis and the relationships between MUFG and its major related companies are as shown in the chart below.

 

LOGO

 

*1 Consumer finance subsidiaries.

 

5


Mitsubishi UFJ Financial Group, Inc.

 

The Group has a combined group organization through which it seeks as a unified group to meet the financial needs of its customers by providing financial products and services that transcend traditional business boundaries. A system of integrated business groups has been introduced under which the group formulates a unified strategy and pursues its business based on coordination between group companies.

 

LOGO

 

Note: On July 1, 2012, MUFG plans to establish a new business group, the Integrated Global Markets Business Group, within which it is planned to establish a new Global Markets Planning Division. On the same day, MUFG plans to establish a new Group Strategy Division for EMEA, containing a Risk Monitoring Office for EMEA, within the Integrated Global Business Group. It is also planned to rename the current Corporate Governance Division for the United States as the US Holdings Division, and to establish a new Enterprise Risk Management Office for the United States within that division.

 

6


Mitsubishi UFJ Financial Group, Inc.

 

3. Management Policy

(1)  Principal management policy

MUFG Group put in place a management philosophy at the Group’s launch. This has now been reworked to become the Group Corporate Vision, outlined below. Throughout the Group, the people of MUFG are working under three shared values—Integrity and Responsibility, Professionalism and Teamwork, and Challenging Ourselves to Grow—while aiming to be the world’s most trusted financial group.

 

 

Corporate Vision

 

LOGO

(2)  Medium- and long-term management strategy

MUFG Group’s new Medium-term Business Plan is for three years, starting in fiscal 2012. The basic policies of the Plan are as follows:

 

 Enhance comprehensive financial service capabilities on a global basis

 

Contribute to initiatives for revitalizing and regenerating the Japanese market

 

ƒ Leverage world-class capabilities in capital and risk management

Social and economic structures are changing in Japan and worldwide with aging populations, globalization and other such factors, and the environment for financial institutions is also undergoing significant change amid stronger international regulations and other influences. Under our new Medium-term Business Plan we intend to respond deliberately to these changes, building on our solid domestic business base to raise our global-level comprehensive financial services capabilities and strengthening our financial and management foundations. Through these measures we aim to earn the trust of our customers and meet their expectations in Japan and around the world.

 

7


Mitsubishi UFJ Financial Group, Inc.

 

(3)  Key issues

The economic environment during fiscal 2011 remained severe, affected amongst other things by the dramatic impact in Japan of the Great East Japan Earthquake, and by the share price and interest rate instability arising from a deepening of the European sovereign debt crisis. Throughout the year, MUFG Group supported the recovery of Japan’s disaster region, for example by ensuring a smooth supply of finance. As the final year of the Medium-term Business Plan that began in fiscal 2009, we also worked to enhance our core capital and realize a higher level of earnings growth.

During fiscal 2012, the first year of the new Medium-term Business Plan, the Group will establish a basis for achieving the aims of the Plan by targeting early implementation of key initial measures for each of the Plan’s strategies.

In working to grow earnings and enhance returns to shareholders, the Group will address the following key issues.

Promotion of growth strategies

In the Retail business, MUFG Group will offer products that meet various needs of customers, such as products pertaining to asset management, inheritance, real estate and loans according to the customers’ life stages.

In Corporate business, the Group will strive to provide optimal solutions for customers by aggressively pursuing its CIB (Corporate & Investment Banking 1 ) strategy and trust-related business strategy, including pensions, real estate and stock transfer agency services, through the enhancement of cooperation within MUFG Group.

In Global business, the Group will work to further expand its network centered on the high-growth region of Asia, while pursuing its CIB strategy by strengthening collaboration between Group companies and regions and utilizing its alliance with Morgan Stanley, with the aim of expanding the Group’s business scale and presence.

In Trust Assets business, MUFG Group will seek to augment the balance of entrusted assets through the enhancement of cooperation within MUFG Group as well as that of product development, and will also endeavor to improve its presence as a global management institution.

In Global Markets business, MUFG Group will strengthen collaboration between Group companies and regions in sales and trading business 2 , creating a structure that enables the Group to provide comprehensive services on a global scale.

MUFG Group will continue ongoing efforts to strengthen earnings capacity, making use of its formidable capabilities across the Group while strengthening collaboration in three areas: between Group companies, business groups, and regions.

 

*1 Refers to business aimed at improving customer’s corporate value, comprising corporate banking such as deposit and loan services, along with investment banking operations such as M&A advisory.
*2 Refers to business comprising the sale to customers of financial products such as equities, bonds, and derivatives along with trading of market risk between banks or at exchanges.

 

8


Mitsubishi UFJ Financial Group, Inc.

 

Enhancement of management fundamentals and control

MUFG Group will support its growth strategy by strengthening management fundamentals and control.

As part of measures to enhance management control, measures will be taken to strengthen governance not only in Japan but also in overseas regions as the Group’s overseas business expands.

The Group will respond appropriately amid moves to strengthen core capital requirements and other aspects of global financial regulations, and will engage in proper capital management, including making effective use of equity capital.

With respect to management fundamentals, the Group will pursue synergies between Group companies to improve the quality of operations and increase the sophistication of systems and IT infrastructure.

Promotion of CSR management and strengthening the MUFG brand

MUFG Group will seek to enhance customer satisfaction through the provision of the distinct services of MUFG while also conducting management with a clear emphasis on its CSR (corporate social responsibilities).

MUFG Group has been working on two priority themes for its CSR activities: “Addressing Global Environmental Issues,” and “Nurturing Society’s Next Generation.” Under the first theme, guided by the MUFG Environmental Action Policy, we will seek to utilize the financial functions of each Group company as we strive to provide products and services that respond to customer needs.

MUFG Group will continue to offer its utmost support to recovery in regions affected by the Great East Japan Earthquake. In collaboration with the National Federation of UNESCO Associations in JAPAN, Bank of Tokyo-Mitsubishi UFJ has established the “MUFG NFUAJ East Japan Earthquake Recovery and Scholarship Fund”, as part of measures to support recovery over the longer term. The activities of the fund are centered on a scholarship program, totaling approximately ¥3.0 billion, for children of elementary, junior high school and high school age who lost their parents in the Great East Japan Earthquake, along with a range of other initiatives, such as replanting flowers in school gardens.

Under the new Group Corporate Vision, all employees and executives will work together to maintain and strengthen the MUFG brand, following the Group’s three core values—Integrity and Responsibility, Professionalism and Teamwork, and Challenging Ourselves to Grow—to earn the broadest possible appreciation and support from society.

By engaging in the range of initiatives outlined above, including promoting growth, enhancing management fundamentals and control, promoting CSR and strengthening the MUFG brand, the Group will strive to maximize value for shareholders.

 

9


Mitsubishi UFJ Financial Group, Inc.

 

(4)  Management Targets

MUFG has set an earnings target of 670.0 billion yen of consolidated net income for the fiscal year ending March 31, 2013.

[Reference]

MUFG Consolidated

 

(in billions of Japanese yen)   For the fiscal year
ending
March 31, 2013
    For the six months
ending
September 30, 2012
    For the fiscal year
ended
March 31, 2012

(Results)
    For the six months
ended
September 30, 2011
(Results)
 

Ordinary profits

    1,110.0        500.0        1,471.9        958.6   

Net income (loss)

    670.0        290.0        981.3        696.0   

Total credit costs

    (210.0     (100.0     (193.4     (28.6

<2 Banks on a stand-alone basis>

       

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

       

Net business profits
before provision for general allowance for credit losses

    860.0        405.0        1,022.8        553.8   

Ordinary profits (losses)

    690.0        310.0        743.3        416.5   

Net income (loss)

    460.0        215.0        469.0        271.9   

Total credit costs

    (100.0     (50.0     (125.3     (7.5

Mitsubishi UFJ Trust and Banking Corporation

       

Net business profits
before credit costs for trust accounts and provision for general allowance for credit losses

    155.0        70.0        148.1        74.6   

Ordinary profits (losses)

    130.0        60.0        110.1        64.1   

Net income (loss)

    80.0        40.0        75.8        46.0   

Total credit costs

    (10.0     (5.0     (9.2     7.0   

 

10


Mitsubishi UFJ Financial Group, Inc.

 

4. Consolidated Financial Statements

(1) Consolidated Balance Sheets

 

(in millions of yen)    As of
March 31, 2011
    As of
March 31, 2012
 

Assets:

    

Cash and due from banks

     10,406,053        9,036,116   

Call loans and bills bought

     361,123        347,930   

Receivables under resale agreements

     4,997,138        4,552,860   

Receivables under securities borrowing transactions

     3,621,210        3,256,655   

Monetary claims bought

     2,700,617        2,954,838   

Trading assets

     14,946,185        16,768,713   

Money held in trust

     357,159        395,352   

Securities

     71,023,637        78,264,735   

Loans and bills discounted

     79,995,024        84,492,697   

Foreign exchanges

     1,140,201        1,480,083   

Other assets

     6,631,715        8,004,949   

Tangible fixed assets

     1,333,298        1,343,909   

Buildings

     319,485        310,003   

Land

     740,007        729,229   

Lease assets

     7,699        14,324   

Construction in progress

     14,917        19,327   

Other tangible fixed assets

     251,187        271,024   

Intangible fixed assets

     1,069,317        1,023,834   

Software

     459,268        443,091   

Goodwill

     450,965        418,401   

Lease assets

     1,047        881   

Other intangible fixed assets

     158,035        161,460   

Deferred tax assets

     780,310        522,886   

Customers’ liabilities for acceptances and guarantees

     8,008,084        7,539,826   

Allowance for credit losses

     (1,143,997     (1,123,773
  

 

 

   

 

 

 

Total assets

     206,227,081        218,861,616   
  

 

 

   

 

 

 

 

11


Mitsubishi UFJ Financial Group, Inc.

