As of September 30, 2003	Change from March 31, 2003
Total Assets	3,740.4 billion yen	- 484.8 billion yen
Interest Bearing Liabilities	1,476.6 billion yen	- 287.1 billion yen
Shareholders' Equity	649.8 billion yen	- 52.5 billion yen

Total assets at the end of the first half were 3,740.4 billion yen, a reduction of 484.8 billion yen from the end of the previous fiscal year. The reduction in assets is a result of the switch to equity-method accounting for the company's flash memory operations and leasing affiliate as well as further progress in promoting balance sheet efficiencies through such measures as the sale of marketable securities.

Total current assets were reduced by 271.6 billion yen from the end of the last fiscal year, to 1,799.9 billion yen. While trade receivables declined by 170.9 billion yen as a result of collections from sales concentrated at the end of the previous fiscal year, inventories increased by 23.3 billion yen in anticipation of increased sales in the second half. Other current assets decreased by 79.5 billion yen from the end of the previous fiscal year as a result of the reduction of lease receivables in accordance with the switch to equity-method accounting for the leasing company.

Total fixed assets decreased by 213.1 billion yen from the end of the last fiscal year, to 1,940.5 billion yen. Property, plant and equipment decreased by 134.6 billion yen as a result of the reorganization of flash memory operations. In addition, investments and other assets decreased by 65.3 billion yen in accordance with the decrease in lease receivables and the sale of marketable securities.

Total liabilities declined by 386.3 billion yen from the end of the previous fiscal year, to 2,922.0 billion yen. In addition to a 220 billion yen reduction in interest-bearing liabilities from the change in the accounting treatment of the leasing company to the equity method, progress was also achieved in the redemption of corporate bonds and the repayment of bank loans, resulting in a total reduction of interest-bearing liabilities of 287.1 billion yen from the end of the previous fiscal year. Interest-bearing liabilities at the end of the current period were 1,476.6 billion yen, so at present the company has already achieved its objective of reducing interest-bearing liabilities to 1,500.0 billion yen by the end of the fiscal year. Fujitsu has also reduced its ratio of interest-bearing liabilities by 2.2%, to 39.5%. Through the effective use of its asset holdings, the company will continue its effort to reduce interest-bearing liabilities to the extent possible.

Total shareholders' equity declined by 52.5 billion yen as a result of the net loss for the period, to 649.8 billion yen. Because, proportionally, assets contracted by more than shareholders' equity, the shareholders' equity ratio increased by 0.8%, to 17.4%.

	First Half	Change from Previous Year
Cash Flow from Operations	37.4 billion yen	118.4 billion yen
Cash Flow from Investing	- 30.3 billion yen	-19.8 billion yen
Free Cash Flow	7.0 billion yen	98.6 billion yen

Net cash flow generated by operating activities in the first half was 37.4 billion yen (compared to negative 80.9 billion yen in the same period last year), resulting in part from the significant collection of trade receivables at the end of the last fiscal year. This improvement of 118.4 billion yen was also attributable to a substantial reduction in the loss before income taxes compared to the same period of the previous year.

Net cash flow from investing activities was negative 30.3 billion yen, achieved by concentrating capital expenditures in high growth segments and through sales of marketable securities.

By holding investment spending within the amount of net cash generated by operating activities, free cash flow improved by 98.6 billion yen compared to the same period last year, to positive 7.0 billion yen.

Net cash flow generated from financing activities was negative 50.6 billion yen. Cash generated from operations and existing cash balances were used towards the redemption of bonds and the repayment of outstanding debt.

As a result, total cash and cash equivalents fell by 45.6 billion yen, to 236.6 billion yen.

With respect to the disposition of profits, Fujitsu believes that a portion should be paid to shareholders to offer a stable return, and that a portion should be retained by the company to strengthen its financial base and support new business development opportunities that will result in improved long-term performance.

Although, on an unconsolidated basis, Fujitsu posted net income of 18.7 billion yen for the current period, the company is still in the midst of its plans to restore the profitability of its core business as reflected in operating income, and the company reported operating losses for the current period on both a consolidated and unconsolidated basis. Accordingly, the company has reluctantly decided to forgo dividend payments for the first half of fiscal 2003. With respect to the dividend for the next payout period, following the end of this fiscal year, the company would like to base its decision on a review of the full-year's results, and therefore no decision has been reached at the present time.

