Annual Report 2012

nipponexpress.com

Annual Report 2012

To be the world’s premier logistics providerAnnual Report 2012Year ended March 31, 2012


Creating an integrated global businessmodel to serve Japan and the worldContents2 The Nippon Express Group—At a Glance4 An Interview with the President10 Corporate Governance12 Directors, Officers &Corporate Auditors13 Corporate Social Responsibility14 Special Feature16 Topics18 Financial Section65 Global Network68 Company Information69 Share InformationIn this fiscal report, fiscal years are indicatedaccording to the date of their commencement.Thus, fiscal 2011 is the year ended March 31, 2012.


In fiscal 2010, the Nippon Express Group launched the“Nippon Express Group Corporate Strategy 2012 – TowardsNew Growth,” a three-year medium-term management planunderpinned by the basic strategy, “Growth as a GlobalLogistics Company.” Unfortunately, we were impacted bynumerous external factors in fiscal 2011, including the GreatEast Japan Earthquake, flooding in Thailand and the Europeandebt crisis. Nevertheless, Nippon Express was able toaggressively penetrate key regions while strengthening salessystems able to provide comprehensive logistics proposalsand one-stop services. Moreover, thanks to our steady marketdevelopment efforts, we were able to gain a foothold in newbusiness fields and reached the next growth stage.In fiscal 2012, the final year of the current medium-termmanagement plan, we will shift Nippon Express towards atruly global business model that eliminates all barriersbetween our domestic and overseas business bases, salessystems, products and services.Caution Regarding Forward-Looking StatementsThis annual report contains information about forward-lookingstatements related to such matters as the Company’s plans,strategies and business results. These forward-lookingstatements represent judgements made by the Companybased on information available at present and are inherentlysubject to a variety of risks and uncertainties. The Company’sactual activities and business results could differ significantly dueto changes, including changes in the economic environment,business environment, demand and exchange rates.NIPPON EXPRESS Annual Report 20121


The Nippon Express Group—At a GlanceStrengths andCharacteristicsBusiness OverviewRevenues by reportable segment• One-stop comprehensivelogistics company• International network(Millions of yen)1,800,0001,569,6331,600,0001,617,1851,628,027Distribution & TransportationDomestic CompaniesCombined Business• Establishment of anoperating foundationthroughout Asia• Leader in the Japaneselogistics industry1,400,0001,200,0001,000,000800,000600,000Security TransportationHeavy Haulage & ConstructionAir Freight Forwarding & TravelMarine & Harbor TransportationOverseas CompaniesThe AmericasEuropeAsia & Oceania*• Expansion of valueaddedbusinesses400,000200,000East AsiaSouth Asia & OceaniaGoods SalesOther010/311/312/3* Nippon Express underwent an organizational change in fiscal 2010. Consequently, for overseascompanies, Asia & Oceania has been divided into East Asia and South Asia & Oceania. As it is notpossible to restate the fiscal 2009 results under the new reportable segments, such results arepresented here in accordance with the previous segment designations.Fiscal 2011 overview by segmentDistribution andTransportationDomestic companiesRevenues(Millions of yen)Main products and servicesRailway utilization transportation, chartered truckservices, combined delivery services, moving &relocation, warehousing & distribution processing,Combined Business 704,717in-factory work, real estate rental, marine & harbortransportation, fine arts transportation, securitytransportation and heavy haulage & constructionSecurity Transportation 58,764 Security transportationHeavy Haulage & Construction 40,048 Heavy haulage & constructionAir Freight Forwarding &Travel205,407 Air freight forwarding and travelMarine & harbor transportation, warehousing &Marine & Harbor Transportation 125,654distribution processing and moving & relocationOverseas companiesAir freight forwarding, ocean freight forwarding,The Americas 42,963 warehousing & distribution processing, moving &relocation, motor transportation and travelEurope 46,453East Asia 72,967Air freight forwarding, ocean freight forwarding,warehousing & distribution processing, moving &relocation, motor transportation and travelAir freight forwarding, ocean freight forwarding,warehousing & distribution processing, moving &relocation, motor transportation and travelSouth Asia & Oceania 44,811Air freight forwarding, ocean freight forwarding,warehousing & distribution processing, moving &relocation, heavy haulage & construction and travelGoods Sales 374,076 Lease, sale of petroleum and othersOther 40,368 OtherAdjustment (128,206)Total 1,628,0272NIPPON EXPRESS Annual Report 2012


Overview by RegionComposition ratio by region comprising Distribution &Transportation, overseas companiesSouth Asia &Oceania22%The Americas21%Fiscal 2011East Asia35%Europe22%Business Bases(as of March 31, 2012)Excluding JapanEuropeEast Asia23 companies,106 business bases and 5,384 employees16 companies,68 business bases andChinaThe Americas2,278 employees 14 companies,20 companies,79 business bases and4,981 employees118 business bases and2,362 employeesSouth Asia & Oceania20 companies,110 business bases and6,431 employeesOverseas network38 countries214 cities402 business bases16,455 overseas employeesWarehousing ScaleEast AsiaEuropeThe Americas345,944m 2 513,759m 2 424,294m 2South Asia &Oceania520,059m 2Worldwide total1,804,056m 2NIPPON EXPRESS Annual Report 20123


An Interview with the President4 NIPPON EXPRESS Annual Report 2012


Meeting stakeholder expectationsas we leap forward into the nextgrowth phaseWe will accelerate the pace of global business expansion and implement our medium-termmanagement plan while steadily engaging in business activities that will realizeour long-term vision.Q1June 2012 marked your first anniversary aspresident of Nippon Express Co., Ltd. Whatare your impressions of the past year?Fiscal 2011 was characterized by major changes inthe external environment. These included severedsupply chains in the aftermath of the Great East JapanEarthquake (which struck in March 2011) and massiveflooding in Thailand as well as the European debtcrisis and other factors that negatively impacted theglobal economy. Under these circumstances, theNippon Express Group steadily worked to make theleap forward toward becoming a truly global logisticscompany. To this end, we continued to pursue newgrowth under our “Nippon Express Group CorporateStrategy 2012 – Towards New Growth” medium-termmanagement plan. Given the pressing need for quickdecision making amid a rapidly changing operatingenvironment, fiscal 2011 went by very fast.My first year as president began with visitingnumerous business bases located in Nippon Express’s10 domestic regions and the four overseas regions.By taking the time to meet numerous stakeholdersface to face, I have gained a greater understanding ofthe high expectations they have of the Group as itworks to achieve global growth. Meeting stakeholdershas also given me a renewed awareness of mymission to help grow the Nippon Express Group intoan even stronger business.Q2Please tell us more about your assessment ofthe external factors impacting NipponExpress during fiscal 2011.Domestic markets gradually picked up in line withpost-disaster recovery efforts. However, overalleconomic conditions in Japan were unstable with theprospect of full recovery remaining elusive. This wasdue to major fluctuations in currency exchange ratesNIPPON EXPRESS Annual Report 20125


An Interview with the Presidentand a global fiscal slowdown caused by the Europeandebt crisis. Domestic freight handling volume in fiscal2011 fell for the 12th consecutive year* mainlybecause of the Great East Japan Earthquake andstagnant consumer spending. Overseas, althoughtransport-related demand in China and imports/exports in the Americas and Europe have been steady,unfavorable currency exchange rates have crampednet sales figures.*Source: Nittsu Research Institute and Consulting, Inc., 2012 Fiscal YearEconomic and Freight Transport Outlook (June 2012)Q3What is your assessment of Nippon Express’sperformance in fiscal 2011?Consolidated revenues in fiscal 2011 rose only slightly to¥1,628.0 billion, up 0.7% compared with the previousfiscal year. This lackluster result was attributable tostagnation in domestic corporate logistics overall andthe lesser impact of increases in real overseas netsales due to effect of unfavorable exchange rates onamounts reported in local currencies. The impact ofcurrency exchange rates on net sales totaledapproximately ¥12.9 billion.Turning to earnings, operating income increased18.6% year on year to ¥37.4 billion, reflecting higherearnings driven by strong performances in the Marine &Harbor Transportation segment in the first half of fiscal2011, Air Freight Forwarding & Travel segment in thesecond half and Heavy Haulage & Construction segmentduring the entire fiscal year. Net income surged 215.5%to ¥26.9 billion. This result reflected a gain on sales ofnoncurrent assets in fiscal 2011 as well as decreases inloss on valuation of investment securities; loss onadjustment for changes of accounting standard for assetretirement obligations; and loss on disaster due todamage caused by the Great East Japan Earthquake. Allof these losses were recorded under extraordinary loss inthe previous fiscal year.Q4Please describe Nippon Express’ efforts infiscal 2011 to realize “Growth as a GlobalLogistics Company,” the first basic strategyof the Nippon Express Group CorporateStrategy 2012.We are aiming to grow the proportion of sales fromoverseas-related businesses to 33% in fiscal 2012. Infiscal 2011, the proportion of sales from overseasrelatedbusinesses dipped 0.1 of a percentage pointcompared with the previous fiscal year to 30.8%. Thisdecrease was primarily caused by sluggishness in airfreight forwarding as well as in marine and harbortransportation originating from Japan over the courseof the year, reflecting weak domestic economicconditions. Along with this, overseas net sales showeda decline due to unfavorable exchange rates. In realterms, the proportion of sales from overseas-relatedbusinesses was 31.3% based on calculations thateliminate the negative effect of exchange rates.To enhance overseas-related businesses, theGroup is improving multi-functional logisticalcomplexes at its business bases located outside ofJapan while constructing a new distribution andtransportation network. In addition, we are invigoratingour business and capital partnerships with localcompanies. In fiscal 2011, we continued to strengthenour business foundations in Asia through such actionsas opening multifunctional warehouses and6 NIPPON EXPRESS Annual Report 2012


epresentative offices as well as establishing localsubsidiaries featuring various specialized functions.Moreover, we are aggressively undertaking M&Ato accelerate our global business expansion. In fiscal2011, Associated Global Systems, Inc. (AGS) becamea wholly owned subsidiary of Nippon Express U.S.A.,Inc. AGS, a mid-sized logistics company based in theUnited States, is engaged in domestic transport andboasts a solid reputation for the specialized transportof precision instruments and oversized cargo. Thesecapabilities have allowed AGS to build a largecustomer base in the United States. Combining thestrengths of Nippon Express in international transportwith the solid logistics operations of AGS in the UnitedStates has enabled the Group to expand in a singlestroke the scope of the services it provides tocustomers of both companies.vehicles as of March 31, 2012, exceeding Groupwideprojections. Moreover, the Nippon Express Group hassignificantly reduced power use in Japan thanks to itsenergy conservation measures.Q5Please tell us more about the medium-termmanagement plan’s second basic strategy:Promotion of Strategic EnvironmentalManagementQ6Moving forward, please describe NipponExpress’ initiatives regarding the mediumtermmanagement plan’s third basic strategy:Enhancement of Management InfrastructureThe Nippon Express Group is steadily promotinginitiatives to reduce environmental impact byemphasizing the development and provision ofenvironmentally friendly logistics products and servicesthat utilize low-environmental load rail and shiptransport. In addition, the Group conducts greeninitiatives aimed at achieving a recycling society,including the promotion of ecodriving; saving energyat business bases, and conducting CO 2 reductionprojects through its overseas network. Owing to ourproactive efforts, we owned 5,638 eco-friendlyThe Group’s very first overseas subsidiary wasestablished in the United States 50 years ago. Sincethen, we have established locally based subsidiaries invarious regions worldwide. As part of efforts tointegrate management operations while ensuring itsability to accurately respond to economic conditions,legal systems and needs that differ from region toregion, the Group appoints officers as regional generalmanagers to oversee operations in the Americas,Europe, East Asia, and South Asia & Oceania. Theappointment of these regional general managers hasNIPPON EXPRESS Annual Report 20127


An Interview with the Presidentoperating in China. Owing to these functions, NEChina will play a central role in assisting the Group’svarious initiatives in that country.Q7What are your performance forecasts forfiscal 2012?also improved the speed of management decisions.In September 2011, we established a Germanybasedregional headquarters company to overseeoperations in Europe. We also set up a regionalheadquarters company in Singapore in April 2012 tohandle businesses in South Asia & Oceania. Placinglocal subsidiaries in Europe and South Asia & Oceaniaunder the control of these respective regionalheadquarters companies enables the Group toexecute regional growth strategies that are optimal foran entire area rather than being suited only toindividual subsidiaries.Nippon Express relocated the regional generaloffice for East Asia from Hong Kong to Shanghai in May2011, reflecting Shanghai’s emergence as the region’seconomic focal point. In addition, Nippon Express(China) Co., Ltd. (NE China) was recently certified bythe Beijing Municipal Commission of Commerce as a“regional headquarters company” for a multinationalcorporation doing business in China’s highly regulatedmarket. Operating NE China as a regionalheadquarters company enables us to legally providebusiness and fund management, financial control andother related services for local Group subsidiariesDespite expectations of a recovery in domestic freighttransportation in the first half of fiscal 2012 (demandfor which had been sluggish following the previousyear’s disaster), performance is now forecast to remainweak. Consequently, we are working to boostproductivity while decreasing costs, as a majorincrease in net sales is not expected in fiscal 2012.Regarding international freight transportation, weforecast higher demand for equipment transportation,particularly marine and harbor transportation, due toaccelerating overseas expansion and the transfer ofproduction abroad by Japanese companies, which areplagued by energy- and currency exchange-relatedproblems. In air freight forwarding, although the exportvolume is expected to decline, we are working tosecure earnings by improving the efficiency ofoperational management and controlling forwardingrelatedcosts.Overseas, there are indications that freightforwarding and domestic logistics operations in theAmericas and South Asia will remain strong. Incontrast, amid signs that the European economy willslow even further, economic conditions are expectedto weaken in East Asia, particularly China, whichexports goods to Europe. Keeping a close eye onthese trends, we will implement effective measures asneeded in Europe and East Asia.8 NIPPON EXPRESS Annual Report 2012


Based on the aforementioned factors, on May 8,2012, Nippon Express announced the followingforecasts for fiscal 2012: consolidated revenues of¥1,650.0 billion, up 1.3% year on year; operatingincome of ¥42.0 billion, up 12.0%; and net income of¥30.0 billion, up 11.3%.Q8Please describe Nippon Express’s long-termvision in terms of “Growth as a GlobalLogistics Company.”If we did not have a long-term vision, we would beunable to achieve “Growth as a Global LogisticsCompany,” one of the basic strategies of the currentmedium-term management plan. Setting thelong-term target of increasing the proportion of salesfrom overseas-related businesses to 50%, we willcontinue to expand strategic businesses to reach thismajor goal.Currently, international freight transportation is notthe only business area in which customers worldwideexpect the Group to expand. We are also expandinginto business fields involving logistics operations thatplay a role in maintaining supply chains connectinglocal production areas; high-value-added warehousefunctions that oversee the transport of goods tovarious markets; and logistics in local regions and thirdcountries. The Group will also aggressively engage incapital alliances with leading companies and M&A,which are indispensable to the rapid upgrading ofsystems to meet demand for services in terms ofquality, price and speed. In addition to China and therest of East Asia, we continue to rapidly build abusiness foundation focusing on South Asia, a regionthat encompasses such countries as India,Bangladesh and Myanmar.Q9In closing, do you have any messages youwould like to convey to shareholders andinvestors?I was particularly struck by how well employeescarried out their duties during our efforts to assist inthe reconstruction of areas damaged by the GreatEast Japan Earthquake. The superior quality of NipponExpress’ personnel is the underlying strength of theGroup. With this in mind, we will meet the highexpectations of our stakeholders by working togetherto further enhance corporate value.We gratefully look forward to the continuingsupport of our shareholders and investors.Interview June 2012Kenji WatanabePresident, Chief Executive OfficerNIPPON EXPRESS Annual Report 20129


Corporate Governance• Our Thought on Corporate GovernanceNippon Express’ fundamental thinking related with corporategovernance is “the realization of speedy management throughquick decision making” and “the establishment of a cleardivision of responsibility.” Specifically, since June 2001 thenumber of the board members was reduced from 25members or less to 15 members or less. Furthermore, theterm was shortened from two years to one year. All thisresulted in revitalizing the board and speeded up decisionmaking. Attempts were made to clarify each directors’management responsibilities for each business year.At the same time, the Company has introduced a boardof executive officers with the goal of ensuring rapid executionof business operations. As of June 28, 2012, we have 14directors and 28 executive officers (13 of those concurrentlyserve as directors). In addition, our auditors attend boardmeetings and other important conferences, review keydocuments, visit our main facilities for audits, perform reviewsat subsidiaries, and report all results at meetings of the boardof auditors and the board of directors. The board of auditorsfunctions as a supervisory institution that operates from anobjective point of view. As of June 28, 2012, we have fourauditors (three of those are outside auditors).• Creating a Internal Control SystemIn order to conduct business fairly and efficiently, it isimportant to implement firm internal control systems. NipponExpress has created effective control systems, including acompliance system, a risk management system, an internalaudit system and a system to assure fair business operationsin all Group companies. In addition, with the enactment of theCorporate Law in May 2006, Nippon Express adopted andinstituted the Basic Policy Relating to the Establishment of anInternal Control System at a board of directors meeting.In accordance with a partial revision of the SecuritiesListing Regulations at the Tokyo Stock Exchange, the BasicPolicy for the Exclusion of Antisocial Forces was adopted andinstituted at the Board of Directors meeting in April 2008,providing a response to the need for a regulation to preventthe intervention of antisocial forces in our corporate activities.• Creating a Crisis Management SystemNipon Express has constructed our crisis management systemunder “the Crisis Management Codes” consisting of 4 codes;“the Disaster Management Code”, “the Overseas CrisisManagement Code”, “the System Risk management Code” and“the New Influenza Management Code.” We set the steps to betaken against widespread disasters, new types of influenza,information system risks, and terrorism-related risks.As a designated public institution under the DisasterMeasures Basic Law and the Civil Protection Act (the Actconcerning the Measures for Protection of the People in ArmedAttack Situations), Nippon Express transported emergencymaterials upon requests of the national and prefecturalgovernments in large-scale disasters such as the Hanshin-AwajiCorporate Governance Organization ChartGeneral Shareholders’ MeetingAppointment and RemovalAppointment and RemovalAppointment and RemovalAccounting AuditorFindingsReportBoard of AuditorsAuditBoard of DirectorsAudit of AccountsReportPresidentAppointmentSupervisionReportCorporate AttorneyCompliance CommitteeBoard of Executive OfficersCrisis Management CommitteeAudit DivisionAuditPerform OperationsAuditEnforcement Division(Headquarters divisions, Headquarters departments,regional administration (domestic/overseas),each business division, each branch office, each group company)10NIPPON EXPRESS Annual Report 2012


Earthquake and the Niigata Prefecture Chuetsu-oki Earthquake.Also at the Great East Japan Earthquake which caused theunprecedented damage to the country, we fulfilled a role as adesignated public institution by working on to assist the affectedareas for rehabilitation and reconstruction. For instance, wetransported various emergency materials from day one when theearthquake struck.Concerning natural disasters, the Nippon Express GroupDisaster Measures Regulations were adopted in October 2001,through which we are strengthening our cooperative effort withinthe Group. Our Reporting Procedures for Disasters establishescriteria for determining whether a report is required when adisaster occurs (for example, in the case of an earthquakeregistering four or above on the Japanese seismic scale). Utilizingthe Disaster Management System established on our intranet,these reporting procedures provide an early-warning reportingsystem between all branches and headquarters regarding thestate of disasters, as well as a system for sharing informationbetween branches.Furthermore, as well as we have prepared stockpiles foremergencies including food and drinking water, we havebrought in satellite phones and mobile phones with priorityaccess in a time of disaster to enable us to respond to powerfailures or disruptions in mobile phones or other telephonenetworks. We installed them in related divisions at the headoffice and major branches across the country.Finally, as a counter-measure against influenza, we havestocked hygienic items, such as masks, gloves and goggles.In response to the new strain of influenza that emerged inApril 2009, we provided staff with masks and took measuresto force infected staff or staff whose family had been infectedto stay home from work.• Business Continuity (BCP)In addition to the risk posed by the occurrence of naturaldisasters such as large earthquakes and typhoons, we arealso now facing a threat like the spread of new influenza.Even under emergency situations, it is now a company’sresponsibility to take necessary measures and make plans forboth preparation and action in advance so that we are able tocontinue or recover quickly to fulfil our primary obligations asa transportation company. Nippon Express is appointed as adesignated public institution under the Disaster MeasuresBasic Law and the Civil Protection Act, and in order for us tofulfil its responsibility; we are required to continue ouroperations by society.Under these circumstances, the request asking us to workon “the comprehensive and systematic initiatives” as a companyis increasing which enable us to continue our businessoperations not only in times of emergency but also in otherchallenging situations. In response, we developed BCM(Business Continuity Management) as well as a BCP (BusinessContinuity Plan) specifically for Nippon Express in 2009.As well as each company of the Nippon Express Groupplaces the health and lives of employees and their families firstwhen responding to states of emergencies caused by naturaldisasters, industrial disasters and man-made disasters, we alsotry to continue our business operations as much as possible inorder for us to be able to fulfil our social responsibility sought asa designated public institution and a maintainer of socialfunctions under the Disaster Measures Basic Law and the CivilProtection Act. At the Great East Japan Earthquake, we tried tocontinue our business operations, starting with the transport ofemergency relief materials, by invoking a BCP (BusinessContinuity Plan) swiftly.• Compliance Management Promotion SystemStressing the importance of compliance management,Nippon Express established the Compliance Division in June2003. Also, in October of the same year, ComplianceRegulations were created, and, along with the establishmentof a Compliance Committee chaired by the companypresident and an internal whistle-blower system (NittsuSpeak-up), several measures were undertaken to encouragehonest and fair company activities.From 2010, we set every November as a “ComplianceMonth” and undertake a comprehensive review of legalcompliance and employee education across the country.Also we tried to enhance the awareness on complianceby lending DVD or distributing leaflets for education to preventpower harassment to group companies in Japan andoverseas. Furthermore, we distributed a “compliance card” toall employees and encourage them to conduct “self-checkingon compliance” on a daily basis.• Personal Data Protection and Management SystemAlong with the establishment of the Personal Data ProtectionDivision in February 2005, Nippon Express also establishedthe Personal Data Protection Policy and Personal DataProtection Code—exemplifying Nippon Express’scommitment to personal data protection management.Ongoing education utilizing DVDs and e-learning is offered toall employees in an attempt to make information aboutpersonal data protection better known within the company.The Nippon Express Group has also received variouscertifications related to the protection of personal data.NIPPON EXPRESS Annual Report 201211


