UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934

KOMATSU LTD.

3-6 Akasaka 2-chome, Minato-ku, Tokyo, Japan
Address of principal executive office

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

INFORMATION TO BE INCLUDED IN REPORT

1. Quarterly Report for the First Quarter of the 143^rd Fiscal Year filed on August 10, 2011

On August 10, 2011, the registrant filed its Quarterly Report (Shihanki Houkokusho) with the Director of the Kanto Local Finance Bureau of Japan pursuant to the Financial Instruments and Exchange Act of Japan. This Quarterly Report contains, among other information, Quarterly Consolidated Financial Statements for the three months period ended June 30, 2011.

Material information in the report, other than the Quarterly Consolidated Financial Statements, has already been reported by the registrant in its press release dated July 28, 2011, a copy of which was submitted under cover of Form 6-K on August 1, 2011 by the registrant.

Attached is an English translation of the registrant’s Quarterly Consolidated Financial Statements for the three months ended June 30, 2011.

SIGNATURES

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

		KOMATSU LTD.
		(Registrant)
Date: August 11, 2011		By:		/s/ Mikio Fujitsuka   Mikio Fujitsuka
				Director and Senior Executive Officer, Chief Financial Officer

Notes to Quarterly Consolidated Financial Statements (Unaudited)

1. Basis of Quarterly Financial Statement Presentation and Summary of Significant Accounting Policies

Basis of Quarterly Financial Statement Presentation

Komatsu Ltd. (“Company”) and consolidated subsidiaries (together “Komatsu”) prepare and present the accompanying quarterly consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.

Summary of Significant Accounting Policies

There is no material change for Summary of Significant Accounting Policies stated in the annual report for the year ended March 31, 2011.

[Quarterly Consolidated Financial Statements]

Consolidated Balance Sheets (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries
June 30, 2011 and March 31, 2011

		June 30, 2011								March 31, 2011
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Assets
Current assets
Cash and cash equivalents		¥	83,049							¥	84,224
Time deposits			1,441								734
Trade notes and accounts receivable (Note 4)			510,076								532,757
Inventories (Note 5)			530,719								473,876
Deferred income taxes and other current assets (Notes 8, 11, 12 and 13)			169,696								152,781
Total current assets			1,294,981				58.4				1,244,372				57.9
Long-term trade receivables (Note 4)			196,213				8.9				183,270				8.5
Investments
Investments in and advances to affiliated companies			20,090								25,115
Investment securities (Notes 6, 12 and 13)			53,679								60,855
Other			2,989								3,124
Total investments			76,758				3.5				89,094				4.1
Property, plant and equipment —less accumulated depreciation of ¥636,630 million at June 30, 2011 and ¥639,368 million at March 31, 2011			510,188				23.0				508,387				23.7
Goodwill			30,253				1.4				29,321				1.4
Other intangible assets			60,373				2.7				53,971				2.5
Deferred income taxes and other assets (Notes 8, 11, 12 and 13)			47,305				2.1				40,722				1.9
		¥	2,216,071				100.0			¥	2,149,137				100.0

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

		June 30, 2011								March 31, 2011
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Liabilities and Equity
Current liabilities
Short-term debt		¥	149,499							¥	130,308
Current maturities of long-term debt (Notes 12 and 13)			138,577								122,608
Trade notes, bills and accounts payable			303,141								308,975
Income taxes payable			20,236								38,829
Deferred income taxes and other current liabilities (Notes 8, 11, 12 and 13)			211,848								199,268
Total current liabilities			823,301				37.2				799,988				37.2
Long-term liabilities
Long-term debt (Notes 12 and 13)			307,033								291,152
Liability for pension and retirement benefits			45,873								48,027
Deferred income taxes and other liabilities (Notes 8, 11, 12 and 13)			51,171								37,290
Total long-term liabilities			404,077				18.2				376,469				17.5
Total liabilities			1,227,378				55.4				1,176,457				54.7
Commitments and contingent liabilities (Note 10)			—								—
Equity
Komatsu Ltd. shareholders’ equity
Common stock:
Authorized 3,955,000,000 shares at June 30, 2011 and at March 31, 2011
Issued 998,744,060 shares at June 30, 2011 and at March 31, 2011			67,870								67,870
Outstanding 967,983,328 shares at June 30, 2011 and 967,902,641 shares at March 31, 2011
Capital surplus			140,582								140,523
Retained earnings:
Appropriated for legal reserve			37,147								34,494
Unappropriated			880,837								847,153
Accumulated other comprehensive income (loss) (Note 6)			(143,203	)							(131,059	)
Treasury stock at cost, 30,760,732 shares at June 30, 2011 and 30,841,419 shares at March 31, 2011			(35,176	)							(35,138	)
Total Komatsu Ltd. shareholders’ equity			948,057				42.8				923,843				43.0
Noncontrolling interests			40,636				1.8				48,837				2.3
Total equity			988,693				44.6				972,680				45.3
		¥	2,216,071				100.0			¥	2,149,137				100.0