 

(in millions of yen)    As of
March 31, 2011
    As of
March 31, 2012
 

Liabilities:

    

Deposits

     124,144,337        124,789,252   

Negotiable certificates of deposit

     10,961,012        12,980,617   

Call money and bills sold

     2,311,428        2,809,618   

Payables under repurchase agreements

     12,385,585        13,585,846   

Payables under securities lending transactions

     2,102,757        4,978,915   

Commercial papers

     101,688        569,659   

Trading liabilities

     11,219,391        13,451,275   

Borrowed money

     8,895,546        10,318,096   

Foreign exchanges

     685,309        874,225   

Short-term bonds payable

     436,967        523,065   

Bonds payable

     6,438,685        6,634,121   

Due to trust accounts

     1,459,108        1,416,725   

Other liabilities

     5,422,853        5,956,502   

Reserve for bonuses

     44,983        47,797   

Reserve for bonuses to directors

     543        1,057   

Reserve for retirement benefits

     59,192        81,111   

Reserve for retirement benefits to directors

     1,556        1,534   

Reserve for loyalty award credits

     8,627        6,768   

Reserve for contingent losses

     492,693        373,439   

Reserves under special laws

     2,235        1,799   

Deferred tax liabilities

     43,301        84,706   

Deferred tax liabilities for land revaluation

     186,765        159,867   

Acceptances and guarantees

     8,008,084        7,539,826   
  

 

 

   

 

 

 

Total liabilities

     195,412,655        207,185,831   
  

 

 

   

 

 

 

Net assets:

    

Capital stock

     2,137,476        2,138,487   

Capital surplus

     2,174,287        2,175,304   

Retained earnings

     4,799,668        5,602,327   

Treasury stock

     (6,458     (6,544
  

 

 

   

 

 

 

Total shareholders’ equity

     9,104,972        9,909,575   
  

 

 

   

 

 

 

Net unrealized gains (losses) on other securities

     90,765        440,900   

Net deferred gains (losses) on hedging instruments

     38,786        23,904   

Land revaluation excess

     141,198        161,361   

Foreign currency translation adjustments

     (392,083     (494,155

Pension liability adjustments of subsidiaries preparing financial statements under US GAAP

     (34,691     (48,555
  

 

 

   

 

 

 

Total accumulated other comprehensive income

     (156,024     83,454   
  

 

 

   

 

 

 

Subscription rights to shares

     7,192        7,933   

Minority interests

     1,858,283        1,674,821   
  

 

 

   

 

 

 

Total net assets

     10,814,425        11,675,784   
  

 

 

   

 

 

 

Total liabilities and net assets

     206,227,081        218,861,616   
  

 

 

   

 

 

 

 

12


Mitsubishi UFJ Financial Group, Inc.

 

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Consolidated Statements of Income

 

(in millions of yen)    For the fiscal  year
ended

March 31, 2011
     For the fiscal  year
ended

March 31, 2012
 

Ordinary income

     4,528,933         4,951,095   

Interest income

     2,537,508         2,349,355   

Interest on loans and bills discounted

     1,589,377         1,511,115   

Interest and dividends on securities

     658,290         605,627   

Interest on call loans and bills bought

     5,266         6,877   

Interest on receivables under resale agreements

     45,721         77,198   

Interest on receivables under securities borrowing transactions

     5,544         5,605   

Interest on deposits

     28,286         39,130   

Other interest income

     205,023         103,800   

Trust fees

     100,437         96,958   

Fees and commissions

     1,135,255         1,129,303   

Trading income

     105,950         225,588   

Other business income

     489,876         583,227   

Other ordinary income

     159,905         566,661   

Gains on loans written-off

     —           60,750   

Others

     159,905         505,911   

Ordinary expenses

     3,882,501         3,479,103   

Interest expenses

     517,637         508,874   

Interest on deposits

     207,249         183,125   

Interest on negotiable certificates of deposit

     46,121         41,995   

Interest on call money and bills sold

     5,730         8,385   

Interest on payables under repurchase agreements

     56,941         77,679   

Interest on payables under securities lending transactions

     5,669         5,050   

Interest on commercial papers

     604         746   

Interest on borrowed money

     53,884         55,393   

Interest on short-term bonds payable

     1,116         1,073   

Interest on bonds payable

     122,578         107,948   

Other interest expenses

     17,742         27,474   

Fees and commissions

     155,797         165,101   

Trading expenses

     2,207         —     

Other business expenses

     170,974         208,523   

General and administrative expenses

     2,083,718         2,066,035   

Other ordinary expenses

     952,165         530,569   

Provision for allowance for credit losses

     165,135         75,519   

Others

     787,029         455,049   
  

 

 

    

 

 

 

Ordinary profits

     646,432         1,471,991   
  

 

 

    

 

 

 

 

13


Mitsubishi UFJ Financial Group, Inc.

 

(in millions of yen)    For the fiscal  year
ended

March 31, 2011
    For the fiscal  year
ended

March 31, 2012
 

Extraordinary gains

     81,162        33,092   

Gains on disposition of fixed assets

     5,409        10,395   

Gains on negative goodwill

     3,639        2,228   

Gains on loans written-off

     63,786        —     

Reversal of reserve for contingent liabilities from financial instruments transactions

     863        436   

Gains on changes in subsidiaries’ equity

     1,096        —     

Gains on sales of equity securities of affiliates

     —          20,032   

Others

     6,365        —     

Extraordinary losses

     88,032        56,960   

Losses on disposition of fixed assets

     28,256        10,607   

Losses on impairment of fixed assets

     9,812        22,114   

Amortization of goodwill

     13,031        3,496   

Business structure improvement expenses

     11,914        20,512   

Loss on adjustment for changes of accounting standard for asset retirement obligations

     24,447        —     

Losses on sales of equity securities of subsidiaries

     —          228   

Others

     570        —     
  

 

 

   

 

 

 

Income before income taxes and others

     639,561        1,448,124   
  

 

 

   

 

 

 

Income taxes-current

     126,036        239,236   

Income taxes-deferred

     49,460        137,258   
  

 

 

   

 

 

 

Total taxes

     175,496        376,494   
  

 

 

   

 

 

 

Income before minority interests

     464,065        1,071,629   
  

 

 

   

 

 

 

Minority interests

     (119,013     90,297   
  

 

 

   

 

 

 

Net income

     583,079        981,331   
  

 

 

   

 

 

 

 

14


Mitsubishi UFJ Financial Group, Inc.

 

Consolidated Statements of Comprehensive Income

 

(in millions of yen)    For the fiscal year
ended
March 31, 2011
    For the fiscal year
ended
March 31, 2012
 

Income before minority interests

     464,065        1,071,629   

Other comprehensive income

    

Net unrealized gains (losses) on other securities

     (310,499     346,125   

Net deferred gains (losses) on hedging instruments

     (53,762     (14,259

Land revaluation excess

     —          22,130   

Foreign currency translation adjustments

     (135,208     (57,884

Pension liability adjustments of subsidiaries preparing financial statements under US GAAP

     2,239        (18,140

Share of other comprehensive income of associates accounted for using equity method

     (3,912     (39,017
  

 

 

   

 

 

 

Total other comprehensive income

     (501,145     238,955   
  

 

 

   

 

 

 

Comprehensive income

     (37,079     1,310,584   
  

 

 

   

 

 

 

(Comprehensive income attributable to)

    

Comprehensive income attributable to owners of the parent

     81,694        1,222,778   

Comprehensive income attributable to minority interests

     (118,773     87,806   

 

15


Mitsubishi UFJ Financial Group, Inc.

 

(3) Consolidated Statements of Changes in Net Assets

 

(in millions of yen)    For the fiscal year
ended
March 31, 2011
    For the fiscal  year
ended

March 31, 2012
 

Shareholders’ equity

    

Capital stock

    

Balance at the beginning of the period

     2,136,582        2,137,476   

Changes during the period

    

Issuance of new shares-exercise of subscription rights to shares

     893        1,011   
  

 

 

   

 

 

 

Total changes during the period

     893        1,011   
  

 

 

   

 

 

 

Balance at the end of the period

     2,137,476        2,138,487   
  

 

 

   

 

 

 

Capital surplus

    

Balance at the beginning of the period

     2,423,322        2,174,287   

Changes during the period

    

Issuance of new shares-exercise of subscription rights to shares

     893        1,009   

Disposition of treasury stock

     71        7   

Retirement of treasury stock

     (250,000     —     
  

 

 

   

 

 

 

Total changes during the period

     (249,034     1,017   
  

 

 

   

 

 

 

Balance at the end of the period

     2,174,287        2,175,304   
  

 

 

   

 

 

 

Retained earnings

    

Balance at the beginning of the period

     4,405,512        4,799,668   

Changes during the period

    

Dividends from retained earnings

     (190,575     (187,614

Net income

     583,079        981,331   

Reversal of land revaluation excess

     1,650        1,967   

Change of scope of consolidation

     —          2,434   

Change of application of equity method

     —          4,540   
  

 

 

   

 

 

 

Total changes during the period

     394,155        802,659   
  

 

 

   

 

 

 

Balance at the end of the period

     4,799,668        5,602,327   
  

 

 

   

 

 

 

Treasury stock

    

Balance at the beginning of the period

     (6,633     (6,458

Changes during the period

    

Repurchase of treasury stock

     (250,042     (103

Disposition of treasury stock

     217        17   

Retirement of treasury stock

     250,000        —     
  

 

 

   

 

 

 

Total changes during the period

     175        (85
  

 

 

   

 

 

 

Balance at the end of the period

     (6,458     (6,544
  

 

 

   

 

 

 

 

16


Mitsubishi UFJ Financial Group, Inc.

 

(in millions of yen)    For the fiscal year
ended
March 31, 2011
    For the fiscal year
ended
March 31, 2012
 

Total shareholders’ equity

    

Balance at the beginning of the period

     8,958,783        9,104,972   

Changes during the period

    

Issuance of new shares-exercise of subscription rights to shares

     1,787        2,021   

Dividends from retained earnings

     (190,575     (187,614

Net income

     583,079        981,331   

Repurchase of treasury stock

     (250,042     (103

Disposition of treasury stock

     288        25   

Retirement of treasury stock

     —          —     

Reversal of land revaluation excess

     1,650        1,967   

Change of scope of consolidation

     —          2,434   

Change of application of equity method

     —          4,540   
  

 

 

   

 

 

 

Total changes during the period

     146,189        804,602   
  

 

 

   

 

 

 

Balance at the end of the period

     9,104,972        9,909,575   
  

 

 

   

 

 

 

Accumulated other comprehensive income

    

Net unrealized gains (losses) on other securities

    

Balance at the beginning of the period

     403,490        90,765   

Changes during the period

    

Net changes of items other than shareholders’ equity

     (312,724     350,134   
  

 

 

   

 

 

 

Total changes during the period

     (312,724     350,134   
  

 

 

   

 

 

 

Balance at the end of the period

     90,765        440,900   
  

 

 

   

 

 

 

Net deferred gains (losses) on hedging instruments

    

Balance at the beginning of the period

     92,402        38,786   

Changes during the period

    

Net changes of items other than shareholders’ equity

     (53,616     (14,882
  

 

 

   

 

 

 

Total changes during the period

     (53,616     (14,882
  

 

 

   

 

 

 

Balance at the end of the period

     38,786        23,904   
  

 

 

   

 

 

 

Land revaluation excess

    

Balance at the beginning of the period

     142,848        141,198   

Changes during the period

    

Net changes of items other than shareholders’ equity

     (1,650     20,163   
  

 

 

   

 

 

 

Total changes during the period

     (1,650     20,163   
  

 

 

   

 

 

 

Balance at the end of the period

     141,198        161,361   
  

 

 

   

 

 

 

Foreign currency translation adjustments

    

Balance at the beginning of the period

     (254,800     (392,083

Changes during the period

    

Net changes of items other than shareholders’ equity

     (137,283     (102,072
  

 

 

   

 

 

 

Total changes during the period

     (137,283     (102,072
  

 

 

   

 

 

 

Balance at the end of the period

     (392,083     (494,155
  

 

 

   

 

 

 

 

17


Mitsubishi UFJ Financial Group, Inc.