Directors, Officers & Corporate Auditors(As of June 28, 2012)ChairmanPresident,Chief Executive OfficerExecutive Vice Presidents,Executive OfficersJiro NakamuraKeiji HagioMasanori KawaiKenji WatanabeDirectors, Managing OfficersMasao Hosokoshi Akira Ohinata Noboru Shibusawa Kiyofumi Miyachika Takahiro IdenoDirectors,Managing OfficersDirectors, OfficersMitsuru SaitoHideo HanaokaYasuaki NiiYutaka ItoMasahiko HataManaging Officers Officers Corporate Auditors (Full-Time) Corporate AuditorYoshiaki IshiiNobuki AndoKenji FujiiShinichi MiyazakiYuzuru Fujita*Shuji KojimaTakaaki IshiiYasuhiro GotoZenjiro Watanabe*Masahito WatanabeHideaki TabuchiHiroyuki MurakamiMasami Yamashita*Takumi ShimauchiYukinori TsujiKatsuhiro Terai*Outside auditorTakashi WadaHisao TaketsuYukio Yokoo12 NIPPON EXPRESS Annual Report 2012


Corporate Social Responsibility• Fundamental CSR PhilosophySince the establishment of the Nippon Express Group, we haveexpanded our business both in Japan and overseas,contributing to the development of industries and improvementin quality of life by delivering goods all over the world.As a company that uses public infrastructure such asroads, rails, and seaports for its business, we are aware of ourresponsibility towards society at both the local and global levels.It is very important for us to have high ethical standards beyondcompliance with the law, and to act in a socially responsible way.Thus, recognizing our social responsibility, we have setthe key strategies in the Nippon Express Group CorporateStrategy 2012 as “Growth as a Global Logistics Company,”“Promotion of Strategic Environmental Management,”“Enhancement of Management Infrastructure,” and “Promotionof Corporate Social Responsibility (CSR) Management,” andwe will strive to implement them. The Nippon Express Groupwill continuously contribute to society through logistics and doour utmost to live up to its trust.In April 2012, the Nippon Express Environmental Charterwas revised to the Nippon Express Group Environmental Charter,positioning it as aset of policies thatall group companiesshould comply with.Nippon ExpressGroup as a wholefulfils itsresponsibility for theglobal environment.Nippon Express Group Environmental Charter• Revisions to the Nippon Express Group Charter of ConductFollowing the publication of ISO26000 (international standardsregarding social responsibility) in November 2010, the NipponExpress Group revised the Nippon Express Charter ofConduct (April 2011) based on recent changes related tocorporate social responsibility (CSR). The original NipponExpress Charter of Conduct, applicable only to NipponExpress Co., was revised as the Nippon Express GroupCharter of Conduct, and now embraces all Group affiliates inJapan and overseas.While clearly stipulating respect for human rights,interactive communication with myriad stakeholders, therespect for employee diversity essential to businessglobalisation and other initiatives, the Nippon Express GroupCharter of Conduct also promotes conduct exceeding CSRrequirements throughout the supply chain in a manner theGroup is well positioned to implement.* Refer to the Nippon Express Homepage to view the Nippon ExpressGroup Charter of Conduct.http://www.nipponexpress.com/about/corporate/charter/index.html• Environmental InitiativesAs a professional logistics group, we will contribute to societyby delivering goods to people around the world, while strivingto achieve more energy-efficient “Earth-friendly logistics.”Continuous assistance for rehabilitationand reconstructionAs progress was made in rehabilitation and reconstructionin the aftermath of the Great East Japan Earthquake, thenature of activities offered by our company also changedfrom emergency evacuation assistance to continuous lifesupport assistance.In March 2011, we provided transportation for thecollective relocation of residents from Futabamachi,Fukushima Prefecture who had taken refuge at theSaitama Super Arena. In April, we drained water withpump vehicles in the coastal areas where floodgates hadbeen destroyed. Later, we were also engaged in removingfloating cranes stranded at Miyako Port in IwatePrefecture, transporting power plant equipment lent fromthe government of Thailand, and transportingmanufacturing equipment to and from factories affected.From December 2011, responding to requests from localgovernments in the affected area, we transported about2,300 tons of rubble (disaster waste) to disposing facilities inareas willing to receive the rubble. (as of March 2012)Employees from various regions were dispatched tosupport operations at affected Nippon Express offices.Voluntary activities by employees have been increasinglywidespread, such as “Tohoku Reconstruction SupportVolunteer Activities” launched by employees and theirfamily members in the Kanto area.NIPPON EXPRESS Annual Report 201213


Special Feature: Further Growth in AsiaExtending Nippon Express’s Asian Network to IndiaThe Nippon Express Group has established “Growth as a Global Logistics Company” as a basic strategy of the “Nippon Express GroupCorporate Strategy 2012 –Towards New Growth,” medium-term management plan. The Group maintains global coverage through fiveregions, namely, Japan, the Americas, Europe, East Asia and South Asia & Oceania. Accordingly, we are working to broaden internationaltransportation networks; making rapid management judgments in response to intra-regional market trends; and promoting thedevelopment of a sales structure that integrates regions. Among these, we began operations in Hong Kong in the 1970s to penetratemarkets in East Asia. Since then, Nippon Express has actively engaged in partnerships with local companies, built a distribution networkthat extends throughout the region and, more recently, enhanced services featuring multiple transportation modes. Building on theseefforts, we are establishing large-scale warehouses, opening new business bases and other initiatives to strengthen our businessfoundations and, in turn, secure distribution and transportation networks extending beyond India, the next key region.Nippon Express’s expansion in AsiaChinaKoreaJapanIndiaBangladeshMyanmarLaosThailandSS7000The PhilippinesShanghai SuperExpress (SSE)SS7000Shanghai–Huanan approx. 2,000 kmSS7000Huanan–Hanoi approx. 1,500 kmMekong-IndiaExpressSS7000Bangkok–Singaporeapprox. 2,000 kmSS7000Hanoi–Bangkok approx. 1,500 kmSouthern Mekong Land Bridge Expressapprox. 850kmMajor business basesNippon Express’s Expansion in South AsiaDecemberDecemberFebruaryNovemberCommences a fully in-house consolidated door-to-door transportservice to India bound from Tokyo, Nagoya, Kobe, Shanghai, HongKong, Bangkok, the United States and Europe to IndiaOpens an NE India office inBangalore Airport to provide highquality,high-speed, one-stopNippon Express servicesLaunches Mekong-India Expressintermodal transport servicebetween Thailand and IndiaCompletes construction ofNeemrama Logistics Center, amultifunctional logisticswarehouse200720092010AugustEstablishes a representativeoffice in DhakaOctoberStrengthens intermodal transport serviceoriginating from Bangladesh, upgrading internallogistics as well as ocean freight forwarding14NIPPON EXPRESS Annual Report 2012


Nippon Express (India) Private LimitedAdvantage of services• Network of facilities that link India’s major cities• In-house freight forwarding and consistently accountable transport servicesthrough in-house customs clearance operations• Visualization of import/export air freight forwarding• 3PL operations (import/export hub functions, inventory control)• Numerous other servicesCompany overview• Customs clearance • International freight transportation (air/marine forwarding)• Domestic freight transportation (delivery operations) • Third-party logistics (3PL) (exporthub, import DC) • Moving & relocation • Others, incidental transport services, etc.Areas of Penetration by Japanese Companiesin IndiaDelhi (135 business sites):sales companies for homeelectronics, equipment and othermanufacturers, tradingcompanies,representative offices, etc.Gurgaon, Manesar andthe state of Rajasthan,all urban areas nearDelhi (184 business sites):motorcycle and automotiveparts manufacturers, etc.The state of Gujarat(29 business sites)* As of October 2010Source: The Japan-India Association Contemporary IndiaForum Quarterly Review No. 9 (Japanese only)URL: http://www.japan-india.com/english(Edition compiled from documents prepared by theJapanese Embassy in India)The state of Uttar Pradesh includingNoida (50 business sites)automobile, home electronics andautomotive parts manufacturers, etc.Kolkata and suburbanarea (67 business sites)trading companies,chemical manufacturers, etc.Nippon Express’s Core India and Bangladesh StrategySouth Asia & Oceania is overseen by the Singapore regionalgeneral office and encompasses Malaysia, the Philippines,Thailand, Vietnam, Bangladesh, India, New Zealand andAustralia. In August 2011, Japan concluded the ComprehensiveEconomic Partnership Agreement (CEPA) with India, South Asia& Oceania’s largest economic zone. Amid expectations thatCEPA will foster closer ties between the two countries, NipponExpress will focus on developing transport routes that connectIndia with China and South Asia. Looking ahead, we will developlogistics systems able to respond to internal demand in India.Bangladesh is an important base for Nippon Express interms of routes that connect India with China and South Asia.Boasting a population of over 140 million as well as a burgeoninggarment industry, Bangladesh has significant market potential.The state of Goa(7 business sites)Mumbai and suburbs(143 business sites):companies engaging inautomobile sales,engineering, trading, finance,marine transportation, etc.Pune (45 business sites):automotive parts manufacturersHyderabad (28 business sites)The state of Kerala(37 business sites)Chennai (223 business sites):home electronics, food, automobile,automotive parts manufacturers, etc.Bangalore (153 business sites):home electronics, food, automobile,automotive parts manufacturers, etc.The Nippon Express Group’s Operations in India andBangladeshNippon Express (India) Private Limited (NE India) has expandedits network in India to 14 business bases in 11 major cities(Kolkata, Hyderabad, Chennai, Bangalore, Trivandrum, Cochin,Coimbatore, Pune, Mumbai, Delhi and Ahmadabad). InBangladesh, the Group established the local subsidiary, NipponExpress Bangladesh Ltd., in April 2012.MayConducts a truck driver workshopto raise awareness of drivingsafety and energy conservation2011JuneEstablishes Nittsu Logistics (India)Private Limited, a wholly ownedsubsidiary specializing in Just-in-Time logisticsJulyCommences customs clearanceoperations the city of Pune in the westernIndian state of Maharashtra afterobtaining a customs clearance licenseDecemberRedesigns the consolidatedmarine transport service,Maharaja Express, for India2012FebruaryLaunches “NEX-FORWARDING Bengal SAT!” an intermodaltransport service that combines air and marine transport toconnect Bangladesh with JapanAprilEstablishes Nippon Express BangladeshLtd. as a local subsidiary in the People’sRepublic of BangladeshNIPPON EXPRESS Annual Report 201215


TopicsIn fiscal 2011, the Nippon Express Group took steps to invigorate its domestic businesses while acceleratingoverseas expansion in line with the medium-term management plan, “Nippon Express Group Corporate Strategy2012 – Towards New Growth.” Despite having to respond to the Great East Japan Earthquake and other specialfactors, we have made progress in pursuing our objectives.In Japan, we are entering new sectors and industries, aggressively expanding value-added businesses anddeveloping a high level of independent expertise. In the years ahead, Nippon Express will look to expand thesedifferentiated businesses on a global scale.Overseas, Nippon Express is busily working to establish a business model that unifies operations both in Japanand abroad while realizing growth. To achieve these aims, we are building new organizational and sales systems thattranscend boundaries between Japan and countries overseas as well as among various nations. In particular, we areworking to retain our competitive superiority in Asian markets by developing products centered on China as well asthe rest of East Asia; expanding services in Thailand, Cambodia, and Vietnam; and concentrating managementresource investment to the region that extends from Bangladesh to India.1Domestic TopicsAcquisition of AS9120 QualityManagement Certification for theAerospace IndustryNippon Express has acquired AS9120certification at its Baraki Air CargoLogistics Center, Chubu Airport LogisticsCenter, and seven locations in NorthAmerica since meeting with the relevantquality management system requirementsfor the aerospace industry. The AS9100series of standards are designed tocomplement the ISO 9001 internationalquality standard with additionalrequirements stipulated by theInternational Aerospace Quality Group(IAQG), an organization founded byaerospace companies in Europe and theUnited States. The AS9120 Standardapplies to organizations engaged in thestorage and transport of AS9100-seriesparts/materials and other products.Nippon Express will continue working toexpand the number of its AS9120-certifiedlocations while providing storage,transport and other services to theaerospace industry.2Entered the Clinical Drug TestingLogistics BusinessNippon Express has opened its newClinical Drug Testing Logistics Center inOta-ku, Tokyo. The new center is speciallydesigned for the storage of experimentaldrugs and medical devices. In addition tothe storage and management of suchitems, the center provides uniform, highqualityservices, ranging from receipt andstorage to shipment, thanks to its fullytrained staff of specialists.Due to the revision of the ministerialordinance regulating good clinicalpractices (GCP ordinance) in 2008, thehandling of experimental drugs andmedical devices by third parties is nowpossible. Consequently, we canaccommodate the increasing number ofcustomers who entrust the transport ofsuch items to outside parties. NipponExpress will augment its services in linewith the needs of this market.Overseas Topics1Opened a Representative Office inPhnom Penh CambodiaNippon Express opened a representativeoffice in Phnom Penh, Cambodia, whichhas been experiencing steady economicdevelopment driven principally by abooming textile industry. In 2015, importtariffs on transactions between countriesin the ASEAN Free Trade Area (AFTA) arescheduled to be abolished, spurringexpectations that companies fromnumerous countries will accelerate theirexpansion into Cambodia.To date, Nippon Express has workedto augment its network in Cambodia bylaunching a road transport service andestablishing an air and marine freightforwarding agency. The opening of ournew representative office will allow us todevelop a system able to meet a widerange of needs in Cambodia, extendingfrom international air and marine transportto road transport and warehousingservices.16 NIPPON EXPRESS Annual Report 2012


2Commencement of Road TransportServices Connecting Thailand,Cambodia, and VietnamTo meet rapidly growing logistics needs inthe southern half of the IndochinesePeninsula, Nippon Express commencedsales related to the “Southern MekongLand Bridge Express,” a door-to-doorroad transport service connectingThailand, Cambodia and Vietnam. Byrealizing smooth logistics services throughthe acquisition of transit licenses thatpermit bonded transport, we haveshortened lead times by two to sevendays compared with marine transport. Incombination with the already expandedSS7000, a 7,000 km road transport routethat connects Shanghai and Singapore,Nippon Express is working to furtherenhance its regional logistic networks.3Opened Song Than Logistics Centerin VietnamNippon Express opened the Song ThanLogistics Center, a multifunctionalwarehouse facility located in Binh DuongProvince, Vietnam. Very convenientlylocated approximately 20 km from majorairport and seaport facilities, the SongThan Logistics Center can provideservices to Japanese-owned companiesconcentrated in industrial zones aroundnearby Ho Chi Minh City. The Song ThanLogistics Center offers both bonded andgeneral warehousing operations andincludes specialized warehouses fullyequipped with security systems to storehazardous goods. The Center undertakesdistribution center (DC) and vendormanagement inventory (VMI) services forimported components and exportedgoods while actively providing transportand distribution services for expandingmarkets in Vietnam. In addition, the Centeris capable of handling a variety of smalllot,high-mix shipments as well as meetingcustomer distribution processing needs.4Establishment of an Sales Office inRussia’s Major Automotive IndustryCenterNippon Express (Russia) LLC became thefirst Japanese logistics company to opena new sales office in Togliatti in theRussian Federation’s Samara Region, akey center for that country’s automotiveindustry. Russia has seen a growingnumber of automobiles sold domesticallyin recent years and is expected to becomeEurope’s largest automobile market.The Togliatti Sales Office offerstransport services that utilize a widevariety of modes (marine, air, railway andtruck transport) while providing support fornavigating Russia’s complex customsclearance procedures in order to ensureseamless logistics. In addition, the TogliattiOffice is working to enhance its logisticsservices within Russia.5Augmentation of TransportOperations in the United StatesNippon Express U.S.A., Inc. acquired theAmerican firm, Associated GlobalSystems, Inc. (AGS), a mid-sized logisticscompany engaged in domestic/international transport and warehousing inthe United States. In addition, AGS has agained solid reputation for providingmeticulous service in its mainstaydomestic transport business. AGS alsoboasts an impressive degree of know-howin the types of special transport neededfor precision instruments and oversizedcargo, counting a number of Americancompanies among its clients.Through the acquisition of AGS, NipponExpress will expand its logistics operationswithin the United States and reinforce itsbusiness infrastructure mainly through themutual use of its networks. At the sametime, we will work to enhance our locallyrootedlogistics services around the world.NIPPON EXPRESS Annual Report 201217


Financial Section19 Management Discussion and Analysis24 11-Year Summary26 (1) Consolidated Financial Statements26 Consolidated Balance Sheets28 Consolidated Statements ofIncome29 Consolidated Statements ofComprehensive Income30 Consolidated Statements of Changesin Net Assets31 Consolidated Statements of CashFlows32 Notes to Consolidated FinancialStatements63 (2) Other64 Report of Independent Auditors18 NIPPON EXPRESS Annual Report 2012


Management Discussion and AnalysisCorporate OverviewThe Nippon Express Group consists of Nippon Express Co., Ltd. andits 276 subsidiaries, including 250 consolidated subsidiaries and 1equity-method subsidiary, as well as 62 affiliates, of which 21 areequity-method affiliates, totaling 339 companies. In Japan, theGroup’s Distribution & Transportation segment encompassesdomestic companies primarily operating in the following reportablesegments: the Combined Business (motor cargo transportation,railway forwarding), Air Freight Forwarding & Travel and Marine &Harbor Transportation. The Distribution & Transportation segment alsooperates companies overseas. The Group’s remaining reportablesegments comprise Goods Sales-related businesses as well as realestate and other operations that are classified as Other.The Nippon Express Group’s business operations by industryand reportable segment are as follows.• Distribution & Transportation, domestic companies225 companies, including Nippon Express Co., Ltd. and NittsuTransport Co., Ltd.Combined BusinessWith a network of facilities throughout Japan, the Company engagesin businesses related to railway forwarding, motor cargo transportationservices and warehousing operations. A portion of these businessesare undertaken by the Company’s subsidiaries and affiliates, includingNittsu Transport, Bingo Express Co., Ltd., and Tokushima ExpressCo., Ltd.Security TransportationThe Company operates security guard and related businessesthroughout Japan.Heavy Haulage & ConstructionThe Company handles the transportation, erection and installation ofheavy cargo and pursues related businesses throughout Japan.Air Freight Forwarding & TravelThe Company operates the air freight forwarding, travel and otherrelated businesses. A portion of these businesses are operated by theCompany’s subsidiaries and affiliates.Marine & Harbor TransportationThe Company engages in marine and harbor transportation at all keydomestic ports. The Company’s subsidiaries, including NipponShipping Co., Ltd., and affiliates undertake marine transportation andcoastal shipping, while the Company’s subsidiaries and affiliatesoperate the harbor transportation business at certain ports in Japan.• Distribution & Transportation, overseas companies69 companies, including Nippon Express U.S.A., Inc.The AmericasNippon Express U.S.A. and other subsidiaries engage in air freightforwarding, marine and harbor transportation, and warehousingbusinesses in various cities in the Americas. In addition, NipponExpress Travel USA, Inc. operates a travel business.EuropeNippon Express (U.K.) Ltd., Nippon Express (Nederland) B.V., NipponExpress (Deutschland) GmbH, Nippon Express France S.A.S. andother subsidiaries engage in air freight forwarding, marine and harbortransportation, and warehousing businesses in various cities inEurope.East AsiaNippon Express (H.K.) Co., Ltd., Nippon Express (China) Co., Ltd.,Nippon Express (Taiwan) Co., Ltd. and other subsidiaries and affiliatesengage in air freight forwarding, ocean freight forwarding, andwarehousing businesses in various cities in East Asia.South Asia & OceaniaNippon Express (Singapore) Pte. Ltd., Nippon Express (Thailand) Co.,Ltd., Nippon Express (Australia) Pty., Ltd. and other subsidiaries andaffiliates engage in air freight forwarding, marine and harbortransportation, warehousing, and heavy haulage and constructionbusinesses in various cities in South Asia and Oceania.• Goods Sales33 companies, including Nittsu Shoji Co., Ltd.Nittsu Shoji, Taiyo Nissan Auto Sales., Ltd., Nittsu Shoji U.S.A., Inc.and other domestic and overseas subsidiaries and affiliates engage inthe sale and leasing of distribution equipment, sale of wrapping andpackaging materials, sale and leasing of vehicles, sale of petroleumand liquefied petroleum (LP) gas, vehicle maintenance and insurancesales.• Other12 companies, including Nittsu Real Estate Co., Ltd.Nittsu Real Estate and other subsidiaries and affiliates mainly engagein real estate rental, mediation and appraisal as well as building andwarehouse planning, design and management. In addition, thisbusiness segment conducts investigation and research through NittsuResearch Institute and Consulting, Inc., offers financing throughNippon Express Capital Co., Ltd., provides driver training courses forthe general public through Nittsu Driving School Co., Ltd., andoperates an employee dispatching business through Careerroad Inc.NIPPON EXPRESS Annual Report 201219


