Mitsubishi UFJ Financial Group Inc

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)

(cid:33)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0)(cid:18)(cid:16)(cid:16)(cid:25)

(cid:57)(cid:69)(cid:65)(cid:82)(cid:0)(cid:69)(cid:78)(cid:68)(cid:69)(cid:68)(cid:0)(cid:45)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:19)(cid:17)(cid:12)(cid:0)(cid:18)(cid:16)(cid:16)(cid:25)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202) (cid:49)(cid:19)(cid:27)(cid:202) (cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202) (cid:20)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202) (cid:173)(cid:31)(cid:49)(cid:19)(cid:20)(cid:174)(cid:202) (cid:136)(cid:195)(cid:202) (cid:156)(cid:152)(cid:105)(cid:202) (cid:156)(cid:118)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202) (cid:220)(cid:156)(cid:192)(cid:143)(cid:96)(cid:191)(cid:195)(cid:202) (cid:143)(cid:62)(cid:192)(cid:125)(cid:105)(cid:195)(cid:204)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:147)(cid:156)(cid:195)(cid:204)(cid:202) (cid:96)(cid:136)(cid:219)(cid:105)(cid:192)(cid:195)(cid:136)(cid:118)(cid:136)(cid:105)(cid:96)(cid:202)

(cid:118)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202) (cid:125)(cid:192)(cid:156)(cid:213)(cid:171)(cid:195)(cid:202) (cid:220)(cid:136)(cid:204)(cid:133)(cid:202) (cid:204)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202) (cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202) (cid:156)(cid:118)(cid:202) (cid:62)(cid:192)(cid:156)(cid:213)(cid:152)(cid:96)(cid:202) (cid:225)(cid:163)(cid:153)(cid:228)(cid:202) (cid:204)(cid:192)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)(cid:202) (cid:62)(cid:195)(cid:202) (cid:156)(cid:118)(cid:202) (cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202) (cid:206)(cid:163)(cid:93)(cid:202) (cid:211)(cid:228)(cid:228)(cid:153)(cid:176)(cid:202) (cid:47)(cid:133)(cid:105)(cid:202) (cid:125)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202)

(cid:86)(cid:156)(cid:147)(cid:171)(cid:192)(cid:136)(cid:195)(cid:105)(cid:195)(cid:202) (cid:118)(cid:136)(cid:219)(cid:105)(cid:202) (cid:171)(cid:192)(cid:136)(cid:147)(cid:62)(cid:192)(cid:222)(cid:202) (cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202) (cid:86)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:136)(cid:105)(cid:195)(cid:93)(cid:202) (cid:136)(cid:152)(cid:86)(cid:143)(cid:213)(cid:96)(cid:136)(cid:152)(cid:125)(cid:202) (cid:47)(cid:133)(cid:105)(cid:202) (cid:9)(cid:62)(cid:152)(cid:142)(cid:202) (cid:156)(cid:118)(cid:202) (cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:135)(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202) (cid:49)(cid:19)(cid:27)(cid:93)(cid:202)

(cid:29)(cid:204)(cid:96)(cid:176)(cid:93)(cid:202) (cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202) (cid:49)(cid:19)(cid:27)(cid:202) (cid:47)(cid:192)(cid:213)(cid:195)(cid:204)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:9)(cid:62)(cid:152)(cid:142)(cid:136)(cid:152)(cid:125)(cid:202) (cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:93)(cid:202) (cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202) (cid:49)(cid:19)(cid:27)(cid:202) (cid:45)(cid:105)(cid:86)(cid:213)(cid:192)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202) (cid:10)(cid:156)(cid:176)(cid:93)(cid:202) (cid:29)(cid:204)(cid:96)(cid:176)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:32)(cid:22)(cid:10)(cid:34)(cid:45)(cid:202)(cid:10)(cid:156)(cid:176)(cid:93)(cid:202)(cid:29)(cid:204)(cid:96)(cid:176)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:29)(cid:105)(cid:62)(cid:195)(cid:105)(cid:202)(cid:69)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:10)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:222)(cid:202)(cid:29)(cid:136)(cid:147)(cid:136)(cid:204)(cid:105)(cid:96)(cid:176)(cid:202)(cid:31)(cid:49)(cid:19)(cid:20)(cid:191)(cid:195)(cid:202)

(cid:195)(cid:105)(cid:192)(cid:219)(cid:136)(cid:86)(cid:105)(cid:195)(cid:202)(cid:136)(cid:152)(cid:86)(cid:143)(cid:213)(cid:96)(cid:105)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:105)(cid:192)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:76)(cid:62)(cid:152)(cid:142)(cid:136)(cid:152)(cid:125)(cid:93)(cid:202)(cid:204)(cid:192)(cid:213)(cid:195)(cid:204)(cid:202)(cid:76)(cid:62)(cid:152)(cid:142)(cid:136)(cid:152)(cid:125)(cid:93)(cid:202)(cid:195)(cid:105)(cid:86)(cid:213)(cid:192)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:93)(cid:202)(cid:86)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:86)(cid:62)(cid:192)(cid:96)(cid:195)(cid:93)(cid:202)(cid:86)(cid:156)(cid:152)(cid:195)(cid:213)(cid:147)(cid:105)(cid:192)(cid:202)(cid:118)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:105)(cid:93)(cid:202)

(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:202) (cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:93)(cid:202) (cid:143)(cid:105)(cid:62)(cid:195)(cid:136)(cid:152)(cid:125)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:147)(cid:62)(cid:152)(cid:222)(cid:202) (cid:147)(cid:156)(cid:192)(cid:105)(cid:202) (cid:118)(cid:136)(cid:105)(cid:143)(cid:96)(cid:195)(cid:202) (cid:156)(cid:118)(cid:202) (cid:118)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202) (cid:195)(cid:105)(cid:192)(cid:219)(cid:136)(cid:86)(cid:105)(cid:195)(cid:176)(cid:202) (cid:47)(cid:133)(cid:105)(cid:202) (cid:125)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202) (cid:133)(cid:62)(cid:195)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202)

(cid:143)(cid:62)(cid:192)(cid:125)(cid:105)(cid:195)(cid:204)(cid:202)(cid:156)(cid:219)(cid:105)(cid:192)(cid:195)(cid:105)(cid:62)(cid:195)(cid:202)(cid:152)(cid:105)(cid:204)(cid:220)(cid:156)(cid:192)(cid:142)(cid:202)(cid:156)(cid:118)(cid:202)(cid:62)(cid:152)(cid:222)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:105)(cid:195)(cid:105)(cid:202)(cid:76)(cid:62)(cid:152)(cid:142)(cid:93)(cid:202)(cid:86)(cid:156)(cid:147)(cid:171)(cid:192)(cid:136)(cid:195)(cid:136)(cid:152)(cid:125)(cid:202)(cid:156)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:195)(cid:213)(cid:76)(cid:195)(cid:136)(cid:96)(cid:136)(cid:62)(cid:192)(cid:136)(cid:105)(cid:195)(cid:93)(cid:202)(cid:136)(cid:152)(cid:86)(cid:143)(cid:213)(cid:96)(cid:136)(cid:152)(cid:125)(cid:202)

(cid:49)(cid:152)(cid:136)(cid:156)(cid:152)(cid:202)(cid:9)(cid:62)(cid:152)(cid:142)(cid:93)(cid:202)(cid:136)(cid:152)(cid:202)(cid:147)(cid:156)(cid:192)(cid:105)(cid:202)(cid:204)(cid:133)(cid:62)(cid:152)(cid:202)(cid:123)(cid:228)(cid:202)(cid:86)(cid:156)(cid:213)(cid:152)(cid:204)(cid:192)(cid:136)(cid:105)(cid:195)(cid:176)

●(cid:202) (cid:47)(cid:133)(cid:136)(cid:195)(cid:202) (cid:62)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202) (cid:192)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202) (cid:136)(cid:195)(cid:202) (cid:171)(cid:192)(cid:105)(cid:171)(cid:62)(cid:192)(cid:105)(cid:96)(cid:202) (cid:136)(cid:152)(cid:202) (cid:62)(cid:86)(cid:86)(cid:156)(cid:192)(cid:96)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202) (cid:220)(cid:136)(cid:204)(cid:133)(cid:202) (cid:49)(cid:176)(cid:45)(cid:176)(cid:202) (cid:20)(cid:1)(cid:1)(cid:42)(cid:176)(cid:202) (cid:47)(cid:156)(cid:202) (cid:192)(cid:105)(cid:62)(cid:96)(cid:202) (cid:62)(cid:202) (cid:96)(cid:136)(cid:195)(cid:86)(cid:213)(cid:195)(cid:195)(cid:136)(cid:156)(cid:152)(cid:202) (cid:220)(cid:136)(cid:204)(cid:133)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202)

(cid:171)(cid:192)(cid:105)(cid:195)(cid:136)(cid:96)(cid:105)(cid:152)(cid:204)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:96)(cid:105)(cid:204)(cid:62)(cid:136)(cid:143)(cid:105)(cid:96)(cid:202) (cid:96)(cid:105)(cid:195)(cid:86)(cid:192)(cid:136)(cid:171)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202) (cid:156)(cid:118)(cid:202) (cid:156)(cid:213)(cid:192)(cid:202) (cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202) (cid:195)(cid:204)(cid:192)(cid:62)(cid:204)(cid:105)(cid:125)(cid:136)(cid:105)(cid:195)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:136)(cid:152)(cid:136)(cid:204)(cid:136)(cid:62)(cid:204)(cid:136)(cid:219)(cid:105)(cid:195)(cid:93)(cid:202) (cid:171)(cid:143)(cid:105)(cid:62)(cid:195)(cid:105)(cid:202) (cid:192)(cid:105)(cid:118)(cid:105)(cid:192)(cid:202) (cid:204)(cid:156)(cid:202)

(cid:31)(cid:49)(cid:19)(cid:20)(cid:189)(cid:195)(cid:202)(cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:44)(cid:105)(cid:219)(cid:136)(cid:105)(cid:220)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:93)(cid:202)(cid:220)(cid:133)(cid:136)(cid:86)(cid:133)(cid:202)(cid:220)(cid:62)(cid:195)(cid:202)(cid:171)(cid:213)(cid:76)(cid:143)(cid:136)(cid:195)(cid:133)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:45)(cid:105)(cid:171)(cid:204)(cid:105)(cid:147)(cid:76)(cid:105)(cid:192)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:176)

(cid:10)(cid:156)(cid:152)(cid:204)(cid:105)(cid:152)(cid:204)(cid:195)

(cid:10)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:222)(cid:202)(cid:34)(cid:219)(cid:105)(cid:192)(cid:219)(cid:136)(cid:105)(cid:220)(cid:202)

(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:21)(cid:136)(cid:125)(cid:133)(cid:143)(cid:136)(cid:125)(cid:133)(cid:204)(cid:195)(cid:202)

(cid:1)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:156)(cid:152)(cid:202)(cid:19)(cid:156)(cid:192)(cid:147)(cid:202)(cid:211)(cid:228)(cid:135)(cid:19)(cid:202)(cid:202)

(cid:202)(cid:202)(cid:202)(cid:163)

(cid:202)(cid:202)(cid:206)

(cid:17)(cid:0)(cid:0)(cid:0)(cid:1)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:202)(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)

(cid:1)(cid:143)(cid:143)(cid:202)(cid:118)(cid:136)(cid:125)(cid:213)(cid:192)(cid:105)(cid:195)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:62)(cid:136)(cid:152)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:204)(cid:133)(cid:136)(cid:195)(cid:202)(cid:192)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:62)(cid:192)(cid:105)(cid:202)(cid:86)(cid:62)(cid:143)(cid:86)(cid:213)(cid:143)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:192)(cid:96)(cid:136)(cid:152)(cid:125)(cid:202)(cid:204)(cid:156)(cid:202)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)

(cid:20)(cid:1)(cid:1)(cid:42)(cid:93)(cid:202)(cid:213)(cid:152)(cid:143)(cid:105)(cid:195)(cid:195)(cid:202)(cid:156)(cid:204)(cid:133)(cid:105)(cid:192)(cid:220)(cid:136)(cid:195)(cid:105)(cid:202)(cid:152)(cid:156)(cid:204)(cid:105)(cid:96)(cid:176)

(cid:47)(cid:133)(cid:136)(cid:195)(cid:202) (cid:96)(cid:156)(cid:86)(cid:213)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202) (cid:86)(cid:156)(cid:152)(cid:204)(cid:62)(cid:136)(cid:152)(cid:195)(cid:202) (cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202) (cid:204)(cid:133)(cid:62)(cid:204)(cid:202) (cid:86)(cid:156)(cid:152)(cid:195)(cid:204)(cid:136)(cid:204)(cid:213)(cid:204)(cid:105)(cid:202) (cid:118)(cid:156)(cid:192)(cid:220)(cid:62)(cid:192)(cid:96)(cid:135)(cid:143)(cid:156)(cid:156)(cid:142)(cid:136)(cid:152)(cid:125)(cid:202)

(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202) (cid:220)(cid:136)(cid:204)(cid:133)(cid:136)(cid:152)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202) (cid:147)(cid:105)(cid:62)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202) (cid:156)(cid:118)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202) (cid:49)(cid:152)(cid:136)(cid:204)(cid:105)(cid:96)(cid:202) (cid:45)(cid:204)(cid:62)(cid:204)(cid:105)(cid:195)(cid:202) (cid:42)(cid:192)(cid:136)(cid:219)(cid:62)(cid:204)(cid:105)(cid:202) (cid:45)(cid:105)(cid:86)(cid:213)(cid:192)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202)

(cid:29)(cid:136)(cid:204)(cid:136)(cid:125)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202) (cid:44)(cid:105)(cid:118)(cid:156)(cid:192)(cid:147)(cid:202) (cid:1)(cid:86)(cid:204)(cid:202) (cid:156)(cid:118)(cid:202) (cid:163)(cid:153)(cid:153)(cid:120)(cid:176)(cid:202) (cid:45)(cid:213)(cid:86)(cid:133)(cid:202) (cid:118)(cid:156)(cid:192)(cid:220)(cid:62)(cid:192)(cid:96)(cid:135)(cid:143)(cid:156)(cid:156)(cid:142)(cid:136)(cid:152)(cid:125)(cid:202) (cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)

(cid:192)(cid:105)(cid:171)(cid:192)(cid:105)(cid:195)(cid:105)(cid:152)(cid:204)(cid:202)(cid:204)(cid:62)(cid:192)(cid:125)(cid:105)(cid:204)(cid:195)(cid:202)(cid:204)(cid:133)(cid:62)(cid:204)(cid:202)(cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:220)(cid:136)(cid:143)(cid:143)(cid:202)(cid:195)(cid:204)(cid:192)(cid:136)(cid:219)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:62)(cid:86)(cid:133)(cid:136)(cid:105)(cid:219)(cid:105)(cid:202)(cid:76)(cid:222)(cid:202)(cid:136)(cid:147)(cid:171)(cid:143)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)

(cid:31)(cid:49)(cid:19)(cid:20)(cid:189)(cid:195)(cid:202) (cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202) (cid:195)(cid:204)(cid:192)(cid:62)(cid:204)(cid:105)(cid:125)(cid:136)(cid:105)(cid:195)(cid:93)(cid:202) (cid:76)(cid:213)(cid:204)(cid:202) (cid:62)(cid:192)(cid:105)(cid:202) (cid:152)(cid:156)(cid:204)(cid:202) (cid:171)(cid:192)(cid:156)(cid:141)(cid:105)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202) (cid:152)(cid:156)(cid:192)(cid:202) (cid:62)(cid:202) (cid:125)(cid:213)(cid:62)(cid:192)(cid:62)(cid:152)(cid:204)(cid:105)(cid:105)(cid:202) (cid:156)(cid:118)(cid:202)

(cid:118)(cid:213)(cid:204)(cid:213)(cid:192)(cid:105)(cid:202) (cid:171)(cid:105)(cid:192)(cid:118)(cid:156)(cid:192)(cid:147)(cid:62)(cid:152)(cid:86)(cid:105)(cid:176)(cid:202) (cid:1)(cid:143)(cid:143)(cid:202) (cid:118)(cid:156)(cid:192)(cid:220)(cid:62)(cid:192)(cid:96)(cid:135)(cid:143)(cid:156)(cid:156)(cid:142)(cid:136)(cid:152)(cid:125)(cid:202) (cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202) (cid:136)(cid:152)(cid:219)(cid:156)(cid:143)(cid:219)(cid:105)(cid:202) (cid:192)(cid:136)(cid:195)(cid:142)(cid:195)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202)

(cid:213)(cid:152)(cid:86)(cid:105)(cid:192)(cid:204)(cid:62)(cid:136)(cid:152)(cid:204)(cid:136)(cid:105)(cid:195)(cid:176)(cid:202) (cid:31)(cid:49)(cid:19)(cid:20)(cid:202) (cid:147)(cid:62)(cid:222)(cid:202) (cid:152)(cid:156)(cid:204)(cid:202) (cid:76)(cid:105)(cid:202) (cid:195)(cid:213)(cid:86)(cid:86)(cid:105)(cid:195)(cid:195)(cid:118)(cid:213)(cid:143)(cid:202) (cid:136)(cid:152)(cid:202) (cid:136)(cid:147)(cid:171)(cid:143)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202) (cid:136)(cid:204)(cid:195)(cid:202) (cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202)

(cid:195)(cid:204)(cid:192)(cid:62)(cid:204)(cid:105)(cid:125)(cid:136)(cid:105)(cid:195)(cid:93)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202) (cid:147)(cid:62)(cid:222)(cid:202) (cid:118)(cid:62)(cid:136)(cid:143)(cid:202) (cid:204)(cid:156)(cid:202) (cid:62)(cid:86)(cid:133)(cid:136)(cid:105)(cid:219)(cid:105)(cid:202) (cid:136)(cid:204)(cid:195)(cid:202) (cid:204)(cid:62)(cid:192)(cid:125)(cid:105)(cid:204)(cid:195)(cid:93)(cid:202) (cid:118)(cid:156)(cid:192)(cid:202) (cid:62)(cid:202) (cid:220)(cid:136)(cid:96)(cid:105)(cid:202)

(cid:192)(cid:62)(cid:152)(cid:125)(cid:105)(cid:202) (cid:156)(cid:118)(cid:202) (cid:171)(cid:156)(cid:195)(cid:195)(cid:136)(cid:76)(cid:143)(cid:105)(cid:202) (cid:192)(cid:105)(cid:62)(cid:195)(cid:156)(cid:152)(cid:195)(cid:93)(cid:202) (cid:136)(cid:152)(cid:86)(cid:143)(cid:213)(cid:96)(cid:136)(cid:152)(cid:125)(cid:202) (cid:192)(cid:105)(cid:86)(cid:105)(cid:152)(cid:204)(cid:202) (cid:118)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202) (cid:147)(cid:62)(cid:192)(cid:142)(cid:105)(cid:204)(cid:202) (cid:136)(cid:152)(cid:195)(cid:204)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:222)(cid:202)

(cid:125)(cid:143)(cid:156)(cid:76)(cid:62)(cid:143)(cid:143)(cid:222)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202) (cid:195)(cid:136)(cid:125)(cid:152)(cid:136)(cid:118)(cid:136)(cid:86)(cid:62)(cid:152)(cid:204)(cid:202) (cid:118)(cid:143)(cid:213)(cid:86)(cid:204)(cid:213)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202) (cid:136)(cid:152)(cid:202) (cid:195)(cid:105)(cid:86)(cid:213)(cid:192)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202) (cid:147)(cid:62)(cid:192)(cid:142)(cid:105)(cid:204)(cid:195)(cid:202) (cid:62)(cid:195)(cid:202) (cid:62)(cid:202) (cid:192)(cid:105)(cid:195)(cid:213)(cid:143)(cid:204)(cid:202)

(cid:156)(cid:118)(cid:202) (cid:195)(cid:213)(cid:86)(cid:133)(cid:202) (cid:136)(cid:152)(cid:195)(cid:204)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:222)(cid:198)(cid:202) (cid:62)(cid:96)(cid:219)(cid:105)(cid:192)(cid:195)(cid:105)(cid:202) (cid:105)(cid:86)(cid:156)(cid:152)(cid:156)(cid:147)(cid:136)(cid:86)(cid:202) (cid:86)(cid:156)(cid:152)(cid:96)(cid:136)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:96)(cid:105)(cid:86)(cid:192)(cid:105)(cid:62)(cid:195)(cid:105)(cid:96)(cid:202) (cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202)

(cid:62)(cid:86)(cid:204)(cid:136)(cid:219)(cid:136)(cid:204)(cid:222)(cid:202)(cid:136)(cid:152)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:93)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:49)(cid:152)(cid:136)(cid:204)(cid:105)(cid:96)(cid:202)(cid:45)(cid:204)(cid:62)(cid:204)(cid:105)(cid:195)(cid:202)(cid:156)(cid:192)(cid:202)(cid:156)(cid:204)(cid:133)(cid:105)(cid:192)(cid:202)(cid:147)(cid:62)(cid:192)(cid:142)(cid:105)(cid:204)(cid:195)(cid:198)(cid:202)(cid:96)(cid:105)(cid:86)(cid:143)(cid:136)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:192)(cid:105)(cid:62)(cid:143)(cid:202)(cid:105)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:202)

(cid:156)(cid:192)(cid:202)(cid:195)(cid:204)(cid:156)(cid:86)(cid:142)(cid:202)(cid:171)(cid:192)(cid:136)(cid:86)(cid:105)(cid:195)(cid:198)(cid:202)(cid:118)(cid:213)(cid:192)(cid:204)(cid:133)(cid:105)(cid:192)(cid:202)(cid:96)(cid:105)(cid:204)(cid:105)(cid:192)(cid:136)(cid:156)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:156)(cid:118)(cid:202)(cid:86)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:96)(cid:105)(cid:76)(cid:204)(cid:202)(cid:147)(cid:62)(cid:192)(cid:142)(cid:105)(cid:204)(cid:195)(cid:93)(cid:202)(cid:171)(cid:62)(cid:192)(cid:204)(cid:136)(cid:86)(cid:213)(cid:143)(cid:62)(cid:192)(cid:143)(cid:222)(cid:202)

(cid:136)(cid:152)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202) (cid:49)(cid:152)(cid:136)(cid:204)(cid:105)(cid:96)(cid:202) (cid:45)(cid:204)(cid:62)(cid:204)(cid:105)(cid:195)(cid:198)(cid:202) (cid:62)(cid:96)(cid:96)(cid:136)(cid:204)(cid:136)(cid:156)(cid:152)(cid:62)(cid:143)(cid:202) (cid:86)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202) (cid:76)(cid:62)(cid:152)(cid:142)(cid:192)(cid:213)(cid:171)(cid:204)(cid:86)(cid:136)(cid:105)(cid:195)(cid:202) (cid:156)(cid:192)(cid:202) (cid:62)(cid:96)(cid:96)(cid:136)(cid:204)(cid:136)(cid:156)(cid:152)(cid:62)(cid:143)(cid:202)

(cid:171)(cid:192)(cid:156)(cid:76)(cid:143)(cid:105)(cid:147)(cid:195)(cid:202) (cid:136)(cid:152)(cid:202) (cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202) (cid:195)(cid:105)(cid:86)(cid:204)(cid:156)(cid:192)(cid:195)(cid:202) (cid:204)(cid:156)(cid:202) (cid:220)(cid:133)(cid:136)(cid:86)(cid:133)(cid:202) (cid:31)(cid:49)(cid:19)(cid:20)(cid:202) (cid:86)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:136)(cid:105)(cid:195)(cid:202) (cid:143)(cid:105)(cid:152)(cid:96)(cid:198)(cid:202) (cid:96)(cid:136)(cid:118)(cid:118)(cid:136)(cid:86)(cid:213)(cid:143)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202)

(cid:156)(cid:192)(cid:202) (cid:96)(cid:105)(cid:143)(cid:62)(cid:222)(cid:195)(cid:202) (cid:136)(cid:152)(cid:202) (cid:136)(cid:152)(cid:204)(cid:105)(cid:125)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202) (cid:31)(cid:49)(cid:19)(cid:20)(cid:189)(cid:195)(cid:202) (cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:105)(cid:195)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:62)(cid:86)(cid:133)(cid:136)(cid:105)(cid:219)(cid:136)(cid:152)(cid:125)(cid:202) (cid:195)(cid:204)(cid:192)(cid:62)(cid:204)(cid:105)(cid:125)(cid:136)(cid:86)(cid:202) (cid:125)(cid:156)(cid:62)(cid:143)(cid:195)(cid:202)

(cid:156)(cid:118)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202) (cid:136)(cid:152)(cid:204)(cid:105)(cid:125)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:198)(cid:202) (cid:96)(cid:136)(cid:118)(cid:118)(cid:136)(cid:86)(cid:213)(cid:143)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202) (cid:136)(cid:152)(cid:202) (cid:62)(cid:86)(cid:133)(cid:136)(cid:105)(cid:219)(cid:136)(cid:152)(cid:125)(cid:202) (cid:204)(cid:133)(cid:105)(cid:202) (cid:76)(cid:105)(cid:152)(cid:105)(cid:118)(cid:136)(cid:204)(cid:195)(cid:202) (cid:156)(cid:118)(cid:202) (cid:171)(cid:192)(cid:156)(cid:171)(cid:156)(cid:195)(cid:105)(cid:96)(cid:202) (cid:156)(cid:192)(cid:202)

(cid:192)(cid:105)(cid:86)(cid:105)(cid:152)(cid:204)(cid:143)(cid:222)(cid:202)(cid:86)(cid:156)(cid:147)(cid:171)(cid:143)(cid:105)(cid:204)(cid:105)(cid:96)(cid:202)(cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202)(cid:136)(cid:152)(cid:204)(cid:105)(cid:125)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:62)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:198)(cid:202)(cid:136)(cid:152)(cid:86)(cid:192)(cid:105)(cid:62)(cid:195)(cid:105)(cid:96)(cid:202)(cid:86)(cid:156)(cid:147)(cid:171)(cid:105)(cid:204)(cid:136)(cid:204)(cid:136)(cid:219)(cid:105)(cid:202)

(cid:171)(cid:192)(cid:105)(cid:195)(cid:195)(cid:213)(cid:192)(cid:105)(cid:195)(cid:202) (cid:62)(cid:195)(cid:202) (cid:62)(cid:202) (cid:192)(cid:105)(cid:195)(cid:213)(cid:143)(cid:204)(cid:202) (cid:156)(cid:118)(cid:202) (cid:125)(cid:143)(cid:156)(cid:76)(cid:62)(cid:143)(cid:202) (cid:86)(cid:156)(cid:152)(cid:195)(cid:156)(cid:143)(cid:136)(cid:96)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202) (cid:156)(cid:192)(cid:202) (cid:62)(cid:143)(cid:143)(cid:136)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202) (cid:118)(cid:156)(cid:192)(cid:147)(cid:136)(cid:152)(cid:125)(cid:202) (cid:62)(cid:147)(cid:156)(cid:152)(cid:125)(cid:202)

(cid:118)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202) (cid:136)(cid:152)(cid:195)(cid:204)(cid:136)(cid:204)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:198)(cid:202) (cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:62)(cid:143)(cid:202) (cid:156)(cid:192)(cid:202) (cid:192)(cid:105)(cid:171)(cid:213)(cid:204)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:62)(cid:143)(cid:202) (cid:136)(cid:147)(cid:171)(cid:62)(cid:86)(cid:204)(cid:202) (cid:118)(cid:192)(cid:156)(cid:147)(cid:202) (cid:192)(cid:105)(cid:125)(cid:213)(cid:143)(cid:62)(cid:204)(cid:156)(cid:192)(cid:222)(cid:202)

(cid:62)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:136)(cid:152)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:93)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:49)(cid:152)(cid:136)(cid:204)(cid:105)(cid:96)(cid:202)(cid:45)(cid:204)(cid:62)(cid:204)(cid:105)(cid:195)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:156)(cid:204)(cid:133)(cid:105)(cid:192)(cid:202)(cid:141)(cid:213)(cid:192)(cid:136)(cid:195)(cid:96)(cid:136)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:198)(cid:202)(cid:86)(cid:133)(cid:62)(cid:152)(cid:125)(cid:105)(cid:195)(cid:202)(cid:136)(cid:152)(cid:202)(cid:143)(cid:62)(cid:220)(cid:195)(cid:202)

(cid:62)(cid:152)(cid:96)(cid:202) (cid:192)(cid:105)(cid:125)(cid:213)(cid:143)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202) (cid:62)(cid:171)(cid:171)(cid:143)(cid:136)(cid:86)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202) (cid:204)(cid:156)(cid:202) (cid:31)(cid:49)(cid:19)(cid:20)(cid:189)(cid:195)(cid:202) (cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:105)(cid:195)(cid:198)(cid:202) (cid:62)(cid:152)(cid:96)(cid:202) (cid:62)(cid:96)(cid:219)(cid:105)(cid:192)(cid:195)(cid:105)(cid:202) (cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)

(cid:105)(cid:152)(cid:219)(cid:136)(cid:192)(cid:156)(cid:152)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:118)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:136)(cid:152)(cid:195)(cid:204)(cid:136)(cid:204)(cid:213)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:125)(cid:143)(cid:156)(cid:76)(cid:62)(cid:143)(cid:143)(cid:222)(cid:176)(cid:202)(cid:42)(cid:143)(cid:105)(cid:62)(cid:195)(cid:105)(cid:202)(cid:195)(cid:105)(cid:105)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:62)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:192)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)

(cid:156)(cid:152)(cid:202)(cid:19)(cid:156)(cid:192)(cid:147)(cid:202)(cid:211)(cid:228)(cid:135)(cid:19)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:118)(cid:136)(cid:195)(cid:86)(cid:62)(cid:143)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:202)(cid:105)(cid:152)(cid:96)(cid:105)(cid:96)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:206)(cid:163)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:93)(cid:202)(cid:118)(cid:136)(cid:143)(cid:105)(cid:96)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:45)(cid:13)(cid:10)(cid:202)

(cid:136)(cid:152)(cid:202)(cid:45)(cid:105)(cid:171)(cid:204)(cid:105)(cid:147)(cid:76)(cid:105)(cid:192)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:93)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:62)(cid:96)(cid:96)(cid:136)(cid:204)(cid:136)(cid:156)(cid:152)(cid:62)(cid:143)(cid:202)(cid:136)(cid:152)(cid:118)(cid:156)(cid:192)(cid:147)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)(cid:192)(cid:105)(cid:125)(cid:62)(cid:192)(cid:96)(cid:136)(cid:152)(cid:125)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:192)(cid:136)(cid:195)(cid:142)(cid:195)(cid:202)(cid:192)(cid:105)(cid:143)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)

(cid:204)(cid:156)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:105)(cid:195)(cid:176)(cid:202)(cid:202)(cid:55)(cid:105)(cid:202)(cid:62)(cid:192)(cid:105)(cid:202)(cid:213)(cid:152)(cid:96)(cid:105)(cid:192)(cid:202)(cid:152)(cid:156)(cid:202)(cid:156)(cid:76)(cid:143)(cid:136)(cid:125)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:93)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:96)(cid:136)(cid:195)(cid:86)(cid:143)(cid:62)(cid:136)(cid:147)(cid:202)(cid:62)(cid:152)(cid:222)(cid:202)(cid:156)(cid:76)(cid:143)(cid:136)(cid:125)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)

(cid:204)(cid:156)(cid:202)(cid:213)(cid:171)(cid:96)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:192)(cid:202)(cid:62)(cid:143)(cid:204)(cid:105)(cid:192)(cid:202)(cid:156)(cid:213)(cid:192)(cid:202)(cid:118)(cid:156)(cid:192)(cid:220)(cid:62)(cid:192)(cid:96)(cid:135)(cid:143)(cid:156)(cid:156)(cid:142)(cid:136)(cid:152)(cid:125)(cid:202)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:93)(cid:202)(cid:220)(cid:133)(cid:105)(cid:204)(cid:133)(cid:105)(cid:192)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:192)(cid:105)(cid:195)(cid:213)(cid:143)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)

(cid:152)(cid:105)(cid:220)(cid:202)(cid:136)(cid:152)(cid:118)(cid:156)(cid:192)(cid:147)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:93)(cid:202)(cid:118)(cid:213)(cid:204)(cid:213)(cid:192)(cid:105)(cid:202)(cid:105)(cid:219)(cid:105)(cid:152)(cid:204)(cid:195)(cid:202)(cid:156)(cid:192)(cid:202)(cid:156)(cid:204)(cid:133)(cid:105)(cid:192)(cid:220)(cid:136)(cid:195)(cid:105)(cid:176)

(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:0)(cid:47)(cid:86)(cid:69)(cid:82)(cid:86)(cid:73)(cid:69)(cid:87)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)(cid:93)(cid:202)(cid:22)(cid:152)(cid:86)(cid:176)(cid:202)

(cid:202)

(cid:12)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:13)(cid:195)(cid:204)(cid:62)(cid:76)(cid:143)(cid:136)(cid:195)(cid:133)(cid:147)(cid:105)(cid:152)(cid:204)(cid:92)(cid:202)

(cid:1)(cid:171)(cid:192)(cid:136)(cid:143)(cid:202)(cid:211)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:163)

(cid:21)(cid:105)(cid:62)(cid:96)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:92)(cid:202)

(cid:1)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:92)(cid:202)

(cid:45)(cid:204)(cid:156)(cid:86)(cid:142)(cid:202)(cid:13)(cid:221)(cid:86)(cid:133)(cid:62)(cid:152)(cid:125)(cid:105)(cid:202)(cid:29)(cid:136)(cid:195)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)

(cid:29)(cid:156)(cid:152)(cid:125)(cid:135)(cid:204)(cid:105)(cid:192)(cid:147)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)

(cid:199)(cid:135)(cid:163)(cid:93)(cid:202)(cid:31)(cid:62)(cid:192)(cid:213)(cid:152)(cid:156)(cid:213)(cid:86)(cid:133)(cid:136)(cid:202)(cid:211)(cid:135)(cid:10)(cid:133)(cid:156)(cid:147)(cid:105)(cid:93)(cid:202)(cid:10)(cid:133)(cid:136)(cid:222)(cid:156)(cid:96)(cid:62)(cid:135)(cid:142)(cid:213)(cid:93)(cid:202)(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:202)(cid:163)(cid:228)(cid:228)(cid:135)(cid:110)(cid:206)(cid:206)(cid:228)(cid:93)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)

(cid:225)(cid:163)(cid:93)(cid:200)(cid:211)(cid:228)(cid:176)(cid:110)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)

(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:93)(cid:202)(cid:34)(cid:195)(cid:62)(cid:142)(cid:62)(cid:93)(cid:202)(cid:32)(cid:62)(cid:125)(cid:156)(cid:222)(cid:62)(cid:93)(cid:202)(cid:32)(cid:105)(cid:220)(cid:202)(cid:57)(cid:156)(cid:192)(cid:142)(cid:202)(cid:173)(cid:32)(cid:57)(cid:45)(cid:13)(cid:202)(cid:204)(cid:136)(cid:86)(cid:142)(cid:105)(cid:192)(cid:92)(cid:202)(cid:31)(cid:47)(cid:49)(cid:174)(cid:202)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:1)(cid:1)(cid:113)(cid:202)(cid:173)(cid:27)(cid:10)(cid:44)(cid:174)(cid:93)(cid:202)(cid:1)(cid:202)(cid:173)(cid:44)(cid:69)(cid:22)(cid:174)(cid:93)(cid:202)(cid:1)(cid:202)(cid:173)(cid:45)(cid:69)(cid:42)(cid:174)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:9)(cid:22)(cid:45)(cid:202)(cid:44)(cid:136)(cid:195)(cid:142)(cid:135)(cid:62)(cid:96)(cid:141)(cid:213)(cid:195)(cid:204)(cid:105)(cid:96)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:156)(cid:92)(cid:202)

(cid:163)(cid:163)(cid:176)(cid:199)(cid:199)(cid:175)

(cid:10)(cid:156)(cid:152)(cid:204)(cid:62)(cid:86)(cid:204)(cid:92)(cid:202)

(cid:47)(cid:105)(cid:143)(cid:92)(cid:202)

(cid:55)(cid:105)(cid:76)(cid:195)(cid:136)(cid:204)(cid:105)(cid:92)(cid:202)

(cid:22)(cid:152)(cid:219)(cid:105)(cid:195)(cid:204)(cid:156)(cid:192)(cid:202)(cid:44)(cid:105)(cid:143)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:93)(cid:202)(cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:42)(cid:143)(cid:62)(cid:152)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:12)(cid:136)(cid:219)(cid:136)(cid:195)(cid:136)(cid:156)(cid:152)

(cid:110)(cid:163)(cid:135)(cid:206)(cid:135)(cid:206)(cid:211)(cid:123)(cid:228)(cid:135)(cid:110)(cid:163)(cid:163)(cid:163)

(cid:220)(cid:220)(cid:220)(cid:176)(cid:147)(cid:213)(cid:118)(cid:125)(cid:176)(cid:141)(cid:171)(cid:201)(cid:105)(cid:152)(cid:125)(cid:143)(cid:136)(cid:195)(cid:133)(cid:201)

(cid:47)(cid:133)(cid:105)(cid:202)(cid:9)(cid:62)(cid:152)(cid:142)(cid:202)(cid:156)(cid:118)(cid:202)(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:135)(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:93)(cid:202)(cid:29)(cid:204)(cid:96)(cid:176)(cid:202)

(cid:12)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:13)(cid:195)(cid:204)(cid:62)(cid:76)(cid:143)(cid:136)(cid:195)(cid:133)(cid:147)(cid:105)(cid:152)(cid:204)(cid:92)(cid:202)

(cid:1)(cid:213)(cid:125)(cid:213)(cid:195)(cid:204)(cid:202)(cid:163)(cid:120)(cid:93)(cid:202)(cid:163)(cid:153)(cid:163)(cid:153)

(cid:21)(cid:105)(cid:62)(cid:96)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:92)(cid:202)

(cid:1)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:92)(cid:202)

(cid:29)(cid:156)(cid:152)(cid:125)(cid:135)(cid:204)(cid:105)(cid:192)(cid:147)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)

(cid:199)(cid:135)(cid:163)(cid:93)(cid:202)(cid:31)(cid:62)(cid:192)(cid:213)(cid:152)(cid:156)(cid:213)(cid:86)(cid:133)(cid:136)(cid:202)(cid:211)(cid:135)(cid:10)(cid:133)(cid:156)(cid:147)(cid:105)(cid:93)(cid:202)(cid:10)(cid:133)(cid:136)(cid:222)(cid:156)(cid:96)(cid:62)(cid:135)(cid:142)(cid:213)(cid:93)(cid:202)(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:202)(cid:163)(cid:228)(cid:228)(cid:135)(cid:110)(cid:206)(cid:110)(cid:110)(cid:93)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)

(cid:225)(cid:163)(cid:93)(cid:163)(cid:153)(cid:200)(cid:176)(cid:211)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)

(cid:1)(cid:62)(cid:211)(cid:202)(cid:173)(cid:31)(cid:156)(cid:156)(cid:96)(cid:222)(cid:189)(cid:195)(cid:174)(cid:93)(cid:202)(cid:1)(cid:179)(cid:30)(cid:173)(cid:45)(cid:69)(cid:42)(cid:174)(cid:93)(cid:202)(cid:1)(cid:202)(cid:173)(cid:19)(cid:22)(cid:47)(cid:10)(cid:21)(cid:174)(cid:93)(cid:202)(cid:1)(cid:1)(cid:202)(cid:173)(cid:27)(cid:10)(cid:44)(cid:174)(cid:93)(cid:202)(cid:1)(cid:179)(cid:202)(cid:173)(cid:44)(cid:69)(cid:22)(cid:174)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:9)(cid:22)(cid:45)(cid:202)(cid:44)(cid:136)(cid:195)(cid:142)(cid:135)(cid:62)(cid:96)(cid:141)(cid:213)(cid:195)(cid:204)(cid:105)(cid:96)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:156)(cid:92)(cid:202)

(cid:163)(cid:211)(cid:176)(cid:228)(cid:211)(cid:175)

(cid:10)(cid:156)(cid:152)(cid:204)(cid:62)(cid:86)(cid:204)(cid:92)(cid:202)

(cid:47)(cid:105)(cid:143)(cid:92)(cid:202)

(cid:55)(cid:105)(cid:76)(cid:195)(cid:136)(cid:204)(cid:105)(cid:92)(cid:202)

(cid:42)(cid:213)(cid:76)(cid:143)(cid:136)(cid:86)(cid:202)(cid:44)(cid:105)(cid:143)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:12)(cid:136)(cid:219)(cid:136)(cid:195)(cid:136)(cid:156)(cid:152)

(cid:110)(cid:163)(cid:135)(cid:206)(cid:135)(cid:206)(cid:211)(cid:123)(cid:228)(cid:135)(cid:163)(cid:163)(cid:163)(cid:163)

(cid:220)(cid:220)(cid:220)(cid:176)(cid:76)(cid:142)(cid:176)(cid:147)(cid:213)(cid:118)(cid:125)(cid:176)(cid:141)(cid:171)(cid:201)(cid:105)(cid:152)(cid:125)(cid:143)(cid:136)(cid:195)(cid:133)(cid:201)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:47)(cid:192)(cid:213)(cid:195)(cid:204)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:9)(cid:62)(cid:152)(cid:142)(cid:136)(cid:152)(cid:125)(cid:202)(cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:202)

(cid:12)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:13)(cid:195)(cid:204)(cid:62)(cid:76)(cid:143)(cid:136)(cid:195)(cid:133)(cid:147)(cid:105)(cid:152)(cid:204)(cid:92)(cid:202)

(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:163)(cid:228)(cid:93)(cid:202)(cid:163)(cid:153)(cid:211)(cid:199)

(cid:21)(cid:105)(cid:62)(cid:96)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:92)(cid:202)

(cid:1)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:92)(cid:202)

(cid:29)(cid:156)(cid:152)(cid:125)(cid:135)(cid:204)(cid:105)(cid:192)(cid:147)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)
(cid:202)

(cid:123)(cid:135)(cid:120)(cid:93)(cid:202)(cid:31)(cid:62)(cid:192)(cid:213)(cid:152)(cid:156)(cid:213)(cid:86)(cid:133)(cid:136)(cid:202)(cid:163)(cid:135)(cid:10)(cid:133)(cid:156)(cid:147)(cid:105)(cid:93)(cid:202)(cid:10)(cid:133)(cid:136)(cid:222)(cid:156)(cid:96)(cid:62)(cid:135)(cid:142)(cid:213)(cid:93)(cid:202)(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:202)(cid:163)(cid:228)(cid:228)(cid:135)(cid:110)(cid:211)(cid:163)(cid:211)(cid:93)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)

(cid:225)(cid:206)(cid:211)(cid:123)(cid:176)(cid:211)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)

(cid:1)(cid:62)(cid:211)(cid:73)(cid:202)(cid:173)(cid:31)(cid:156)(cid:156)(cid:96)(cid:222)(cid:189)(cid:195)(cid:174)(cid:93)(cid:202)(cid:1)(cid:179)(cid:202)(cid:173)(cid:45)(cid:69)(cid:42)(cid:174)(cid:93)(cid:202)(cid:1)(cid:202)(cid:173)(cid:19)(cid:22)(cid:47)(cid:10)(cid:21)(cid:174)(cid:93)(cid:202)(cid:1)(cid:1)(cid:202)(cid:173)(cid:27)(cid:10)(cid:44)(cid:174)(cid:93)(cid:202)(cid:1)(cid:179)(cid:202)(cid:173)(cid:44)(cid:69)(cid:22)(cid:174)(cid:202)

(cid:73)(cid:12)(cid:105)(cid:171)(cid:156)(cid:195)(cid:136)(cid:204)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:34)(cid:152)(cid:143)(cid:222)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:9)(cid:22)(cid:45)(cid:202)(cid:44)(cid:136)(cid:195)(cid:142)(cid:135)(cid:62)(cid:96)(cid:141)(cid:213)(cid:195)(cid:204)(cid:105)(cid:96)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:156)(cid:92)(cid:202)

(cid:163)(cid:211)(cid:176)(cid:199)(cid:228)(cid:175)

(cid:10)(cid:156)(cid:152)(cid:204)(cid:62)(cid:86)(cid:204)(cid:92)(cid:202)

(cid:47)(cid:105)(cid:143)(cid:92)(cid:202)

(cid:55)(cid:105)(cid:76)(cid:195)(cid:136)(cid:204)(cid:105)(cid:92)(cid:202)

(cid:42)(cid:213)(cid:76)(cid:143)(cid:136)(cid:86)(cid:202)(cid:44)(cid:105)(cid:143)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:45)(cid:105)(cid:86)(cid:204)(cid:136)(cid:156)(cid:152)(cid:93)(cid:202)(cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:42)(cid:143)(cid:62)(cid:152)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:12)(cid:136)(cid:219)(cid:136)(cid:195)(cid:136)(cid:156)(cid:152)

(cid:110)(cid:163)(cid:135)(cid:206)(cid:135)(cid:206)(cid:211)(cid:163)(cid:211)(cid:135)(cid:163)(cid:211)(cid:163)(cid:163)

(cid:220)(cid:220)(cid:220)(cid:176)(cid:204)(cid:192)(cid:176)(cid:147)(cid:213)(cid:118)(cid:125)(cid:176)(cid:141)(cid:171)(cid:201)(cid:105)(cid:152)(cid:125)(cid:143)(cid:136)(cid:195)(cid:133)(cid:201)

(cid:173)(cid:10)(cid:156)(cid:152)(cid:204)(cid:136)(cid:152)(cid:213)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:152)(cid:105)(cid:221)(cid:204)(cid:202)(cid:171)(cid:62)(cid:125)(cid:105)(cid:174)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:206)(cid:163)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202)(cid:202)(cid:1)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:202)(cid:202)(cid:17)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:45)(cid:105)(cid:86)(cid:213)(cid:192)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202)(cid:10)(cid:156)(cid:176)(cid:93)(cid:202)(cid:29)(cid:204)(cid:96)(cid:176)(cid:202)(cid:202)

(cid:12)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:13)(cid:195)(cid:204)(cid:62)(cid:76)(cid:143)(cid:136)(cid:195)(cid:133)(cid:147)(cid:105)(cid:152)(cid:204)(cid:92)(cid:202)

(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:123)(cid:93)(cid:202)(cid:163)(cid:153)(cid:123)(cid:110)

(cid:21)(cid:105)(cid:62)(cid:96)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:92)(cid:202)

(cid:1)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:92)(cid:202)

(cid:29)(cid:156)(cid:152)(cid:125)(cid:135)(cid:204)(cid:105)(cid:192)(cid:147)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)

(cid:10)(cid:156)(cid:152)(cid:204)(cid:62)(cid:86)(cid:204)(cid:92)(cid:202)

(cid:47)(cid:105)(cid:143)(cid:92)(cid:202)

(cid:55)(cid:105)(cid:76)(cid:195)(cid:136)(cid:204)(cid:105)(cid:92)(cid:202)

(cid:123)(cid:135)(cid:163)(cid:93)(cid:202)(cid:31)(cid:62)(cid:192)(cid:213)(cid:152)(cid:156)(cid:213)(cid:86)(cid:133)(cid:136)(cid:202)(cid:211)(cid:135)(cid:10)(cid:133)(cid:156)(cid:147)(cid:105)(cid:93)(cid:202)(cid:10)(cid:133)(cid:136)(cid:222)(cid:156)(cid:96)(cid:62)(cid:135)(cid:142)(cid:213)(cid:93)(cid:202)(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:202)(cid:163)(cid:228)(cid:228)(cid:135)(cid:200)(cid:206)(cid:163)(cid:199)(cid:93)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:202)

(cid:225)(cid:200)(cid:120)(cid:176)(cid:120)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)(cid:202)

(cid:1)(cid:62)(cid:211)(cid:202)(cid:173)(cid:31)(cid:156)(cid:156)(cid:96)(cid:222)(cid:189)(cid:195)(cid:174)(cid:93)(cid:202)(cid:1)(cid:1)(cid:202)(cid:173)(cid:27)(cid:10)(cid:44)(cid:174)(cid:93)(cid:202)(cid:1)(cid:179)(cid:202)(cid:173)(cid:44)(cid:69)(cid:22)(cid:174)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:42)(cid:213)(cid:76)(cid:143)(cid:136)(cid:86)(cid:202)(cid:44)(cid:105)(cid:143)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:93)(cid:202)(cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:42)(cid:143)(cid:62)(cid:152)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:12)(cid:136)(cid:219)(cid:136)(cid:195)(cid:136)(cid:156)(cid:152)

(cid:110)(cid:163)(cid:135)(cid:206)(cid:135)(cid:200)(cid:211)(cid:163)(cid:206)(cid:135)(cid:110)(cid:120)(cid:228)(cid:228)