 

(in millions of yen)    For the fiscal year
ended
March 31, 2011
    For the fiscal year
ended
March 31, 2012
 

Pension liability adjustments of subsidiaries preparing financial statements under US GAAP

    

Balance at the beginning of the period

     (36,930     (34,691

Changes during the period

    

Net changes of items other than shareholders’ equity

     2,239        (13,864
  

 

 

   

 

 

 

Total changes during the period

     2,239        (13,864
  

 

 

   

 

 

 

Balance at the end of the period

     (34,691     (48,555
  

 

 

   

 

 

 

Total accumulated other comprehensive income

    

Balance at the beginning of the period

     347,011        (156,024

Changes during the period

    

Net changes of items other than shareholders’ equity

     (503,035     239,478   
  

 

 

   

 

 

 

Total changes during the period

     (503,035     239,478   
  

 

 

   

 

 

 

Balance at the end of the period

     (156,024     83,454   
  

 

 

   

 

 

 

Subscription rights to shares

    

Balance at the beginning of the period

     6,451        7,192   

Changes during the period

    

Net changes of items other than shareholders’ equity

     741        740   
  

 

 

   

 

 

 

Total changes during the period

     741        740   
  

 

 

   

 

 

 

Balance at the end of the period

     7,192        7,933   
  

 

 

   

 

 

 

Minority interests

    

Balance at the beginning of the period

     1,987,213        1,858,283   

Changes during the period

    

Net changes of items other than shareholders’ equity

     (128,929     (183,462
  

 

 

   

 

 

 

Total changes during the period

     (128,929     (183,462
  

 

 

   

 

 

 

Balance at the end of the period

     1,858,283        1,674,821   
  

 

 

   

 

 

 

Total net assets

    

Balance at the beginning of the period

     11,299,459        10,814,425   

Changes during the period

    

Issuance of new shares-exercise of subscription rights to shares

     1,787        2,021   

Dividends from retained earnings

     (190,575     (187,614

Net income

     583,079        981,331   

Repurchase of treasury stock

     (250,042     (103

Disposition of treasury stock

     288        25   

Retirement of treasury stock

     —          —     

Reversal of land revaluation excess

     1,650        1,967   

Change of scope of consolidation

     —          2,434   

Change of application of equity method

     —          4,540   

Net changes of items other than shareholders’ equity

     (631,223     56,757   
  

 

 

   

 

 

 

Total changes during the period

     (485,034     861,359   
  

 

 

   

 

 

 

Balance at the end of the period

     10,814,425        11,675,784   
  

 

 

   

 

 

 

 

18


Mitsubishi UFJ Financial Group, Inc.

 

(4) Consolidated Statements of Cash Flows

 

(in millions of yen)    For the fiscal year
ended
March 31, 2011
    For the fiscal year
ended
March 31, 2012
 

Cash flows from operating activities:

    

Income before income taxes and others

     639,561        1,448,124   

Depreciation

     238,444        237,469   

Impairment losses

     9,812        22,114   

Amortization of goodwill

     44,116        32,867   

Amortization of negative goodwill

     (1,591     (1,602

Gains on negative goodwill

     (3,639     (2,228

Equity in losses (gains) of affiliates

     (11,371     (377,515

Increase (decrease) in allowance for credit losses

     (175,049     (14,848

Increase (decrease) in reserve for bonuses

     (6,652     2,569   

Increase (decrease) in reserve for bonuses to directors

     (186     522   

Increase (decrease) in reserve for retirement benefits

     (883     22,486   

Increase (decrease) in reserve for retirement benefits to directors

     32        (21

Increase (decrease) in reserve for loyalty award credits

     (90     (1,858

Increase (decrease) in reserve for contingent losses

     255,334        (118,538

Interest income recognized on statement of income

     (2,537,508     (2,349,355

Interest expenses recognized on statement of income

     517,637        508,874   

Losses (gains) on securities

     (164,181     (181,702

Losses (gains) on money held in trust

     2,699        5,162   

Foreign exchange losses (gains)

     1,061,867        (52,298

Losses (gains) on sales of fixed assets

     22,846        211   

Net decrease (increase) in trading assets

     1,016,997        (2,026,447

Net increase (decrease) in trading liabilities

     1,578,222        2,364,654   

Adjustment of unsettled trading accounts

     (28,146     (99,158

Net decrease (increase) in loans and bills discounted

     4,233,481        (4,761,214

Net increase (decrease) in deposits

     946,517        955,812   

Net increase (decrease) in negotiable certificates of deposit

     (22,646     2,029,196   

Net increase (decrease) in borrowed money (excluding subordinated borrowings)

     2,590,880        1,458,199   

Net decrease (increase) in due from banks (excluding cash equivalents)

     (2,149,425     924,230   

Net decrease (increase) in call loans and bills bought and others

     (1,512,646     (32,368

Net decrease (increase) in receivables under securities borrowing transactions

     2,109,378        342,733   

Net increase (decrease) in call money and bills sold and others

     1,597,674        1,942,243   

Net increase (decrease) in commercial papers

     (72,554     472,650   

Net increase (decrease) in payables under securities lending transactions

     (1,493,898     2,890,232   

Net decrease (increase) in foreign exchanges (assets)

     (91,149     (341,749

Net increase (decrease) in foreign exchanges (liabilities)

     (17,643     190,137   

Net increase (decrease) in short-term bonds payable

     (43,577     86,098   

Net increase (decrease) in issuance and redemption of unsubordinated bonds payable

     (113,016     328,804   

Net increase (decrease) in due to trust accounts

     (100,657     (42,383

Interest income (cash basis)

     2,602,655        2,427,414   

Interest expenses (cash basis)

     (550,785     (538,781

Others

     216,701        (21,509
  

 

 

   

 

 

 

Sub-total

     10,587,557        7,729,229   
  

 

 

   

 

 

 

 

19


Mitsubishi UFJ Financial Group, Inc.

 

(in millions of yen)    For the fiscal year
ended
March 31, 2011
    For the fiscal year
ended
March 31, 2012
 

Income taxes

     (114,281     (150,523

Refund of income taxes

     22,532        6,818   
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     10,495,808        7,585,524   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of securities

     (117,179,039     (196,162,029

Proceeds from sales of securities

     78,186,263        173,130,373   

Proceeds from redemption of securities

     30,753,734        15,845,616   

Increase in money held in trust

     (609,396     (777,285

Decrease in money held in trust

     583,607        685,921   

Purchases of tangible fixed assets

     (80,603     (108,503

Purchases of intangible fixed assets

     (146,411     (156,499

Proceeds from sales of tangible fixed assets

     19,534        19,306   

Proceeds from sales of intangible fixed assets

     136        9,298   

Payments for transfer of business

     (103,964     (230

Purchases of equity of consolidated subsidiaries

     (10,138     (386

Proceeds from sales of equity of consolidated subsidiaries

     —          1,600   

Decrease related to purchases of subsidiaries’ equity affecting the scope of consolidation

     —          (739

Increase related to sales of subsidiaries’ equity affecting the scope of consolidation

     —          794   

Others

     (1,708     (1,394
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (8,587,988     (7,514,157
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Increase in subordinated borrowings

     156,000        89,800   

Decrease in subordinated borrowings

     (102,500     (82,300

Increase in subordinated bonds payable and bonds with warrants

     461,692        562,103   

Decrease in subordinated bonds payable and bonds with warrants

     (779,868     (632,996

Proceeds from issuance of common stock to minority shareholders

     14,909        10,947   

Decrease in redemption of preferred stocks

     (165,000     (120,000

Dividend paid by MUFG

     (190,298     (187,459

Dividend paid by subsidiaries to minority shareholders

     (91,535     (94,716

Repayments to minority shareholders

     —          (14,082

Purchases of treasury stock

     (250,029     (12

Proceeds from sales of treasury stock

     3        2   

Purchases of treasury stock by consolidated subsidiaries

     (2,031     (0

Disposition of treasury stock by consolidated subsidiaries

     8        —     

Others

     2        3   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (948,646     (468,710
  

 

 

   

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

     (147,538     (34,853
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     811,634        (432,197
  

 

 

   

 

 

 

Cash and cash equivalents at the beginning of the period

     4,110,281        4,919,083   

Decrease in cash and cash equivalents due to deconsolidation of subsidiaries

     —          (133

Decrease in cash and cash equivalents due to absorption-type splits

     (2,832     —     
  

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

     4,919,083        4,486,753   
  

 

 

   

 

 

 

 

20


Mitsubishi UFJ Financial Group, Inc.

 

Notes on Going-Concern Assumption

Not applicable

Significant Accounting Policies Applied in the Preparation of the Consolidated Financial Statements

 

1. Scope of Consolidation

 

  (1) Number of Consolidated Subsidiaries: 224

Principal companies:

 

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Mitsubishi UFJ Trust and Banking Corporation

  

Mitsubishi UFJ Securities Holdings Co., Ltd.

Mitsubishi UFJ NICOS Co., Ltd.

(Changes in the scope of consolidation)

In the current fiscal year, BTMU LF Capital LLC and 5 other companies were newly consolidated following their formations or for other reasons.

In the current fiscal year, BTMU Preferred Capital Limited and 12 other companies were excluded from the scope of consolidation because they were no longer subsidiaries due to liquidation or other reasons.

 

  (2) Non-consolidated Subsidiaries: None

 

  (3) Entities not accounted for as subsidiaries even though MUFG Group Owns the Majority of Votes:

 

  (A) Hygeia Co., Ltd.

This company was established as a property management agent for a land trust project as a passive investment without any intent to control.

 

  (B) Shonan Sangakurenkei Fund Investment Limited Partnership

Gunma Challenge Fund Investment Limited Partnership

FOODSNET Corporation

YAMAGATA FOODS Co., Ltd.

GREEN BELL Co., Ltd.

PATLITE Corporation (former Fukuin Ltd.)

Dream Infinity Inc.

MUFG’s consolidated venture capital subsidiaries participated in the management of partnerships as unlimited liability partners or own the majority of votes as passive investments primarily to benefit from the appreciation of their investments resulting from growth or restructuring of the investee’s businesses without any intent to control.

 

2. Application of the Equity Method

 

  (1) Number of Non-consolidated Subsidiaries Accounted for under the Equity Method: None

 

  (2) Number of Affiliates Accounted for under the Equity Method: 59

Principal companies:

Mitsubishi UFJ Lease & Finance Company Limited

(Changes in the scope of application of the equity method)

In the current fiscal year, Morgan Stanley and 8 other companies were included in the scope of application of the equity method mainly because MUFG acquired additional voting rights.

