KUB » Topics » 4. Risk Factors

This excerpt taken from the KUB 6-K filed Dec 5, 2006.

4. Risk Factors

The Company has several risks that may have a material effect on the Company’s consolidated results of operations and financial position. The descriptions of risks are as follows;

 

(1) Declines in economic conditions in Kubota’s major markets, including private-sector capital expenditure, construction investment, and domestic public investment, may adversely impact the results of operations of the Company.

 

(2) Fluctuations of foreign exchange rates, including a stronger yen, may reduce net sales and adversely affect the results of operations of the Company.

 

(3) Difficulties associated with operating internationally may adversely affect net sales and profitability.

 

(4) The Company utilizes estimations on some accounts in the consolidated financial statements, which may require additional accruals due to unanticipated changes in the basis of assumptions.

 

(5) Strategic alliances, mergers, and acquisitions may not generate successful results as planned.

 

(6) The Company may not be able to successfully create new businesses or businesses complementary to the current ones.

 

(7) Impairment losses on investments in marketable securities may occur as a result of stock market fluctuations.

 

(8) In each of its businesses, Kubota is subject to intensifying competitive pressures. The Company must compete successfully to maintain sales and profits.

 

(9) The Company may be required to incur significant financial expenses if its products and services have serious defects.

 

(10) The Company is subject to various environmental laws and regulations, and may be required to incur considerable expenses in order to comply with such laws and regulations.

 

(11) The Company may be required to incur significant financial expenses in connection with environmental damage it may cause in its activities.

 

(12) The Company may be required to incur significant expenses relevant to asbestos-related issues.

 

(13) The Company may experience a material effect on its consolidated results of operations and financial position if it faces issues related to compliance.

 

(14) Damage by Natural Disasters.

For details, please refer to the Kubota’s latest annual report on Form 20-F filed with United States Securities and Exchange Commission.

 

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Table of Contents

< Cautionary Statements with Respect to Forward-Looking Statements >

This document may contain forward-looking statements that are based on management’s expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results may differ materially from what is forecast in forward-looking statements due to a variety of factors, including, without limitation: general economic conditions in the Company’s markets, particularly government agricultural policies, levels of capital expenditures, both in public and private sectors, foreign currency exchange rates, continued competitive pricing pressures in the marketplace, as well as the Company’s ability to continue to gain acceptance of its products.


 

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Table of Contents
This excerpt taken from the KUB 6-K filed Dec 6, 2005.

4. Risk Factors

 

The Company has several risks that may have a material effect on the Company’s consolidated results of operations and financial position. The descriptions of risks are as follows;

 

(1) Declines in economic conditions in Kubota’s major markets, including private-sector capital expenditure, construction investment, and domestic public investment, may adversely impact the results of operations of the Company.

 

Industrial and capital goods make up a substantial portion of the Company’s products. Accordingly, sales of the Company may be sensitive to declines in general economic conditions, including private-sector capital expenditure, construction investment, domestic public investment, change in governmental agricultural policies and general economic conditions in overseas markets.

 

(2) Fluctuations of foreign exchange rates, including a stronger yen, may reduce net sales and adversely affect the results of operations of the Company.

 

(3) Difficulties associated with operating internationally may adversely affect net sales and profitability.

 

The following risks are important concerns for the Company:

 

    Unexpected changes in international, or each country’s, tax regulations

 

    Unexpected legal or regulatory changes in each country

 

    Difficulties in retaining qualified personnel

 

    Insufficient technological skills or instability between management and employee unions in developing countries

 

    Political instability in those countries

 

(4) The Company utilizes estimations on some accounts in the consolidated financial statements, which may require additional accruals due to unanticipated changes in the basis of assumptions.

 

Estimations on some accounts in the consolidated financial statements of the Company are based on various assumptions about future economic results. If actual results differ from any of these assumptions, unanticipated additional accruals may be required.

 

(5) Strategic alliances, mergers, and acquisitions may not generate successful results as planned.

 

(6) The Company may not be able to successfully create new businesses or businesses complementary to the current ones.

 

If the Company fails to develop such businesses which require investments in personnel and assets to produce and market appropriate products, subsequent impairment charges may be taken, or there may be a negative impact on the Company’s financial position.

 

(7) Impairment losses on investments in marketable securities may occur as a result of stock market fluctuations.

 

The Company owns a large amount of securities. Most of these securities are equity securities, and, accordingly, depending on stock market fluctuations, unrealized and realized losses may occur.

 

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Table of Contents

Kubota Corporation

and Subsidiaries

 

(8) In each of its businesses, Kubota is subject to intensifying competitive pressures. The Company must compete successfully to maintain sales and profits.

 

Unless the Company surpasses other companies in such areas as terms of trade, R&D, and quality, sales and/or net income may decrease in the future.

 

(9) The Company may be required to incur significant financial expenses if its products and services have serious defects.

 

If the Company’s products and services have serious defects, associated expenses may have a material effect on the Company’s consolidated results of operations and financial position.

 

(10) The Company is subject to various environmental laws and regulations, and may be required to incur considerable expenses in order to comply with such laws and regulations.

 

(11) The Company may be required to incur significant financial expenses in connection with environmental damage it may cause in its activities.

 

The Company may cause environmental pollution while conducting its activities, such as the release of hazardous materials, and causing air pollution, water pollution and ground pollution. In such an event, the Company may have to incur substantial expense and may face litigation regarding these issues.

 

(12) The Company may be required to incur significant expenses relevant to asbestos-related issues.

 

There may be a material adverse effect on the Company’s consolidated results of operations and financial position resulting from various expenses or face lawsuits related to the asbestos-related health hazards of employees (including former employees) who engaged in the manufacturing of asbestos-containing products, and residents who lived near the Company’s factory at which asbestos-containing products were produced.

 

(13) Damage by Natural Disasters

 

In case of a strong earthquake or related tidal wave or large and powerful typhoon, the Company may be affected in the operation of manufacturing products.

 


< Cautionary Statements with Respect to Forward-Looking Statements >

 

This document may contain forward-looking statements that are based on management’s expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results may differ materially from what is forecast in forward-looking statements due to a variety of factors, including, without limitation: general economic conditions in the Company’s markets, particularly government agricultural policies, levels of capital expenditures, both in public and private sectors, foreign currency exchange rates, continued competitive pricing pressures in the marketplace, as well as the Company’s ability to continue to gain acceptance of its products.


 

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Table of Contents

Kubota Corporation

and Subsidiaries

 

EXCERPTS ON THIS PAGE:

6-K
Dec 5, 2006
6-K
Dec 6, 2005
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