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

Consolidated Statements of Income (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries
Three months ended June 30, 2011 and 2010

		Three months ended								Three months ended
		June 30, 2011								June 30, 2010
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Net sales		¥	494,177				100.0			¥	447,140				100.0
Cost of sales			356,637				72.2				329,856				73.8
Selling, general and administrative expenses (Note 3 and 7)			69,428				14.0				62,947				14.1
Other operating income (expenses), net			257				0.1				(262	)			(0.1	)
Operating income			68,369				13.8				54,075				12.1
Other income (expenses), net			72								(3,971	)
Interest and dividend income			1,295				0.3				1,021				0.2
Interest expense			(1,888	)			(0.4	)			(1,669	)			(0.4	)
Other, net (Notes 3, 6, 11 and 13)			665				0.1				(3,323	)			(0.7	)
Income before income taxes and equity in earnings of affiliated companies			68,441				13.8				50,104				11.2
Income taxes (Notes 8)
Current			16,741								9,158
Deferred			(5,605	)							8,308
Total			11,136				2.3				17,466				3.9
Income before equity in earnings of affiliated companies			57,305				11.6				32,638				7.3
Equity in earnings of affiliated companies			581				0.1				641				0.1
Net income			57,886				11.7				33,279				7.4
Less net income attributable to noncontrolling interests			(2,180	)			(0.4	)			(2,582	)			(0.6	)
Net income attributable to Komatsu Ltd.		¥	55,706				11.3			¥	30,697				6.9

		Yen
		Three months ended				Three months ended
		June 30, 2011				Three 30, 2010
Net income attributable to Komatsu Ltd. per share (Note 9)
Basic		¥	57.55			¥	31.72
Diluted			57.50				31.70
Cash dividends per share (Note 15)			20.00				8.00

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

Consolidated Statements of Equity (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Three months ended June 30, 2011		Millions of yen

										Retained earnings								Accumulated								Total
										Appropriated								other								Komatsu Ltd.
		Common				Capital				for legal								comprehensive				Treasury				shareholders’				Noncontrolling
		stock				surplus				reserve				Unappropriated				income (loss)				stock				equity				interests				Total equity
Balance at March 31, 2011		¥	67,870			¥	140,523			¥	34,494			¥	847,153			¥	(131,059	)		¥	(35,138	)		¥	923,843			¥	48,837			¥	972,680
Cash dividends (Note 15)															(19,369	)											(19,369	)			(6,063	)			(25,432	)
Transfer to retained earnings appropriated for legal reserve											2,653				(2,653	)											—								—
Other changes																											—				(3,881	)			(3,881	)
Comprehensive income (loss)
Net income															55,706												55,706				2,180				57,886
Other comprehensive income (loss), for the period, net of tax
Foreign currency translation adjustments																			(10,241	)							(10,241	)			(421	)			(10,662	)
Net unrealized holding gains (losses) on securities available for sale																			(2,243	)							(2,243	)							(2,243	)
Pension liability adjustments																			(196	)							(196	)							(196	)
Net unrealized holding gains (losses) on derivative instruments (Note 11)																			536								536				(16	)			520
Comprehensive income (loss)																											43,562				1,743				45,305
Issuance and exercise of stock acquisition rights (Note 7)							(61	)																			(61	)							(61	)
Purchase of treasury stock																							(216	)			(216	)							(216	)
Sales of treasury stock							120																178				298								298
Balance at June 30, 2011		¥	67,870			¥	140,582			¥	37,147			¥	880,837			¥	(143,203	)		¥	(35,176	)		¥	948,057			¥	40,636			¥	988,693