In the current fiscal year, Kim Eng Holdings Limited and 14 other companies were excluded from the scope of application of the equity method because of sales or for other reasons.

 

21


Mitsubishi UFJ Financial Group, Inc.

 

(Additional Information)

 

  (A) Summary of Conversion of Morgan Stanley Convertible Preferred Stock into Common Stock

On June 30, 2011, MUFG converted all of its holding of Morgan Stanley convertible preferred stock into common stock after adjustment of the conversion rate. As a result, MUFG now directly holds 22.4% of the voting rights of Morgan Stanley and, in the current fiscal year, Morgan Stanley became an affiliate of MUFG accounted for under the equity method.

A summary of Morgan Stanley, the investee, is as follows:

 

Company name (Name of investee)    Morgan Stanley
Business description    Bank holding company

Effective date accounted for under the equity method

   June 30, 2011
Legal basis (for becoming an affiliate)    Conversion of convertible preferred stock into common stock
Ratio of voting rights after conversion    22.4%

 

  (B) Business performance period of the investee as included in the consolidated statement of income

The balance sheet date of Morgan Stanley, the investee, is December 31, which differs by three months from the consolidated balance sheet date of MUFG. As the effective date accounted for under the equity method for Morgan Stanley was on June 30, 2011, which coincided with the end of the second quarter of the company, business performance of the company for the period from July 1, 2011 to December 31, 2011 was included in the consolidated statement of income.

 

  (C) Outline of the Accounting Treatment Applied

(a) Acquisition Cost of the Investee and its Detail

 

Consideration for the acquisition

   Convertible preferred stocks    ¥ 728,687 million   

Direct expenses for the acquisition

   Advisory fees and others    ¥ 3,120 million   
               

Acquisition cost

      ¥ 731,807 million   

(b) Amount of Negative Goodwill and Cause of Recognition

 

  a. Amount of Negative Goodwill

¥290,644 million

 

  b. Cause of Recognition

Due to the difference between the amount corresponding to the net asset value of the investee as of the conversion date and acquisition cost of the common stock.

 

  (3) Number of Non-consolidated Subsidiaries not Accounted for under the Equity Method: None

 

  (4) Affiliates not Accounted for under the Equity Method: None

 

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Mitsubishi UFJ Financial Group, Inc.

 

  (5) Entities not Recognized as Affiliates in which MUFG Owns 20% to 50% of their Voting Rights:

 

  (A) Kyoto Constella Technologies Co., Ltd.

Japan Medical Information Research Institute, Inc.

Pharma Frontier Co., Ltd.

NSCore, Inc.

Spring co., ltd.

SyncPower Corporation

REVO trading co., Ltd.

TECHTOM Ltd.

FirstLogic, Inc.

ERIMAKEE Co., Ltd.

Aqumen Biopharmaceuticals, K.K.

Biovisiq Japan Co., Ltd.

two-five Co., Ltd.

Beaunet Corporation Limited

MUFG’s consolidated venture capital subsidiaries owned 20% to 50% of votes as passive investments primarily to benefit from the appreciation of their investments resulting from growth or restructuring of the investees’ businesses without any intent to control.

 

  (B) RYOGOKU CITY CORE Co., Ltd.

It was established as a property management agent for a land trust project as a passive investment without any intent to control.

 

3. The Balance Sheet Dates of Consolidated Subsidiaries

 

  (1) The balance sheet dates of consolidated subsidiaries were as follows:

 

July 24:

   1 subsidiary

September 1:

   1 subsidiary

October 31:

   1 subsidiary

December 31:

   126 subsidiaries

January 24:

   20 subsidiaries

January 31:

   1 subsidiary

February 29:

   2 subsidiaries

March 31:

   72 subsidiaries

 

  (2) A subsidiary whose balance sheet date is July 24 was consolidated based on its preliminary financial statements as of January 24.

A subsidiary whose balance sheet date is September 1 was consolidated based on its preliminary financial statements as of March 31.

A subsidiary whose balance sheet date is October 31 was consolidated based on its preliminary financial statements as of January 31.

Subsidiaries other than specified above were consolidated based on the financial statements as of their balance sheet dates.

Adjustments were made in the consolidated financial statements to reflect the significant transactions occurred between the balance sheet dates of the subsidiaries and the consolidated balance sheet date.

 

4. Accounting Policies

 

  (1) Trading assets and trading liabilities; trading income and expenses

Transactions involving short-term fluctuations or arbitrage opportunities in interest rates, currency exchange rates, market prices of financial instruments or other market indices (“Trading transactions”) are presented in “Trading assets” and “Trading liabilities” in the consolidated balance sheet on a trade date basis, and gains and losses from trading transactions (interest and dividends, gains or losses on sales and gains or losses on valuation) are presented in “Trading income” and “Trading expenses” in the consolidated statement of income on a trade date basis.

Trading assets and trading liabilities are stated at their fair values on the consolidated balance sheet date.

 

23


Mitsubishi UFJ Financial Group, Inc.

 

  (2) Securities

 

  (A) Debt securities being held to maturity are stated at amortized costs (using the straight-line method) computed under the moving average method. Investments in non-consolidated affiliates not accounted for under the equity method are stated at acquisition costs computed under the moving average method. Other securities with fair value are stated at their quoted market prices on the consolidated balance sheet date (cost of securities sold is calculated primarily under the moving average method), and other securities whose fair value is extremely difficult to estimate are stated at acquisition costs computed under the moving average method. Net unrealized gains (losses) on other securities are included directly in net assets, net of applicable income taxes, except in the case of securities with embedded derivatives, which are measured at fair value in their entirety with the change in fair value recognized in current earnings.

 

  (B) Securities which are held as trust assets in money held in trust are accounted for under the same basis as noted above in Notes (1) and (2)(A). Unrealized gains and losses on securities in money held in trust, which are not held for trading purposes or held to maturity, are included directly in net assets, net of applicable income taxes.

 

  (3) Derivatives

Derivatives transactions (other than trading transactions) are calculated primarily based on fair value.

 

  (4) Depreciation

 

  (A) Tangible Fixed Assets (except for Lease Assets)

Depreciation for tangible fixed assets of MUFG and its domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries is computed under the declining-balance method.

The useful lives are primarily estimated as follows:

Buildings:             15 years to 50 years

Equipment:             2 years to 20 years

Depreciation for tangible fixed assets of other consolidated subsidiaries is computed primarily under the straight-line method based on their estimated useful lives.

 

  (B) Intangible Fixed Assets (except for Lease Assets)

Amortization for intangible fixed assets is computed under the straight-line method. Development costs for internally used software are capitalized and amortized under the straight-line method over the estimated useful lives of primarily 3 years to 10 years.

 

  (C) Lease Assets

Depreciation or amortization for lease assets in “Tangible fixed assets” or “Intangible fixed assets” of the finance leases other than those that are deemed to transfer the ownership of leased property to the lessees is computed under the straight-line method over the lease periods with zero residual value unless residual value is guaranteed by the corresponding lease contracts.

 

  (5) Deferred Assets

Stock issuance costs and bond issuance costs are expensed as incurred.

Discount on bonds recognized prior to March 31, 2006 is amortized using the straight-line method over the life of corresponding bonds and the unamortized portion is deducted directly from bonds in accordance with ASBJ PITF No. 19 “Tentative Solution on Accounting for Deferred Assets” (August 11, 2006).

 

  (6) Allowance for Credit Losses

Principal domestic consolidated subsidiaries provide allowance for credit losses in accordance with the internal standards for self-assessment of asset quality and the internal standards for write-offs and provisions.

For claims on borrowers that have entered into bankruptcy, special liquidation proceedings or similar legal proceedings or whose notes have been dishonored and suspended from processing through clearing houses (“bankrupt borrowers”) or borrowers that are not legally or formally bankrupt but are regarded as substantially in a similar condition (“substantially bankrupt borrowers”), allowances are provided based on the amount of claims, after the write-offs as stated below, net of expected amounts to be collected through the disposal of collateral and the execution of guarantees.

For claims on borrowers that are not yet legally or formally bankrupt but deemed to have a high possibility of becoming bankrupt (“potentially bankrupt borrowers”) excluding a portion of which principal and interest payment can be reasonably estimated from borrower’s cash flows, allowances are provided based on an overall solvency assessment of the claims, net of expected amounts to be collected through the disposal of collateral and the execution of guarantees.

 

24


Mitsubishi UFJ Financial Group, Inc.

 

For claims on potentially bankrupt borrowers and claims on borrowers requiring close monitoring, of which principal and interest payment can be reasonably estimated from borrower’s cash flows, allowances are provided in an amount equal to the difference between the book value of the claims and the relevant cash flows discounted by the initial contractual interest rates.

For other claims, allowances are provided based on historical credit loss experience.

For claims originated in specific foreign countries, additional allowances are provided based on an assessment of political and economic conditions of these countries.

All claims are assessed by branches and the credit supervision departments in accordance with the internal standards for self-assessment of asset quality. The credit review department, which is independent from those operating sections, subsequently audits these assessments. The allowances presented above reflect these internally audited assessments.

For claims on bankrupt borrowers and substantially bankrupt borrowers, the amount of claims exceeding the estimated value of collateral or guarantees, that is deemed uncollectible, has been written-off. The total amount of write-offs was ¥668,234 million.

Consolidated subsidiaries, not adopting procedures stated above, provide allowances based on their historical credit loss experience for general claims and based on individual assessments of the possibility of collection for specific deteriorated claims.

 

  (7) Reserve for Bonuses

Reserve for bonuses, which is provided for future bonus payments to employees, reflects an estimated amount accrued on the consolidated balance sheet date.

 

  (8) Reserve for Bonuses to Directors

Reserve for bonuses to directors, which is provided for future bonus payments to directors, reflects an estimated amount accrued on the consolidated balance sheet date.

 

  (9) Reserve for Retirement Benefits

Reserve for retirement benefits, which is provided for future pension payments to employees, is recorded in the amount deemed accrued on the consolidated balance sheet date based on the projected benefit obligation and the estimated plan asset amount at the end of each fiscal year.

Unrecognized prior service cost is amortized under the straight-line method for a period, primarily over 10 years, within the employees’ average remaining service period, commencing on the fiscal year in which the cost is incurred.

Unrecognized net actuarial gains (losses) are amortized under the straight-line method for a period, primarily over 10 years, within the employees’ average remaining service period, commencing on the fiscal year immediately following the fiscal year in which the gains (losses) are incurred.

(Additional Information)

Employees’ pension funds of MUFG’s domestic consolidated trust banking subsidiaries obtained approval of the Minister of Health, Labour and Welfare, dated December 1, 2011, for the relief of the future payment obligation of the substitutional portion of employees’ pension funds of subsidiaries.

