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## 13. FOREIGN EXCHANGE GAINS AND LOSSES 

## 14. RESTRUCTURING CHARGES 

For the years ended March 31, 2002 and 2001, the net foreign exchange losses are ¥6,682 million ($50,241 thou- sand) and ¥7,776 million, respectively. 

Restructuring charges consist of various reorganization costs totaling ¥111,280 million ($836,692 thousand) primarily related to the “01 Action Plan,” a series of measures to reshape business operations and strengthen competitiveness announced in August 2001 and additional termination benefits for voluntary early retirement of ¥97,674 million ($734,391 thousand). 

The reorganization costs of ¥111,280 million ($836,692 thousand) comprised the following. For the year ended March 31, 2002, the Company incurred sluggish demand and price erosion of semiconductors especially commodity DRAMs and consequently the Company’s gross margin significantly decreased. Given these cir- cumstances the Company evaluated certain machinery and equipment for memory production to be held and used for impairment. The impairment of such machinery and equipment was based upon an analysis of projected undis- counted cash flows, which were no longer deemed adequate to support their value. Consequently, the Company record- ed an impairment loss of ¥55,247 million ($415,391 thousand) for assets to be held and used. 

The Company decided to exit the commodity DRAM business. In December 2001, the Company announced that it would sell Dominion Semiconductor, L.L.C. (“Dominion”) to Micron Technology, Inc. (“Micron”). The sale covers all of the assets of Dominion, including its land, buildings and DRAM production equipment. In connection with the exit, certain NAND flash manufacturing equipment will be transferred to a Company facility in Japan. Furthermore, the Company determined to liquidate a wholly-owned subsidiary, which had been engaged mainly in the assembly of DRAMs. In connection with such reorganization of the DRAM business, the Company has incurred losses on disposal and impairment for building, machinery and equipment of ¥5,125 million ($38,534 thousand) and various other loss- es including; losses on contract terminations, purchase commitment losses, dismantling costs for machinery and equip- ment to be disposed of, totaling ¥31,083 million ($233,707 thousand). The Company anticipates that substantially all of the restructuring liabilities will be paid during the year ending March 31, 2003. 

Other reorganization costs of ¥19,825 million ($149,060 thousand) mainly related to impairment losses of building, machinery and equipment for other businesses to be discontinued or already discontinued. 

The Company anticipates that substantially all of such assets will be disposed during the year ending March 31, 2003. 

The Company recorded a loss of ¥97,674 million ($734,391 thousand) with respect to the additional termination ben- efits for the voluntary early retirement of approximately 8,200 employees under the “01 Action Plan”. Substantially all of these additional termination benefits were paid as of March 31, 2002. 

Approximately ¥79,993 million ($601,451 thousand) of the restructuring charges are non-cash charges. 

## 15. INCOME TAXES 

The Company is subject to a number of different taxes based on income which, in the aggregate, result in a normal statutory tax rate in Japan of approximately 42.1 percent for the years ended March 31, 2002 and 2001. A recon- ciliation between the reported income tax expense (benefit) and the amount computed by multiplying the income (loss) before income taxes, minority interest and equity in earnings of affiliates by the applicable statutory tax rate is as fol- lows: 

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