Other Businesses Sales for this segment, which comprises new product development operations, the construction and repair of plants and production facilities, and goods transportation services, posted a year-on-year decline of 13.3% to \1,460 million. An operating loss of \462 million was registered. Cash Flows Despite a decrease in trade receivables, net cash provided by operating activities fell by \2,371 million from the previous year, to \13,280 million, largely as a result of a decline in income before income taxes. Net cash used in investing activities posted an increase of \4,566 million to \8,776 million as a result of increased expenditure on the acquisition of securities for investment purposes, as well as a decline revenues in proceeds from the sale of investment securities from the previous year. Net cash used in financing activities came to \4,057 million, down from \15,894 million for the previous term. This is primarily attributable to a decline in the repayment of long-term loans. The net cash outflow consisted largely of the repayment of interest-bearing debt and the payment of dividends. As a result of the above, cash and cash equivalents at the reporting term-end stood at \9,826 million, for an increase of \115 million over the previous term-end. Business Performance Prospects for Fiscal 2009 For the current term, ending December 31, 2009, we forecast sales of \135,000 million, operating income of \6,400 million, recurring profit of \6,600 million, and net income of \2,000 million. Cash Flow Prospects for Fiscal 2009 Due to an expected decline in sales, net cash provided by operating activities is likely to be in the region of \11,000 million. Net cash used in investing activities is forecast at \9,000 million, mainly due to the acquisition of property, plant and equipment. Net cash used in financing activities is forecast at \2,000 million as a result of the Company’s acquisition of its own shares and measures taken to reduce its interest-bearing debt burden. Business Risks (1) Cost competition The Group manufactures and sells many products that are difficult to differentiate from those of other companies in terms of their function and performance. Given the present trend of intensifying price competition, there is a possibility that the Group, despite its efforts to strengthen marketing activities and reduce costs, may not be able to maintain its competitive edge over rival companies that are able to sell products with the same qualities at lower prices. This could adversely affect the business performance and financial position of the Group. (2) Changes in the price of crude oil and naphtha The purchase prices of the major raw materials of products manufactured and sold by the Group are affected by changes in crude oil and naphtha prices. Therefore, if the Group is unable to sufficiently raise its product prices, and/or if the Group is unable to rationalize its operations sufficiently to offset the rising prices of crude oil and naphtha, there is a possibility that the Group’s business performance and financial position will be adversely affected. 0 15 30 45 60 (%) 04 05 06 07 08 Net worth ratio ■ Net worth ROE 0 30,000 60,000 90,000 120,000 0.0 4.0 8.0 12.0 16.0 (Millions of yen) (%) 04 05 06 07 08 Net worth & ROE 24 Annual Report 2008