The amount of refund (minimum policy reserve) measured at the end of the current fiscal year was ¥57,785 million. Based on the assumption that the amount of the refund was paid at the end of the current fiscal year, extraordinary gains would be estimated at ¥44,811 million in the case that Article 44-2 of Japanese Institute of Certified Public Accountants (“JICPA”) Accounting Committee Report No. 13, “Practical Guidelines on Accounting for Retirement Benefits (Interim Report)” (September 14, 1999), was applied.

 

  (10) Reserve for Retirement Benefits to Directors

Reserve for retirement benefits to directors, which is provided for future payments of retirement benefits to directors of subsidiaries, is recorded in the amount deemed accrued on the consolidated balance sheet date based on the estimated amount of benefits.

 

25


Mitsubishi UFJ Financial Group, Inc.

 

  (11) Reserve for Loyalty Award Credits

Reserve for loyalty award credits, which is provided to meet future use of credits granted to credit card (such as “Super IC card”) customers, is recorded in the amount deemed necessary based on the estimated future use of unused credits.

 

  (12) Reserve for Contingent Losses

Reserve for contingent losses, which is provided for possible losses from contingent events related to off-balance sheet and other transactions, is calculated by estimating the impact of such contingent events and includes future claims for repayment of excess interest payments on consumer loans which are estimated based on the past and pending claims.

 

  (13) Reserves under Special Laws

Reserves under special laws represented the ¥1,799 million of reserve for contingent liabilities from financial instruments transactions set aside in accordance with Article 46-5-1 and Article 48-3-1 of the Financial Instruments and Exchange Law and Article 175 and 189 of the Cabinet Office Ordinance on Financial Instruments Business.

 

  (14) Assets and Liabilities Denominated in Foreign Currencies

Assets and liabilities denominated in foreign currencies or booked at overseas branches of domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries are translated into yen primarily at exchange rates in effect on the consolidated balance sheet date, except for investments in non-consolidated affiliates which are translated into yen at exchange rates in effect on the acquisition dates.

Assets and liabilities denominated in foreign currencies of other consolidated subsidiaries are translated into yen at the exchange rates in effect on the respective balance sheet date.

 

  (15) Leasing Transactions

(As Lessees)

Domestic consolidated subsidiaries’ finance leases other than those that are deemed to transfer the ownership of leased property to the lessees, which commenced in fiscal years beginning on or after April 1, 2008, are accounted for in a similar way to purchases and depreciation for lease assets is computed under the straight-line method over the lease term with zero residual value unless residual value is guaranteed by the corresponding lease contracts.

Finance leases other than those that are deemed to transfer the ownership of leased property to the lessees, which commenced in fiscal years beginning prior to April 1, 2008, are accounted for in a similar way to operating leases.

(As Lessors)

Finance leases other than those that are deemed to transfer the ownership of leased property to the lessees are accounted for in a similar way to sales and income and expenses related to such leases are recognized by allocating interest equivalents to applicable fiscal periods instead of recording sales as “Other ordinary income”.

 

  (16) Hedge Accounting

 

  (A) Hedge Accounting for Interest Rate Risks

Domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries have adopted the deferred hedge accounting method for hedging transactions for interest rate risks arising from financial assets and liabilities. Portfolio hedging or individual hedging, as described in the JICPA Industry Audit Committee Report No. 24, “Treatment of Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (February 13, 2002) and JICPA Accounting Committee Report No. 14, “Practical Guidelines for Accounting for Financial Instruments” (January 31, 2000), are primarily applied to determine hedged items.

 

26


Mitsubishi UFJ Financial Group, Inc.

 

With respect to hedging transactions to offset fluctuations in the fair value of fixed rate deposits, loans and other instruments, hedging instruments (e.g. interest rate swaps) are designated to hedged items individually or collectively by their maturities in accordance with Industry Audit Committee Report No. 24. With respect to hedging transactions to offset fluctuations in fair value of fixed rate bonds classified as other securities, hedging instruments (e.g. interest rate swaps) are designated to hedged items collectively by the type of bond. Since material terms related to hedged items and hedging instruments are substantially identical, and such hedging transactions are deemed highly effective, the assessment of effectiveness is based on the similarity of the terms.

With respect to hedging transactions to fix the cash flows related to floating rate deposits and loans as well as forecasted transactions related to short-term fixed rate deposits, loans and other instruments, hedging instruments (e.g. interest rate swaps) are designated to hedged items collectively by interest rate indices and tenors in accordance with Industry Audit Committee Report No. 24. Since material terms related to hedged items and hedging instruments are substantially identical, and such hedging transactions are deemed highly effective, the assessment of effectiveness is based on the similarity of the terms. The effectiveness of hedging transactions is also assessed by verifying the correlation between factors that cause fluctuations in interest rates of hedged items and those of hedging instruments.

As of March 31, 2003, deferred hedge losses and gains were recorded in the consolidated balance sheet as a result of the application of macro hedge accounting based on JICPA Industry Audit Committee Report No. 15 “Tentative Treatment for Accounting and Auditing in Adoption of Accounting Standards for Banking Industry” (February 15, 2000), under which the overall interest rate risks arising from numerous deposits, loans and other instruments are hedged collectively by derivative transactions. These losses and gains are amortized as expense or income over the remaining lives of the macro hedging instruments (for a maximum period of 15 years from April 1, 2003). Deferred hedge losses and gains attributable to macro hedge accounting at the end of the current fiscal year were ¥260 million (before tax effect adjustment) and ¥318 million (before tax effect adjustment), respectively.

 

  (B) Hedge Accounting for Foreign Currency Risks

Domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries have adopted the deferred hedge accounting method for hedging foreign currency risks arising from financial assets and liabilities denominated in foreign currencies. Portfolio hedging is applied to determine hedged items as described in JICPA Industry Audit Committee Report No. 25 “Treatment of Accounting and Auditing concerning Accounting for Foreign Currency Transactions in the Banking Industry” (July 29, 2002). Hedging instruments (e.g. currency swaps and forward exchange contracts) are designated to hedged items collectively by currencies.

Domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries have adopted deferred hedge accounting method for hedging transactions for foreign currency risks arising from investments in affiliates denominated in foreign currencies, while adopting the fair value hedge accounting method for hedging transactions for foreign currency risks arising from other securities (other than bonds) denominated in foreign currency. Portfolio hedging and individual hedging are applied to determine hedged items. Monetary liabilities denominated in the same foreign currencies or forward exchange contracts are used as hedging instruments.

 

  (C) Transactions among Consolidated Subsidiaries

Derivative transactions including interest rate swaps and currency swaps which are designated as hedging instruments among consolidated subsidiaries or between trading accounts and other accounts (or among internal sections) are not eliminated from the consolidated statements of income or valuation difference, but are recognized as related gains or losses or deferred under hedge accounting because these derivative transactions are executed, meeting certain criteria under JICPA Industry Audit Committee Reports No. 24 and No. 25 and they are regarded as equivalent to external third party transactions.

 

  (17) Amortization of Goodwill

Goodwill, and negative goodwill recognized on or before March 31, 2010 are amortized using the straight-line method over 20 years starting from the period of the consolidation. Goodwill with insignificant balances was expensed as incurred.

 

27


Mitsubishi UFJ Financial Group, Inc.

 

  (18) Cash and Cash Equivalents in the Consolidated Statements of Cash Flows

Cash and cash equivalents in the consolidated statements of cash flows are defined as “Cash and due from banks” on the consolidated balance sheet, excluding time deposits and negotiable certificates of deposits in other banks.

 

  (19) Consumption Taxes

National and local consumption taxes are excluded from transaction amounts. Non-deductible portions of consumption taxes on the purchases of tangible fixed assets are expensed when incurred.

 

  (20) Accounting Standard for Foreign Subsidiaries

Financial statements of foreign subsidiaries are used for consolidated accounting as long as they are prepared in accordance with the International Financial Reporting Standards (“IFRS”) or Generally Accepted Accounting Principles in the United States (“U.S. GAAP”).

If they are prepared in accordance with generally accepted accounting principles in each domicile country and not in accordance with IFRS or U.S. GAAP, the financial statements of foreign subsidiaries are mainly adjusted in accordance with U.S. GAAP. They were also adjusted when necessary in the process of consolidation.

 

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Mitsubishi UFJ Financial Group, Inc.

 

Additional Information

Starting from the current fiscal year, we have applied “Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Statement No. 24 issued on December 4, 2009) and “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24 issued on December 4, 2009) with reference to accounting changes and corrections of prior period errors made after the beginning of the current fiscal year. In accordance with JICPA Accounting Committee Report No. 14, “Practical Guidelines for Accounting for Financial Instruments” (January 31, 2000), “Gains on loans written-off” were included in “Other ordinary income” of the current fiscal year, however, the treatment was not applied retroactively to the financial statements for the previous fiscal year.

 

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Mitsubishi UFJ Financial Group, Inc.

 

Notes to the Consolidated Financial Statements

(Consolidated Balance Sheet)

 

1. Securities include ¥1,671,153 million in stock and ¥30,438 million in investments of affiliates.

 

2. For borrowed securities under securities borrowing transactions and securities purchased under resale agreements which were permissibe to be sold or re-pledged without restrictions, ¥5,854,414 million of such securities were re-pledged, ¥521,381 million were re-loaned and ¥2,185,317 million were held by MUFG Group as of the consolidated balance sheet date.

 

3. Loans to bankrupt borrowers: ¥37,839 million.

Non-accrual delinquent loans: ¥1,107,470 million.

Loans to bankrupt borrowers are loans, after write-offs, to bankrupt borrowers as defined in Article 96-1-3-1 to 5 and 96-1-4 of the Enforcement Ordinance of the Corporate Tax Law (No. 97 in 1965) on which accrued interest income is not recognized (“Non-accrual loans”) as there is substantial doubt as to the collection of principal and/or interest because of delinquencies in payment of principal and/or interest for a significant period of time or for some other reasons.

Non-accrual delinquent loans represent non-accrual loans other than loans to bankrupt borrowers and loans renegotiated at concessionary terms including reduction or deferral of interest due to borrowers’ weakened financial condition.

 

4. Loans past due for 3 months or more: ¥76,519 million.

Loans past due for 3 months or more represent loans whose principal and/or interest payments have been past due for 3 months or more excluding loans to bankrupt borrowers and non-accrual delinquent loans.

 

5. Restructured loans: ¥642,361 million.

Restructured loans represent loans renegotiated at concessionary terms including reduction or deferral of interest or principal and waiver of the claims for the purpose of business reconstruction or support for the borrower, excluding loans to bankrupt borrowers, non-accrual delinquent loans and loans past due for 3 months or more.