(cid:220)(cid:220)(cid:220)(cid:176)(cid:195)(cid:86)(cid:176)(cid:147)(cid:213)(cid:118)(cid:125)(cid:176)(cid:141)(cid:171)(cid:201)(cid:105)(cid:152)(cid:125)(cid:143)(cid:136)(cid:195)(cid:133)(cid:201)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:32)(cid:22)(cid:10)(cid:34)(cid:45)(cid:202)(cid:10)(cid:156)(cid:176)(cid:93)(cid:202)(cid:29)(cid:204)(cid:96)(cid:176)(cid:202)

(cid:12)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:13)(cid:195)(cid:204)(cid:62)(cid:76)(cid:143)(cid:136)(cid:195)(cid:133)(cid:147)(cid:105)(cid:152)(cid:204)(cid:92)(cid:202)

(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:199)(cid:93)(cid:202)(cid:163)(cid:153)(cid:120)(cid:163)

(cid:21)(cid:105)(cid:62)(cid:96)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:92)(cid:202)

(cid:1)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:92)(cid:202)

(cid:29)(cid:156)(cid:152)(cid:125)(cid:135)(cid:204)(cid:105)(cid:192)(cid:147)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)

(cid:10)(cid:156)(cid:152)(cid:204)(cid:62)(cid:86)(cid:204)(cid:92)(cid:202)

(cid:47)(cid:105)(cid:143)(cid:92)(cid:202)

(cid:55)(cid:105)(cid:76)(cid:195)(cid:136)(cid:204)(cid:105)(cid:92)(cid:202)

(cid:206)(cid:206)(cid:135)(cid:120)(cid:93)(cid:202)(cid:21)(cid:156)(cid:152)(cid:125)(cid:156)(cid:202)(cid:206)(cid:135)(cid:10)(cid:133)(cid:156)(cid:147)(cid:105)(cid:93)(cid:202)(cid:9)(cid:213)(cid:152)(cid:142)(cid:222)(cid:156)(cid:135)(cid:142)(cid:213)(cid:93)(cid:202)(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:202)(cid:163)(cid:163)(cid:206)(cid:135)(cid:110)(cid:123)(cid:163)(cid:163)(cid:93)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)

(cid:225)(cid:163)(cid:228)(cid:153)(cid:176)(cid:206)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)

(cid:1)(cid:163)(cid:202)(cid:173)(cid:31)(cid:156)(cid:156)(cid:96)(cid:222)(cid:189)(cid:195)(cid:174)(cid:93)(cid:202)(cid:1)(cid:1)(cid:135)(cid:202)(cid:173)(cid:27)(cid:10)(cid:44)(cid:174)(cid:93)(cid:202)(cid:1)(cid:202)(cid:173)(cid:44)(cid:69)(cid:22)(cid:174)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:42)(cid:143)(cid:62)(cid:152)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:12)(cid:105)(cid:171)(cid:62)(cid:192)(cid:204)(cid:147)(cid:105)(cid:152)(cid:204)

(cid:110)(cid:163)(cid:135)(cid:206)(cid:135)(cid:206)(cid:110)(cid:163)(cid:163)(cid:135)(cid:206)(cid:163)(cid:163)(cid:163)

(cid:220)(cid:220)(cid:220)(cid:176)(cid:86)(cid:192)(cid:176)(cid:147)(cid:213)(cid:118)(cid:125)(cid:176)(cid:141)(cid:171)(cid:201)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:29)(cid:105)(cid:62)(cid:195)(cid:105)(cid:202)(cid:69)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:10)(cid:156)(cid:147)(cid:171)(cid:62)(cid:152)(cid:222)(cid:202)(cid:29)(cid:136)(cid:147)(cid:136)(cid:204)(cid:105)(cid:96)(cid:202)

(cid:12)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:13)(cid:195)(cid:204)(cid:62)(cid:76)(cid:143)(cid:136)(cid:195)(cid:133)(cid:147)(cid:105)(cid:152)(cid:204)(cid:92)(cid:202)

(cid:1)(cid:171)(cid:192)(cid:136)(cid:143)(cid:202)(cid:163)(cid:211)(cid:93)(cid:202)(cid:163)(cid:153)(cid:199)(cid:163)

(cid:21)(cid:105)(cid:62)(cid:96)(cid:202)(cid:34)(cid:118)(cid:118)(cid:136)(cid:86)(cid:105)(cid:92)(cid:202)

(cid:1)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:10)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:92)(cid:202)
(cid:202)

(cid:45)(cid:204)(cid:156)(cid:86)(cid:142)(cid:202)(cid:13)(cid:221)(cid:86)(cid:133)(cid:62)(cid:152)(cid:125)(cid:105)(cid:202)(cid:29)(cid:136)(cid:195)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)

(cid:29)(cid:156)(cid:152)(cid:125)(cid:135)(cid:204)(cid:105)(cid:192)(cid:147)(cid:202)(cid:44)(cid:62)(cid:204)(cid:136)(cid:152)(cid:125)(cid:195)(cid:92)(cid:202)
(cid:202)

(cid:10)(cid:156)(cid:152)(cid:204)(cid:62)(cid:86)(cid:204)(cid:92)(cid:202)

(cid:47)(cid:105)(cid:143)(cid:92)(cid:202)

(cid:55)(cid:105)(cid:76)(cid:195)(cid:136)(cid:204)(cid:105)(cid:92)(cid:202)

(cid:120)(cid:135)(cid:163)(cid:93)(cid:202)(cid:31)(cid:62)(cid:192)(cid:213)(cid:152)(cid:156)(cid:213)(cid:86)(cid:133)(cid:136)(cid:202)(cid:163)(cid:135)(cid:10)(cid:133)(cid:156)(cid:147)(cid:105)(cid:93)(cid:202)(cid:10)(cid:133)(cid:136)(cid:222)(cid:156)(cid:96)(cid:62)(cid:135)(cid:142)(cid:213)(cid:93)(cid:202)(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:202)(cid:163)(cid:228)(cid:228)(cid:135)(cid:200)(cid:120)(cid:211)(cid:120)(cid:93)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)

(cid:225)(cid:206)(cid:206)(cid:176)(cid:163)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:47)(cid:156)(cid:142)(cid:222)(cid:156)(cid:93)(cid:202)(cid:32)(cid:62)(cid:125)(cid:156)(cid:222)(cid:62)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:1)(cid:163)(cid:202)(cid:173)(cid:31)(cid:156)(cid:156)(cid:96)(cid:222)(cid:189)(cid:195)(cid:174)(cid:93)(cid:202)(cid:1)(cid:1)(cid:135)(cid:202)(cid:173)(cid:27)(cid:10)(cid:44)(cid:174)(cid:93)(cid:202)(cid:1)(cid:179)(cid:202)(cid:173)(cid:44)(cid:69)(cid:22)(cid:174)

(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:213)(cid:152)(cid:105)(cid:202)(cid:206)(cid:228)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:10)(cid:156)(cid:192)(cid:171)(cid:156)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:10)(cid:156)(cid:147)(cid:147)(cid:213)(cid:152)(cid:136)(cid:86)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:12)(cid:105)(cid:171)(cid:62)(cid:192)(cid:204)(cid:147)(cid:105)(cid:152)(cid:204)

(cid:110)(cid:163)(cid:135)(cid:206)(cid:135)(cid:200)(cid:110)(cid:200)(cid:120)(cid:135)(cid:206)(cid:228)(cid:228)(cid:228)

(cid:220)(cid:220)(cid:220)(cid:176)(cid:143)(cid:118)(cid:176)(cid:147)(cid:213)(cid:118)(cid:125)(cid:176)(cid:141)(cid:171)(cid:201)(cid:105)(cid:152)(cid:125)(cid:143)(cid:136)(cid:195)(cid:133)(cid:201)

(cid:202)(cid:173)(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:206)(cid:163)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:174)

(cid:18)(cid:0)(cid:0)(cid:0)(cid:1)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:202)(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)

(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0)(cid:40)(cid:73)(cid:71)(cid:72)(cid:76)(cid:73)(cid:71)(cid:72)(cid:84)(cid:83)

(cid:10)(cid:156)(cid:152)(cid:195)(cid:156)(cid:143)(cid:136)(cid:96)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:45)(cid:213)(cid:147)(cid:147)(cid:62)(cid:192)(cid:222)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:12)(cid:62)(cid:204)(cid:62)(cid:202)(cid:156)(cid:118)(cid:202)(cid:31)(cid:49)(cid:19)(cid:20)(cid:202)(cid:213)(cid:152)(cid:96)(cid:105)(cid:192)(cid:202)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:20)(cid:1)(cid:1)(cid:42)

(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:156)(cid:192)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:118)(cid:136)(cid:195)(cid:86)(cid:62)(cid:143)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:195)(cid:202)(cid:105)(cid:152)(cid:96)(cid:105)(cid:96)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:206)(cid:163)(cid:93)
(cid:202)
(cid:22)(cid:152)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:222)(cid:105)(cid:152)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:147)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:96)(cid:156)(cid:143)(cid:143)(cid:62)(cid:192)(cid:195)(cid:202)(cid:105)(cid:221)(cid:86)(cid:105)(cid:171)(cid:204)(cid:202)(cid:171)(cid:105)(cid:192)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:202)(cid:96)(cid:62)(cid:204)(cid:62)
(cid:202)

(cid:45)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:34)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:12)(cid:62)(cid:204)(cid:62)(cid:202)

(cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)

(cid:42)(cid:192)(cid:156)(cid:219)(cid:136)(cid:195)(cid:136)(cid:156)(cid:152)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:86)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:143)(cid:156)(cid:195)(cid:195)(cid:105)(cid:195)(cid:202)

(cid:32)(cid:156)(cid:152)(cid:135)(cid:136)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)

(cid:32)(cid:156)(cid:152)(cid:135)(cid:136)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:202)(cid:105)(cid:221)(cid:171)(cid:105)(cid:152)(cid:195)(cid:105)(cid:202)

(cid:22)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:204)(cid:62)(cid:221)(cid:202)(cid:105)(cid:221)(cid:171)(cid:105)(cid:152)(cid:195)(cid:105)(cid:202)

(cid:22)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:118)(cid:192)(cid:156)(cid:147)(cid:202)(cid:96)(cid:136)(cid:195)(cid:86)(cid:156)(cid:152)(cid:204)(cid:136)(cid:152)(cid:213)(cid:105)(cid:96)(cid:202)(cid:202)(cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:112)(cid:152)(cid:105)(cid:204)(cid:202)

(cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)

(cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:62)(cid:219)(cid:62)(cid:136)(cid:143)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:202)

(cid:1)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:195)(cid:202)(cid:171)(cid:105)(cid:192)(cid:202)(cid:45)(cid:133)(cid:62)(cid:192)(cid:105)(cid:73)(cid:202) (cid:173) (cid:22)(cid:152)(cid:202)(cid:222)(cid:105)(cid:152)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:96)(cid:156)(cid:143)(cid:143)(cid:62)(cid:192)(cid:195)(cid:174)(cid:202)

(cid:9)(cid:62)(cid:195)(cid:136)(cid:86)(cid:202)(cid:105)(cid:62)(cid:192)(cid:152)(cid:136)(cid:152)(cid:125)(cid:195)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:171)(cid:105)(cid:192)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:92)(cid:202)

(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)
(cid:202)

(cid:202)

(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)
(cid:173)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:12)(cid:156)(cid:143)(cid:143)(cid:62)(cid:192)(cid:195)(cid:174)(cid:202)

(cid:202)

(cid:211)(cid:228)(cid:228)(cid:110)

(cid:225)(cid:202)(cid:202)(cid:202)(cid:202)(cid:211)(cid:93)(cid:211)(cid:153)(cid:200)(cid:176)(cid:123)(cid:202)

(cid:102)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:211)(cid:206)(cid:93)(cid:163)(cid:200)(cid:163)(cid:202)

(cid:225)(cid:202)(cid:202)(cid:202)(cid:202)(cid:211)(cid:93)(cid:211)(cid:199)(cid:153)(cid:176)(cid:199)

(cid:200)(cid:211)(cid:200)(cid:176)(cid:153)(cid:202)(cid:202)

(cid:163)(cid:199)(cid:120)(cid:176)(cid:163)(cid:202)

(cid:206)(cid:93)(cid:120)(cid:199)(cid:211)(cid:176)(cid:120)(cid:202)

(cid:173)(cid:211)(cid:120)(cid:153)(cid:176)(cid:153)(cid:174)(cid:202)

(cid:113)(cid:202)

(cid:173)(cid:163)(cid:93)(cid:123)(cid:200)(cid:110)(cid:176)(cid:228)(cid:174)(cid:202)

(cid:173)(cid:163)(cid:93)(cid:123)(cid:153)(cid:163)(cid:176)(cid:200)(cid:174)(cid:202)

(cid:200)(cid:93)(cid:206)(cid:211)(cid:206)(cid:202)

(cid:163)(cid:93)(cid:199)(cid:200)(cid:200)(cid:202)

(cid:206)(cid:200)(cid:93)(cid:228)(cid:206)(cid:211)(cid:202)

(cid:173)(cid:211)(cid:93)(cid:200)(cid:211)(cid:211)(cid:174)(cid:202)

(cid:113)(cid:202)

(cid:173)(cid:163)(cid:123)(cid:93)(cid:110)(cid:228)(cid:200)(cid:174)(cid:202)

(cid:173)(cid:163)(cid:120)(cid:93)(cid:228)(cid:123)(cid:123)(cid:174)(cid:202)

(cid:206)(cid:110)(cid:120)(cid:176)(cid:199)(cid:202)

(cid:163)(cid:93)(cid:199)(cid:199)(cid:110)(cid:176)(cid:163)

(cid:206)(cid:93)(cid:200)(cid:120)(cid:153)(cid:176)(cid:199)

(cid:120)(cid:120)(cid:206)(cid:176)(cid:228)(cid:202)

(cid:173)(cid:163)(cid:176)(cid:199)(cid:174)

(cid:173)(cid:120)(cid:123)(cid:211)(cid:176)(cid:123)(cid:174)

(cid:173)(cid:120)(cid:120)(cid:199)(cid:176)(cid:228)(cid:174)

(cid:202)

(cid:202)

(cid:202)

(cid:22)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:118)(cid:192)(cid:156)(cid:147)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:136)(cid:152)(cid:213)(cid:136)(cid:152)(cid:125)(cid:202)(cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:62)(cid:219)(cid:62)(cid:136)(cid:143)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)

(cid:202)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:202)(cid:76)(cid:105)(cid:118)(cid:156)(cid:192)(cid:105)(cid:202)(cid:86)(cid:213)(cid:147)(cid:213)(cid:143)(cid:62)(cid:204)(cid:136)(cid:219)(cid:105)(cid:202)(cid:105)(cid:118)(cid:118)(cid:105)(cid:86)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:62)(cid:202)

(cid:202)(cid:202)(cid:86)(cid:133)(cid:62)(cid:152)(cid:125)(cid:105)(cid:202)(cid:136)(cid:152)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:213)(cid:152)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:171)(cid:192)(cid:136)(cid:152)(cid:86)(cid:136)(cid:171)(cid:143)(cid:105)(cid:202)

(cid:225)(cid:202)(cid:202)(cid:202)(cid:202)(cid:173)(cid:163)(cid:206)(cid:199)(cid:176)(cid:110)(cid:123)(cid:174)(cid:202)

(cid:102)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:173)(cid:163)(cid:176)(cid:206)(cid:153)(cid:174)(cid:202)

(cid:225)(cid:202)　(cid:202)(cid:173)(cid:120)(cid:206)(cid:176)(cid:110)(cid:110)(cid:174)

(cid:202) (cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:62)(cid:219)(cid:62)(cid:136)(cid:143)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:202)

(cid:173)(cid:163)(cid:206)(cid:199)(cid:176)(cid:110)(cid:123)(cid:174)(cid:202)

(cid:173)(cid:163)(cid:176)(cid:206)(cid:153)(cid:174)(cid:202)

(cid:173)(cid:120)(cid:123)(cid:176)(cid:228)(cid:120)(cid:174)

(cid:12)(cid:136)(cid:143)(cid:213)(cid:204)(cid:105)(cid:96)(cid:202)(cid:105)(cid:62)(cid:192)(cid:152)(cid:136)(cid:152)(cid:125)(cid:195)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:171)(cid:105)(cid:192)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:92)

(cid:202)

(cid:202)

(cid:202)

(cid:22)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:118)(cid:192)(cid:156)(cid:147)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:136)(cid:152)(cid:213)(cid:136)(cid:152)(cid:125)(cid:202)(cid:156)(cid:171)(cid:105)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:62)(cid:219)(cid:62)(cid:136)(cid:143)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)

(cid:202)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:202)(cid:76)(cid:105)(cid:118)(cid:156)(cid:192)(cid:105)(cid:202)(cid:86)(cid:213)(cid:147)(cid:213)(cid:143)(cid:62)(cid:204)(cid:136)(cid:219)(cid:105)(cid:202)(cid:105)(cid:118)(cid:118)(cid:105)(cid:86)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:62)(cid:202)

(cid:202)(cid:202)(cid:86)(cid:133)(cid:62)(cid:152)(cid:125)(cid:105)(cid:202)(cid:136)(cid:152)(cid:202)(cid:62)(cid:86)(cid:86)(cid:156)(cid:213)(cid:152)(cid:204)(cid:136)(cid:152)(cid:125)(cid:202)(cid:171)(cid:192)(cid:136)(cid:152)(cid:86)(cid:136)(cid:171)(cid:143)(cid:105)(cid:202)

(cid:202) (cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:62)(cid:219)(cid:62)(cid:136)(cid:143)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:202)

(cid:9)(cid:62)(cid:143)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:45)(cid:133)(cid:105)(cid:105)(cid:204)(cid:202)(cid:12)(cid:62)(cid:204)(cid:62)

(cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)

(cid:29)(cid:156)(cid:62)(cid:152)(cid:195)(cid:93)(cid:202)(cid:152)(cid:105)(cid:204)(cid:202)(cid:156)(cid:118)(cid:202)(cid:62)(cid:143)(cid:143)(cid:156)(cid:220)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:86)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:143)(cid:156)(cid:195)(cid:195)(cid:105)(cid:195)(cid:202)

(cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:143)(cid:136)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202)

(cid:12)(cid:105)(cid:171)(cid:156)(cid:195)(cid:136)(cid:204)(cid:195)(cid:202)

(cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:189)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:204)(cid:222)(cid:202)

(cid:173)(cid:163)(cid:206)(cid:199)(cid:176)(cid:110)(cid:123)(cid:174)(cid:202)

(cid:173)(cid:163)(cid:206)(cid:199)(cid:176)(cid:110)(cid:123)(cid:174)(cid:202)

(cid:173)(cid:163)(cid:176)(cid:206)(cid:153)(cid:174)(cid:202)

(cid:173)(cid:163)(cid:176)(cid:206)(cid:153)(cid:174)(cid:202)

(cid:173)(cid:120)(cid:206)(cid:176)(cid:110)(cid:110)(cid:174)

(cid:173)(cid:120)(cid:123)(cid:176)(cid:228)(cid:120)(cid:174)

(cid:225)(cid:163)(cid:153)(cid:206)(cid:93)(cid:123)(cid:153)(cid:153)(cid:176)(cid:123)(cid:202)

(cid:102)(cid:163)(cid:93)(cid:153)(cid:120)(cid:163)(cid:93)(cid:120)(cid:110)(cid:206)(cid:202)

(cid:225)(cid:163)(cid:153)(cid:120)(cid:93)(cid:199)(cid:200)(cid:200)(cid:176)(cid:163)

(cid:153)(cid:153)(cid:93)(cid:163)(cid:120)(cid:206)(cid:176)(cid:199)(cid:202)

(cid:163)(cid:93)(cid:228)(cid:228)(cid:228)(cid:93)(cid:228)(cid:206)(cid:199)(cid:202)

(cid:153)(cid:199)(cid:93)(cid:110)(cid:200)(cid:199)(cid:176)(cid:163)

(cid:163)(cid:110)(cid:199)(cid:93)(cid:211)(cid:200)(cid:123)(cid:176)(cid:120)(cid:202)

(cid:163)(cid:93)(cid:110)(cid:110)(cid:110)(cid:93)(cid:200)(cid:153)(cid:153)(cid:202)

(cid:163)(cid:110)(cid:199)(cid:93)(cid:211)(cid:199)(cid:200)(cid:176)(cid:228)

(cid:163)(cid:211)(cid:110)(cid:93)(cid:206)(cid:206)(cid:163)(cid:176)(cid:163)(cid:202)

(cid:163)(cid:93)(cid:211)(cid:153)(cid:123)(cid:93)(cid:206)(cid:163)(cid:211)(cid:202)

(cid:163)(cid:211)(cid:153)(cid:93)(cid:211)(cid:123)(cid:228)(cid:176)(cid:163)

(cid:200)(cid:93)(cid:211)(cid:206)(cid:123)(cid:176)(cid:153)(cid:202)

(cid:200)(cid:211)(cid:93)(cid:110)(cid:110)(cid:206)(cid:202)

(cid:110)(cid:93)(cid:123)(cid:153)(cid:228)(cid:176)(cid:163)

(cid:19)(cid:156)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:86)(cid:156)(cid:152)(cid:219)(cid:105)(cid:152)(cid:136)(cid:105)(cid:152)(cid:86)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:192)(cid:105)(cid:62)(cid:96)(cid:105)(cid:192)(cid:195)(cid:93)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:96)(cid:156)(cid:143)(cid:143)(cid:62)(cid:192)(cid:202)(cid:62)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:192)(cid:105)(cid:202)(cid:171)(cid:192)(cid:105)(cid:195)(cid:105)(cid:152)(cid:204)(cid:105)(cid:96)(cid:202)(cid:62)(cid:195)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:143)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:105)(cid:195)(cid:105)(cid:202)(cid:222)(cid:105)(cid:152)(cid:202)(cid:62)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:204)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)

(cid:225)(cid:153)(cid:153)(cid:176)(cid:163)(cid:120)(cid:114)(cid:49)(cid:45)(cid:102)(cid:163)(cid:176)(cid:228)(cid:228)(cid:93)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:152)(cid:156)(cid:156)(cid:152)(cid:202)(cid:76)(cid:213)(cid:222)(cid:136)(cid:152)(cid:125)(cid:202)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:152)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:206)(cid:163)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:136)(cid:152)(cid:202)(cid:32)(cid:105)(cid:220)(cid:202)(cid:57)(cid:156)(cid:192)(cid:142)(cid:202)(cid:10)(cid:136)(cid:204)(cid:222)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:86)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:118)(cid:105)(cid:192)(cid:195)(cid:202)(cid:136)(cid:152)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:105)(cid:195)(cid:105)(cid:202)(cid:222)(cid:105)(cid:152)(cid:202)(cid:62)(cid:195)(cid:202)(cid:86)(cid:105)(cid:192)(cid:204)(cid:136)(cid:118)(cid:136)(cid:105)(cid:96)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)

(cid:86)(cid:213)(cid:195)(cid:204)(cid:156)(cid:147)(cid:195)(cid:202)(cid:171)(cid:213)(cid:192)(cid:171)(cid:156)(cid:195)(cid:105)(cid:195)(cid:202)(cid:76)(cid:222)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:19)(cid:105)(cid:96)(cid:105)(cid:192)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:195)(cid:105)(cid:192)(cid:219)(cid:105)(cid:202)(cid:9)(cid:62)(cid:152)(cid:142)(cid:202)(cid:156)(cid:118)(cid:202)(cid:32)(cid:105)(cid:220)(cid:202)(cid:57)(cid:156)(cid:192)(cid:142)(cid:176)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202)(cid:202)(cid:1)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:202)(cid:202)(cid:19)

(cid:1)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:156)(cid:192)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:118)(cid:136)(cid:195)(cid:86)(cid:62)(cid:143)(cid:202)(cid:222)(cid:105)(cid:62)(cid:192)(cid:195)(cid:202)(cid:105)(cid:152)(cid:96)(cid:105)(cid:96)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:206)(cid:163)(cid:93)
(cid:202)
(cid:22)(cid:152)(cid:202)(cid:76)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:222)(cid:105)(cid:152)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:147)(cid:136)(cid:143)(cid:143)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:96)(cid:156)(cid:143)(cid:143)(cid:62)(cid:192)(cid:195)(cid:202)
(cid:202)

(cid:1)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:9)(cid:62)(cid:143)(cid:62)(cid:152)(cid:86)(cid:105)(cid:195)(cid:202)(cid:173)(cid:49)(cid:152)(cid:62)(cid:213)(cid:96)(cid:136)(cid:204)(cid:105)(cid:96)(cid:174)(cid:202)

(cid:22)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:135)(cid:105)(cid:62)(cid:192)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)

(cid:22)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:135)(cid:76)(cid:105)(cid:62)(cid:192)(cid:136)(cid:152)(cid:125)(cid:202)(cid:143)(cid:136)(cid:62)(cid:76)(cid:136)(cid:143)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:202)

(cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)

(cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:189)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:204)(cid:222)(cid:202)

(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)
(cid:173)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:12)(cid:156)(cid:143)(cid:143)(cid:62)(cid:192)(cid:195)(cid:174)(cid:202)

(cid:211)(cid:228)(cid:228)(cid:110)

(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)
(cid:202)

(cid:202)

(cid:225)(cid:163)(cid:199)(cid:206)(cid:93)(cid:211)(cid:123)(cid:211)(cid:176)(cid:199)(cid:202)

(cid:102)(cid:163)(cid:93)(cid:199)(cid:123)(cid:199)(cid:93)(cid:211)(cid:199)(cid:153)(cid:202)

(cid:225)(cid:163)(cid:199)(cid:211)(cid:93)(cid:123)(cid:200)(cid:199)(cid:176)(cid:206)

(cid:163)(cid:120)(cid:200)(cid:93)(cid:228)(cid:110)(cid:123)(cid:176)(cid:153)(cid:202)

(cid:163)(cid:93)(cid:120)(cid:199)(cid:123)(cid:93)(cid:211)(cid:206)(cid:228)(cid:202)

(cid:163)(cid:120)(cid:200)(cid:93)(cid:163)(cid:120)(cid:211)(cid:176)(cid:228)

(cid:163)(cid:153)(cid:200)(cid:93)(cid:211)(cid:163)(cid:123)(cid:176)(cid:123)(cid:202)

(cid:163)(cid:93)(cid:153)(cid:199)(cid:110)(cid:93)(cid:153)(cid:200)(cid:120)(cid:202)

(cid:163)(cid:153)(cid:199)(cid:93)(cid:153)(cid:123)(cid:200)(cid:176)(cid:199)

(cid:199)(cid:93)(cid:153)(cid:199)(cid:123)(cid:176)(cid:200)(cid:202)

(cid:110)(cid:228)(cid:93)(cid:123)(cid:206)(cid:228)(cid:202)

(cid:153)(cid:93)(cid:153)(cid:120)(cid:199)(cid:176)(cid:123)

(cid:44)(cid:105)(cid:204)(cid:213)(cid:192)(cid:152)(cid:202)(cid:156)(cid:152)(cid:202)(cid:13)(cid:181)(cid:213)(cid:136)(cid:204)(cid:222)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:1)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)(cid:173)(cid:49)(cid:152)(cid:62)(cid:213)(cid:96)(cid:136)(cid:204)(cid:105)(cid:96)(cid:174)(cid:202)

(cid:202)

(cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:62)(cid:219)(cid:62)(cid:136)(cid:143)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:171)(cid:105)(cid:192)(cid:86)(cid:105)(cid:152)(cid:204)(cid:62)(cid:125)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)

(cid:202)(cid:202)(cid:204)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:62)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)

(cid:173)(cid:228)(cid:176)(cid:199)(cid:200)(cid:175)(cid:174)(cid:202)

(cid:173)(cid:228)(cid:176)(cid:199)(cid:200)(cid:175)(cid:174)(cid:202)

(cid:173)(cid:228)(cid:176)(cid:211)(cid:110)(cid:175)(cid:174)

(cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:173)(cid:143)(cid:156)(cid:195)(cid:195)(cid:174)(cid:202)(cid:62)(cid:219)(cid:62)(cid:136)(cid:143)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:156)(cid:202)(cid:86)(cid:156)(cid:147)(cid:147)(cid:156)(cid:152)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:171)(cid:105)(cid:192)(cid:86)(cid:105)(cid:152)(cid:204)(cid:62)(cid:125)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)

(cid:202)(cid:202)(cid:204)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:62)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:189)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:204)(cid:222)(cid:202)

(cid:173)(cid:163)(cid:110)(cid:176)(cid:199)(cid:228)(cid:175)(cid:174)(cid:202)

(cid:173)(cid:163)(cid:110)(cid:176)(cid:199)(cid:228)(cid:175)(cid:174)(cid:202)

(cid:173)(cid:120)(cid:176)(cid:120)(cid:153)(cid:175)(cid:174)

(cid:47)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:62)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:195)(cid:133)(cid:62)(cid:192)(cid:105)(cid:133)(cid:156)(cid:143)(cid:96)(cid:105)(cid:192)(cid:195)(cid:189)(cid:202)(cid:105)(cid:181)(cid:213)(cid:136)(cid:204)(cid:222)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:171)(cid:105)(cid:192)(cid:86)(cid:105)(cid:152)(cid:204)(cid:62)(cid:125)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)

(cid:202)(cid:202)(cid:204)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:62)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)

(cid:123)(cid:176)(cid:228)(cid:200)(cid:175)(cid:202)

(cid:123)(cid:176)(cid:228)(cid:200)(cid:175)(cid:202)

(cid:120)(cid:176)(cid:228)(cid:206)(cid:175)

(cid:32)(cid:105)(cid:204)(cid:202)(cid:136)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:202)(cid:136)(cid:152)(cid:86)(cid:156)(cid:147)(cid:105)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:171)(cid:105)(cid:192)(cid:86)(cid:105)(cid:152)(cid:204)(cid:62)(cid:125)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:204)(cid:156)(cid:204)(cid:62)(cid:143)(cid:202)(cid:62)(cid:219)(cid:105)(cid:192)(cid:62)(cid:125)(cid:105)(cid:202)

(cid:202)(cid:202)(cid:136)(cid:152)(cid:204)(cid:105)(cid:192)(cid:105)(cid:195)(cid:204)(cid:135)(cid:105)(cid:62)(cid:192)(cid:152)(cid:136)(cid:152)(cid:125)(cid:202)(cid:62)(cid:195)(cid:195)(cid:105)(cid:204)(cid:195)(cid:202)

(cid:10)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:43)(cid:213)(cid:62)(cid:143)(cid:136)(cid:204)(cid:222)(cid:202)(cid:12)(cid:62)(cid:204)(cid:62)(cid:202)

(cid:1)(cid:143)(cid:143)(cid:156)(cid:220)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:86)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:143)(cid:156)(cid:195)(cid:195)(cid:105)(cid:195)(cid:202)

(cid:163)(cid:176)(cid:206)(cid:206)(cid:175)(cid:202)

(cid:163)(cid:176)(cid:206)(cid:206)(cid:175)(cid:202)

(cid:163)(cid:176)(cid:206)(cid:211)(cid:175)

(cid:202)

(cid:225)(cid:202)(cid:202)(cid:202)(cid:202)(cid:163)(cid:93)(cid:163)(cid:120)(cid:200)(cid:176)(cid:200)(cid:202)

(cid:102)(cid:202)(cid:202)(cid:202)(cid:202)(cid:202)(cid:163)(cid:163)(cid:93)(cid:200)(cid:200)(cid:200)(cid:202)

(cid:225)(cid:202)(cid:202)(cid:202)(cid:202)(cid:163)(cid:93)(cid:163)(cid:206)(cid:123)(cid:176)(cid:153)

(cid:1)(cid:143)(cid:143)(cid:156)(cid:220)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:86)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:143)(cid:156)(cid:195)(cid:195)(cid:105)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:171)(cid:105)(cid:192)(cid:86)(cid:105)(cid:152)(cid:204)(cid:62)(cid:125)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:202)

(cid:163)(cid:176)(cid:163)(cid:120)(cid:175)(cid:202)

(cid:163)(cid:176)(cid:163)(cid:120)(cid:175)(cid:202)

(cid:163)(cid:176)(cid:163)(cid:120)(cid:175)

(cid:32)(cid:156)(cid:152)(cid:62)(cid:86)(cid:86)(cid:192)(cid:213)(cid:62)(cid:143)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:192)(cid:105)(cid:195)(cid:204)(cid:192)(cid:213)(cid:86)(cid:204)(cid:213)(cid:192)(cid:105)(cid:96)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:93)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:62)(cid:86)(cid:86)(cid:192)(cid:213)(cid:136)(cid:152)(cid:125)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:192)(cid:62)(cid:86)(cid:204)(cid:213)(cid:62)(cid:143)(cid:143)(cid:222)(cid:202)(cid:202)

(cid:202)(cid:202)(cid:171)(cid:62)(cid:195)(cid:204)(cid:202)(cid:96)(cid:213)(cid:105)(cid:202)(cid:153)(cid:228)(cid:202)(cid:96)(cid:62)(cid:222)(cid:195)(cid:202)(cid:156)(cid:192)(cid:202)(cid:147)(cid:156)(cid:192)(cid:105)(cid:202)

(cid:163)(cid:93)(cid:199)(cid:153)(cid:211)(cid:176)(cid:200)(cid:202)

(cid:163)(cid:110)(cid:93)(cid:228)(cid:110)(cid:228)(cid:202)

(cid:163)(cid:93)(cid:200)(cid:199)(cid:153)(cid:176)(cid:199)

(cid:32)(cid:156)(cid:152)(cid:62)(cid:86)(cid:86)(cid:192)(cid:213)(cid:62)(cid:143)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:192)(cid:105)(cid:195)(cid:204)(cid:192)(cid:213)(cid:86)(cid:204)(cid:213)(cid:192)(cid:105)(cid:96)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:93)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:62)(cid:86)(cid:86)(cid:192)(cid:213)(cid:136)(cid:152)(cid:125)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:192)(cid:62)(cid:86)(cid:204)(cid:213)(cid:62)(cid:143)(cid:143)(cid:222)(cid:202)

(cid:202)(cid:202)(cid:171)(cid:62)(cid:195)(cid:204)(cid:202)(cid:96)(cid:213)(cid:105)(cid:202)(cid:153)(cid:228)(cid:202)(cid:96)(cid:62)(cid:222)(cid:195)(cid:202)(cid:156)(cid:192)(cid:202)(cid:147)(cid:156)(cid:192)(cid:105)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:171)(cid:105)(cid:192)(cid:86)(cid:105)(cid:152)(cid:204)(cid:62)(cid:125)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:202)

(cid:163)(cid:176)(cid:199)(cid:153)(cid:175)(cid:202)

(cid:163)(cid:176)(cid:199)(cid:153)(cid:175)(cid:202)

(cid:163)(cid:176)(cid:199)(cid:228)(cid:175)

(cid:1)(cid:143)(cid:143)(cid:156)(cid:220)(cid:62)(cid:152)(cid:86)(cid:105)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:86)(cid:192)(cid:105)(cid:96)(cid:136)(cid:204)(cid:202)(cid:143)(cid:156)(cid:195)(cid:195)(cid:105)(cid:195)(cid:202)(cid:62)(cid:195)(cid:202)(cid:62)(cid:202)(cid:171)(cid:105)(cid:192)(cid:86)(cid:105)(cid:152)(cid:204)(cid:62)(cid:125)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:152)(cid:156)(cid:152)(cid:62)(cid:86)(cid:86)(cid:192)(cid:213)(cid:62)(cid:143)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)

(cid:202)(cid:202)(cid:192)(cid:105)(cid:195)(cid:204)(cid:192)(cid:213)(cid:86)(cid:204)(cid:213)(cid:192)(cid:105)(cid:96)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:93)(cid:202)(cid:62)(cid:152)(cid:96)(cid:202)(cid:62)(cid:86)(cid:86)(cid:192)(cid:213)(cid:136)(cid:152)(cid:125)(cid:202)(cid:143)(cid:156)(cid:62)(cid:152)(cid:195)(cid:202)(cid:86)(cid:156)(cid:152)(cid:204)(cid:192)(cid:62)(cid:86)(cid:204)(cid:213)(cid:62)(cid:143)(cid:143)(cid:222)(cid:202)

(cid:202)(cid:202)(cid:171)(cid:62)(cid:195)(cid:204)(cid:202)(cid:96)(cid:213)(cid:105)(cid:202)(cid:153)(cid:228)(cid:202)(cid:96)(cid:62)(cid:222)(cid:195)(cid:202)(cid:156)(cid:192)(cid:202)(cid:147)(cid:156)(cid:192)(cid:105)(cid:202)

(cid:44)(cid:136)(cid:195)(cid:142)(cid:135)(cid:62)(cid:96)(cid:141)(cid:213)(cid:195)(cid:204)(cid:105)(cid:96)(cid:202)(cid:86)(cid:62)(cid:171)(cid:136)(cid:204)(cid:62)(cid:143)(cid:202)(cid:192)(cid:62)(cid:204)(cid:136)(cid:156)(cid:202)(cid:86)(cid:62)(cid:143)(cid:86)(cid:213)(cid:143)(cid:62)(cid:204)(cid:105)(cid:96)(cid:202)(cid:213)(cid:152)(cid:96)(cid:105)(cid:192)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:105)(cid:195)(cid:105)(cid:202)(cid:20)(cid:1)(cid:1)(cid:42)(cid:202)(cid:173)(cid:213)(cid:152)(cid:62)(cid:213)(cid:96)(cid:136)(cid:204)(cid:105)(cid:96)(cid:174)(cid:202)

(cid:200)(cid:123)(cid:176)(cid:120)(cid:211)(cid:175)(cid:202)

(cid:163)(cid:163)(cid:176)(cid:199)(cid:199)(cid:175)(cid:202)

(cid:200)(cid:123)(cid:176)(cid:120)(cid:211)(cid:175)(cid:202)

(cid:163)(cid:163)(cid:176)(cid:199)(cid:199)(cid:175)(cid:202)

(cid:200)(cid:199)(cid:176)(cid:120)(cid:199)(cid:175)

(cid:163)(cid:163)(cid:176)(cid:163)(cid:153)(cid:175)

(cid:19)(cid:156)(cid:192)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:86)(cid:156)(cid:152)(cid:219)(cid:105)(cid:152)(cid:136)(cid:105)(cid:152)(cid:86)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)(cid:192)(cid:105)(cid:62)(cid:96)(cid:105)(cid:192)(cid:195)(cid:93)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:49)(cid:176)(cid:45)(cid:176)(cid:202)(cid:96)(cid:156)(cid:143)(cid:143)(cid:62)(cid:192)(cid:202)(cid:62)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:192)(cid:105)(cid:202)(cid:171)(cid:192)(cid:105)(cid:195)(cid:105)(cid:152)(cid:204)(cid:105)(cid:96)(cid:202)(cid:62)(cid:195)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:143)(cid:62)(cid:204)(cid:136)(cid:156)(cid:152)(cid:195)(cid:202)(cid:156)(cid:118)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:105)(cid:195)(cid:105)(cid:202)(cid:222)(cid:105)(cid:152)(cid:202)(cid:62)(cid:147)(cid:156)(cid:213)(cid:152)(cid:204)(cid:195)(cid:202)(cid:62)(cid:204)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:118)(cid:202)

(cid:225)(cid:153)(cid:153)(cid:176)(cid:163)(cid:120)(cid:114)(cid:49)(cid:45)(cid:102)(cid:163)(cid:176)(cid:228)(cid:228)(cid:93)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:152)(cid:156)(cid:156)(cid:152)(cid:202)(cid:76)(cid:213)(cid:222)(cid:136)(cid:152)(cid:125)(cid:202)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:156)(cid:152)(cid:202)(cid:31)(cid:62)(cid:192)(cid:86)(cid:133)(cid:202)(cid:206)(cid:163)(cid:93)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:136)(cid:152)(cid:202)(cid:32)(cid:105)(cid:220)(cid:202)(cid:57)(cid:156)(cid:192)(cid:142)(cid:202)(cid:10)(cid:136)(cid:204)(cid:222)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)(cid:86)(cid:62)(cid:76)(cid:143)(cid:105)(cid:202)(cid:204)(cid:192)(cid:62)(cid:152)(cid:195)(cid:118)(cid:105)(cid:192)(cid:195)(cid:202)(cid:136)(cid:152)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)(cid:105)(cid:195)(cid:105)(cid:202)(cid:222)(cid:105)(cid:152)(cid:202)(cid:62)(cid:195)(cid:202)(cid:86)(cid:105)(cid:192)(cid:204)(cid:136)(cid:118)(cid:136)(cid:105)(cid:96)(cid:202)(cid:118)(cid:156)(cid:192)(cid:202)

(cid:86)(cid:213)(cid:195)(cid:204)(cid:156)(cid:147)(cid:195)(cid:202)(cid:171)(cid:213)(cid:192)(cid:171)(cid:156)(cid:195)(cid:105)(cid:195)(cid:202)(cid:76)(cid:222)(cid:202)(cid:204)(cid:133)(cid:105)(cid:202)(cid:19)(cid:105)(cid:96)(cid:105)(cid:192)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:195)(cid:105)(cid:192)(cid:219)(cid:105)(cid:202)(cid:9)(cid:62)(cid:152)(cid:142)(cid:202)(cid:156)(cid:118)(cid:202)(cid:32)(cid:105)(cid:220)(cid:202)(cid:57)(cid:156)(cid:192)(cid:142)(cid:176)

(cid:20)(cid:0)(cid:0)(cid:0)(cid:1)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:202)(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)

As filed with the Securities and Exchange Commission on September 2, 2009

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 20-F
‘ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2009
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period

to

OR
‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number 1-10277

KABUSHIKI KAISHA MITSUBISHI UFJ FINANCIAL GROUP
(Exact name of Registrant as specified in its charter)
MITSUBISHI UFJ FINANCIAL GROUP, INC.
(Translation of Registrant’s name into English)
Japan
(Jurisdiction of incorporation or organization)
7-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100-8330
Japan
(Address of principal executive offices)
Takeaki Ishii, +81-3-3240-8111, +81-3-3240-7520, address is same as above
(Name, Telephone, Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common stock, without par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
American depositary shares, each of which represents one share of common stock . . . . . . . . . . . . . . . . . . . . . . . . . .

New York Stock Exchange (1)
New York Stock Exchange

(1) The listing of the registrant’s common stock on the New York Stock Exchange is for technical purposes only and without trading privileges.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
$2,300,000,000 Fixed/Floating Rate Non-Cumulative Preferred Securities of MUFG Capital Finance 1 Limited, and Mitsubishi UFJ Financial Group, Inc.’s
Guarantee thereof
€750,000,000 Fixed/Floating Rate Non-Cumulative Preferred Securities of MUFG Capital Finance 2 Limited, and Mitsubishi UFJ Financial Group, Inc.’s
Guarantee thereof
¥120,000,000,000 Fixed/Floating Rate Non-Cumulative Preferred Securities of MUFG Capital Finance 3 Limited, and Mitsubishi UFJ Financial Group, Inc.’s
Guarantee thereof
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
At March 31, 2009, (1) 11,648,360,720 shares of common stock (including 9,080,212 shares of common stock held by the registrant and its consolidated
subsidiaries as treasury stock), (2) 100,000,000 shares of first series of class 3 preferred stock, (3) 156,000,000 shares of first series of class 5 preferred stock, and
(4) 1,000 share of class 11 preferred stock.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes È No ‘

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934.

Yes ‘ No È
Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such short period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to

be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).

Yes ‘ No ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and

large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer È

Non-accelerated filer ‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

Accelerated filer ‘

U.S. GAAP

È

International Financial Reporting Standards as issued
by the International Accounting Standards Board ‘

Other ‘

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ‘ Item 18 ‘

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ‘ No È

TABLE OF CONTENTS

Page

3
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Identity of Directors, Senior Management and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
4
Offer Statistics and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
4
Key Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
22
Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4.
45
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4A.
46
Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5.
108
Directors, Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
121
Major Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7.
123
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
124
The Offer and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9.
125
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10.
146
Quantitative and Qualitative Disclosures about Credit, Market and Other Risk . . . . . . . . . . .
Item 11.
162
Description of Securities Other than Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12.
163
Defaults, Dividend Arrearages and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13.
163
Material Modifications to the Rights of Security Holders and Use of Proceeds . . . . . . . . . . .
Item 14.
163
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15.
167
Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16A.
167
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16B.
167
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16C.
168
Exemptions from the Listing Standards for Audit Committees . . . . . . . . . . . . . . . . . . . . . . . .
Item 16D.
169
Purchases of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . . .
Item 16E.
169
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in Registrant’s Certifying Accountant
Item 16F.
170
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16G.
172
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 17.
172
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 18.
172
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 19.
Selected Statistical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
F-1
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For purposes of this Annual Report, we have presented our consolidated financial statements in accordance
with accounting principles generally accepted in the United States, or US GAAP, except for risk-adjusted capital
ratios, business segment financial information and some other specifically identified information. Unless otherwise
stated or the context otherwise requires, all amounts in our financial statements are expressed in Japanese yen.

When we refer in this Annual Report to “MUFG,” “we,” “us,” “our” and the “Group,” we generally mean

Mitsubishi UFJ Financial Group, Inc. and its consolidated subsidiaries, but from time to time as the context
requires, we mean Mitsubishi UFJ Financial Group, Inc. as an individual legal entity. Similarly, references to
“MTFG” and “UFJ Holdings” are to Mitsubishi Tokyo Financial Group, Inc. and to UFJ Holdings, Inc.,
respectively, as well as to MTFG and UFJ Holdings and their respective consolidated subsidiaries, as the context
requires. Unless the context otherwise requires, references in this Annual Report to the financial results or
business of the “MTFG group” and the “UFJ group” refer to those of MTFG and UFJ Holdings and their
respective consolidated subsidiaries. In addition, our “major banking subsidiaries” refers to The Bank of Tokyo-
Mitsubishi UFJ, Ltd. and Mitsubishi UFJ Trust and Banking Corporation. References in this Annual Report to
“yen” or “¥” are to Japanese yen and references to “US dollars,” “US dollar,” “dollars,” “US$” or “$” are to
United States dollars. Our fiscal year ends on March 31 of each year. References to years not specified as being
fiscal years are to calendar years.

We usually hold the ordinary general meeting of shareholders of Mitsubishi UFJ Financial Group, Inc. in

June of each year in Tokyo.

2

Forward-Looking Statements

We may from time to time make written or oral forward-looking statements. Written forward-looking
statements may appear in documents filed with or submitted to the US Securities and Exchange Commission, or
SEC, including this Annual Report, and other reports to shareholders and other communications.

The US Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking
information to encourage companies to provide prospective information about themselves. We rely on this safe
harbor in making these forward-looking statements.

Forward-looking statements appear in a number of places in this Annual Report and include statements

regarding our intent, business plan, targets, belief or current expectations or the current belief or current
expectations of our management with respect to our results of operations and financial condition, including,
among other matters, our problem loans and loan losses. In many, but not all cases, we use words such as
“anticipate,” “aim,” “believe,” “estimate,” “expect,” “intend,” “plan,” “probability,” “risk,” “will,” “may” and
similar expressions, as they relate to us or our management, to identify forward-looking statements. These
statements reflect our current views with respect to future events and are subject to risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions
prove incorrect, actual results may vary materially from those which are aimed, anticipated, believed, estimated,
expected, intended or planned, or otherwise stated.

Our forward-looking statements are not guarantees of future performance and involve risks and
uncertainties. Actual results may differ from those in the forward-looking statements as a result of various
factors. We identify in this Annual Report in “Item 3.D. Key Information—Risk Factors,” “Item 4.B. Information
on the Company—Business Overview,” “Item 5. Operating and Financial Review and Prospects” and elsewhere,
some, but not necessarily all, of the important factors that could cause these differences.

We do not intend to update our forward-looking statements. We are under no obligation, and disclaim any

obligation, to update or alter our forward-looking statements, whether as a result of new information, future
events or otherwise.

3

PART I

Item 1.

Identity of Directors, Senior Management and Advisors.

Not applicable.

Item 2. Offer Statistics and Expected Timetable.

Not applicable.

Item 3. Key Information.

