Provision for losses on doubtful loans receivable to subsidiary companies and Losses on devaluation of loans receivable to subsidiary companies

During fiscal year 2005, from April 1, 2004 to March 31, 2005, Nikon Corporation took measures to reduce interest-bearing debt, dispose of inventories, write down inventories, and dispose of fixed assets throughout Nikon group businesses in order to enhance its financial position.
As part of these measures, Nikon Eyewear Co., Ltd., a wholly owned subsidiary of Nikon Corporation that deals in eyeglass frames, revaluated its inventory assets, thereby improving profitability. We applied ¥1,383 million in provision for losses on doubtful loans receivable to subsidiary companies to improve the future financial position of Nikon Eyewear Co., Ltd. As another financial assistance measure, we forgave ¥400 million in debt that Nikon Eyewear Co., Ltd. owed us, recording both of them as an extraordinary loss.