 

6. The total amount of loans to bankrupt borrowers, non-accrual delinquent loans, loans past due for 3 months or more and restructured loans was ¥1,864,190 million.

The amounts provided in Notes 3 to 6 represent gross amounts before the deduction of allowances for credit losses.

 

7. Bills discounted were accounted for as financial transactions in accordance with JICPA Industry Audit Committee Report No. 24. MUFG’s banking subsidiaries and trust banking subsidiaries have rights to sell or pledge bank acceptances bought, commercial bills discounted, documentary bills and foreign exchanges bought without restrictions. The total face value of these bills was ¥1,056,967 million.

 

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Mitsubishi UFJ Financial Group, Inc.

 

8. Assets pledged as collateral were as follows:

 

Cash and due from banks:

     ¥13,134 million   

Trading assets:

     ¥153,379 million   

Securities:

     ¥2,871,205 million   

Loans and bills discounted:

     ¥5,813,739 million   

Other assets:

     ¥73,377 million   

Liabilities related to pledged assets were as follows:

 

Deposits:

     ¥175,975 million   

Call money and bills sold:

     ¥530,000 million   

Trading liabilities:

     ¥80,449 million   

Borrowed money:

     ¥7,601,655 million   

Bonds payable:

     ¥36,163 million   

Other liabilities:

     ¥56,191 million   

Acceptances and guarantees:

     ¥467 million   

In addition to the items listed above, ¥1,372 million of cash and due from banks, ¥223,731 million of monetary claims bought, ¥77,052 million of trading assets, ¥11,805,979 million of securities, and ¥4,121,927 million of loans and bills discounted were pledged as collateral for cash settlements and other transactions or as deposits for margin accounts of futures and other transactions. ¥4,085,789 million of trading assets and ¥9,753,343 million of securities were sold under repurchase agreements or loaned under secured lending transactions with cash collateral. Payables corresponding to the assets sold or loaned under repurchase agreements and under securities lending transactions were ¥9,912,465 million and ¥4,620,925 million, respectively.

Bills rediscounted were accounted for as financial transactions in accordance with Industry Audit Committee Report No. 24. The total face value of rediscounted bank acceptances bought, commercial bills discounted, documentary bills and bills of exchange rediscounted was ¥5,788 million.

 

9. Overdraft facilities and commitment lines of credit are binding contracts under which MUFG’s consolidated subsidiaries have obligations to disburse funds up to predetermined limits upon the borrower’s request as long as there have been no breach of contracts. The total amount of the unused portion of these facilities was ¥69,406,744 million.

The total amount of the unused portion does not necessarily represent actual future cash requirements because many of these contracts are expected to expire without being drawn upon. In addition, most of these contracts include clauses which allow MUFG’s consolidated subsidiaries to decline the borrower’s request for disbursement or decrease contracted limits for cause, such as changes in financial condition or deterioration in the borrower’s creditworthiness. MUFG’s consolidated subsidiaries may request the borrowers to pledge real property and/or securities as collateral upon signing of the contract and will perform periodic monitoring on the borrower’s business conditions in accordance with internal procedures, which may lead to renegotiation of the terms and conditions of the contracts and/or initiate the request for additional collateral and/or guarantees.

 

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Mitsubishi UFJ Financial Group, Inc.

 

10. In accordance with the “Law concerning Revaluation of Land” (the “Law”) (No. 34, March 31, 1998), land used for business operations of domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries has been revalued as of the dates indicated below. The total excess from revaluation, net of income taxes corresponding to the excess which were recognized as “Deferred tax liabilities for land revaluation”, is stated as “Land revaluation excess” in net assets. Land revaluation excess includes MUFG’s share of affiliated companies’ land revaluation excess.

Dates of revaluation:

 

Domestic consolidated banking subsidiaries

   March 31, 1998

Domestic consolidated trust banking subsidiaries

   March 31, 1998, December 31, 2001 and March 31, 2002

The method of revaluation as set forth in Article 3, Paragraph 3 of the “Law”:

Fair values are determined based on (1) “published land price under the Land Price Publication Law” stipulated in Article 2-1 of the “Enforcement Ordinance of the Law concerning Revaluation of Land” (“Ordinance”) (No. 119, March 31, 1998), (2) “standard land price determined on measurement spots under the Enforcement Ordinance of National Land Planning Law” stipulated in Article 2-2 of the “Ordinance,” (3) “land price determined by the method established and published by the Director General of the National Tax Agency in order to calculate land value which is used for determining taxable amounts subject to landholding tax articulated in Article 16 of the Landholding Tax Law” stipulated in Article 2-4 of the “Ordinance” with price adjustments by shape and time and (4) appraisal by certified real estate appraisers stipulated in Article 2-5 of the “Ordinance” with price adjustments for time.

The difference between the fair value of land used for business operations revaluated in accordance with Article 10 of the law as of the end of the current fiscal year and the book value of such land following the revaluation was ¥62,607 million.

In addition, some of our affiliates that were accounted under equity method did the revaluation for land used for business operations on March 31, 2002.

 

11. Accumulated depreciation on tangible fixed assets: ¥1,142,245 million.

 

12. Deferred gains on tangible fixed assets deducted for tax purposes: ¥95,466 million.

 

13. Borrowed money included ¥804,632 million of subordinated borrowings.

 

14. Bonds payable included ¥3,300,547 million of subordinated bonds.

 

15. Goodwill, and negative goodwill recognized on or before March 31, 2010 were netted and presented in “Goodwill”. The balances of goodwill and negative goodwill before netting were as follows:

 

Goodwill:

   ¥ 444,264 million   

Negative goodwill:

   ¥ 25,863 million   
  

 

 

 

Balance after net out:

   ¥ 418,401 million   

 

16. The principal amount of money trusts entrusted to domestic trust banking subsidiaries, for which repayment of the principal to the customers was guaranteed, was ¥974,326 million.

 

17. With regard to bonds and other securities in “Securities”, guarantee obligations for private placement bonds (provided in accordance with the Article 2-3 of the Financial Instruments and Exchange Law) were ¥1,590,292 million.

 

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Mitsubishi UFJ Financial Group, Inc.

 

(Consolidated Statements of Income)

 

1. “Other ordinary income” included ¥377,515 million of equity in gain (losses) of the equity method investees.

 

2. “Other ordinary expenses” included ¥183,189 million of write-offs of loans, ¥79,251 million of write-offs of equity securities, ¥65,844 million of losses on sales of equity securities, ¥61,888 million of provision for reserve for contingent losses.

 

3. “Amortization of goodwill” was recorded in accordance with the provisions in Paragraph 32 of JICPA Accounting Committee Report No. 7 “Practical Guidelines on the Capital Consolidation Procedure in Consolidated Financial Statements” (May 12, 1998).

 

4. “Business structure improvement expenses” is ¥20,512 million of extra early retirement payments.

 

33


Mitsubishi UFJ Financial Group, Inc.

 

(Consolidated Statements of Changes in Net Assets)

 

1. Detailed Information regarding Outstanding Shares

 

     (Thousand shares)
     Number of
shares as of
April 1,

2011
     Number
of shares
increased
     Number
of shares

decreased
     Number of
shares as of
March 31,
2012
    

Notes

Outstanding shares

              

Common stock

     14,150,894         3,639         —           14,154,534       (1)

First series of class 5 preferred stock

     156,000         —           —           156,000      

Class 11 preferred stock

     1         —           —           1      

Total

     14,306,895         3,639         —           14,310,535      

Treasury stock

              

Common stock

     9,413         221         81         9,553       (2)

Total

     9,413         221         81         9,553      

 

  (1) Increase in the number of common stock by 3,639 thousand shares was due to the exercise of stock options.
  (2) Increase in the number of common stock held in treasury by 221 thousand shares was mainly due to repurchase of stocks in response to requests made by shareholders holding shares constituting less than a unit, purchase of shares by affiliates accounted for under the equity method and an increase in the number of shares held by affiliates accounted for under the equity method. Decrease in the number of common stock held in treasury by 81 thousand shares was mainly due to sale of shares in response to requests made by shareholders holding shares constituting less than a unit, sale of shares by affiliates accounted for under the equity method and a decrease in the number of shares held by affiliates accounted for under the equity method.

 

2. Information regarding Subscription Rights to Shares and Subscription Rights to Treasury Stock

 

Issuer

  

Type of

Subscription rights to

shares

   Type of
shares to
be issued
   Number of shares subject to subscription rights   Balance as of
March 31,
2012
(in millions
of yen)
         As of
April 1,
2011
  Increase   Decrease   As of
March 31,
2012
 

MUFG

  

Subscription rights

to shares

(Treasury shares)

   —      —  

(—)

  —  

(—)

  —  

(—)

  —  

(—)

  —  

(—)

   Stock options    —          7,933

Consolidated subsidiaries (Treasury shares)

      —          —  

(—)

Total

   —          7,933

 

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Mitsubishi UFJ Financial Group, Inc.

 

3. Detailed Information regarding Cash Dividends

 

  (A) Dividends Paid in the Fiscal Year Ended March 31, 2012

 

Date of approval

  

Type of shares

   Total Dividends
(in millions of
yen)
     Dividend
per share
(¥)
     Dividend
record date
   Effective date

General meeting of shareholders on June 29, 2011

   Common stock      84,904         6       March 31,
2011
   June 29,
2011
   First series of class 5 preferred stock      8,970         57.5         
   Class 11 preferred stock      0         2.65         

Board of directors meeting on November 14, 2011

   Common stock      84,926         6       September 30,
2011
   December 8,
2011
   First series of class 5 preferred stock      8,970         57.5         
   Class 11 preferred stock      0         2.65         

The total amount of dividends above includes ¥157 million paid to consolidated subsidiaries.

 

  (B) Dividends with Record Dates on or before March 31, 2012 and Effective Dates after March 31, 2012

The following matters relating to dividends are planned to be submitted to shareholder vote at an ordinary general meeting of shareholders scheduled to be held on June 28, 2012.

 

Date of approval

(scheduled)

  

Type of shares

   Total Dividends
(in millions of
yen)
     Source of
dividends
   Dividend
per share
(¥)
     Dividend
record date
   Effective
date

General meeting of shareholders on June 28, 2012

   Common shares      84,926       Retained
earnings
     6       March 31,
2012
   June 28,
2012
   First series of class 5 preferred stock      8,970            57.5         
  

Class 11 preferred stock

     0            2.65         

 

35


Mitsubishi UFJ Financial Group, Inc.

 

(Consolidated Statements of Cash Flows)

The difference between “cash and cash equivalents” and items presented on the consolidated balance sheet

As of March 31, 2012

 

Cash and due from banks on the consolidated balance sheet:

   ¥ 9,036,116 million   

Time deposits and negotiable certificates of deposit in other banks:

   ¥ (4,549,362 million
  

 

 

 

Cash and cash equivalents:

   ¥ 4,486,753 million   
  

 

 

 

 

36


Mitsubishi UFJ Financial Group, Inc.