A. Selected Financial Data

The selected statement of operations data and selected balance sheet data set forth below have been derived
from our audited consolidated financial statements. On October 1, 2005, Mitsubishi Tokyo Financial Group, Inc.,
or MTFG, merged with UFJ Holdings, Inc. with MTFG being the surviving entity. Upon consummation of the
merger, MTFG changed its name to Mitsubishi UFJ Financial Group, Inc., or MUFG. The merger was accounted
for under the purchase method of accounting, and the assets and liabilities of UFJ Holdings and its subsidiaries
were recorded at fair value as of October 1, 2005. Therefore, numbers as of and for the fiscal year ended
March 31, 2005 reflect the financial position and results of MTFG and its subsidiaries only. Numbers as of
March 31, 2006 reflect the financial position of MUFG while numbers for the fiscal year ended March 31, 2006
comprise the results of MTFG and its subsidiaries for the six months ended September 30, 2005 and the results of
MUFG from October 1, 2005 to March 31, 2006. Numbers as of and for the fiscal years ended March 31, 2007,
2008 and 2009 reflect the financial position and results of MUFG.

Except for risk-adjusted capital ratios, which are calculated in accordance with Japanese banking regulations
based on information derived from our consolidated financial statements prepared in accordance with accounting
principles generally accepted in Japan, or Japanese GAAP, and the average balance information, the selected
financial data set forth below are derived from our consolidated financial statements prepared in accordance with
US GAAP.

4

You should read the selected financial data set forth below in conjunction with “Item 5. Operating and
Financial Review and Prospects” and our consolidated financial statements and other financial data included
elsewhere in this Annual Report on Form 20-F. These data are qualified in their entirety by reference to all of
that information.

Fiscal years ended March 31,

2005

2006

2007

2008

2009

(in millions, except per share data and number of shares)

Statement of operations data:

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,438,701
469,606

¥2,530,682
882,069

¥ 3,915,729
1,585,963

¥ 4,366,811
2,087,094

¥ 3,895,794
1,599,389

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net interest income after provision for credit losses . . . . . . . .
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations before income tax
expense (benefit) and cumulative effect of a change in
accounting principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) from continuing operations before cumulative

effect of a change in accounting principle . . . . . . . . . . . . . .
Income (loss) from discontinued operations—net . . . . . . . . . .
Cumulative effect of a change in accounting principle, net of
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

tax(1)

969,095
108,338

860,757
986,810
1,129,173

1,648,613
110,167

1,538,446
1,067,352
2,076,125

2,329,766
358,603

1,971,163
1,947,936
2,784,168

2,279,717
385,740

1,893,977
1,778,114
3,659,736

2,296,405
626,947

1,669,458
175,099
3,572,525

718,394
303,755

529,673
165,473

1,134,931
552,826

12,355
553,045

(1,727,968)
(259,928)

414,639
1,493

364,200
8,973

582,105
(817)

(540,690)
(1,746)

(1,468,040)
—

(977)

(9,662)

—

—

—

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 415,155

¥ 363,511

Net income (loss) available to common shareholders . . . . . . .

¥ 408,318

¥ 156,842

¥

¥

581,288

¥ (542,436) ¥ (1,468,040)

300,227

¥ (557,014) ¥ (1,491,593)

Amounts per share:

Basic earnings (loss) per common share—income (loss) from
continuing operations available to common shareholders
before cumulative effect of a change in accounting
principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Basic earnings (loss) per common share—net income (loss)

¥

62.64

¥

19.40

¥

29.94

¥

(53.88) ¥

(137.84)

available to common shareholders . . . . . . . . . . . . . . . . . . . .

62.72

19.31

29.86

(54.05)

(137.84)

Diluted earnings (loss) per common share—income (loss)

from continuing operations available to common
shareholders before cumulative effect of a change in
accounting principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings (loss) per common share—net income (loss)
available to common shareholders . . . . . . . . . . . . . . . . . . . .

Number of shares used to calculate basic earnings (loss) per

common share (in thousands)

. . . . . . . . . . . . . . . . . . . . . . .
Number of shares used to calculate diluted earnings (loss) per
. . . . . . . . . . . . . . . . . . . . . . .

common share (in thousands)

62.40

62.48

19.04

18.95

29.76

29.68

(53.88)

(137.84)

(54.05)

(137.84)

6,510,461

8,120,732

10,053,408

10,305,911

10,821,091

6,516,375(2) 8,120,733(3) 10,053,409(3) 10,305,911

10,821,091

Cash dividends per share declared during the fiscal year:
— Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 1) . . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 2) . . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 3) . . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 8) . . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 9) . . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 10) . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 11) . . . . . . . . . . . . . . . . . . . . . . . . . .

— Preferred stock (Class 12) . . . . . . . . . . . . . . . . . . . . . . . . . .

¥
$
¥
$
¥
$

¥
$
¥
$

6.00
0.06
82.50
0.77
8.10
0.07

— ¥
— $
—
—
—
—
—
—
—
—
—
—

5

¥
$

9.00
0.08
41.25
0.37
—
—
37.07
0.31

¥
$
— ¥
— $
— ¥
— $
— ¥
— $
— ¥
— $
— ¥
— $

9.00
0.08
—
—
—
—
60.00
0.52
23.85
0.21
18.60
0.16
19.40
0.17
7.95
0.07
17.25
0.15

¥
$

¥
$
¥
$

¥
$
¥
$

13.00
0.11
—
—
—
—
60.00
0.51
15.90
0.14
—
—
—
—
5.30
0.05
11.50
0.10

¥
$

¥
$
¥
$

¥
$
¥
$

14.00
0.14
—
—
—
—
60.00
0.61
7.95
0.07
—
—
—
—
5.30
0.05
11.50
0.12

2005

2006

2007

2008

2009

At March 31,

Balance sheet data:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets(5)
Loans, net of allowance for credit losses . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities(5)
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital stock(4)

¥110,159,923
50,164,144
105,786,826
71,143,099
5,981,747
4,373,097
1,084,708

¥188,749,117
94,494,608
179,080,964
126,639,931
13,889,525
9,668,153
1,084,708

(in millions)

¥188,929,469
94,210,391
178,496,157
126,587,009
14,389,930
10,433,312
1,084,708

¥195,766,083
97,867,139
187,275,968
129,240,128
13,675,250
8,490,115
1,084,708

¥193,499,417
99,153,703
187,264,522
128,331,052
13,273,288
6,234,895
1,127,552

Fiscal years ended March 31,

2005

2006

2007

2008

2009

Other financial data:
Average balances:

(unaudited)

(in millions, except percentages)
(unaudited)

(unaudited)

(unaudited)

(unaudited)

Interest-earning assets . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing liabilities . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets(5)
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . .

¥ 99,282,143
92,226,818
112,635,733
3,880,044

¥135,385,329
118,120,185
161,481,516
7,106,910

¥168,767,341
146,796,013
188,311,147
9,823,404

¥172,467,323
156,151,982
197,946,692
9,957,382

¥173,242,745
156,084,859
196,214,390
7,974,628

Return on equity and assets:

as a percentage of total average assets(5)

Net income (loss) available to common shareholders
. . . . . . . .
Net income (loss) available to common shareholders
as a percentage of total average shareholders’
equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dividends per common share as a percentage of

basic earnings per common share . . . . . . . . . . . . .

Total average shareholders’ equity as a percentage

of total average assets(5) . . . . . . . . . . . . . . . . . . . . .

Net interest income as a percentage of total average

interest-earning assets . . . . . . . . . . . . . . . . . . . . . .

Credit quality data:

Allowance for credit losses . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses as a percentage of

loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonaccrual and restructured loans, and accruing

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

0.36%

0.10%

0.16%

(0.28)%

(0.76)%

10.52%

2.21%

3.06%

(5.59)%

(18.70)%

9.57%

3.44%

0.98%

46.60%

30.14%

4.40%

1.22%

5.22%

1.38%

—(6)

5.03%

1.32%

—(6)

4.06%

1.33%

¥

739,872

¥

1,012,227

¥

1,112,453

¥

1,134,940

¥

1,156,638

1.45%

1.06%

1.17%

1.15%

1.15%

loans contractually past due 90 days or more . . . .

¥

1,285,204

¥

2,044,678

¥

1,699,500

¥

1,679,672

¥

1,792,597

Nonaccrual and restructured loans, and accruing

loans contractually past due 90 days or more as a
percentage of loans . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for credit losses as a percentage of

nonaccrual and restructured loans, and accruing
loans contractually past due 90 days or more . . . .
Net loan charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . .

2.52%

2.14%

1.78%

1.70%

1.79%

57.57%

49.51%

65.46%

67.57%

64.52%

¥

260,622

¥

136,135

¥

262,695

¥

355,892

¥

576,852

Net loan charge-offs as a percentage of average

loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average interest rate spread . . . . . . . . . . . . . . . . . . . .
Risk-adjusted capital ratio calculated under Japanese
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GAAP(7)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

0.51%
0.94%

0.19%
1.12%

0.27%
1.24%

0.37%
1.19%

0.58%
1.23%

11.76%

12.20%

12.54%

11.19%

11.77%

Notes:
(1) Effective April 1, 2004, we adopted Financial Accounting Standards Board Interpretation, or FIN, No. 46 (revised December 2003),

“Consolidation of Variable Interest Entities, an interpretation of ARB No. 51.” Effective March 31, 2006, we adopted FIN No. 47,
“Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143.”
Includes the common shares potentially issuable by conversion of the Class 2 Preferred Stock.
Includes the common shares potentially issuable by conversion of the Class 11 Preferred Stock.

(2)
(3)
(4) Amounts include common shares and convertible Class 2 Preferred Stock. Redeemable Class 1 and Class 3 Preferred Stock are excluded.
(5) Effective April 1, 2008, we discontinued netting out derivative assets and liabilities under master netting agreements and we now present

them on a gross basis. See Note 1 “Netting of Cash Collateral against Derivative Exposures” under “Accounting Changes” section for
the detail. We have restated average balances, as well as year-end balances, of “Total assets” and “Total liabilities” in the previous
periods from 2005 to 2008. Accordingly “Net income (loss) available to a common shareholder as a percentage of total average assets”
and “Total average shareholders’ equity as a percentage of total average assets” have been restated.

(6) Percentages of basic loss per common share have not been presented because such information is not meaningful.
(7) Risk-adjusted capital ratios have been calculated in accordance with Japanese banking regulations, based on information derived from

our consolidated financial statements prepared in accordance with Japanese GAAP.

6

Exchange Rate Information

The tables below set forth, for each period indicated, the noon buying rate in New York City for cable
transfers in Japanese yen as certified for customs purposes by the Federal Reserve Bank of New York, expressed
in Japanese yen per US$1.00. On August 18, 2009, the noon buying rate was ¥94.72 to US$1.00 and the inverse
noon buying rate was US$1.06 to ¥100.00.

High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99.34
¥93.85

¥100.71
¥ 96.49

¥99.24
¥94.45

¥98.56
¥95.19

¥96.41
¥92.33

¥97.65
¥94.33

March

April

May

June

July

August(1)

Year 2009

Note:
(1) Period from August 1, 2009 to August 18, 2009.

Average (of month-end rates)

. . . . . . . . . . . . . . . . . . . . . . . .

¥107.28

¥113.67

¥116.55

¥113.61

¥100.85

Fiscal years ended March 31,

2005

2006

2007

2008

2009

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Investing in our securities involves a high degree of risk. You should carefully consider the risks described
below as well as all the other information in this Annual Report, including our consolidated financial statements
and related notes, “Item 5. Operating and Financial Review and Prospects,” “Item 11. Quantitative and
Qualitative Disclosures about Credit, Market and Other Risk” and “Selected Statistical Data.”

Our business, operating results and financial condition could be materially and adversely affected by any of

the factors discussed below. The trading price of our securities could decline due to any of these factors. This
Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of various factors,
including the risks faced by us described below and elsewhere in this Annual Report. See “Forward-Looking
Statements.”

Risks Related to Our Business

We have experienced and may continue to experience difficulty integrating our operations with those of

the UFJ group and, as a result, may have difficulty achieving the benefits expected from the integration.

Since our merger with UFJ Holdings in October 2005, we have been implementing a business integration
plan that is complex, time-consuming and costly. Achieving the targeted revenue synergies and cost savings is
dependent on the successful implementation of our ongoing integration process. We may not succeed in
addressing the risks or other problems encountered in the ongoing integration process. In particular, there may be
delays or other difficulties in coordinating, consolidating and integrating the branch and subsidiary networks, and
customer products and services of the two groups as planned. These and other problems in the ongoing
integration process may cause us to incur significant unanticipated additional costs, preventing us from achieving
the previously announced cost reduction targets as scheduled. In addition, the two groups’ previous relationships
with their respective customers, employees and strategic partners could be impaired in future periods. Those

7

problems could also damage our reputation. In addition, previously expected revenue synergies may not
materialize in the expected time period if we fail to address any problems that arise in the ongoing integration
process. If we are unable to resolve smoothly any problems that arise in the ongoing integration process, our
business, results of operations, financial condition and stock price may be materially and adversely affected.

We may have difficulty achieving the benefits expected from the recently completed and planned mergers

and other business combinations.

In line with our ongoing strategic effort to create a leading comprehensive financial group that offers a
broad range of financial products and services, we have recently completed or are planning to complete mergers
and other business combinations, including transactions with some of our subsidiaries and equity method
investees. For example, in August 2008, we acquired, through a share exchange transaction, all the shares of our
consolidated subsidiary, Mitsubishi UFJ NICOS Co., Ltd., not owned by us, and sold a minority stake in
Mitsubishi UFJ NICOS to The Norinchukin Bank. In November 2008, our consolidated subsidiary, The Bank of
Tokyo-Mitsubishi UFJ, Ltd., or BTMU, completed the acquisition of all of the shares of common stock of
UnionBanCal Corporation, or UNBC, not owned by us. In March 2009, we signed a memorandum of
understanding with Morgan Stanley to form a securities joint venture combining our consolidated subsidiary,
Mitsubishi UFJ Securities Co., Ltd., or MUS, and Morgan Stanley Japan Securities Co., Ltd., by March 2010,
subject to regulatory approval. We intend to own a 60% interest in the joint venture. In addition, we regularly
review opportunities to pursue new acquisitions or business combinations.

If a planned merger or business combination fails, we may be subject to various material risks. For example,

our growth strategies in Japan and globally may not be implemented as planned. In addition, the price of our
stock may decline to the extent that the current market price reflects a market assumption that any pending
transaction will be completed. Furthermore, our costs related to any planned transaction, including legal,
accounting and certain financial adviser fees, must be paid even if the transaction is not completed. Our
reputation may also be harmed due to our failure to complete an announced transaction. Even after a transaction
is completed, there are various risks that could adversely affect our ability to achieve our business objectives,
including:

•

The growth opportunities and other expected benefits of these business combinations or acquisitions
may not be realized in the expected time period and unanticipated problems could arise in the
integration process, including unanticipated expenses related to the integration process as well as delays
or other difficulties in coordinating, consolidating and integrating personnel, information and
management systems, and customer products and services;

• We may be unable to cross-sell our products and services as effectively as anticipated and we may lose
customers and business as some of the operations are reorganized, consolidated with other businesses
and, in some cases, rebranded;

• We may have difficulty in coordinating the operations of our subsidiaries and affiliates as planned due

to legal restrictions, internal conflict or market resistance;

•

The diversion of management and key employees’ attention may detract from our ability to increase
revenues and minimize costs; and

• We may encounter difficulties in penetrating certain markets due to adverse reactions to our newly

acquired ownership in, or closer affiliation with, other financial institutions or businesses.

Any of the foregoing and other risks may adversely affect our business, results of operations, financial
condition and stock price. For a more detailed discussion of recently completed and planned mergers and other
business combinations involving our subsidiaries and affiliates, see “Item 4.B. Information on the Company—
Business Overview” and “Item 5. Operating and Financial Review and Prospects—Recent Developments.”

8

Our recently completed and planned investments may increase our exposure to market fluctuations and

other factors over which we have little or no control.

In line with our ongoing strategic effort to create a leading comprehensive financial group that offers a
broad range of financial products and services, we have recently agreed to enter into, and have entered into,
several business combinations and strategic business alliances. For example,

•

•

on October 2, 2008, we acquired 9.9% of the issued shares of Aberdeen Asset Management PLC, or
Aberdeen, and intend to increase our holdings but not to a level that exceeds 19.9%, subject to receiving
the required regulatory approvals;

on October 13, 2008, we purchased approximately $9 billion of convertible and non convertible shares
of Morgan Stanley preferred stock, which provided us with an approximately 21% interest in Morgan
Stanley on a fully diluted basis at the time of our purchase, which interest decreased to approximately
20% on a fully diluted basis as a result of the US Department of the Treasury’s subsequent purchase of a
warrant to purchase up to 65,245,759 shares of common stock. Since this initial investment, we have
acquired 46,553,055 additional shares of common stock for a total of approximately $1,176 million and
sold back to Morgan Stanley $705 million of the non convertible preferred stock. As a result of these
transactions, our interest in Morgan Stanley remains approximately 20% on a fully diluted basis. We
have also signed a memorandum of understanding with Morgan Stanley to form a securities joint
venture in Japan and a memorandum of understanding to expand the scope of our strategic alliance into
new geographies and businesses; and

•

on October 21, 2008, we completed a tender offer for outstanding shares of ACOM CO., LTD., common
stock raising our stake in ACOM to approximately 40%.

The fair value of our investments in those financial institutions may be impaired if their business results are
adversely affected by current or future financial market instability or otherwise, resulting in a decline in the fair
value of their securities that is other than temporary. Any significant impairment of the fair value of our
investments could have a material adverse impact on our results of operations and financial condition.

Changes in economic policies of governments and central banks, laws and regulations, including capital
adequacy requirements for financial institutions, and applicable accounting rules implemented in response to
current and future market fluctuations, may have a greater impact on our results of operations and financial
condition because of our recent investments.

In addition, the most significant investments we have made or announced in the fiscal year ended March 31,

2009 involve companies in industries undergoing significant change or restructuring. As a result, it may be
difficult to evaluate the prospects of such investments based on historical results, and our results of operations
may be subject to greater uncertainty.

In cases where we hold a minority interest in the investees, we typically cannot control the operations and

assets of these investees or make major decisions without the consent of other shareholders or participants. In
some cases, increasing our shareholding to a controlling stake could also trigger additional regulatory approvals
and subject us to significantly increased regulatory supervision. If our investees encounter financial or other
business difficulties, if their strategic objectives change or if they no longer perceive us to be an attractive
alliance partner, they may no longer desire or be able to participate in alliances with us. Our business and results
of operations could be adversely affected if we are unable to continue with one or more strategic business
alliances.

For a more detailed discussion of recently completed and planned investments, see “Item 4.B. Information

on the Company—Business Overview” and “Item 5. Operating and Financial Review and Prospects—Recent
Developments.”

9

If the Japanese stock market or other global markets decline in the future, we may incur losses on our

securities portfolio and our capital ratios will be adversely affected. We may also need to reduce our strategic
shareholdings which could affect our relationship with customers.

We hold large amounts of marketable equity securities, of which a significant portion are securities of

Japanese issuers. The market values of these securities are inherently volatile. We have recently experienced
impairment losses on our marketable equity securities as a result of a decline in Japanese stock prices. The
Nikkei Stock Average, which is an average of 225 blue chip stocks listed on the Tokyo Stock Exchange, declined
from ¥12,656.42 at April 1, 2008 to ¥8,109.53 at March 31, 2009. The Nikkei Stock Average was ¥10,284.96 on
August 18, 2009. The Tokyo Stock Price Index, or TOPIX, a composite index of all stocks listed on the First
Section of the Tokyo Stock Exchange, declined from 1,230.49 at April 1, 2008 to 789.54 at March 31, 2009. The
TOPIX was 949.66 on August 18, 2009. If the Japanese stock market or other global markets further decline or
do not improve, we may incur additional losses on our securities portfolio. Further declines in the Japanese stock
market or other global markets may also materially and adversely affect our capital ratios, results of operations
and financial condition. For a detailed discussion of our holdings of marketable equity securities and the effect of
market declines on our capital ratios, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity
and Capital Resources—Capital Adequacy” and “Selected Statistical Data—Investment Portfolio.”

In addition, like many Japanese financial institutions, a substantial portion of our equity securities portfolio
is held for strategic and business relationship purposes. The sale of equity securities, whether to reduce our risk
exposure to fluctuations in equity security prices, or otherwise, will reduce our strategic shareholdings, which
may have an adverse effect on relationships with our customers. Our plans to further reduce our strategic
shareholdings may also encourage some of our customers to sell their shares of our common stock, which may
have a negative impact on our stock price.

Our trading and investment activities as well as our international operations expose us to interest rate,

exchange rate and other risks.

We undertake extensive trading and investment activities involving a variety of financial instruments,
including derivatives. We also have significant business operations abroad, including operations of UNBC, in the
United States and elsewhere. Our income from these activities as well as our foreign assets and liabilities
resulting from our international operations are subject to volatility caused by, among other things, changes in
interest rates, foreign currency exchange rates and equity and debt prices. For example:

•

•

increases in interest rates may have an adverse effect on the value of our fixed income securities
portfolio, as discussed in “—Changes in interest rate policy, particularly unexpected or sudden increases
in interest rates, could adversely affect the value of our bond and financial derivatives portfolios,
problem loans and results of operations” below; and

fluctuations in foreign currency exchange rates against the Japanese yen may adversely affect our
financial condition, including our capital ratios, to the extent that our foreign currency-denominated
assets and liabilities are not matched in the same currency or appropriately hedged, and will create
foreign currency translation gains or losses, as described in “Item 5. Operating and Financial Review
and Prospects—A. Operating Results—Effect of the Change in Exchange Rates on Foreign Currency
Translation.”

In addition, downgrades of the credit ratings of some of the securities in our portfolio could negatively

affect our results of operations. Our trading and investment activities in financial instruments may also be
adversely affected by regulatory measures taken by government agencies. Our results of operations and financial
condition are exposed to the risks of loss associated with these activities. For a discussion of our investment
portfolio and related risks see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital
Resources—Financial Condition—Investment Portfolio” and “Item 11. Quantitative and Qualitative Disclosures
about Credit, Market and Other Risk.”

10

We may suffer additional credit-related losses in the future due to problem loans.

When we loan money or commit to loan money, we incur credit risk, or the risk of losses if our borrowers do

not repay their loans. We may incur credit losses or have to provide for additional allowance for credit losses if:

•

•

•

large borrowers become insolvent or must be restructured;

domestic or global economic conditions, either generally or in particular industries in which large
borrowers operate, deteriorate;

the value of the collateral we hold, such as real estate or securities, declines; or

• we are adversely affected by other factors, including corporate credibility issues among our borrowers,

to an extent that is worse than anticipated.

If actual credit losses are higher than currently expected, the current allowances for credit losses will be

insufficient. Our allowance for credit losses in our loan portfolio is based on evaluations, assumptions and
estimates about customers, the value of collateral we hold and the economy as a whole. Our loan losses could
prove to be materially different from the estimates and could materially exceed these allowances. In addition, the
standards for establishing allowances may change, causing us to change some of the evaluations, assumptions
and estimates used in determining the allowances. As a result, we may need to provide for additional allowances
for credit losses. For example, as a result of recent deteriorating economic conditions, declines in real estate
values and securities price levels, and worsening operations of borrowers, we experienced increases in the
amount of problem loans and provision for credit losses in the fiscal year ended March 31, 2009.

Credit losses may also increase if we elect, or are forced by economic or other considerations, to sell or
write off our problem loans at a larger discount, in a larger amount or in a different time or manner than we may
otherwise want. We may not be able to realize the value of the collateral we hold or enforce our rights against
defaulting customers because of the difficulty of foreclosing on collateral in Japan, the illiquidity of and
depressed values in the Japanese real estate market, or other reasons.

Although we from time to time enter into credit derivative transactions, including credit default swap
contracts, to manage our credit risk exposure, such transactions may not provide the protection against credit
defaults that we intended due to counter-party defaults or otherwise. In addition, negative changes in financial
market conditions may restrict the availability and liquidity of credit default swaps. For more information on our
credit derivative transactions, see Note 23 to our consolidated financial statements included elsewhere in this
Annual Report.

In addition, we may provide additional loans, equity capital or other forms of support to troubled borrowers
in order to facilitate their restructuring and revitalization efforts. We may forbear from exercising some or all of
our rights as a creditor against them, and we may forgive loans to them in conjunction with their debt
restructuring. These practices may substantially increase our exposure to troubled borrowers and increase our
losses. An increase in loan losses would adversely affect our results of operations, weaken our financial condition
and erode our capital base.

We may be adversely affected if economic conditions in Japan or elsewhere worsen.

Our performance is affected by general economic conditions of the countries in which we operate,
particularly Japan where we primarily conduct our business. General economic conditions that could affect us
include interest rates, inflation, investor sentiment, the availability and cost of credit, the liquidity of the global
financial markets, the level and volatility of debt and equity capital markets, the levels of corporate capital
investments and individual consumption, and raw material prices. Any of these economic conditions, currently
existing or occurring in the future, may adversely affect our financial condition and results of operations. For a
discussion of the current economic environment in Japan and certain other countries, see “Item 5. Operating and
Financial Review and Prospects—Business Environment.”

11

Our business may be adversely affected by negative developments with respect to other financial
institutions, both directly and through the effect they may have on the overall banking environment and on
their borrowers.

Some domestic and foreign financial institutions, including banks, non-bank lending and credit institutions,

securities companies and insurance companies, have experienced declining asset quality and capital adequacy
and other financial problems. This may lead to severe liquidity and solvency problems, which have in the past
resulted in the liquidation, government control or restructuring of affected institutions. For example, the
deterioration of the asset-backed securitization products market and residential mortgage market in the
United States resulted in Lehman Brothers Holdings Inc. filing a petition under Chapter 11 of the US Bankruptcy
Code. Other banks, securities companies, insurance companies and other financial institutions, especially US
institutions, continue to be under significant pressure due to declining asset quality as a result of the continuing
deterioration of the global financial markets. These developments may continue to adversely affect our financial
results. Other financial difficulties relating to financial institutions could adversely affect us because:

• we have extended loans, some of which may need to be classified as nonaccrual and restructured loans,
to banks, securities companies, insurance companies and other financial institutions that are not our
consolidated subsidiaries;

• we may be requested to participate in providing assistance to support distressed financial institutions

that are not our consolidated subsidiaries;

• we are a shareholder of some other banks and financial institutions that are not our consolidated

subsidiaries;

•

•

•

•

the government may elect to provide regulatory, tax, funding or other benefits to those financial
institutions to strengthen their capital, facilitate their sale or otherwise, which in turn may increase their
competitiveness against us;

deposit insurance premiums could rise if deposit insurance funds prove to be inadequate;

bankruptcies or government support or control of financial institutions could generally undermine
confidence in financial institutions or adversely affect the overall banking environment; and

negative media coverage of the financial industry, regardless of its accuracy and applicability to us,
could affect customer or investor sentiment, harm our reputation and have a materially adverse effect on
our business or the price of our securities.

Changes in interest rate policy, particularly unexpected or sudden increases in interest rates, could

adversely affect the value of our bond and financial derivative portfolios, problem loans and results of
operations.

We hold a significant amount of Japanese government bonds and foreign bonds, including US Treasury
bonds. We also hold a large financial derivative portfolio, consisting primarily of interest-rate futures, swaps and
options, for our asset liability management. An increase in relevant interest rates, particularly if such increase is
unexpected or sudden, may negatively affect the value of our bond portfolio and reduce the so called “spread,”
which is the difference between the rate of interest earned and the rate of interest paid. In addition, an increase in
relevant interest rates may increase losses on our derivative portfolio and increase our problem loans as some of
our borrowers may not be able to meet the increased interest payment requirements, thereby adversely affecting
our results of operations and financial condition. For a detailed discussion of our bond portfolio, see “Selected
Statistical Data—Investment Portfolio.”

A downgrade of our credit ratings could have a negative effect on our business.

A downgrade of our credit ratings by one or more of the credit rating agencies could have a negative effect

on our treasury operations and other aspects of our business. In the event of a downgrade of our credit ratings,
our treasury business unit may have to accept less favorable terms in our transactions with counterparties,
including capital raising activities, or may be unable to enter into some transactions. This could have a negative
impact on the profitability of our treasury and other operations and adversely affect our results of operations and
financial condition.

12

We are exposed to new or increased risks as we expand the range of our products and services and the

geographic scope of our business.

We currently plan to pursue various business strategies to improve our profitability. In addition to the risks

associated with investments, business combinations and mergers described above, there are various other risks
which could adversely affect our ability to achieve our business objectives. For example, as we expand the range
of our products and services beyond our traditional banking and trust businesses and as the sophistication of
financial products and management systems grows, we will be exposed to new and increasingly complex risks.
We may have only limited experience with the risks related to the expanded range of these products and services.
In addition, we may have difficulty developing and operating the necessary information systems. As a result, we
may not be able to foresee certain risks, and new products and services we introduce may not gain acceptance
among customers. Moreover, some of the activities that our subsidiaries are expected to engage in, such as
derivatives and foreign currency trading, present substantial risks. As we expand the geographic scope of our
business, we will also be exposed to risks that are unique to particular jurisdictions or markets. Our risk
management systems may prove to be inadequate and may not work in all cases or to the degree required. As a
result, we are subject to substantial market, credit and other risks in relation to the expanding scope of our
products, services and trading activities or expanding our business beyond our traditional markets, which could
result in us incurring substantial losses. In addition, our efforts to offer new services and products or penetrate
new markets may not succeed if product or market opportunities develop more slowly than expected or if the
profitability of opportunities is undermined by competitive pressures. If we fail to achieve some or all of the
goals of our business strategies, our results of operations could be materially and adversely affected. For a
detailed discussion of our risk management systems, see “Item 11. Quantitative and Qualitative Disclosures
about Credit, Market and Other Risk.”

We are exposed to substantial credit and market risks in emerging market countries.

We are active in countries in Asia, Latin America, Central and Eastern Europe and other emerging market
countries through a network of branches and subsidiaries and are thus exposed to a variety of credit and market
risks associated with these countries. These risks will increase if the global financial crisis and recession continue
or worsen. For example, a decline in the value of local currencies of these countries could adversely affect the
creditworthiness of some of our borrowers in these countries. The loans we have made to borrowers and banks in
these countries are often denominated in US dollars, Euro or other foreign currencies. These borrowers often do
not hedge the loans to protect against fluctuations in the values of local currencies. A devaluation of the local
currency would make it more difficult for a borrower earning income in that currency to pay its debts to us and
other foreign lenders. In addition, some countries in which we operate may attempt to support the value of their
currencies by raising domestic interest rates. If this happens, the borrowers in these countries would have to
devote more of their resources to repaying their domestic obligations, which may adversely affect their ability to
repay their debts to us and other foreign lenders. The limited credit availability resulting from these and related
conditions may adversely affect economic conditions in some countries. This could cause a further deterioration
of the credit quality of borrowers and banks in those countries and cause us to incur further losses.

In addition, we are active in other countries and regions that expose us to risks similar to the risks described

above and also risks specific to those countries and regions, which may cause us to incur losses or suffer other
adverse effects.

Any adverse changes in Union Bank’s business could significantly affect our results of operations.

Union Bank, N.A., or Union Bank, is UNBC’s primary subsidiary. Union Bank contributes to a significant
portion of our net income. Any adverse change in the business or operations of Union Bank could significantly
affect our results of operations. Factors that could negatively affect Union Bank’s results include adverse
economic conditions in California, including the downturn in the real estate and housing industries in California,
substantial competition in the California banking market, uncertainty over the US economy due to deteriorating
economic conditions in the United States, the threat of terrorist attacks, fluctuating oil prices and rising interest

13

rates, negative trends in debt ratings, and additional costs and other adverse consequences which may arise from
enterprise-wide compliance, or failure to comply, with applicable laws and regulations, such as the US Bank
Secrecy Act and related amendments under the USA PATRIOT Act. Compared to prior years, any adverse
developments which could arise at Union Bank will have a greater negative impact on our results of operation
and financial condition, since Union Bank became, through UNBC, our wholly owned subsidiary in November
2008 compared with approximately 65% ownership in prior years.

Changes in the business environment for consumer finance companies in Japan have adversely affected

our recent financial results, and may further adversely affect our future financial results.

We have a large loan portfolio in the consumer lending industry as well as large shareholdings in

subsidiaries and equity method investees in the consumer finance industry. The Japanese government has been
implementing regulatory reforms affecting the consumer lending industry in recent years. In December 2006, the
Diet passed legislation to reduce the maximum permissible interest rate under the Law Concerning Acceptance
of Investment, Cash, Deposit and Interest Rate, etc., which is currently 29.2% per annum, to 20% per annum.
The reduction in the maximum permissible interest rate will be implemented before mid-2010. Under the
reforms, all interest rates will be subject to the lower limits (15-20% per annum) imposed by the Interest Rate
Restriction Law, which will compel, or has already compelled, lending institutions to lower the interest rates they
charge borrowers.

Currently and until the reduction in the maximum permissible interest rate as described above takes effect,
consumer finance companies are able to charge interest rates exceeding the limits stipulated by the Interest Rate
Restriction Law, provided that they satisfy certain conditions set forth in the Law Concerning Lending Business.
Accordingly, our consumer finance subsidiaries and equity method investees offer loans at interest rates above
the Interest Rate Restriction Law. As a result of recent decisions by the Supreme Court of Japan, consumer
finance companies experienced a significant increase in borrowers’ claims for reimbursement of previously
collected interest payments in excess of the limits stipulated by the Interest Rate Restriction Law. New
regulations that are scheduled to be effective before mid-2010 may also have a negative impact on the business
of consumer finance companies as those new regulations are expected to require, among other things, consumer
finance companies to review the repayment capability of borrowers before lending, thereby limiting the amount
of borrowing available to individual borrowers.

These and other related developments have adversely affected, and may further adversely affect, the
operations and financial condition of our subsidiaries and borrowers which are engaged in consumer lending,
which in turn may affect the value of our related shareholdings and loan portfolio.

We may have to compensate for losses in our loan trusts and money in trusts.

Our trust bank subsidiary may have to compensate for losses of principal of all loan trusts and some money

in trusts. Funds in those guaranteed trusts are generally invested in loans and securities. If the amount of assets
and reserves held in the guaranteed trusts falls below the principal as a result of loan losses, losses in the
investment portfolio or otherwise, it would adversely affect our results of operations.

Our results of operations may be negatively affected by the global financial crisis and recession triggered

by disruptions in the financial markets in the United States.

The recent global financial crisis and recession may continue to adversely affect our loan and investment

portfolios, which includes securitization products, such as asset-backed securities. For example, some of our
investment securities have been, and may continue to be, marked at a significantly lower price because the
market for those securities is inactive. We have also been, and may continue to be, affected by credit market
deterioration caused by defaults on these higher risk residential mortgages. Specifically, the availability of credit
has become, and may continue to be, limited causing some of our counterparties to default, or some of our credit

14

derivative transactions may also be negatively affected. Moreover, the negative developments in the US credit
markets have caused, and may continue to cause, significant fluctuations in global stock markets and foreign
currency exchange rates, which in turn affect our results of operations. If credit market conditions continue to
deteriorate, our capital funding structure may need to be adjusted, our funding costs may increase, or our credit-
related losses may increase, all of which could have a material impact on our financial results and financial
condition.

Our information systems and other aspects of our business and operations are exposed to various system,

political and social risks.

As a major financial institution, our information systems and other aspects of our business and operations
are exposed to various system, political and social risks beyond our control. Incidents such as disruptions of the
Internet and other information networks due to major virus outbreaks, major terrorist activity, serious political
instability and major health epidemics have the potential to directly affect our business and operations by
disrupting our operational infrastructure or internal systems. Such incidents may also negatively impact the
economic conditions, political regimes and social infrastructure of countries and regions in which we operate,
and possibly the global economy as a whole. Our risk management policies and procedures may be insufficient to
address these and other large-scale unanticipated risks.

In particular, the capacity and reliability of our electronic information technology systems are critical to our
day-to-day operations and a failure or disruption of these systems would adversely affect our capacity to conduct
our business. In addition to our own internal information systems, we also provide our customers with access to
our services and products through the Internet and ATMs. These systems as well as our hardware and software
are subject to malfunction or incapacitation due to human error, accidents, power loss, sabotage, hacking,
computer viruses and similar events, as well as the loss of support services from third parties such as telephone
and Internet service providers.

Additionally, as with other Japanese companies, our offices and other facilities are subject to the risk of

earthquakes and other natural disasters. Our redundancy and backup measures may not be sufficient to avoid a
material disruption in our operations, and our contingency plans may not address all eventualities that may occur
in the event of a material disruption.

These various factors, the threat of such risks or related countermeasures, or a failure to address such risks,

may materially and adversely affect our business, operating results and financial condition.

Our business may be adversely affected by competitive pressures, which have partly increased due to

regulatory changes and recent market changes in the financial industry domestically and globally.

In recent years, the Japanese financial system has been increasingly deregulated and barriers to competition
have been reduced. The privatization of the Japanese postal savings system and the establishment of Japan Post
Bank Co., Ltd. in October 2007, as well as the establishment of Japan Finance Corporation, a public corporation
wholly owned by the Japanese government, in October 2008, could also substantially increase competition within
the financial services industry. In addition, there has been significant consolidation and convergence among
financial institutions domestically and globally, and this trend may continue in the future and further increase
competition in the market. A number of large commercial banks and other broad-based financial services firms
have merged or formed strategic alliances with, or have acquired, other financial institutions both in Japan and
overseas. If we are unable to compete effectively in this more competitive and deregulated business environment,
our business, results of operations and financial condition will be adversely affected. For a more detailed
discussion of our competition in Japan, see “Item 4.B. Information on the Company—Business Overview—
Competition—Japan.”

15

We are subject to increased regulatory requirements and supervision in the United States as a financial

holding company.

In October 2008, MUFG, BTMU, Mitsubishi UFJ Trust and Banking Corporation, or MUTB, and UNBC,
which is a subsidiary of BTMU, elected to become financial holding companies respectively under the US Bank
Holding Company Act. As a financial holding company, we are authorized to engage in an expanded list of
activities in the United States, including merchant banking, insurance underwriting, and a full range of securities
activities.

Under our financial holding company status, we are also subject to additional regulatory requirements. For

example, each of our banking subsidiaries with operations in the United States, comprising Bank of Tokyo-
Mitsubishi UFJ Trust Company, Mitsubishi UFJ Trust & Banking Corporation (U.S.A.) and Union Bank, which
are our US domestic depository institutions, as well as BTMU and MUTB, must be “well capitalized,” meaning a
Tier 1 risk-based capital ratio of at least 6% and a total risk-based capital ratio of at least 10%. Our US banking
operations must also be “well managed,” including that they maintain examination ratings that are at least
satisfactory. Failure to comply with such requirements would require us to prepare a remediation plan and we
would not be able to undertake new business activities or acquisitions based on our status as a financial holding
company during any period of noncompliance, and as a result, it may negatively affect our future financial
results.

In June 2009, the US government released a regulatory reform proposal called “Financial Regulatory
Reform, A New Foundation: Rebuilding Financial Supervision and Regulation.” This proposal includes, among
other things, sweeping financial regulatory reforms designed to promote enhanced supervision and regulation of
financial firms, establish comprehensive supervision of financial markets, protect consumers and investors from
financial abuse, provide government with the tools needed to manage a financial crisis, and raise international
regulatory standards and improve international cooperation. This reform, if enacted, could have a significant
impact on our regulatory and financial compliance systems and practices, possibly requiring us to incur a
significant amount of resources to implement measures to come into compliance with the reform and manage
them on an ongoing basis.

We have recently been subject to several regulatory actions for non-compliance with legal requirements.

These regulatory matters and any future regulatory matters or regulatory changes could have a negative
impact on our business and results of operations.

We conduct our business subject to ongoing regulation and associated regulatory risks, including the effects

of changes in laws, regulations, policies, voluntary codes of practice and interpretations in Japan and other
markets where we operate. Our compliance risk management systems and programs may not be fully effective in
preventing all violations of laws, regulations and rules.

The Financial Services Agency of Japan and regulatory authorities in the United States and elsewhere also
have the authority to conduct, at any time, inspections to review banks’ accounts, including those of our banking
subsidiaries. Some of our other financial services businesses, such as our securities business, are also subject to
regulations set by, and inspections conducted by, various self-regulatory organizations, such as the Financial
Industry Regulatory Authority in the United States. In recent years, we have been subject to several regulatory
actions by, among others, the Financial Services Agency of Japan, the Securities and Exchange Surveillance
Commission of Japan and various US banking regulators.

Our failure or inability to comply fully with applicable laws and regulations could lead to fines, public

reprimands, damage to reputation, enforced suspension of operations or, in extreme cases, withdrawal of
authorization to operate, adversely affecting our business and results of operations. Regulatory matters may also
adversely affect our ability to obtain regulatory approvals for future strategic initiatives. Furthermore, failure to
take necessary corrective action, or the discovery of violations of law in the process of further review of any of
the matters mentioned above or in the process of implementing any corrective measures, could result in further
regulatory action.

16

In addition, future developments or changes in laws, regulations, policies, voluntary codes of practice and

their effects are unpredictable and beyond our control. For example, new regulations to be enacted before
mid-2010 are expected to require, among other things, consumer finance companies in Japan to review the
repayment capabilities of borrowers before lending, thereby limiting the amount of borrowing available to
individual borrowers, which in turn may negatively affect our future financial results.

Transactions with counterparties in countries designated by the US Department of State as state sponsors
of terrorism may lead some potential customers and investors in the United States and other countries to avoid
doing business with us or investing in our shares.

We, through our banking subsidiaries, engage in operations with entities in or affiliated with Iran and Syria,

including transactions with entities owned or controlled by the Iranian or Syrian governments, and the banking
subsidiary has a representative office in Iran. The US Department of State has designated Iran, Syria and other
countries as “state sponsors of terrorism,” and US law generally prohibits US persons from doing business with
such countries. Our activities with counterparties in or affiliated with Iran, Syria and other countries designated
as state sponsors of terrorism are conducted in compliance in all material respects with both applicable Japanese
and US regulations.

Our operations with entities in Iran consist primarily of loans to Iranian financial institutions in the form of
financing for petroleum projects and trade financing for general commercial purposes, as well as letters of credit
and foreign exchange services. Our operations relating to Syria are primarily foreign exchange services. We do
not believe our operations relating to Iran and Syria are material to our business or financial condition. As of
March 31, 2009, the loans outstanding to borrowers in or affiliated with Iran and Syria were approximately
$151.7 million and less than $0.1 million, respectively. These represented less than 0.1% of our total assets as of
March 31, 2009. In addition, we receive deposits or hold assets on behalf of several individuals resident in Japan
who are citizens of countries designated as state sponsors of terrorism.

We are aware of initiatives by US governmental entities and US institutional investors, such as pension
funds, to adopt or consider adopting laws, regulations or policies prohibiting transactions with or investment in,
or requiring divestment from, entities doing business with Iran, Syria and other countries identified as state
sponsors of terrorism. It is possible that such initiatives may result in our being unable to gain or retain entities
subject to such prohibitions as customers or as investors in our shares. In addition, depending on socio-political
developments our reputation may suffer due to our association with these countries. The above circumstances
could have an adverse effect on our business and financial condition.

We may not be able to maintain our capital ratios above minimum required levels, which could result in

the suspension of some or all of our operations.

We, as a holding company, and our Japanese banking subsidiaries are required to maintain risk-weighted
capital ratios above the levels specified in the capital adequacy guidelines of the Financial Services Agency of
Japan. The capital ratios are calculated in accordance with Japanese banking regulations based on information
derived from the relevant entity’s financial statements prepared in accordance with Japanese GAAP. Our
subsidiaries in California, UNBC and Union Bank are subject to similar US capital adequacy guidelines. We or
our banking subsidiaries may be unable to continue to satisfy the capital adequacy requirements because of:

•

•

•

increases in credit risk assets and expected losses we or our banking subsidiaries may incur due to
fluctuations in our or our banking subsidiaries’ loan and securities portfolios as a result of deteriorations
in the credit of our borrowers and the issuers of equity and debt securities;

increases in credit costs we or our banking subsidiaries may incur as we or our banking subsidiaries
dispose of problem loans or as a result of deteriorations in the credit of our borrowers;

declines in the value of our or our banking subsidiaries’ securities portfolio;

17

•

•

•

•

changes in the capital ratio requirements or in the guidelines regarding the calculation of bank holding
companies’ or banks’ capital ratios or changes in the regulatory capital requirements for securities firms;

a reduction in the value of our or our banking subsidiaries’ deferred tax assets;

adverse changes in foreign currency exchange rates; and

other adverse developments discussed in these risk factors.

Our capital ratios may also be adversely affected if we or our banking subsidiaries fail to refinance our

subordinated debt obligations with equally subordinated debt. As of March 31, 2009, subordinated debt
accounted for approximately 32.9% of our total regulatory capital, 35.7% of BTMU’s total regulatory capital,
and 23.7% of total regulatory capital of MUTB, in each case, as calculated under Japanese GAAP. The failure to
refinance these subordinated debt obligations with equally subordinated debt may reduce our total regulatory
capital and, as a result, negatively affect our capital ratios.

If our capital ratios fall below required levels, the Financial Services Agency could require us to take a
variety of corrective actions, including withdrawal from all international operations or suspension of all or part of
our business operations. For a discussion of our capital ratios and the related regulatory guidelines, see
“Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—Japan—Capital
Adequacy” and “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—
Capital Adequacy.”

The valuation of certain financial instruments may change due to market price fluctuations, changes in

accounting standards or otherwise.

A substantial portion of the assets on our consolidated balance sheets includes financial instruments that we

carry at fair value. Generally, in order to establish the fair value of these instruments, we rely on quoted market
prices. If the value of these financial instruments declines, a corresponding write-down may be recognized in our
consolidated statement of operations. As the global financial markets became unstable following concerns of
increased defaults of higher risk mortgages in the United States, there have been increasing circumstances where
quoted market prices for securities became significantly depressed or were not properly quoted. Specifically, due
to the reduction in liquidity of certain debt securities resulting from the global financial market instability in the
second half of the fiscal year ended March 31, 2009, we observed that the market for collateralized loan
obligations (“CLOs”) backed by general corporate loans became significantly inactive compared with normal
market activity. In light of such circumstances, we concluded that the unadjusted non-binding quotes from
broker-dealers became less reflective of the fair value as defined by Statement of Financial Accounting Standards
(“SFAS”) No. 157, “Fair Value Measurements,” with respect to such CLOs. Consequently, we changed the
estimation method for estimating the fair value of such CLOs from the method adopting unadjusted quotes from
independent broker-dealers to the estimation method weighting the internal model valuation and the non-binding
broker-dealer quotes during the second half of the fiscal year ended March 31, 2009. Additional fluctuations in
the market or instabilities in the market could have a significant adverse effect on the fair value of the financial
instruments that we hold.

In response to the recent instabilities in financial markets, several international organizations which set

accounting standards announced new or revised rules for estimating the fair value for certain financial
instruments. Accounting standards applicable to these financial instruments remain subject to further debate and
revision by international organizations which set accounting standards. If the current accounting standards
change in the future, the reported values of some of our financial instruments may need to be modified, and such
modification could have a significant impact on our financial results or financial condition. Specifically, changes
in accounting standards applicable to some of our financial instruments could have a significant negative impact
on our capital ratios. For more information, see “Item 5. Operating and Financial Review and Prospects—Critical
Accounting Estimates.”

18

Losses relating to our pension plans and a decline in returns on our plan assets may negatively affect our

results of operations and financial condition.

The fair value of our pension plan assets has declined and our investment return has decreased under the

current market circumstances. If the fair value of our pension plan assets decline or our investment return
decreases further, or if there is a change in the actuarial assumptions on which the calculations of the projected
pension obligations or pension plan assets are based, such as a decline in the discount rate or the expected rate of
return on plan assets, we may incur additional losses. Changes in the interest rate environment and other factors
may also adversely affect the amount of unfunded pension obligations and the resulting annual amortization
expense. In addition, we may have to record expenses relating to the amortization of previously unrecognized
prior service costs if our pension plans are amended.

If the goodwill recorded in connection with our acquisitions becomes impaired, we may be required to
record impairment charges, which may adversely affect our financial results and the price of our securities.

In accordance with US GAAP, we have accounted for our acquisitions using the purchase method of
accounting. We recorded the excess of the purchase price over the fair value of the assets and liabilities of the
acquired companies as goodwill. US GAAP requires us to test goodwill for impairment at least annually, or more
frequently if events or changes in circumstances indicate that goodwill may be impaired. Goodwill is tested by
initially estimating fair value and then comparing it against the carrying amount. If the carrying amount of a
reporting unit exceeds its estimated fair value, we are required to record an impairment loss. The amount of
impairment and the remaining amount of goodwill, if any, is determined by comparing the fair value of the
reporting unit as of the test date against the fair value of the assets and liabilities of that reporting unit as of the
same date.

