NEC Corporation

Consolidated Statements of Income and Retained Earnings

NEC CORPORATION AND CONSOLIDATED SUBSIDIARIES
Six months ended September 30
The statements are subject to year-end adjustments and audit.                                             In thousands of
                                                                       In millions of yen                   U.S. dollars
                                                            ---------------------------------------  -----------------------
                                                                 1995         1996         1997                 1997
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Sales and other income:
  Net sales ...............................................   Y1,921,737   Y2,242,541   Y2,371,610         $ 19,600,083
  Interest, gain on securities sold, dividends and other ..       15,758       35,170       23,874              197,305
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                                                               1,937,495    2,277,711    2,395,484           19,797,388
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Costs and expenses:
  Cost of sales ..........................................     1,267,220    1,547,410    1,626,679           13,443,628
  Selling, general and administrative ....................       549,806      602,760      638,132            5,273,818
  Interest ...............................................        35,308       30,848       29,507              243,860
  Other ..................................................        35,477       35,747       35,946              297,074
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                                                               1,887,811    2,216,765    2,330,264           19,258,380
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Income before income taxes
                            ..............................        49,684       60,946       65,220              539,008

Income taxes
            ..............................................        34,180       29,862       30,464              251,769
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Income before minority interests,
 equity in earnings of affiliated companies
 and cumulative effect of accounting change
                                               ...........        15,504       31,084       34,756              287,239
Minority interest in consolidated
 subsidiary companies
                      ....................................           158          597        1,084                8,958
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Income before equity in earnings of
 affiliated companies and cumulative effect
 of accounting change
                      ....................................        15,346       30,487       33,672              278,281
Equity in earnings of affiliated companies
                                              ............         4,891          724        2,091               17,281
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Net income
         .................................................        20,237       31,211       35,763              295,562

Retained earnings:
  Balance at beginning of year ...........................       324,704      382,901      455,388            3,763,537
  Cash dividends .........................................        (7,723)      (8,508)      (8,611)             (71,165)
  Transfer to legal reserve ..............................          (907)        (905)        (839)              (6,934)
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  Balance at end of period ...............................    Y  336,311   Y  404,699   Y  481,701         $  3,981,000
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