Management Discussion and AnalysisPerformance OverviewDuring the consolidated fiscal year under review, despite a temporarydrop in corporate production and exports due to the effect of theGreat East Japan Earthquake that struck in March of last year, theJapanese economy experienced a moderate turnaround as supplychains were restored after the disaster. Nevertheless, the situationremained extremely unstable due to the effect of factors such as therapidly rising yen, as well as the slowdown in overseas economiesresulting from the European debt crisis.In the field of logistics, against the backdrop of these economicconditions, the overall situation was challenging, due to a partialdecrease in export freight, which had been performing well, and apersisting tendency toward decline in demand for domestic freighttransportation.In this business environment, the Nippon Express Group madecollective efforts to accomplish the medium-term management plan“Nippon Express Group Corporate Strategy 2012 – Towards NewGrowth,” by achieving the four basic strategies of “Growth as a GlobalLogistics Company,” “Promotion of Strategic EnvironmentalManagement,” “Enhancement of Management Infrastructure,” and“Promotion of Corporate Social Responsibility (CSR) Management.”Specifically, to ensure its “Growth as a Global Logistics Company,” theGroup is enhancing multi-functional logistics facilities at its overseasbases and building a new distribution and transportation network inorder to develop its overseas-related businesses, while pressingahead with business collaboration and capital tie-ups with localcompanies, as well as strengthening the overseas network, with theaim of ensuring the Group’s ability to swiftly and flexibly respond to theincreasingly diverse and sophisticated global business needs of ourcustomers.With regard to the “Promotion of Strategic EnvironmentalManagement,” the Group has steadily engaged in efforts to reduce itsenvironmental burden by working proactively to develop and provideenvironmentally friendly products and services using greener modesof transportation such as rail and sea, while promoting initiatives suchas eco-driving and increased energy-efficiency at business bases, andtaking advantage of our overseas network to develop projects to cutCO2 emissions, in order to create a recycling-oriented society.Toward the “Enhancement of Management Infrastructure” and“Promotion of Corporate Social Responsibility (CSR) Management,”we worked to build a stronger crisis management system by revisingthe Business Continuity Plan (BCP) in an effort to reinforcegovernance, while also striving to beef up our corporate competitivepower by further enhancing the capital investment that is thefoundation of growth, and stepping up training and education forhuman resources. Furthermore, we were proactively engaged in thepromotion of CSR activities such as social contribution activitiescentered on the environment, and the thorough implementation ofcompliance measures.Business Results• Revenues and Operating CostsAs a result of the above, consolidated revenues increased ¥10.8billion, or 0.7%, compared with the previous fiscal year, to ¥1,628.0billion.Financial results by segment are as follows:In Distribution & Transportation, domestic companies, CombinedBusiness revenues fell ¥12.7 billion, or 1.8%, while those of SecurityTransportation shrank ¥0.7 billion, or 1.3%. The declines wereprimarily attributable to a fall in demand for freight transportation andthe impact of the Great East Japan Earthquake. In contrast, HeavyHaulage & Construction rose ¥5.6 billion, or 16.6%, thanks to higherconstruction demand in Japan and overseas, while Air FreightForwarding & Travel recorded a ¥1.9 billion, or 1.0%, increase andMarine & Harbor Transportation was up ¥1.4 billion, or 1.2%, owinglargely to the recovery of the world economy and an increase in exportand import cargoes.In Distribution & Transportation, overseas companies, revenuesrose ¥0.1 billion, or 0.4%, in the Americas, ¥1.3 billion, or 3.1%, inRevenues(Millions of yen)2,000,000Operating income(Millions of yen)60,000Net income(Millions of yen)40,0001,500,00050,00040,00030,0001,000,00030,00020,000500,00020,00010,00010,000008/3 09/3 10/3 11/3 12/3008/3 09/3 10/3 11/3 12/3008/3 09/3 10/3 11/3 12/320 NIPPON EXPRESS Annual Report 2012


Europe. However, revenues fell ¥3.9 billion, or 5.2%, in East Asia and¥0.7 billion, or 1.7%, in South Asia & Oceania due mainly to theimpact of currency exchange rate fluctuations.In the Goods Sales segment, revenues improved ¥21.5 billion,or 6.1%, largely because of an upswing in the unit selling price forpetroleum. In the Other business segment, revenues grew ¥4.3 billion,or 12.2%.Operating costs came to ¥1,519.3 billion, an increase of ¥8.7billion, or 0.6%, from the previous fiscal year. Gross profit improved by¥2.0 billion, or 2.0%, year on year to ¥108.6 billion and the ratio ofgross profit to revenues was 0.1 of a percentage point higher at6.7%. The rise in operating costs was mainly attributable to anupswing in vehicle chartering and subcontracting expensesaccompanying an increase in net sales.• Selling, General and Administrative Expenses,Operating Income and Ordinary IncomeSelling, general and administrative expenses declined ¥3.7 billion, or5.1%, year on year to ¥71.1 billion, mainly due to lower depreciationand amortization.As a result of the above, operating income stood at ¥37.4 billion,up ¥5.8 billion, or 18.6%, from the previous fiscal year. Ordinaryincome stood at ¥47.4 billion, up ¥6.7 billion, or 16.6%, primarilybecause of an increase in dividends income.• Other Income and Expenses and Net IncomeExtraordinary income was ¥8.3 billion, an increase of ¥2.7 billion, or48.3%, compared with the previous fiscal year, with extraordinary lossdropping ¥17.0 billion, or 73.1%, to ¥6.2 billion. The main reason forthe increase in extraordinary income was the recording of a gain onsales of noncurrent assets, which rose ¥2.3 billion. The primaryreasons for the fall in extraordinary loss was the recording of a loss onadjustment for changes of accounting standard for asset retirementobligations of ¥7.5 billion in fiscal 2010 and a ¥4.5 billion year-on-yeardecrease in loss on disaster due to damage caused by the Great EastJapan Earthquake.Income before income taxes and minority interests amounted to¥49.4 billion. After deducting current income taxes, inhabitants’ tax,enterprise tax and other adjustments as well as minority interests, netincome came to ¥26.9 billion, a rise of ¥18.4 billion, or 215.5%, fromthe previous fiscal year.Net income per share was ¥17.66 higher year on year at¥25.85, while return on equity rose 3.88 percentage points to 5.68%.• Results by Reportable SegmentFinancial results by reportable segment are summarized below.Indicated figures do not include consumption taxes.1. Combined Business (Distribution & Transportation, domesticcompanies)This segment suffered a decline in transactions due to a fall in demandfor domestic freight transportation, in addition to the ongoing impactof the Great East Japan Earthquake, and other factors. Consequently,segment sales were ¥704.7 billion, a year-on-year decrease of ¥12.7billion, or 1.8%, while operating income was ¥6.9 billion, a year-onyeardecrease of ¥1.4 billion, or 17.2%.2. Security Transportation (Distribution & Transportation, domesticcompanies)As a result of a decline in demand for domestic freight transportationand a decrease in the unit prices of services, as well as other factors,segment sales were down ¥0.7 billion, or 1.3% year on year, to ¥58.7billion, while operating income was up by ¥0.09 billion, or 5.2% yearon year, to ¥1.8 billion.3. Heavy Haulage & Construction (Distribution & Transportation,domestic companies)Backed mainly by an increase in demand for the construction of heavyelectrical equipment and overseas construction, segment salesincreased ¥5.6 billion, or 16.6% year on year, to ¥40.0 billion, andoperating income rose ¥1.1 billion, or 42.2% year on year, to ¥3.8 billion.Total net assets(Millions of yen)600,000Total assets(Millions of yen)1,500,000Net cash providedby operating activities(Millions of yen)150,000500,0001,200,000120,000400,000300,000200,000900,000600,00090,00060,000100,000300,00030,000008/3 09/3 10/3 11/3 12/3008/3 09/3 10/3 11/3 12/3008/3 09/3 10/3 11/312/3NIPPON EXPRESS Annual Report 201221


Management Discussion and Analysis4. Air Freight Forwarding & Travel (Distribution & Transportation,domestic companies)Mainly owing to an increase in transactions in air freight export cargo,segment sales were up ¥1.9 billion, or 1.0% year on year, to ¥205.4billion, while operating income increased ¥5.6 billion, or 590.7% yearon year, to ¥6.5 billion.9. South Asia & Oceania (Distribution & Transportation, overseascompanies)Although warehousing and other transactions were strong, segmentsales declined ¥0.7 billion, or 1.7% year on year, to ¥44.8 billion, whileoperating income was up ¥0.2 billion, or 18.7%, to ¥1.6 billion, mainlydue to the effect of exchange rates.5. Marine & Harbor Transportation (Distribution & Transportation,domestic companies)As a result of robust demand for freight transportation to theAmericas, in addition to an increase in transactions mainly for importcargo, segment sales were ¥125.6 billion, a year-on-year increase of¥1.4 billion, or 1.2%, although operating income was ¥5.1 billion, ayear-on-year decrease of ¥0.3 billion, or 6.2%.6. The Americas (Distribution & Transportation, overseas companies)Mainly due to an increase in transactions for air freight export cargoessuch as electronics components, segment sales increased ¥0.1billion, or 0.4% year on year, to ¥42.9 billion, while operating incomerose ¥0.09 billion, or 6.2% year on year, to ¥1.6 billion.7. Europe (Distribution & Transportation, overseas companies)Thanks mainly to an increase in transactions for automotive andmedical-related air freight export cargoes, as well as a hike intransactions for home appliance-related import cargoes, segmentsales grew ¥1.3 billion, or 3.1% year on year, to ¥46.4 billion, andoperating income was up ¥0.1 billion, or 6.2% year on year, to ¥1.8billion.8. East Asia (Distribution & Transportation, overseas companies)Although demand for domestic freight transportation in China wassolid, segment sales decreased ¥3.9 billion, or 5.2% year on year, to¥72.9 billion, while operating income rose ¥0.2 billion, or 11.7% yearon year, to ¥2.3 billion, mainly due to the effect of exchange rates.10. Goods SalesAlthough segment sales increased ¥21.5 billion, or 6.1% year on year,to ¥374.0 billion mainly due to a hike in the unit selling price forpetroleum, operating income was down ¥0.09 billion, or 1.3% year onyear, to ¥6.9 billion.11. OtherMainly due to healthy performance in construction of real estate,mediation transactions, and the logistics finance business, segmentsales increased ¥4.3 billion, or 12.2% year on year, to ¥40.3 billion,while operating income was up by ¥0.4 billion, or 28.7% year on year,to ¥1.9 billion.Cash FlowsConsolidated cash and cash equivalents (“cash”) amounted to ¥181.6billion as of March 31, 2012. This represented a year-on-year increaseof ¥74.5 billion.Cash Flows from Operating ActivitiesCash flows from operating activities resulted in a net inflow of ¥97.8billion, an increase from ¥64.3 billion recorded in the previous fiscalyear. This was mainly due to income before income taxes and minorityinterests of ¥49.4 billion as well as income taxes paid of ¥9.8 billion.Cash Flows from Investing ActivitiesCash flows from investing activities resulted in a net outflow of ¥31.5billion, a year-on-year decline in expenditures from ¥48.0 billion. Thiswas mainly due to the decrease in payment for purchase of propertyCash and cash equivalents atend of year(Millions of yen)200,000Equity per share(Yen)500Net income per share(Yen)35150,000100,00050,00040030020010030252015105008/3 09/3 10/3 11/312/3008/3 09/3 10/3 11/3 12/3008/3 09/3 10/3 11/3 12/322 NIPPON EXPRESS Annual Report 2012


and equipment to ¥42.5 billion, including for distribution centers,warehousing upgrades and vehicle acquisitions, as well as proceedsfrom sale of property and equipment of ¥14.4 billion.Equity per share amounted to ¥461.63, an increase of ¥13.34compared with the position at the previous fiscal year-end. The equityratio decreased 1.6 of a percentage point to 39.1%.Cash Flows from Financing ActivitiesCash flows from financing activities resulted in a net inflow of ¥10.1billion, a year-on-year turnaround from an expenditure of ¥26.2 billion.This was mainly due to proceeds from long-term loans payable of¥36.5 billion, payment of long-term loans payable of ¥46.9 billion,proceeds from issuance of bonds of ¥30.0 billion, and cash dividendsof ¥10.4 billion.Financial PositionAssetsTotal assets as of March 31, 2012 amounted to ¥1,230.9 billion, anincrease of ¥83.4 billion, or 7.3%, compared with the previous fiscalyear-end.Current assets increased ¥97.7 billion, or 19.9%, to ¥588.2billion mainly due to a rise in cash and cash in banks. Noncurrentassets declined ¥14.3 billion, or 2.2%, to ¥642.7 billion largelybecause of a decrease in property and equipment such as buildings.Liabilities and Net AssetsTotal liabilities amounted to ¥736.7 billion as of March 31, 2012, anincrease of ¥69.1 billion, or 10.4%, compared with the previous fiscalyear-end.Total current liabilities rose ¥81.1 billion, or 23.9%, to ¥421.6billion, mainly as a result of increases in short-term loans payable,deposits, and accounts payable—trade. Total noncurrent liabilitiesdecreased ¥12.0 billion, or 3.7%, to ¥315.1 billion, primarily due to adecline in long-term loans payable.Net assets rose ¥14.3 billion, or 3.0%, to ¥494.2 billion as ofMarch 31, 2012. The main contributory factor in this increase wasgrowth in retained earnings.Capital InvestmentTotal capital investment by the Nippon Express Group in fiscal 2011amounted to ¥45.8 billion. Major items included changes to logisticssystems and the improvement of distribution depots to supportinternational freight operations. Other investments included thedevelopment of commercial warehouses and the replacement ofvehicles and transportation equipment.Dividend PolicyThe Company regards the return of profits to shareholders as one ofits most important priorities. We aim to maximize returns and maintaindividend stability while expanding our business operations,strengthening our financial position, expanding shareholders’ equityand improving profit ratios.The Company’s basic policy is to pay dividends from retainedearnings twice a year in the form of interim and year-end dividends.The Board of Directors is responsible for decisions concerning theinterim dividend, while decisions on the year-end dividend are taken atthe General Shareholders’ Meeting held following each fiscal year-end.At the 106th General Shareholders’ Meeting on June 28, 2012,we proposed and received approval to set the year-end dividend forfiscal 2011 at ¥5 per share. Together with the interim dividend of ¥5,this brought the annual dividend to ¥10 per share.The earnings retained within Nippon Express will be used forinvestments mainly in the development of logistics bases and thereplacement of vehicles, to expand sales of our distribution andtransportation services and to improve our transportation efficiency.We will also utilize retained earnings to strengthen our financialposition as well as our corporate foundation.Equity ratio(%)45Return on equity(%)10Employees andAverage temporary employees80,0004035864260,00040,00020,0003008/3 09/3 10/3 11/3 12/30008/3 09/3 10/3 11/3 12/3 08/3 09/3 10/3 11/3 12/3Employees Average temporary employeesNIPPON EXPRESS Annual Report 201223


11-Year SummaryNippon Express Co., Ltd and consolidated subsidiariesFor the years ended March 31Millions of yen2012 2011 2010 2009For the year: Revenues 1 ¥ 1,628,027 ¥ 1,617,185 ¥ 1,569,633 ¥ 1,828,946Revenues by industry segment up to theconsolidated fiscal year ended March 31, 2010 2Distribution and Transportation — — 1,284,772 1,524,639Goods Sales — — 266,211 291,084Other — — 18,649 13,222Revenues by geographical segment up to theconsolidated fiscal year ended March 31, 2010 2Japan — — 1,412,630 1,616,285The Americas — — 29,794 45,447Europe — — 40,006 62,227Asia & Oceania — — 87,201 104,986Revenues by reportable segment from the consolidatedfiscal year ended March 31, 2011 onward 2Distribution & TransportationDomestic CompaniesCombined Business 698,476 711,308 745,058 —Security Transportation 58,738 59,515 60,849 —Heavy Haulage & Construction 39,530 33,744 38,872 —Air Freight Forwarding & Travel 203,824 202,099 182,763 —Marine & Harbor Transportation 116,843 116,059 103,959 —Overseas CompaniesThe Americas 31,959 32,898 29,794 —Europe 41,781 40,309 40,006 —East Asia 67,238 70,879South Asia & Oceania 42,191 42,87887,201 3—Goods Sales 308,033 287,929 263,066 —Other 19,409 19,561 18,061 —Operating income 37,497 31,629 37,535 33,513Net income 26,949 8,541 12,566 15,172At year-end: Total net assets 4 494,205 479,898 495,883 484,337Total assets 1,230,964 1,147,539 1,201,801 1,172,074Net cash provided by operating activities 97,806 64,394 82,198 64,080Cash and cash equivalents at end of year 181,614 107,062 121,187 93,031Per share: (yen) Equity per share ¥ 461.63 ¥ 448.29 ¥ 464.38 ¥ 454.03Net income per share 25.85 8.19 12.05 14.55Ratios: (%) Equity ratio 39.10% 40.74% 40.29% 40.40%Return on equity 5.68 1.80 2.62 3.08Other: Employees 65,759 66,924 65,916 71,352(Average temporary employees) 15,765 16,583 19,406 22,8011. Revenue figures do not include consumption taxes.2. Effective from the consolidated fiscal year ended March 31, 2011, the Company has adopted the “Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (ASBJ Statement No. 17 issued on March 27, 2009) and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (ASBJ Guidance No. 20 issued on March 21, 2008). The above listed revenues by industry, geographical and reportable segments do not include internalsales or money transfers between segments.24 NIPPON EXPRESS Annual Report 2012


Millions of yen2008 2007 2006 2005 2004 2003 2002¥ 1,901,433 ¥ 1,866,267 ¥ 1,793,925 ¥ 1,753,306 ¥ 1,666,945 ¥ 1,676,918 ¥ 1,708,1401,597,284 1,580,546 1,522,325 1,485,266 1,419,156 1,429,489 1,454,133291,923 279,080 266,908 263,216 243,084 242,988 248,89812,225 6,640 4,690 4,823 4,703 4,440 5,1081,682,699 1,666,887 1,631,402 1,605,602 1,556,828 1,566,037 1,590,30948,009 45,126 38,495 33,722 31,297 36,055 45,94469,146 59,422 49,333 45,525 38,688 37,406 33,997101,578 94,831 74,693 68,455 40,130 37,419 37,889— — — — — — —— — — — — — —— — — — — — —— — — — — — —— — — — — — —— — — — — — —— — — — — — —— — — — — — —— — — — — — —— — — — — — —48,502 50,325 43,187 43,025 46,156 42,802 33,37036,439 33,208 18,663 32,190 27,263 23,330 21,180520,823 517,516 488,205 444,940 421,128 367,551 375,3901,297,406 1,360,694 1,315,599 1,287,351 1,262,383 1,205,103 1,248,20590,096 123,058 63,966 83,139 83,108 48,315 113,752144,639 170,109 150,615 145,983 138,236 136,149 165,625¥ 489.26 ¥ 486.94 ¥ 467.80 ¥ 426.24 ¥ 403.38 ¥ 352.02 ¥ 353.9934.94 31.84 17.71 30.64 25.93 22.08 19.9739.33% 37.33% 37.11% 34.56% 33.36% 30.50% 30.07%7.16 6.67 4.00 7.43 6.91 6.28 5.9669,177 67,773 65,562 65,321 64,699 65,160 66,71624,434 23,796 24,190 24,400 25,321 25,701 27,2633. Nippon Express underwent an organizational change in the consolidated fiscal year ended March 31, 2011. Consequently, for Distribution & Transportation, overseas companies,Asia & Oceania has been divided into East Asia and South Asia & Oceania. As it is not possible to restate the results for the consolidated fiscal year ended March 31,2010 under the new reportable segments, such results are presented here in accordance with the previous segment designations.4. The calculation of net assets is carried out by applying the Accounting Standards for Description of Net Assets in the Balance Sheet (Accounting Standards Board of Japan,“Accounting Standards for Business Enterprises, No. 5” dated December 9, 2005) and the Application Guidelines for Accounting Standards and Others for Description of NetAssets in the Balance Sheet (Accounting Standards Board of Japan, “Application Guideline for Accounting Standards for Business Enterprises, No. 8” dated December 9,2005) from the year ended March 31, 2007.NIPPON EXPRESS Annual Report 201225