The global financial crisis and recession led to the decline in our market capitalization and negatively
affected the fair value of our reporting units for purposes of our periodic testing of goodwill for impairment. As a
result, we recorded ¥845.8 billion of goodwill impairment charges for the fiscal year ended March 31, 2009, in
addition to having recorded ¥893.7 billion of goodwill impairment charges for the previous fiscal year. As of
March 31, 2009, the balance of goodwill was ¥379.4 billion.

We may be required to record additional impairment charges relating to goodwill in future periods if the fair
value of any of our reporting units declines below the fair value of related assets net of liabilities. Any additional
impairment charges will negatively affect our financial results, and the price of our securities could be adversely
affected. For a detailed discussion of the goodwill recorded and our periodic testing of goodwill for impairment,
see “Item 5. Operating and Financial Review and Prospects— Critical Accounting Estimates—Accounting for
Goodwill and Intangible Assets” and “Item 5. Operating and Financial Review and Prospects—B. Liquidity and
Capital Resources—Financial Condition—Goodwill.”

We may incur significant additional costs for implementing effective internal controls.

In order to operate as a global financial institution, it is essential for us to have effective internal controls,
corporate compliance functions, and accounting systems to manage our assets and operations. Moreover, under
the US Sarbanes-Oxley Act of 2002, which applies by reason of our status as an SEC reporting company, we are
required to establish internal control over our financial reporting, and our management is required to assess the
effectiveness of our internal control over financial reporting and disclose whether such internal control is
effective. Our independent auditors must also conduct an audit to evaluate and then render an opinion on the
effectiveness of our internal control over financial reporting. We are also subject to regulations on internal
control over financial reporting under Japanese law from the fiscal year ended March 31, 2009.

Designing and implementing an effective system of internal control capable of monitoring and managing

our business and operations requires significant management and human resources and considerable costs. If we
identify any material weaknesses in our internal control system, we may incur significant additional costs for

19

remediating such weaknesses. In addition, if we adopt a new accounting system, we may be required to incur
significant additional costs for establishing and implementing effective internal controls, which may materially
and adversely affect our financial condition and results of operations.

Our risk management policies, procedures and methods may leave us exposed to unidentified or

unanticipated risks, which could lead to material losses.

We have devoted significant resources to developing and implementing our risk management policies,
procedures and assessment methods and intend to continue to do so in the future. Our risk management policies,
procedures and methods, however, may not be fully effective in mitigating our risk exposures in all economic or
market environments or against all types of risk, including risks that we fail to identify or anticipate.

Some of our risk management policies, procedures and methods may not be fully effective in forecasting,
identifying and managing our future risks because these risk management policies, procedures and methods are
based primarily on our experiences. If our risk management policies, procedures or methods prove ineffective,
our business, operating results and financial condition could be materially and adversely affected.

We may be subject to liability and regulatory action if we are unable to protect personal and other

confidential information.

There have been many cases where personal information and records in the possession of corporations and
institutions were leaked or improperly accessed. In the event that personal information in our possession about
our customers or employees is leaked or improperly accessed and subsequently misused, we may be subject to
liability and regulatory action. As an institution in possession of personal information, we are required to treat
personal and other confidential information as required by the Personal Information Protection Law of Japan, as
well as the Banking Law and the Financial Instruments and Exchange Law of Japan. We may have to provide
compensation for economic loss and emotional distress arising out of a failure to protect such information. In
addition, such incidents could create a negative public perception of our operations, systems or brand, which may
in turn decrease customer and market confidence and materially and adversely affect our business, operating
results and financial condition.

For example, in March 2009, MUS discovered that an employee had illegally stolen and sold customer
information to information vendors. In June 2009, MUS received from the Financial Services Agency of Japan
an order to improve business operations under the Financial Instruments and Exchange Law and a
recommendation under the Personal Information Protection Law requiring MUS, among other things, to enhance
its information security controls so as to prevent any recurrence of similar incidents and to submit a report on
MUS’s progress on adopting and implementing remedial and preventive measures.

Damage to our reputation could harm our business.

We are one of the largest and most influential financial institutions in Japan by virtue of our market share

and the size of our operations and customer base. Our reputation is critical in maintaining our relationships with
clients, investors, regulators and the general public. Our reputation could be damaged by numerous causes,
including, among others, system troubles, employee misconduct, failure to properly address potential conflicts of
interest, litigation, compliance failures, the activities of customers and counterparties over which we have limited
or no control, and exacting scrutiny from regulatory authorities and customers regarding our trade practices and
potential abuses of our dominant bargaining position in our dealings with customers. If we are unable to prevent
or properly address these causes, we could lose existing or prospective customers and investors, in which case
our business, financial condition and results of operations could be materially and adversely affected.

20

Our businesses may be materially and adversely affected if we are unable to hire and retain qualified

employees.

Our performance is largely dependent on the talents and efforts of highly skilled individuals. Competition

for qualified employees in the banking, securities and financial services industries is intense. Our continued
ability to compete effectively in our businesses depends on our ability to attract new employees as necessary and
to retain and motivate our existing employees. If we are not successful in attracting and retaining sufficient
skilled employees through our hiring efforts and training programs aimed to maintain and enhance the skills and
expertise of our employees, our competitiveness and performance could be negatively affected, and
consequently, our business, operating results and financial condition may also be adversely affected.

Risks Related to Owning Our Shares

Rights of shareholders under Japanese law may be different from those under the laws of jurisdictions

within the United States and other countries.

Our Articles of Incorporation, the regulations of our board of directors and the Company Law of Japan, or

the Company Law (also known as the Corporation Act), govern our corporate affairs. Legal principles relating to
such matters as the validity of corporate procedures, directors’ and officers’ fiduciary duties and shareholder
rights are different from those that would apply if we were not a Japanese corporation. Shareholder rights under
Japanese law are different in some respects from shareholder rights under the laws of jurisdictions within the
United States and other countries. You may have more difficulty in asserting your rights as a shareholder than
you would as a shareholder of a corporation organized in a jurisdiction outside of Japan. For a detailed discussion
of the relevant provisions under the Company Law and our Articles of Incorporation, see “Item 10.B. Additional
Information—Memorandum and Articles of Association.”

It may not be possible for investors to effect service of process within the United States upon us or our

directors, corporate auditors or other management members, or to enforce against us or those persons
judgments obtained in US courts predicated upon the civil liability provisions of the federal securities laws of
the United States.

We are a joint stock company incorporated under the laws of Japan. Almost all of our directors, corporate

auditors or other management members reside outside the United States. Many of our assets and the assets of
these persons are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for
US investors to effect service of process within the United States upon us or these persons or to enforce, against
us or these persons, judgments obtained in the US courts predicated upon the civil liability provisions of the
federal securities laws of the United States. We believe that there is doubt as to the enforceability in Japan, in
original actions or in actions to enforce judgments of US courts, of claims predicated solely upon the federal
securities laws of the United States.

Risks Related to Owning Our ADSs

As a holder of ADSs, you have fewer rights than a shareholder and you must act through the depositary

to exercise these rights.

The rights of our shareholders under Japanese law to take actions such as voting, receiving dividends and
distributions, bringing derivative actions, examining our accounting books and records and exercising appraisal
rights are available only to shareholders of record. Because the depositary, through its custodian, is the record
holder of the shares underlying the American Depositary Shares, or ADSs, a holder of ADSs may not be entitled
to the same rights as a shareholder. In your capacity as an ADS holder, you are not able to bring a derivative
action, examine our accounting books and records or exercise appraisal rights, except through the depositary.

21

Foreign exchange rate fluctuations may affect the US dollar value of our ADSs and dividends payable to

holders of our ADSs.

Market prices for our ADSs may fall if the value of the yen declines against the US dollar. In addition, the
US dollar amount of cash dividends and other cash payments made to holders of our ADSs would be reduced if
the value of the yen declines against the US dollar.

Item 4.

Information on the Company.

A. History and Development of the Company

Mitsubishi UFJ Financial Group, Inc.

MUFG is a bank holding company incorporated as a joint stock company (kabushiki kaisha) under the
Company Law of Japan. We are the holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU,
Mitsubishi UFJ Trust and Banking Corporation, or MUTB, and Mitsubishi UFJ Securities Co., Ltd., or MUS,
Mitsubishi UFJ NICOS Co., Ltd., or Mitsubishi UFJ NICOS, and other companies engaged in a wide range of
financial businesses.

On April 2, 2001, The Bank of Tokyo-Mitsubishi, Ltd., Mitsubishi Trust and Banking Corporation, or
Mitsubishi Trust Bank, and Nippon Trust Bank Limited established MTFG to be a holding company for the three
entities. Before that, each of the banks had been a publicly held company. On April 2, 2001, through a
stock-for-stock exchange, they became wholly owned subsidiaries of MTFG, and the former shareholders of the
three banks became shareholders of MTFG. Nippon Trust Bank Limited was later merged into Mitsubishi Trust
Bank.

On April 1, 2004, we implemented a new integrated business group system, which currently integrates the

operations of BTMU, MUTB and MUS into the following three areas—Retail, Corporate, and Trust Assets.
Although this new measure did not change the legal entities of MUFG, BTMU, MUTB and MUS, it is intended
to enhance synergies by promoting more effective and efficient collaboration between our subsidiaries.

On July 1, 2005, MTFG made Mitsubishi Securities Co., Ltd. a directly held subsidiary by acquiring all of

the shares of Mitsubishi Securities common stock held by Bank of Tokyo-Mitsubishi and Mitsubishi Trust Bank.

On June 29, 2005, the merger agreement between MTFG and UFJ Holdings was approved at the general
shareholders meetings of MTFG and UFJ Holdings. As the surviving entity, Mitsubishi Tokyo Financial Group,
Inc. was renamed “Mitsubishi UFJ Financial Group, Inc.” The merger of the two bank holding companies was
completed on October 1, 2005.

On September 30, 2007, MUS became a wholly owned subsidiary of MUFG through a share exchange

transaction.

On August 1, 2008, Mitsubishi UFJ NICOS became a wholly owned subsidiary of MUFG through a share
exchange transaction. On the same day, we entered into a share transfer agreement with The Norinchukin Bank,
or Norinchukin, under which we sold some of our shares of Mitsubishi UFJ NICOS common stock to
Norinchukin. Currently, Mitsubishi UFJ NICOS is a consolidated subsidiary of MUFG.

On October 13, 2008, we made an investment in Morgan Stanley as part of a global strategic alliance. We
beneficially own approximately 20% of the common stock of Morgan Stanley (assuming full conversion of the
convertible preferred stock of Morgan Stanley we currently own), and are pursuing a variety of business
opportunities in Japan and abroad.

On October 21, 2008, we completed a tender offer for outstanding shares of ACOM CO., LTD. common

stock, raising our ownership in ACOM to approximately 40%.

22

On November 4, 2008, BTMU completed the acquisition of all of the shares of common stock of
UnionBanCal Corporation, or UNBC, not owned by BTMU and, as a result, UNBC became a wholly owned
indirect subsidiary of MUFG.

Our registered address is 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan, and our telephone

number is 81-3-3240-8111.

For a discussion of recent developments, see “Item 5. Operating and Financial Review and Prospects—

Recent Developments.”

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

BTMU is a major commercial banking organization in Japan that provides a broad range of domestic and

international banking services from its offices in Japan and around the world. BTMU’s registered head office is
located at 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8388, Japan, and its telephone number is
81-3-3240-1111. BTMU is a joint stock company (kabushiki kaisha) incorporated in Japan under the Company
Law.

BTMU was formed through the merger, on January 1, 2006, of Bank of Tokyo-Mitsubishi and UFJ Bank
Limited after their respective parent companies, MTFG and UFJ Holdings, merged to form MUFG on October 1,
2005.

Bank of Tokyo-Mitsubishi was formed through the merger, on April 1, 1996, of The Mitsubishi Bank,

Limited and The Bank of Tokyo, Ltd.

The origins of Mitsubishi Bank can be traced to the Mitsubishi Exchange Office, a money exchange house
established in 1880 by Yataro Iwasaki, the founder of the Mitsubishi industrial, commercial and financial group.
In 1895, the Mitsubishi Exchange Office was succeeded by the Banking Division of the Mitsubishi Goshi
Kaisha, the holding company of the “Mitsubishi group” of companies. Mitsubishi Bank had been a principal
bank to many of the Mitsubishi group companies but broadened its relationships to cover a wide range of
Japanese industries, small and medium-sized companies and individuals.

Bank of Tokyo was established in 1946 as a successor to The Yokohama Specie Bank, Ltd., a special
foreign exchange bank established in 1880. When the government of Japan promulgated the Foreign Exchange
Bank Law in 1954, Bank of Tokyo became the only bank licensed under that law. Because of its license, Bank of
Tokyo received special consideration from the Ministry of Finance in establishing its offices abroad and in many
other aspects relating to foreign exchange and international finance.

UFJ Bank was formed through the merger, on January 15, 2002, of The Sanwa Bank, Limited and The

Tokai Bank, Limited.

Sanwa Bank was established in 1933 when the three Osaka-based banks, the Konoike Bank, the Yamaguchi

Bank, and the Sanjyushi Bank merged. Sanwa Bank was known as a city bank having the longest history in
Japan, since the foundation of Konoike Bank can be traced back to the Konoike Exchange Office established in
1656. The origin of Yamaguchi Bank was also a money exchange house, established in 1863. Sanjyushi Bank
was founded by influential fiber wholesalers in 1878. The corporate philosophy of Sanwa Bank had been the
creation of the premier banking services especially for small and medium-sized companies and individuals.

Tokai Bank was established in 1941 when the three Nagoya-based banks, the Aichi Bank, the Ito Bank, and

the Nagoya Bank merged. In 1896, Aichi Bank took over businesses of the Jyuichi Bank established by
wholesalers in 1877 and the Hyakusanjyushi Bank established in 1878. Ito Bank and Nagoya Bank were
established in 1881 and 1882, respectively. Tokai Bank had expanded the commercial banking business to
contribute to economic growth mainly of the Chubu area in Japan, which is known for the manufacturing
industry, especially automobiles.

23

Mitsubishi UFJ Trust and Banking Corporation

MUTB is a major trust bank in Japan, providing trust and banking services to meet the financing and
investment needs of clients in Japan and the rest of Asia, as well as in the United States and Europe. MUTB’s
registered head office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan, and its
telephone number is 81-3-3212-1211. MUTB is a joint stock company (kabushiki kaisha) incorporated in Japan
under the Company Law.

MUTB was formed on October 1, 2005 through the merger of Mitsubishi Trust and Banking Corporation, or

Mitsubishi Trust Bank, and UFJ Trust Bank Limited. As the surviving entity, Mitsubishi Trust Bank was
renamed “Mitsubishi UFJ Trust and Banking Corporation.”

Mitsubishi Trust Bank traces its history to The Mitsubishi Trust Company, Limited, which was founded by

the leading members of the Mitsubishi group companies in 1927. The Japanese banking and financial industry
was reconstructed after World War II and, in 1948, Mitsubishi Trust Bank was authorized to engage in the
commercial banking business, in addition to its trust business, under the new name Asahi Trust & Banking
Corporation. In 1952, the bank changed its name again, to “The Mitsubishi Trust and Banking Corporation.”

Nippon Trust Bank and The Tokyo Trust Bank, Ltd., which were previously subsidiaries of Bank of Tokyo-

Mitsubishi, were merged into Mitsubishi Trust Bank on October 1, 2001.

UFJ Trust Bank was founded in 1959 as The Toyo Trust & Banking Company, Limited, or Toyo Trust
Bank. The Sanwa Trust & Banking Company, Limited, which was a subsidiary of Sanwa Bank, was merged into
Toyo Trust Bank on October 1, 1999. The Tokai Trust & Banking Company, Limited, which was a subsidiary of
Tokai Bank, was merged into Toyo Trust Bank on July 1, 2001. Toyo Trust Bank was renamed “UFJ Trust Bank
Limited” on January 15, 2002.

Mitsubishi UFJ Securities Co., Ltd.

MUS was formed through the merger between Mitsubishi Securities Co., Ltd. and UFJ Tsubasa Securities

Co., Ltd. on October 1, 2005. As the surviving entity, Mitsubishi Securities was renamed “Mitsubishi UFJ
Securities Co., Ltd.” MUS is a wholly owned subsidiary of MUFG. MUS’s registered head office is located at
4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-6317, Japan, and its telephone number is 81-3-6213-8500.
MUS is a joint stock company (kabushiki kaisha) incorporated in Japan under the Company Law.

MUS functions as the core of our securities and investment banking business, including underwriting and
brokerage of securities, mergers and acquisitions, derivatives, corporate advisory and securitization operations. In
addition to its own independent branches, MUS serves individual customers of BTMU and MUTB through a
network of MUFG Plazas, which provide individual customers with one-stop access to services and products
offered by MUS, BTMU and MUTB.

In the securities business, MUS offers its customers a wide range of investment products. The equity sales

staff members provide services to clients ranging from individual investors to institutional investors in Japan and
abroad. Through derivative products, MUS provides solutions to meet customers’ risk management needs. MUS
also offers structured bonds utilizing various types of derivatives in response to customers’ investment needs. In
the investment trust business, MUS provides its retail and corporate customers a wide variety of products. MUS
also offers investment banking services in such areas as bond underwriting, equity underwriting, initial public
offerings, support for IR activities, securitization of assets and mergers and acquisitions. MUS has research
functions and provides in-depth company and strategy reports. To strengthen and enhance our global securities
business network, MUS has major overseas subsidiaries in London, New York, Hong Kong, Singapore, Shanghai
and Geneva.

24

In March 2009, we signed a memorandum of understanding with Morgan Stanley to form a securities joint
venture in Japan by combining MUS and Morgan Stanley Japan Securities Co., Ltd. by March 2010, subject to
regulatory approval. For more information on our strategic alliance with Morgan Stanley, see “Item 5. Operating
and Financial Review and Prospects—Recent Developments.”

Mitsubishi UFJ NICOS Co., Ltd.

Mitsubishi UFJ NICOS is a major credit card company in Japan that issues credit cards, including those
issued under the MUFG, NICOS, UFJ and DC brands, and provides a broad range of credit card and other related
services for its card members in Japan. Mitsubishi UFJ NICOS is a consolidated subsidiary of MUFG. Mitsubishi
UFJ NICOS’s registered head office is located at 33-5, Hongo 3-chome, Bunkyo-ku, Tokyo 113-8411, Japan, and
its telephone number is 81-3-3811-3111. Mitsubishi UFJ NICOS is a joint stock company (kabushiki kaisha)
incorporated in Japan under the Company Law.

Mitsubishi UFJ NICOS was formed through the merger, on April 1, 2007, of UFJ NICOS Co., Ltd. and DC

Card Co., Ltd. As the surviving entity, UFJ NICOS Co., Ltd. was renamed “Mitsubishi UFJ NICOS Co., Ltd.”

UFJ NICOS was formed through the merger, on October 1, 2005, of Nippon Shinpan Co., Ltd. and UFJ Card
Co., Ltd. Originally founded in 1951 and listed on the Tokyo Stock Exchange in 1961, Nippon Shinpan was a
leading company in the consumer credit business in Japan. Nippon Shinpan became a subsidiary of MUFG at the
time of the merger with UFJ Card.

Prior to the merger between MTFG and UFJ Holdings in October 2005, DC Card was a subsidiary of MTFG

while UFJ Card was a subsidiary of UFJ Holdings.

B. Business Overview

We are one of the world’s largest and most diversified financial groups with total assets of ¥193 trillion as

of March 31, 2009. The Group is comprised of BTMU, MUTB, MUS, Mitsubishi UFJ NICOS and other
subsidiaries and affiliates. Our services include commercial banking, trust banking, securities, credit cards,
consumer finance, asset management, leasing and many more fields of financial services. The Group has the
largest overseas network among the Japanese banks, comprised of offices and subsidiaries, including Union
Bank, N.A., or Union Bank, in more than 40 countries.

While maintaining the corporate cultures and core competencies of BTMU, MUTB, MUS, Mitsubishi UFJ

NICOS, we, as the holding company, seek to work with them to find ways to:

•

•

•

•

•

establish a more diversified financial services group operating across business sectors;

leverage the flexibility afforded by our organizational structure to expand our business;

benefit from the collective expertise of BTMU, MUTB, MUS and Mitsubishi UFJ NICOS;

achieve operational efficiencies and economies of scale; and

enhance the sophistication and comprehensiveness of the Group’s risk management expertise.

In order to further enhance our operations and increase profits, in April 2004 we introduced an integrated
business group system comprising three core business areas: Retail, Corporate, and Trust Assets. These three
businesses serve as the Group’s core sources of net operating profit. Our remaining business areas are grouped
into Global Markets and Other. In addition, MUFG’s role as the holding company has expanded from strategic
coordination to integrated strategic management. Group-wide strategies are determined by the holding company
and executed by the banking subsidiaries and other subsidiaries.

25

MUFG Management Philosophy

MUFG’s management philosophy serves as the basic policy in conducting its business activities, and

provides guidelines for all group activities. It is also the foundation for management decisions, including the
formulation of management strategies and management plans, and serves as the core value for all employees.
BTMU, MUTB, MUS and Mitsubishi UFJ NICOS adopted the MUFG’s management philosophy as their own
respective management philosophy, and the entire group strives to comply with this philosophy. The details of
the MUFG’s management philosophy are set forth below:

• We will respond promptly and accurately to the diverse needs of our customers around the world and

seek to inspire their trust and confidence;

• We will offer innovative and high-quality financial services by actively pursuing the cultivation of new

business areas and developing new technologies;

• We will comply strictly with all laws and regulations and conduct our business in a fair and transparent

manner to gain the public’s trust and confidence;

• We will seek to inspire the trust of our shareholders by enhancing corporate value through continuous
business development and appropriate risk management, and by disclosing corporate information in a
timely and appropriate manner;

• We will contribute to progress toward a sustainable society by assisting with development in the areas in
which we operate and conducting our business activities with consideration for the environment; and

• We will provide the opportunities and work environment necessary for all employees to enhance their

expertise and make full use of their abilities.

We have declared our message to the world as “Quality for You,” with management’s emphasis on quality.

“Quality for You” means that by providing high-quality services, we aspire to help improve the quality of the
lives of individual customers, and the quality of each corporate customer. The “You” expresses the basic stance
of MUFG that we seek to contribute not only to the development of our individual customers but also
communities and society. We believe that delivering superior quality services, reliability, and global coverage
will result in more profound and enduring contributions to society.

Integrated Retail Banking Business Group

The Integrated Retail Banking Business Group covers all domestic retail businesses, including commercial

banking, trust banking and securities businesses, and enables us to offer a full range of banking products and
services, including financial consulting services, to retail customers in Japan. This business group integrates the
retail business of BTMU, MUTB and MUS as well as retail product development, promotion and marketing in a
single management structure. Many of our retail services are offered through our network of MUFG Plazas
providing individual customers with one-stop access to our comprehensive financial product offerings of
integrated commercial banking, trust banking and securities services.

Deposits and retail asset management services. We offer a full range of bank deposit products including a

non-interest-bearing deposit account that is redeemable on demand and intended primarily for payment and
settlement functions, and is fully insured without a maximum amount limitation.

We also offer a variety of asset management and asset administration services to individuals, including

savings instruments such as current accounts, ordinary deposits, time deposits, deposits at notice and other
deposit facilities. We also offer trust products, such as loan trusts and money trusts, and other investment
products, such as investment trusts, performance-based money trusts and foreign currency deposits.

We create portfolios tailored to customer needs by combining savings instruments and investment products.

We also provide a range of asset management and asset administration products as well as customized trust
products for high net worth individuals, as well as advisory services relating to, among other things, the purchase
and disposal of real estate and effective land utilization, and testamentary trusts.

26

Investment trusts. We provide a varied lineup of investment trust products allowing our customers to
choose products according to their investment needs through BTMU, MUTB and MUS as well as kabu.com
Securities, which specializes in online financial services. In the fiscal year ended March 31, 2009, BTMU
introduced a total of six new investment trusts. As of the end of March 2009, BTMU offered our clients a total of
72 investment trusts. Moreover, BTMU has placed significant importance on ensuring that aftercare is provided
to all of our customers who have purchased our investment trust products.

Insurance. Since the Japanese government lifted the prohibition against sales of annuity insurance
products by banks in October 2002, we have been actively offering insurance products to meet the needs of our
customers. Our current lineup of insurance products consists of investment-type individual annuities, foreign
currency-denominated insurance annuities and yen-denominated fixed-amount annuity insurance. Additionally,
since January 2005, we have been offering single premium term insurance. BTMU has been offering life,
medical and cancer insurance since December 2007 and care insurance since April 2008. Since the regulatory
changes in December 2007 eliminated the restrictions on over-the-counter sales of life insurance products by
banks, BTMU has introduced seven varieties of life insurance products (four life insurance, two medical
insurance and one cancer insurance products). Between December 31, 2007 and March 31, 2009, the number of
branches through which BTMU offers insurance products increased from 173 to 377. Professional insurance
sales representatives, called “Insurance Planners,” have been assigned to each branch where these insurance
products are sold in order to ensure that the branch responds to our customers’ needs. MUTB also offers whole
term life insurance and medical insurance at all of its branches.

Financial products intermediation services. Our banking subsidiaries entered the securities industry
following the lifting of the ban on securities intermediation by banks in Japan in December 2004. We offer
stocks including public offerings, foreign and domestic investment trusts, Japanese government bonds, foreign
bonds and various other products through BTMU and MUTB with MUS, Mitsubishi UFJ Merrill Lynch PB
Securities Co., Ltd. and kabu.com Securities Co., Ltd. acting as agents. As of the end of March 31, 2009, BTMU
employed approximately 470 employees seconded from MUS, of whom around 280 were assigned to branches in
Japan as sales representatives, while 90 employees were employed in the capacity of Retail Money Desk, or
RMD, representatives to assist the branch sales force. They are sales professionals mostly seconded from MUS
with strong sales skills and a sophisticated understanding of compliance.

Loans. We offer housing loans, card loans, and other loans to individuals. With respect to housing loans,

in addition to ultra-long term fixed rate housing loans and housing loans incorporating health insurance for seven
major illnesses, BTMU began offering in June 2009 preferential interest rates under its “Environmentally
Friendly Support” program to customers who purchase “environment-conscious” houses (houses with solar
electric systems) which meet specific criteria in response to increasing public interest in environmental issues.
Since November 2007, BTMU has been offering a card loan service called “BANQUIC” through which loan
applications are accepted and approved for customers who meet certain criteria immediately upon submission. In
January 2009, under this service, BTMU began accepting loan applications through mobile phones as a new
channel in addition to telephone, internet, postal mail and facsimile. In June 2009, BTMU also started accepting
loan applications through the “Video Counters” that allow face-to-face style contact with operators through the
use of a video conferencing system. BTMU continues to strive to meet a wide variety of customer needs by
enhancing our product offerings and increasing customers’ ease of access to our services.

Credit cards.

In October 2004, BTMU began to issue multi-functional “IC cards,” which combine ATM

card, credit card and electronic money functions that enhance customer’s ease of access to our services. For
example, BTMU has been offering an “alliance credit card,” which is an integrated IC commuter pass compatible
with the ticketing systems of Japanese railway companies, including East Japan Railway Company since
February 2007, Kintetsu Corporation since February 2008, and Tokyu Corporation since April 2009.

We strive to improve the quality of our products, aiming to enhance the convenience for our customers. As

part of such efforts, in April 2009, BTMU transferred its guarantee service operations for card loans to

27

Mitsubishi UFJ NICOS. In August 2008, we acquired, through a share exchange transaction, all the shares of
Mitsubishi UFJ NICOS not owned by us, and sold a minority stake in Mitsubishi UFJ NICOS to The
Norinchukin Bank. As a result, our current ownership interest in Mitsubishi UFJ NICOS is approximately 85%.

Domestic Network. We offer products and services through a wide range of channels, including branches,
ATMs (including convenience store ATMs shared by multiple banks), Mitsubishi-Tokyo UFJ Direct (telephone,
internet and mobile phone banking), the Video Counter and postal mail.

We offer integrated financial services combining our banking, trust banking and securities services at
MUFG Plazas. These Plazas provide retail customers with integrated and flexible suite of services at one-stop
outlets. As of March 31 2009, we provided those services through 48 MUFG Plazas.

To provide exclusive membership services to high net worth customers, private banking offices have been

established since December 2006 featuring lounges and private rooms where customers can receive wealth
management advice and other services in a relaxing and comfortable setting. As of March 31, 2009, we had 21
private banking offices in the Tokyo metropolitan area, Nagoya and Osaka.

To improve customer convenience, BTMU has enhanced its ATM network and ATM related services.

BTMU has also ceased to charge ATM transaction fees from customers of BTMU and MUTB for certain
transactions. In addition, BTMU has reduced commissions for transactions conducted through ATMs located in
convenience stores.

“Jibun Bank Corporation,” a joint venture between BTMU and KDDI CORPORATION, started its banking

business in July 2008. The bank offers comprehensive retail banking services through mobile phone networks.

Trust agency operations. As of the end of March 2009, BTMU engaged in eight businesses as the trust
banking agent for MUTB: testamentary trusts, inheritance management, asset succession planning, inheritance
management agency operations, business management financial consulting, lifetime gift trusts, share disposal
trusts, and marketable securities administration trusts. In October 2006, BTMU accepted approximately 30
financial consultants (sales managers specializing in inheritance business) from MUTB. Because of Japan’s
aging society, customer demand for inheritance-related advice is increasing and we aim to significantly
strengthen our ability to cross-sell the inheritance business to our existing customers.

Strategic alliances.

In July 2008, BTMU acquired 49.375% of the issued shares of JALCARD, Inc., a

wholly owned subsidiary of Japan Airlines International Co., Ltd. As a result, JALCARD, Inc. became an equity
method affiliate of MUFG and BTMU. Through this alliance, we aim to improve our profitability and customer
services by capitalizing on the broader customer base, jointly developed products and services, and the brands of
MUFG and the Japan Airlines group. For example, we currently plan to introduce a jointly developed program
through which our customers who apply for a JALCARD, a frequent flyer program membership card with the
functionality of a credit card, will be entitled to preferential terms and services.

Integrated Corporate Banking Business Group

The Integrated Corporate Banking Business Group covers all domestic and overseas corporate businesses,

including commercial banking, investment banking, trust banking and securities businesses as well as UNBC.
UNBC is a wholly owned subsidiary of BTMU and a US bank holding company with Union Bank, being its
primary subsidiary. On December 18, 2008, Union Bank changed its name to the current name from Union Bank
of California, N.A. Through the integration of these business lines, diverse financial products and services are
provided to our corporate clients, from large corporations to medium-sized and small businesses. The business
group has clarified strategic domains, sales channels and methods to match the different growth stages and
financial needs of our corporate customers.

28

CIB (Corporate and Investment Banking)

Corporate management/financial strategies. We provide advisory services to customers concerning
mergers and acquisitions, inheritance-related business transfers and stock listings. We also help customers
develop financial strategies to restructure their balance sheets. These strategies include the use of credit lines,
factoring services and securitization of real estate.

Capital Markets. We manage the underwriting of debt and equity instruments for mainly large

corporations. We also provide arrangement services relating to private placements primarily for medium-sized
enterprise issuers and institutional investors.

Commercial Banking

Corporate financing and fund management. We advise on financing methods to meet various financing

needs, including loans with derivatives, corporate bonds, commercial paper, asset-backed securities,
securitization programs and syndicated loans. We also offer a wide range of products to meet fund management
needs, such as deposits with derivatives, government bonds, debenture notes and investment funds.

Risk management. We offer swaps, options and other risk-hedge programs to customers seeking to reduce

various business risks such as those relating to interest rate and exchange rate fluctuations.

Transaction Banking

We provide online banking services that allow customers to make domestic and overseas remittances
electronically. Settlement and cash management services include global settlement services, such as Global Cash
Management Services, a global pooling/netting service, and a fund management system for group companies,
such as the Treasury Station system.

Trust Banking

MUTB’s experience and know-how in the asset management business, real estate brokerage and appraisal
services, and stock transfer agency service also enable us to offer services tailored to the financial strategies of
each client, including securitization of real estate, receivables and other assets.

Global Businesses

Overseas business support. We provide a full range of services to support customers’ overseas activities,

including loans, deposits, assistance with mergers and acquisitions and cash management services. We also
provide advisory services to help customers develop financial strategies, such as arranging the issuance of asset-
backed commercial paper, providing credit commitments and securitizing real estate in Japan.

Advice on business expansion overseas. We provide advisory services to clients launching businesses

overseas, particularly Japanese companies expanding into other Asian countries.

Union Bank.

In November 2008, BTMU completed the acquisition of all of the shares of UNBC’s

common stock not owned by BTMU and, as a result, UNBC became a wholly owned indirect subsidiary of
MUFG. UNBC is a US bank holding company with Union Bank being its primary subsidiary. Union Bank is one
of the largest commercial banks in California by both total assets and total deposits. Union Bank provides a wide
range of financial services to consumers, small businesses, middle market companies and major corporations,
primarily in California, Oregon, and Washington, as well as nationally and internationally.

Global Strategic Alliance with Morgan Stanley. We made a $9.0 billion preferred equity investment in
Morgan Stanley in October 2008 as part of a global strategic alliance between Morgan Stanley and us. Since this

29

initial investment, we have acquired a total of $705 million of shares of Morgan Stanley common stock and sold
back to Morgan Stanley $705 million of the preferred securities in May 2008, and we have acquired a total of
$471 million of additional shares of Morgan Stanley common stock in June 2009. We beneficially own
approximately 20% of the common stock of Morgan Stanley (assuming full conversion of the convertible
preferred stock of Morgan Stanley we currently own). In addition, Nobuyuki Hirano, a member of our senior
management, has been appointed to serve on the board of directors of Morgan Stanley.

We have reached an agreement with Morgan Stanley on a number of initiatives in connection with the
Global Strategic Alliance. In March 2009, we signed a memorandum of understanding with Morgan Stanley to
form a securities joint venture in Japan by combining MUS and Morgan Stanley Japan Securities Co., Ltd. by
March 2010, subject to regulatory approval. The proposed joint venture is expected to become a new industry
leader in Japan offering a large domestic retail brokerage network, a full range of institutional businesses, and
significant global reach. The memorandum of understanding provides that we will own a 60% interest of the joint
venture while Morgan Stanley will own the remaining 40% interest.

On June 30, 2009, the scope of the Global Strategic Alliance was expanded into new geographies and
businesses, including (1) a loan marketing joint venture that will provide clients in the Americas with access to
expanded, world-class lending and capital markets services from both companies, (2) agreements to establish
business referral arrangements in Asia and in Europe, the Middle East and Africa, covering capital markets,
loans, fixed income sales and other businesses, (3) a global commodities referral agreement whereby BTMU and
its affiliates will refer clients in need of commodities-related hedging solutions to certain affiliates of Morgan
Stanley, and (4) an employee secondment program to share best practices and expertise in a wide range of
business areas.

For a more detailed discussion on the business alliance, see “Item 5. Operating and Financial Review and

Prospects—Recent Developments.”

Integrated Trust Assets Business Group

The Integrated Trust Assets Business Group covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and the
international strengths of BTMU. The business group provides a full range of services to corporate and pension
funds, including stable and secure pension fund management and administration, advice on pension schemes, and
payment of benefits to scheme members. Our Integrated Trust Assets Business Group combines MUTB’s trust
assets business, comprising trust assets management services, asset administration and custodial services, and the
businesses of Mitsubishi UFJ Global Custody S.A., Mitsubishi UFJ Asset Management Co., Ltd. and KOKUSAI
Asset Management Co., Ltd.

Mitsubishi UFJ Global Custody, which was established on April 11, 1974 and was formerly named Bank of

Tokyo-Mitsubishi UFJ (Luxembourg) S.A., provides global custody services, administration services for
investment funds and fiduciary and trust accounts, and other related services to institutional investors.

Mitsubishi UFJ Asset Management and KOKUSAI Asset Management provide asset management and trust

products and services mainly to high net worth individuals, branch customers and corporate clients in Japan.

Global Markets

Global Markets consists of the treasury operations of BTMU and MUTB. Global Markets also conducts

asset liability management and liquidity management and provides various financial operations such as money
markets, foreign exchange operations and securities investments.

Other

Other mainly consists of the corporate centers of the holding company, BTMU, MUTB and MUS.

30

Competition

We face strong competition in all of our principal areas of operation. The deregulation of the Japanese
financial markets as well as structural reforms in the regulation of the financial industry have resulted in dramatic
changes in the Japanese financial system. Structural reforms have prompted Japanese banks to merge or
reorganize their operations, thus changing the nature of the competition from other financial institutions as well
as from other types of businesses.

Japan

Deregulation. Competition in Japan has intensified as a result of the relaxation of regulations relating to
Japanese financial institutions. Most of the restrictions that served to limit competition were lifted before the year
2000. Deregulation has eliminated barriers between different types of Japanese financial institutions, which are
now able to compete directly against one another. Deregulation and market factors have also facilitated the entry
of various large foreign financial institutions into the Japanese domestic market.

The Banking Law, as amended, now permits banks to engage in certain types of securities business,
including retail sales of investment funds and government and municipal bonds, and, through a domestic and
overseas securities subsidiary, all types of securities business, with appropriate registration with or approval of
the Financial Services Agency, an agency of the Cabinet Office. The Banking Law was amended in December
2008 to expand the scope of permissible activities of banks, permitting banks to engage in emissions trading and,
through their subsidiaries and certain affiliates, Islamic financing. Further increases in competition among
financial institutions are expected in these new areas of permissible activities.

In terms of recent market entrants, other financial institutions, such as Orix Corporation, and non-financial

companies, such as the Seven & i Holdings group and Sony Corporation, have also begun to offer various
banking services, often through non-traditional distribution channels. Also, in recent years, various large foreign
financial institutions have entered the Japanese domestic market. Citigroup Inc., for example, has expanded its
banking operations in Japan through a locally incorporated banking subsidiary. The privatization of Japan Post, a
government-run public services corporation that is the world’s largest holder of deposits, and the establishment
of the Japan Post Group companies, including Japan Post Bank Co., Ltd., as part of the continuing privatization
process, as well as the privatization of other governmental financial institutions, could also substantially increase
competition within the financial services industry.

In the corporate banking sector, the principal effect of these reforms has been the increase in competition as

two structural features of Japan’s highly specialized and segmented financial system have eroded:

•

•

the separation of banking and securities businesses in Japan; and

the distinctions among the permissible activities of Japan’s two principal types of private banking
institutions. For a discussion of the two principal types of private banking institutions, see “—The
Japanese Financial System.”

In addition, as foreign exchange controls have been generally eliminated, customers can now have direct

access to foreign financial institutions, with which we must also compete.

In the consumer banking sector, deregulation has enabled banks to offer customers an increasingly attractive

and diversified range of products. For example, banks are permitted to sell investment trusts and all types of
insurance products. Recently, competition has increased due to the development of new products and distribution
channels. For example, Japanese banks have started competing with one another by developing innovative
proprietary computer technologies that allow them to deliver basic banking services in a more efficient manner,
such as internet banking services, and to create sophisticated new products in response to customer demand.

31

The trust assets business is a promising growth area that is competitive and becoming more so because of

changes in the industry. In addition, there is growing corporate demand for change in the trust regulatory
environment, such as reform of the pension system and related accounting regulations under Japanese GAAP.
However, competition may increase in the future as regulatory barriers to entry are lowered. The current trust
business law came into effect on December 30, 2004. Among other things, the trust business law has expanded
the types of property that can be entrusted and allows non-financial companies to conduct trust business upon
approval. The law has also adopted a type of registration for companies that wish to conduct only the
administration type trust business. The Trust Business Law was further amended in December 2006 in order to
cope with new types of trusts and to amend the duties imposed on the trustee in accordance with the sweeping
amendment to the Law. As these regulatory developments have facilitated the expansion of the trust business, the
competition in this area has also intensified.

Integration. Since their formation in 2000 and 2001, the so-called Japanese “mega bank” groups,

including us, the Mizuho Financial Group, and the Sumitomo Mitsui Financial Group have continued to expand
their businesses and financial group capabilities. Heightened competition among the mega bank groups is
currently expected in the securities sector as they have recently announced plans to expand, or have expanded,
their respective securities businesses. In March 2009, we entered into a memorandum of understanding with
Morgan Stanley to establish a joint venture combining MUS and Morgan Stanley Japan Securities. In May 2009,
Mizuho Securities Co., Ltd. acquired Shinko Securities Co., Ltd., and the Sumitomo Mitsui Financial Group
entered into an agreement to acquire Nikko Cordial Securities Inc. and other businesses from Citigroup Inc. In
July 2009, The Sumitomo Trust and Banking Co., Ltd. entered into an agreement to acquire Nikko Asset
Management Co., Ltd. from Citigroup Inc. The mega bank groups are also expected to face heightened
competition with other financial groups. For example, the Nomura Group acquired Lehman Brothers Holding,
Inc.’s franchise in the Asia-Pacific region and investment banking businesses in Europe and the Middle East in
October 2008.

Foreign

In the United States, we face substantial competition in all aspects of our business. We face competition
from other large US and foreign-owned money-center banks, as well as from similar institutions that provide
financial services. Through Union Bank, we currently compete principally with US and foreign-owned money-
center and regional banks, thrift institutions, insurance companies, asset management companies, investment
advisory companies, consumer finance companies, credit unions and other financial institutions.

In other international markets, we face competition from commercial banks and similar financial

institutions, particularly major international banks and the leading domestic banks in the local financial markets
in which we conduct business. In addition, we may face further competition as a result of recent investments,
mergers and other business tie-ups among global financial institutions.

The Japanese Financial System

Japanese financial institutions may be categorized into three types:

•

•

•

the central bank, namely the Bank of Japan;

private banking institutions; and

government financial institutions.

The Bank of Japan

The Bank of Japan’s role is to maintain price stability and the stability of the financial system to ensure a

solid foundation for sound economic development.

32

Private Banking Institutions

Private banking institutions in Japan are commonly classified into two categories (the following numbers

are based on information published by the Financial Services Agency available as of August 18, 2009):

•

•

ordinary banks (129 ordinary banks and 60 foreign commercial banks with ordinary banking
operations); and

trust banks (19 trust banks, including four Japanese subsidiaries of foreign financial institutions).

Ordinary banks in turn are classified as city banks, of which there are five, including BTMU, and regional

banks, of which there are 109 and other banks, of which there are 15. In general, the operations of ordinary banks
correspond to commercial banking operations in the United States. City banks and regional banks are
distinguished based on head office location as well as the size and scope of their operations.

The city banks are generally considered to constitute the largest and most influential group of banks in
Japan. Generally, these banks are based in large cities, such as Tokyo, Osaka and Nagoya, and operate nationally
through networks of branch offices. City banks have traditionally emphasized their business with large corporate
clients, including the major industrial companies in Japan. However, in light of deregulation and other
competitive factors, many of these banks, including BTMU, in recent years have increased their emphasis on
other markets, such as small and medium-sized companies and retail banking.

With some exceptions, the regional banks tend to be much smaller in terms of total assets than the city
banks. Each of the regional banks is based in one of the Japanese prefectures and extends its operations into
neighboring prefectures. Their clients are mostly regional enterprises and local public utilities, although the
regional banks also lend to large corporations. In line with the recent trend among financial institutions toward
mergers or business tie-ups, various regional banks have announced or are currently negotiating or pursuing
integration transactions.

Trust banks, including MUTB, provide various trust services relating to money trusts, pension trusts and

investment trusts and offer other services relating to real estate, stock transfer agency and testamentary services
as well as banking services.

In recent years, almost all of the city banks have consolidated with other city banks and also, in some cases,

with trust banks. Integration among these banks was achieved, in most cases, through the use of a bank holding
company.

In addition to ordinary banks and trust banks, other private financial institutions in Japan, including shinkin
banks or credit associations, and credit cooperatives, are engaged primarily in making loans to small businesses
and individuals.

Government Financial Institutions

Since World War II, a number of government financial institutions have been established. These

corporations are wholly owned by the government and operate under its supervision. Their funds are provided
mainly from government sources. Certain types of operations undertaken by these institutions have been or are
planned to be assumed by, or integrated with the operations of, private corporations, through privatization and
other measures.

Among them are the following:

•

The Development Bank of Japan, which was established for the purpose of contributing to the economic
development of Japan by extending long-term loans, mainly to primary and secondary sector industries,
and which was reorganized as a joint stock company in October 2008 as part of its ongoing privatization
process;

33

•

•

•

Japan Finance Corporation, which was formed in October 2008, through the merger of the International
Financial Operations of the former Japan Bank for International Cooperation, National Life Finance
Corporation, Agriculture, Forestry and Fisheries Finance Corporation, and Japan Finance Corporation
for Small and Medium Enterprise, the primary purposes of which are to supplement and encourage the
private financing of exports, imports, overseas investments and overseas economic cooperation, and to
supplement private financing to the general public, small and medium enterprises and those engaged in
agriculture, forestry and fishery;

Japan Housing Finance Agency, which was originally established in June 1950 as the Government
Housing Loan Corporation for the purpose of providing housing loans to the general public, was
reorganized as an incorporated administrative agency and became specialized in securitization of
housing loans in April 2007; and

The Postal Service Agency, which was reorganized in April 2003 into Japan Post, a government-run
public services corporation, which is currently undergoing a privatization process and, as part of the
process, was privatized into the Japan Post Group companies in October 2007.

Supervision and Regulation

Japan

Supervision.

The Financial Services Agency, an agency of the Cabinet Office, or FSA, is responsible for

supervising and overseeing financial institutions, making policy for the overall Japanese financial system and
conducting insolvency proceedings with respect to financial institutions. The Bank of Japan, as the central bank
for financial institutions, also has supervisory authority over banks in Japan, based primarily on its contractual
agreements and transactions with the banks.

The Banking Law. Among the various laws that regulate financial institutions, the Banking Law and its
subordinated orders and ordinances are regarded as the fundamental law for ordinary banks and other private
financial institutions. The Banking Law addresses bank holding companies, capital adequacy, inspections and
reporting, as well as the scope of business activities, disclosure, accounting, limitation on granting credit and
standards for arm’s length transactions. In addition, the amendment to the Banking Law which came into effect
in April 2006 relaxed the standards relating to bank-agent eligibility, which encourages banks to expand their
operations through the use of bank agents. As a result of the amendment to the Banking Law and Financial
Instruments and Exchange Law effective as of June 2009, firewall regulations that separate bank holding
companies/banks from affiliated securities companies have become less stringent, and instead, bank holding
companies, banks and other financial institutions are now expressly required to establish an appropriate system to
cope with conflicts of interest that may arise from their business operations.

Bank holding company regulations. A bank holding company is prohibited from carrying on any business
other than the management of its subsidiaries and other incidental businesses. A bank holding company may have
any of the following as a subsidiary: a bank, a securities company, an insurance company and a foreign
subsidiary that is engaged in the banking, securities or insurance business. In addition, a bank holding company
may have as a subsidiary, any company that is engaged in a finance-related business, such as a credit card
company, a leasing company or an investment advisory company. Certain companies that are designated by a
ministerial ordinance as those that cultivate new business fields may also become the subsidiary of a bank
holding company.

Capital adequacy.

The capital adequacy guidelines adopted by the FSA that are applicable to Japanese bank
holding companies and banks with international operations closely follow the risk-weighted approach introduced by
the Basel Committee on Banking Supervision of the Bank for International Settlements, or BIS. In June 2004, the
Basel Committee released revised standards called “International Convergence of Capital Measurement and Capital
Standards: A Revised Framework,” or Basel II, which has become applicable to Japanese banks since the end of
March 2007. Basel II has three core elements, or “pillars”: requiring minimum regulatory capital, the self-regulation

34

of financial institutions based on supervisory review, and market discipline through the disclosure of information.
Basel II is based on the belief that these three “pillars” will collectively ensure the stability and soundness of
financial systems. Although these amendments do not change the minimum capital requirements applicable to
internationally active banks, they reflect the nature of risks at each bank more closely.

Basel II provides more risk-sensitive approaches and a range of options for measuring risks and determining

the capital requirements. As a result, Basel II also reflects the nature of risks at each bank more closely. Under
Basel II, we and our banking subsidiaries shifted from the Foundation Internal Ratings-Based Approach, or the
FIRB approach, to the Advanced Internal Ratings-Based Approach, or the AIRB approach, to calculate capital
requirements for credit risk as of the end of March 2009. The Standardized Approach is used for some
subsidiaries that are considered to be immaterial to the overall MUFG capital requirements and a few subsidiaries
adopted a phased rollout of the internal ratings-based approach. We and our banking subsidiaries adopted the
Standardized Approach to calculate capital requirements for operational risk. As for market risk, we and our
banking subsidiaries adopted the Internal Models Approach mainly to calculate general market risk and adopted
the Standardized Methodology to calculate specific risk.