As the scope of the networked society continues to expand, IT is permeating every aspect of our daily lives, moving us ever closer to a ubiquitous networked world, where information sharing through the network is available anytime, anyplace and with anyone. Moreover, IT is playing an increasingly important role in the ability of customers to manage their businesses. Nowadays, IT vendors must recognize that customers do not simply look for suppliers of products and services when selecting partners for building and operating their IT systems. Rather, IT vendors are expected to be true partners who, based on long-term relationships of mutual trust, can make appropriate proposals and implement them through the entire IT life-cycle.

The customer is the starting point for everything we do and think about at Fujitsu. By understanding in detail the environment in which our customers operate and their overall businesses, we are able to provide them with effective proposals that are both concrete and timely. Moreover, we will continue to strive to keep pace with the fast-changing markets and needs of our customers.

As a leader of the IT industry, we are firmly committed to continuously providing total solutions that utilize high-quality products and services based on advanced technology that offers superior performance and reliability. In this way, we will further strengthen our overall capabilities -- which range from cutting-edge technology that incorporates the latest advances and applications to a full complement of services -- and at the same time contribute to our customers' businesses. We aim by so doing to become management partners to our customers and grow together with them.

We believe that, in today's uncertain economic and market conditions, our customers are giving priority to reducing the cost of operating their IT systems and bolstering their competitiveness in order to promote further growth.

Today's IT systems are comprised of an increasingly wide variety of hardware and software products, and along with higher performance levels comes greater complexity. Consequently, the task of operating them has become a greater burden for customers. While, on the one hand, systems are often separated along divisional lines, it is becoming increasingly important to link them with external systems, and the issue of interconnectivity among systems is becoming increasingly crucial. In addition, there is growing demand for the ability to integrate the overall structure and management of corporate IT systems.

Fujitsu is uniquely positioned to offer our customer comprehensive solutions to their business problems through the strategic utilization of information technology. We are actively using this expertise to contribute to our customers' business growth and expansion.

Below are some of the specific initiatives we are currently emphasizing.

While increasing the level of interconnectivity among our customers' various divisional systems, we aim to achieve an integrated perspective on the overall chain of processes relating to our customers' systems - from consulting and planning through development, operation and maintenance - and thereby help them to reduce their overall IT costs and strengthen the competitiveness of their operations. We are not simply offering suggestions at the various stages in these processes but rather continuously providing comprehensive service proposals based on in-depth understanding of the customers' management policies and strategy.

Today's IT systems are becoming increasingly sophisticated and complex. In response, Fujitsu is intensifying its commitment to develop and deploy TRIOLE, its next-generation IT infrastructure initiative. TRIOLE utilizes middleware to integrate open standard servers, storage and network resources, bringing harmony to the disparate parts of an IT system, including those manufactured by other companies. Specifically, while enhancing the technology we have accumulated in the mainframe field in high-reliability design and superior operational stability, we are utilizing our rich experience and know-how in systems integration and producing templates for highly-reliable systems integration. These advantages enable us to offer our customers operational system stability, faster system deployments, and scalability to keep pace with the growth of their business.

In our services and software business, we are continuing to strive to improve profitability by bolstering the efficiency of application development and strengthening project management. We are also rapidly shifting our emphasis to growth markets such as services for top-tier manufacturers and retailers, healthcare, and local government consolidation, in addition to growth fields as outsourcing, CRM, ERP, e-learning and mobile solutions. Moreover, we are strengthening sales of our competitive middleware products and aim to increase our share of that market.

In our platforms business, we are further strengthening our manufacturing prowess by taking various measures to boost productivity, such as initiating major productivity reforms in our manufacturing facilities. Our efforts are not limited to the manufacturing process. At every stage of our operations, including development, design and procurement, we are working hard to improve product and service quality, reduce development time and cut costs. Moreover, based upon our TRIOLE next-generation IT infrastructure initiative, we are promoting coordination with our software and services unit to expand business, and we are laying the organizational foundation to expand our business globally.

In our electronic devices business, as part of the initiatives to improve our profitability, we are moving quickly to focus our resources on markets in which we expect high growth, such as logic ICs for home information appliances, mobile devices and networks. At the same time, we are moving ahead with the development of advanced CMOS technology, which will further enhance the competitiveness of our products. To launch, in a timely manner, the products that meet our customers' needs, we are working to speed up every process throughout our organization.