Three months ended June 30, 2010		Millions of yen

										Retained earnings								Accumulated								Total
										Appropriated								other								Komatsu Ltd.
		Common				Capital				for legal								comprehensive				Treasury				shareholders’				Noncontrolling
		stock				surplus				reserve				Unappropriated				income (loss)				stock				equity				interests				Total equity
Balance at March 31, 2010		¥	67,870			¥	140,421			¥	31,983			¥	724,090			¥	(95,634	)		¥	(34,755	)		¥	833,975			¥	42,824			¥	876,799
Cash dividends (Note 15)															(7,749	)											(7,749	)			(102	)			(7,851	)
Transfer to retained earnings appropriated for legal reserve											743				(743	)											—								—
Other changes																											—								—
Comprehensive income (loss)
Net income															30,697												30,697				2,582				33,279
Other comprehensive income (loss), for the period, net of tax
Foreign currency translation adjustments																			(35,245	)							(35,245	)			(2,983	)			(38,228	)
Net unrealized holding gains (losses) on securities available for sale																			(3,350	)							(3,350	)							(3,350	)
Pension liability adjustments																			(215	)							(215	)							(215	)
Net unrealized holding gains (losses) on derivative instruments (Note 11)																			938								938				(60	)			878
Comprehensive income (loss)																											(7,175	)			(461	)			(7,636	)
Issuance and exercise of stock acquisition rights(Note 7)																											—								—
Purchase of treasury stock																							(545	)			(545	)							(545	)
Sales of treasury stock																											—								—
Balance at June 30, 2010		¥	67,870			¥	140,421			¥	32,726			¥	746,295			¥	(133,506	)		¥	(35,300	)		¥	818,506			¥	42,261			¥	860,767

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

Consolidated Statements of Cash Flows (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries
Three months ended June 30, 2011 and 2010

		Millions of yen
		Three months ended				Three months ended
		June 30, 2011				June 30, 2010
Operating activities
Net income		¥	57,886			¥	33,279
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			20,356				21,433
Deferred income taxes			(5,605	)			8,308
Net loss (gain) from sale of investment securities and subsidiaries			(130	)			33
Net loss (gain) on sale of property			(236	)			(585	)
Loss on disposal of fixed assets			388				457
Pension and retirement benefits, net			(838	)			(3,074	)
Changes in assets and liabilities:
Decrease (increase) in trade receivables			5,160				(15,202	)
Decrease (increase) in inventories			(57,626	)			(4,336	)
Increase (decrease) in trade payables			(14,083	)			32,280
Increase (decrease) in income taxes payable			(18,466	)			(8,086	)
Other, net			7,249				(9,261	)
Net cash provided by (used in) operating activities			(5,945	)			55,246
Investing activities
Capital expenditures			(24,067	)			(18,829	)
Proceeds from sale of property			2,991				2,043
Proceeds from sale of available for sale investment securities			410				2
Purchases of available for sale investment securities			(333	)			(536	)
Acquisition of subsidiaries and equity investees, net of cash acquired			(5,107	)			762
Collection of loan receivables			213				305
Disbursement of loan receivables			(61	)			(27	)
Decrease (increase) in time deposits			(504	)			(935	)
Net cash provided by (used in) investing activities			(26,458	)			(17,215	)
Financing activities
Proceeds from long-term debt			61,355				17,893
Repayments on long-term debt			(7,740	)			(5,367	)
Increase (decrease) in short-term debt, net			20,806				(25,478	)
Repayments of capital lease obligations			(17,524	)			(9,977	)
Sale (purchase) of treasury stock, net			23				(6	)
Dividends paid			(19,369	)			(7,749	)
Other, net			(4,925	)			(133	)
Net cash provided by (used in) financing activities			32,626				(30,817	)
Effect of exchange rate change on cash and cash equivalents			(1,398	)			(5,314	)
Net increase (decrease) in cash and cash equivalents			(1,175	)			1,900
Cash and cash equivalents, beginning of year			84,224				82,429
Cash and cash equivalents, end of period		¥	83,049			¥	84,329