The capital adequacy guidelines are in accordance with the standards of the BIS for a target minimum

standard ratio of capital to modified risk-weighted assets of 8.0% on both consolidated and non-consolidated
bases for banks with international operations, including BTMU and MUTB, or on a consolidated basis for bank
holding companies with international operations, such as MUFG. Modified risk-weighted assets is the sum of
risk-weighted assets compiled for credit risk purposes, market risk equivalent amount divided by 8% and
operational risk equivalent amount divided by 8%. The capital adequacy guidelines place considerable emphasis
on tangible common shareholders’ equity as the core element of the capital base, with appropriate recognition of
other components of capital.

Capital is classified into three tiers, referred to as Tier I, Tier II and Tier III. Tier I capital generally consists
of shareholders’ equity items, including common stock, preferred stock, capital surplus, retained earnings (which
includes deferred tax assets) and minority interests, but recorded goodwill and other items, such as treasury
stock, are deducted from Tier I capital. Tier II capital generally consists of:

•

•

•

•

•

The amount (up to a maximum of 0.6% of credit risk-weighted assets) by which eligible reserves for
credit losses exceed expected losses in the internal ratings-based approach, and general reserves for
credit losses, subject to a limit of 1.25% of modified risk-weighted assets determined by the partial use
of the Standardized Approach (including a phased rollout of the internal ratings-based approach);

45% of the unrealized gains on investment securities classified as “securities available for sale” under
Japanese accounting rules;

45% of the land revaluation excess;

the balance of perpetual subordinated debt; and

the balance of subordinated term debt with an original maturity of over five years and preferred stock
with a maturity up to 50% of Tier I capital.

Tier III capital generally consists of short-term subordinated debt with an original maturity of at least two

years and which is subject to a “lock-in” provision, which stipulates that neither interest nor principal may be
paid if such payment would cause the bank’s overall capital amount to be less than its minimum capital
requirement. At least 50% of the minimum total capital requirements must be maintained in the form of Tier I
capital.

Amendments to the capital adequacy guidelines limiting the portion of Tier I capital consisting of deferred

tax assets became effective on March 31, 2006. The restrictions are targeted at major Japanese banks and their
holding companies, which include MUFG and its banking subsidiaries. The cap was set at 20% for the fiscal year
ended March 31, 2009. The banks subject to the restrictions will not be able to reflect in their capital adequacy
ratios any deferred tax assets that exceed the relevant limit.

35

Inspection and reporting. By evaluating banks’ systems of self-assessment, auditing their accounts and

reviewing their compliance with laws and regulations, the FSA monitors the financial soundness of banks,
including the status and performance of their control systems for business activities. The FSA implemented the
Financial Inspection Rating System (“FIRST”) for deposit-taking financial institutions which has become
applicable to major banks since April 1, 2007. By providing inspection results in the form of graded evaluations
(i.e., ratings), the FSA expects this rating system to motivate financial institutions to voluntarily improve their
management and operations. Additionally, the FSA currently takes the “better regulation” approach in its
financial regulation and supervision. This consists of four pillars: optimal combination of rules-based and
principles-based supervisory approaches; timely recognition of priority issues and effective response;
encouraging voluntary efforts by financial firms and placing greater emphasis on providing them with incentives;
improving the transparency and predictability of regulatory actions, in pursuit of improvement of the quality of
financial regulation and supervision.

The FSA, if necessary to secure the sound and appropriate operation of a bank’s business, may request the

submission of reports or materials from, or conduct an on-site inspection of, the bank or the bank holding
company. If a bank’s capital adequacy ratio falls below a specified level, the FSA may request the bank to submit
an improvement plan and may restrict or suspend the bank’s operations when it determines that action is
necessary.

In addition, the Securities and Exchange Surveillance Commission inspects banks in connection with their

securities business as well as financial instruments business operators, such as securities firms.

The Bank of Japan also conducts inspections of banks similar to those undertaken by the FSA. The Bank of
Japan Law provides that the Bank of Japan and financial institutions may agree as to the form of inspection to be
conducted by the Bank of Japan.

Laws limiting shareholdings of banks.

The provisions of the Anti-Monopoly Law that prohibit a bank

from holding more than 5% of another company’s voting rights do not apply to a bank holding company.
However, the Banking Law prohibits a bank holding company and its subsidiaries from holding, on an
aggregated basis, more than 15% of the voting rights of companies other than those which can legally become
subsidiaries of bank holding companies.

On September 30, 2006, a law which imposes a limitation on a bank’s shareholding of up to the amount

equivalent to its Tier I capital took effect.

Financial Instruments and Exchange Law. The Financial Instruments and Exchange Law amending and

replacing the Securities and Exchange Law became effective on September 30, 2007. The new law not only
preserves the basic concepts of the Securities and Exchange Law, but is also intended to further protect investors.
The new law also regulates sales of a wide range of financial instruments and services, requiring financial
institutions to revise their sales rules and strengthen compliance frameworks and procedures accordingly. Among
the instruments that the Japanese banks deal with, derivatives, foreign currency-denominated deposits, and
variable insurance and annuity products are subject to regulations covered by sales-related rules of conduct.

Article 33 of the Financial Instruments and Exchange Law generally prohibits banks from engaging in

securities transactions. However, bank holding companies and banks may, through a domestic or overseas
securities subsidiary, conduct all types of securities business, with appropriate approval from the FSA. Similarly,
registered banks are permitted to provide securities intermediation services and engage in certain other similar
types of securities related transactions, including retail sales of investment funds and government and municipal
bonds.

Anti-money laundering laws. Under the Law for Prevention of Transfer of Criminal Proceeds, banks and

other financial institutions are required to report to responsible ministers, in the case of banks, the Commissioner
of the FSA, any assets which they receive while conducting their businesses that are suspected of being illicit
profits from criminal activity.

36

Law concerning trust business conducted by financial institutions. Under the Trust Business Law, joint
stock companies that are licensed by the Prime Minister as trust companies are allowed to conduct trust business.
In addition, under the Law Concerning Concurrent Operation for Trust Business by Financial Institutions, banks
and other financial institutions, as permitted by the Prime Minister, are able to conduct trust business. The Trust
Business Law was amended in December 2004 to expand the types of property that can be entrusted, to allow
non-financial companies to conduct trust business and to allow a new type of registration for trustees who
conduct only administration type trust business. The Trust Business Law was further amended in December 2006
in order to cope with new types of trust and to amend the duties imposed on the trustee in accordance with the
sweeping amendment to the Trust Law.

Deposit insurance system and government measures for troubled financial institutions. The Deposit
Insurance Law is intended to protect depositors if a financial institution fails to meet its obligations. The Deposit
Insurance Corporation was established in accordance with that law.

City banks (including BTMU), regional banks, trust banks (including MUTB), and various other credit

institutions participate in the deposit insurance system on a compulsory basis.

Under the Deposit Insurance Law, the maximum amount of protection is ¥10 million per customer within

one bank. Since April 1, 2005, all deposits are subject to the ¥10 million maximum, except for non-interest
bearing deposits that are redeemable on demand and used by the depositor primarily for payment and settlement
functions (the “settlement accounts”). Such deposit accounts are fully protected without a maximum amount
limitation. Certain types of deposits are not covered by the deposit insurance system, such as foreign currency
deposits and negotiable certificates of deposit. Currently, the Deposit Insurance Corporation charges insurance
premiums equal to 0.107% on the deposits in the settlement accounts, which are fully protected as mentioned
above, and premiums equal to 0.081% on the deposits in other accounts.

Since 1998, the failure of a number of large-scale financial institutions has led to the introduction of various

measures with a view to stabilizing Japan’s financial system, including financial support from the national budget.

Under the Deposit Insurance Law, a Financial Reorganization Administrator can be appointed by the Prime

Minister if a bank is unable to fully perform its obligations with its assets or may suspend or has suspended
repayment of deposits. The Financial Reorganization Administrator will take control of the assets of the troubled
bank, dispose of the assets and search for another institution willing to take over its business. The troubled bank’s
business may also be transferred to a “bridge bank” established by the Deposit Insurance Corporation for the
purpose of the temporary maintenance and continuation of operations of the troubled bank, and the bridge bank
will seek to transfer the troubled bank’s assets to another financial institution or dissolve the troubled bank. The
Deposit Insurance Corporation protects deposits, as described above, either by providing financial aid for costs
incurred by the financial institution succeeding the insolvent bank or by paying insurance money directly to
depositors. The financial aid, provided by the Deposit Insurance Corporation, may take the form of a monetary
grant, loan or deposit of funds, purchase of assets, guarantee or assumption of debts, subscription of preferred
stock, or loss sharing. The Deposit Insurance Law also provides for exceptional measures to cope with systemic
risk in the financial industry.

Further, against the background of the global financial crisis, in December 2008 the Law Concerning

Special Measures for Strengthening of Financial Function was amended in order to enable the Japanese
government to take special measures in order to strengthen the capital of financial institutions. Under the law,
banks and other financial institutions may apply to receive capital injections from the Deposit Insurance
Corporation, subject to government approval, which will be granted subject to the fulfillment of certain
requirements, including, among other things, the improvement of profitability and efficiency, facilitation of
financing to mid-small business enterprises in the local communities, and that the financial institution is not
insolvent. The application deadline is March 31, 2012.

37

Personal Information Protection Law. With regards to protection of personal information, the Personal

Information Protection Law became fully effective on April 1, 2005. Among other matters, the law requires
Japanese banking institutions to limit the use of personal information to the stated purpose and to properly
manage the personal information in their possession, and forbids them from providing personal information to
third parties without consent. If a bank violates certain provisions of the law, the FSA may advise or order the
bank to take proper action. The FSA announced related guidelines for the financial services sector in December
2004. In addition, the Banking Law and the Financial Instruments and Exchange Law provide certain provisions
with respect to appropriate handling of customer information.

Law concerning Protection of Depositors from Illegal Withdrawals Made by Counterfeit or Stolen
Cards. This law became effective in February 2006 and requires financial institutions to establish internal
systems to prevent illegal withdrawals of deposits made using counterfeit or stolen bank cards. The law also
requires financial institutions to compensate depositors for any amount illegally withdrawn using counterfeit
bank cards, unless the financial institution can verify that it acted in good faith without negligence, and there is
gross negligence on the part of the relevant account holder.

Recent Regulatory Actions.

In February 2007, BTMU received an administrative order from the FSA in
respect of compliance management at certain of its operations regarding the occurrence of certain inappropriate
transactions. The administrative order required, among other things, temporary suspensions of credit extensions to
new corporate customers, training of all staff and directors regarding compliance, temporary suspension of the
establishment of new domestic corporate business locations, strengthening of the management and internal control
framework, presentation and implementation of a business improvement plan, and reports on the progress of such
business improvement plan. Further, in June 2007, BTMU received separate administrative orders from the FSA in
respect of its overseas business and its investment trust sales and related business. The administrative orders
required, among other things, BTMU to make improvements of its compliance structure and related internal control
functions in its overseas business and its domestic investment trust sales and related business, presentation and
implementation of a business improvement plan, and reports on the progress of such business improvement plan.

Also, in January 2007, MUS received a business improvement order from the FSA following a
recommendation by the Securities and Exchange Surveillance Commission of Japan regarding securities
transactions conducted by MUS for its proprietary account. In June 2009, MUS further received from the FSA an
order to improve business operations pursuant to Section 51 of the Financial Instruments and Exchange Law and
a recommendation pursuant to the first paragraph of Section 34 of the Personal Information Protection Law in
connection with the incident where data including customer information were fraudulently stolen.

In July 2009, kabu.com Securities Co., Ltd., a consolidated subsidiary, received an order to improve

business operations from the FSA in connection with a former employee’s trading activities in violation of
Japanese insider trading regulations.

Proposed government reforms to restrict maximum interest rates on consumer lending business.
December 2006, the Diet passed legislation to reduce the maximum permissible interest rate under the Law
Concerning Acceptance of Investment, Cash Deposit and Interest Rate etc., which is currently 29.2% per annum,
to 20% per annum. Currently, consumer finance companies are able to charge interest rates exceeding the limits
stipulated by the Interest Rate Restriction Law provided that they satisfy certain conditions set forth in the Law
Concerning Lending Business. This so-called “gray-zone interest” will be abolished as well. Such reduction in
the maximum permissible interest rate will be implemented before mid-2010. Under the reforms, all interest rates
will be subject to the lower limits (15-20% per annum) imposed by the Interest Rate Restriction Law, which will
compel, or has already compelled, lending institutions, including our consumer finance subsidiaries and equity
method investees, to lower the interest rates they charge borrowers.

In

In addition, the Supreme Court of Japan recently passed decisions concerning interest exceeding the limits

stipulated by the Interest Rate Restriction Law, and the business environment for consumer finance companies in

38

Japan has been altered in favor of borrowers. Due to such changes, borrowers’ demands for reimbursement of
such excess interest that they have paid to the consumer finance companies have significantly increased and are
still holding at high levels.

Furthermore, new regulations that are scheduled to be effective before mid-2010 are expected to require,

among other things, consumer finance companies to review the repayment capability of borrowers before
lending, thereby limiting the amount of borrowing available to individual borrowers.

United States

As a result of our operations in the United States, we are subject to extensive US federal and state

supervision and regulation.

Overall supervision and regulation. We are subject to supervision, regulation and examination with
respect to our US operations by the Board of Governors of the Federal Reserve System, or the Federal Reserve
Board, pursuant to the US Bank Holding Company Act of 1956, as amended, or the BHCA, and the International
Banking Act of 1978, as amended, or the IBA, because we are a bank holding company and a foreign banking
organization, respectively, as defined pursuant to those statutes. The Federal Reserve Board functions as our
“umbrella” supervisor under amendments to the BHCA effected by the Gramm-Leach-Bliley Act of 1999, which
among other things:

•

•

prohibited further expansion of the types of activities in which bank holding companies, acting directly
or through nonbank subsidiaries, may engage;

authorized qualifying bank holding companies to opt to become “financial holding companies,” and
thereby acquire the authority to engage in an expanded list of activities; and

• modified the role of the Federal Reserve Board by specifying new relationships between the Federal
Reserve Board and the functional regulators of nonbank subsidiaries of both bank holding companies
and financial holding companies.

The BHCA generally prohibits each of a bank holding company and a foreign banking organization that

maintains branches or agencies in the United States from, directly or indirectly, acquiring more than 5% of the
voting shares of any company engaged in nonbanking activities in the United States unless the bank holding
company or foreign banking organization has elected to become a financial holding company, as discussed
above, or the Federal Reserve Board has determined, by order or regulation, that such activities are so closely
related to banking as to be a proper incident thereto and has granted its approval to the bank holding company or
foreign banking organization for such an acquisition. The BHCA also requires a bank holding company or
foreign banking organization that maintains branches or agencies in the United States to obtain the prior approval
of an appropriate federal banking authority before acquiring, directly or indirectly, the ownership of more than
5% of the voting shares or control of any US bank or bank holding company. In addition, under the BHCA, a US
bank or a US branch or agency of a foreign bank is prohibited from engaging in various tying arrangements
involving it or its affiliates in connection with any extension of credit, sale or lease of any property or provision
of any services.

On October 6, 2008, we became a financial holding company. At the same time, BTMU, MUTB, and
UNBC, which are also bank holding companies, elected to become financial holding companies. As noted above,
as a financial holding company we are authorized to engage in an expanded list of activities. These activities
include those deemed to be financial in nature or incidental to such financial activity, including among other
things merchant banking, insurance underwriting, and a full range of securities activities. In addition, we are
permitted to engage in certain specified nonbanking activities deemed to be closely related to banking, without
prior notice to or approval from the Federal Reserve Board. To date, we have utilized this expanded authority by
electing to engage in certain securities activities, including securities underwriting, indirectly through certain of
our securities subsidiaries. In order to maintain our status as a financial holding company that allows us to

39

expand our activities, we must continue to meet certain standards established by the Federal Reserve Board.
Those standards require that we exceed the minimum standards applicable to bank holding companies that have
not elected to become financial holding companies. These higher standards include meeting the “well
capitalized” and “well managed” standards for financial holding companies as defined in the regulations of the
Federal Reserve Board. In addition, as a financial holding company, we must ensure that our US banking
subsidiaries identified below meet certain minimum standards under the Community Reinvestment Act of 1977.
At this time, we continue to comply with these standards.

US branches and agencies of subsidiary Japanese banks. Under the authority of the IBA, our banking
subsidiaries , BTMU and MUTB, operate seven branches, two agencies and five representative offices in the
United States. BTMU operates branches in Los Angeles and San Francisco, California; Chicago, Illinois; New
York, New York; Portland, Oregon; and Seattle, Washington; agencies in Atlanta, Georgia and Houston, Texas;
and representative offices in Washington, D.C; Minneapolis, Minnesota; Dallas, Texas; Jersey City, New Jersey;
and Florence, Kentucky. MUTB operates a branch in New York, New York.

The IBA provides, among other things, that the Federal Reserve Board may examine US branches and
agencies of foreign banks, and that each such branch and agency shall be subject to on-site examination by the
appropriate federal or state bank supervisor as frequently as would a US bank. The IBA also provides that if the
Federal Reserve Board determines that a foreign bank is not subject to comprehensive supervision or regulation
on a consolidated basis by the appropriate authorities in its home country, or if there is reasonable cause to
believe that the foreign bank or its affiliate has committed a violation of law or engaged in an unsafe or unsound
banking practice in the United States, the Federal Reserve Board may order the foreign bank to terminate
activities conducted at a branch or agency in the United States.

US branches and agencies of foreign banks must be licensed, and are also supervised and regulated, by a
state or by the Office of the Comptroller of the Currency, or the OCC, the federal regulator of national banks. All
of the branches and agencies of BTMU and MUTB in the United States are state-licensed. Under US federal
banking laws, state-licensed branches and agencies of foreign banks may engage only in activities that would be
permissible for their federally-licensed counterparts, unless the Federal Reserve Board determines that the
additional activity is consistent with sound practices. US federal banking laws also subject state-licensed
branches and agencies to the single-borrower lending limits that apply to federal branches and agencies, which
generally are the same as the lending limits applicable to national banks, but are based on the capital of the entire
foreign bank.

As an example of state supervision, the branches of BTMU and MUTB in New York are licensed by the New

York State Superintendent of Banks, or the Superintendent, pursuant to the New York Banking Law. Under the
New York Banking Law and the Superintendent’s Regulations, each of BTMU and MUTB must maintain with
banks in the State of New York eligible assets as defined and in amounts determined by the Superintendent. These
New York branches must also submit written reports concerning their assets and liabilities and other matters, to the
extent required by the Superintendent, and are examined at periodic intervals by the New York State Banking
Department. In addition, the Superintendent is authorized to take possession of the business and property of BTMU
and MUTB located in New York whenever events specified in the New York Banking Law occur.

US banking subsidiaries. We indirectly own and control three US banks:

• Bank of Tokyo-Mitsubishi UFJ Trust Company, New York, New York (through BTMU, a registered

bank holding company),

• Mitsubishi UFJ Trust & Banking Corporation (U.S.A.), New York, New York (through MUTB, a

registered bank holding company), and

• Union Bank (through BTMU and its subsidiary, UNBC, a registered bank holding company).

Bank of Tokyo-Mitsubishi UFJ Trust Company and Mitsubishi UFJ Trust & Banking Corporation (U.S.A.)
are chartered by the State of New York and are subject to the supervision, examination and regulatory authority

40

of the Superintendent pursuant to the New York Banking Law. Union Bank is a national bank subject to the
supervision, examination and regulatory authority of the OCC pursuant to the National Bank Act.

The Federal Deposit Insurance Corporation, or the FDIC, is the primary federal agency responsible for the
supervision, examination and regulation of the two New York-chartered banks referred to above. The FDIC may
take enforcement action, including the issuance of prohibitive and affirmative orders, if it determines that a
financial institution under its supervision has engaged in unsafe or unsound banking practices, or has committed
violations of applicable laws and regulations. The FDIC insures the deposits of all three US banking subsidiaries
up to legally specified maximum amounts. In the event of the failure of an FDIC-insured bank, the FDIC is
virtually certain to be appointed as receiver, and would resolve the failure under provisions of the Federal
Deposit Insurance Act. An FDIC-insured institution that is affiliated with a failed or failing FDIC-insured
institution can be required to indemnify the FDIC for losses resulting from the insolvency of the failed
institution, even if this causes the affiliated institution also to become insolvent. In the liquidation or other
resolution of a failed FDIC-insured depository institution, deposits in its US offices and other claims for
administrative expenses and employee compensation are afforded priority over other general unsecured claims,
including deposits in offices outside the United States, non-deposit claims in all offices and claims of a parent
company. Moreover, under longstanding Federal Reserve Board policy, a bank holding company is expected to
act as a source of financial strength for its banking subsidiaries and to commit resources to support such banks.

Bank capital requirements and capital distributions. Our US banking subsidiaries are subject to applicable

risk-based and leverage capital guidelines issued by US regulators for banks and bank holding companies. In
addition, BTMU and MUTB, as foreign banking organizations that have US branches and agencies and that are
controlled by us as a financial holding company, are subject to the Federal Reserve’s requirements that they be
“well-capitalized based on Japan’s risk based capital standards, as well as “well managed”. All of our US banking
subsidiaries and BTMU, MUTB, and UNBC are “well capitalized” as defined under, and otherwise comply with, all
US regulatory capital requirements applicable to them. The Federal Deposit Insurance Corporation Improvement
Act of 1991, or FDICIA, provides, among other things, for expanded regulation of insured depository institutions,
including banks, and their parent holding companies. As required by FDICIA, the federal banking agencies have
established five capital tiers ranging from “well capitalized” to “critically undercapitalized” for insured depository
institutions. As an institution’s capital position deteriorates, the federal banking regulators may take progressively
stronger actions, such as further restricting affiliate transactions, activities, asset growth or interest payments. In
addition, FDICIA generally prohibits an insured depository institution from making capital distributions, including
the payment of dividends, or the payment of any management fee to its holding company, if the insured depository
institution would subsequently become undercapitalized.

The availability of dividends from insured depository institutions in the United States is limited by various
other statutes and regulations. The National Bank Act and other federal laws prohibit the payment of dividends
by a national bank under various circumstances and limit the amount a national bank can pay without the prior
approval of the OCC. In addition, state-chartered banking institutions are subject to dividend limitations imposed
by applicable federal and state laws.

Other regulated US subsidiaries. Our nonbank subsidiaries that engage in securities-related activities in

the United States are regulated by appropriate functional regulators, such as the SEC, any self-regulatory
organizations of which they are members, and the appropriate state regulatory agencies. These nonbank
subsidiaries are required to meet separate minimum capital standards as imposed by those regulatory authorities.

Anti-Money Laundering Initiatives and the USA PATRIOT Act. A major focus of US governmental policy

relating to financial institutions in recent years has been aimed at preventing money laundering and terrorist
financing. The USA PATRIOT Act of 2001 substantially broadened the scope of US anti-money laundering laws
and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and
penalties and expanding the extra-territorial jurisdiction of the United States. The US Department of the Treasury
has issued a number of implementing regulations that impose obligations on financial institutions to maintain
appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist

41

financing, and to verify the identity of their customers. In addition, the bank regulatory agencies carefully
scrutinize the adequacy of an institution’s policies, procedures and controls. As a result, there has been an
increased number of regulatory sanctions and law enforcement authorities have been taking a more active role.
Failure of a financial institution to maintain and implement adequate policies, procedures and controls to prevent
money laundering and terrorist financing could in some cases have serious legal and reputational consequences
for the institution, including the incurring of expenses to enhance the relevant programs, the imposition of
limitations on the scope of their operations and the imposition of fines and other monetary penalties.

Recent Regulatory Actions.

In December 2006, we and BTMU entered into a written agreement with the

Federal Reserve Banks of San Francisco and New York and the New York State Banking Department, and Bank
of Tokyo-Mitsubishi UFJ Trust Company, or BTMUT, a subsidiary of BTMU, consented to an Order to Cease
and Desist issued by the Federal Deposit Insurance Corporation and the New York State Banking Department, to
strengthen the compliance framework and operations of BTMU, the New York Branch of BTMU and BTMUT,
respectively, for preventing money laundering. As a result of the written agreement and the consent to the Order
to Cease and Desist, we were required, among other things, to implement corrective measures and submit
periodic progress reports to the authorities. The terms of each of the written agreement and the Order to Cease
and Desist were deemed to be complied with and each was formally terminated by the respective supervisory
parties thereto on September 29, 2008.

Separately, on September 14, 2007, Union Bank (then known as Union Bank of California, N.A.) agreed to
a consent order and payment of a civil money penalty of $10.0 million assessed concurrently by the US Office of
the Comptroller of the Currency, or OCC, and the US Financial Crimes Enforcement Network, relating to the
Bank Secrecy Act/Anti-Money Laundering compliance controls and processes of Union Bank. On September 17,
2007, Union Bank also entered into a deferred prosecution agreement with the US Department of Justice under
which Union Bank agreed to a payment of $21.6 million and the government agreed to defer prosecution of a
Bank Secrecy Act Program violation primarily related to the discontinued international banking business of
Union Bank and dismiss prosecution if Union Bank met the conditions of the deferred prosecution agreement,
including complying with the OCC consent order for one year. Union Bank was deemed to be in compliance with
the consent order and the consent order was formally terminated by the supervisory parties thereto on
September 25, 2008. The conditions of the deferred prosecution agreement were deemed to be met and the
deferred prosecution agreement was formally terminated on October 1, 2008.

42

C. Organizational Structure

The following chart presents our corporate structure summary as at March 31, 2009:

Mitsubishi UFJ Financial Group, Inc.

Domestic

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Senshu Bank, Ltd.

Overseas

UnionBanCal Corporation
Mitsubishi UFJ Wealth Management Bank (Switzerland), Ltd.

Domestic

Mitsubishi UFJ Trust and Banking Corporation

Overseas

Mitsubishi UFJ Global Custody S.A. 
Mitsubishi UFJ Trust & Banking Corporation (U.S.A.)

Domestic

Mitsubishi UFJ Securities Co., Ltd. 
kabu.com Securities Co., Ltd. 
Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd.

Overseas

Mitsubishi UFJ Securities International plc
Mitsubishi UFJ Securities (USA), Inc.
Mitsubishi UFJ Trust International Limited
Mitsubishi UFJ Securities (HK) Holdings, Limited

g
n
i
k
n
a
B

s
s
e
n
i
s
u
b

g
n
i
k
n
a
b

t
s
u
r
T

s
s
e
n
i
s
u
b

s
e
i
t
i
r
u
c
e
S

s
s
e
n
i
s
u
b

t
i
d
e
r
C

d
r
a
c

s
s
e
n
i
s
u
b

Domestic

Mitsubishi UFJ NICOS Co., Ltd.

g
n
i
s
a
e
L

s
s
e
n
i
s
u
b

r
e
h
t
O

s
e
s
s
e
n
i
s
u
b

Domestic

NBL Co., Ltd.
BOT Lease Co., Ltd.

Overseas

BTMU Capital Corporation
PT U Finance Indonesia
BTMU Leasing & Finance, Inc.
PT. BTMU-BRI Finance

Domestic

Mitsubishi UFJ Factors Limited
MU Frontier Servicer Co., Ltd.
Mitsubishi UFJ Capital Co., Ltd.
KOKUSAI Asset Management Co., Ltd.
Mitsubishi UFJ Asset Management Co., Ltd.
MU Investments Co., Ltd.
Mitsubishi UFJ Reserch & Consulting Co., Ltd.
Mitsubishi UFJ  Real Estate Services Co., Ltd.

43

 
 
Set forth below is a list of our principal consolidated subsidiaries at March 31, 2009:

Name

Country of
Incorporation

Proportion of
Ownership
Interest
(%)

Proportion of
Voting
Interest(1)
(%)

The Bank of Tokyo-Mitsubishi UFJ, Ltd. . . . . . . . . . . . . . . . . . . . .
The Senshu Bank, Ltd.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Trust and Banking Corporation . . . . . . . . . . . . . . .
Mitsubishi UFJ Securities Co., Ltd.
. . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd. . . . . . . . . . .
kabu.com Securities Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ NICOS Co., Ltd.
. . . . . . . . . . . . . . . . . . . . . . . . . .
Tokyo Credit Services, Ltd.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ryoshin DC Card Company, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . .
Tokyo Associates Finance Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . .
NBL Co., Ltd.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Factors Limited . . . . . . . . . . . . . . . . . . . . . . . . . . .
MU Frontier Servicer Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Capital Co., Ltd.
. . . . . . . . . . . . . . . . . . . . . . . . . . .
MU Hands-on Capital Co., Ltd.
Defined Contribution Plan Consulting of Japan Co., Ltd.
. . . . . . .
. . . . . . . . . . . . . . . . . . . .
KOKUSAI Asset Management Co., Ltd.
Mitsubishi UFJ Asset Management Co., Ltd. . . . . . . . . . . . . . . . . .
MU Investments Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Real Estate Services Co., Ltd. . . . . . . . . . . . . . . . .
Mitsubishi UFJ Personal Financial Advisers Co., Ltd. . . . . . . . . . .
Mitsubishi UFJ Research and Consulting Ltd.
. . . . . . . . . . . . . . . .
MU Business Engineering, Ltd.
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Shareholder Services Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . .
BOT Lease Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UnionBanCal Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Trust & Banking Corporation (U.S.A.) . . . . . . . . .
Mitsubishi UFJ Global Custody S.A.
. . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Wealth Management Bank (Switzerland), Ltd. . . .
Mitsubishi UFJ Securities International plc . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Securities (USA), Inc.
. . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Trust International Limited . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Securities (HK) Holdings, Limited . . . . . . . . . . . . Peoples’ Republic

Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
USA
USA
Luxembourg
Switzerland
UK
USA
UK

Mitsubishi UFJ Securities (Singapore), Limited . . . . . . . . . . . . . . .
BTMU Capital Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU Leasing & Finance, Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . .
PT U Finance Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PT. BTMU-BRI Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU Lease (Deutschland) GmbH . . . . . . . . . . . . . . . . . . . . . . . .
BTMU Participation (Thailand) Co., Ltd. . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Baillie Gifford Asset Management Limited . . . . .
MU Trust Consulting (Shanghai) Co., Ltd. . . . . . . . . . . . . . . . . . . . Peoples’ Republic

of China
Singapore
USA
USA
Indonesia
Indonesia
Germany
Thailand
UK

100.00%
67.47%
100.00%
100.00%
50.98%
54.86%
84.98%
74.00%
75.20%
100.00%
89.74%
100.00%
94.44%
40.26%
50.00%
77.49%
53.35%
100.00%
100.00%
100.00%
73.69%
69.45%
100.00%
50.00%
22.57%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
95.00%
55.00%
100.00%
24.49%
51.00%

100.00%
67.59%
100.00%
100.00%
50.98%
54.86%
84.98%
74.00%
75.20%
100.00%
89.74%
100.00%
94.44%
40.26%
50.00%
77.49%
53.41%
100.00%
100.00%
100.00%
73.69%
69.45%
100.00%
50.00%
22.57%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
95.00%
55.00%
100.00%
24.49%
51.00%

Mitsubishi UFJ Securities (India) Private Limited . . . . . . . . . . . . .

Note:
(1)

Includes shares held in trading accounts, custody accounts and others.

44

of China
India

100.00%
100.00%

100.00%
100.00%

D. Property, Plants and Equipment

Premises and equipment at March 31, 2008 and 2009 consisted of the following:

At March 31,

2008

2009

(in millions)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 430,968
585,196
639,228
355,484
6,679

¥ 413,257
566,310
653,211
356,985
16,290

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,017,555
941,749

2,006,053
962,637

Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,075,806

¥1,043,416

Our registered address is 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo. At March 31, 2009, we and our

subsidiaries conducted our operations either in the premises we owned or in the properties we leased.

The following table presents the areas and book values of our material offices and other properties at

March 31, 2009:

Owned land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leased land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Owned buildings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leased buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Area

(in thousands of square feet)
40,646
9,321
30,103
17,493

Book value

(in millions)
¥413,257
—
238,216
—

The buildings and land we own are primarily used by us and our subsidiaries as offices and branches. Most

of the buildings and land we own are free from material encumbrances.

During the fiscal year ended March 31, 2009, we invested approximately ¥154.6 billion in our subsidiaries

primarily for office renovations and relocation.

Item 4A. Unresolved Staff Comments.

None.

45

Item 5. Operating and Financial Review and Prospects.

The following discussion and analysis should be read in conjunction with “Item 3.A. Key Information—
Selected Financial Data,” “Selected Statistical Data” and our consolidated financial statements and related
notes included elsewhere in this Annual Report.

Roadmap to Reading the Discussion of Our Operating and Financial Review and Prospects

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recent Developments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Business Environment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Critical Accounting Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounting Changes and Recently Issued Accounting Pronouncements . . . . . . . . . . . . . . . . . . . . . . .

A. Operating Results

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Results of Operations

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Business Segment Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Geographic Segment Analysis

Effect of Change in Exchange Rates on Foreign Currency Translation . . . . . . . . . . . . . . . . . . . . . . . .

B. Liquidity and Capital Resources

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-exchange Traded Contracts Accounted for at Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C. Research and Development, Patents and Licenses, etc.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Trend Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

E. Off-balance-sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F. Tabular Disclosure of Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

G. Safe Harbor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

47

50

55

60

66

67

67

78
82

83

84

84

96

100

100

100

101

107

107

46

Introduction

We are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU, Mitsubishi UFJ Trust
and Banking Corporation, or MUTB, Mitsubishi UFJ Securities Co., Ltd., or MUS, Mitsubishi UFJ NICOS Co.,
Ltd., or Mitsubishi UFJ NICOS, and other subsidiaries. Through our subsidiaries and affiliated companies, we
engage in a broad range of financial businesses and services, including commercial banking, investment banking,
trust banking and asset management services, securities businesses, and credit card businesses, and provide
related services to individual and corporate customers.

Key Financial Figures

The following are some key figures prepared in accordance with US GAAP relating to our business.

Effective April 1, 2008, we discontinued netting our derivative assets and liabilities under master netting

agreements and recorded them on a gross basis. To provide a consistent presentation, we restated average
balances, as well as period-end balances, of total assets for prior periods. Accordingly, all of the percentages to
total assets or total average assets included elsewhere in this Annual Report have been restated. See “Netting of
Cash Collateral against Derivative Exposures” under “Accounting Changes” in Note 1 to our consolidated
financial statements included elsewhere in this Annual Report for details.

Fiscal years ended March 31,

2007

2008

2009

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets (at end of period) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

2,329.8
358.6
1,947.9
2,784.2
581.3
188,929.5

(in billions)
2,279.7
¥
385.7
1,778.1
3,659.7
(542.4)
195,766.1

¥

2,296.4
626.9
175.1
3,572.5
(1,468.0)
193,499.4

Our revenues consist of net interest income and non-interest income.

Net interest income is a function of:

•

•

•

•

•

the amount of interest-earning assets,

the amount of interest-bearing funds,

the general level of interest rates,

the so-called “spread,” or the difference between the rate of interest earned on interest-earning
assets and the rate of interest paid on interest-bearing liabilities, and

the proportion of interest-earning assets financed by non-interest-bearing liabilities and equity.

Non-interest income consists of:

•

fees and commissions, including

•

•

•

•

•

•

trust fees,

fees on funds transfer and service charges for collections,

fees and commissions on international business,

fees and commissions on credit card business,

service charges on deposits,

fees and commissions on securities business,

47

•

•

•

•

•

•

fees on real estate business,

insurance commissions,

fees and commissions on stock transfer agency services,

guarantee fees,

fees on investment funds business, and

other fees and commissions;

•

•

•

•

•

•

foreign exchange gains (losses)—net, which primarily include net gains (losses) on currency
derivative instruments entered into for trading purposes and transaction gains (losses) on the
translation into Japanese yen of monetary assets and liabilities denominated in foreign currencies;

trading account profits (losses)—net, which primarily include net profits (losses) on trading
account securities and interest rate derivative contracts entered into for trading purposes;

investment securities gains (losses)—net, which primarily include net gains (losses) on sales and
impairment losses on securities available for sale;

equity in earnings (losses) of equity method investees;

gains on sales of loans; and

other non-interest income.

Provision for credit losses is charged to operations to maintain the allowance for credit losses at a level

deemed appropriate by management.

Core Business Areas

We operate our main businesses under an integrated business group system, which integrates the operations

of BTMU, MUTB, MUS, Mitsubishi UFJ NICOS and other subsidiaries in the following three areas—Retail,
Corporate and Trust Assets. These three businesses serve as the core sources of our revenue. Operations that are
not covered under the integrated business group system are classified under Global Markets and Other.

Our business segment information is based on financial information prepared in accordance with Japanese
GAAP, as adjusted in accordance with internal management accounting rules and practice and is not consistent
with our consolidated financial statements included elsewhere in this report, which have been prepared in
accordance with US GAAP. The following chart illustrates the relative contributions to operating profit for the
fiscal year ended March 31, 2009 of the three core business areas and the other business areas based on our
business segment information:

Global Markets and
Other
4%

Integrated Trust Assets
Business Group
7%

Integrated Corporate
Banking Business Group
(Overseas)
25%

Integrated Retail
Banking Business Group
30%

Integrated Corporate
Banking Business Group
(Domestic)
34%

48

Establishment of Mitsubishi UFJ Financial Group

In October 2005, MTFG merged with UFJ Holdings to form MUFG. At the same time, our respective trust

banking and securities companies merged to form MUTB and MUS. Subsequently, our subsidiary commercial
banks merged to form BTMU in January 2006, and our credit card subsidiaries merged to form Mitsubishi UFJ
NICOS in April 2007.

The merger marked the creation of a comprehensive financial group with a broad and balanced domestic

and international network, and a diverse range of services provided by group companies, complemented by one
of the largest customer bases in Japan.

As part of our integration process, we successfully completed a significant project to fully integrate the IT

systems of the merged commercial bank subsidiaries and the merged trust bank subsidiaries respectively in
December 2008.

The merger of MTFG and UFJ Holdings was accounted for under the purchase method of accounting, and
the assets and liabilities of UFJ Holdings and its subsidiaries were recorded at fair value as of October 1, 2005.
The purchase price of UFJ Holdings amounted to ¥4,406.1 billion, of which ¥4,403.2 billion was recorded in
capital surplus relating to the merger with UFJ Holdings and the direct acquisition costs of ¥2.9 billion were
included in the purchase price. The total fair value of UFJ Holdings’ net assets acquired was ¥2,673.0 billion and
the goodwill relating to the merger with UFJ Holdings was ¥1,733.1 billion.

We test goodwill for impairment annually or more frequently if events or changes in circumstances indicate

that goodwill may be impaired. In the fiscal year ended March 31, 2009, we recorded ¥845.8 billion of
impairment related to goodwill, including the goodwill recorded in connection with our acquisitions other than
the merger with UFJ Holdings, due to the global financial crisis and recession that negatively affected the fair
value of certain of our reporting units for the purposes of our impairment testing, compared to ¥893.7 billion of
impairment related to goodwill recorded in the previous fiscal year. For further information, see “Item 3. Key
Information—Risk Factors—If the goodwill recorded in connection with our acquisitions becomes impaired, we
may be required to record impairment charges, which may adversely affect our financial results and price of our
securities,” and Note 9 to our consolidated financial statements included elsewhere in this Annual Report.

49

Recent Developments

Strategic Global Alliance with Morgan Stanley

On October 13, 2008, we acquired approximately $7,839.2 million of perpetual non-cumulative convertible

preferred stock without voting rights and approximately $1,160.8 million of perpetual non-cumulative
non-convertible preferred stock without voting rights issued by Morgan Stanley. The acquisition was made
pursuant to an agreement with Morgan Stanley to enter into a strategic capital alliance originally executed on
September 29, 2008, and subsequently modified on October 3, October 8 and October 13, 2008.

The acquired shares of the convertible preferred stock are convertible to 310,464,033 shares of common
stock (at a conversion price of $25.25 per share). One half of the convertible preferred stock will be converted to
common stock one year after our investment if the price of Morgan Stanley’s common stock exceeds $37.875 for
20 or more days out of 30 consecutive trading days. The remainder of the convertible preferred stock will be
converted to common stock two years after our investment if the same conditions are satisfied. The
non-convertible preferred stock is redeemable at Morgan Stanley’s option on or after three years of our
investment for an aggregate redemption price of approximately $1,276.9 million. The shares of the convertible
and non-convertible preferred stock have a fixed non-cumulative annual dividend of 10%. The convertible shares
provided us with an aggregate of approximately 21% of the voting rights of Morgan Stanley on a fully diluted
basis at the time of our acquisition. The conversion terms contained in the convertible preferred stock were
approved by Morgan Stanley’s shareholders on February 9, 2009.

We have the right to maintain 20% of the voting rights in Morgan Stanley on a fully diluted basis and the

right to appoint one director and one observer to its board as long as we hold a voting right ratio of 10% or more
in Morgan Stanley on a fully diluted basis. Beginning one year after our investment, we also have the right to
demand that Morgan Stanley register, under the US Securities Act of 1933, the shares of common stock issued or
issuable by Morgan Stanley that we request to be so registered on up to five occasions, subject to certain
conditions. Effective March 10, 2009, Mr. Nobuyuki Hirano, a director of MUFG, was appointed as a member of
the board of directors of Morgan Stanley.

In a separate transaction, on October 28, 2008, the US Department of the Treasury purchased for an

aggregate purchase price of $10,000,000,000, (1) 10,000,000 shares of fixed rate cumulative perpetual preferred
stock, and (2) a warrant to purchase up to 65,245,759 shares of common stock, of Morgan Stanley. The purchase
was transacted pursuant to the “Capital Purchase Program,” announced on October 14, 2008, through which the
US Department of the Treasury invests in various US financial institutions. As a result of this purchase, our
voting right ratio in Morgan Stanley decreased to approximately 20% on a fully diluted basis.

Since this initial investment, we have acquired 29,375,000 additional shares of Morgan Stanley common

stock for a total of $705 million and sold back to Morgan Stanley $705 million of the perpetual non-cumulative
non-convertible preferred stock on May 22, 2009, and we have also acquired 17,178,055 additional shares of
Morgan Stanley common stock for a total of approximately $471 million on June 11, 2009, in each case at the
time of public offerings of common stock by Morgan Stanley. We beneficially own approximately 20% of the
common stock of Morgan Stanley (assuming full conversion of the convertible preferred stock of Morgan
Stanley we currently own).

Through our capital alliance with Morgan Stanley, we plan to pursue a global strategic alliance in corporate

and investment banking, retail, investment management and other businesses. On March 26, 2009, we signed a
memorandum of understanding with Morgan Stanley to form a securities joint venture combining MUS and
Morgan Stanley Japan Securities Co., Ltd. by March 2010. The proposed joint venture is expected to become a
new industry leader in Japan offering a large domestic retail brokerage network, a full range of institutional
businesses and significant global reach. MUFG will own a 60% interest of the joint venture while Morgan
Stanley will own a 40% interest. On June 30, 2009, the scope of the strategic alliance was expanded into new
geographies and businesses. These include:

• A global alliance in corporate and investment banking consisting of the creation of Morgan Stanley

MUFG Loan Partners, LLC., a loan marketing joint venture that will be focused on generating attractive

50

credit opportunities for both companies and provide clients in the United States, Canada and Latin
America (subject to clearance of any regulatory requirement in each jurisdiction) with access to
expanded, world-class lending and capital markets services from both companies;

• Business referral arrangements in Asia, Europe, the Middle East and Africa, which are intended to cover

a number of products and services, including capital markets, loans, fixed income sales and other
ancillary businesses;

• A commodities-specific initiative, in the form of a referral agreement for commodities transactions

executed outside of Japan, which will enable BTMU to refer its clients to the Morgan Stanley Capital
Group for commodity transactions and receive referral fees upon completion of any deals; and

•

Secondment of personnel to share best practices and expertise, through which the secondees will be able
to share knowledge and help maximize the benefits of the strategic alliance across a variety of business
areas.

Completion of Tender Offer and Merger to Acquire All the Outstanding Shares of UNBC

In September 2008, we and BTMU completed a cash tender offer for approximately $3.5 billion to purchase

all of the outstanding shares of UnionBanCal Corporation, or UNBC, that we and our affiliates did not already
own. As of the close of the offer, shares representing approximately 33% of the outstanding shares of UNBC had
been validly tendered or guaranteed to be delivered. When added to our and our affiliates’ 64% stake at the time,
the amount represented approximately 97% of UNBC’s total outstanding shares. All shareholders who tendered
shares were paid $73.50 per share in cash. In November 2008, BTMU and UNBC completed a second-step
merger as a result of which UNBC became a wholly owned subsidiary of BTMU.

Completion of Tender Offer to Acquire Additional Shares of ACOM

In October 2008, we completed a tender offer and acquired, for ¥4,000 per share in cash, 38,140,009 shares

of common stock of ACOM CO., LTD., an equity method investee engaged in the consumer loan business in
which we owned approximately 15% of the voting rights. As a result, we increased our voting rights to
approximately 40%. Although ACOM remains an equity method investee under US GAAP, our increased
ownership in ACOM complements our related efforts to increase the competitiveness of our consumer finance
operations, which include a business and capital alliance among JACCS Co., Ltd., another equity method
investee, BTMU and Mitsubishi UFJ NICOS centering on credit card related operations, installment credit sales,
settlement operations and housing loan related operations, as described below.

Strategic Business and Capital Alliance between MUTB and Aberdeen

In October 2008, MUTB and Aberdeen Asset Management PLC, or Aberdeen, entered into a strategic
business and capital alliance. Aberdeen is an asset management company based in Scotland and manages a wide
range of investment products, including emerging market equities, global equities, and global fixed income.
Under the business alliance, MUTB has an exclusive right to access Aberdeen’s services on behalf of domestic
institutional investors, such as pension funds, in Japan. We believe the alliance will enable MUTB to meet its
clients’ demands for global investment products.

As part of the capital alliance, MUTB initially acquired 9.9% of Aberdeen’s issued share capital for

approximately ¥20 billion in October 2008. As of December 8, 2008, MUTB owned 11.0% of Aberdeen’s issued
share capital. Subject to receiving the required regulatory approvals, MUTB intends to increase its holdings but
not to a level that exceeds 19.9%. MUTB may appoint a representative as a nonexecutive director to the board of
Aberdeen if MUTB’s holding reaches 15% or more of Aberdeen’s issued share capital. MUTB has agreed that,
until April 2, 2010, it will not raise its holding in Aberdeen’s shares beyond 19.9%, subject to some exceptions.

51

MUTB and Aberdeen plan to continue to work towards further strengthening their strategic alliance by

collaborating in marketing and product development.

Agreement on Integration between Bank of Ikeda and Senshu Bank

In May 2008, BTMU signed a basic agreement with The Senshu Bank, Ltd., or Senshu Bank, a regional

bank subsidiary of BTMU headquartered in Osaka, and The Bank of Ikeda Ltd., or Bank of Ikeda, another
regional bank headquartered in Osaka, concerning the planned business integration between the two regional
banks.

On May 25, 2009, Bank of Ikeda and Senshu Bank entered into an agreement concerning their business
integration (the “Business Integration”), with BTMU, which had agreed to the planned Business Integration. The
new integrated company, to be incorporated on October 1, 2009, is expected to be an equity method affiliate of
BTMU. As a leading independent financial group in the Osaka region, the new integrated company will not only
contribute to the development of the regional society and economy, but will also aim for the improvement of its
enterprise value. In order to respect the business independence of the new financial group consisting of Bank of
Ikeda, Senshu Bank and the new integrated company, BTMU plans to divest a part of its common stock in the
new integrated company and intends to exclude the new integrated company from an equity method affiliate of
MUFG by September 30, 2014 at the latest. However, BTMU also intends to continuously and appropriately
support the formation and development of the new financial group and Nobuo Kuroyanagi, the Chairman of
BTMU as well as the President and CEO of MUFG, will be seconded as an outside director to the new integrated
company upon its incorporation. As of March 31, 2009, BTMU owned 3.45% of the outstanding common stock
and ¥30.0 billion of non-convertible preferred stock of Bank of Ikeda. BTMU’s voting right ratio in Bank of
Ikeda increased to approximately 22% on June 26, 2009 following the terms and conditions of the
non-convertible preferred stock of Bank of Ikeda.

MUTB’s Agreement to Acquire NikkoCiti Trust and Banking and Subsequent Rescission of the Agreement

In December 2008, MUTB entered into an agreement with Nikko Citi Holdings Inc. and Citigroup
International LLC under which MUTB will purchase all of the issued shares of NikkoCiti Trust and Banking
Corporation for ¥25 billion in cash, subject to certain purchase price adjustments as well as pending regulatory
approvals and other closing conditions. However, on May 14, 2009, MUTB agreed with Nikko Citi Holdings Inc.
to terminate the transaction due to the changes in its business environment and strategy.