We have made cash flow management a major priority and are taking various steps to improve our financial structure. In the first half, we succeeded in reducing interest-bearing debt through such means as the sales of equity holdings and changing the status of our leasing affiliate into a company warranting equity-method accounting treatment. By continuing to focus on improving the profitability of our core operations as a top priority, while at the same time promoting a more efficient use of our assets, we will make further progress towards improving the company's financial position.

By continuously applying our efforts to the accomplishment of these tasks, we are striving to become a global company that is trusted by our customers and society, and that can make a significant contribution to building a prosperous and dynamic networked society.

Participation of individual investors in the equity markets is increasing, and we recognize the importance of this trend from the viewpoint of the revitalization of the capital markets and the promotion of long-term, stable holdings of the company's shares. Moreover, as a basic principle, as part of our ongoing investor relations activities, we inform investors about the company's financial condition through active and appropriate disclosure of company information.

With respect to lowering the minimum lot size for trading the company's shares, we realize that such a move could promote the participation of individual investors in the equity market and, therefore, could be an effective means of boosting the liquidity of the stock. Nevertheless, after considering the current stock price level, the number of shareholders, the current distribution of individual shareholders and the market liquidity of Fujitsu's stock, we have come to the conclusion that it would be premature to reduce the minimum lot size at the present time.

Taking into account overall trends in individual stock ownership and Fujitsu's stock price, we will carefully consider what action might be appropriate in the future.

After having undergone two painful years of restructuring, there are signs that Fujitsu's financial results are beginning to improve, with the company posting in the second quarter its first year-on-year quarterly sales growth in two years. With respect to the market environment facing the IT industry, technological advances have made digital cameras, DVDs, camera phones, and other digital audio-visual equipment cheaper, lighter, and more sophisticated, spurring an increase in demand, and the company expects these trends to continue. In conjunction with these trends, Fujitsu fully expects demand for advanced broadband network infrastructure, particularly servers and storage systems, to also increase.

At the present time there are some causes for concern about instability relating to the situation in Iraq and the equity market, but the company feels that conditions are ripe for an economic upturn in the second half. On the other hand, globalization and technological progress are combining to significantly accelerate the downward pricing pressure on computer hardware in addition to software and services. Fujitsu itself must therefore intensify the globalization of its own operations, maintain its technological superiority, strengthen its manufacturing prowess, and implement operational reforms to generate greater efficiencies, including additional cost savings. Amid the major changes affecting the IT industry, Fujitsu will continue to emphasize, above all, the company's customer-oriented perspective and fast responsiveness.

With respect to Fujitsu's projections for the full fiscal year, the shift to the equity-method of accounting for the company's leasing affiliate has resulted in a downward revision of 50 billion yen in our net sales forecast. For operating income, because of a profit deterioration in software and services, the company expects not to be able to meet its original profit targets in that business segment. Fujitsu now expects, however, to offset that amount through improved results in platforms and electronic devices, so it is not changing its original projections for the full year. The company's projections for net income also remain unchanged.

Earnings projections for the third quarter are shown below. In Fujitsu's business, sales tend to be concentrated at the end of the fiscal year. Even though sales in the third quarter are projected to be 100 billion yen lower than in the second quarter, the company still expects to post an operating profit and lay the foundation for stable profitability.

Note:

*

All yen figures have been converted to US dollars for convenience only at a uniform rate of $1=111 yen.

*

FY2003 from April 1, 2003 - March 31, 2004; FY2002 from April 1, 2002 - March 31, 2003

*

Due to uncertainties relating to changes in demand for products and components in key markets (Japan, U.S., Europe, etc.), currency exchange rate fluctuations, Japan and U.S. stock market conditions, and other factors, actual results may vary substantially from projections above.

About Fujitsu
Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. Pace-setting technologies, highly reliable computing and telecommunications platforms, and a worldwide corps of systems and services experts uniquely position Fujitsu to deliver comprehensive solutions that open up infinite possibilities for its customers' success. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.6 trillion yen (US$38 billion) for the fiscal year ended March 31, 2003. For more information, please see: www.fujitsu.com
For details and supplemental information regarding Fujitsu's FY2002 financial results, please see http://pr.fujitsu.com/en/ir/
All company/product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only