 

(Financial Instruments)

Disclosure on the Fair Value, etc. of Financial Instruments

 

(1) The following table summarizes the amount stated in the consolidated balance sheet and the fair value of financial instruments as of March 31, 2012 together with their differences. Note that the following table does not include non-listed equity securities and certain other securities for which fair value is extremely difficult to determine.

 

     Consolidated
balance sheet
amount
(in millions of yen)
    Fair value
(in millions of yen)
    Difference
(in millions of yen)
 

(1) Cash and due from banks

     9,036,116        9,036,116        —     

(2) Call loans and bills bought

     347,930        347,930        —     

(3) Receivables under resale agreements

     4,552,860        4,552,860        —     

(4) Receivables under securities borrowing transactions

     3,256,655        3,256,655        —     

(5) Monetary claims bought (*1)

     2,954,838        2,992,074        37,236   

(6) Trading assets

     6,571,279        6,571,279        —     

(7) Money held in trust

     395,352        395,352        —     

(8) Securities

      

Debt securities being held to maturity

     1,465,169        1,458,247        (6,921

Other securities

     74,526,793        74,526,793        —     

(9) Loans and bills discounted

     84,492,697       

Allowance for credit losses (*1)

     (895,878    
  

 

 

   

 

 

   

 

 

 
     83,596,819        84,636,788        1,039,969   
  

 

 

   

 

 

   

 

 

 

(10) Foreign exchanges (*1)

     1,480,083        1,480,083        —     
  

 

 

   

 

 

   

 

 

 

Total assets

     188,183,897        189,254,182        1,070,284   
  

 

 

   

 

 

   

 

 

 

(1) Deposits

     124,789,252        124,851,057        61,805   

(2) Negotiable certificates of deposit

     12,980,617        12,986,395        5,778   

(3) Call money and bills sold

     2,809,618        2,809,618        —     

(4) Payables under repurchase agreements

     13,585,846        13,585,846        —     

(5) Payables under securities lending transactions

     4,978,915        4,978,915        —     

(6) Commercial papers

     569,659        569,659        —     

(7) Trading liabilities

     3,212,302        3,212,302        —     

(8) Borrowed money

     10,318,096        10,360,252        42,155   

(9) Foreign exchanges

     874,225        874,225        —     

(10) Short-term bonds payable

     523,065        523,065        —     

(11) Bonds payable

     6,634,121        6,726,679        92,558   

(12) Due to trust accounts

     1,416,725        1,416,725        —     
  

 

 

   

 

 

   

 

 

 

Total liabilities

     182,692,446        182,894,744        202,297   
  

 

 

   

 

 

   

 

 

 

Derivative transactions (*2)

      

Activities not qualifying for hedges

     176,129        176,129        —     

Activities qualifying for hedges

     (174,245     (174,245     —     
  

 

 

   

 

 

   

 

 

 

Total derivative transactions

     1,883        1,883        —     
  

 

 

   

 

 

   

 

 

 

 

(*1) General and specific reserves for credit losses corresponding to loans are deducted. However, with respect to items other than loans, the amount stated in the consolidated balance sheet is shown since the amount of reserve for credit losses corresponding to these items is insignificant.
(*2) Derivative transactions in trading assets and liabilities as well as other assets and liabilities are shown together. Assets and liabilities arising from derivative transactions are presented on a net basis.

 

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Mitsubishi UFJ Financial Group, Inc.

 

(2) The following table summarizes financial instruments whose fair value is extremely difficult to estimate. These securities are not included in the amount presented under the line item “Assets – (8) Other securities” in the table summarizing fair value of financial instruments.

 

Category

   Carrying amount
(in millions of yen)
 

(1) Non-listed equity securities (*1) (*2)

     411,012   

(2) Investments in partnerships etc. (*2) (*3)

     158,924   

(3) Others (*2)

     1,243   

Total

     571,180   

 

  (*1) Non-listed equity securities do not carry quoted market prices. Since it is extremely difficult to estimate the fair value of these securities, their fair value is not disclosed.
  (*2) With respect to non-listed equity securities, an impairment loss of ¥13,846 million was recorded in the current fiscal year.
  (*3) Investments in partnerships, etc. mainly include silent partnerships and investment partnerships, etc., and they do not carry quoted market prices. Since it is extremely difficult to estimate the fair value of these securities, their fair value is not disclosed.

 

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Mitsubishi UFJ Financial Group, Inc.

 

(Securities)

In addition to “Securities” in the consolidated balance sheet, the figures in the following tables include trading account securities, securities related to trading transactions and short-term corporate bonds classified as “Trading assets”, negotiable certificates of deposit in “Cash and due from banks” and beneficiary certificates of commodities investment trusts in “Monetary claims bought” and others.

1. Trading Securities (as of March 31, 2012)

 

     (in millions of yen)
         Net unrealized gains (losses) recorded in the  consolidated statement of income during the current fiscal year     

Trading securities

   61,013

 

2. Debt Securities Being Held to Maturity (as of March 31, 2012)

 

    

(in millions of yen)

 
    

Type of securities

   Amount on
consolidated
balance
sheet
     Fair value      Difference  

Securities for which the fair value exceeds the amount recorded in consolidated balance sheet

  

Securities

     613,745         618,129         4,383   
  

Government bonds

     556,942         561,111         4,168   
  

Municipal bonds

     3,530         3,536         6   
  

Corporate bonds

     53,272         53,480         208   
  

Other Securities

     1,453,321         1,497,794         44,472   
  

Foreign bonds

     594,745         600,016         5,271   
  

Other

     858,576         897,777         39,201   
  

Subtotal

     2,067,067         2,115,923         48,855   

Securities for which the fair value does not exceed the amount recorded in consolidated balance sheet

  

Securities

     1,400         1,387         (12
  

Government bonds

     —           —           —     
  

Municipal bonds

     —           —           —     
  

Corporate bonds

     1,400         1,387         (12
  

Other Securities

     538,546         520,017         (18,528
  

Foreign bonds

     255,277         238,714         (16,563
  

Other

     283,268         281,303         (1,964
  

Subtotal

     539,946         521,405         (18,540

Total

     2,607,013         2,637,328         30,314   

 

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Mitsubishi UFJ Financial Group, Inc.

 

3. Other Securities (as of March 31, 2012)

 

    

(in millions of yen)

 
    

Type of securities

   Amount on
consolidated
balance sheet
     Acquisition cost      Difference  

Securities for which the fair value exceeds the acquisition cost

  

Domestic equity securities

     1,867,281         1,206,244         661,036   
  

Domestic bonds

     35,131,756         34,900,979         230,777   
  

Government bonds

     31,989,473         31,831,424         158,048   
  

Municipal bonds

     180,778         173,027         7,750   
  

Corporate bonds

     2,961,504         2,896,526         64,977   
  

Other Securities

     15,173,807         14,805,616         368,190   
  

Foreign equity securities

     163,802         112,241         51,560   
  

Foreign bonds

     14,013,752         13,734,726         279,026   
  

Other

     996,252         958,649         37,603   
  

Subtotal

     52,172,845         50,912,840         1,260,004   

Securities for which the fair value does not exceed the acquisition cost

  

Domestic equity securities

     1,466,605         1,805,902         (339,297
  

Domestic bonds

     16,435,052         16,448,318         (13,265
  

Government bonds

     16,016,330         16,019,204         (2,874
  

Municipal bonds

     —           —           —     
  

Corporate bonds

     418,721         429,113         (10,391
  

Other Securities

     4,757,218         4,832,600         (75,381
  

Foreign equity securities

     6,522         7,833         (1,311
  

Foreign bonds

     3,908,194         3,926,552         (18,358
  

Other

     842,501         898,213         (55,712
  

Subtotal

     22,658,875         23,086,820         (427,945

Total

     74,831,720         73,999,661         832,059   

 

(Note)   The total difference amount shown in the above table includes ¥7,616 million revaluation gains of securities with embedded derivatives.

 

4. Other Securities Sold during the Fiscal Year (from April 1, 2011 to March 31, 2012)

 

     (in millions of yen)  
     Amount sold      Gains on sales      Losses on sales  

Domestic equity securities

     268,713         40,824         48,950   

Domestic bonds

     140,219,740         181,571         44,405   

Government bonds

     139,782,992         179,729         44,152   

Municipal bonds

     138,767         191         183   

Corporate bonds

     297,980         1,650         69   

Other Securities

     32,577,359         306,261         129,166   

Foreign equity securities

     38,632         12,857         41   

Foreign bonds

     32,209,776         273,373         104,370   

Other

     328,951         20,030         24,754   

Total

     173,065,813         528,656         222,522   

 

5. Change in Classification of Securities by Purpose of Holding

In the current fiscal year, classification of bonds for the value of ¥7,856 million held by domestic consolidated trust banking subsidiaries was changed from being held to maturity category to other securities following a significant deterioration of creditworthiness of the bond issuers.

 

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Mitsubishi UFJ Financial Group, Inc.

 

6. Securities Incurred Impairment Losses

Securities that have fair value (excluding those held for trading purposes and investment in affiliates) are subject to write-downs when their fair value has impaired considerably and it is not probable that the value will recover to the acquisition cost as of the end of the current fiscal year. In such case, the fair value is recorded in the consolidated balance sheet and the difference between fair value and acquisition cost are recognized as losses for the fiscal year (referred to as “impairment losses”).

For the current fiscal year, impairment losses were ¥72,808 million consisting of ¥62,372 million of impairment losses on equity securities and ¥10,435 million of impairment losses on bonds and other securities in which securities whose fair value was extremely difficult to estimate were included.

“Considerable decline in fair value” was determined based on the classification of issuers in accordance with the internal standards for self-assessment of asset quality as follows:

Bankrupt, Substantially bankrupt or Potentially bankrupt issuers:

Fair value is lower than acquisition cost.

Issuers requiring close monitoring:

Fair value has declined 30% or more from acquisition cost.

Other issuers:

Fair value has declined 50% or more from acquisition cost.

“Bankrupt issuer” means issuer who has entered into bankruptcy, special liquidation proceedings or similar legal proceedings or whose notes have been dishonored and suspended from processing through clearing houses. “Substantially bankrupt issuer” means issuer who is not legally or formally bankrupt but is regarded as substantially in a similar condition. “Potentially bankrupt issuer” means issuer who is not yet legally or formally bankrupt but deemed to have high a possibility of becoming bankrupt. “Issuer requiring close monitoring” means issuer who is financially weak and under close monitoring conducted by MUFG’s subsidiaries. “Other issuer” means issuer who does not correspond to the four issuers mentioned above.

 

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Mitsubishi UFJ Financial Group, Inc.