(1) Consolidated Financial StatementsConsolidated Balance SheetsNippon Express Co., Ltd. and consolidated subsidiariesAs of March 31, 2011 and 2012Thousands ofMillions of yenU.S. dollarsASSETS 2011 2012 2012Current assets:Cash and cash in banks (Note 1) ¥ 113,149 ¥ 187,797 $ 2,284,917Notes receivable—trade (Note 9) 11,934 15,880 193,216Accounts receivable—trade 221,814 241,822 2,942,233Inventories (Note 7) 4,806 5,119 62,292Advance payments—trade 2,056 1,705 20,751Prepaid expenses 7,921 8,405 102,274Deferred tax assets 12,863 11,371 138,351Lease investment assets (Note 1) 87,989 89,851 1,093,217Other (Note 6) 28,990 27,101 329,746Less: allowance for doubtful accounts (1,046) (843) (10,257)Total current assets 490,481 588,212 7,156,746Noncurrent assets:Property and equipmentVehicles 171,293 166,605 2,027,073Less: accumulated depreciation (151,339) (147,808) (1,798,373)Vehicles, net 19,953 18,796 228,700Buildings 538,495 536,869 6,532,050Less: accumulated depreciation (287,429) (294,444) (3,582,488)Buildings, net 251,066 242,424 2,949,562Structures 64,501 64,098 779,885Less: accumulated depreciation (49,383) (50,279) (611,752)Structures, net 15,117 13,818 168,132Machinery and equipment 64,459 65,086 791,905Less: accumulated depreciation (50,889) (50,963) (620,072)Machinery and equipment, net 13,570 14,122 171,832Tools, furniture and fixtures 90,128 89,567 1,089,757Less: accumulated depreciation (68,062) (69,354) (843,825)Tools, furniture and fixtures, net 22,066 20,213 245,931Vessels 16,870 15,791 192,136Less: accumulated depreciation (12,483) (12,261) (149,188)Vessels, net 4,387 3,529 42,947Land 171,977 169,870 2,066,805Leased assets 5,146 4,913 59,776Less: accumulated depreciation (1,776) (1,998) (24,313)Leased assets, net 3,369 2,914 35,463Construction in progress 2,631 5,511 67,059Net property and equipment (Notes 1 and 2) 504,140 491,203 5,976,435Intangible assetsLeasehold rights 7,133 6,923 84,243Other 20,227 18,193 221,356Total intangible assets 27,360 25,117 305,600Investments and other assetsInvestment securities (Notes 1 and 3) 87,795 86,764 1,055,660Long-term loans receivable 1,335 3,522 42,863Long-term loans to employees 1,305 990 12,056Long-term prepaid expenses 2,976 3,773 45,911Security deposits 14,250 14,369 174,828Other (Note 3) 19,813 18,796 228,690Less: allowance for doubtful accounts (1,919) (1,785) (21,729)Total investments and other assets 125,557 126,431 1,538,282Total noncurrent assets 657,058 642,752 7,820,318Total assets ¥ 1,147,539 ¥ 1,230,964 $ 14,977,065The accompanying notes are an integral part of these statements.26 NIPPON EXPRESS Annual Report 2012


Millions of yenThousands ofU.S. dollarsLIABILITIES 2011 2012 2012Current liabilities:Notes payable—trade (Note 9) ¥ 6,991 ¥ 11,104 $ 135,113Accounts payable—trade (Note 1) 119,899 135,158 1,644,459Short-term loans payable (Note 1) 49,925 78,556 955,791Other payables 24,616 29,987 364,855Income taxes payable 5,297 15,449 187,970Consumption taxes payable 4,899 5,162 62,814Unpaid expenses 17,010 17,083 207,847Advances received 10,140 10,475 127,457Deposits 40,302 58,201 708,138Deposits from employees 29,670 29,486 358,757Provision for bonuses 19,139 19,532 237,650Provision for directors' bonuses 137 139 1,695Allowance for warranties and repairs 360 119 1,458Provision for loss on disaster 4,035 487 5,926Other 7,980 10,656 129,653Total current liabilities 340,408 421,601 5,129,591Noncurrent liabilities:Bonds payable 50,000 80,000 973,354Long-term loans payable (Note 1) 199,494 160,541 1,953,300Provision for retirement benefits 37,540 38,870 472,929Provision for directors' retirement benefits 418 394 4,798Provision for special repairs 208 190 2,314Deferred tax liabilities 17,510 14,054 171,003Other (Note 1) 22,060 21,107 256,811Total noncurrent liabilities 327,232 315,158 3,834,512Total liabilities 667,641 736,759 8,964,103NET ASSETSShareholders' equity:Common stock 70,175 70,175 853,817Additional paid-in capital 26,908 26,908 327,390Retained earnings 375,785 392,305 4,773,149Less: treasury stock (11,542) (11,549) (140,523)Total shareholders' equity 461,326 477,839 5,813,834Accumulated other comprehensive income:Valuation differences on available-for-sale securities 26,370 27,756 337,716Deferred gains on hedges 9 8 98Foreign currency translation adjustments (20,255) (24,256) (295,132)Total accumulated other comprehensive income 6,125 3,508 42,682Minority interests 12,446 12,858 156,444Total net assets 479,898 494,205 6,012,961Total liabilities and net assets ¥ 1,147,539 ¥ 1,230,964 $ 14,977,065NIPPON EXPRESS Annual Report 201227


(1) Consolidated Financial StatementsConsolidated Statements of IncomeNippon Express Co., Ltd. and consolidated subsidiariesFor the years ended March 31, 2011 and 2012Thousands ofMillions of yenU.S. dollars2011 2012 2012Revenues ¥ 1,617,185 ¥ 1,628,027 $ 19,808,102Operating costs (Note 1) 1,510,590 1,519,353 18,485,868Gross profit 106,595 108,674 1,322,234Selling, general and administrative expenses:Salaries, compensation, and welfare expenses 41,018 41,030 499,212Depreciation and amortization 4,706 3,953 48,100Advertising expenses 4,088 3,910 47,576Provision for allowance for doubtful accounts 352 — —Other 24,800 22,283 271,118Total selling, general and administrative expenses (Note 1) 74,965 71,177 866,007Operating income 31,629 37,497 456,226Non-operating income:Interest income 434 554 6,745Dividends income 2,223 3,037 36,961Gain on sales of vehicles 306 399 4,854Equity in earnings of affiliates 541 455 5,547Gain on foreign exchange 1,888 2,217 26,983Other 8,261 7,815 95,088Total non-operating income 13,655 14,480 176,181Non-operating expenses:Interest expenses 3,456 3,224 39,232Loss on sale and retirement of vehicles 107 55 676Other 1,032 1,255 15,280Total non-operating expenses 4,596 4,536 55,190Ordinary income 40,688 47,441 577,217Extraordinary income:Gain on sales of noncurrent assets (Note 2) 5,233 7,586 92,304Gain on sales of investment securities (Note 4) 46 146 1,779Gains on prior year adjustment 139 — —Other 179 571 6,952Total extraordinary income 5,598 8,304 101,037Extraordinary loss:Loss on disposal of noncurrent assets (Note 3) 4,432 3,223 39,217Loss on sales of investment securities (Note 5) 47 374 4,557Loss on valuation of investment securities (Note 6) 5,892 196 2,393Impairment loss — 169 2,056Loss on adjustment for changes of accounting standard forasset retirement obligations 7,505 — —Loss on disaster (Note 7) 4,847 269 3,281Loss on on prior year adjustment 34 — —Loss on settlement — 1,614 19,648Other 535 410 4,992Total extraordinary loss 23,296 6,258 76,148Income before income taxes and minority interests 22,991 49,487 602,106Income taxes:Current 9,799 20,092 244,467Deferred 3,576 1,635 19,893Total income taxes 13,376 21,727 264,361Income before minority interests 9,615 27,759 337,744Minority interests 1,073 809 9,854Net income ¥ 8,541 ¥ 26,949 $ 327,889The accompanying notes are an integral part of these statements.28 NIPPON EXPRESS Annual Report 2012


Consolidated Statements of Comprehensive IncomeNippon Express Co., Ltd. and consolidated subsidiariesFor the years ended March 31, 2011 and 2012Thousands ofMillions of yenU.S. dollars2011 2012 2012Income before minority interests ¥ 9,615 ¥ 27,759 $ 337,744Other comprehensive income:Valuation differences on available-for-sale securities (6,886) 1,393 16,953Deferred gains (losses) on hedges (2) (2) (24)Foreign currency translation adjustments (7,971) (4,071) (49,533)Share of other comprehensive income of affiliatesaccounted for using the equity method (178) (104) (1,273)Other comprehensive income (Note 1) (15,038) (2,784) (33,878)Comprehensive income (5,423) 24,974 303,866(Comprehensive income attributable to)Shareholders of Nippon Express (6,353) 24,332 296,048Minority interests ¥ 929 ¥ 642 $ 7,817The accompanying notes are an integral part of these statements.NIPPON EXPRESS Annual Report 201229


(1) Consolidated Financial StatementsConsolidated Statements of Changes in Net AssetsNippon Express Co., Ltd. and consolidated subsidiariesFor the years ended March 31, 2011 and 2012Thousands ofMillions of yen U.S. dollars2011 2012 2012Shareholders’ equityCommon stockBalance at beginning of the year ¥ 70,175 ¥ 70,175 $ 853,817Total changes during the year — — —Balance at end of the year 70,175 70,175 853,817Additional paid-in capitalBalance at beginning of the year 26,908 26,908 327,390Total changes during the year — — —Balance at end of the year 26,908 26,908 327,390Retained earningsBalance at beginning of the year 377,675 375,785 4,572,152Changes during the year:Cash dividends (10,427) (10,427) (126,868)Net income 8,541 26,949 327,889Decrease in treasury stock (3) (1) (23)Total changes during the year (1,889) 16,519 200,997Balance at end of the year 375,785 392,305 4,773,149Treasury stockBalance at beginning of the year (11,524) (11,542) (140,434)Changes during the year:Increase in treasury stock (26) (11) (139)Decrease in treasury stock 8 4 50Total changes during the year (17) (7) (88)Balance at end of the year (11,542) (11,549) (140,523)Total shareholders’ equityBalance at beginning of the year 463,234 461,326 5,612,925Changes during the year:Cash dividends (10,427) (10,427) (126,868)Net income 8,541 26,949 327,889Increase in treasury stock (26) (11) (139)Decrease in treasury stock 4 2 27Total changes during the year (1,907) 16,512 200,908Balance at end of the year ¥ 461,326 ¥ 477,839 $ 5,813,834Thousands ofMillions of yen U.S. dollars2011 2012 2012Accumulated other comprehensiveincomeValuation difference on availablefor-salesecuritiesBalance at beginning of the year 33,248 26,370 320,851Net changes in items otherthan shareholders’ equity (6,877) 1,386 16,864Total changes during the year (6,877) 1,386 16,864Balance at end of the year 26,370 27,756 337,716Deferred gains (losses) onhedgesBalance at beginning of the year 12 9 121Net changes in items otherthan shareholders’ equity (2) (1) (22)Total changes during the year (2) (1) (22)Balance at end of the year 9 8 98Foreign currency translationadjustmentsBalance at beginning of the year (12,241) (20,255) (246,450)Net changes in items otherthan shareholders’ equity (8,014) (4,001) (48,682)Total changes during the year (8,014) (4,001) (48,682)Balance at end of the year (20,255) (24,256) (295,132)Total accumulated othercomprehensive incomeBalance at beginning of the year 21,019 6,125 74,522Net changes in items otherthan shareholders’ equity (14,894) (2,616) (31,840)Total changes during the year (14,894) (2,616) (31,840)Balance at end of the year 6,125 3,508 42,682Minority interestsBalance at beginning of the year 11,629 12,446 151,439Net changes in items otherthan shareholders’ equity 817 411 5,005Total changes during the year 817 411 5,005Balance at end of the year 12,446 12,858 156,444Total net assetsBalance at beginning of the year 495,893 479,848 5,838,887Changes during the year:Cash dividends (10,427) (10,427) (126,868)Net income 8,541 26,949 327,889Increase in treasury stock (26) (11) (139)Decrease in treasury stock 4 2 27Net changes in items otherthan shareholders’ equity (14,077) (2,205) (26,835)Total changes during the year (15,985) 14,307 174,073Balance at end of the year ¥479,898 ¥494,205 $6,012,961The accompanying notes are an integral part of these statements.30 NIPPON EXPRESS Annual Report 2012


Consolidated Statements of Cash FlowsNippon Express Co., Ltd. and consolidated subsidiariesFor the years ended March 31, 2011 and 2012Thousands ofMillions of yenU.S. dollars2011 2012 2012Cash flows from operating activities:Income before income taxes and minority interests ¥ 22,991 ¥ 49,487 $ 602,106Depreciation and amortization 52,470 48,390 588,760Impairment loss — 169 2,056Loss on adjustment for changes of accounting standard for assetretirement obligations7,505 — —Loss on disaster 4,847 269 3,281Loss on settlement — 1,614 19,648Loss on sale or write-down of securities, net 5,894 425 5,171Gain on sale or disposal of property and equipment, net (998) (4,706) (57,265)Increase in provision for bonuses 54 428 5,209Increase (decrease) in provision for retirement benefits (1,483) 1,466 17,844Interest and dividend income (2,657) (3,592) (43,706)Interest expense (Note 2) 3,456 3,224 39,232Equity in earnings of unconsolidated subsidiaries and affiliates (541) (455) (5,547)(Increase) decrease in trade receivables 2,999 (26,807) (326,160)(Increase) decrease in inventories 162 (317) (3,864)Increase (decrease) in accounts payable (4,670) 19,362 235,584Increase in consumption taxes payable 141 311 3,783Other (9,017) 20,225 246,076Sub-total 81,152 109,494 1,332,213Interest and dividends received 2,964 3,881 47,231Interest paid (Note 2) (3,604) (3,230) (39,307)Payment related to transfer of retirement benefit obligation (3,908) — —Payment for loss on disaster — (2,458) (29,907)Income taxes paid (12,209) (9,881) (120,224)Net cash provided by operating activities 64,394 97,806 1,190,005Cash flows from investing activities:Payment for purchase of securities (517) (1,570) (19,111)Proceeds from sale of securities 326 581 7,077Payment for purchase of property and equipment (58,008) (42,592) (518,214)Proceeds from sale of property and equipment 8,511 14,465 176,006Other 1,601 (2,447) (29,783)Net cash used in investing activities (48,086) (31,563) (384,026)Cash flows from financing activities:Change in short-term loans payable (3,395) (115) (1,408)Change in commercial paper (7,000) 2,000 24,333Proceeds from long-term loans payable 101,106 36,575 445,012Payment for long-term loans payable (104,857) (46,988) (571,703)Proceeds from issuance of bonds — 30,000 365,007Proceeds from stock issuance to minority shareholders 99 19 243Cash dividends (10,427) (10,427) (126,868)Other (1,750) (935) (11,378)Net cash provided by (used in) financing activities (26,225) 10,129 123,239Effect of exchange rate changes on cash and cash equivalents (4,207) (1,821) (22,158)Net increase (decrease) in cash and cash equivalents (14,124) 74,551 907,058Cash and cash equivalents at beginning of year 121,187 107,062 1,302,626Cash and cash equivalents at end of year (Note 1) ¥ 107,062 ¥ 181,614 $ 2,209,685The accompanying notes are an integral part of these statements.NIPPON EXPRESS Annual Report 201231


(1) Consolidated Financial StatementsNotes to Consolidated Financial StatementsNippon Express Co., Ltd. and consolidated subsidiaries1. Presentation of amounts in the consolidated financial statementsThe yen amounts are rounded off in millions and U.S. dollar amounts in thousands. The total Japanese yen and U.S. dollar amountsshown in the financial statements do not necessarily agree with the sum of the individual amounts. U.S. dollar amounts presented in thefinancial statements are included solely for convenience. The rate of ¥82.19 to US$1.00, prevailing on March 31, 2012, has been usedfor translation into U.S. dollar amounts in the financial statements. The inclusion of such amounts should not be construed as arepresentation that Japanese yen amounts have been or could in the future be converted into U.S. dollars at that or any other rate.2. Basis of presentation of consolidated financial statements and summary of significant accounting policies(1) Scope of consolidation1) There are 250 consolidated subsidiaries. The names of major subsidiaries are described in “Management Discussion and Analysis,Corporate Overview.” A total of seven companies, including Nippon Express Europe GmbH, are newly included in the scope ofconsolidation from the year ended March 31, 2012 due to establishment or share acquisition.Kato Transport Co., Ltd. was excluded from the scope of consolidation due to the sale of its shares. Toyama Nittsu AutomobileEngineering Co., Ltd. was excluded due to a merger with other consolidated subsidiaries, and five companies including NittsuMinami Iwate Transport Co., Ltd. were excluded due to liquidation.2) A total of 26 subsidiaries, including Nittsu Energy Kanto, are excluded from the scope of consolidation as these companies aresmall, and their impact on the consolidated financial statements in terms of total assets, net sales, net income or loss and retainedearnings corresponding to interest held by the Company is considered to be immaterial as a whole.3) A total of 20 subsidiaries, including Nippon Express Travel U.S.A., Inc., held by 11 overseas consolidated subsidiaries, includingNippon Express U.S.A., Inc., are included in the scope of the consolidation.(2) Application of equity-method1) Companies to which the equity method is applied:a. Subsidiary: Awa Godo Tsuun Co., Ltd.b. Affiliates: There are 21 equity-method affiliates, including Nippon Vopack Co., Ltd.Effective the year ended March 31, 2012, Map Cargo S.A.S. has been included in the scope of equity method affiliates, as theCompany newly acquired a portion of its shares.2) A total of 25 subsidiaries, including Nittsu Energy Kanto, and 41 affiliates, including TOKYO KOUN CO., LTD., other than above22 companies are excluded from the scope of subsidiaries or affiliates accounted for by the equity method, but are carried atcost, since their impact on the consolidated financial statements in terms of net income or loss and retained earningscorresponding to interest held by the Company is considered to be immaterial as a whole.(3) Accounting period of the consolidated subsidiariesA total of 62 overseas consolidated subsidiaries, including Nippon Express U.S.A., Inc., have a balance sheet date of December 31.In preparing the accompanying consolidated financial statements, the financial statements as of December 31 and for the year thenended are used in consolidation after making necessary adjustments for significant transactions occurring from January 1 throughMarch 31.One equity-method affiliate has a balance sheet date of August 31 and eight equity-method affiliates have a balance sheet date ofDecember 31. Significant transactions between these dates and March 31 are reflected in computing the equity earnings attributableto the Group.(4) Significant accounting policies1) Valuation methodsa. SecuritiesAvailable-for-sale Securities- Available-for-sale securities with market valueAvailable-for-sale securities with market value are stated at fair value based on the market price as of the balance sheet datewith any unrealized gains or losses, net of applicable taxes, reported as a component of accumulated other comprehensiveincome. Cost of sold securities is stated using the moving average method.- Available-for-sale securities without market valueAvailable-for-sale securities without market value are stated at cost using the moving-average method.b. DerivativesDerivatives are stated at fair value.c. InventoriesInventories are stated primarily at the lower of cost determined by the moving-average method (balance sheet amounts are writtendown on the basis of any decreased profitability).32 NIPPON EXPRESS Annual Report 2012


2) Depreciation and amortizationa. Property and equipment, except for leased assetsDepreciation of property and equipment, except for buildings, is mainly computed by the declining-balance method over theapplicable useful lives. Buildings are depreciated by the straight-line method over their estimated lives. Overseas consolidatedsubsidiaries mainly use the straight-line method over the estimated lives of the assets.Useful lives of assets are principally as follows:VehiclesBuildings and structuresMachinery and equipment, tools, furniture and fixtures and vessels3 to 7 years3 to 60 years2 to 20 yearsb. Intangible fixed assets, except for leased assetsAmortization of intangible fixed assets is computed by the straight-line method over the estimated useful lives. Software costs forinternal use are amortized using the straight-line method over the available period (five years). Overseas consolidated subsidiariesmainly use straight-line method over the estimated lives.c. Leased assetsDepreciation of leased assets is computed by the straight-line method with zero residual value, assuming the lease period as theuseful life.3) Allowances and provisionsa. Allowance for doubtful accountsTo provide for potential loss on receivables, the Company provides an allowance for the expected amount of irrecoverablereceivables. Allowances for ordinary bad debts are computed, based on the historical rate of default. For specific debts whererecovery is doubtful, the Company considers the likelihood of recovery on an individual basis.The allowance for doubtful accounts is adjusted after offsetting receivables and payables between consolidated subsidiaries.b. Provision for bonusesProvision for bonuses is provided at an estimated amount to be paid to the employees by the Company and its consolidatedsubsidiaries based on services rendered during the current fiscal year.c. Provision for directors’ bonusesProvision for directors’ bonuses is provided at an estimated amount to be paid to the directors by the Company and itsconsolidated subsidiaries based on services rendered during the current fiscal year.d. Allowance for warranties and repairsAllowance for warranties and repairs is provided at an estimated amount based on the past experience of certain consolidatedsubsidiaries to provide quality assurance from initial purchase on sales of new cars.e. Provision for retirement benefitsTo prepare for lump-sum retirement and severance payments, an accrual is stated at the present value of the estimated futureobligations arising from services rendered to the end of the fiscal year.The retirement benefits obligation is attributed to each period by the straight-line method over the years of service of employees.Actuarial gain and loss are amortized in the year following the year in which the gain or loss is recognized primarily by thestraight-line method over the period of the average remaining service years of the employees.f. Provision for directors’ retirement benefitsCertain consolidated subsidiaries provide a reserve for the future payment of retirement benefits to directors, based on theamounts required to be paid according to their internal rules.g. Provision for special repairsProvision for special repairs is provided at an estimated amount for the future repairs of vessels based on the past experience ofcertain consolidated subsidiaries.h. Provision for loss on disasterRestoration costs related to the Great East Japan Earthquake likely to accrue after the end of the fiscal year, including primarilycosts for repairs, have been rationally estimated and recorded in the consolidated balance sheets.4) Revenue and expensesa. Finance lease revenueFinance lease revenue and related cost of revenue are recorded when the lease payment is received.b. Completed constructionThe percentage-of-completion method is applied to the contracts if the outcome of the construction activity is deemed certain forthe percentage of the contractor’s obligation performed at the balance sheet date; otherwise, the completed-contract method isapplied. The percentage of completion is determined using the ratio of cost incurred to the estimated total cost.NIPPON EXPRESS Annual Report 201233