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

2. Supplemental Cash Flow Information

Additional cash flow information and noncash investing and financing activities for the three months ended June 30, 2011 and 2010 are as follows:

		Millions of yen
		Three months ended				Three months ended
		June 30, 2011				June 30, 2010
Additional cash flow information:
Interest paid		¥	1,848			¥	1,628
Income taxes paid			35,358				20,301
Noncash investing and financing activities:
Capital lease obligations incurred		¥	241			¥	1,177

3. Business Combination

On May 18, 2011, the Company acquired additional 50,000 shares of Gigaphoton Inc. (hereinafter “Gigaphoton”) for ¥7,500 million in cash tendered.

Prior to the additional acquisition, the Company held a 50.0% equity interest in Gigaphoton and accounted for the investment by the equity method. As a result of the additional investment, the Company’s ownership increased to 100.0% and Gigaphoton became a consolidated subsidiary of the Company.

Gigaphoton was established by Ushio Inc. (hereinafter “Ushio”) and the Company as a 50-50 joint-venture company to develop, manufacture, sell and service excimer laser light sources for lithography tools in August 2000.

To develop an extreme ultraviolet light source, Ushio and Gigaphoton have been working on different methods. Because Gigaphoton and Ushio will be competing on the same market, Ushio and the Company have decided to terminate the joint-venture agreement. As a wholly owned subsidiary of the Company, Gigaphoton will not only further expand its conventional excimer laser business but also accelerate the pace of research and development by teaming up with the Company to create an extreme ultraviolet light source as the basis for next-generation lithography tools.

Following is a summary of the assets acquired and liabilities assumed adjusted to reflect purchase price allocation as of the date of acquisition:

		Millions of yen
Consideration
Cash and cash equivalents		¥	7,500
Fair value of total consideration transferred			7,500
Fair value of Komatsu’s equity interest in Gigaphoton held before the business combination			7,500
		¥	15,000
Acquisiton-related cost (included in selling, general and administrative expenses)		¥	36
Recognized amounts of identifiable assets and liabilities assumed
Current assets		¥	14,859
Property, plant and equipment			2,376
Intangible assets			7,425
Other assets			15
Total assets acquired			24,675
Current liabilities			(7,860	)
Long-term liabilities			(2,896	)
Total liabilities assumed			(10,756	)
Net assets acquired			13,919
Goodwill			1,081
		¥	15,000

The goodwill of ¥1,081 million was assigned to the Industrial Machinery and Others operating segment. The goodwill is not deductible for tax purposes.

As a result of remeasuring to fair value its 50% equity interest in Gigaphoton held before the business combination, a gain of ¥2,592 million was recorded in “Other income (expenses)” in the accompanying consolidated statement of income for the three months ended June 30, 2011.

The sales and net income attributable to Komatsu Ltd. of the combined entity had the acquisition date been April 1, 2010 would not differ materially from the amounts reported in the consolidated financial statements for the three months ended June 30, 2010.

4. Allowance for Doubtful Receivables

At June 30, 2011 and at March 31, 2011, allowances for doubtful receivables deducted from “Trade notes and accounts receivable” and “Long-term trade receivables” are ¥15,409 million and ¥15,793 million, respectively.

5. Inventories

At June 30, 2011 and at March 31, 2011, inventories comprised the following:

		Millions of yen
		June 30,				March 31,
		2011				2011
Finished products, including finished parts held for sale		¥	336,182			¥	294,807
Work in process			148,189				135,167
Materials and supplies			46,348				43,902
Total		¥	530,719			¥	473,876

6. Investment Securities

Investment securities at June 30, 2011 and at March 31, 2011 primarily consisted of securities available for sale.