Effects of Challenging Business Environment in Recent Periods

The global financial market crisis and recession initially triggered by disruptions in the US residential
mortgage market and negative trends in the global economy has continued in recent months. Japan is also
experiencing a difficult business environment with the Nikkei Stock Average, which is an average of 225 blue
chip stocks listed on the Tokyo Stock Exchange and which was ¥8,109.53 as of March 31, 2009 declined from
¥12,525.54 as of March 31, 2008. The Nikkei Stock Average was ¥10,284.96 as of August 18, 2009.

The difficult business environment in Japan and globally has adversely affected our business and financial

results in recent periods, and we expect the severe business conditions, resulting from the global financial market
crisis and the recession in Japan and globally, to continue in the near term. As a result, we expect, among other
things, increased credit costs resulting mainly from deteriorating business conditions for our borrowers, lower
fees from investment products in retail business and derivative transactions in our corporate banking business,
lower trading income, and increased impairment losses on equity securities resulting from the continuing decline
in equity security prices in Japan generally.

The financial markets and overall economy, both in Japan and globally, may not improve in the near term.

In fact, business conditions in Japan and globally could become even more challenging than we currently
anticipate.

52

Permission to Operate as Financial Holding Companies in the United States

We, BTMU, MUTB and UNBC have received notification from the Board of Governors of the US Federal
Reserve System that our elections to become financial holding companies under the US Bank Holding Company
Act became effective as of October 6, 2008. This change in status means that we are able to engage in a broader
range of financial activities in the United States without prior regulatory approval. More specifically, we will be
able to engage in financial activities including a full range of securities and insurance businesses, as well as
merchant banking activities.

Under our financial holding company status, we are also subject to additional regulatory requirements. For

example, each of our banking subsidiaries with operations in the United States must be “well capitalized,”
meaning a Tier 1 risk-based capital ratio of at least 6% and a total risk-based capital ratio of at least 10%. Our US
banking operations must also be “well managed,” including that they maintain examination ratings that are at
least satisfactory. Failure to comply with such requirements would require us to prepare a remediation plan and
we would not be able to undertake new business activities or acquisitions based on our status as a financial
holding company during any period of noncompliance.

Completion of Global Offering of Common Stock

In December 2008, we completed the sale of 934,800,000 shares of common stock in public offerings in the
United States and Japan as well as private placements in other countries. On January 14, 2009, we completed the
sale of additional 65,200,000 shares of common stock through a third-party allotment pursuant to the over-
allotment option granted in connection with the Japanese offering. We sold 700 million newly issued shares of
common stock and 300 million shares of treasury stock in the global offering. The proceeds from the global
offering after underwriting discounts and commissions were ¥399.8 per share. The total net proceeds from the
global offering after underwriting discounts and commissions and offering expenses were approximately ¥398.7
billion.

The total net proceeds from the global offering after underwriting discounts and commissions and offering

expenses were used to make an equity investment in BTMU to strengthen our overall group capital base.

Issuance of Preferred Stock in Japan

In November 2008, we issued and sold 156,000,000 shares of non-convertible preferred stock, First Series

Class 5 Preferred Stock, through a third-party allotment to Japanese institutional investors in order to further
strengthen our financial base for our group’s future growth. A dividend of ¥43 per share of preferred stock was
paid for the fiscal year ended March 31, 2009 and a dividend of ¥115 per share of preferred stock will be paid
annually, subject to certain conditions, in priority to the common stock. We received approximately ¥388.6
billion in net cash proceeds from the third-party allotment. We used the net proceeds from the issuance and sale
of the preferred stock to invest in our consolidated subsidiaries.

Issuance of Preferred Securities by Special Purpose Companies

In September 2008, MUFG Capital Finance 7 Limited, a special purpose company established in the

Cayman Islands, issued ¥222 billion in non-cumulative and non-dilutive perpetual preferred securities in order to
enhance the flexibility of our capital management. The securities have a fixed dividend rate of 3.60% per annum
until January 2019 and a floating dividend rate after January 2019, and were sold primarily to Japanese
institutional investors.

In March 2009, MUFG Capital Finance 8 Limited, a special purpose company established in the Cayman

Islands, issued ¥90 billion in series A non-cumulative and non-dilutive perpetual preferred securities to enhance
the flexibility of our capital management. The securities have a fixed dividend rate of 4.88% per annum until July
2019 and a non-step up floating dividend rate after July 2019. MUFG Capital Finance 8 Limited also issued ¥7.4
billion in series B non-cumulative and non-dilutive perpetual preferred securities with a fixed dividend rate of
4.55% per annum until July 2014 and a non-step up floating dividend rate after July 2014. These offerings were
targeted towards Japanese institutional investors.

53

The proceeds from the sale of these preferred securities were reflected in our Tier I capital as of March 31,

2009 under the BIS capital adequacy requirements, which is calculated primarily from our Japanese GAAP
financial information pursuant to the regulations promulgated by the Financial Services Agency of Japan, or the
FSA. However, for accounting purposes under US GAAP, because those special purpose companies are not
consolidated entities, the loans, which are made to us from the proceeds from the sale of these preferred
securities issued by the special purpose companies, are presented as long-term debt on our consolidated balance
sheet as of March 31, 2009.

In July 2009, MUFG Capital Finance 9 Limited, a special purpose company established in the Cayman
Islands, issued ¥130 billion in series A non-cumulative and non-dilutive perpetual preferred securities with a
fixed dividend rate of 4.52% per annum until January 2020 and a non-step up floating dividend rate after January
2020, ¥110 billion in series B non-cumulative and non-dilutive perpetual preferred securities with a fixed
dividend rate of 4.02% per annum until January 2020 and a step up floating dividend rate after January 2020, and
¥130 billion in series C non-cumulative and non-dilutive perpetual preferred securities with a fixed dividend rate
of 4.02% per annum until January 2015 and a non-step up floating dividend rate after January 2015. These
offerings were targeted towards Japanese institutional investors. The preferred securities will also be reflected in
our Tier I capital.

Redemption of Preferred Securities issued by a Special Purpose Company

In July 2009, Sanwa Capital Finance 2 Limited, a special purpose company established in the Cayman
Islands, redeemed a total of ¥130 billion in non-cumulative and non-dilutive perpetual preferred securities. These
preferred securities were previously reflected as part of our Tier I capital.

Allotment of Stock Compensation Type Stock Options (Stock Acquisition Rights)

In July 2009, we allotted stock compensation type stock options, or stock acquisition rights, to the directors,
corporate auditors and executive officers of MUFG, BTMU, MUTB and MUS to acquire an aggregate amount of
5,655,800 shares of MUFG’s common stock. The stock acquisition rights have an exercise price of ¥1 per share
of common stock and are exercisable until July 13, 2039. The purpose of issuing the stock acquisition rights is to
further motivate the directors and executive officers to contribute to the improvement of stock prices and profits
of MUFG and, with respect to the corporate auditors, to improve their audits and investigations aiming to
increase the corporate value of MUFG. For more information on the stock acquisition rights, see “Item 6.B.
Compensation” and Note 31 to our consolidated financial statements included elsewhere in this Annual Report.

54

Business Environment

We engage, through our subsidiaries and affiliated companies, in a broad range of financial operations,
including commercial banking, investment banking, trust banking and asset management services, securities
businesses and credit card businesses, and provide related services to individuals primarily in Japan and the
United States and to corporate customers around the world. Our results of operations and financial condition are
exposed to changes in various external economic factors, including:

•

•

•

•

general economic conditions;

interest rates;

currency exchange rates; and

stock and real estate prices.

Economic Environment in Japan

The environment surrounding the Japanese economy has continued to be severe, but signs of recovery have

been increasing. Exports, which had continued to decline significantly since last fall, increased in March and
April 2009, exceeding the previous month’s level, led by exports to Asia, especially to China. Production activity
has begun to recover in response to the recovery of exports and expectations that the peak levels of inventory
adjustments may have subsided. However, economic activity has significantly weakened relative to the past
several years and remains severely low, although its rapid decline has slowed. It may take considerable time until
economic activity recovers to the average level of the past few years and confidence of an economic recovery
returns generally. Under these circumstances, profitability of Japanese corporations has substantially worsened.
Net profits of corporations for the January-March 2009 period decreased by 69% compared to the same quarter
of the last year, which was the largest decrease in Japan’s history, due to falling sales reflecting the plunge in
exports since last fall and sluggish demand. Although the employment and income situation remain severe, there
are signs of a recovery in private consumption as a result of improvement in Japanese stock prices since March
2009 and the effects of economic stimulus measures implemented by the Japanese government. However, private
consumption may also lose momentum due to the continuing deterioration in employment and personal income.

55

The Bank of Japan lowered its uncollateralized overnight call rate target to 0.1% from 0.5% during the
period between October 2008 and December 2008 as the economy further decelerated and the environment for
corporate finance deteriorated. Long-term interest rates have also been on a downward trend with some
fluctuations under the circumstances described above. As of early August 2009, the uncollateralized overnight
call rate target was around 0.1%, and the yield on ten-year Japanese government bonds was around 1.4%. The
following chart shows the interest rate trends in Japan since April 2007:

%

2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

A ug-07
Jul-07
M ay-07
A pr-07
Jun-07

N ov-07
O ct-07
S ep-07

Jan-08
D ec-07

F eb-08

A ug-08
Jul-08
Jun-08
M ay-08
M ar-08
A pr-08

O ct-08
S ep-08
N ov-08

Jan-09
D ec-08

F eb-09

Jul-09
M ay-09
Jun-09
M ar-09
A pr-09

Newly Issued Japanese Government Bonds Yield (10 years) (End of Month) 
Uncollateralized Overnight Call Rates (End of Month)

56

Regarding the Japanese stock market, the closing price of the Nikkei Stock Average, which is an average of

225 blue chip stocks listed on the Tokyo Stock Exchange, declined from ¥12,525.54 at March 31, 2008 to
¥8,109.53 at March 31, 2009, and the closing price of the Tokyo Stock Price Index, or TOPIX, a composite index
of all stocks listed on the First Section of the Tokyo Stock Exchange, declined from 1,212.96 at March 31, 2008
to 773.66 at March 31, 2009, mainly due to the global financial market crisis and recession of both Japanese and
overseas economies. On October 27, 2008, the closing price of the Nikkei Stock Average reached a 26-year low
of ¥7,162.90 due to the market turmoil triggered by the financial crisis in the United States including the filing of
a bankruptcy petition by Lehman Brothers Holdings Inc. As of August 18, 2009, the closing price of the Nikkei
Stock Average was ¥10,284.96 and that of TOPIX was 949.66. The following chart shows the daily closing price
of the Nikkei Stock Average since April 2007.

Yen
19,000

18,000

17,000

16,000

15,000

14,000

13,000

12,000

11,000

10,000

9,000

8,000

7,000

A pr-07

M ay-07

Jun-07

Jul-07

A ug-07

S ep-07

O ct-07

N ov-07

D ec-07

Jan-08

Feb-08

M ar-08

A pr-08

M ay-08

Jun-08

Jul-08

A ug-08

S ep-08

O ct-08

N ov-08

D ec-08

Jan-09

Feb-09

M ar-09

A pr-09

M ay-09

Jun-09

Jul-09

A ug-09

Nikkei Stock Average

57

In the foreign exchange markets, the Japanese yen/US dollar foreign exchange rate was approximately ¥100 to

US$1 at the beginning of April 2008, depreciating to approximately ¥110 to US$1 as of mid-August 2008. By
January 2009, the Japanese yen had appreciated to approximately ¥88 to US$1. As of March 31, 2009, the Japanese
yen/US dollar foreign exchange rate was ¥98.31 to US$1. Thereafter, the Japanese yen continued to be volatile,
fluctuating between ¥92 to ¥101 to US$1. As of August 18, 2009, the Japanese yen/US dollar foreign exchange rate
was ¥95.10 to US$1. Against the euro, the Japanese yen traded in a range of approximately ¥115 and ¥169 during the
fiscal year ended March 31, 2009. As of August 18, 2009, the Japanese yen/euro foreign exchange rate was ¥134.35 to
the euro. The following chart shows the foreign exchange rates expressed in Japanese yen per US dollar since April
2007:

Yen per Dollar

125
123
121
119
117
115
113
111
109
107
105
103
101
99
97
95
93
91
89
87
85

A pr-07

M ay-07

Jun-07

Jul-07

A ug-07

S ep-07

O ct-07

N ov-07

D ec-07

Jan-08

Feb-08

M ar-08

A pr-08

M ay-08

Jun-08

Jul-08

A ug-08

S ep-08

O ct-08

N ov-08

D ec-08

Jan-09

Feb-09

M ar-09

A pr-09

M ay-09

Jun-09

Jul-09

A ug-09

Yen/Dollar Spot Rate at 17:00 (Tokyo time)

For the first time in the past three years, the average price for both residential and commercial real estate
experienced significant declines. Based on a survey by the Japanese government, the average residential land price in
Japan declined by 3.2% between January 1, 2008 and January 1, 2009. The average commercial land price in Japan
also declined by 4.7% during the same period. In the three major metropolitan areas of Tokyo, Osaka and Nagoya, the
average residential land price declined by 3.5% between January 1, 2008 and January 1, 2009, while the average
commercial land price declined by 5.4% during the same period. Between January 1, 2007 and January 1, 2008, the
average residential land price rose by 4.3%, and the average commercial land price rose by 10.4%, in the same
metropolitan areas. Looking into the local regions of Japan, which consist of regions other than the major metropolitan
areas, the average residential and commercial land prices continued to decline for the fifth consecutive year with the
rates of decline between January 1, 2008 and January 1, 2009, being 2.8% and 4.2%, respectively.

According to Teikoku Databank, a Japanese research institution, the number of companies who filed for

legal bankruptcy in Japan from April 2008 to March 2009 was approximately 13,200, an increase of
approximately 17% from the previous year, mainly due to an increase in bankruptcies of small sized companies,
especially in the transportation and communications, real estate, and wholesale industries. Similarly, the
aggregate amount of liabilities subject to bankruptcy filings for the same period was approximately ¥13.7 trillion,
an increase of approximately 147% from the previous fiscal year, caused by an increase in the number of
bankruptcy filings and large-scale bankruptcies in financial and real estate industries.

58

International Financial Markets

With respect to the international financial and economic environment, the US economy rapidly worsened
due to the intensified financial crisis during the fiscal year ended March 31, 2009. Private consumption in the
United States rapidly stalled in reaction to the significant deterioration of employment. The financial crisis also
impacted Western Europe and parts of emerging Europe, triggered by the collapse of US investment banks in
mid-September 2008.

Signs of recovery in the US economy have been increasing in recent months, but it may take considerable
time until economic activities recover to the level of past years. In the corporate sector, production continues its
downward trend due to higher inventory levels. Although disposable income of the household sector has been
increasing due to the effects of economic stimulus measures and tax cuts by the US government, consumer
sentiment is still weak because of low stock prices and high employment rates. In the European Union, or EU,
the economic situation has also improved in recent months. However, there is no strong sign of recovery due to
the high employment rates and increasing loan defaults experienced in the financial sector.

In the United States, the target for the federal funds rate was lowered to the range of zero to 0.25% in
response to the deteriorating market conditions. In the EU, the European Central Bank coordinated an emergency
rate cut in October 2008, followed by another substantial rate cut in November 2008 and thereafter took further
actions. Currently, the European Central Bank’s interest rate policy has been established at 1.0%, which is the
lowest level in the EU’s history.

59

Critical Accounting Estimates

Our consolidated financial statements included elsewhere in this Annual Report are prepared in accordance

with US GAAP. Many of the accounting policies require management to make difficult, complex or subjective
judgments regarding the valuation of assets and liabilities. The accounting policies are fundamental to
understanding our operating and financial review and prospects. The notes to our consolidated financial
statements included elsewhere in this Annual Report provide a summary of our significant accounting policies.
The following is a summary of the critical accounting estimates:

Allowance for Credit Losses

The allowance for credit losses represents management’s estimate of probable losses in our loan portfolio.

The evaluation process, including credit-ratings and self-assessments, involves a number of estimates and
judgments. The allowance is based on two principles of accounting: (1) Statement of Financial Accounting
Standards (“SFAS”) No. 5, “Accounting for Contingencies,” which requires that losses be accrued when they are
probable of occurring and can be estimated; and (2) SFAS No. 114, “Accounting by Creditors for Impairment of
a Loan” and SFAS No. 118, “Accounting by Creditors for Impairment of a Loan—Income Recognition and
Disclosures,” which require that losses be accrued based on the difference between the loan balance, on the one
hand, and the present value of expected future cash flows discounted at the loan’s effective interest rate and the
fair value of collateral or the loan’s observable market value, on the other hand.

Our allowance for credit losses consists of an allocated allowance and an unallocated allowance. The
allocated allowance comprises (a) the allowance for specifically identified problem loans, (b) the allowance for
large groups of smaller balance homogeneous loans, (c) the allowance for loans exposed to specific country risk
and (d) the formula allowance. Both the allowance for loans exposed to specific country risk and the formula
allowance are provided for performing loans that are not subject to either the allowance for specifically identified
problem loans or the allowance for large groups of smaller balance homogeneous loans. The allowance for loans
exposed to specific country risk covers transfer risk which is not specifically covered by other types of
allowance. Each of these components is determined based upon estimates that can and do change when actual
events occur.

The allowance for specifically identified problem loans, which represent large-balance, non-homogeneous

loans that have been individually determined to be impaired, is calculated by using various techniques to arrive at
an estimate of loss. Historical loss information, discounted cash flows, fair value of collateral and secondary
market information are all used to estimate those losses.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment, and the
allowance for such loans is established through a process that begins with estimates of probable losses inherent in
the portfolio. These estimates are based upon various analyses, including historical delinquency and credit loss
experience.

The allowance for loans exposed to specific country risk is based on an estimate of probable losses relating

to our exposure to countries that we identify as having a high degree of transfer risk. We use a country risk
grading system that assigns risk ratings to individual countries. To determine the risk rating, we consider the
instability of foreign currency and difficulties regarding our borrowers’ ability to service their debt.

The formula allowance uses a model based on historical losses as an indicator of future probable losses.

However, the use of historical losses is inherently uncertain and as a result could differ from losses incurred in
the future. However, since this history is updated with the most recent loss information, the differences that
might otherwise occur are mitigated.

Our actual losses could be more or less than the estimates. The unallocated allowance captures losses that
are attributable to various economic events, industry or geographic sectors whose impact on the portfolio have

60

occurred but have yet to be recognized in the allocated allowance. For further information regarding our
allowance for credit losses, see “—B. Liquidity and Capital Resources—Financial Condition—Allowance for
Credit Losses, Nonperforming and Past Due Loans.”

In addition to the allowance for credit losses on our loan portfolio, we maintain an allowance for credit
losses on off-balance-sheet credit instruments, including commitments to extend credit, a variety of guarantees
and standby letters of credit and other financial instruments. Such allowance is included in other liabilities. With
regard to the allocated allowance for specifically identified credit exposure and the allocated formula allowance,
we apply the same methodology that we use in determining the allowance for loan credit losses.

Determining the adequacy of the allowance for credit losses requires the exercise of considerable judgment

and the use of estimates, such as those discussed above. To the extent that actual losses differ from
management’s estimates, additional provisions for credit losses may be required that would adversely impact our
operating results and financial condition in future periods.

Impairment of Investment Securities

US GAAP requires the recognition in earnings of an impairment loss on investment securities for a decline

in fair value that is other than temporary. Determination of whether a decline is other than temporary often
involves estimating the outcome of future events. Management judgment is required in determining whether
factors exist that indicate that an impairment loss has been incurred at the balance sheet date. These judgments
are based on subjective as well as objective factors. We conduct a review semi-annually to identify and evaluate
investment securities that have indications of possible impairment. The assessment of other than temporary
impairment requires judgment and therefore can have an impact on the results of operations. Impairment is
evaluated considering various factors, and their significance varies from case to case.

Debt and marketable equity securities.

In determining whether a decline in fair value below cost is other
than temporary for a particular security, we generally consider factors such as the ability and positive intent to
hold the investments for a period of time sufficient to allow for any anticipated recovery in fair value. In
addition, indicators of an other than temporary decline for both debt and marketable equity securities include, but
are not limited to, the extent of decline in fair value below cost and the length of time that the decline in fair
value below cost has continued. If a decline in fair value below cost is 20% or more or has continued for six
months or more, we generally deem such decline as an indicator of an other than temporary decline. We also
consider the current financial condition and near-term prospects of issuers primarily based on the credit standing
of the issuers as determined by our credit rating system.

Certain securities held by BTMU, MUTB and certain other subsidiaries, which primarily consist of debt
securities issued by the Japanese national government and generally considered to be of minimal credit risk, were
determined not to be impaired in some cases, on the basis of the respective subsidiary’s ability and positive intent
to hold such securities to maturity.

The determination of other than temporary impairment for certain securities held by UNBC, our US
subsidiary, which primarily consist of securities backed by the full faith and credit of the US government and
corporate asset-backed and debt securities, are made on the basis of a cash flow analysis of securities and/or the
ability of UNBC to hold such securities to maturity.

Nonmarketable equity securities. Nonmarketable equity securities are equity securities of companies that

are not publicly traded or are thinly traded. Such securities are primarily held at cost less other than temporary
impairment if applicable. For the securities carried at cost, we consider factors such as the credit standing of
issuers and the extent of decline in net assets of issuers to determine whether the decline is other than temporary.
When we determine that the decline is other than temporary, nonmarketable equity securities are written down to
the estimated fair value, determined based on such factors as the ratio of our investment in the issuer to the

61

issuer’s net assets and the latest transaction price if applicable. When the decline is other than temporary, certain
nonmarketable equity securities issued by public companies, such as preferred stock convertible to marketable
common stock in the future, are written down to fair value estimated by commonly accepted valuation models,
such as option pricing models based on a number of factors, including the quoted market price of the underlying
marketable common stock, volatility and dividend payments as appropriate.

The markets for equity securities and debt securities are inherently volatile, and the values of both types of

securities have fluctuated significantly in recent years. Accordingly, our assessment of potential impairment
involves risks and uncertainties depending on market conditions that are global or regional in nature and the
condition of specific issuers or industries, as well as management’s subjective assessment of the estimated future
performance of investments. If we later conclude that a decline is other than temporary, the impairment loss may
significantly affect our operating results and financial condition in future periods.

For further information on the amount of the impairment losses and the aggregate amount of unrealized
gross losses on investment securities, see Note 5 to our consolidated financial statements included elsewhere in
this Annual Report.

Income Taxes

Valuation of deferred tax assets. A valuation allowance for deferred tax assets is recognized if, based on
the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will
not be realized. All available evidence, both positive and negative, is considered to determine whether, based on
the weight of that evidence, a valuation allowance is needed. Future realization of the tax benefit of existing
deductible temporary differences or carryforwards ultimately depends on the existence of sufficient taxable
income in future periods.

In determining a valuation allowance, we perform a review of future taxable income (exclusive of reversing

temporary differences and carryforwards) and future reversals of existing taxable temporary differences. Future
taxable income is developed from forecasted operating results, based on recent historical trends and approved
business plans, the eligible carryforward periods and other relevant factors. For certain subsidiaries where strong
negative evidence exists, such as the existence of significant amounts of operating loss carryforwards, cumulative
losses and the expiration of unused operating loss carryforwards in recent years, a valuation allowance is
recognized against the deferred tax assets to the extent that it is more likely than not that they will not be realized.

Among other factors, forecasted operating results, which serve as the basis of our estimation of future

taxable income, have a significant effect on the amount of the valuation allowance. In developing forecasted
operating results, we assume that our operating performance is stable for certain entities where strong positive
evidence exists, including core earnings based on past performance over a certain period of time. The actual
results may be adversely affected by unexpected or sudden changes in interest rates as well as an increase in
credit-related expenses due to the deterioration of economic conditions in Japan and material declines in the
Japanese stock market to the extent that such impacts exceed our original forecast. In addition, near-term taxable
income is also influential on the amount of the expiration of unused operating loss carryforwards since the
Japanese corporate tax law permits operating losses to be deducted for a predetermined period generally no
longer than seven years. For further information on the amount of operating loss carryforwards and the expiration
dates, see Note 10 to our consolidated financial statements included elsewhere in this Annual Report.

Because the establishment of the valuation allowance is an inherently uncertain process involving estimates

as discussed above, the currently established allowance may not be sufficient. If the estimated allowance is not
sufficient, we will incur additional deferred tax expenses, which could materially affect our operating results and
financial condition in future periods.

62

Tax reserves. We provide reserves for unrecognized tax benefits as required under Financial Accounting
Standards Board (“FASB”) Interpretation, or FIN, No. 48, “Accounting for Uncertainty in Income Taxes—An
Interpretation of FASB Statement No. 109.” In applying the standards of the Interpretation, we consider the
relative risks and merits of positions taken in tax returns filed and to be filed, considering statutory, judicial, and
regulatory guidance applicable to those positions. The Interpretation requires us to make assumptions and
judgments about potential outcomes that lie outside management’s control. To the extent the tax authorities
disagree with our conclusions, and depending on the final resolution of those disagreements, our effective tax
rate may be materially affected in the period of final settlement with tax authorities.

Accounting for Goodwill and Intangible Assets

US GAAP requires us to test goodwill for impairment at least annually, or more frequently if events or
changes in circumstances indicate that goodwill may be impaired, using a two-step process that begins with an
estimation of the fair value of a reporting unit of our business, which is to be compared with the carrying amount
of the unit, to identify potential impairment of goodwill. A reporting unit is an operating segment or component
of an operating segment that constitutes a business for which discrete financial information is available and is
regularly reviewed by management. The fair value of a reporting unit is defined as the amount at which the unit
as a whole could be bought or sold in a current transaction between willing parties. For a reporting unit for which
an observable quoted market price is available, the price is used for the fair value and control premium is also
considered. For a reporting unit for which an observable quoted market price is not available, the fair value is
determined using an income approach. In the income approach, discounted cash flows are calculated by taking
the net present value based on each reporting unit’s internal forecasts. Cash flows are discounted using a discount
rate approximating the weighted average cost of capital, and the discount rate reflects current market
capitalization. A control premium factor is also considered in relation to market capitalization.

If the carrying amount of a reporting unit exceeds its estimated fair value, the second step of the goodwill
impairment test is performed to measure the amount of impairment loss recorded in income. This test requires
comparison of the implied fair value of the unit’s goodwill with the carrying amount of that goodwill. The
estimate of the implied fair value of the reporting unit’s goodwill requires us to allocate the fair value of a
reporting unit to all of the assets and liabilities of that reporting unit, including unrecognized intangible assets, if
any, since the implied fair value is determined as the excess of the fair value of a reporting unit over the net
amounts assigned to its assets and liabilities in the allocation. Accordingly, the second step of the impairment test
also requires an estimate of the fair value of individual assets and liabilities, including any unrecognized
intangible assets that belong to that unit. A change in the estimation could have an impact on impairment
recognition since it is driven by hypothetical assumptions, such as customer behavior and interest rate forecasts.
The estimation is based on information available to management at the time the estimation is made.

Intangible assets are amortized over their estimated useful lives unless they have indefinite useful lives.

Amortization for intangible assets is computed in a manner that best reflects the economic benefits of the
intangible assets. Intangible assets having indefinite useful lives are subject to annual impairment tests. An
impairment exists if the carrying value of an indefinite-lived asset exceeds its fair value. For other intangible
assets subject to amortization, an impairment is recognized if the carrying amount exceeds the fair value of the
intangible asset.

Accrued Severance Indemnities and Pension Liabilities

We have defined retirement benefit plans, including lump-sum severance indemnities and pension plans,
which cover substantially all of our employees. Severance indemnities and pension costs are calculated based
upon a number of actuarial assumptions, including discount rates, expected long-term rates of return on our plan
assets and rates of increase in future compensation levels. In accordance with US GAAP, actual results that differ
from the assumptions are accumulated and amortized over future periods, and affect our recognized net periodic
pension costs and accrued severance indemnities and pension obligations in future periods. Differences in actual
experience or changes in assumptions may affect our financial condition and operating results in future periods.

63

The discount rates for the domestic plans are set to reflect the interest rates of high-quality fixed-rate

instruments with maturities that correspond to the timing of future benefit payments.

In developing our assumptions for expected long-term rates of return, we refer to the historical average
returns earned by the plan assets and the rates of return expected to be available for reinvestment of existing plan
assets, which reflect recent changes in trends and economic conditions, including market price. We also evaluate
input from our actuaries, as well as their reviews of asset class return expectations.

Valuation of Financial Instruments

In accordance with SFAS No. 157, “Fair Value Measurement”, we measure the fair value of certain

financial assets and liabilities on a recurring basis, including trading securities, trading derivatives and
investment securities. In addition, certain other financial assets and liabilities are measured at fair value on a
non-recurring basis, including held for sale loans which are carried at the lower of cost or fair value, collateral
dependent loans under SFAS No. 114, “Accounting by Creditors for Impairment of Loans”, and nonmarketable
equity securities subject to impairment. In accordance with FSP SFAS No. 157-2, we did not apply the provision
of SFAS No.157 to the nonrecurring nonfinancial assets and nonfinancial liabilities which included premises and
equipment, intangible assets and goodwill measured at fair value for impairment. SFAS No. 157 defines fair
value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.

In accordance with SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—
Including an amendment of FASB Statement No. 115”, we have elected the fair value option for certain foreign
securities classified as available for sale, whose unrealized gains and losses are reported in income.

We have an established and documented process for determining fair value in accordance with SFAS
No. 157. To determine fair value, we use quoted market prices which include those provided from pricing
vendors, where available. We generally obtain one price or quote per instrument and do not adjust it to determine
fair value of the instrument. Certain asset-backed securities are valued based on non-binding quotes provided by
independent broker-dealers where no or few observable inputs are available to measure fair value. We do not
adjust such broker-dealer quotes to the extent that there is no evidence that would indicate that the quotes are not
indicative of the fair values of the securities. We perform internal price verification procedures to ensure that the
quotes provided from the independent broker-dealers are reasonable. Such verification procedures include
analytical review of periodic price changes, comparison analysis between periodic price changes and changes of
indices such as a credit default swap index, or inquiries of underlying inputs and assumptions used by the broker-
dealers such as probability of default, prepayment rate and discount margin. These verification procedures are
periodically performed by independent risk management departments. For collateralized loan obligations, or
CLOs, backed by general corporate loans, the fair value is determined by weighting the internal model valuation
and the non-binding broker-dealer quotes. If quoted market prices are not available to determine fair value of
derivatives, the fair value is based upon valuation techniques that use, where possible, current market-based or
independently sourced parameters, such as interest rates, yield curves, foreign exchange rates, volatilities and
credit curves. The fair values of trading liabilities are determined by discounting future cash flows at a rate which
incorporates our own creditworthiness. In addition, valuation adjustments may be made to ensure that the
financial instruments are recorded at fair value. These adjustments include, but are not limited to, amounts that
reflect counterparty credit quality, liquidity risk, and model risk. Our financial models are validated and
periodically reviewed by risk management departments independent of divisions that created the models.

For a further discussion of the valuation techniques or models applied to the material assets or liabilities, see

“Fair Value” in Note 30 to our consolidated financial statements included elsewhere in this Annual Report.

Change in Valuation Method

We observed that the market for CLOs backed by general corporate loans became significantly inactive

compared with normal market activity due to the reduction in liquidity of certain debt securities resulting from

64

the global financial market instability in the second half of the fiscal year ended March 31, 2009. Under such
circumstances, we concluded that the unadjusted non-binding quotes from broker-dealers became less reflective
of the fair value as defined by SFAS No. 157 with respect to CLOs backed by general corporate loans.
Consequently, we changed the valuation method for estimating the fair value of such CLOs from the method
adopting unadjusted quotes from independent broker-dealers to an estimation method by weighting the internal
model prices and the non-binding broker-dealer quotes during the second half of the fiscal year ended March 31,
2009.

This change in valuation method was treated as a change in accounting estimate and has been accounted for

prospectively. This change in valuation method had a positive impact on losses from continuing operations
before income tax expense and net loss of ¥251 billion and ¥149 billion, respectively, and a corresponding
impact on both basic and diluted loss per share of ¥13.77 for the fiscal year ended March 31, 2009. This change
also had a positive impact on the accumulated other changes in equity from nonowner sources, net of taxes, of
¥38 billion at March 31, 2009.

Fair Value Hierarchy

SFAS No. 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to

measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in
active markets and the lowest priority to unobservable data, for example, the reporting entity’s own data. Based
on the observability of the inputs used in the valuation techniques, the following three-level hierarchy is
established by SFAS No. 157:

•

•

•

Level 1—Unadjusted quoted prices for identical instruments in active markets.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar instruments in
active markets; quoted prices for identical or similar instruments in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data for substantially the full
term of the instruments.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant
to the fair value of the instruments.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of
input that is significant to the fair value measurement of the financial instrument. For the categorization within
the valuation hierarchy by the financial instruments, see “Fair Value” in Note 30 to our consolidated financial
statements included elsewhere in this Annual Report.

The following table summarizes the assets and liabilities accounted for at fair value on a recurring basis by

level under the SFAS No. 157 fair value hierarchy at March 31, 2009:

March 31, 2009

Fair Value

Percentage of Total

(in billions)

Assets:

Level 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Level 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total

¥40,664
18,239
5,667
¥64,570

As a percentage of total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33.4%

Liabilities:

Level 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Level 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total

¥ 2,742
9,632
227
¥12,601

As a percentage of total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7%

63.0%
28.2
8.8
100.0%

21.8%
76.4
1.8
100.0%

65

Level 3 assets decreased ¥2,338 billion during the fiscal year ended March 31, 2009 mainly because level 3

trading securities decreased ¥1,978 billion and level 3 securities available for sale decreased ¥206 billion. The
level 3 trading securities were principally comprised of foreign asset-backed securities such as CLOs backed by
general corporate loans, residential mortgage-backed securities, or RMBS, and other securitized products. For the
level 3 trading securities, losses of ¥719 billion were recognized for the fiscal year ended March 31, 2009. The
losses were largely attributable to unrealized losses incurred by declines in fair value of the foreign asset-backed
securities and their foreign exchange losses caused by the global financial market instability. The level 3 trading
securities of ¥216 billion decreased because the amounts of sales and redemptions were greater than the purchase
amounts for the fiscal year ended March 31, 2009. Furthermore, trading securities of ¥1,055 billion were
transferred out of the level 3 recurring measurements during the fiscal year ended March 31, 2009, because
BTMU reclassified certain trading securities to securities being held to maturity which are not measured at fair
value and therefore are not subject to the SFAS No. 157 disclosure requirements. For further information on the
reclassification, see Note 5 to our consolidated financial statements included elsewhere in this Annual Report.
The decrease in the level 3 securities available for sale is mainly attributable to redemption of private placement
bonds issued by Japanese non-public companies and unrealized losses incurred by declines in fair value of
certain securities subject to deteriorated credit worthiness during the fiscal year ended March 31, 2009. The
decrease in the level 3 securities available for sale was partially mitigated by an increase in the level 3 securities
available for sale due to the transfers into level 3 on the private placement bonds issued by Japanese non-public
companies subject to deteriorated credit worthiness.

In measuring fair value of these foreign asset-backed securities and private placement bonds issued by

Japanese non-public companies, significant unobservable inputs are used because there is limited observable
pricing information and market illiquidity. For further information of fair value measurements, see “Fair Value”
in Note 30 to our consolidated financial statements included elsewhere in this Annual Report.

Accounting Changes and Recently Issued Accounting Pronouncements

See “Accounting Changes” and “Recently Issued Accounting Pronouncements” in Note 1 to our

consolidated financial statements included elsewhere in this Annual Report.

66

A. Operating Results

Results of Operations

The following table sets forth a summary of our results of operations for the fiscal years ended March 31,

2007, 2008 and 2009:

Fiscal years ended March 31,

2007

2008

2009

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,915.7
1,585.9

(in billions)
¥4,366.8
2,087.1

¥ 3,895.8
1,599.4

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,329.8

2,279.7

Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

358.6
1,947.9
2,784.2

385.7
1,778.1
3,659.7

2,296.4

626.9
175.1
3,572.5

Income (loss) from continuing operations before income tax expense

(benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,134.9
552.8

Income (loss) from continuing operations
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

582.1
(0.8)

12.4
553.1

(540.7)
(1.7)

(1,727.9)
(259.9)

(1,468.0)

—

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 581.3

¥ (542.4) ¥(1,468.0)

We reported a net loss of ¥1,468.0 billion for the fiscal year ended March 31, 2009, an increase of ¥925.6
billion from ¥542.4 billion for the fiscal year ended March 31, 2008. Our basic loss per share of common stock
(net loss available to common shareholders) for the fiscal year ended March 31, 2009 was ¥137.84, an increase of
¥83.79 from ¥54.05 for the fiscal year ended March 31, 2008. Loss from continuing operations before income tax
expense for the fiscal year ended March 31, 2009 was ¥1,727.9 billion, compared with income of ¥12.4 billion
for the fiscal year ended March 31, 2008.

67

Net Interest Income

The following is a summary of the interest rate spread for the fiscal years ended March 31, 2007, 2008 and

2009:

2007

Fiscal years ended March 31,
2008

2009

Average
balance

Average
rate

Average
balance

Average
rate

Average
balance

Average
rate

(in billions, except percentages)

Interest-earning assets:

Domestic . . . . . . . . . . . . . . . . . . . . . . . ¥130,196.1
38,571.2
Foreign . . . . . . . . . . . . . . . . . . . . . . . .

1.63% ¥123,196.2
49,271.1
4.65

1.78% ¥121,686.4
51,556.3
4.41

Total

. . . . . . . . . . . . . . . . . . . . . . ¥168,767.3

2.32% ¥172,467.3

2.53% ¥173,242.7

1.70%
3.53

2.25%

Financed by:
Interest-bearing funds:

Domestic . . . . . . . . . . . . . . . . . . . . . . . ¥122,332.7
24,463.3
Foreign . . . . . . . . . . . . . . . . . . . . . . . .

0.54% ¥123,231.9
32,920.1
3.78

0.69% ¥124,716.0
31,368.9
3.74

0.58%
2.80

. . . . . . . . . . . . . . . . . . . . . .
Non-interest-bearing funds . . . . . . . . . . . . .

Total

146,796.0
21,971.3 —

1.08

156,152.0
16,315.3 —

1.34

156,084.9
17,157.8 —

1.02

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . ¥168,767.3

0.94% ¥172,467.3

1.21% ¥173,242.7

0.92%

Spread on:

Interest-bearing funds . . . . . . . . . . . . .
Total funds . . . . . . . . . . . . . . . . . . . . .

1.24%
1.38%

1.19%
1.32%

1.23%
1.33%

We use interest rate and other derivative contracts for hedging the risks affecting the values of our financial

assets and liabilities. Although these contracts are generally entered into for risk management purposes, a
majority of them do not meet the specific conditions to qualify for hedge accounting under US GAAP and thus
are accounted for as trading assets or liabilities. Therefore, our net interest income for each of the fiscal years
ended March 31, 2007, 2008 and 2009 was not materially affected by gains or losses resulting from such
derivative instruments.

For a detailed discussion of our risk management systems, refer to “Item 11. Quantitative and Qualitative

Disclosures about Credit, Market and Other Risk.”

Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

Net interest income for the fiscal year ended March 31, 2009 was ¥2,296.4 billion, an increase of ¥16.7 billion,

from ¥2,279.7 billion for the fiscal year ended March 31, 2008. This increase was mainly due to decreases in the
average interest rates on both domestic and foreign interest-bearing funds. The effect of these decreases exceeded
that of the decreases in the average interest rates on both domestic and foreign interest-earning assets.

The average interest rate spread on interest-bearing funds increased four basis points from 1.19% for the
fiscal year ended March 31, 2008 to 1.23% for the fiscal year ended March 31, 2009. For the fiscal year ended
March 31, 2009, the average rate on interest-earning assets decreased mainly due to lower foreign interest rates.
However, the average rate on interest-bearing funds further decreased, which resulted in an increase of the
average interest rate spread on interest-bearing funds, mainly due to the lower foreign interest rates. The average
interest rate spread on total funds increased, showing an increase of one basis point from 1.32% for the fiscal
year ended March 31, 2008 to 1.33% for the fiscal year ended March 31, 2009.

Average interest-earning assets for the fiscal year ended March 31, 2009 were ¥173,242.7 billion, an increase

of ¥775.4 billion, from ¥172,467.3 billion for the fiscal year ended March 31, 2008. The increase was primarily
attributable to an increase of ¥13,884.9 billion in trading account assets and an increase of ¥3,529.3 billion in
foreign loans. These increases were partially offset by a decrease of ¥9,601.7 billion in foreign investment

68

securities, a decrease of ¥2,058.4 billion in foreign interest-earning deposits in other banks and a decrease of
¥2,001.2 billion in call loans, funds sold, and receivables under resale agreements and securities borrowing
transactions. The increase in trading account assets was mainly due to the application of the fair value options,
which resulted in the reclassification of some of our securities available for sale to trading account assets. For
further information, see Note 30 to our consolidated financial statements included elsewhere in this Annual Report.

Average interest-bearing funds for the fiscal year ended March 31, 2009 were ¥156,084.9 billion, a decrease

of ¥67.1 billion, from ¥156,152.0 billion for the fiscal year ended March 31, 2008. The decrease was primarily
attributable to a decrease of ¥1,830.1 billion in foreign interest-bearing deposits and a decrease of ¥802.6 billion
in domestic long-term debt. These decreases were partially offset by an increase of ¥2,581.3 billion in domestic
interest-bearing deposits. The decrease in foreign interest-bearing deposits was mainly due to the fact that large
deposits from foreign financial institutions decreased in response to the recent difficult market conditions in
addition to the appreciation of the Japanese yen against the US dollar and other foreign currencies. The increase
in domestic interest-bearing deposits was partially attributable to the attractive interest rates of our time deposits.

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

Net interest income for the fiscal year ended March 31, 2008 was ¥2,279.7 billion, a decrease of ¥50.1
billion, from ¥2,329.8 billion for the fiscal year ended March 31, 2007. This decrease was mainly due to an
increase in the average interest rate on domestic interest-bearing funds and an increase in the average balance of
foreign interest-bearing funds. These increases offset the effect of the increase in the average balance of foreign
interest-earning assets.

The average interest rate spread on interest-bearing funds decreased five basis points from 1.24% for the
fiscal year ended March 31, 2007 to 1.19% for the fiscal year ended March 31, 2008. For the fiscal year ended
March 31, 2007, the average rate on interest-earning assets increased partly due to an increase in the expected
cash flows from impaired loans acquired in the merger with UFJ Holdings, which cash flows are accounted for as
adjustments to accretable yields under Statement of Position 03-3, “Accounting for Certain Loans or Debt
Securities Acquired in a Transfer.” For the fiscal year ended March 31, 2008, the increase in the expected cash
flows from such impaired loans was smaller than that for the previous fiscal year. The average interest rate
spread on total funds decreased, showing a decrease of six basis points from 1.38% for the fiscal year ended
March 31, 2007 to 1.32% for the fiscal year ended March 31, 2008.

Average interest-earning assets for the fiscal year ended March 31, 2008 were ¥172,467.3 billion, an increase
of ¥3,700.0 billion, from ¥168,767.3 billion for the fiscal year ended March 31, 2007. The increase was primarily
attributable to an increase of ¥3,494.3 billion in foreign call loans, funds sold, and receivables under resale
agreements and securities borrowing transactions, an increase of ¥3,493.3 billion in foreign loans, an increase of
¥1,600.7 billion in foreign interest-earning deposits in other banks and an increase of ¥1,538.8 billion in foreign
investment securities. These increases were partially offset by a decrease of ¥4,718.6 billion in domestic investment
securities and a decrease of ¥2,016.9 billion in domestic loans. The increase in foreign loans was mainly due to the
growth of lending to Japanese and non-Japanese customers in Asia, the United States and Europe.

Average interest-bearing funds for the fiscal year ended March 31, 2008 were ¥156,152.0 billion, an
increase of ¥9,356.0 billion, from ¥146,796.0 billion for the fiscal year ended March 31, 2007. The increase was
primarily attributable to an increase of ¥3,779.3 billion in foreign interest-bearing deposits, an increase of
¥3,494.3 billion in foreign call money, funds purchased, and payables under repurchase agreements and
securities lending transactions and an increase of ¥2,183.3 billion in domestic deposits. The increase in foreign
interest-bearing deposits was mainly due to the fact that large deposits from foreign central banks and
government sponsored investment corporations increased in response to the recent difficult market conditions.

Provision for Credit Losses

Provision for credit losses is charged to operations to maintain the allowance for credit losses at a level

deemed appropriate by management. For a description of the approach and methodology used to establish the

69

allowance for credit losses, see “—B. Liquidity and Capital Resources—Financial Condition—Allowance for
Credit Losses, Nonperforming and Past Due Loans.”

Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

Provision for credit losses for the fiscal year ended March 31, 2009 was ¥626.9 billion, an increase of
¥241.2 billion from ¥385.7 billion for the fiscal year ended March 31, 2008. The increase in provision for credit
losses was mainly due to the general weakening of the financial condition of certain borrowers particularly
overseas and small and medium sized borrowers.

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

Provision for credit losses for the fiscal year ended March 31, 2008 was ¥385.7 billion, an increase of ¥27.1

billion from ¥358.6 billion for the fiscal year ended March 31, 2007. The increase in provision for credit losses
was mainly due to the downgrade in credit rating of certain overseas borrowers.

Non-Interest Income

The following table is a summary of our non-interest income for the fiscal years ended March 31, 2007,

2008 and 2009:

Fees and commissions:

Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on funds transfer and service charges for collections . . . . . . . . . . . . .
Fees and commissions on international business . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on credit card business . . . . . . . . . . . . . . . . . . . . . .
Service charges on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on securities business . . . . . . . . . . . . . . . . . . . . . . .
Fees on real estate business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on stock transfer agency services . . . . . . . . . . . . . .
Guarantee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on investment funds business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account profits (losses)—net:

Fiscal years ended March 31,

2007

2008

2009

(in billions)

¥ 146.0
151.3
70.2
164.2
37.5
136.6
60.2
52.2
73.7
88.3
152.8
274.2
1,407.2
(162.0)

¥

156.3
152.9
69.7
138.0
36.1
130.7
44.5
43.0
72.3
86.3
161.5
225.8
1,317.1
1,295.9

¥ 125.4
147.7
64.1
141.4
31.6
112.1
19.8
28.1
62.9
77.6
130.6
247.2
1,188.5
(206.2)

Net profits on interest rate and other derivative contracts . . . . . . . . . . . . . .
Net profits (losses) on trading account securities, excluding derivatives . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

212.8
192.0
404.8

520.6
(122.2)
398.4

555.5
(813.3)
(257.8)

Investment securities gains (losses)—net:

Net gains on sales of securities available for sale:

Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188.5
105.7

1.2
83.8

120.9
28.4

Impairment losses on securities available for sale:

Other

Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(38.1)
(71.3)
53.5
238.3
(56.9)
23.1
93.4
¥1,947.9

(1,169.1)
(331.3)
42.3
(1,373.1)
(34.5)
11.8
162.5
¥ 1,778.1

(155.5)
(660.7)
8.2
(658.7)
(60.1)
6.4
163.0
¥ 175.1

70

Net foreign exchange gains (losses) primarily include transaction gains (losses) on the translation into
Japanese yen of monetary assets and liabilities denominated in foreign currencies and net gains (losses) on
currency derivative instruments entered into for trading purposes. The transaction gains (losses) on the
translation into Japanese yen fluctuate from period to period depending upon the spot rates at the end of each
fiscal year. In principle, all transaction gains (losses) on translation of monetary liabilities denominated in foreign
currencies are included in current earnings. Transaction gains (losses) on translation into Japanese yen of
securities available for sale, such as bonds denominated in foreign currencies, are not included in current
earnings, but are reflected in other changes in equity from nonowner sources. However, if we recognize an
impairment loss on foreign currency-denominated securities available for sale due to the appreciation of the
Japanese yen against the relevant foreign currency, such impairment loss is included in current earnings as part of
investment securities losses.

Net trading account profits (losses) primarily include net gains (losses) on trading account securities and

interest rate and other derivative instruments entered into for trading purposes. Trading account assets or
liabilities are carried at fair value and any changes in the value of trading account assets or liabilities, including
interest rate derivatives, are recorded in net trading account profits (losses). Derivative instruments for trading
purposes also include those used as hedges of net exposures rather than for specifically identified assets or
liabilities, which do not meet the specific criteria for hedge accounting.