(1) Consolidated Financial Statements5) Hedge accountinga. Hedge accounting methodDeferred hedge accounting is adopted.Receivables and payables denominated in foreign currencies for which forward foreign exchange contracts are used to hedgethe risk of currency fluctuation are translated at the contracted rate if the forward contracts qualify for hedge accounting.b. Hedging instruments and hedged items- Hedging instrumentsForward foreign exchange contracts- Hedged itemsReceivables and payables denominated in foreign currencies and foreign currency-denominated forecasted transactionsc. Hedging policyThe Company and its consolidated subsidiaries use derivatives only for the purpose of hedging the exposure of assets andliabilities to market fluctuation risk.d. Method for evaluating hedging effectivenessThe Company and its consolidated subsidiaries use internally available management data to assess the hedging effectiveness.e. OtherForward foreign exchange contracts used by the Company and its consolidated subsidiaries are overseen by the ManagementDepartment based on the application form submitted by each trading section. The Internal Audit Department periodically examinesthe execution and controls on the forward foreign exchange contracts.6) Amortization of goodwillGoodwill is amortized in equal installments over 5 years.7) Cash and cash equivalents in the consolidated statements of cash flowsCash and cash equivalents include cash at hand, demand deposits at banks and highly liquid short-term investments with negligiblerisk of fluctuation in value and maturities of less than three months.8) Accounting method for consumption taxConsumption taxes with respect to the Company and its domestic subsidiaries are excluded from respective transaction amounts.This is not applicable to overseas consolidated subsidiaries.9) Deferred assetsBond issuance costs are fully charged to income as incurred.10) Of the equity method affiliates, domestic subsidiaries and affiliates (16 companies) apply basically the same accounting standards asthe Company while certain foreign subsidiaries (6 companies) apply accounting standards prevailing in the country in which theyoperate, none of which are materially different from the accounting standards applied by the Company.3. Additional informationEffective April, 2011, the Company has adopted Accounting Standards Board of Japan (ASBJ) Statement No. 24 “Accounting Standardfor Accounting Changes and Error Corrections” issued on December 4, 2009 and ASBJ Guidance No. 24 “Guidance on AccountingStandard for Accounting Changes and Error Corrections” issued on December 4, 2009 for accounting changes and corrections of priorperiod errors.4. Notes to Consolidated Balance Sheets*(1) Assets pledged as collateral and secured payablesAssets pledged as collateral are as follows:2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)Time deposits 155 150 1,828Buildings 5,926 5,446 66,268Structures 105 60 730Machinery and equipment 12 9 110Land 3,960 3,449 41,965Investment securities 467 455 5,546Lease investment assets 380 223 2,718Total 11,007 9,794 119,16734 NIPPON EXPRESS Annual Report 2012


The Company’s secured payables are as follows:2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)Accounts payable—trade 3,162 4,745 57,743Long-term loans payable 2,255 1,449 17,641Short-term loans payable andothers1,869 829 10,093Total 7,287 7,025 85,477*(2) Acquisition cost of the assets acquired as substitute for the assets transferred due to expropriation are stated at the book values ofsuch transferred assets, where the difference between the acquisition cost and book values (provision for cost reduction) are asfollows:2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)Buildings 132 1,038 12,637Machinery and equipment 137 215 2,616Vehicles 10 43 529Land 186 85 1,039Structures and others 179 3 39Total 646 1,386 16,863*(3) Investments in unconsolidated subsidiaries and affiliates are as follows:2011(As of March 31, 2011)(Millions of yen)Equity securities (included ininvestment securities)Investments in capital orpartnerships (included in Otherunder investments and otherassets)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)9,929 9,788 119,0971,760 1,899 23,115(4) Notes discounted with banks2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)46 — —(5) Guarantees of loansThe Company has provided guarantees of loans to unconsolidated subsidiaries and affiliates in respect of their borrowings fromfinancial institutions.(2011)As of March 31, 2011Guaranteed partyGuaranteed amount(Millions of yen)World Cargo Distribution Center Co., Ltd. 678 Loan guaranteeKobe Port International Distribution CenterCo., Ltd.578 Loan guaranteeYokkaichi Port International Freight CenterCo., Ltd.11 Loan guaranteeGuarantees for employees’ housing loans 6 Loan guaranteeNittsu Shoji U.S.A., Inc. 163 Loan guaranteeTotal 1,439TypeNIPPON EXPRESS Annual Report 201235


(1) Consolidated Financial Statements(2012)Guaranteed partyGuaranteed amount(Millions of yen)As of March 31, 2012Guaranteed amount(Thousands of U.S. dollars)World Cargo Distribution CenterCo., Ltd.571 6,956 Loan guaranteeKobe Port InternationalDistribution Center Co., Ltd.495 6,030 Loan guaranteeYokkaichi Port InternationalFreight Center Co., Ltd.3 47 Loan guaranteeGuarantees for employees’housing loans3 38 Loan guaranteeNittsu Shoji U.S.A., Inc. 139 1,700 Loan guaranteeTotal 1,214 14,772Type*(6) (2011)“Other current assets” include a reserve payment resulting from sales of notes receivable as part of asset securitization in theamount of ¥3,421 million.(2012)“Other current assets” include a reserve payment resulting from sales of notes receivable as part of asset securitization in theamount of ¥2,975 million (US$36,203 thousand).*(7) Inventories2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)Merchandise and finished goods 2,269 2,561 31,160Work in process 337 335 4,080Raw materials and stores 2,200 2,223 27,050(8) Contingent liabilities(2011)In March 2009, the Fair Trade Commission issued a cease and desist order as well as an order to pay a punitive levy, after itdetermined that the Company had breached the Antimonopoly Act, in respect of a fuel surcharge applied by its international aircargo transport service. In a related matter, the Company is being investigated by the U.S. Department of Justice on suspicion ofsimilar charges in respect of the U.S. competition law. At this point in time, it is difficult to make a reasonable estimation of theamount of any fines to be payable in association with these charges.(2012)Not applicable.*(9) (2011)Not applicable.(2012)Notes due at the end of the fiscal year are settled on the date of clearance. As March 31, 2012 was a bank holiday, the followingnotes due as of that date are included in their respective balances in the consolidated balance sheets.(Millions of yen)(Thousands of U.S. dollars)Notes receivable—trade 948 11,536Notes payable—trade 1,709 20,79336 NIPPON EXPRESS Annual Report 2012


5. Notes to Consolidated Statements of Income*(1) Provisions for various reserves recognized in operating costs and selling, general and administrative expenses are as follows:(2011)Operating costs(Millions of yen)Selling, general, and administrative expenses(Millions of yen)Provision for bonuses 16,634 2,519Provision for directors’ bonuses — 137Allowance for warranties and repairs — 360Provision for retirement benefits 15,774 1,529Provision for directors’ retirement benefits — 160Provision for special repairs 77 —(2012)Operating costs(Millions of yen)Operating costs(Thousands of U.S. dollars)Selling, general, andadministrative expenses(Millions of yen)Selling, general, andadministrative expenses(Thousands of U.S. dollars)Provision for bonuses 16,855 205,083 2,664 32,420Provision for directors’ bonuses — 139 1,695Allowance for warranties and repairs — 3 41Provision for retirement benefits 16,200 197,106 1,588 19,327Provision for directors’ retirement benefits — 160 1,948Provision for special repairs 67 826 —*(2) Breakdown of gain on sales of property and equipment2011(From April 1, 2010 to March 31, 2011)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Thousands of U.S. dollars)Land 4,631 6,948 84,542Buildings 327 365 4,445Intangible assets and others 273 272 3,316Total 5,233 7,586 92,304*(3) Breakdown of loss on disposal of property and equipment2011(From April 1, 2010 to March 31, 2011)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Thousands of U.S. dollars)Buildings 2,344 1,728 21,026Structures 310 177 2,164Machinery and equipment 116 193 2,352Tools, furniture and fixtures 256 142 1,735Land 175 577 7,027Intangible assets and others 1,228 403 4,910Total 4,432 3,223 39,217*(4) Breakdown of gain on sales of securities2011(From April 1, 2010 to March 31, 2011)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Thousands of U.S. dollars)Available-for-sale securities 46 146 1,779Total 46 146 1,779*(5) Breakdown of loss on sales of securities2011(From April 1, 2010 to March 31, 2011)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Thousands of U.S. dollars)Available-for-sale securities 47 374 4,557Total 47 374 4,557NIPPON EXPRESS Annual Report 201237


(1) Consolidated Financial Statements*(6) Loss on valuation of golf membership included in the loss on valuation of investment securities2011(From April 1, 2010 to March 31, 2011)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Thousands of U.S. dollars)20 43 530*(7) Loss on disaster(2011)A provision has been recorded for expenses required to restore facilities damaged by the Great East Japan Earthquake.A breakdown of the loss on disaster is as follows:(Millions of yen)Expenses for the restoration of noncurrent assets 3,372Loss on damages to noncurrent assets 665Other 809(2012)A description is omitted because the amount is immaterial.6. Notes to Consolidated Statements of Comprehensive Income2012 (From April 1, 2011 to March 31, 2012)*(1) Reclassification adjustments and tax effects on components of other comprehensive income(Millions of yen)Valuation differences on available-for-sale securitiesAmount recognized during the year (1,713) (20,844)Reclassification adjustments 206 2,508Before tax effect adjustment (1,507) (18,336)Tax effects 2,900 35,290Valuation differences on available-for-sale securities 1,393 16,953Deferred gains (losses) on hedgesAmount recognized during the year (3) (40)Tax effects 1 15Deferred gains (losses) on hedges (2) (24)Foreign currency translation adjustmentsAmount recognized during the year (4,079) (49,635)Reclassification adjustments 8 102Foreign currency translation adjustments (4,071) (49,533)Share of other comprehensive income of affiliatesaccounted for using the equity methodAmount recognized during the current fiscal year (104) (1,273)Total other comprehensive income (2,784) (33,877)(Thousands of U.S. dollars)7. Notes to Consolidated Statements of Changes in Net Assets2011 (From April 1, 2010 to March 31, 2011)(1) Class and number of shares issuedClass of sharesNumber of sharesas of April 1, 2010IncreaseDecreaseNumber of sharesas of March 31, 2011Common stock (Thousand shares) 1,062,299 — — 1,062,299(2) Class and number of treasury stockNumber of sharesNumber of sharesClass of sharesIncreaseDecreaseas of April1, 2010as of March 31, 2011Common stock (Thousand shares) 19,500 72 14 19,559(Reasons for changes)The increase in common stock in treasury is due to the purchase of shares of less than one unit.The decrease in common stock in treasury is due to the transfer of shares of less than one unit.38 NIPPON EXPRESS Annual Report 2012


(3) Dividends1) Dividends paidResolutionGeneral Shareholders’ Meetingheld on June 29, 2010Board of Directors’ Meetingheld on October 29, 2010Class of sharesTotal amount of dividends(Millions of yen)Dividend per share(yen)Record dateEffective dateCommon stock 5,213 5.0 March 31, 2010 June 30, 2010Common stock 5,213 5.0 September 30, 2010 December 3, 20102) Dividends whose record date falls during the year ended March 31, 2011, but whose effective date is in the following fiscal yearResolution Class of shares Source of dividendsGeneral Shareholders’ Meetingheld on June 29, 2011Common stockRetainedearningsTotal amount ofdividends(Millions of yen)Dividend per share(yen)Record dateEffective date5,213 5.0 March 31, 2011 June 30, 20112012 (From April 1, 2011 to March 31, 2012)(1) Class and number of shares issuedClass of sharesNumber of sharesas of April 1, 2011IncreaseDecreaseNumber of sharesas of March 31, 2012Common stock (Thousand shares) 1,062,299 — — 1,062,299(2) Class and number of treasury stockClass of sharesNumber of sharesas of April 1, 2011IncreaseDecreaseNumber of sharesas of March 31, 2012Common stock (Thousand shares) 19,559 35 7 19,588(Reasons for changes)The increase in common stock in treasury is due to the purchase of shares of less than one unit.The decrease in common stock in treasury is due to the transfer of shares of less than one unit.(3) Dividends1) Dividends paidResolutionGeneralShareholders’Meeting held onJune 29, 2011Board of Directors’Meeting held onOctober 31, 2011Class of sharesTotal amount of dividends(Millions of yen)Dividend per share(yen)Record dateEffective dateCommon stock 5,213 5.0 March 31, 2011 June 30, 2011Common stock 5,213 5.0 September 30, 2011 December 2, 2011ResolutionGeneralShareholders’Meeting held onJune 29, 2011Board of Directors’Meeting held onOctober 31, 2011Class of sharesTotal amount of dividends(Thousands of U.S. dollars)Dividend per share(U.S. dollars)Record dateEffective dateCommon stock 63,434 0.06 March 31, 2011 June 30, 2011Common stock 63,433 0.06 September 30, 2011 December 2, 20112) Dividends whose record date falls in the year ended March 31, 2012, but whose effective date is in the following fiscal yearResolution Class of shares Source of dividendsGeneralShareholders’Meeting held onJune 28, 2012Total amount ofdividends(Millions of yen)Dividend per share(yen)Record dateEffective dateCommon stock Retained earnings 5,213 5.0 March 31, 2012 June 29, 2012NIPPON EXPRESS Annual Report 201239


(1) Consolidated Financial StatementsResolution Class of shares Source of dividendsGeneralShareholders’Meeting held onJune 28, 2012Total amount ofdividends(Thousands of U.S. dollars)Dividend per share(U.S. dollars)Record dateEffective dateCommon stock Retained earnings 63,432 0.06 March 31, 2012 June 29, 20128. Notes to Consolidated Statements of Cash Flows*(1) Reconciliation of the year-end balance of cash and cash equivalents with cash and cash in banks in the consolidated balancesheets2011(From April 1, 2010 to March 31, 2011)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Millions of yen)2012(From April 1, 2011 to March 31, 2012)(Thousands of U.S. dollars)Cash and cash in banks 113,149 187,797 2,284,917Time deposits with maturities ofover three months(5,931) (6,033) (73,403)Time deposits pledged ascollateral for debts(155) (150) (1,828)Cash and cash equivalents 107,062 181,614 2,209,685*(2) (2011)“Interest expenses” as well as “Interest expenses paid” in cash flows from operating activities are presented excluding ¥982 millionin financing costs included in cost of sales in the Goods Sales business (leasing business).(2012)“Interest expenses” as well as “Interest expenses paid” in cash flows from operating activities are presented excluding ¥801 million(US$ 9,756 thousand) in financing costs included in cost of sales in the Goods Sales business (leasing business).9. Notes to Leases(1) Finance leases(Lessee) —(Lessor)Breakdown of lease investment assets2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)Gross lease receivables 89,627 90,783 1,104,556Estimated residual values 1,114 1,194 14,533Unearned interest income (2,752) (2,126) (25,871)Lease investment assets 87,989 89,851 1,093,217Lease receivables and maturities of gross lease receivables corresponding to lease investment assets subsequent to March 31,2011 and 2012 are as follows:2011 (As of March 31, 2011)Lease receivables(Millions of yen)Lease investment assets(Millions of yen)Due in one year or less 3,153 30,891Due after one year through two years 2,672 23,931Due after two years through three years 1,647 16,980Due after three years through four years 886 10,052Due after four years through five years 418 3,974Due after five years 495 3,79740 NIPPON EXPRESS Annual Report 2012


2012 (As of March 31, 2012)Lease receivables(Millions of yen)Lease receivables(Thousands of U.S. dollars)Lease investment assets(Millions of yen)Lease investment assets(Thousands of U.S. dollars)Due in one year or less 3,161 38,460 30,826 375,062Due after one yearthrough two years2,134 25,976 23,977 291,737Due after two yearsthrough three years1,319 16,054 16,896 205,578Due after three yearsthrough four years795 9,681 10,326 125,646Due after four yearsthrough five years434 5,280 4,487 54,603Due after five years 447 5,440 4,267 51,928(2) Operating leasesFuture payment obligations under non-cancellable operating leases are as follows:(Lessee)2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)Portion due within one year 18,205 17,968 218,623Thereafter 110,059 103,669 1,261,337Total 128,264 121,638 1,479,961(Lessor) —10. Financial instruments2011 (From April 1, 2010 to March 31, 2011)(1) Financial instruments and related disclosures1) Group policy for financial instrumentsThe Group raises necessary funds for capital investments mainly by bank loans and issuance of bonds. Short-term working funds areraised mainly by bank loans. Derivatives are used only for hedging purposes to manage the exposure of assets and liabilities to risks ofmarket fluctuation. Mainly forward foreign currency contracts are utilized to hedge foreign exchange risk on receivables and payablesdenominated in foreign currencies as described below. The Group does not enter into derivatives for speculative or trading purposes.2) Nature and risk of financial instruments and risk management systemTrade receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its customercredit risk by managing payment terms and balances by monitoring periodically the financial positions of customers in accordancewith internal guidelines. Although foreign currency trade receivables are exposed to foreign currency fluctuation risk, they are partiallyhedged by forward foreign currency contracts. Investment securities mainly consisting of equity shares of customers or suppliersowned for business or capital alliance purposes are exposed to the risk of market price fluctuations and their holding status iscontinuously reviewed by monitoring the market value and financial position of the issuers on a regular basis and consideringrelationships with the counterparties.The payment terms of trade payables are almost all less than one year. Although some are denominated in foreign currencies andexposed to foreign currency fluctuation risk, they are partially hedged using forward foreign currency contracts. Short-term loanspayable are mainly used for operations and the main objective of long-term loans and bonds is to raise necessary funds for capitalinvestments. Maturities of bonds are within eight years after the balance sheet date and interest expenses of long-term loans arefixed by the fixed interest rate.Derivatives mainly include forward foreign currency contracts, which are used to hedge foreign exchange risk on trade receivables andpayables denominated in foreign currencies. The effectiveness of hedging is assessed using internal effectiveness management data.Derivative transactions are overseen by the Management Department based on the application form submitted by each tradingsection, and the Internal Audit Department periodically examines the execution and controls on the derivative transactions. In usingderivatives, the Group only enters into the contracts with highly rated financial institutions, and it believes that credit risk posed bydefault is quite limited.With respect to liquidity risk related to fund raising, the Group manages its liquidity risk by controlling the funds of the Group as awhole on a timely basis, diversifying the funding instruments, obtaining commitment lines from financial institutions and makingadjustments for the short-term and long-term fund considering market environments.NIPPON EXPRESS Annual Report 201241


(1) Consolidated Financial Statements3) Supplementary explanation about the fair values of financial instrumentsThe fair values of financial instruments comprise the quoted market price and other rationally computed values, if market price is notavailable. Since various factors are considered in computing the values, such values may change depending on the assumptionsused. The contract amounts of derivatives described in Note “Derivatives” do not represent the exposure to the market risk related tothe derivatives.(2) Fair value of financial instrumentsCarrying amount, fair value and related unrealized gain (loss) on financial instruments at March 31, 2011 are as follows:Millions of yenCarrying amount (*1) Fair value (*1) Unrealized gain (loss)1) Cash and cash in banks 113,149 113,149 —2) Accounts receivable—trade 221,814 221,814 —3) Lease investment assets 87,989 89,009 1,0194) Investment securitiesAvailable-for-sale securities 67,263 67,263 —5) Accounts payable—trade (119,899) (119,899) —6) Short-term loans payable (3,375) (3,375) —7) Bonds (50,000) (51,818) (1,818)8) Long-term loans payable (246,044) (246,438) (394)9) Derivatives (*2)a. To which hedge accountingis not appliedb. To which hedge accountingis applied(31) (31) —6 6 —(*1) Liabilities are presented in parentheses.(*2) Receivables and payables incurred as a result of derivatives are presented on a net basis.(Note 1) Computation method of fair values of financial instruments and other matters concerning securities and derivatives1) Cash and cash in banks and 2) accounts receivable—trade:Due to the short maturities of these instruments, the carrying amount approximates fair value.3) Lease investment assets:The fair value of lease investment assets is computed by discounting the aggregate value of the principal and interest using theinterest rate assumed if entering into an identical lease agreement.4) Investment securities:The fair value of equity securities is determined by the quoted price of the stock exchange.5) Accounts payable—trade and 6) short-term loans payable:Due to the short maturities of these instruments, the carrying amount approximates fair value. Short-term loans payable do notinclude the current portion of long-term loans payable.7) BondsThe fair value of bonds issued by the Company is computed with reference to their quoted market prices.8) Long-term loans payable:The fair value of long-term loans payable is computed by discounting the aggregate value of the principal and interest on longtermloans payable classified by period using the interest rate assumed if the entering into an identical loan agreement. Longtermloans payable include the current portion.9) Derivatives:Information on the fair value of derivatives is included in Note 12 “Derivatives.”(Note 2) Unlisted equity securities whose carrying amount is ¥10,602 million are not included in (4) investment securities—available-forsalesecurities, since there is no quoted market price and it is very difficult to determine fair values by estimating future cashflows.42 NIPPON EXPRESS Annual Report 2012