Unrealized holding gains and losses are included as a component of accumulated other comprehensive income (loss) until realized.

The cost, gross unrealized holding gains and losses, and fair value for such investment securities by major security types at June 30, 2011 and at March 31, 2011 are as follows:

		Millions of yen
						Gross unrealized holding
		Cost				Gains				Losses				Fair value
June 30, 2011
Investment securities:
Marketable equity securities available for sale		¥	23,866			¥	21,847			¥	270			¥	45,443
Other investment securities at cost			8,236
		¥	32,102

		Millions of yen
						Gross unrealized holding
		Cost				Gains				Losses				Fair value
March 31, 2011
Investment securities:
Marketable equity securities available for sale		¥	23,887			¥	25,599			¥	114			¥	49,372
Other investment securities at cost			11,483
		¥	35,370

Other investment securities primarily include non-marketable equity securities. The fair value of other investment securities was not estimated as it was not practicable to estimate the fair value of investments and no significant events or changes that might have effected the fair value of those investments were observed.

Proceeds from the sales of investment securities available for sale were ¥410 million and ¥2 million for the three months ended June 30, 2011 and 2010, respectively.

Impairment losses and net realized gains or losses from sale of investment securities available for sale during the three months ended June 30, 2011 and 2010 amounted to gains of ¥130 million and losses of ¥33 million, respectively. Such gains and losses were included in other income (expenses), net in the accompanying consolidated statements of income.

The cost of the investment securities sold was computed based on the average-cost method.

7. Stock Option Plan

The Company intends to transfer treasury shares to directors and certain employees and certain directors of subsidiaries and affiliated companies under an agreement granting the right for them to request such transfers at a predetermined price.

Komatsu recognizes compensation expense using the fair value method. For the three months ended June 30, 2011 and 2010, no compensation expense was recorded as no right was granted.

8. Income Taxes

The effective tax rates for the three months ended June 30, 2011 was 16.3%. The differences between the effective tax rate and the Japanese statutory tax rate 40.8% include a decrease of the valuation allowance of ¥12,686 million(18.5% on income before income taxes and equity in earnings of affiliated companies) by a change in assessment about the likelihood of recovery of a deferred tax asset related to the decision of the merger between Komatsu Rental Ltd. and the Company during the three months ended June 30, 2011.

9. Net Income Attributable to Komatsu Ltd. per Share

A reconciliation of the numerators and denominators of the basic and diluted net income attributable to Komatsu Ltd. per share computations is as follows:

		Millions of yen
		Three months ended				Three months ended
		June 30, 2011				June 30, 2010
Net income attributable to Komatsu Ltd.		¥	55,706			¥	30,697

		Number of shares
		Three months ended				Three months ended
		June 30, 2011				June 30, 2010
Weighted average common shares outstanding, less treasury stock			967,942,471				967,834,078
Dilutive effect of:
Stock options			877,259				462,103
Weighted average diluted common shares outstanding			968,819,730				968,296,181

		Yen
		Three months ended				Three months ended
		June 30, 2011				June 30, 2010
Net income attributable to Komatsu Ltd. per share:
Basic		¥	57.55			¥	31.72
Diluted		¥	57.50			¥	31.70

10. Contingent Liabilities

At June 30, 2011 and at March 31, 2011, Komatsu was contingently liable for discounted and transferred receivables on a recourse basis with the financial institutions of ¥1,387 million and ¥1,347 million, respectively.

Komatsu provides guarantees to third parties of loans of the employees, affiliated companies, customers and other companies. The guarantees relating to the employees are mainly made for their housing loans. The guarantees of loans relating to the affiliated companies, customers and other companies are made to enhance the credit of those companies.

For each guarantee provided, Komatsu would have to perform under a guarantee, if the borrower defaults on a payment within the contract terms. The contract terms are from 16 years to 30 years in the case of employees with housing loans, and from 1 year to 11 years in the case of loans relating to the affiliated companies, customers and other companies. The maximum amount of undiscounted payments Komatsu would have had to make in the event of default was ¥105,626 million and ¥99,312 million at June 30, 2011 and at March 31, 2011, respectively. The fair value of the liabilities recognized for Komatsu’s obligations as guarantors under those guarantees at June 30, 2011 was insignificant. Certain of those guarantees were secured by collateral and insurance issued to Komatsu.