Net investment securities gains (losses) primarily include net gains (losses) on sales of marketable
securities, particularly debt securities and marketable equity securities that are classified as securities available
for sale. In addition, impairment losses are recognized as an offset of net investment securities gains (losses)
when management concludes that declines in fair value of investment securities are other than temporary.

Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

Non-interest income for the fiscal year ended March 31, 2009 was ¥175.1 billion, a decrease of

¥1,603.0 billion, from ¥1,778.1 billion for the fiscal year ended March 31, 2008. This decrease was primarily due
to a decrease of ¥1,502.1 billion in foreign exchange gains and a decrease of ¥656.2 billion in trading account
profits. These decreases were partially offset by a decrease of ¥714.4 billion in investment securities losses.

Fees and commissions

Fees and commissions for the fiscal year ended March 31, 2009 were ¥1,188.5 billion, a decrease of

¥128.6 billion, from ¥1,317.1 billion for the fiscal year ended March 31, 2008. This decrease was primarily
attributable to a decrease of ¥30.9 billion in trust fees, a decrease of ¥30.9 billion in fees on investment funds
business, and a decrease of ¥24.7 billion in fees on real estate business due to a decrease of business volume.

Net foreign exchange gains (losses)

Net foreign exchange losses for the fiscal year ended March 31, 2009 were ¥206.2 billion, compared to net

foreign exchange gains of ¥1,295.9 billion for the fiscal year ended March 31, 2008. The losses in foreign
exchange were mainly due to the appreciation of the Japanese yen against the US dollar in the fiscal year ended
March 31, 2009, compared to the fiscal year ended March 31, 2008. For reference, the foreign exchange rate
expressed in Japanese yen per US$1.00 by BTMU was ¥118.05 at March 30, 2007, ¥100.19 at March 31, 2008
and ¥98.23 at March 31, 2009. As a result of adopting the fair value option under SFAS No.159, in principle, all
transaction gains or losses on translation of eligible monetary assets and liabilities denominated in foreign
currencies are included in current earnings. We recorded losses on translation of securities available for sale
denominated in foreign currencies as non-interest income for the fiscal year ended March 31, 2009, which were
recorded as other comprehensive income in prior fiscal years. As we maintain monetary assets and liabilities
denominated in foreign currencies for our asset liability management, net foreign exchange gains or losses
fluctuate with the appreciation or depreciation of the Japanese yen.

71

Net trading account profits (losses)

Net trading account losses of ¥257.8 billion were recorded for the fiscal year ended March 31, 2009,

compared to net trading account profits of ¥398.4 billion for the fiscal year ended March 31, 2008. Net profits on
interest rate and other derivative contracts were largely affected by the impact of the decrease in Japanese long-
term interest rates on interest rate swaps principally held for risk management purposes. Although such contracts
are generally entered into for risk management purposes, the majority did not meet the conditions to qualify for
hedge accounting under US GAAP and thus are accounted for as trading positions. Both Japanese yen short-term
interest rates and long-term interest rates generally declined during the fiscal year ended March 31, 2009
compared to the previous fiscal year. These declines in short-term and long-term interest rates had a favorable
impact on our interest rate swap portfolios, in which we generally maintained net receive-fix and pay-variable
positions, for managing interest rate risk on domestic deposits. However, the increase in net profits on interest
rate and other derivative contracts of ¥34.9 billion was offset by an increase in net losses on trading account
securities, excluding derivatives, of ¥691.1 billion, mainly reflecting the increase in loss on sales and revaluation
from trading in debt and equity securities, including securities reclassified under SFAS No. 159, primarily due to
unfavorable market conditions.

Net investment securities gains (losses)

Net investment securities losses for the fiscal year ended March 31, 2009 were ¥658.7 billion, a decrease of

¥714.4 billion, from ¥1,373.1 billion for the fiscal year ended March 31, 2008.

The net investment securities losses for the fiscal year ended March 31, 2009 mainly reflected the
impairment losses of ¥660.7 billion on marketable equity securities available for sale and of ¥155.5 billion on
debt securities available for sale. Impairment losses on debt securities for the fiscal year ended March 31, 2008
were ¥1,169.1 billion due to the appreciation of the Japanese yen against the US dollar. The impairment losses on
debt securities for the fiscal year ended March 31, 2009 substantially decreased by ¥1,013.6 billion, compared to
those for the fiscal year ended March 31, 2008, due to the election of the fair value option under SFAS No. 159
for certain foreign securities. The increase in impairment losses on marketable equity securities was due to a
general decline in Japanese stock prices in the fiscal year ended March 31, 2009. The Nikkei Stock Average,
which is an average of 225 blue chip stocks listed on the Tokyo Stock Exchange, was ¥12,525.54 at March 31,
2008 and ¥8,109.53 at March 31, 2009.

Equity in losses of equity method investees

We recorded equity in losses of equity method investees of ¥60.1 billion for the fiscal year ended March 31,

2009, an increase of ¥25.6 billion, from ¥34.5 billion for the fiscal year ended March 31, 2008. The increase in
losses in the fiscal year ended March 31, 2009 was mainly due to increased losses associated with our equity
method investees primarily in consumer finance and regional banking.

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

Non-interest income for the fiscal year ended March 31, 2008 was ¥1,778.1 billion, a decrease of

¥169.8 billion, from ¥1,947.9 billion for the fiscal year ended March 31, 2007. This decrease was primarily due
to a decrease of ¥1,611.4 billion in net investment securities gains and a decrease of ¥90.1 billion in fees and
commissions. These decreases were offset by an increase of ¥1,457.9 billion in net foreign exchange gains and an
increase of ¥69.1 billion in other non-interest income.

Fees and commissions

Fees and commissions for the fiscal year ended March 31, 2008 were ¥1,317.1 billion, a decrease of
¥90.1 billion, from ¥1,407.2 billion for the fiscal year ended March 31, 2007. This decrease was primarily
attributable to a decrease of ¥48.4 billion in other fees and commissions, a decrease of ¥26.2 billion in fees and
commissions on credit card business, and a decrease of ¥15.7 billion in fees on real estate business due to a
decrease of business volume.

72

Net foreign exchange gains (losses)

Net foreign exchange gains for the fiscal year ended March 31, 2008 were ¥1,295.9 billion, compared to net
foreign exchange losses of ¥162.0 billion for the fiscal year ended March 31, 2007. The improvement in foreign
exchange gains (losses) was due mainly to the larger appreciation of the Japanese yen against the US dollar in the
fiscal year ended March 31, 2008, compared to the fiscal year ended March 31, 2007. For reference, the foreign
exchange rate expressed in Japanese yen per US$1.00 by BTMU was ¥117.47 at March 31, 2006, ¥118.05 at
March 30, 2007 and ¥100.19 at March 31, 2008. All transaction gains or losses on translation of monetary
liabilities denominated in foreign currencies are included in current earnings. As we maintain monetary liabilities
denominated in foreign currencies for our asset liability management, net foreign exchange gains (losses)
fluctuate with the appreciation (depreciation) of the Japanese yen.

Net trading account profits

Net trading account profits of ¥398.4 billion were recorded for the fiscal year ended March 31, 2008, a

decrease of ¥6.4 billion, from ¥404.8 billion for the fiscal year ended March 31, 2007.

Net profits (losses) on interest rate and other derivative contracts were largely affected by the impact of the

decrease (increase) in Japanese long-term interest rates on interest rate swaps principally held for risk
management purposes. Although such contracts are generally entered into for risk management purposes, a
majority of them did not meet the conditions to qualify for hedge accounting under US GAAP and thus are
accounted for as trading positions.

Though Japanese yen short-term interest rates generally rose during the fiscal year ended March 31, 2008

compared to the previous fiscal year, long-term interest rates generally declined. This decline in long-term
interest rates had a favorable impact on our interest rate swap portfolios, in which we generally maintained net
receive-fix and pay-variable positions, for managing interest rate risks on domestic deposits. The increase in net
profits on interest rate and other derivative contracts of ¥307.8 billion was offset by a decrease in net profits on
trading account securities, excluding derivatives of ¥314.2 billion, primarily reflecting the increase in loss on
sales and revaluation from trading in debt and equity securities primarily due to unfavorable market conditions.

Net investment securities gains (losses)

Net investment securities losses for the fiscal year ended March 31, 2008 were ¥1,373.1 billion, compared

to net investment securities gains of ¥238.3 billion for the fiscal year ended March 31, 2007.

The net investment securities losses for the fiscal year ended March 31, 2008 mainly reflected the
impairment losses of ¥1,169.1 billion on debt securities available for sale and of ¥331.3 billion on marketable
equity securities available for sale. The increase in impairment losses on debt securities was mainly due to the
appreciation of the Japanese yen against US dollar in the fiscal year ended March 31, 2008, compared to the
fiscal year ended March 31, 2007. The amount of impairment losses attributable to the appreciation of the
Japanese yen against foreign currencies was ¥863.2 billion. The increase in impairment losses on marketable
equity securities was due to a decline in Japanese stock prices in the fiscal year 2008. The Nikkei Stock Average,
which is an average of 225 blue chip stocks listed on the Tokyo Stock Exchange, was ¥17,287.65 at March 30,
2007 and ¥12,525.54 at March 31, 2008.

Equity in losses of equity method investees

We recorded equity in losses of equity method investees of ¥34.5 billion for the fiscal year ended March 31,

2008, a decrease of ¥22.4 billion, from ¥56.9 billion for the fiscal year ended March 31, 2007. The decrease in
losses in the fiscal year ended March 31, 2008 was mainly due to reduced losses of an equity method investee in
the consumer finance business.

73

Non-Interest Expense

The following table shows a summary of our non-interest expense for the fiscal years ended March 31,

2007, 2008 and 2009:

Fiscal years ended March 31,

2007

2008

2009

Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expenses—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outsourcing expenses, including data processing . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation of premises and equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance premiums, including deposit insurance . . . . . . . . . . . . . . . . . . . . . . . .
Minority interest in income (loss) of consolidated subsidiaries . . . . . . . . . . . . . .
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes and public charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for repayment of excess interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 862.4
179.4
238.0
267.9
118.9
264.9
184.8
112.8
16.9
62.2
79.7
106.2
—
290.1

(in billions)
¥ 909.8
173.2
218.1
248.2
179.6
252.9
78.7
112.4
39.4
65.3
83.4
2.8
893.7
402.2

¥ 873.4
171.9
209.8
267.8
132.1
278.2
126.9
113.8
(36.3)
62.9
85.7
47.9
845.8
392.6

Total non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,784.2

¥3,659.7

¥3,572.5

Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

Non-interest expense for the fiscal year ended March 31, 2009 was ¥3,572.5 billion, a decrease of

¥87.2 billion from ¥3,659.7 billion for the previous fiscal year. This decrease was primarily due to the decrease
of minority interest in income of consolidated subsidiaries, impairment of goodwill, depreciation of premises and
equipment, and salaries and employee benefits. The decrease in these non-interest expenses was partially offset
by an increase in impairment of intangible assets, provision for repayment of excess interest, amortization of
intangible assets and outsourcing expenses, including data processing.

Salaries and employee benefits

Salaries and employee benefits for the fiscal year ended March 31, 2009 were ¥873.4 billion, a decrease of
¥36.4 billion from ¥909.8 billion for the previous fiscal year. This decrease was mainly due to the fact that our
credit card subsidiary paid early retirement benefits during the fiscal year ended March 31, 2008, which were not
paid for in the fiscal year ended March 31, 2009.

Depreciation of premises and equipment

Depreciation of premises and equipment for the fiscal year ended March 31, 2009 was ¥132.1 billion, a

decrease of ¥47.5 billion from ¥179.6 billion for the previous fiscal year. This decrease primarily reflected the
fact that the depreciation of premises and equipment increased significantly for the fiscal year ended March 31,
2008, because we reviewed the salvage values of premises and equipment and decided to change the estimated
salvage values of these assets to ¥1 during the fiscal year ended March 31, 2008. For the fiscal year ended
March 31, 2009, we did not have such additional depreciation and this resulted in a decrease of depreciation of
premises and equipment compared to the previous year. For further information, see Note 1 to our consolidated
financial statements included elsewhere in this Annual Report.

74

Impairment of intangible assets

Impairment of intangible assets for the fiscal year ended March 31, 2009 was ¥126.9 billion, an increase of

¥48.2 billion, from ¥78.7 billion for the previous fiscal year. The increase was mainly due to an increase in
impairment of intangible assets related to our consumer finance subsidiary.

Minority interest in income of consolidated subsidiaries

Minority interest in loss of consolidated subsidiaries for the fiscal year ended March 31, 2009 was ¥36.3
billion, a decrease of ¥75.7 billion from income of ¥39.4 billion for the previous fiscal year. The decrease was
mainly due to our making UNBC a wholly-owned subsidiary, which resulted in a decrease in minority interest of
UNBC.

Provision for repayment of excess interest

Provision for repayment of excess interest for the fiscal year ended March 31, 2009 was ¥47.9 billion, an

increase of ¥45.1 billion from ¥2.8 billion for the previous fiscal year. The increase was mainly due to an
increase in the provision for repayment of excess interest at our credit card subsidiary following developments in
recent court cases relating to gray-zone interest repayment claims.

Impairment of goodwill

In the fiscal year ended March 31, 2009, we recorded an impairment of goodwill of ¥845.8 billion. We
recorded an impairment in goodwill due to, among other factors, the global financial market crisis and recession
which negatively impacted the fair value of our reporting units for the purposes of our periodic testing of
goodwill for impairment. We recorded an impairment of goodwill of ¥893.7 billion for the fiscal year ended
March 31, 2008. For further information, see Note 9 to our consolidated financial statements included elsewhere
in this Annual Report.

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

Non-interest expense for the fiscal year ended March 31, 2008 was ¥3,659.7 billion, an increase of
¥875.5 billion from the previous fiscal year. This increase was primarily due to the impairment of goodwill
which we recorded during the fiscal year ended March 31, 2008 in the amount of ¥893.7 billion, but for which
we did not record any amount for the previous fiscal year. The increase in non-interest expenses was partially
offset by decreases in impairment of intangible assets and provision for repayment of excess interest.

Salaries and employee benefits

Salaries and employee benefits for the fiscal year ended March 31, 2008 were ¥909.8 billion, an increase of
¥47.4 billion from ¥862.4 billion for the previous fiscal year. This increase was mainly due to an increase in the
one-time severance payments related to an early retirement program, totaling approximately ¥37 billion, made by
a consumer finance subsidiary.

Depreciation of premises and equipment

Depreciation of premises and equipment for the fiscal year ended March 31, 2008 was ¥179.6 billion, an
increase of ¥60.7 billion from ¥118.9 billion for the previous fiscal year. This increase primarily reflected the fact
that we reviewed the salvage values of premises and equipment and decided to change the estimated salvage
values of these assets to ¥1 during the fiscal year ended March 31, 2008. This change had an adverse impact on
our income from continuing operations before income tax expense and net loss of ¥53 billion and ¥31 billion,
respectively, for the fiscal year ended March 31, 2008. For further information, see Note 1 to our consolidated
financial statements included elsewhere in this Annual Report.

75

Impairment of intangible assets

Impairment of intangible assets for the fiscal year ended March 31, 2008 was ¥78.7 billion, a decrease of
¥106.1 billion, from ¥184.8 billion for the previous fiscal year. The decrease was mainly due to our having no
impairment of intangible assets related to a subsidiary in the consumer finance business whereas a significant
amount was provided during the previous fiscal year.

Provision for repayment of excess interest

Provision for repayment of excess interest for the fiscal year ended March 31, 2008 was ¥2.8 billion, a
decrease of ¥103.4 billion from ¥106.2 billion for the previous fiscal year. The decrease was mainly due to a
decrease in the provision for repayment of excess interest at our consumer finance subsidiaries.

Impairment of goodwill

In the fiscal year ended March 31, 2008, we recorded an impairment of goodwill of ¥893.7 billion. We

recorded impairment of goodwill due to, among other factors, the global financial market instability which
negatively impacted the fair value of our reporting units for the purposes of our periodic testing of goodwill for
impairment. We did not record an impairment of goodwill for the fiscal year ended March 31, 2007. For further
information, see Note 9 to our consolidated financial statements included elsewhere in this Annual Report.

Income Tax Expense (Benefit)

The following table presents a summary of our income tax expense (benefit):

Fiscal years ended March 31,

2007

2008

2009

(in billions, except percentages)

Income (loss) from continuing operations before income tax expense

(benefit)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . .

¥1,134.9
¥ 552.8

¥
12.4
¥ 553.1

¥(1,727.9)
¥ (259.9)

48.7% 4,476.3%
40.6%
40.6%

15.0%
40.6%

Reconciling items between the combined normal effective statutory tax rates and the effective income tax

rates for the fiscal years ended March 31, 2007, 2008 and 2009 are summarized as follows:

Fiscal years ended March 31,

2007

2008

2009

Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit and payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lower tax rates applicable to income of subsidiaries . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realization of previously unrecognized tax effects of subsidiaries . . . . . . . . . . . . —
Nontaxable dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.9
Tax and interest expense for FIN No. 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.6% 40.6%
24.9
101.8
10.2
(79.0) —
0.6
143.7
(2.4)
1,400.7
(1.7)
(5.0)
0.5
(152.3)
(19.9)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,937.4
(1.5)
36.3
(1.0)
8.5
1.0
8.5

40.6%
0.2
0.9
0.8
(0.5)
0.6
7.2

(0.2)
(0.3)
(0.7)

(1.4)

(0.6)

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48.7% 4,476.3% 15.0%

76

The effective income tax rate of 15.0% for the fiscal year ended March 31, 2009 was 25.6 percentage points

lower than the combined normal effective statutory tax rate of 40.6%. This lower tax rate primarily reflected an
impairment loss related to goodwill which was recognized as a result of a decline in the fair value of certain
reporting units for the impairment testing purpose due to the continuing global financial market instability. In
addition, this lower tax rate reflected an increased valuation allowance for operating loss carryforwards that were
no longer deemed to be “more likely than not” to be realized to capture the global economic slowdown.

The effective income tax rate of 4,476.3% for the fiscal year ended March 31, 2008 was 4,435.7 percentage
points higher than the combined normal effective statutory tax rate of 40.6%. This higher tax rate was primarily
due to the fact that an impairment of goodwill was recorded under US GAAP, decreasing our income from
continuing operations before income tax expense to ¥12.4 billion for the fiscal year ended March 31, 2008.
Under Japanese tax law, such impairment of goodwill was not deductible in computing our taxable income and,
accordingly, our income tax expense was significantly higher in comparison to our income from continuing
operations before income tax expense reported under US GAAP. In addition, this higher tax rate reflected an
additional valuation allowance related to operating loss carryforwards that were no longer deemed to be “more
likely than not” to be realized, due to a decline in estimated future taxable income resulting from the downturn in
financial and banking businesses caused by disruptions in the global financial markets.

The effective income tax rate of 48.7% for the fiscal year ended March 31, 2007 was 8.1 percentage points
higher than the combined normal effective statutory tax rate of 40.6%. This higher tax rate primarily reflected an
addition of valuation allowance for certain companies, including a subsidiary in the consumer finance business.

77

Business Segment Analysis

We measure the performance of each of our business segments primarily in terms of “operating profit.”
Operating profit and other segment information in this section are based on the financial information prepared in
accordance with Japanese GAAP as adjusted in accordance with internal management accounting rules and
practices. Accordingly, the format and information are not consistent with our consolidated financial statements
prepared on the basis of US GAAP. For example, operating profit does not reflect items such as a part of
provision (credit) for credit losses (primarily an equivalent of formula allowance under US GAAP), foreign
exchange gains (losses) and equity investment securities gains (losses).

We operate our main businesses under an integrated business group system, which integrates the operations

of BTMU, MUTB, MUS, Mitsubishi UFJ NICOS and other subsidiaries in the following three areas—Retail,
Corporate, and Trust Assets. This integrated business group system is intended to enhance synergies by
promoting more effective and efficient collaboration between our subsidiaries. Under this system, as the holding
company, we formulate strategies for our Group on an integrated basis, which is then executed by the
subsidiaries. Through this system, we aim to reduce overlapping of functions within our Group, thereby
increasing efficiency and realizing the benefits of group resources and scale of operations. Moreover, through
greater integration of our shared expertise in banking, trust and securities businesses, we aim to deliver a more
diverse but integrated lineup of products and services for our customers.

Operations that are not covered by the integrated business group system are classified under Global Markets

and Other.

The following is a brief explanation of our business segments:

Integrated Retail Banking Business Group—Covers all domestic retail businesses, including commercial
banking, trust banking and securities businesses. This business group integrates the retail business of BTMU,
MUTB, MUS, Mitsubishi UFJ NICOS and other subsidiaries as well as retail product development, promotion
and marketing in a single management structure. At the same time, this business group has developed and
implemented MUFG Plaza, a one-stop, comprehensive financial services concept that provides integrated
banking, trust and securities services.

Integrated Corporate Banking Business Group—Covers all domestic and overseas corporate businesses,
including commercial banking, investment banking, trust banking and securities businesses as well as UNBC.
Through the integration of these business lines, diverse financial products and services are provided to our
corporate clients. This business group has clarified strategic domains, sales channels and methods to match the
different growth stages and financial needs of our corporate customers. UNBC is a bank holding company,
whose primary subsidiary, Union Bank, N.A., or Union Bank, is one of the largest commercial banks in
California by both total assets and total deposits. Union Bank provides a wide range of financial services to
consumers, small businesses, middle market companies and major corporations, primarily in California, Oregon
and Washington but also nationally and internationally. As a result of the tender offer that was completed in
September 2008, and the second-step merger that was completed in November 2008, UNBC became our wholly
owned subsidiary. For further information, see “—Recent Developments.”

Integrated Trust Assets Business Group—Covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and the
global network of BTMU. This business group provides a full range of services to corporate and other pension
funds, including stable and secure pension fund management and administration, advice on pension schemes and
payment of benefits to scheme members.

Global Markets—Consists of the treasury operations of BTMU and MUTB. Global Markets also conducts
asset liability management and liquidity management and provides various financial operations such as money
markets and foreign exchange operations and securities investments.

78

Other—Consists mainly of the corporate centers of MUFG, BTMU and MUTB. The elimination of

duplicated amounts of net revenue among business segments is also reflected in Other.

Effective April 1, 2008, we modified our managerial accounting methods, including those regarding revenue
and expense distribution among our business segments. The presentation set forth below for the fiscal year ended
March 31, 2007 and for the fiscal year ended March 31, 2008 has been reclassified to conform to the new basis of
managerial accounting. For further information, see Note 28 to our consolidated financial statements included
elsewhere in this Annual Report.

Integrated
Retail
Banking
Business
Group

Integrated Corporate Banking Business Group

Domestic

Overseas

Total

Other than
UNBC

UNBC

Overseas
total

Integrated
Trust
Assets
Business
Group

Global
Markets Other

Total

(in billions)

Fiscal year ended March 31,

2007

Net revenue . . . . . . . . . . . . . .
Operating expenses . . . . . . . .

¥1,304.1
917.1

¥1,283.3
537.0

Operating profit (loss) . . . . . .

¥ 387.0

¥ 746.3

Fiscal year ended March 31,

2008

Net revenue . . . . . . . . . . . . . .
Operating expenses . . . . . . . .

¥1,332.7
955.9

¥1,171.8
573.6

Operating profit (loss) . . . . . .

¥ 376.8

¥ 598.2

Fiscal year ended March 31,

2009

Net revenue . . . . . . . . . . . . . .
Operating expenses . . . . . . . .

¥1,319.6
977.0

¥ 952.7
569.4

Operating profit (loss) . . . . . .

¥ 342.6

¥ 383.3

¥301.4
178.7

¥122.7

¥301.5
183.8

¥117.7

¥350.8
171.6

¥179.2

¥324.3
200.8

¥625.7
379.5

¥1,909.0
916.5

¥194.2
103.8

¥380.1
57.7

¥ 14.9
176.8

¥3,802.3
2,171.9

¥123.5

¥246.2

¥ 992.5

¥ 90.4

¥322.4

¥(161.9) ¥1,630.4

¥296.4
187.6

¥597.9
371.4

¥1,769.7
945.0

¥198.5
98.5

¥290.6
59.0

¥ 28.6
190.5

¥3,620.1
2,248.9

¥108.8

¥226.5

¥ 824.7

¥100.0

¥231.6

¥(161.9) ¥1,371.2

¥256.8
157.3

¥607.6
328.9

¥1,560.3
898.3

¥171.1
93.3

¥311.6
62.3

¥ (24.0) ¥3,338.6
2,212.8

181.9

¥ 99.5

¥278.7

¥ 662.0

¥ 77.8

¥249.3

¥(205.9) ¥1,125.8

Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

Net revenue of the Integrated Retail Banking Business Group decreased ¥13.1 billion from ¥1,332.7 billion

for the fiscal year ended March 31, 2008 to ¥1,319.6 billion for the fiscal year ended March 31, 2009. Net
revenue of the Integrated Retail Banking Business Group mainly consists of revenue from commercial banking
operations, such as deposits and lending operations, and fees related to the sales of investment products to retail
customers, as well as fees of subsidiaries within the Integrated Retail Banking Business Group. The decrease in
net revenue was mainly due to decreases in net interest income in consumer finance as well as fees and
commissions on securities businesses and investment funds business, which fully offset increases in net fees and
revenue from deposits and those from ACOM CO., LTD., a consumer finance company that became a
consolidated subsidiary during the fiscal year ended March 31, 2009.

Operating expenses of the Integrated Retail Banking Business Group increased ¥21.1 billion from ¥955.9
billion for the fiscal year ended March 31, 2008 to ¥977.0 billion for the fiscal year ended March 31, 2009. The
increase in operating expenses was due to the consolidation of ACOM.

Operating profit of the Integrated Retail Banking Business Group decreased ¥34.2 billion from ¥376.8
billion for the fiscal year ended March 31, 2008 to ¥342.6 billion for the fiscal year ended March 31, 2009. This
decrease was mainly due to the decrease in net revenue and increase in operating expenses as stated above.

Net revenue of the Integrated Corporate Banking Business Group decreased ¥209.4 billion from ¥1,769.7
billion for the fiscal year ended March 31, 2008 to ¥1,560.3 billion for the fiscal year ended March 31, 2009. Net

79

revenue of the Integrated Corporate Banking Business Group mainly consists of revenues from lending and other
commercial banking operations, investment banking and trust banking businesses in relation to corporate clients,
as well as fees of subsidiaries within the Integrated Corporate Banking Business Group. The decrease in net
revenue was mainly due to decreased net revenue in domestic businesses.

With regard to the domestic businesses, net revenue of ¥952.7 billion, a decrease of ¥219.1 billion from the

previous fiscal year, was recorded for the fiscal year ended March 31, 2009. This decrease was mainly due to a
decrease in net interest income resulting from a decrease in loan interest margin and decreases in net revenue
from sales of derivative products and from securities businesses. The decrease in net revenue was also
attributable to losses from impairment and sales of securitized products.

With regard to the overseas businesses, net revenue of ¥607.6 billion, an increase of ¥9.7 billion from the

previous fiscal year, was recorded for the fiscal year ended March 31, 2009. This increase was mainly due to an
increase in net revenue from overseas lending business mainly for non-Japanese corporate clients.

Operating expenses of the Integrated Corporate Banking Business Group were ¥898.3 billion for the fiscal

year ended March 31, 2009, a decrease of ¥46.7 billion from the fiscal year ended March 31, 2008.

Operating profit of the Integrated Corporate Banking Business Group decreased ¥162.7 billion from
¥824.7 billion for the fiscal year ended March 31, 2008 to ¥662.0 billion for the fiscal year ended March 31,
2009. This decrease was mainly due to the decrease in net revenue as stated above.

Net revenue of the Integrated Trust Assets Business Group decreased ¥27.4 billion from ¥198.5 billion for
the fiscal year ended March 31, 2008 to ¥171.1 billion for the fiscal year ended March 31, 2009. Net revenue of
the Integrated Trust Assets Business Group mainly consists of fees from asset management and administration
services for products such as pension trusts and investment trusts. The decrease in net revenue was mainly due to
a decrease in net revenue from pension funds and investment trusts.

Operating expenses of the Integrated Trust Assets Business Group decreased ¥5.2 billion from ¥98.5 billion

for the fiscal year ended March 31, 2008 to ¥93.3 billion for the fiscal year ended March 31, 2009.

Operating profit of the Integrated Trust Assets Business Group decreased ¥22.2 billion from ¥100.0 billion
for the fiscal year ended March 31, 2008 to ¥77.8 billion for the fiscal year ended March 31, 2009. This decrease
was due to the decrease in net revenue as stated above.

Net revenue of Global Markets increased ¥21.0 billion from ¥290.6 billion for the fiscal year ended
March 31, 2008 to ¥311.6 billion for the fiscal year ended March 31, 2009. The increase in net revenue was
mainly due to a good performance in asset liability management for both domestic and overseas operations.

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

Net revenue of the Integrated Retail Banking Business Group increased ¥28.6 billion from ¥1,304.1 billion

for the fiscal year ended March 31, 2007 to ¥1,332.7 billion for the fiscal year ended March 31, 2008. Net
revenue of the Integrated Retail Banking Business Group mainly consists of revenue from commercial banking
operations, such as deposits and lending operations, and fees related to the sales of investment products to retail
customers, as well as fees of subsidiaries within the Integrated Retail Banking Business Group. The increase in
net revenue was mainly due to increases in net fees and revenue from the deposits and the revenue from
kabu.com Securities, an online securities company that became a consolidated subsidiary during the fiscal year
ended March 31, 2008.

Operating expenses of the Integrated Retail Banking Business Group increased ¥38.8 billion from
¥917.1 billion for the fiscal year ended March 31, 2007 to ¥955.9 billion for the fiscal year ended March 31,
2008. The increase in operating expenses was due to an increase in expenses related to the integration of IT
systems mainly for our merged commercial bank subsidiaries.

80

Operating profit of the Integrated Retail Banking Business Group decreased ¥10.2 billion from

¥387.0 billion for the fiscal year ended March 31, 2007 to ¥376.8 billion for the fiscal year ended March 31,
2008. This decrease was mainly due to the increase in operating expenses as stated above.

Net revenue of the Integrated Corporate Banking Business Group decreased ¥139.3 billion from

¥1,909.0 billion for the fiscal year ended March 31, 2007 to ¥1,769.7 billion for the fiscal year ended March 31,
2008. Net revenue of the Integrated Corporate Banking Business Group mainly consists of revenues from lending
and other commercial banking operations, investment banking and trust banking businesses in relation to
corporate clients, as well as fees of subsidiaries within the Integrated Corporate Banking Business Group. The
decrease in net revenue was mainly due to decreased net revenue in domestic businesses resulting from a
decrease in interest spread and lending volume.

With regard to the domestic businesses, net revenue of ¥1,171.8 billion, a decrease of ¥111.5 billion from

the previous fiscal year, was recorded for the fiscal year ended March 31, 2008. This decrease was mainly due to
a decrease in net interest income from loans and fees related to securities businesses. Intensified competition with
other financial institutions increased downward pressure on the interest spread of our lending operations to large
and medium-sized Japanese companies, and the recent deterioration in financial markets led to lower transaction
volume in securities businesses.

With regard to the overseas businesses, net revenue of ¥597.9 billion, a decrease of ¥27.8 billion from the

previous fiscal year, was recorded for the fiscal year ended March 31, 2008. Although lending and foreign
exchange businesses to Japanese and non-Japanese corporate clients in growing markets in Asia as well as the
markets in the Americas and Europe contributed to the expansion of our overseas businesses, net revenue
decreased due to further appreciation of the Japanese yen against the US dollar.

Operating expenses of the Integrated Corporate Banking Business Group were ¥945.0 billion for the fiscal

year ended March 31, 2008, an increase of ¥28.5 billion from the fiscal year ended March 31, 2007.

Operating profit of the Integrated Corporate Banking Business Group decreased ¥167.8 billion from ¥992.5
billion for the fiscal year ended March 31, 2007 to ¥824.7 billion for the fiscal year ended March 31, 2008. This
decrease was mainly due to the decrease in net revenue as stated above.

Net revenue of the Integrated Trust Assets Business Group increased ¥4.3 billion from ¥194.2 billion for the

fiscal year ended March 31, 2007 to ¥198.5 billion for the fiscal year ended March 31, 2008. Net revenue of the
Integrated Trust Assets Business Group mainly consists of fees from asset management and administration
services for products such as pension trusts and investment trusts. The increase in net revenue was mainly due to
an increase in business in investment trusts.

Operating expenses of the Integrated Trust Assets Business Group decreased ¥5.3 billion from ¥103.8
billion for the fiscal year ended March 31, 2007 to ¥98.5 billion for the fiscal year ended March 31, 2008. This
decrease was mainly due to a decrease in costs of retirement benefits.

Operating profit of the Integrated Trust Assets Business Group increased ¥9.6 billion from ¥90.4 billion for

the fiscal year ended March 31, 2007 to ¥100.0 billion for the fiscal year ended March 31, 2008. This increase
was mainly due to the decrease in operating expenses as stated above.

Net revenue of Global Markets decreased ¥89.5 billion from ¥380.1 billion for the fiscal year ended
March 31, 2007 to ¥290.6 billion for the fiscal year ended March 31, 2008. The decrease in net revenue was
mainly due to losses on sales and impairment losses of investment securities, including asset-backed securities.

81

Geographic Segment Analysis

The table immediately below sets forth our total revenue, income (loss) from continuing operations before

income tax expense (benefit) and net income (loss) on a geographic basis for the fiscal years ended March 31,
2007, 2008 and 2009. Assets, income and expenses attributable to foreign operations are allocated to
geographical areas based on the domicile of the debtors and customers. For further information, see Note 29 to
our consolidated financial statements included elsewhere in this Annual Report.

Fiscal years ended March 31,

2007

2008

2009

(in billions)

Total revenue (interest income and non-interest income):

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,668.0

¥4,691.0

¥ 2,924.4

Foreign:

United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1)

1,191.6
540.6
270.2
193.3

228.1
699.8
442.0
84.0

568.7
233.7
329.7
14.4

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,195.7

1,453.9

1,146.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,863.7

¥6,144.9

¥ 4,070.9

Income (loss) from continuing operations before income tax expense (benefit):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 236.8

¥ 280.2

¥(1,331.1)

Foreign:

United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1)

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

462.9
254.5
83.5
97.2

898.1

(517.6)
91.8
183.9
(25.9)

(267.8)

(203.0)
(235.8)
110.5
(68.6)

(396.9)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,134.9

¥

12.4

¥(1,728.0)

Net income (loss):

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

63.0

¥ (227.1) ¥(1,064.3)

Foreign:

United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1)

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248.9
169.2
44.2
56.0

518.3

(637.3)
121.3
232.2
(31.5)

(315.3)

(223.5)
(229.5)
119.4
(70.1)

(403.7)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 581.3

¥ (542.4) ¥(1,468.0)

Note:
(1) Other areas primarily include Canada, Latin America and the Caribbean.

Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

Domestic net loss for the fiscal year ended March 31, 2009 was ¥1,064.3 billion, compared to a net loss of
¥227.1 billion for the fiscal year ended March 31, 2008. This deterioration mainly reflected the increase in loss
on sales and revaluation from trading in debt and equity securities primarily due to unfavorable market
conditions.

82

Foreign net loss for the fiscal year ended March 31, 2009 was ¥403.7 billion, an increase of ¥88.4 billion,

from ¥315.3 billion for the fiscal year ended March 31, 2008. This increase primarily reflected an increase in net
loss in Europe of ¥350.8 billion over the same period, which was recorded mainly due to the appreciation of the
Japanese yen against the euro and other foreign currencies.

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

Domestic net loss for the fiscal year ended March 31, 2008 was ¥227.1 billion, compared to a net income of

¥63.0 billion for the fiscal year ended March 31, 2007. This deterioration was mainly due to our recording an
impairment of goodwill for the fiscal year ended March 31, 2008.

Foreign net loss for the fiscal year ended March 31, 2008 was ¥315.3 billion, compared to a foreign net
income of ¥518.3 billion for the fiscal year ended March 31, 2007. This deterioration primarily reflected the net
loss in the United States mainly due to an increase in impairment losses on investment securities denominated in
US dollars.

Effect of Change in Exchange Rates on Foreign Currency Translation

Fiscal Year Ended March 31, 2009 Compared to Fiscal Year Ended March 31, 2008

The average exchange rate for the fiscal year ended March 31, 2009 was ¥100.54 per US$1.00, compared to

the prior fiscal year’s average exchange rate of ¥114.29 per US$1.00. The average exchange rate for the
conversion of the US dollar financial statements of some of our foreign subsidiaries for the fiscal year ended
December 31, 2008 was ¥103.46 per US$1.00, compared to the average exchange rate for the fiscal year ended
December 31, 2007 of ¥117.84 per US$1.00.

The change in the average exchange rate of the Japanese yen against the US dollar and other foreign
currencies had the effect of decreasing total revenue by ¥477.2 billion, net interest income by ¥141.2 billion and
income before income taxes by ¥168.2 billion, respectively, for the fiscal year ended March 31, 2009.

Fiscal Year Ended March 31, 2008 Compared to Fiscal Year Ended March 31, 2007

The average exchange rate for the fiscal year ended March 31, 2008 was ¥114.29 per US$1.00, compared to

the prior fiscal year’s average exchange rate of ¥117.02 per US$1.00. The average exchange rate for the
conversion of the US dollar financial statements of some of our foreign subsidiaries for the fiscal year ended
December 31, 2007 was ¥117.84 per US$1.00, compared to the average exchange rate for the fiscal year ended
December 31, 2006 of ¥116.38 per US$1.00.

The change in the average exchange rate of the Japanese yen against the US dollar and other foreign
currencies had the effect of increasing total revenue by ¥30.7 billion, net interest income by ¥12.3 billion and
income before income taxes by ¥0.3 billion, respectively, for the fiscal year ended March 31, 2008.

83

B. Liquidity and Capital Resources

Financial Condition

Total Assets

Our total assets at March 31, 2009 were ¥193.50 trillion, a decrease of ¥2.27 trillion from ¥195.77 trillion at
March 31, 2008. The decrease in total assets mainly reflected decreases in receivables under resale agreements of
¥4.58 trillion, investment securities of ¥4.51 trillion, and interest-earning deposits in other banks of ¥2.78 trillion.
These decreases were partially offset by increases in trading account assets of ¥11.84 trillion, net loans of ¥1.29
trillion, and deferred tax assets of ¥1.27 trillion.

We have allocated a substantial portion of our assets to international activities. As a result, reported amounts

are affected by changes in the value of the Japanese yen against the US dollar and other foreign currencies.
Foreign assets are denominated primarily in US dollars. The following table shows our total assets at March 31,
2008 and 2009 by geographic region based principally on the domicile of the obligors:

At March 31,

2008(2)
(Adjusted)

2009

(in trillions)

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥140.61

¥143.00

Foreign:

United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1)

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.62
19.97
8.32
6.25

55.16

23.09
14.98
7.47
4.96

50.50

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥195.77

¥193.50

Notes:
(1) Other areas primarily include Canada, Latin America and the Caribbean.
(2) Balances at March 31, 2008 were adjusted. See “Netting of Cash Collateral against Derivative Exposures” under “Accounting Changes”

in Note 1 to our consolidated financial statements included elsewhere in this Annual Report for details.

At March 31, 2009, the foreign exchange rate expressed in Japanese yen per US$1.00 by us was ¥98.23, as

compared with ¥100.19 at March 31, 2008. The Japanese yen amount of foreign currency-denominated assets
and liabilities decreased as the relevant exchange rates resulted in an increase in the value of the Japanese yen
relative to such foreign currencies. The appreciation of the Japanese yen against the US dollar and other foreign
currencies during the fiscal year ended March 31, 2009 decreased the Japanese yen amount of our total assets by
¥8.03 trillion.

84

Loan Portfolio

The following table sets forth our loans outstanding, before deduction of allowance for credit losses, at
March 31, 2008 and 2009, based on classification by industry segment as defined by the Bank of Japan for
regulatory reporting purposes, which is not necessarily based on use of proceeds.

At March 31,

2008
(Restated)(3)

2009

(in billions)

Domestic:

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,178.9
1,728.5
10,857.1
6,554.0
9,308.6
4,671.5
1,150.4
10,806.2
21,517.7

¥ 12,922.8
1,803.5
10,436.8
6,750.4
9,760.8
4,836.0
732.7
9,515.9
20,542.4

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,772.9

77,301.3

Foreign:

Governments and official institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial and industrial
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

316.8
2,100.1
16,189.7
2,706.7

351.1
2,687.0
17,550.6
2,510.5

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,313.3

23,099.2

Unearned income, unamortized premium—net and deferred loan fees—net

. . . . . . . . .

(84.1)

(90.2)

Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99,002.1

¥100,310.3

Notes:
(1) Loans to the so-called non-bank finance companies are generally included in the “Banks and other financial institutions” category.

Non-bank finance companies are primarily engaged in consumer lending, factoring and credit card businesses.

(2) The above table includes loans held for sale of ¥505.6 billion at March 31, 2008 and ¥119.6 billion at March 31, 2009, which are carried

at the lower of cost or estimated fair value.

(3) Classification of loans by industry at March 31, 2008 were restated. See Note 6 to our consolidated financial statement included

elsewhere in this Annual Report for further information.

Loans are our primary use of funds. The average loan balance accounted for 56.26% of total interest-earning

assets for the fiscal year ended March 31, 2008 and 57.81% for the fiscal year ended March 31, 2009.

At March 31, 2009, our total loans were ¥100.31 trillion, representing an increase of ¥1.31 trillion from

¥99.00 trillion at March 31, 2008. Before unearned income, unamortized premiums—net and deferred loan
fees—net, our loan balance at March 31, 2009 consisted of ¥77.30 trillion of domestic loans and ¥23.10 trillion
of foreign loans, while the loan balance at March 31, 2008 consisted of ¥77.77 trillion of domestic loans and
¥21.31 trillion of foreign loans. Between March 31, 2008 and March 31, 2009, domestic loans decreased
¥0.47 trillion and foreign loans increased ¥1.79 trillion.

Within the domestic loan portfolio, the loan balances for the manufacturing, and wholesale and retail sectors

increased by ¥1.74 trillion and ¥0.45 trillion, respectively. This was offset by decreases in the other industries,
consumer, and real estate sectors of ¥1.29 trillion, ¥0.98 trillion, and ¥0.42 trillion, respectively. The overall
decrease in domestic loans was mainly due to the continued economic recession, experienced throughout the
fiscal year ended March 31, 2009.

85

The increase in foreign loans was mainly due to increased demand for loans from the commercial and
industrial and the banks and other financial institutions during the fiscal year ended March 31, 2009. The recent
disruptions in the global financial markets have limited the ability of businesses to obtain funding from the
capital markets. As a result, loans to our foreign customers increased.

Allowance for Credit Losses, Nonperforming and Past Due Loans

The following table shows a summary of the changes in the allowance for credit losses for the fiscal years

ended March 31, 2007, 2008 and 2009:

Fiscal years ended March 31,

2007

¥1,012.2
358.6

2008

(in billions)
¥1,112.5
385.7

2009

¥1,134.9
626.9

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recoveries:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(289.2)
(13.9)

(303.1)

35.5
5.0

40.5

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(262.6)
4.3

(380.0)
(6.5)

(386.5)

28.5
2.1

30.6

(355.9)
(7.4)

(559.0)
(44.3)

(603.3)

23.7
2.8

26.5

(576.8)
(28.4)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,112.5

¥1,134.9

¥1,156.6

Note:
(1) “Others” primarily include foreign currency translation adjustments.

As previously discussed, the provision for credit losses for the fiscal year ended March 31, 2009 was ¥626.9

billion, an increase of ¥241.2 billion from ¥385.7 billion for the fiscal year ended March 31, 2008. The increase
in the provision for credit losses was mainly due to the general weakening of the financial condition of certain
borrowers particularly overseas and small and medium sized borrowers.

For the fiscal year ended March 31, 2009, the ratio of the provision for the credit losses of ¥626.9 billion to

the average loan balance of ¥100.16 trillion was 0.63%, and that to the total average interest-earning assets of
¥173.24 trillion was 0.36%.

Charge-offs for the fiscal year ended March 31, 2009 were ¥603.3 billion, an increase of ¥216.8 billion from

¥386.5 billion for the fiscal year ended March 31, 2008. The increase in the charge-offs was mainly due to
increases in the charge-offs for the domestic real estate and wholesale and retail and the foreign banks and other
financial institutions.

The total allowance for credit losses at March 31, 2009 was ¥1,156.6 billion, an increase of ¥21.7 billion

from ¥1,134.9 billion at March 31, 2008 as we recorded a provision for credit losses of ¥626.9 billion, whereas
we had net charge-offs of ¥576.8 billion.

86

The following table presents comparative data in relation to the principal amount of nonperforming loans

sold and reversal of allowance for credit losses:

Principal
amount of
loans(1)

Allowance
for credit
losses(2)

Loans,
net of
allowance

(in billions)

Reversal of
allowance
for credit
losses

For the fiscal year ended March 31, 2008 . . . . . . . . . . . . . . . . . . . . .
For the fiscal year ended March 31, 2009 . . . . . . . . . . . . . . . . . . . . .

¥78.3
¥24.5

¥20.8
¥ 9.4

¥57.5
¥15.1

¥(13.2)
¥ (0.3)

Notes:
(1) Represents principal amount after the deduction of charge-offs made before the sales of nonperforming loans.
(2) Represents allowance for credit losses at the latest balance-sheet date.

Through the sale of nonperforming loans to third parties, additional provisions or gains may arise from
factors such as a change in the credit quality of the borrowers or the value of the underlying collateral subsequent
to the prior reporting date, and the risk appetite and investment policy of the purchasers.

Due to the inherent uncertainty of factors that may affect negotiated prices which reflect the borrowers’
financial condition and the value of underlying collateral, the fact that we recorded no additional cost during the
reported period is not necessarily indicative of the results that we may record in the future.

In connection with the sale of loans including performing loans, we recorded net gains of ¥14.8 billion and

net losses of ¥1.8 billion for the fiscal years ended March 31, 2008 and 2009, respectively.

The following table summarizes the allowance for credit losses by component at March 31, 2008 and 2009:

Allocated allowance:

Specific—specifically identified problem loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Large groups of smaller balance homogeneous loans . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans exposed to specific country risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Formula—substandard, special mention and other loans . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 563.3
129.1
0.1
432.7
9.7

¥ 618.5
97.9
1.1
432.8
6.3

Total allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,134.9

¥1,156.6

At March 31,

2008

2009

(in billions)

Allowance Policy

Our credit rating system is closely linked to the risk grading standards set by the Japanese regulatory
authorities for asset evaluation and assessment, and is used as a basis for establishing the allowance for credit
losses and charge-offs. The categorization is based on conditions that may affect the ability of borrowers to
service their debt, such as current financial condition and results of operations, historical payment experience,
credit documentation, other public information and current trends. For a discussion of our credit rating system,
see “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Credit Risk
Management—Credit Rating System.”

Change in total allowance and provision for credit losses

At March 31, 2009, the total allowance for credit losses was ¥1,156.6 billion, representing 1.15% of our

total loan portfolio. At March 31, 2008, the total allowance for credit losses was ¥1,134.9 billion, representing
1.15% of our total loan portfolio.

87

The total allowance increased from ¥1,134.9 billion at March 31, 2008 to ¥1,156.6 billion at March 31, 2009

primarily as a result of the downgrade in the credit rating of certain overseas borrowers and certain borrowers of
the real estate and wholesale and retail segment during the fiscal year ended March 31, 2009.

During the fiscal year ended March 31, 2009, there were no significant changes in our general allowance
policy, which affected our allowance for credit losses for the period, resulting from directives, advice or counsel
from governmental or regulatory bodies.

Allocated allowance for specifically identified problem loans

The allocated credit loss allowance for specifically identified problem loans represents the allowance

against impaired loans required under SFAS No. 114, “Accounting by Creditors for Impairment of a Loan.”
Impaired loans primarily include nonaccrual loans and restructured loans. We generally discontinue the accrual
of interest income on loans when substantial doubt exists as to the full and timely collection of either principal or
interest, or when principal or interest is contractually past due one month or more with respect to loans of our
domestic banking subsidiaries, including BTMU and MUTB, and 90 days or more with respect to loans of certain
banking subsidiaries abroad. Loans are classified as restructured loans when we grant a concession to borrowers
for economic or legal reasons related to the borrowers’ financial difficulties.