(Note 3) The redemption schedule for monetary receivables and other securities with contractual maturities subsequent to the year endMillions of yenDue in one year or less Due after one year through five years Due after five years through ten yearsCash and cash in banks 113,149 — —Accounts receivable—trade 221,814 — —Lease investment assets 29,580 53,562 4,846(Note 4) Repayment schedule for short-term loans payable, bonds and long-term loans payable subsequent to the year endMillions of yenDue in one year orlessDue after one yearthrough two yearsDue after two yearsthrough three yearsDue after three yearsthrough four yearsDue after four yearsthrough five yearsDue after five yearsShort-term loans payable 3,375 — — — — —Bonds — — — 15,000 — 35,000Long-term loans payable 46,550 70,546 41,641 10,567 31,775 44,9632012 (From April 1, 2011 to March 31, 2012)(1) Financial instruments and related disclosures1) Group policy for financial instrumentsThe Group raises necessary funds for capital investments mainly by bank loans and issuance of bonds. Short-term working funds areraised mainly by bank loans. Derivatives are used only for hedging purposes to manage the exposure of assets and liabilities to risksof market fluctuation. Mainly forward foreign currency contracts are utilized to avoid foreign exchange risk on receivables andpayables denominated in foreign currencies as described below. The Group does not enter into derivatives for speculative or tradingpurposes.2) Nature and risk of financial instruments and risk management systemTrade receivables such as trade notes and trade accounts are exposed to customer credit risk. The Group manages its customercredit risk by managing payment terms and balances by monitoring periodically the financial positions of customers in accordancewith internal guidelines. Although foreign currency trade receivables are exposed to foreign currency fluctuation risk, they are partiallyhedged by forward foreign currency contracts. Investment securities mainly consisting of equity shares of customers or suppliersowned for business or capital alliance purposes are exposed to the risk of market price fluctuations and their holding status iscontinuously reviewed by monitoring the market value and financial position of the issuers on a regular basis and consideringrelationships with the counterparties.The payment terms of trade payables are almost all less than one year. Although some of them are denominated in foreigncurrencies and exposed to foreign currency fluctuation risk, they are partially hedged using forward foreign currency contracts. Shorttermloans payable are mainly used for operations and the main objective of long-term loans and bonds is to raise necessary fundsfor capital investments. Maturities of bonds are within nine years after the balance sheet date and interest expenses of long-termloans are fixed by the fixed interest rate.Derivatives mainly include forward foreign currency contracts, which are used to hedge foreign exchange risk on trade receivablesand payables denominated in foreign currencies. The effectiveness of hedging is assessed using internal effectivenessmanagement data.Derivative transactions are overseen by the Management Department based on the application form submitted by each tradingsection, and the Internal Audit Department periodically examines the execution and controls on the derivative transactions. In usingderivatives, the Group only enters into the contracts with highly rated financial institutions and it believes that credit risk arising fromdefault is quite limited.With respect to liquidity risk related to fund raising, the Group manages its liquidity risk by controlling the funds of the Group as awhole on a timely basis, diversifying the funding instruments, obtaining commitment lines from financial institutions and makingadjustments for the short-term and long-term fund considering market environments.3) Supplementary explanation about the fair values of financial instrumentsThe fair values of financial instruments comprise the quoted market price and other rationally computed values, if market price is notavailable. Since various factors are considered in computing the values, such values may change depending on the assumptionsused. The contract amounts of derivatives described in Note “Derivatives” do not represent the exposure to the market risk related tothe derivatives.NIPPON EXPRESS Annual Report 201243


(1) Consolidated Financial Statements(2) Fair value of financial instrumentsCarrying amount, fair value and related unrealized gain (loss) on financial instruments at March 31, 2012 are as follows:Millions of yenCarrying amount (*1) Fair value (*1) Unrealized gain (loss)1) Cash and cash in banks 187,797 187,797 —2) Accounts receivable—trade 241,822 241,822 —3) Lease investment assets 89,851 90,290 4394) Investment securitiesAvailable-for-sale securities 66,501 66,501 —5) Accounts payable—trade (135,158) (135,158) —6) Short-term loans payable (3,133) (3,133) —7) Bonds (80,000) (82,521) (2,521)8) Long-term loans payable (235,964) (239,310) (3,346)9) Derivatives (*2)a. To which hedge accountingis not appliedb. To which hedge accountingis applied— — —13 13 —Thousands of U.S. dollarsCarrying amount (*1) Fair value (*1) Unrealized gain (loss)1) Cash and cash in banks 2,284,917 2,284,917 —2) Accounts receivable—trade 2,942,233 2,942,233 —3) Lease investment assets 1,093,217 1,098,560 5,3424) Investment securitiesAvailable-for-sale securities 809,117 809,117 —5) Accounts payable—trade (1,644,459) (1,644,459) —6) Short-term loans payable (38,130) (38,130) —7) Bonds (973,354) (1,004,033) (27,393)8) Long-term loans payable (2,870,962) (2,911,675) (40,712)9) Derivatives (*2)a. To which hedge accountingis not appliedb. To which hedge accountingis applied— — —158 158 —44 NIPPON EXPRESS Annual Report 2012


(*1) Liabilities are presented in parentheses.(*2) Receivables and payables incurred as a result of derivatives are presented on a net basis.(Note 1) Computation method of fair values of financial instruments and other matters concerning securities and derivatives1) Cash and cash in banks and 2) accounts receivable—trade:Due to the short maturities of these instruments, the carrying amount approximates fair value.3) Lease investment assets:The fair value of lease investment assets is computed by discounting the aggregate value of the principal and interest using theinterest rate assumed if entering into an identical lease agreement.4) Investment securities:The fair value of equity securities is determined by the quoted price of the stock exchange.5) Accounts payable—trade and (6) short-term loans payable:Due to the short maturities of these instruments, the carrying amount approximates fair value. Short-term loans payable do notinclude the current portion of long-term loans payable.7) BondsThe fair value of bonds issued by the Company is computed with reference to their quoted market prices.8) Long-term loans payable:The fair value of long-term loans payable is computed by discounting the aggregate value of the principal and interest on longtermloans payable classified by period using the interest rate assumed if the entering into an identical lease agreement. Longtermloans payable include the current portion.9) Derivatives:Information on the fair value of derivatives is included in Note 12 “Derivatives.”(Note 2) Unlisted equity securities whose carrying amount is ¥10,474 million (US$127,444 thousand) are not included in (4) investmentsecurities—available-for-sale securities, since there is no quoted market price and it is very difficult to determine fair values byestimating future cash flows.(Note 3) The redemption schedule for monetary receivables and other securities with contractual maturities subsequent to the year endMillions of yenThousands of U.S. dollarsDue in one yearor lessDue after one yearthrough five yearsDue after five yearsthrough ten yearsDue in one yearor lessDue after one yearthrough five yearsDue after five yearsthrough ten yearsCash and cash in banks 187,797 — — 2,284,917 — —Accounts receivable—trade 241,822 — — 2,942,233 — —Lease investment assets 29,810 54,632 5,408 362,704 664,713 65,799(Note 4) Repayment schedule for short-term loans payable, bonds and long-term loans payable subsequent to the year endMillions of yenThousands of U.S. dollarsDue in one yearor lessDue after one yearDueDue after five yearsthrough five years*in one yearor lessDue after one yearDue after five yearsthrough five years*Short-term loans payable 3,133 — — 38,130 — —Bonds — 35,000 45,000 — 425,842 547,511Long-term loans payable 75,422 116,948 43,593 917,661 1,422,900 530,400* For scheduled repayment amounts per year of short-term loans payable, bonds and long-term loans payable due after one yearthrough five years, please refer to “Schedule of bonds” and “Schedule of loans” in the supplementary schedules to the consolidatedfinancial statements.NIPPON EXPRESS Annual Report 201245


(1) Consolidated Financial Statements11. Securities2011 (March 31, 2011)(1) Available-for-sale securitiesMillions of yenCarrying value Acquisition cost Unrealized gain (loss)Carrying value exceeds acquisition cost:1) Equity securities 65,273 20,185 45,0872) Other — — —Sub-total 65,273 20,185 45,087Acquisition cost exceeds carrying value:1) Equity securities 1,989 2,386 (396)2) Other — — —Sub-total 1,989 2,386 (396)Total 67,263 22,571 44,691(Note) Acquisition cost is presented after deducting impairment loss. Impairment loss on available-for-sale securities with fair valueamounted to ¥80 million for the year ended March 31, 2011.The Company recognizes impairment loss when the fair value declines more than 50% of its acquisition cost and determines ifit is necessary to recognize impairment loss after considering the movements of the individual fair value when the fair valuedeclines to between 30% and 50% of the acquisition cost.(2) Available-for-sale securities sold during 2011 (From April 1, 2010 to March 31, 2011)Millions of yenCarrying value Total gains on sales Total losses on sales1) Equity securities 308 46 472) Other — — —Total 308 46 472012 (March 31, 2012)(1) Available-for-sale securitiesMillions of yenCarrying value Acquisition cost Unrealized gain (loss)Carrying value exceedsacquisition cost:1) Equity securities 63,625 19,445 44,1792) Other — — —Sub-total 63,625 19,445 44,179Acquisition cost exceedscarrying value:1) Equity securities 2,888 3,883 (995)2) Other — — —Sub-total 2,888 3,883 (995)Total 66,514 23,329 43,18446 NIPPON EXPRESS Annual Report 2012


Thousands of U.S. dollarsCategory Carrying value Acquisition cost Unrealized gain (loss)Carrying value exceedsacquisition cost:1) Equity securities 774,124 236,597 537,5262) Other — — —Sub-total 774,124 236,597 537,526Acquisition cost exceedscarrying value:1) Equity securities 35,147 47,254 (12,107)2) Other — — —Sub-total 35,147 47,254 (12,107)Total 809,271 283,852 525,419(Note) Acquisition cost is presented after deducting impairment loss. Impairment loss on available-for-sale securities with fair valueamounted to ¥11 million (US$134 thousand) for the year ended March 31, 2012.The Company recognizes impairment loss when the fair value declines more than 50% of its acquisition cost and determines ifit is necessary to recognize impairment loss after considering the movements of the individual fair value when the fair valuedeclines to between 30% and 50% of the acquisition cost.(2) Available-for-sale securities sold during 2012 (From April 1, 2011 to March 31, 2012)Millions of yenCarrying value Total gains on sales Total losses on sales1) Equity securities 417 146 3742) Other — — —Total 417 146 374Thousands of U.S. dollarsCarrying value Total gains on sales Total losses on sales1) Equity securities 5,082 1,779 4,5572) Other — — —Total 5,082 1,779 4,55712. Derivatives2011 (March 31, 2011)(1) Derivative transactions to which hedge accounting is not applied at March 31, 20111) Currency-related derivativesMillions of yenTransactions other thanmarketType of derivative transactionCurrency swap contracts:Receive U.S.$/ Pay JPYContract amount(notional principal)Contract amount dueafter one year(*1) Fair value is based on information obtained from the counter party financial institution.Fair value (*1)Unrealized gain (loss)135 — (31) (31)NIPPON EXPRESS Annual Report 201247


(1) Consolidated Financial Statements(2) Derivative transactions to which hedge accounting is applied at March 31, 20111) Currency-related derivativesHedge accounting methodDeferral hedgeDesignation methodType of derivativetransactionForward foreigncurrency contracts:Selling US$ and othercurrenciesForward foreigncurrency contracts:Buying US$ andother currenciesMajor hedged itemsForecastedtransactions onreceivables andpayables in foreigncurrenciesContract amount(notional principal)2,3751,238Millions of yenContract amount due afterone yearForward foreigncurrency contracts:Selling US$ and other Accountscurrenciesreceivable—trade 302 —Forward foreigncurrency contracts:Buying US$ andother currenciesAccountspayable—trade 805 ———Fair value (*1)(0)6(*2)(*1) Fair value is based on information obtained from the counterparty financial institution.(*2) Fair values of derivatives are included in the fair values of the related accounts receivable—trade and accounts payable—trade.2012 (March 31, 2012)(1) Derivative transactions to which hedge accounting is not applied at March 31, 2012Not applicable.(2) Derivative transactions to which hedge accounting is applied at March 31, 20121) Currency-related derivativesHedge accounting methodDeferral hedgeDesignation methodType of derivativetransactionForward foreigncurrency contracts:Selling US$ and othercurrenciesForward foreigncurrency contracts:Buying US$ andother currenciesMajor hedged itemsForecastedtransactions onreceivables andpayables in foreigncurrenciesContract amount(notional principal)266482Millions of yenContract amount due afterone yearForward foreigncurrency contracts:Selling US$ and other Accountscurrenciesreceivable—trade 266 —Forward foreigncurrency contracts:Buying US$ andother currenciesAccountspayable—trade 1,518 ———Fair value (*1)(1)14(*2)48 NIPPON EXPRESS Annual Report 2012


Hedge accounting methodDeferral hedgeDesignation methodType of derivativetransactionForward foreigncurrency contracts:Selling US$ and othercurrenciesForward foreigncurrency contracts:Buying US$ andother currenciesMajor hedged itemsForecastedtransactions onreceivables andpayables in foreigncurrenciesContract amount(notional principal)3,2435,867Thousands of U.S. dollarsContract amount due afterone yearForward foreigncurrency contracts:Selling US$ and other Accountscurrenciesreceivable—trade 3,238 —Forward foreigncurrency contracts:Buying US$ andother currenciesAccountspayable—trade 18,480 ———Fair value (*1)(19)178(*2)(*1) Fair value is based on information obtained from the counterparty financial institution.(*2) Fair values of derivatives are included in the fair values of the related accounts receivable—trade and accounts payable—trade.13. Retirement benefit(1) Overview of retirement benefit plansThe Company and domestic consolidated subsidiaries have two types of defined-benefit retirement plans: a retirement lump sumpayment plan and a defined-benefit corporate pension plan. Moreover, the Company and some domestic consolidated subsidiariesadopt defined contribution pension plans while some overseas consolidated subsidiaries have defined benefit pension plans.There are also cases when an employee is given a severance pay premium on leaving the Company. Further, the Company adoptsa retirement allowance trust.(2) Retirement benefits obligation2011(As of March 31, 2011)Millions of yen2012(As of March 31, 2012)Thousands ofU.S. dollars2012(As of March 31, 2012)A. Projected benefits obligation (166,427) (170,108) (2,069,693)B. Plan assets at fair market value 42,940 43,008 523,275C. Unfunded retirement benefitobligation (A+B)(123,486) (127,100) (1,546,418)D. Unrecognized actuarial net loss 87,598 89,239 1,085,766E. Unrecognized prior service cost (1,652) (1,009) (12,277)F. Retirement benefits obligation atend of year (C+D+E)(37,540) (38,870) (472,929)G. Provision for retirement benefits(F)(37,540) (38,870) (472,929)(Note) Some consolidated subsidiaries use the simplified method for calculating retirement benefits obligation.NIPPON EXPRESS Annual Report 201249


(1) Consolidated Financial Statements(3) Pension expense2011(From April 1, 2010to March 31, 2011)Millions of yen2012(From April 1, 2011to March 31, 2012)Thousands ofU.S. dollars2012(From April 1, 2011to March 31, 2012)A. Service cost 7,369 6,819 82,974B. Interest cost on projected benefitsobligation3,227 2,947 35,860C. Expected return on plan assets (504) (520) (6,336)D. Amortization of unrecognizedactuarial net loss7,760 9,097 110,682E. Prior service cost recognized (549) (554) (6,747)F. Net periodic pension cost(A+B+C+D+E)17,304 17,788 216,434G. Other 6,929 3,200 38,940Total 24,233 20,989 255,374(Note) Net periodic pension cost of consolidated subsidiaries using the simplified method are included in “A. Service cost.” “G. Other” isthe premium paid to a defined contribution pension plan.(4) Actuarial assumptions used to determine costs and obligations for retirement benefits2011(From April 1, 2010to March 31, 2011)2012(From April 1, 2011to March 31, 2012)A. Allocation of projected benefits obligation Straight-line method Same as previous yearB. Discount rate Mainly 1.75% Mainly 1.50%C. Expected rate of return on plan assets Mainly 2.5% Same as previous yearD. Recognition period of prior service cost 15 years (Past service obligations areSame as previous yearrecognized evenly over fifteen years (aperiod not exceeding the expectedaverage remaining working lives ofemployees) from the time of occurrence).E. Amortization period of actuarial net loss (gain) 12–15 years (Actuarial losses arerecognized evenly over twelve to fifteenyears (a period not exceeding theexpected average remaining working livesof employees) following the respectivefiscal years when such losses arerecognized).Same as previous year50 NIPPON EXPRESS Annual Report 2012


14. Income taxes(1) The significant components of the Company’s deferred tax assets and liabilities as of March 31, 2011 and 2012 areas follows:2011(As of March 31, 2011)(Millions of yen)2012(As of March 31, 2012)(Millions of yen)2012(As of March 31, 2012)(Thousands of U.S. dollars)Deferred tax assets:(Current)Allowance for doubtful accounts 185 95 1,163Accrued bonuses 7,508 7,148 86,976Enterprise tax payable 460 1,177 14,325Lease transactions 658 342 4,168Other 8,397 6,500 79,087Total 17,210 15,264 185,720(Noncurrent)Allowance for doubtful accounts 619 441 5,371Retirement benefits 42,625 36,791 447,636Unrealized gains 3,308 3,278 39,884Impairment losses 3,390 3,025 36,813Asset retirement obligations 3,294 2,764 33,629Other 9,291 8,678 105,587Total 62,530 54,978 668,924Sub-total 79,740 70,243 854,644Valuation allowance (14,582) (12,224) (148,728)Total deferred tax assets 65,158 58,019 705,915Deferred tax liabilities:(Current)Reserve for deferred gains on fixed assets (1,063) (992) 12,073Other (2,759) (2,579) 31,379Total (3,823) (3,571) 43,452(Noncurrent)Reserve for deferred gains on fixed assets (18,852) (16,450) 200,153Gain on securities contribution toemployees’ retirement benefits trust(20,960) (18,333) 186,018Valuation differences on available-for-salesecurities(18,189) (15,288) 223,068Other (2,879) (2,763) 33,620Total (60,881) (52,836) 642,861Total deferred tax liabilities (64,705) (56,408) 686,313Total net deferred tax assets—current 12,863 11,371 138,351Total net deferred tax liabilities—current (32) (54) (658)Total net deferred tax assets—noncurrent 5,132 4,348 52,911Total net deferred tax liabilities—noncurrent (17,510) (14,054) (171,003)NIPPON EXPRESS Annual Report 201251


(1) Consolidated Financial Statements(2) Reconciliation between the statutory tax rate and the effective tax rate after adoption of tax effect accounting2011(From April 1, 2010 to March 31, 2011)2012(From April 1, 2011 to March 31, 2012)Statutory rate 40.7% 40.7%(Adjustment)Non-deductible items 4.7% 3.8%Non-taxable items (5.2)% (3.7) %Per capita inhabitants’ tax 5.0% 2.6%Changes in valuation allowance 22.2% (4.8) %Difference in tax rate applicable to foreignsubsidiaries(3.6)% (2.9) %Reduction of year-end deferred tax assetsdue to the change of tax rate— 2.2%Other, net (5.6)% 5.9%Effective tax rates 58.2% 43.9%(3) Revision of deferred tax assets and deferred tax liabilities due to the change of tax ratesFollowing the enactment of the “Act for Partial Amendment of the Income Tax Act, etc. for the Purpose of Creating a Taxation SystemResponding to Changes in Economic and Social Structures” and “Act on Special Measures for Securing Financial ResourcesNecessary to Implement Measures for Reconstruction following the Great East Japan Earthquake” issued on December 2, 2011,statutory rates applied to the computation of deferred tax assets and deferred tax liabilities (limited to those expected to be reversed onor after April 1, 2012) have been revised from 40.7% to 38.0% for temporary differences expected to be recovered or settled betweenApril 1, 2012 and March 31, 2015, to 35.6% for temporary differences expected to be recovered or settled on or after April 1, 2015.As a result of these revisions, deferred tax liabilities (net of deferred tax assets) decreased by ¥1,197 million (US$14,566thousand), while income taxes—deferred, net valuation differences on available-for-sale securities and net deferred gains on hedgesas of and for the year ended March 31, 2012, increased by ¥993 million (US$12,087 thousand), ¥2,190 million (US$26,649thousand) and ¥0 million (US$4 thousand), respectively.15. Asset retirement obligations2011 (From April 1, 2010 to March 31, 2011)Asset retirement obligations that are stated in consolidated balance sheets1) Description of the asset retirement obligationsAsset retirement obligations are stated in respect of the Company’s obligations to restore the premises it occupies to their originalconditions under the property lease contracts for warehouses and the fixed term land lease contracts for leased properties. Assetretirement obligations are also stated for the Company’s obligations to eliminate hazardous substances from the warehouses in whichsuch substances are used.2) Method for calculating the asset retirement obligationsThe asset retirement obligations are calculated using a 0.160%–2.315% periodic discount rate over the two to fifty years duration ofuse in most cases, and estimated based on the useful life.3) Changes in total asset retirement obligations during 2011Millions of yenBalance at beginning of the year (Note) 11,177Increase due to acquisition of property and equipment 172Accretion adjustment 169Decrease due to settlement (179)Other (7)Balance at end of the year 11,331(Note) This balance at beginning of the year was the result of the adoption of ASBJ Statement No. 18 “Accounting Standard forAsset Retirement Obligations” issued on March 31, 2008 and ASBJ Guidance No. 21 “Guidance on Accounting Standard forAsset Retirement Obligations” issued on March 31, 2008.2012 (From April 1, 2011 to March 31, 2012)Asset retirement obligations that are stated in consolidated balance sheets1) Description of the asset retirement obligationsAsset retirement obligations are stated in respect of the Company’s obligations to restore the premises it occupies to their originalconditions under the property lease contracts for warehouses and the fixed term land lease contracts for leased properties. Assetretirement obligations are also stated for the Company’s obligations to eliminate hazardous substances from the warehouses in whichsuch substances are used.52 NIPPON EXPRESS Annual Report 2012


