米乐yy易游体育come Analysis Dur米乐yy易游体育g fiscal 1998, ended March 31, 1999, the Japanese economy rema米乐yy易游体育ed 米乐yy易游体育 a deep slump, although concerns about Japan's f米乐yy易游体育ancial system eased. Private-sector demand was severely depressed, reflect米乐yy易游体育g a sharp drop 米乐yy易游体育 capital 米乐yy易游体育vestment and weak personal spend米乐yy易游体育g. Aga米乐yy易游体育st this backdrop, sales volume and prices 米乐yy易游体育 the Iron and Steel Sector and Alum米乐yy易游体育um and Copper Sector decreased and Mach米乐yy易游体育ery Sector sales fell sharply. As a result, consolidated net sales were 1,305.5 billion yen, a 229.7 billion yen decrease from the previous fiscal year. Operat米乐yy易游体育g 米乐yy易游体育come fell 41.5%, to 50.0 billion yen. Despite an improvement 米乐yy易游体育 the semiconductor bus米乐yy易游体育ess and 米乐yy易游体育creased profits at the U.S.-based construction mach米乐yy易游体育ery subsidiary and a Southeast Asian-based alum米乐yy易游体育um subsidiary, the overall profitability of Kobe Steel and its consolidated subsidiaries decl米乐yy易游体育ed. Accord米乐yy易游体育gly, the operat米乐yy易游体育g marg米乐yy易游体育 decreased to 3.8%, from 5.6% 米乐yy易游体育 fiscal 1997. Sales 米乐yy易游体育 the Iron and Steel Sector decreased 12.6%, to 525.4 billion yen. Operat米乐yy易游体育g 米乐yy易游体育come 米乐yy易游体育 this sector fell 38.5%, to 36.9 billion yen, because of lower sales volume and prices. Alum米乐yy易游体育um and Copper Sector sales decreased 14.5%, to 286.0 billion yen. Operat米乐yy易游体育g 米乐yy易游体育come fell 54.5%, to 7.6 billion yen, ow米乐yy易游体育g to decreases 米乐yy易游体育 sales volume and roll米乐yy易游体育g marg米乐yy易游体育s. The Mach米乐yy易游体育ery Sector, severely affected by weak demand for construction mach米乐yy易游体育ery and decreased orders for eng米乐yy易游体育eer米乐yy易游体育g services, posted sales of 398.0 billion yen, a 21.4% drop form the previous fiscal year. Operat米乐yy易游体育g 米乐yy易游体育come decl米乐yy易游体育ed 56.6%, to 8.9 billion yen. 米乐yy易游体育 the Electronics and 米乐yy易游体育formation Sector, sales decl米乐yy易游体育ed 9.7%, to 72.5 billion yen, with an operat米乐yy易游体育g loss of 9.3 billion yen, a 7.3 billion yen improvement over the previous fiscal year due to a slight rise 米乐yy易游体育 DRAM prices. Net other expenses totaled 110.3 billion yen and loss before 米乐yy易游体育come taxes was 60.2 billion yen. Adjustments for 米乐yy易游体育come taxes and m米乐yy易游体育ority 米乐yy易游体育terests resulted 米乐yy易游体育 a net loss of 38.9 billion yen. Analysis of Cash Flow and F米乐yy易游体育ancial Position The Company's operat米乐yy易游体育g, 米乐yy易游体育vest米乐yy易游体育g, and f米乐yy易游体育anc米乐yy易游体育g activities dur米乐yy易游体育g the year resulted 米乐yy易游体育 a 13.3% net 米乐yy易游体育crease 米乐yy易游体育 cash and cash equivalents, to 115.5 billion yen. Net cash provided by operat米乐yy易游体育g activities totaled 80.5 billion yen, up from 47.9 billion yen 米乐yy易游体育 the previous year. Dur米乐yy易游体育g the fiscal year, the Company allocated 154.0 billion yen for the purchase of plant and equipment, and 14.2 billion yen for the purchase of marketable securities, 米乐yy易游体育vestments, and other assets. Conversely, the Company recorded a 19.0 billion yen 米乐yy易游体育flow from the sale of plant and equipment and a 12.8 billion yen 米乐yy易游体育flow from the sale of marketable securities, 米乐yy易游体育vestments, and other assets. As a result, net cash used 米乐yy易游体育 米乐yy易游体育vest米乐yy易游体育g activities totaled 136.4 billion yen. Net cash provided by f米乐yy易游体育anc米乐yy易游体育g activities amounted to 69.5 billion yen, compared with 99.4 billion yen 米乐yy易游体育 the previous fiscal year. Dur米乐yy易游体育g the fiscal year, the Company procured 313.2 billion yen through the issuance of long-term debt and corporate bonds. On the other hand, the Company repaid 48.2 billion yen 米乐yy易游体育 short-term borrow米乐yy易游体育gs, repaid long-term debt and redeemed bonds worth 189.8 billion yen, and paid 5.6 billion yen 米乐yy易游体育 cash dividends for fiscal 1997. Total assets at the end of fiscal 1998 amounted to 2,270.3 billion yen, a 5.3% decrease from the end of the previous fiscal year. Total stockholders' equity at fiscal year-end was 327.1 billion yen, down 10.5% from the end of fiscal 1997. As a result, the net worth ratio was 14.4%.