Financial Summary

Operating Results
Consolidated net sales at DENSO for the year ended March 31, 1997, were up 14.2%, to 1,624.9 billion yen ($13,104 million). The composition of sales by product group appears in the Operating Summary below.
Sales in Japan amounted to 1,153.4 billion yen ($9,302 million), up 11.4% from the previous year. Positive factors included increased domestic vehicle production and expanding business in automotive parts, cellular phones, and portable handyphone systems. Outside Japan, our sales were up 21.9%, to 471.5 billion yen ($3,803 million), reflecting increased automobile production in North America and Europe.
Operating income increased 52.1%, to 132.4 billion yen ($1,068 million). Much of that increase was the result of the weakening of the yen and progress in upgrading and streamlining management. We allocated 9.3% of sales--151.9 billion yen ($1,225 million)--to research and development, a 16.1% increase over the previous period. Net nonoperating income for the year was up 4.7%, to 15.6 billion yen ($126 million).
Income before taxes rose 45.2%, to 148.0 billion yen ($1,194 million), and net income climbed 43.2%, to 71.4 billion yen ($576 million). Net income per share of common stock was 81.68 yen ($0.66), an increase of 42.5%.
We raised dividends per share of common stock by 2 yen, to 16 yen ($0.13). The rise included a 1 yen increase in the special dividend, to 4 yen, and a 1 yen dividend to commemorate our corporate name change.

Financial Position
Total assets at the end of the fiscal year amounted to 1,701.8 billion yen ($13,724 million), up 7.9% from the end of the previous fiscal period. Shareholders' equity increased 8.2%, to 978.4 billion yen ($7,890 million) at year-end, and the ratio of shareholders' equity plus minority interests to total assets was 59.5%. Net assets per share of common stock increased 6.8%, to 1,110 yen ($8.95) at year-end.
Net cash provided by operating activities was up 19.6% from the previous fiscal period, to 197.9 billion yen ($1,596 million). That cash flow was more than sufficient to finance our 29.1% increase in capital investment, which totaled 124.8 billion yen ($1,006 million). While working through our operations to raise investment efficiency, we invested in facilities and equipment to improve product quality and performance, to develop new products, and to rationalize operations.
With an eye on increasing shareholder value, we conducted a buyback of common stock. We repurchased and retired 8,661 thousand shares of stock valued at 20 billion yen ($161 million). Cash and cash equivalents totaled 175.5 billion yen ($1,415 million) at year-end, a 5.3% increase over the previous year-end period.

Operating Summary*

	Millions of yen (percentage of net sales)						Thousands of U.S. dollars
/	1997	1996	*	1994	1993	1992	1997
Car air conditioners and heaters	Y 552,958	Y 497,132		Y 494,777	Y 492,838	Y 521,080	$4,459,339
	(34.0%)	(34.9%)		(35.0%)	(34.5%)	(34.2%)
Electrical automotive and
electronic control products	472,463	422,708		433,599	446,089	477,291	3,810,185
	(29.1)	(29.7)		(30.7)	(31.2)	(31.3)
Fuel management systems	259,100	227,365		222,589	229,707	235,732	2,089,516
	(15.9)	(16.0)		(15.8)	(16.1)	(15.5)
Radiators	93,769	86,356		89,550	88,053	96,102	756,202
	(5.8)	(6.1)		(6.4)	(6.2)	(6.3)
Meters	67,747	62,490		58,323	59,151	68,943	546,347
	(4.2)	(4.4)		(4.1)	(4.1)	(4.5)
Filters	44,079	42,689		46,433	45,086	48,202	355,476
	(2.7)	(3.0)		(3.3)	(3.2)	(3.2)
Other products	27,926	25,802		66,932	66,769	76,429	225,210
	(1.7)	(1.8)		(4.7)	(4.7)	(5.0)

Automotive products sub-total	1,518,042	1,364,542					12,242,275
	(93.4)	(95.9)

Telecommunications	61,738	23,098					497,887
	(3.8)	(1.6)
Other products	45,126	34,967					363,919
	(2.8)	(2.5)

Non-automotive products
sub-total	106,864	58,065					861,806
	(6.6)	(4.1)

Net sales	Y 1,624,906	Y 1,422,607		Y 1,412,203	Y 1,427,693	Y 1,523,779	$13,104,081
	(100.0)	(100.0)		(100.0)	(100.0)	(100.0)

Notes:
*.	We have begun providing a breakdown of sales figures for non-automotive products as of fiscal 1996. Sales figures for non-automotive products through fiscal 1994 were immaterial and are included in other products.
1.	Sales breakdowns for fiscal 1995 (3 months) are not available because the net sales total for fiscal 1995 does not include overseas consolidated subsidiaries.
2.	U.S. dollar amounts have been translated, for convenience only, at the rate of 124 yen=$1, the approximate exchange rate prevailing on March 31, 1997.

Key Ratios
/	1997	1996	1995 (3 months)*	1994	1993	1992
Profit margin 1	4.4%	3.5%	2.2%	2.6%	1.9%	2.8%
Return on shareholders' equity 2	7.6%	5.7%	0.9%	4.6%	3.6%	5.6%
Return on total assets 3	4.4%	3.2%	0.5%	2.6%	1.9%	2.8%
Current ratio 4	211.4%	251.9%	232.0%	235.4%	249.1%	174.9%
Inventory turnover 5	13.9	14.1	3.7	16.5	16.1	16.1
Equity-to-asset ratio 6	59.5%	59.4%	57.8%	58.0%	55.7%	52.3%
Debt-to-equity ratio 7	68.0%	68.5%	73.0%	72.4%	79.6%	91.3%
Price/earnings ratio 8	29.8	37.7	197.2	47.4	50.4	28.7
Price/book value ratio 9	2.2	2.1	1.7	2.2	1.8	1.6

Notes: 1.

Net income

Net sales

x 100

Net income
Average shareholders' equity

x 100

Net income
Average total assets

x 100

Current assets
Current liabilities

x 100

5.	Cost of sales Average inventory at cost

Shareholders' equity + minority interests in consolidated subsidiaries
Total assets

x 100

Total liabilities
Shareholders' equity + minority interests in consolidated subsidiaries

x 100

8.	Ending market price per common share Net income per share

Ending market price per common share
Book value per share

Book value per share =

Shareholders' equity
Outstanding common shares at end

* Some values may appear to be unusually high or low since calculations were carried out based on a 3-month fiscal period.