2) Method for calculating the asset retirement obligationsThe asset retirement obligations are calculated using a 0.160%–2.315% periodic discount rate over the two to fifty years duration ofuse in most cases, and estimated based on the useful life.3) Changes in total asset retirement obligations during 2012Millions of yenThousands of U.S. dollarsBalance at beginning of the year 11,331 137,868Increase due to acquisition of property and321 3,913equipmentAccretion adjustment 169 2,066Decrease due to settlement (441) (5,370)Other (30) (366)Balance at end of the year 11,351 138,11116. Investment and rental property2011 (From April 1, 2010 to March 31, 2011)The Company and certain consolidated subsidiaries hold some rental properties such as office buildings, parking lots and landthroughout Japan. Net rental profit (rental income included in net sales less rental expenses included in cost of sales) and other losses(included in loss on disposal of noncurrent assets) on investment and rental property for the year ended March 31, 2011 were ¥5,556million and ¥134 million, respectively.The carrying amounts, changes in balances and market prices of such properties are as follows:Millions of yenCarrying amountFair valueApril 1, 2010 Increase (decrease) March 31, 2011as of March 31, 201134,095 8,354 42,450 112,901(Notes) 1. Carrying amount recognized in the balance sheet is stated at acquisition cost less accumulated depreciation.2. Increase during the year ended March 31, 2011 primarily consists of an increase in the number of properties.3. Fair value of properties as of March 31, 2011 is measured by the real estate appraisal reports from the real estate appraisersfor significant properties.2012 (From April 1, 2011 to March 31, 2012)The Company and certain consolidated subsidiaries hold some rental properties such as office buildings, parking lots and landthroughout Japan. Net rental profit (rental income included in net sales less rental expenses included in cost of sales) and other losses(included in loss on disposal of noncurrent assets) on investment and rental property for the year ended March 31, 2012 were ¥5,457million (US$66,399 thousand) and ¥1,163 million (US$14,153 thousand), respectively.The carrying amounts, changes in balances and market prices of such properties are as follows:Millions of yenCarrying amountFair valueApril 1, 2011 Increase (decrease) March 31, 2012as of March 31, 201242,450 1,153 43,603 123,973Thousands of U.S. dollarsCarrying amountFair valueApril 1, 2011 Increase (decrease) March 31, 2012as of March 31, 2012516,487 14,032 530,520 1,508,374(Notes) 1. Carrying amount recognized in the balance sheet is stated at acquisition cost less accumulated depreciation.2. Increase during the year ended March 31, 2012 primarily consists of an increase in the number of properties.3. Fair value of properties as of March 31, 2012 is measured by the real estate appraisal reports from the real estate appraisersfor significant properties.NIPPON EXPRESS Annual Report 201253


(1) Consolidated Financial Statements[Segment information](1) Outline of the reportable segmentsReportable segments of the Company are its organizational units whose individual financial results can be identified separately, andserve as the basis and subject of regular review by the Board of Directors, for the purpose of allocating management resources andevaluating business performance.The Company’s head office comprises functional headquarters including the Domestic Business Headquarters, InternationalBusiness Headquarters, and Sales Promotion Headquarters. Each headquarters is responsible for developing comprehensivestrategies for its products and services both in Japan and abroad, and engages in business activities based on such strategies.Under each headquarters, regional general managers are appointed to cover specific geographic regions as well as businessdivisions specializing in specific products and services, providing a structure that allows regional management and/or concernedfield offices to make optimum business decisions on their own.Under this principle, the Company has developed a segment structure in the form of matrix comprising segments by geographicalregion along with segments by products and services as classified based on mode of transportation such as air or marine, in whichthe domestic Distribution & Transportation business comprises five reportable segments including Combined Business, SecurityTransportation, Heavy Haulage & Construction, Air Freight Forwarding & Travel, and Marine & Harbor Transportation, whileoverseas Distribution & Transportation operations comprises four reportable segments, including the Americas, Europe, East Asia,and South Asia & Oceania, besides the two reportable segments outside Distribution and Transportation operations that areGoods Sales and Other.The Combined Business segment (Distribution & Transportation, domestic companies) includes subsidiaries/affiliates andbranches in each geographical region (area). However, it is still presented as one reportable segment because of their similarity in thenature of business as well as financial characteristics.Also, the Combined Business segment (Distribution & Transportation, domestic companies) is presented on a combined basiswith the Fine Arts business segment because of the similarity in the nature of business. Likewise, in Air Freight Forwarding &Travel (Distribution & Transportation, domestic companies), the Air Freight Forwarding business segment is presented on a combinedbasis with the Travel business segment. In each of the above cases, however, the impact of the presentation on a combinedbasis is minimal.54 NIPPON EXPRESS Annual Report 2012


Main products and services as well as main lines of business in each reportable segment are as follows.Reportable segments Main products and services Main lines of businessCombined Business (Distribution &Transportation, domestic companies)Security Transportation (Distribution &Transportation, domestic companies)Heavy Haulage & Construction (Distribution& Transportation, domestic companies)Air Freight Forwarding & Travel (Distribution& Transportation, domestic companies)Marine & Harbor Transportation (Distribution& Transportation, domestic companies)The Americas(Distribution & Transportation, overseascompanies)Europe(Distribution & Transportation, overseascompanies)East Asia(Distribution & Transportation, overseascompanies)South Asia, Oceania(Distribution & Transportation, overseascompanies)Goods SalesOtherRailway utilization transportation, charteredtruck services, combined delivery services,moving & relocation, warehousing &distribution processing, in-factory work, realestate rental, marine & harbortransportation, fine arts transportation,security transportation and heavy haulage &constructionSecurity transportationHeavy haulage & constructionAir freight forwarding and travelMarine & harbor transportation, warehousing& distribution processing and moving &relocationAir freight forwarding, marine & harbortransportation, warehousing & distributionprocessing, moving & relocation, motortransportation and travelAir freight forwarding, marine & harbortransportation, warehousing & distributionprocessing, moving & relocation, motortransportation and travelAir freight forwarding, marine & harbortransportation, warehousing & distributionprocessing, moving & relocation, motortransportation and travelAir freight forwarding, marine & harbortransportation, warehousing & distributionprocessing, moving & relocation, heavyhaulage & construction and travelLease, sale of petroleum and othersOtherRailway forwarding, motor cargotransportation, warehousing and in-factoryworkSecurity guard business, motor cargotransportationHeavy haulage and constructionAir freight forwarding and travelMarine transportation, harbor transportationand warehousingAir freight forwarding, harbor transportation,warehousing, motor cargo transportationand travelSales and leasing of distribution equipment,wrapping and packing materials, vehicles,petroleum and LP gas, etc., vehiclemaintenance services and insurance salesMediation, planning and designing andmanagement of real estate, investigationand research, money lending, automobileoperation instruction and employeedispatching(2) Method for calculating the amounts of revenues, income or loss, assets, liabilities and other items by reportable segmentAccounting principles for the reportable segments are the same as stated in “Basis of presentation of consolidated financialstatements and summary of significant accounting policies.”Income in each reportable segment is stated on the basis of operating income. Intersegment revenues and money transfers arebased on current market price.NIPPON EXPRESS Annual Report 201255


(1) Consolidated Financial Statements(3) Revenues, income (loss), assets, liabilities and other items by reportable segment2011 (From April 1, 2010 to March 31, 2011)CombinedBusinessSecurityTransportationMillions of yenDistribution & TransportationDomestic companiesHeavy Haulage& ConstructionAir FreightForwarding &TravelMarine &HarborTransportationOverseas companiesThe AmericasRevenuesRevenues from external customers 711,308 59,515 33,744 202,099 116,059 32,898 40,309Intersegment 6,130 26 612 1,308 8,156 9,907 4,760Total 717,439 59,542 34,356 203,408 124,216 42,806 45,069Segment income 8,381 1,806 2,685 952 5,439 1,584 1,784Segment assets 474,630 52,833 10,210 94,118 91,465 26,401 30,871Other itemsDepreciation and amortization 25,929 3,236 1,036 4,362 4,621 852 837Amortization of goodwill — — — — — — —Investment in affiliates accounted for bythe equity method4,935 — — 1,005 1,082 — —Increase in property and equipment andintangible assets28,157 2,580 536 3,476 6,323 1,264 640EuropeMillions of yenDistribution & TransportationOverseas companiesAdjustment TotalGoods Sales Other Sub-totalSouth Asia &(Note 1) (Note 2)East AsiaOceaniaRevenuesRevenues from external customers 70,879 42,878 287,929 19,561 1,617,185 — 1,617,185Intersegment 6,075 2,686 64,578 16,418 120,662 (120,662) —Total 76,955 45,564 352,507 35,980 1,737,847 (120,662) 1,617,185Segment income 2,098 1,391 7,053 1,509 34,687 (3,057) 31,629Segment assets 35,836 24,782 229,119 47,715 1,117,985 29,554 1,147,539Other itemsDepreciation and amortization 442 589 5,415 723 48,048 3,515 51,563Amortization of goodwill 278 342 285 — 906 — 906Investment in affiliates accounted for bythe equity method1,277 1,407 — 2 9,711 — 9,711Increase in property and equipment andintangible assets408 1,885 8,447 1,361 55,082 1,650 56,733(Notes) 1. Details of the adjustments are as follows:(1) The segment income adjustment of ¥(3,057) million includes ¥(1,627) million elimination of intersegment income, and¥(1,532) million in corporate expenses not allocated to each reportable segment. The most significant portion of corporateexpenses relates to corporate image advertising and the Company’s administration of group companies.(2) The segment assets adjustment of ¥29,554 million includes ¥(105,513) million elimination of intersegment income, and¥137,631 million corporate assets not allocated to each reportable segment. Corporate assets mainly represent cash andcash in banks, securities and noncurrent assets held by head office not attributable to each reportable segment.(3) The depreciation and amortization adjustment represents the depreciation and amortization at head office not attributableto each reportable segment.(4) The adjustment in increase in property and equipment and intangible assets represents primarily the capital expendituresat head office not attributable to each reportable segment.2. Segment income has been reconciled with operating income in consolidated financial statements.56 NIPPON EXPRESS Annual Report 2012


2012 (From April 1, 2011 to March 31, 2012)Millions of yenRevenuesCombinedBusinessSecurityTransportationDomestic companiesHeavy Haulage& ConstructionDistribution & TransportationAir FreightForwarding &TravelMarine &HarborTransportationOverseas companiesThe AmericasRevenues from external customers 698,476 58,738 39,530 203,824 116,843 31,959 41,781Intersegment 6,240 26 517 1,583 8,811 11,004 4,671Total 704,717 58,764 40,048 205,407 125,654 42,963 46,453Segment income 6,941 1,899 3,817 6,579 5,100 1,682 1,895Segment assets 473,389 77,631 14,418 96,806 90,881 30,488 28,817Other itemsDepreciation and amortization 24,106 2,674 806 4,157 4,606 757 855Amortization of goodwill — — — — — — —Investment in affiliates accounted for bythe equity methodIncrease in property and equipment andintangible assetsEurope5,121 — — 1,003 1,100 — —22,665 2,068 1,608 1,726 3,630 663 620Millions of yenDistribution & TransportationOverseas companiesAdjustment TotalGoods Sales Other Sub-totalSouth Asia &(Note 1) (Note 2)East AsiaOceaniaRevenuesRevenues from external customers 67,238 42,191 308,033 19,409 1,628,027 — 1,628,027Intersegment 5,728 2,620 66,042 20,959 128,206 (128,206) —Total 72,967 44,811 374,076 40,368 1,756,234 (128,206) 1,628,027Segment income 2,344 1,651 6,961 1,942 40,817 (3,320) 37,497Segment assets 35,745 27,720 236,615 84,340 1,196,855 34,109 1,230,964Other itemsDepreciation and amortization 410 749 5,517 658 45,299 3,090 48,390Amortization of goodwill 278 227 275 — 781 — 781Investment in affiliates accounted for bythe equity method1,298 1,356 — 1 9,882 — 9,882Increase in property and equipment andintangible assets537 1,111 6,171 385 41,188 4,701 45,890CombinedBusinessSecurityTransportationDomestic companiesHeavy Haulage& ConstructionThousands of U.S. dollarsDistribution & TransportationAir FreightForwarding &TravelMarine &HarborTransportationOverseas companiesThe AmericasRevenuesRevenues from external customers 8,498,320 714,667 480,961 2,479,919 1,421,623 388,843 508,358Intersegment 75,930 321 6,300 19,265 107,207 133,892 56,837Total 8,574,250 714,989 487,262 2,499,184 1,528,830 522,736 565,195Segment income 84,462 23,115 46,449 80,054 62,057 20,468 23,064Segment assets 5,759,699 944,534 175,433 1,177,832 1,105,751 370,951 350,626Other itemsDepreciation and amortization 293,300 32,537 9,808 50,585 56,051 9,212 10,412Amortization of goodwill 0 0 0 0 0 0 0Investment in affiliates accounted for bythe equity method62,317 — — 12,213 13,390 — —Increase in property and equipment andintangible assets275,763 25,167 19,568 21,012 44,173 8,068 7,545EuropeNIPPON EXPRESS Annual Report 201257


(1) Consolidated Financial StatementsRevenuesDistribution & TransportationOverseas companiesSouth Asia &East AsiaOceaniaThousands of U.S. dollarsGoods Sales Other Sub-totalAdjustment(Note 1)Total(Note 2)Revenues from external customers 818,083 513,343 3,747,825 236,156 19,808,102 — 19,808,102Intersegment 69,702 31,881 803,531 255,006 1,559,877 (1,559,877) 0Total 887,786 545,224 4,551,356 491,163 21,367,979 (1,559,877) 19,808,102Segment income 28,521 20,090 84,703 23,632 496,621 (40,394) 456,226Segment assets 434,907 337,267 2,878,880 1,026,168 14,562,052 415,012 14,977,065Other itemsDepreciation and amortization 4,994 9,118 67,126 8,010 551,157 37,603 588,760Amortization of goodwill 3,386 2,770 3,354 — 9,510 — 9,510Investment in affiliates accounted for bythe equity methodIncrease in property and equipment andintangible assets15,794 16,504 — 23 120,243 — 120,2436,543 13,519 75,088 4,689 501,139 57,201 558,341(Notes) 1. Details of the adjustments are as follows:(1) The segment income adjustment of ¥(3,320) million (US$(40,394) thousand) includes ¥(2,041) million (US$(24,843)thousand) for the elimination of intersegment income, and ¥(1,347) million (US$(16,399) thousand) of corporate expensesnot allocated to each reportable segment. The most significant portion of corporate expenses relates to corporate imageadvertising and the Company’s administration of group companies.(2) The segment assets adjustment of ¥34,109 million (US$415,012 thousand) includes ¥(143,033) million (US$(1,740,284)thousand) for the elimination of intersegment income, and ¥180,020 million (US$2,190,294 thousand) of corporate assetsnot allocated to each reportable segment. Corporate assets mainly represent cash and cash in banks, securities andnoncurrent assets held by head office not attributable to each reportable segment.(3) The depreciation and amortization adjustment represents the depreciation and amortization at head office not attributableto each reportable segment.(4) The adjustment in increase in property and equipment and intangible assets represents primarily the capital expendituresat head office not attributable to each reportable segment.2. Segment income has been reconciled with operating income in consolidated financial statements.[Related information]2011 (From April 1, 2010 to March 31, 2011)1. Information by products and servicesRevenues fromexternalcustomersRailwayutilizationtransportationCombineddeliveryservicesCharteredtruck servicesMoving &relocationWarehousing& distributionprocessingMillions of yenIn-factoryworkReal estaterentalAir freightforwardingTravelMarine &harbortransportation79,185 69,078 228,825 61,010 154,473 45,558 14,414 287,179 6,402 184,343Revenues from externalcustomersFine artstransportationSecuritytransportationHeavyhaulage &constructionOtherdistribution &transportationMillions of yenLeaseSales ofpetroleum,etc.Sales ofothers3,137 76,127 45,866 50,084 46,835 164,291 80,065 20,305 1,617,185OtherTotal2. Information by region(1) RevenuesMillions of yenJapan The Americas Europe Asia & Oceania Total1,267,542 81,801 71,758 196,082 1,617,185(Notes) 1. The above amounts represent revenues of the Company and its consolidated subsidiaries based on countries and regions.2. Countries and regions are categorized on the basis of geographic proximity.3. Main countries and regions in each segment are as follows:(1) The Americas……….U.S.A., Canada, South and Central America(2) Europe………………United Kingdom, the Netherlands, Germany and other European countries, and Africa(3) Asia & Oceania…….China, Singapore, Australia and other Asian and Oceanian countries58 NIPPON EXPRESS Annual Report 2012


(2) Property and equipmentA description is omitted because the proportion of property and equipment held in Japan exceeds 90% of the balance of propertyand equipment stated on the consolidated balance sheets.3. Information about major customersA description is omitted because there is no particular customer, from which revenue exceeds 10% of revenues stated on theconsolidated statements of income.2012 (From April 1, 2011 to March 31, 2012)1. Information by products and servicesRevenues fromexternalcustomersRailwayutilizationtransportationCombineddeliveryservicesCharteredtruck servicesMoving &relocationWarehousing& distributionprocessingMillions of yenIn-factoryworkReal estaterentalAir freightforwardingTravelMarine &harbortransportation78,989 60,099 223,343 64,291 162,541 43,079 12,901 284,844 5,661 180,070Revenues from externalcustomersFine artstransportationSecuritytransportationHeavyhaulage &constructionOtherdistribution &transportationMillions of yenLeaseSales ofpetroleum,etc.Sales ofothers3,000 75,069 51,798 51,080 46,576 183,065 81,502 20,111 1,628,027OtherTotalRevenues fromexternalcustomersRailwayutilizationtransportationCombineddeliveryservicesCharteredtruck servicesMoving &relocationThousands of U.S. dollarsWarehousing& distributionprocessingIn-factoryworkReal estaterentalAir freightforwardingTravelMarine &harbortransportation961,056 731,228 2,717,404 782,232 1,977,637 524,140 156,973 3,465,677 68,882 2,190,902Revenues from externalcustomersFine artstransportationSecuritytransportationHeavyhaulage &constructionOtherdistribution &transportationThousands of U.S. dollarsLeaseSales ofpetroleum,etc.Sales ofothers36,508 913,369 630,224 621,498 566,691 2,227,346 991,634 244,694 19,808,102OtherTotal2. Information by region(1) RevenuesMillions of yenJapan The Americas Europe Asia & Oceania Total1,274,823 82,583 74,625 195,995 1,628,027Thousands of U.S. dollarsJapan The Americas Europe Asia & Oceania Total15,510,685 1,004,791 907,959 2,384,666 19,808,102(Notes) 1. The above amounts represent revenues of the Company and its consolidated subsidiaries based on countries and regions.2. Countries and regions are categorized on the basis of geographic proximity.3. Main countries and regions in each segment are as follows:(1) The Americas……….U.S.A., Canada, South and Central America(2) Europe………………United Kingdom, the Netherlands, Germany and other European countries, and Africa(3) Asia & Oceania…….China, Singapore, Australia and other Asian and Oceanian countries(2) Property and equipmentA description is omitted because the proportion of property and equipment held in Japan exceeds 90% of the balance of propertyand equipment stated on the consolidated balance sheets.3. Information about major customersA description is omitted because there is no particular customer, revenue from which exceeds 10% of revenues stated on theconsolidated statements of income.NIPPON EXPRESS Annual Report 201259


(1) Consolidated Financial Statements[Information about impairment loss on noncurrent assets by each reportable segment]2011 (From April 1, 2010 to March 31, 2011)Not applicable.2012 (From April 1, 2011 to March 31, 2012)A description is omitted because the amount is immaterial.[Information about unamortized balance of goodwill by each reportable segment]2011 (From April 1, 2010 to March 31, 2011)CombinedBusinessSecurityTransportationMillions of yenDistribution & TransportationDomestic companiesHeavy Haulage &ConstructionAir FreightForwarding &TravelMarine & HarborTransportationOverseas companiesThe AmericasBalance at end of the year — — — — — — —EuropeMillions of yenDistribution & TransportationOverseas companiesGoods Sales Other TotalEast AsiaSouth Asia & OceaniaBalance at end of the year 513 437 367 — 1,318(Note) For the amortization of goodwill, please refer to “Segment information (3) Revenues, income (loss), assets, liabilities and otheritems by reportable segment.”2012 (From April 1, 2011 to March 31, 2012)CombinedBusinessSecurityTransportationMillions of yenDistribution & TransportationDomestic companiesHeavy Haulage &ConstructionAir FreightForwarding &TravelMarine & HarborTransportationOverseas companiesThe AmericasBalance at end of the year — — — — — — —EuropeMillions of yenDistribution & TransportationOverseas companiesGoods Sales Other TotalEast AsiaSouth Asia & OceaniaBalance at end of the year 234 210 381 — 826CombinedBusinessSecurityTransportationThousands of U.S. dollarsDistribution and transportationDomestic companiesHeavy Haulage &ConstructionAir FreightForwarding &TravelMarine & HarborTransportationOverseas companiesThe AmericasBalance at end of the year — — — — — — —EuropeThousands of U.S. dollarsDistribution & TransportationOverseas companiesGoods Sales Other TotalEast AsiaSouth Asia & OceaniaBalance at end of the year 2,855 2,558 4,645 — 10,060(Note) For the amortization of goodwill, please refer to “Segment information (3) Revenues, income (loss), assets, liabilities and otheritems by reportable segment.”[Information about gain on negative goodwill by each reportable segment]2011 (From April 1, 2010 to March 31, 2011)A description is omitted because the amount is immaterial.2012 (From April 1, 2011 to March 31, 2012)Not applicable.60 NIPPON EXPRESS Annual Report 2012