 

(Money Held in Trust)

 

1. Money Held in Trust for Trading Purpose (as of March 31, 2012)

 

     (in millions of yen)
     Amount on
consolidated
balance sheet
    

Net unrealized gains (losses) recorded in the consolidated

statement of income during this period

Money held in trust for trading purpose

     63,355       115

 

2. Money Held in Trust Being Held to Maturity (as of March 31, 2012): None

 

3. Money Held in Trust not for Trading Purpose or Being Held to Maturity (as of March 31, 2012)

 

     (in millions of yen)  
     (a) Amount on
consolidated
balance sheet
     (b)
Acquisition
cost
     Difference
(a)-(b)
     Money held in
trust with
respect to
which (a)
exceeds (b)
     Money held in
trust with
respect to
which (a) does
not exceed (b)
 

Money held in trust not for trading purpose or being held to maturity

     331,996         331,829         167         167         0   

 

(Note) “Money held in trust with respect to which (a) exceeds (b)” and “Money held in trust with respect to which (a) does not exceed (b)” are showing the breakdown of the difference between (a) and (b).

(Net Unrealized Gains (Losses) on Other Securities)

Detailed information regarding net unrealized gains (losses) on other securities (as of March 31, 2012)

 

     (in millions of yen)  

Net unrealized gains (losses) on other securities

     728,421   

Other securities

     826,397   

Money held in trust not for trading purpose or being held to maturity

     167   

Reclassification from “Other securities” to “Debt securities being held to maturity”

     (98,143

Deferred tax liabilities

     (295,574

Net unrealized gains (losses) on other securities, net of deferred tax liabilities (before MUFG’s ownership share of affiliates’ unrealized gains (losses) adjustments)

     432,847   

Minority interests

     16,869   

MUFG’s ownership share of affiliates’ unrealized gains (losses) on other securities

     (8,817

Total

     440,900   

 

(Notes)  

(1)    “Net unrealized gains (losses) on other securities” shown in the above table excluded ¥7,616 million revaluation gains of securities with embedded derivatives, which were recorded in current earnings.

 

(2)    “Net unrealized gains (losses) on other securities” shown in the above table included ¥1,954 million of unrealized gains on securities in investment limited partnerships.

 

42


Mitsubishi UFJ Financial Group, Inc.

 

(Segment Information)

 

1. Information regarding the Amounts of Ordinary Income, Ordinary Profits (Losses), Assets and other items by Segment

For the Fiscal Year Ended March 31, 2012

 

    (in millions of yen)  
    The Bank of
Tokyo-
Mitsubishi
UFJ, Ltd.
    Mitsubishi
UFJ
Trust and
Banking
Corporation
    Mitsubishi
UFJ
Securities
Holdings
Co., Ltd.
    Consumer
Finance
Subsidiaries
    Others     Total     Adjustments     Amount
recorded in
the
consolidated
financial
statements
 

Ordinary income

    3,295,914        611,257        358,479        491,490        354,851        5,111,993        (160,898     4,951,095   

Interest income

    1,856,060        227,960        63,849        239,909        330,649        2,718,430        (369,074     2,349,355   

Investment gains on equity method

    6,312        4,148        30,268        91        —          40,821        336,694        377,515   

Amortization of negative goodwill

    —          —          —          —          —          —          1,602        1,602   

Ordinary income from customers

    3,216,237        591,754        320,997        476,891        345,214        4,951,095        —          4,951,095   

Ordinary income from internal transactions

    79,677        19,502        37,482        14,599        9,637        160,898        (160,898     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment income (loss)

    544,324        80,488        16,583        50,209        296,198        987,805        (6,473     981,331   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment assets

    171,663,939        26,897,506        22,435,690        4,005,802        12,224,303        237,227,242        (18,365,625     218,861,616   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other items

               

Depreciation

    155,843        38,581        16,392        20,823        1,131        232,772        4,696        237,469   

Amortization of goodwill

    14,344        216        188        1,424        —          16,173        13,197        29,371   

Interest expenses

    359,623        73,703        67,046        32,575        39,794        572,744        (63,870     508,874   

Extraordinary gains

    12,978        7,320        12,829        2,502        5,407        41,038        (7,946     33,092   

Gains on negative goodwill

    —          2,228        —          —          —          2,228        —          2,228   

Extraordinary losses

    26,628        1,729        25,508        1,314        176        55,356        1,603        56,960   

Impairment losses on fixed assets

    18,211        1,312        2,403        187        —          22,114        —          22,114   

Income tax expenses

    315,677        45,084        1,764        9,950        1,705        374,182        2,312        376,494   

Unamortized balance of goodwill

    227,879        4,097        —          10,989        —          242,966        175,434        418,401   

Investment to companies accounted for under the equity method

    208,210        102,450        283,038        234        813,138        1,407,073        294,518        1,701,592   

Increases in tangible and intangible fixed assets

    193,857        65,739        20,843        15,465        1,188        297,094        —          297,094   

 

(Notes)    (1)   Ordinary income, interest income and interest expenses are presented, respectively, in lieu of net sales, interest on deposits and interest on borrowings of the companies in non-banking industries.
   (2)   “Others” includes MUFG.
   (3)   Segment income for “Others” includes ¥270,930 million of dividends from MUFG’s subsidiaries and affiliates.
   (4)   Interest income adjustments include elimination of the dividends from affiliates recorded by MUFG.
   (5)   Adjustments for investment gains on equity method include the impact of ¥290,644 million of negative goodwill associated with the application of equity method accounting to MUFG’s investment in Morgan Stanley.
   (6)   Segment income adjustments include minus ¥312,533 million elimination of internal transactions, as well as ¥306,059 million comprising investment gains (losses) on equity method, amortization of goodwill and negative goodwill, tax expenses, and minority interests gains (losses) that are not attributable to specific segments.
   (7)   Segment assets adjustments are primarily elimination of assets and liabilities between segments.
   (8)   Adjustments for amortization of goodwill are primarily those concerning consumer finance subsidiaries and Mitsubishi UFJ Securities Holdings Co., Ltd.
   (9)   Adjustments for extraordinary gains and losses include elimination of internal transactions and amortization of goodwill that are not attributable to specific segments.
   (10)   Adjustments for unamortized balance of goodwill are primarily those concerning consumer finance subsidiaries and Mitsubishi UFJ Securities Holdings Co., Ltd.
   (11)   Segment income is reconciled to net income in the consolidated statement of income.

 

43


Mitsubishi UFJ Financial Group, Inc.

 

(Per Share Information)

 

For the fiscal year ended March 31, 2011

   

For the fiscal year ended March 31, 2012

 

Total net assets per common share

     ¥604.58      Total net assets per common share    ¥ 678.24   

Net loss per common share

     ¥  39.94      Net income per common share    ¥ 68.09   

Diluted net income per common share

     ¥  39.88      Diluted net income per common share    ¥ 67.93   

(Notes)

 

1. Basis for Computing Net Income per Common Share and Diluted Net Income per Common Share

 

         

For the fiscal year ended

March 31, 2011

  

For the fiscal year ended

March 31, 2012

Net income per common share

        

Net income

   million yen    583,079     981,331 

Amounts not attributable to common shareholders

   million yen    18,205     18,205 

Total dividends on preferred stock

   million yen    18,205     18,205 

Net income attributable to common shares

   million yen    564,874     963,125 

Average number of common shares outstanding for the fiscal period

   thousand shares    14,140,858     14,144,183 

Diluted net income per common share

        

Adjustments in net income

   million yen    (363)    (1,061)

Total dividends on preferred stock

   million yen      

Adjustments made to reflect convertible securities of subsidiaries and others

   million yen    (363)    (1,061)

Common share equivalent

   thousand shares    12,267     16,684 

Preferred shares

   thousand shares      

Subscription rights to shares

   thousand shares    12,266     16,683 

Convertible securities not diluting earnings per common share

  

Subscription rights to shares of subsidiaries:

kabu.com Securities Co., Ltd.

1 type: 834 units

Fukutora Ltd.

2 types: 12,370 units

  

Subscription rights to shares of subsidiaries:

kabu.com Securities Co., Ltd.

1 type: 790 units

Subscription rights to shares of affiliates accounted for under the equity method:

Morgan Stanley

56 million units

 

44


Mitsubishi UFJ Financial Group, Inc.

 

2. Basis for Computing Total Net Assets per Common Share

 

          As of March 31, 2011      As of March 31, 2012  

Total net assets

   million yen      10,814,425         11,675,784   

Amounts not attributable to common shareholders

   million yen      2,264,713         2,081,991   

Preferred stock

   million yen      390,001         390,001   

Total dividends on preferred stock

   million yen      9,235         9,235   

Subscription rights to shares

   million yen      7,192         7,933   

Minority interests

   million yen      1,858,283         1,674,821   

Net assets attributable to common shareholders

   million yen      8,549,712         9,593,793   

Number of common shares outstanding at the end of the fiscal period (excluding treasury shares)

   thousand shares      14,141,480         14,144,980   

(Changes in Accounting Policies)

Starting from the current fiscal year, we have applied “Accounting Standard for Earnings Per Share” (ASBJ Statement No. 2 revised on June 30, 2010) and “Guidance on Accounting Standard for Earnings Per Share” (ASBJ Guidance No. 4 revised on June 30, 2010).

In calculating the diluted net income per common share, the method used to reflect the effects of stock options, the rights obtained by the holders after a certain employment period, has been changed to include the amount pertaining to said holders’ services to be provided to MUFG that comprises part of the assessed fair value of stock options, which is assumed to be paid in at the time of the exercise of the rights.

In case that these revisions are not applied, diluted net income per common share for the fiscal year ended March 31, 2011 is ¥39.88.

 

45


Mitsubishi UFJ Financial Group, Inc.

 

5. Non-consolidated Financial Statements

 

(1) Non-consolidated Balance Sheets

 

(in millions of yen)    As of
March 31, 2011
     As of
March 31, 2012
 

Assets:

     

Current assets:

     

Cash and due from banks

     11,031         10,631   

Securities

     140,500         121,800   

Prepaid expenses

     18         170   

Deferred tax assets

     2,203         —     

Others

     87,287         57,036   
  

 

 

    

 

 

 

Total current assets

     241,041         189,638   
  

 

 

    

 

 

 

Fixed assets:

     

Tangible fixed assets:

     

Buildings

     11         8   

Equipment and furniture

     135         78   

Lease assets

     20         12   
  

 

 

    

 

 

 

Total tangible fixed assets

     168         99   
  

 

 

    

 

 

 

Intangible fixed assets:

     

Trademarks

     25         19   

Software

     2,871         3,055   

Lease assets

     —           14   

Others

     1         1   
  

 

 

    

 

 

 

Total intangible fixed assets

     2,899         3,091   
  

 

 

    

 

 

 

Investments and other assets:

     

Investment securities

     803,197         —     

Investments in subsidiaries and affiliates

   <