Management of Komatsu believes that losses from those contingent liabilities, if any, would not have a material effect on the consolidated financial statements.

Komatsu is involved in certain legal actions and claims arising in the ordinary course of its business. It is the opinion of management and legal counsel that such litigation and claims will be resolved without material effect on Komatsu’s financial statements.

Komatsu has business activities with customers, dealers and associates around the world and its trade receivables from such parties are well diversified to minimize concentrations of credit risks. Management does not anticipate incurring losses on its trade receivables in excess of established allowances.

11. Derivative Financial Instruments

Notional principal amounts of derivative financial instruments outstanding at June 30, 2011 and at March 31, 2011 are as follows:

		Millions of yen
		June 30,				March 31,
		2011				2011
Forwards and options:
Sale of foreign currencies		¥	109,519			¥	94,504
Purchase of foreign currencies			76,555				87,605
Option contracts (purchased)			242				490
Interest rate swaps, cross-currency swaps and interest rate cap agreements			119,816				123,424

Fair values of derivative instruments at June 30, 2011 and at March 31, 2011 on the consolidated balance sheets are as follows:

Millions of yen

June 30, 2011

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

836

Deferred income taxes and other current liabilities

¥

54

Deferred income taxes and other assets

—

Deferred income taxes and other liabilities

—

Interest rate swaps,cross-currency swaps and interest rate cap agreements

Deferred income taxes and other current assets

76

Deferred income taxes and other current liabilities

478

Total

¥

912

¥

532

		Derivative Assets						Derivative Liabilities
Undesignated derivative		Location on the consolidated		Estimated				Location on the consolidated		Estimated
instruments		Balance Sheets		fair value				Balance Sheets		fair value
Forwards contracts		Deferred income taxes and other current assets		¥	441			Deferred income taxes and other current liabilities		¥	1,445
		Deferred income taxes and other assets			3			Deferred income taxes and other liabilities			117
Option contracts		Deferred income taxes and other current assets			8			Deferred income taxes and other current liabilities			—
Interest rate swaps,cross-currency swaps and interest rate cap agreements		Deferred income taxes and other current assets			7,080			Deferred income taxes and other current liabilities			392
		Deferred income taxes and other assets			3,786			Deferred income taxes and other liabilities			107
Total				¥	11,318					¥	2,061
Total Derivative Instruments				¥	12,230					¥	2,593

Millions of yen

March 31, 2011

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

11

Deferred income taxes and other current liabilities

¥

817

Deferred income taxes and other assets

2

Deferred income taxes and other liabilities

—

Interest rate swaps,cross-currency swaps and interest rate cap agreements

Deferred income taxes and other current assets

126

Deferred income taxes and other current liabilities

471

Total

¥

139

¥

1,288

		Derivative Assets						Derivative Liabilities
Undesignated derivative		Location on the consolidated		Estimated				Location on the consolidated		Estimated
instruments		Balance Sheets		fair value				Balance Sheets		fair value
Forwards contracts		Deferred income taxes and other current assets		¥	403			Deferred income taxes and other current liabilities		¥	2,025
		Deferred income taxes and other assets			—			Deferred income taxes and other liabilities			126
Option contracts		Deferred income taxes and other current assets			7			Deferred income taxes and other current liabilities			—
Interest rate swaps,cross-currency swaps and interest rate cap agreements		Deferred income taxes and other current assets			6,967			Deferred income taxes and other current liabilities			382
		Deferred income taxes and other assets			3,515			Deferred income taxes and other liabilities			155
Total				¥	10,892					¥	2,688
Total Derivative Instruments				¥	11,031					¥	3,976

The effects of derivative instruments on the consolidated statements of income for the three months ended June 30, 2011 and 2010 are as follows:

Derivative instruments designated as cash flow hedging relationships

Millions of yen

Three months ended

June 30, 2011

Ineffective portion and amount excluded

Effective portion

from effectiveness testing

Amount of

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in

reclassified

reclassified

recognized in

recognized in

OCI on

from accumulated

from accumulated

income

income

derivatives

OCI into income

OCI into income

on derivatives

on derivatives

Forwards contracts

¥

1,797

Other income (expenses), net: Other, net

¥

852

—

¥

—

Interest rate swaps, cross-currency swaps and interest rate cap agreements

(33

)

—

—

—

—

Total

¥

1,764

¥

852

¥

—

Millions of yen

Three months ended

June 30, 2010

Ineffective portion and amount excluded

Effective portion

from effectiveness testing

Amount of

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in

reclassified

reclassified

recognized in

recognized in

OCI on

from accumulated

from accumulated

income

income

derivatives

OCI into income

OCI into income

on derivatives

on derivatives

Forwards contracts

¥

3,334

Other income (expenses), net: Other, net

¥

1,606

—

¥

—

Interest rate swaps, cross-currency swaps and interest rate cap agreements

(127

)

—

—

—

—

Total

¥

3,207

¥

1,606

¥

—

Derivative instruments not designated as hedging instruments relationships

		Millions of yen
		Three months ended
		June 30, 2011
		Location of gains (losses) recognized		Amount of gains (losses) recognized
		in income on derivatives		in income on derivatives
Forwards contracts		Other income (expenses), net: Other, net		¥	(735	)
Option contracts		Other income (expenses), net: Other, net			1
Interest rate swaps,cross-currency swaps and interest rate cap agreements		Cost of sales			(66	)
		Other income (expenses), net: Other, net			975
Total				¥	175

		Millions of yen
		Three months ended
		June 30, 2010
		Location of gains (losses) recognized		Amount of gains (losses) recognized
		in income on derivatives		in income on derivatives
Forwards contracts		Other income (expenses), net: Other, net		¥	1,963
Option contracts		Other income (expenses), net: Other, net			(9	)
Interest rate swaps,cross-currency swaps and interest rate cap agreements		Cost of sales			(149	)
		Other income (expenses), net: Other, net			3,251
Total				¥	5,056

12. The Fair Value of Financial Instruments

(1)

Cash and Cash Equivalents, Time Deposits, Trade Notes and Accounts Receivable, Other Current Assets, Short-Term Debt, Trade Notes, Bills and Accounts Payables, and Other Current Liabilities

The carrying amount approximates fair value because of the short maturity of these instruments.

(2)

Investment Securities, Marketable Equity Securities

The fair values of investment securities available for sale for which it is practicable to estimate fair value are based on quoted market prices and are recognized on the accompanying consolidated balance sheets.

(3)

Long-Term Trade Receivables, Including Current Portion

The fair values of long-term trade receivables are based on the present value of future cash flows through maturity, discounted using estimated current interest rates. The fair values computed on such a basis approximate the carrying amounts.

(4)

Long-Term Debt, Including Current Portion

The fair values of each of the long-term debts are based on the quoted price in the most active market or the present value of future cash flows associated with each instrument discounted using the current borrowing rate for similar debt of comparable maturity.

(5)

Derivatives

The fair values of derivative financial instruments, consisting principally of foreign exchange contracts and interest swaps agreements, are estimated by obtaining quotes from brokers and are recognized on the accompanying consolidated balance sheets.

The carrying amounts and the estimated fair values of the financial instruments, including financial instruments not qualifying as hedge, at June 30, 2011 and at March 31, 2011, are summarized as follows:

		Millions of yen
		June 30, 2011								March 31, 2011
		Carrying				Estimated				Carrying				Estimated
		amount				fair value				amount				fair value
Investment securities, marketable equity securities		¥	45,443			¥	45,443			¥	49,372			¥	49,372
Long-term debt, including current portion			445,610				442,009				413,760				412,375
Derivatives:
Forwards and options
Assets			1,288				1,288				423				423
Liabilities			1,616				1,616				2,968				2,968
Interest rate swaps, cross-currency swaps and interest rate cap agreements
Assets			10,942				10,942				10,608				10,608
Liabilities			977				977				1,008				1,008