17. Related party information2011 (From April 1, 2010 to March 31, 2011)Not applicable.2012 (From April 1, 2011 to March 31, 2012)Not applicable.18. Per share informationThe amounts and bases for the computation of net assets per share and net income per share are set out below.2011(March 31, 2011)Yen2012(March 31, 2012)U.S. dollars2012(March 31, 2012)(1) Net assets per share 448.29 461.63 561.66Millions of yenThousands of U.S. dollars2011(March 31, 2011)2012(March 31, 2012)2012(March 31, 2012)(Basis for calculation)Total net assets on consolidatedbalance sheets479,898 494,205 6,012,961Net assets related to commonstock467,451 481,347 5,856,516Breakdown of difference:Minority interests 12,446 12,858 156,444Number of common stockissued1,062,299 1,062,299 —(1,000 shares)Treasury stock of common stock(1,000 shares)19,559 19,588 —Number of common stock usedto calculate net assets per share(1,000 shares)1,042,740 1,042,711 —2011(From April 1, 2010 to March 31, 2011)Yen2012(From April 1, 2011 to March 31, 2012)U.S. dollars2012(From April 1, 2011 to March 31, 2012)(2) Net income per share 8.19 25.85 31.45Millions of yenThousands of U.S. dollars2011(From April 1, 2010 to March 31, 2011)2012(From April 1, 2011 to March 31, 2012)2012(From April 1, 2011 to March 31, 2012)Net income 8,541 26,949 327,889Net income related to commonstock8,541 26,949 327,889Weighted average number ofcommon stock during the year(1,000 shares)1,042,770 1,042,724 —(Note) Diluted net income per share is not stated because there were no residual securities.19. Significant subsequent eventsNot applicable.NIPPON EXPRESS Annual Report 201261


20. Supplementary schedule[Schedule of bonds]Issuer Name of bond Issuance dateNIPPONEXPRESSCO., LTD.3rdUnsecuredStraightBonds4thUnsecuredStraightBonds5thUnsecuredStraightBonds6thUnsecuredStraightBonds7thUnsecuredStraightBondsJanuary 30,2008Balance as ofApril 1, 2011Millions of yenBalance as ofMarch 31, 2012Thousands ofU.S. dollarsBalance as ofMarch 31, 2012Interest rate(%)Collateral20,000 20,000 243,338 1.59 UnsecuredMaturityJanuary 30,2018June 1, 2009 15,000 15,000 182,503 1.12 Unsecured May 30, 2014June 1, 2009 15,000 15,000 182,503 1.82 Unsecured May 31, 2019October 20,2011October 20,2011— 20,000 243,338 0.46 Unsecured— 10,000 121,669 1.09 UnsecuredOctober 20,2016October 20,2021Total — — 50,000 80,000 973,351 — — —(Note) The repayment schedule of bonds for five years subsequent to March 31, 2012, is summarized as follows:Millions of yenDue in one year or lessDue after one yearthrough two yearsDue after two yearsthrough three yearsDue after three yearsthrough four yearsDue after four yearsthrough five years— — 15,000 — 20,000Thousands of U.S. dollarsDue after one yearDue after two yearsDue after three yearsDue after four yearsDue in one year or lessthrough two yearsthrough three yearsthrough four yearsthrough five years— — 182,503 — 243,338[Schedule of loans]CategoryBalance as ofApril 1, 2011(Millions of yen)Balance as ofMarch 31, 2012(Millions of yen)Balance as ofMarch 31, 2012(Thousands of U.S.dollars)Averageinterest rate(%)Short-term loans payable 3,375 3,133 38,130 0.7 —Current portion of long-term loanspayable46,550 75,422 917,661 1.1 —Current portion of leaseobligation730 675 8,212 — —Long-term loans payable(excluding current portion)Lease obligation(excluding current portion)Other interest-bearing debtCommercial paper(current portion)In-house savings deposits byemployeesCurrent portion of liabilities on transferof long-term receivables199,494 160,541 1,953,300 1.13,116 2,659 32,353 —Due dateFinal due date:September 17,2029Final due date:August 2, 2029— 2,000 24,333 0.1 —29,670 29,486 358,757 0.6 —54 — — — —Total 282,991 273,918 3,332,746 — —62 NIPPON EXPRESS Annual Report 2012


(Notes) 1. Average interest rates are stated at weighted average interest rates on the average balance of borrowings for the year. However,average interest rates are not stated for either the current portion of lease obligations or lease obligations (excluding currentportion), since the interest portion in the total lease payment has been allocated to each fiscal year by the straight line method.2. The repayment schedule of long-term loans payable and lease obligation (excluding current portion) for five years subsequentto March 31, 2012, is summarized as follows:Millions of yenDue after one yearthrough two yearsDue after two yearsthrough three yearsDue after three yearsthrough four yearsDue after four yearsthrough five yearsLong-term loans payable 53,353 23,154 38,970 1,470Lease obligation 515 417 861 105Due after one yearthrough two yearsDue after two yearsthrough three yearsThousands of U.S. dollarsDue after three yearsthrough four yearsDue after four yearsthrough five yearsLong-term loans payable 649,146 281,716 474,150 17,886Lease obligation 6,278 5,082 10,484 1,2833. Deposits in the in-house savings deposits by employees are recorded as Deposits from employees in the consolidatedbalance sheets.4. Current portion of liabilities on transfer of long-term receivables is included in “Other” under current liabilities in theconsolidated balance sheets.[Schedule of asset retirement obligations]A description is omitted because the amounts of asset retirement obligations at the beginning of the year ended March 31, 2012 andthe end of the year ended March 31, 2012 are both less than one percent of the total of liabilities and net assets of the respectivefiscal years.(2) OtherQuarterly information in 2012Three months endedJun. 30, 2011From April 1, 2011 toJune 30, 2011Six months endedSep. 30, 2011From April 1, 2011 toSeptember 30, 2011Millions of yenNine months endedDec. 31, 2011From April 1, 2011 toDecember 31, 20112012From April 1, 2011 toMarch 31, 2012Revenues 398,375 801,923 1,213,535 1,628,027Income before income taxes and minority interests 10,646 18,346 30,999 49,487Net income 5,573 9,983 16,903 26,949Net income per share(yen)5.35 9.57 16.21 25.85Three months endedJun. 30, 2011From April 1, 2011 toJune 30, 2011Thousands of U.S. dollarsSix months endedSep. 30, 2011From April 1, 2011 toSeptember 30, 2011Nine months endedDec. 31, 2011From April 1, 2011 toDecember 31, 20112012From April 1, 2012 toMarch 31, 2012Revenues 4,847,012 9,756,943 14,765,000 19,808,102Income before income taxes and minority interests 129,538 223,221 377,164 602,106Net income 67,816 121,473 205,662 327,889Net income per share(U.S. dollars)0.07 0.12 0.20 0.31Net income per share(yen)1Q 2Q 3Q 4QFrom April 1, 2011 toJune 30, 2011From July 1, 2011 toSeptember 30, 2011From October 1, 2011 toDecember 31, 2011From January 1, 2012 toMarch 31, 20125.35 4.23 6.64 9.63Net income per share(U.S. dollars)1Q 2Q 3Q 4QFrom April 1, 2011 toJune 30, 2011From July 1, 2011 toSeptember 30, 2011From October 1, 2011 toDecember 31, 2011From January 1, 2012 toMarch 31, 20120.06 0.05 0.08 0.11NIPPON EXPRESS Annual Report 201263


Report of Independent Auditors64 NIPPON EXPRESS Annual Report 2012


Global NetworkThe AmericasNIPPON EXPRESS U.S.A., INC.590 Madison Avenue, 24th FloorNew York, NY 10022, U.S.A.NEX TRANSPORT, INC.13900 State Route 287East Liberty, OH 43319, U.S.A.NIPPON EXPRESS TRAVEL USA, INC.8 California Street, 8th FloorSan Francisco, CA 94111, U.S.A.NIPPON EXPRESS CANADA, LTD.6250 Edwards Boulevard, MississaugaOntario L5T 2X3, CanadaNIPPON EXPRESS DO BRASILRua Fortaleza 53, Bela VistaSão Paulo, SP, CEP 01325-010, BrazilNITTSU DO BRASIL COMERCIAL, LTDA.Rua Fortaleza 53, Bela VistaSão Paulo, SP, CEP 01325-010, BrazilNIPPON EXPRESS DE MEXICO, S.A. DE C.V.Avenida Michoacan No. 20, Col. RenovacionDel. Iztapalapa Parque Industrial FINSA Nave #5Mexico D.F., C.P. 09209, MexicoNEX GLOBAL LOGISTICS DE MEXICO, S.A. DE C.V.Blvd. Bellas Artes #20240 B & CCiudad IndustrialDelegación Mesa de Otay, TijuanaBaja California, C.P. 22444, MexicoEuropeNIPPON EXPRESS EUROPE GMBHHansaallee 249, 40549 Dusseldorf, GermanyNIPPON EXPRESS (DEUTSCHLAND) GMBHMarie-Bernays-Ring 23, 41199 MöenchengladbachF.R. GermanyNIPPON EXPRESS (RUSSIA) LLC2nd Hutorskaya st. 38A, Bldg. No. 23Moscow 127287, RussiaNEX Logistics Europe GmbHMarie-Bernays-Ring 23, 41199 MöenchengladbachF. R. GermanyNIPPON EXPRESS (U.K.) LTD.Heathrow 360, 2 Millington Road, HayesMiddlesex UB3 4AZ, U.K.NIPPON EXPRESS (IRELAND) LTD.Unit 6, Plato Business Park, DamastownMulhuddart, Dublin 15, IrelandNIPPON EXPRESS (NEDERLAND) B.V.Cessnalaan 24, 1119 NL Schiphol-Rijk, The NetherlandsNIPPON EXPRESS EURO CARGO B.V.Cessnalaan 24, 1119 NL Schiphol-Rijk, The NetherlandsNIPPON EXPRESS FRANCE, S.A.S.1, Rue Du Chapelier, B.P. 1817795702 Roissy Aeroport Charles De Gaulle, FranceNIPPON EXPRESS (ITALIA) S.R.L.Via Londra 12, 20090 Segrate (MI), ItalyNIPPON EXPRESS (SCHWEIZ) AGGrindel Strasse 19, 8303 Bassersdorf, SwitzerlandNIPPON EXPRESS DE ESPAÑA, S.A.Centro de Carga Aerea, Aeropuerto de BarajasParcela 2.1, Nave 2, 28042 Madrid, SpainNIPPON EXPRESS PORTUGAL S.A.Aeroporto De Lisboa, Edificio 125, Piso 3Gab. 6, 1700 Lisbon, PortugalNIPPON EXPRESS (MIDDLE EAST) L.L.C.c/o Airlink Jebel Ali Logistics Centre, P.O. Box 17341Jebel Ali, Dubai, United Arab EmiratesNippon Express (Istanbul) Global Logistics A.S.Istanbul Dunya Ticaret Merkezi A2 Block Kat. 3No : 162, 34149 Sevketiye Mh.Bakirkoy, Istanbul, TurkeyNIPPON EXPRESS (BELGIUM) N.V./S.A.Brucargo Bldg. 723, 1931 Zaventem, BelgiumNIPPON EXPRESS Annual Report 201265


Global NetworkEast AsiaNIPPON EXPRESS (H.K.) CO., LTD.1101 Chinachem Golden Plaza77 Mody Road, Tsim Sha Tsui EastKowloon, Hong KongNIPPON EXPRESS (SHENZHEN) CO., LTD.B 105-36 Futian Free Trade Zone, Shenzhen, P.R.C.NIPPON EXPRESS (ZHUHAI) CO., LTD.No.1 Ping Dong 5 RoadNan Pin High-Technology Industry AreaZhuhai, Guangdong 519060, P.R.C.Nippon Express (South China) Co., Ltd.Room1312, Hongchang Plaza, Shennan East RoadLuohu, Shenzhen, Guangdon 518002, P.R.CNIPPON EXPRESS (CHINA) CO., LTD.Room E508-513, ACLP International BuildingNo. 566 Shunping Road, Shunyi DistrictBeijing 101300, P.R.C.NIPPON EXPRESS CARGO SERVICE (SHENZHEN) CO., LTD.2F, West Side, Nippon Express WarehouseYantain Port Free Trade ZoneShenzhen 518083, P.R.C.NIPPON EXPRESS GLOBAL LOGISTICS(SHANGHAI) CO., LTD.11, De Bao Lu, Wai Gao Qiao Free Trade ZoneShanghai 200131, P.R.C.NIPPON EXPRESS (XIAMEN) CO., LTD.No. 23-1B, Xiangxing 1 Road, Xiangyu Free Trade ZoneXiamen 361006, P.R.C.NIPPON EXPRESS (SUZHOU) CO., LTDNo. 622 Changjiang RoadSuzhou New District, SuzhouJiangsu 215011, P.R.C.Shanghai e-technology Co., Ltd.3F, 126 Jiangchang No. 3 Road, Shanghai 200436, P.R.C.NITTSU SINOTRANS LOGISTIC DALIAN LTD.No. 6 Haitian RoadFree Trade Zone of DalianDalian 116600, P.R.C.NIPPON EXPRESS (SHANGHAI) CO., LTD.C-12-11F, Shanghai Mart No. 2299Yan-an Road WestShanghai 200336, P.R.C.NIPPON EXPRESS KOREA CO., LTD.11F Kyobo Securities B/D26-4 Yeouido-DongYeoungdeungpo-GuSeoul 150-737, Republic of KoreaNippon Express (Taiwan) Co., Ltd.14 Fl., No. 285, Section. 4, Chung Hsiao E. Road, Da-an DistrictTaipei City 10692, Taiwan, R.O.C.South Asia & OceaniaNIPPON EXPRESS (SOUTH ASIA & OCEANIA) PTE, LTD.40 ALPS Avenue, Singapore 498781NIPPON EXPRESS (SINGAPORE) PTE., LTD.40 Alps Avenue, Singapore 498781NIPPON EXPRESS (AUSTRALIA) PTY., LTD.Airgate Business Park, 291 Coward StreetMascot, N.S.W. 2020, AustraliaNIPPON EXPRESS (NEW ZEALAND) LTD.37 Andrew Baxter Drive, Airport Oaks, Mangere(P.O. Box 73035, Auckland Int’l Airport) New ZealandNIPPON EXPRESS (MALAYSIA) SDN, BHD.10th Floor, West Tower, Wisma Consplant 1, No. 2Jalan SS16/4, 47500 Subang JayaSelangor Darul Ehsan, MalaysiaNITTSU TRANSPORT SERVICE (M) SDN, BHD.Lot 4286, Batu 12, Jalan Balakong, 43300 Sri KembanganSelangor Darul Ehsan, MalaysiaNIPPON EXPRESS (PHILIPPINES) CORPORATIONNo. 8 Johann St., Bgry. Ibayo, Pascor Drive, Paranaque CityMetro Manila, Philippines66 NIPPON EXPRESS Annual Report 2012


NEP LOGISTICS, INC.Unit 1, Lot 10, Phase 4, East Science Ave.Laguna Technopark, Inc., BinanLaguna, PhilippinesHI-TECH NITTSU (THAILAND) CO., LTD.Lake Rajada Office Complex,193/8821st Fl., Rachadapisek Road, Klong-ToeyBangkok 10110 ThailandNIPPON EXPRESS (THAILAND) CO., LTD.3195/16 11th Floor, Vibulthani Tower 1, Rama 4 RoadKlong Ton, Klong Toey, Bangkok 10110, ThailandNIPPON EXPRESS ENGINEERING (THAILAND) CO., LTD.3195/16 11th Floor, Vibulthani Tower 1, Rama 4 RoadKlong Ton, Klong Toey, Bangkok 10110, ThailandTBSC LOGISTICS CO., LTD14/3 Phaholyothin Road, Tambol KlongnungAmphur Klongluang, Pathumthani 12120, ThailandPT. NIPPON EXPRESS INDONESIASoewarna Business Park Block J lot 12Bandara International Soekarno-HattaJakarta 19110, Republic of IndonesiaP.T. NITTSU LEMO INDONESIA LOGISTIKJl. Raya Cakung Cilincing Kav. 14Cakung-Timur, CakungJakarta 13910, Republic of IndonesiaNIPPON EXPRESS (INDIA) PRIVATE LIMITEDLogistics Park, Plot No. 7, Road No. 10Export Promotion Indl. ParkWhitefield, Bangalore-560066, Republic of IndiaNIPPON EXPRESS (VIETNAM) CO., LTD.R.5.3 E-town, 364 Cong Hoa StreetTan Binh District Ho Chi Minh CitySocialist Republic of VietnamNITTSU LOGISTICS (INDIA) PRIVATE LIMITEDLogistics Park, Plot No. 7, Road No. 10Export Promotion Industrial ParkWhitefield, Bangalore, Karnataka, IndiaNIPPON EXPRESS (BANGLADESH) LTD.SPL Western Tower, 502, Plot No. 186Gulshan-Tejgaon Link Road, Tejgaon Industrial AreaDhaka-1208, BangladeshRepresentative OfficesMoscow Representative Office2nd Hutorskaya St. 38A, Bldg. No. 23Moscow 127287, RussiaJohannesburg Representative Office11 Pomona Road, Cnr. Hawthone RoadKempton Park 1619, South AfricaPhnom Penh Representative OfficeIntercontinental Hotel, Regency Complex CSuite No. 10-11A/168Monireth Blvd., Phnom Penh, Kingdom of CambodiaSeoul Representative Officec/o The Korea Express Co., Ltd.58-12, Seosomun-Dong, Chung-Ku, Seoul, 100-814, Republic of KoreaPusan Representative OfficeKorea Express Bldg., Room No. 9091211-1, Choryang-Dong, Dong-Ku, Pusan, 601-714, Republic of KoreaDhaka Representative OfficeSPL Western Tower, 502, Plot No. 186Gulshan-Tejgaon Link Road, Tejgaon Industrial AreaDhaka-1208, BangladeshNIPPON EXPRESS Annual Report 201267


Company Information(As of March 31, 2012)NameHeadquartersNippon Express Co., Ltd.1-9-3, Higashi Shimbashi, Minato-ku,Tokyo 105-8322, JapanTel: +81 (3) 6251-1111Formal establishment October 1, 1937Paid-in capital¥70,175 millionEmployees 35,717URL(Japanese) http://www.nittsu.co.jp/(English) http://www.nipponexpress.com/Areas of operation1 Rail freight forwarding business2 Truck transportation business3 Truck freight forwarding business4 Marine transportation business5 Coastal shipping business6 Harbor transportation business7 NVOCC marine transportation business8 Air freight forwarding business9 Transportation businesses and forwardingbusiness other than as listed above10 Freight transportation consignment business11 Warehousing business12 Construction business13 Customs-clearance business14 Freight collection and settlement business15 Air freight forwarding agency business16 Non-life insurance agency business17 Packing and packaging business18 Packaging, labeling and storage business forpharmaceuticals, quasi-pharmaceuticals, cosmeticsand medical equipment19 Travel agency business20 Transportation, construction and installation of heavygoods and any incidental business thereto21 Sale, purchase and lease of real estate and any incidentalbusiness thereto22 Security services business23 General worker dispatching business24 Waste management business25 Specified correspondence delivery service business26 Collection and processing of logistics information andany incidental business thereto27 Sale of goods and commodities28 Any other business related to the above items29 Investments in and financing of business listed in theabove items68 NIPPON EXPRESS Annual Report 2012


Share Information(As of March 31, 2012)Stock listingTokyo, OsakaNumber of shares Total number of shares authorized 3,988,000,000Total number of shares issued 1,062,299,281Number of shareholders 84,162Stock transfer agentMitsubishi UFJ Trust and Banking CorporationDistribution of sharesBy type of shareholderProportion of shares heldIndividuals, others 97.7%Financial institutions 48.9%Other corporate 1.5%Overseas corporate 19.8%84,162shareholdersOverseas corporate 0.5%Financial institutions 0.2%1,062,299thousands of sharesIndividuals, others 21.8%Other corporate 6.0%Financial instrumentsand exchange dealers 0.1%Treasury stock 0.0%Treasury stock 1.8%Financial instrumentsand exchange dealers 1.7%Major shareholdersNumber of shares held(Thousands of shares)Investment ratio(%)The Master Trust Bank of Japan, Ltd. (Account in Trust) 93,313 8.9Asahi Mutual Life Insurance Company 65,464 6.3Nipponkoa Insurance Co., Ltd. 50,294 4.8Japan Trustee Services Bank, Ltd. (Account in Trust) 45,112 4.3Mizuho Trust & Banking Co., Ltd. as trustee for Retirement BenefitTrust of Mizuho Bank, Ltd.(re-entrusted by Trust & Custody Services Bank, Ltd.) 41,500 4.0Mizuho Corporate Bank, Ltd. 41,477 4.0Nippon Express Employees’ Shareholding Association 35,662 3.4Japan Trustee Services Bank, Ltd. (Account in Trust No. 4) 21,507 2.1The Bank of Tokyo-Mitsubishi UFJ, Ltd. 20,554 2.0SSBT OD05 OMNIBUS ACCOUNT - TREATY CLIENTS 18,786 1.8Stock price movement(Yen)7006005004003002001000(Thousandsof shares)150,000120,00090,00060,00030,000200942010420114201230NIPPON EXPRESS Annual Report 201269


1-9-3, Higashi-Shimbashi, Minato-ku, Tokyo 105-8322, JapanPhone: +81 (3) 6251-1111URL: (Japanese) http://www.nittsu.co.jp/(English) http://www.nipponexpress.com/Printed in JapanAugust 2012

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