Detailed reviews of impaired loans are performed after a borrower’s annual or semi-annual financial
statements first become available. In addition, as part of an ongoing credit review process, our credit officers
monitor changes in all customers’ creditworthiness, including bankruptcy, past due principal or interest,
downgrades of external credit ratings, declines in the stock price, business restructuring and other events, and
reassess our ratings of borrowers in response to such events. This credit monitoring process forms an integral part
of our overall risk management process. An impaired loan is evaluated individually based on the present value of
expected future cash flows discounted at the loan’s effective interest rate, the loan’s estimated marketable price
or the fair value of the collateral at the annual and semi-annual fiscal year end, if the loan is collateral-dependent
as of a balance-sheet date.

88

The following table summarizes nonaccrual and restructured loans, and accruing loans that are contractually

past due 90 days or more as to principal or interest payments, at March 31, 2008 and 2009:

Nonaccrual loans:
Domestic:

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total nonaccrual loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restructured loans:
Domestic:

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans contractually past due 90 days or more:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total accruing loans contractually past due 90 days or more . . . . . . . . . . .

At March 31,

2008

2009

(in billions, except percentages)

¥

109.1
44.3
164.5
142.8
156.8
10.6
45.1
36.2
318.9

1,028.3
116.2
1,144.5

¥

87.7
55.8
263.8
104.6
139.0
14.8
36.9
20.6
372.9

1,096.1
153.4
1,249.5

79.0
16.4
119.3
32.7
32.1
2.0
2.6
145.5
62.6

492.2
25.1

517.3

14.9
3.0

17.9

67.5
18.0
59.4
40.7
28.8
3.3
15.9
128.3
95.9

457.8
63.8

521.6

15.1
6.4

21.5

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,679.7

¥

1,792.6

Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99,002.1

¥100,310.3

Nonaccrual and restructured loans, and accruing loans contractually past due

90 days or more as a percentage of total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.70%

1.79%

Nonaccrual and restructured loans and accruing loans contractually past due 90 days or more increased by

¥112.9 billion from ¥1,679.7 billion at March 31, 2008 to ¥1,792.6 billion at March 31, 2009. Similarly, the
percentage of nonperforming loans to total loans increased to 1.79% at March 31, 2009 from 1.70% at March 31,
2008.

Total nonaccrual loans were ¥1,249.5 billion at March 31, 2009, an increase of ¥105.0 billion from ¥1,144.5

billion at March 31, 2008. Domestic nonaccrual loans increased ¥67.8 billion between March 31, 2008 and
March 31, 2009, mainly due to the downgrade in credit rating of certain borrowers of the real estate segment.

89

Foreign nonaccrual loans increased ¥37.2 billion between March 31, 2008 and March 31, 2009, mainly due to the
downgrade in credit ratings of certain overseas borrowers included in the foreign banks and other financial
institutions segment. Domestic nonaccrual loans in real estate increased ¥99.3 billion and those in services
decreased ¥38.2 billion.

Total restructured loans were ¥521.6 billion at March 31, 2009, an increase of ¥4.3 billion from ¥517.3
billion at March 31, 2008. Domestic restructured loans decreased ¥34.4 billion to ¥457.8 billion at March 31,
2009 from ¥492.2 billion at March 31, 2008 mainly due to the downgrade in credit ratings of certain borrowers in
the real estate segment. Restructured loans in the real estate segment decreased ¥59.9 billion and restructured
loans in the manufacturing segment decreased ¥11.5 billion, but those in the consumer segment increased ¥33.3
billion.

The following table summarizes the balances of impaired loans and related impairment allowances at

March 31, 2008 and 2009, excluding smaller-balance homogeneous loans:

At March 31,

2008

2009

Loan
balance

Impairment
allowance

Loan
balance

Impairment
allowance

Requiring an impairment allowance . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . .
Not requiring an impairment allowance(1)

¥1,131.8
311.8

Total(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,443.6

(in billions)

¥563.3
—

¥563.3

¥1,168.5
407.7

¥1,576.2

¥618.6
—

¥618.6

Percentage of the allocated allowance to total impaired loans . . .

39.0%

39.2%

Notes:
(1) These loans do not require an allowance for credit losses under SFAS No. 114 since the fair values of the impaired loans equal or exceed

(2)

the recorded investments in the loans.
In addition to impaired loans presented in the above table, there were loans held for sale that were impaired of ¥11.9 billion at March 31,
2008 and there were no loans held for sale that were impaired at March 31, 2009.

Impaired loans increased by ¥132.6 billion from ¥1,443.6 billion at March 31, 2008 to ¥1,576.2 billion at

March 31, 2009, reflecting the increase in nonaccrual loans.

The percentage of the allocated allowance to total impaired loans increased 0.2 percentage points to 39.2%

at March 31, 2009 from 39.0% at March 31, 2008.

Based upon a review of the financial status of borrowers, our banking subsidiaries may grant various
concessions (modification of loan terms) to troubled borrowers at the borrowers’ request, including reductions in
the stated interest rates, debt write-offs, and extensions of the maturity date. According to the policies of each of
our banking subsidiaries, such modifications are made to mitigate the near-term burden of the loans to the
borrowers and to better match the payment terms with the borrowers’ expected future cash flows or, in
cooperation with other creditors, to reduce the overall debt burden of the borrowers so that they may normalize
their operations, in each case to improve the likelihood that the loans will be repaid in accordance with the
revised terms. The nature and amount of the concessions depend on the particular financial condition of each
borrower. In principle, however, none of our banking subsidiaries modify the terms of loans to borrowers that are
considered “Likely to Become Bankrupt,” “Virtually Bankrupt,” or “Bankrupt” under the self-assessment
categories established by Japanese banking regulations because in these cases there is little likelihood that the
modification of loan terms would enhance recovery of the loans.

Allocated allowance for large groups of smaller-balance homogeneous loans

The allocated credit loss allowance for large groups of smaller-balance homogeneous loans is focused on

loss experience for the pools of loans rather than on an analysis of individual loans. Large groups of smaller-
balance homogeneous loans primarily consist of first mortgage housing loans to individuals. The allowance for
groups of performing loans is based on historical loss experience over a period. In determining the level of the

90

allowance for delinquent groups of loans, we classify groups of homogeneous loans based on the risk rating and/
or the number of delinquencies. We determine the credit loss allowance for delinquent groups of loans based on
the probability of insolvency by the number of actual delinquencies and actual loss experience.

The allocated credit loss allowance for large groups of smaller-balance homogeneous loans was

¥97.9 billion at March 31, 2009, a decrease of ¥31.2 billion from ¥129.1 billion at March 31, 2008.

Allocated allowance for country risk exposure

The allocated credit loss allowance for country risk exposure is based on an estimate of probable losses
relating to the exposure to countries that we identify as having a high degree of transfer risk. The countries to
which the allowance for country risk exposure relates are decided based on a country risk grading system used to
assess and rate the transfer risk to individual countries. The allowance is generally determined based on a
function of default probability and expected recovery ratios, taking external credit ratings into account.

The allocated allowance for country risk exposure was ¥1.1 billion at March 31, 2009, a increase of

¥1.0 billion from ¥0.1 billion at March 31, 2008.

Formula allowance for substandard, special mention and unclassified loans

The formula allowance is calculated by applying estimated loss factors to outstanding substandard, special

mention and unclassified loans. In evaluating the inherent loss for these loans, we rely on a statistical analysis
that incorporates a percentage of total loans based on historical loss experience.

The formula allowance increased ¥0.1 billion from ¥432.7 billion at March 31, 2008 to ¥432.8 billion at

March 31, 2009.

Each of our banking subsidiaries has computed the formula allowance based on estimated credit losses using

a methodology defined by the credit rating system. Estimated losses inherent in the loan portfolio at the balance
sheet date are calculated by multiplying the default ratio by the nonrecoverable ratio (determined as a
complement of the recovery ratio). The default ratio is determined by each credit risk rating, taking into account
the historical number of defaults of borrowers within each credit risk rating divided by the total number of
borrowers within that credit risk rating existing at the beginning of the three-year observation period. The
recovery ratio is mainly determined by the historical experience of collections against loans in default. The
default ratio, the recovery ratio and other indicators are continually reviewed and improved to compute the
formula allowance and the allowance for off-balance-sheet instruments. In addition, an appropriate adjustment to
the formula allowance and the allowance for off-balance-sheet instruments, considering the risk of losses from
large obligors and other credit risks, is examined and made by analyzing the difference between the allowance
computed by multiplying the default ratio by nonrecoverable ratio and the allowance calculated based on the loss
experience ratio.

UNBC, our largest overseas subsidiary, calculates the formula allowance by applying loss factors to
outstanding loans and certain unused commitments, in each case based on the internal risk grade of such loans,
leases and commitments. Changes in risk grades affect the amount of the formula allowance. Loss factors are
based on their historical loss experience and may be adjusted for significant factors that, in management’s
judgment, affect the collectibility of the portfolio as of the evaluation date. Loss factors are developed in the
following ways:

•

•

loss factors for individually graded credits are derived from a migration model that tracks historical
losses over a period, which we believe captures the inherent losses in our loan portfolio; and

pooled loan loss factors (not individually graded loans) are based on expected net charge-offs. Pooled
loans are loans that are homogeneous in nature, such as consumer installment, home equity, residential
mortgage loans and certain small commercial and commercial real estate loans.

91

Though there are a few technical differences in the methodology used for the formula allowance for credit
losses as mentioned above, we examine overall sufficiency of the formula allowance periodically by back-test
comparison with the actual loss experience subsequent to the balance sheet date.

Unallocated allowance

The unallocated allowance is based on management’s evaluation of conditions that are not directly reflected

in the determination of the formula and specific allowances. The evaluation of the inherent loss with respect to
these conditions is subject to a higher degree of uncertainty because they may not be identified with specific
problem credits or portfolio segments. The conditions evaluated in connection with the unallocated allowance
include the following, which were considered to exist at the balance sheet date:

•

•

•

•

•

•

•

•

•

general economic and business conditions affecting our key lending areas;

credit quality trends (including trends in nonperforming loans expected to result from existing
conditions);

collateral values;

loan volumes and concentrations;

specific industry conditions within portfolio segments;

recent loss experience in particular segments of the portfolio;

duration of the current economic cycle;

bank regulatory examination results; and

findings of internal credit examination.

Executive management reviews these conditions quarterly in discussion with our senior credit officers. To

the extent that any of these conditions are evidenced by a specifically identifiable problem credit or portfolio
segment as of the evaluation date, management’s estimate of the effect of such conditions may be reflected as a
specific allowance. Where any of these conditions are not evidenced by a specifically identifiable problem credit
or portfolio segment as of the evaluation date, management’s evaluation of the probable loss related to such
conditions is reflected in the unallocated allowance.

The unallocated allowance decreased ¥3.4 billion from ¥9.7 billion at March 31, 2008 to ¥6.3 billion at
March 31, 2009. This decrease was primarily due to the impact of a decrease in evaluated loss factors for loans
without allocated allowance.

Allowance for Off-balance-sheet Credit Instruments

In addition to the allowance for credit losses on the loan portfolio, we maintain an allowance for credit
losses on off-balance-sheet credit instruments, including commitments of credit, guarantees and standby letters of
credit. This allowance is included in other liabilities. With regard to the specific allocated allowance for
specifically identified credit exposure and the allocated formula allowance, we apply the same methodology that
we use in determining the allowance for loan credit losses. The allowance for credit losses on off-balance-sheet
credit instruments was ¥84.6 billion at March 31, 2009, a decrease of ¥12.7 billion from ¥97.3 billion at
March 31, 2008. The decrease in the allowance for credit losses on off-balance-sheet credit instruments was
mainly due to the reduction of some off-balance-sheet credit.

Investment Portfolio

Our investment securities are primarily comprised of Japanese national government and Japanese

government agency bonds, corporate bonds and marketable equity securities. Japanese national government and
Japanese government agency bonds are mostly classified as securities available for sale. We also hold Japanese
national government bonds which are classified as securities being held to maturity.

92

Historically, we have held equity securities of some of our customers for strategic purposes, in particular, to

maintain long-term relationships with these customers. However, we have been reducing the aggregate value of
our equity securities because we believe that from a risk management perspective reducing the price fluctuation
risk in our equity portfolio is imperative. As of March 31, 2008 and 2009, the aggregate value of our marketable
equity securities under Japanese GAAP satisfied the requirements of the legislation prohibiting banks from
holding equity securities in excess of their Tier I capital.

Investment securities decreased ¥4.51 trillion, from ¥42.15 trillion at March 31, 2008 to ¥37.64 trillion at
March 31, 2009 due primarily to significant decreases in foreign governments and official institutions bonds,
corporate bonds, mortgage-backed securities, asset-backed securities and marketable equity securities. These
decreases were partially offset by increased purchases of Japanese national government and Japanese government
agency bonds. Certain foreign debt securities of ¥10.45 trillion, which were previously included in foreign
governments and official institutions bonds, corporate bonds, mortgage-backed securities and asset-backed
securities, were reclassified to trading securities upon election of the fair value option accounting under SFAS
No. 159 at April 1, 2008. For marketable equity securities, the decline in stock prices of Japanese equity
securities resulted in a decrease of our marketable equity securities.

The following table shows information as to the amortized costs and estimated fair values of our investment

securities available for sale and being held to maturity at March 31, 2008 and 2009:

At March 31,

2008

2009

Amortized
cost

Estimated
fair value

Net
unrealized
gains (losses)

Amortized
cost

Estimated
fair value

Net
unrealized
gains (losses)

(in billions)

Securities available for sale:

Debt securities:

Japanese national government and
Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . ¥16,133.0 ¥16,185.9

Japanese prefectural and municipal

¥

52.9

¥23,846.2 ¥23,892.8

¥ 46.6

bonds . . . . . . . . . . . . . . . . . . . . . . . . .

203.1

208.2

5.1

277.9

282.5

4.6

Foreign governments and official

institutions bonds . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . .
Mortgage-backed securities . . . . . . . . . .
Asset-backed securities, excluding

3,637.6
5,281.3
3,439.5

3,670.8
5,408.0
3,438.7

33.2
126.7
(0.8)

185.6
3,791.0
676.3

190.6
3,869.0
668.2

mortgage-backed securities(1) . . . . . . .
Other debt securities . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . .

3,455.1
18.9
6,343.7
Total securities available for sale . . . . . . . . . . ¥36,576.2 ¥38,729.3

3,547.3
19.2
4,315.2

(92.2)
(0.3)
2,028.5
¥2,153.1

543.0
33.3
3,340.3

495.1
32.1
3,959.8
¥32,693.6 ¥33,390.1

5.0
78.0
(8.1)

(47.9)
(1.2)
619.5
¥696.5

Debt securities being held to maturity(2)

. . . . ¥ 2,839.7 ¥ 2,860.4

¥

20.7

¥ 2,812.4 ¥ 2,826.4

¥ 14.0

Notes:
(1) AAA-rated products account for approximately two-thirds of our asset-backed securities.
(2) See Note 5 to our consolidated financial statements included elsewhere in this Annual Report for more details.

Net unrealized gains on securities available for sale decreased ¥1.45 trillion from ¥2.15 trillion at March 31,

2008 to ¥0.70 trillion at March 31, 2009. This decrease consisted of a ¥1.41 trillion decrease in net unrealized
gains on marketable equity securities and a ¥0.05 trillion decrease in net unrealized gains on debt securities. The
decrease in net unrealized gains of ¥1.41 trillion on marketable equity securities was mainly due to the decrease
in stock prices which negatively affected our holdings of Japanese equity securities.

93

The amortized cost of securities being held to maturity decreased ¥0.03 trillion compared to the previous
fiscal year mainly due to the redemption of Japanese national government bonds classified as securities being
held to maturity. On the other hand, some of our asset-backed securities were reclassified into securities being
held to maturity from trading securities on January 30, 2009.

Cash and Due from Banks

Cash and due from banks at March 31, 2009 was ¥3.07 trillion, a decrease of ¥1.02 trillion from ¥4.09
trillion at March 31, 2008. The decrease was primarily due to a decrease in our deposit balance with the Bank of
Japan.

Interest-earning Deposits in Other Banks

Interest-earning deposits in other banks fluctuate significantly from day to day depending upon financial

market conditions. Interest-earning deposits in other banks at March 31, 2009 were ¥3.54 trillion, a decrease of
¥2.78 trillion from ¥6.32 trillion at March 31, 2008. This decrease primarily reflected a decrease in interest-
earning deposits denominated in foreign currencies in other banks of our domestic offices.

Receivables under Resale Agreements

Receivables under resale agreements at March 31, 2009 were ¥2.53 trillion, a decrease of ¥4.58 trillion from

¥7.11 trillion at March 31, 2008. The decrease was primarily due to a decrease in transaction volume of our
overseas subsidiaries following the recent market deterioration.

Goodwill

Goodwill at March 31, 2009 was ¥379.4 billion, a decrease of ¥694.7 billion from ¥1,074.1 billion at
March 31, 2008. This decrease was mainly due to goodwill impairment losses of ¥845.8 billion off-set by
¥175.3 billion of goodwill we acquired in connection with making UNBC a wholly-owned subsidiary during the
fiscal year ended March 31, 2009.

Deferred Tax Assets

Deferred tax assets increased ¥1.27 trillion, from ¥0.90 trillion at March 31, 2008 to ¥2.17 trillion at March
31, 2009. This increase primarily reflected an increase in deferred tax assets for net investment securities losses
due to a decline in the fair market value of equity and debt instruments, and an increase in deferred tax assets for
accrued pension costs due to a decline in the fair market value of plan assets. This increase was partly offset by a
decrease in deferred tax assets for utilized operating loss carryforwards.

Total Liabilities

At March 31, 2009, total liabilities were ¥187.26 trillion, a decrease of ¥0.02 trillion from ¥187.28 trillion at

March 31, 2008, while the total balance of deposits was ¥128.33 trillion at March 31, 2009, a decrease of ¥0.91
trillion from ¥129.24 trillion at March 31, 2008. The decrease in interest-bearing deposits of ¥1.32 trillion
compared to the previous fiscal year end was partially offset by the increase in non-interest-bearing deposits of
¥0.41 trillion.

The appreciation of the Japanese yen against the US dollar and other foreign currencies during the fiscal
year ended March 31, 2009 decreased the Japanese yen amount of foreign currency-denominated liabilities by
¥7.92 trillion.

94

Deposits

Deposits are our primary source of funds. Total average balance of deposits increased ¥0.05 trillion from

¥127.02 trillion for the fiscal year ended March 31, 2008 to ¥127.07 trillion for the fiscal year ended March 31,
2009. This increase primarily reflected an increase of ¥2.58 trillion in average domestic interest-bearing deposits,
which was partially offset by a decrease of ¥1.83 trillion in average foreign interest-bearing deposits.

Domestic deposits increased ¥1.33 trillion from ¥109.50 trillion at March 31, 2008 to ¥110.83 trillion at

March 31, 2009, and foreign deposits decreased ¥2.24 trillion from ¥19.74 trillion at March 31, 2008 to ¥17.50
trillion at March 31, 2009. Within domestic deposits, the balance of both interest-bearing and non-interest-
bearing deposits increased, partially in response to the attractive interest rates of our time deposits. The decrease
in foreign interest-bearing deposits was mainly due to the withdrawal of large deposits by foreign financial
institutions in response to the difficult market conditions following the global financial crisis and recession and
the appreciation of the Japanese yen against the US dollar and other foreign currencies.

Short-term Borrowings

We use short-term borrowings as a funding source and in our management of interest rate risk. For
management of interest rate risk, short-term borrowings are used in asset-liability management operations to
match interest rate risk exposure resulting from loans and other interest-earning assets and to manage funding
costs of various financial instruments at an appropriate level, based on our forecast of future interest rate levels.
Short-term borrowings consist of call money and funds purchased, payables under repurchase agreements,
payables under securities lending transactions, due to trust accounts and other short-term borrowings.

Short-term borrowings increased ¥1.84 trillion from ¥26.25 trillion at March 31, 2008 to ¥28.09 trillion at

March 31, 2009. This increase was primarily attributable to an increase of ¥1.85 trillion in other short-term
borrowings which were comprised of borrowings from the Bank of Japan and other financial institutions.

Long-term debt

Long-term debt at March 31, 2009 was ¥13.27 trillion, a decrease of ¥0.41 trillion from ¥13.68 trillion at
March 31, 2008. This decrease was mainly due to the redemption of unsubordinated debts by MUFG and BTMU.
For further information, see Note 15 to our consolidated financial statements included elsewhere in this Annual
Report.

Sources of Funding and Liquidity

Our primary source of liquidity is from a large balance of deposits, mainly ordinary deposits, certificates of

deposit and time deposits. Time deposits have shown a historically high rollover rate among our corporate
customers and individual depositors. As of March 31, 2009, our deposits of ¥128.33 trillion exceeded our loans,
net of allowance for credit losses of ¥99.15 trillion, by ¥29.18 trillion. These deposits provide us with a sizable
source of stable and low-cost funds. While approximately 44.6% of certificates of deposit and time deposits
mature within three months, we continuously monitor relevant interest rate characteristics of these funds and
utilize asset and liability management techniques to manage the possible impact of the rollovers on our net
interest margin and liquidity. Our average deposits, combined with average shareholders’ equity, funded 68.8%
of our average total assets of ¥196.21 trillion during the fiscal year ended March 31, 2009.

Most of the remaining funding was provided by short-term borrowings and long-term senior and

subordinated debt. Short-term borrowings consist of call money and funds purchased, payables under repurchase
agreements, payables under securities lending transactions, due to trust account, and other short-term borrowings.
From time to time, we have issued long-term instruments such as straight bonds with mainly three to five years’
maturity. Liquidity may also be provided by the sale of financial assets, including securities available for sale,
trading account securities and loans. Additional liquidity may be provided by the maturity of loans.

95

Total Shareholders’ Equity

The following table presents a summary of our total shareholders’ equity at March 31, 2008 and 2009:

Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings (Accumulated deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other changes in equity (deficit) from nonowner sources, net of

At March 31,

2008

2009

(in billions, except percentages)

¥ 247.1
1,084.7
5,791.3
1,174.9

¥ 442.1
1,127.6
6,095.8
(606.2)

taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Treasury stock, at cost

919.4
(727.3)

(813.7)
(10.7)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,490.1

¥6,234.9

Ratio of total shareholders’ equity to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.34%

3.22%

Total shareholders’ equity decreased ¥2,255.2 billion from ¥8,490.1 billion at March 31, 2008 to ¥6,234.9
billion at March 31, 2009. The ratio of total shareholders’ equity to total assets also showed a decrease of 1.12
percentage points from 4.34% at March 31, 2008 to 3.22% at March 31, 2009. The decrease in total shareholders’
equity, and the resulting decrease in the ratio to total assets, at March 31, 2009 were principally attributable to a
decrease in accumulated other changes in equity from nonowner sources, net of taxes of ¥1,733.1 billion, and a
decrease in retained earnings of ¥1,781.1 billion, which were partially offset by a decrease in treasury stock of
¥716.6 billion and increases in capital surplus of ¥304.5 billion and preferred stock of ¥195.0 billion. The
decrease in accumulated other changes in equity from nonowner sources, net of taxes, was mainly due to a
decline in the Japanese stock market, which resulted in a decrease in net unrealized gain on investment securities
available for sale. The decrease in retained earnings was mainly due to our recording a net loss for the fiscal year
ended March 31, 2009. The decrease in treasury stock was primarily due to the use of our treasury stock in the
global offering of our common stock in December 2008.

Due to our holdings of a large amount of marketable Japanese equity securities and the volatility of the
equity markets in Japan, changes in the fair value of marketable equity securities have significantly affected our
shareholders’ equity. The following table presents information relating to the accumulated net unrealized gains,
net of taxes, in respect of investment securities classified as available for sale at March 31, 2008 and 2009:

At March 31,

2008

2009

(in billions, except percentages)

Accumulated net unrealized gains on investment securities available for sale . . . . . .
Accumulated net unrealized gains to total shareholders’ equity . . . . . . . . . . . . . . . . .

¥973.7
11.47%

¥95.2
1.53%

Capital Adequacy

We are subject to various regulatory capital requirements promulgated by the regulatory authorities of the
countries in which we operate. Failure to meet minimum capital requirements can initiate mandatory actions by
regulators that, if undertaken, could have a direct material effect on our consolidated financial statements.

We continually monitor our risk-adjusted capital ratio closely and manage our operations in consideration of

the capital ratio requirements. These ratios are affected not only by fluctuations in the value of our assets,
including our credit risk assets such as loans and equity securities, the risk weights of which depend on the
borrowers’ or issuers’ internal ratings, marketable securities and deferred tax assets, but also by fluctuations in
the value of the Japanese yen against the US dollar and other foreign currencies and by general price levels of
Japanese equity securities.

96

Capital Requirements for Banking Institutions in Japan

A Japanese banking institution is subject to the minimum capital adequacy requirements both on a

consolidated basis and a stand-alone basis, and is required to maintain the minimum capital irrespective of whether
it operates independently or as a subsidiary under the control of another company. A bank holding company is also
subject to the minimum capital adequacy requirements on a consolidated basis. Under the guidelines of the
Financial Services Agency, or the FSA, capital is classified into three tiers, referred to as Tier I, Tier II and Tier III
capital. Our Tier I capital generally consists of shareholders’ equity items, including common stock, non-cumulative
preferred stock, capital surplus, minority interests and retained earnings (which includes deferred tax assets), but
recorded goodwill and other items, such as treasury stock, are deducted from Tier I capital. Our Tier II capital
generally consists of the amount (up to a maximum of 0.6% of credit risk-weighted assets) by which eligible
reserves for credit losses exceeds expected losses in the internal ratings-based approach, or the IRB approach, and
general reserves for credit losses, subject to a limit of 1.25% of modified risk-weighted assets determined by the
partial use of the Standardized Approach (including a phased rollout of the IRB approach), 45% of the unrealized
gains on investment securities classified as “securities available for sale,” 45% of the land revaluation excess, the
balance of perpetual subordinated debt and the balance of subordinated term debt with an original maturity of over
five years subject to certain limitations, up to 50% of Tier I capital. Our Tier III capital consists of short-term
subordinated debt with an original maturity of at least two years, subject to certain limitations. At least 50% of the
minimum capital requirements must be maintained in the form of Tier I capital.

The eligible regulatory capital set forth in the FSA’s guidelines discussed above were modified as of

March 31, 2007 to reflect the “International Convergence of Capital Measurement and Capital Standards: A
Revised Framework,” often referred to as “Basel II.”

As of March 31, 2008 and 2009, we have calculated our risk-weighted assets in accordance with Basel II. In

determining capital ratios under Basel II, we and our banking subsidiaries shifted from the foundation internal
ratings-based approach, or the FIRB approach, to the advanced internal ratings-based approach, or the AIRB
approach, to calculate capital requirements for credit risk as of the end of March 2009. The Standardized
Approach is used for some subsidiaries that are considered to be immaterial to the overall MUFG capital
requirements and a few subsidiaries adopted a phased rollout of the internal ratings-based approach. Market risk
is reflected in the risk-weighted assets by applying the Internal Models Approach to calculate general market risk
and the Standardized Methodology to calculate specific risk. Under the Internal Models Approach, we principally
use a historical simulation model to calculate value-at-risk amounts by estimating the profit and loss on our
portfolio by applying actual fluctuations in the market rates and prices over a fixed period in the past. Under
Basel II, we newly reflected operational risk in the risk-weighted assets by applying the Standardized Approach.
Specifically, operational risk capital charge is determined based on the amount of gross profit allocated to
business lines multiplied by a factor ranging from 12% to 18%.

For additional discussion of the calculation of our capital ratios under Basel II, see Note 21 to our

consolidated financial statements included elsewhere in this Annual Report.

Under the Japanese regulatory capital requirements, our consolidated capital components, including Tier I,

Tier II and Tier III capital and risk-weighted assets, are calculated from our consolidated financial statements
prepared under Japanese GAAP. Also, each of the consolidated and stand-alone capital components and risk-
weighted assets of our banking subsidiaries in Japan is calculated from consolidated and non-consolidated
financial statements prepared under Japanese GAAP.

For a detailed discussion of the capital adequacy guidelines adopted by the FSA and proposed amendments,

see “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—Japan—
Capital Adequacy.”

97

Capital Requirements for Banking Institutions in the United States

In the United States, UNBC and its banking subsidiary, Union Bank, our largest subsidiaries operating

outside Japan, are subject to various regulatory capital requirements administered by US Federal banking
agencies, including minimum capital requirements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, they must meet specific capital guidelines that involve quantitative
measures of their assets, liabilities and certain off-balance-sheet items as calculated under US regulatory
accounting practices. Their capital amounts and prompt corrective action classification are also subject to
qualitative judgments by the regulators about components, risk weightings and other factors.

For a detailed discussion of the capital adequacy guidelines applicable to our US banking subsidiaries, see
“Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—United States—
Bank Capital Requirements and Capital Distributions.”

Capital Requirements for Securities Firms in Japan and Overseas

We have securities subsidiaries in Japan and overseas, which are also subject to regulatory capital
requirements. In Japan, the Financial Instruments and Exchange Law of Japan and related ordinances require
financial instruments firms to maintain a minimum capital ratio of 120% calculated as a percentage of capital
accounts less certain fixed assets, as determined in accordance with Japanese GAAP, against amounts equivalent
to market, counterparty credit and operations risks. Specific guidelines are issued as a ministerial ordinance
which details the definition of essential components of the capital ratios, including capital, deductible fixed asset
items and risks, and related measures. Failure to maintain a minimum capital ratio will trigger mandatory
regulatory actions. A capital ratio of less than 140% will call for regulatory reporting and a capital ratio of less
than 100% may lead to a suspension of all or part of the business for a period of time and cancellation of
registration. Overseas securities subsidiaries are subject to the relevant regulatory capital requirements of the
countries or jurisdictions in which they operate.

Mitsubishi UFJ Financial Group Ratios

The table below presents our consolidated total capital, risk-weighted assets and risk-adjusted capital ratios
at March 31, 2008 and 2009. (Underlying figures are calculated in accordance with Japanese banking regulations
based on information derived from our consolidated financial statements prepared in accordance with Japanese
GAAP, as required by the FSA. The percentages in the tables below are rounded down.) For further information,
see Note 21 to our consolidated financial statements included elsewhere in this Annual Report.

At March 31,

2008

2009

Minimum capital
ratios required

(in billions, except percentages)

Capital components:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier I capital
Tier II capital includable as qualifying capital . . . . . . . . . . . . .
. . . . . . . . . . . .
Tier III capital includable as qualifying capital
. . . . . . . . . . . . . . . . .
Deductions from total qualifying capital

¥

8,293.8
4,441.8
—
519.7

¥ 7,575.2
4,216.1
—
312.9

Total risk-based capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 12,215.9

¥11,478.4

Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital ratios:

¥109,075.6

¥97,493.5

Tier I capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.60%
11.19

7.76%
11.77

4.00%
8.00

Our Tier I capital ratio and total risk-adjusted capital ratio at March 31, 2009 were 7.76% and 11.77%
respectively. The increase in total risk-adjusted capital ratio was mainly due to a decrease in risk-weighted assets,
which was partially offset by a decrease in Tier I capital resulting from the decrease in the amount of unrealized
gains on investment securities.

98

Capital Ratios of Our Major Banking Subsidiaries in Japan

The table below presents the risk-adjusted capital ratios of BTMU and MUTB at March 31, 2008 and 2009
(underlying figures are calculated in accordance with Japanese banking regulations based on information derived
from their consolidated and non-consolidated financial statements prepared in accordance with Japanese GAAP,
as required by the FSA. The percentages in the tables below are rounded down.). For further information, see
Note 21 to our consolidated financial statements included elsewhere in this Annual Report.

At March 31,

2008

2009

Minimum capital
ratios required

Consolidated capital ratios:

BTMU

Tier I capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . .

7.43%
11.20

7.64%
12.02

4.00%
8.00

MUTB

Tier I capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . .

9.94
13.13

Stand-alone capital ratios:

BTMU

Tier I capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . .

MUTB

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier I capital
Total risk-adjusted capital . . . . . . . . . . . . . . . . . . . . . . . . .

7.65
11.44

9.55
12.87

10.17
12.70

8.34
12.74

9.85
12.49

4.00
8.00

4.00
8.00

4.00
8.00

At March 31, 2009, management believes that our banking subsidiaries were in compliance with all capital

adequacy requirements to which they are subject.

Capital Ratios of Banking Subsidiaries in the United States

The table below presents the risk-adjusted capital ratios of UNBC and Union Bank, both subsidiaries of

BTMU, at December 31, 2007 and 2008:

At December 31,

2007

2008

Minimum capital
ratios required

Ratios OCC
requires to be
“well-capitalized”

UNBC:

Tier I capital (to risk-weighted assets) . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1)
. . . . . .
Total capital (to risk-weighted assets) . . . . . . . . . . .

Union Bank:

Tier I capital (to risk-weighted assets) . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1)
. . . . . .
Total capital (to risk-weighted assets) . . . . . . . . . . .

8.30%
8.27
11.21

8.20%
8.20
10.38

8.78%
8.42
11.63

8.67%
8.31
11.01

4.00%
4.00
8.00

4.00%
4.00
8.00

—
—
—

6.00%
5.00
10.00

Note:
(1) Excludes certain intangible assets.

Management believes that, as of December 31, 2008 and June 30, 2009, UNBC and Union Bank met all

capital adequacy requirements to which they are subject.

As of December 31, 2008, the Office of the Comptroller of the Currency, or OCC, categorized Union Bank

as “well-capitalized.” To be categorized as “well capitalized,” Union Bank must maintain minimum ratios of
Total and Tier I capital to risk-weighted assets and of Tier I capital to quarterly average assets (the Leverage
ratio) as set forth in the table. There are no conditions or events since that notification that management believes
have changed Union Bank’s category.

99

Capital Adequacy Ratio of Mitsubishi UFJ Securities

At March 31, 2008 and 2009, MUS’s capital accounts less certain fixed assets of ¥619.3 billion and ¥502.8

billion represented 299.4% and 353.7% of the total amounts equivalent to market, counterparty credit and
operations risks, respectively, as calculated pursuant to the Financial Instruments and Exchange Law. For further
information, see Note 21 to our consolidated financial statements included elsewhere in this Annual Report.

Non-exchange Traded Contracts Accounted for at Fair Value

The use of non-exchange traded or over-the-counter contracts provides us with the ability to adapt to the

varied requirements of a wide customer base while mitigating market risks. Non-exchange traded contracts are
accounted for at fair value, which is generally based on pricing models or quoted market prices for instruments
with similar characteristics. Gains or losses on non-exchange traded contracts are included in “Trading account
profits—net” in our consolidated statements of operations included elsewhere in this Annual Report. The
following table summarizes the changes in fair value of non-exchange traded contracts for the fiscal years ended
March 31, 2008 and 2009:

Net fair value of contracts outstandings at beginning of fiscal year . . . . . . . . . . . . . . . .
Changes attributable to contracts realized or otherwise settled during the fiscal

Fiscal years ended March 31,

2008

2009

(in millions)

¥ 86,512

¥ 87,772

year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of new contracts when entered into during the fiscal year . . . . . . . . . . . . . . .
Other changes in fair value, principally revaluation at end of fiscal year . . . . . . . . . . . .

(26,950)
734
27,476

11,137
17,272
(77,956)

Net fair value of contracts outstanding at end of fiscal year . . . . . . . . . . . . . . . . . . . . . .

¥ 87,772

¥ 38,225

During the fiscal years ended March 31, 2009, the fair value of non-exchange traded contracts decreased

primarily due to the decrease in the fair value of metals swap contracts denominated in US dollars and the
depreciation of the US dollar against the Japanese Yen.

The following table summarizes the maturities of non-exchange traded contracts at March 31, 2009:

Net fair value of contracts—unrealized gains

Prices actively quoted

Prices based on models and
other valuation methods

(in millions)

Maturity less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity less than 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity less than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity 5 years or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,036
20,365
4,887
1,343

¥29,631

¥ —
11,026
(624)
(1,808)

¥ 8,594

C. Research and Development, Patents and Licenses, etc.

Not applicable.

D. Trend Information

See the discussions in “—A. Operating Results” and “—B. Liquidity and Capital Resources.”

100

E. Off-balance-sheet Arrangements

In the normal course of our business, we engage in several types of off-balance-sheet arrangements to meet

the financing needs of our customers, including various types of guarantees, commitments to extend credit and
commercial letters of credit. The following table summarizes these commitments at March 31, 2009:

Amount of commitment by expiration period

1 year
or less

1-5
years

Over
5 years

Total

(in billions)

Guarantees:

Standby letters of credit and financial guarantees . . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantees for the repayment of trust principal . . . . . . . . . . . . . . .
Liabilities of trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,095
1,573
29,656
173
2,098
128

¥ 1,113
785
34,946
1,055
382
—

¥1,342
131
3,352
6
678
—

¥

Total guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,723

38,281

5,509

Other off-balance-sheet instruments:

. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit
Commercial letters of credit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to make investments . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43,564
527
22
8

14,732
3
86
—

Total other off-balance-sheet instruments . . . . . . . . . . . . . . . .

44,121

14,821

1,077
—
36
—

1,113

4,550
2,489
67,954
1,234
3,158
128

79,513

59,373
530
144
8

60,055

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥79,844

¥53,102

¥6,622

¥139,568

See Note 24 to our consolidated financial statements, included elsewhere in this Annual Report, for a

description of the nature of our guarantees and other off-balance-sheet instruments.

The contractual amounts of these guarantees and other off-balance-sheet instruments represent the amounts

at risk should the contracts be fully drawn upon with a subsequent default by our customer and a decline in the
value of the underlying collateral. Because many of these commitments expire without being drawn upon, the
total contractual or notional amounts of these commitments do not necessarily represent our future cash
requirements. At March 31, 2009, approximately 57% of these commitments will expire within one year, 38%
from one year to five years and 5% after five years. Such risks are monitored and managed as a part of our risk
management system as set forth in “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and
Other Risk.” In addition, in accordance with SFAS No. 5, “Accounting for Contingencies,” we evaluate
off-balance-sheet arrangements in the manner described in Note 1 to our consolidated financial statements
included elsewhere in this Annual Report.

In the aggregate, the income generated from fees and commissions is one of our most important sources of

revenue, which amounted to ¥1,188.5 billion during the fiscal year ended March 31, 2009. However, the fees
generated specifically from off-balance-sheet arrangements are not a dominant source of our fees and
commissions.

Some of our off-balance-sheet arrangements are related to activities of special purpose entities. Such
arrangements include the following types of special purpose entities, most of which are variable interest entities,
or VIEs.

101

The following table presents, by type of VIE, the total assets of non-consolidated VIEs and the maximum

exposures to non-consolidated VIEs at March 31, 2008 and 2009. For further information, see Note 25 to our
consolidated financial statements included elsewhere in this Annual Report.

Significant Non-consolidated VIEs

2008

2009

Assets

Maximum
exposure

Assets

Maximum
exposure

(in billions)

Asset-backed conduits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special purpose entities created for structured financing . . . . . .
Repackaged instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 13,309.4
22,176.2
8,262.3
82,485.9
9,509.1

¥1,991.5
1,105.0
2,145.1
2,365.5
2,022.4

¥ 11,055.8
12,175.6
12,328.7
57,393.6
8,907.0

¥2,091.1
940.6
1,816.5
1,823.5
1,612.9

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥135,742.9

¥9,629.5

¥101,860.7

¥8,284.6

We have off-balance sheet arrangements primarily with the following types of special purpose entities:

Asset-backed Conduits

This category primarily comprises the following:

Multi-seller Conduits (MUFG-sponsored Asset-backed Commercial Paper, or ABCP, Conduits and Other ABCP
Conduits)

We administer several conduits under asset-backed financing programs under which the conduits purchase

financial assets from our customers, primarily trade accounts receivables, by issuing short-term financing
instruments, primarily commercial paper, to third-party investors. Under the asset-backed financing programs,
we act as an agent for the conduits, which enter into agreements with our customers where the customers transfer
assets to the conduits in exchange for monetary consideration. We also underwrite commercial paper for the
conduits that is secured by the assets held by them and provide program-wide liquidity and credit support
facilities to the conduits. We receive fees related to the services we provide to the conduits and the program-wide
liquidity and credit support. Because of the program-wide credit support that we provide as a sponsor in respect
to the financing by the conduits, we are exposed to the majority of the expected variability of the conduits.
Therefore, we consider ourselves to be the primary beneficiary and consolidate the multi-seller conduits. While
we have significant involvement with the conduits, we have never provided financial or any other support that
are not contractually required to provide in the past. In addition, the assets purchased by the conduits are of high
quality in their credit standing and mostly short-term in nature. Therefore, we believe the risks involved in these
transactions are significantly limited relative to the transaction size.

In addition to the entities described above, we participate as a provider of financing to several conduits that

are administered by third parties. Most of these conduits are established under a multi-seller asset-backed
financing program and we provide financing along with other financial institutions. With respect to these
conduits, we are not considered as the primary beneficiary because our participation in the financing is not
significant relative to the total financing provided by third parties or there is sufficient funding or financial
support that is subordinate to the financing provided by us.

Asset-backed Conduits (MUFG-sponsored Asset-backed Loan, or ABL, Programs and Other Programs)

We administer several conduits under asset-backed financing program where we provide financing to fund

the conduits’ purchases of financial assets, comprising primarily of trade accounts receivables, from our
customers. We act as an agent and sponsor for the conduits, which enter into agreements with our customers
where the customers transfer assets to the conduits in exchange for monetary consideration. In most cases we are

102

the sole provider of financing that is secured by the assets held by the conduits and because of this reason, we are
considered as the primary beneficiary. We have never provided financial or any other support that are not
contractually required to provide in the past. In addition, the assets purchased by the conduits are of high quality
in their credit standing and mostly short-term in nature. Therefore, we believe the risks involved in these
transactions are significantly limited relative to the transaction size.

In addition, we are involved with entities, which take in most cases, the form of a trust, where originators of

financial assets, which primarily comprise lease receivables, entrust the assets with trust banks and receive
beneficial certificates in exchange. The originators then transfer the beneficiary certificates to us in exchange for
cash. Because we participate in a majority of the economics generated from these entities through the beneficiary
certificates that we hold, we are considered as the primary beneficiary and we consolidate these trusts.

We also participate as a provider of financing the ABL programs that are managed by third parties. We are
not considered as the primary beneficiary of the entities used in these programs as our participation to financing
is not significant relative to the total financing provided by the third parties or there is sufficient funding or
financial support that is subordinate to the financing provided by us.

Investment Funds

This category primarily comprises the following:

Corporate Recovery Funds

These entities are established by fund managers, which are unrelated to us for the purpose of investing in
debt or equity instruments issued by distressed companies. After investment, the fund managers work closely
with the management of the issuers and attempt to enhance corporate value by various means including corporate
restructuring and reorganization. Their exit strategies include, among other things, sales to others and Initial
Public Offerings, or IPOs.

Typically, these entities take the form of a limited partnership which is entirely funded by general and

limited partner interests. In some cases, the general partners of the partnerships are entities that have no
substantive decision making ability. The fund managers that establish these partnerships assume investment
management and day-to-day operation by entering into asset management contracts with the general partners.
These partnerships are, therefore, financing vehicles and as such are considered as VIEs. In other cases, the
general partners have substantive decision making ability but the partnerships are considered as VIEs when the
general partners’ investments in the partnerships are considered as non-substantive, usually based on the
percentage interest held, and they do not have substantive limited partner interests.

We participate in these partnerships as a limited partner. While our share in partnership interests is limited

in most cases, we are the only limited partner in some cases and we consolidate these partnerships as the primary
beneficiary.

Our non-voting interests in these funds amounted to ¥34.1 billion at March 31, 2008 and ¥20.2 billion at

March 31, 2009, respectively. In addition, at March 31, 2009, we had commitments to make additional
contributions up to ¥9.8 billion to these funds.

Private Equity Funds

We are involved in venture capital funds that are established by either our group entities or fund managers
unrelated to us. These entities have specific investment objectives in connection with their acquisition of equity
interests, such as providing financing and other support to start-up businesses, medium and small entities in a
particular geographical area, and to companies with certain technology or companies in a high-growth industry.

103

These entities typically take the form of limited partnerships and usually are entirely funded by general and

limited partner interests. The general partners of the partnerships in some cases are entities that have no
substantive decision making ability. The fund managers that establish these partnerships assume investment
management and day-to-day operation by entering into asset management contracts with the general partners.
These partnerships are therefore financing vehicles and as such are considered as VIEs. In other cases, the
general partners have substantive decision making ability and the partnerships are considered as VIEs even when
the general partners’ investments in the partnerships are considered as non-substantive, usually based on the
percentage interest held, and they do not have substantive limited partner interests.

We participate in these partnerships as a general partner or a limited partner. While our share in partnership

interests is limited in most cases, we provide most of the financing to the partnerships in some cases and we
consolidate them as the primary beneficiary.

We made contributions to these funds amounting to ¥12.3 billion at March 31, 2009. At March 31, 2009, in

accordance with the applicable limited partnership agreements, we had commitments to make additional
contributions up to ¥5.3 billion when required by the fund management companies.

Investment Trusts

We invest in investment trusts that are professionally managed collective investment schemes which pool

money from many investors and invest in, among others, equity and debt securities. Most of these funds take the
form of a trust where there is a separation in investment decisions, which is assumed by an investment manager
who has no investment in a trust, and ownership through beneficiary interests issued by a trust are owned by
investors. Therefore, these investment trusts are considered as VIEs. We consolidate investment trusts when we
own a majority of the interests issued by investment trusts.

Buy-out Financing Vehicles

We provide financing to buy-out vehicles. The vehicles are established by equity investment from, among
others, private equity funds or the management of target companies for the purpose of purchasing equity shares
of target companies. Along with other financial institutions, we provide financing to buy-out vehicles in the form
of loans. While the buy-out vehicles’ equity is normally substantive in amount and the rights and obligations
associated with it, in some cases the vehicles have equity that is insufficient to absorb variability primarily
because the amount provided by equity investors is nominal in nature. These vehicles are considered as VIEs and
an assessment as to whether we are the primary beneficiary is required. In most cases, however, we mitigate our
risk by requiring third-party guarantees with collateral or reducing our exposure to an adequate level by
providing loans as one of several lenders. As a result, we are not considered as the primary beneficiary of these
entities.

Special Purpose Entities Created for Structured Financing

This category primarily comprises the following:

Leveraged Leasing Vehicles

These entities are established to raise funds to purchase or build equipment and machinery including

commercial vessels, passenger and cargo aircrafts, production equipment and other machinery, for the purpose of
leasing them to lessees who use the equipment and machinery as part of their business operations. These entities
typically take the form of a limited partnership or a special purpose company where they fund their purchases of
equipment and machinery via senior and subordinate financing. In some cases, the entities are funded only by
senior financing or there is a guarantee provided to the senior financing by parties unrelated to those providing
the senior financing. In most cases, we participate in the senior financing and do not participate in the

104

subordinate financing or provide guarantees. The subordinate financing or the third-party guarantee is substantive
and would absorb expected variability generated by the assets held by the entities. In exceptional cases where
there is no guarantee from a third-party or there is not sufficient subordinate financing, we consolidate the
entities as the primary beneficiary. In some limited cases, we provide a residual value guarantee to the leased
assets. Based on expected loss analysis, we determined that we do not participate in the majority of expected
variability of the entities involved and do not consolidate these entities.

Project Financing Vehicles

These entities are established to raise funds in connection with, among other things, production of natural
resources, construction and development of urban infrastructure (including power plants and grids, highways and
ports), and the development of real estate properties or complexes. These projects typically involve special
purpose companies which issue senior and subordinate financing to raise funds in connection with the various
projects. The subordinate financing is usually provided by parties that will ultimately make use of the assets
constructed or developed. By contrast, the senior financing is typically provided by financial institutions,
including us. Because our participation in the financing is limited or there is sufficient subordinate financing, we
are not considered as the primary beneficiary of these entities and do not consolidate these entities.

Sale and Leaseback Vehicles

We are involved with vehicles that acquire assets, primarily real estate, from our clients and other unrelated

parties where the sellers of the assets continue to use the assets through leaseback agreements. These vehicles
typically take the form of a limited partnership where the general partner has effectively no decision making
ability because an equity holder of the general partner serves a perfunctory role. Therefore, these vehicles are
considered as VIEs. The subordinated financing of these vehicles is usually provided by the sellers of the assets,
with our providing senior financing for the vehicles. The subordinated financing of these entities absorbs the
expected variability generated from the assets held and as such, we are not considered as the primary beneficiary.

Securitization of Client Real Estate Properties

These entities are established for the purpose of securitizing real estate properties held by our customers. In
most cases, these entities take the form of a limited partnership or a special purpose company. These entities are
designed to have non-substantive decision making ability because the general partner or an equity holder serves a
perfunctory role. The entities are typically funded by senior and subordinated financing where the original
owners of the properties provide the subordinated financing, primarily in the form of partnership interests or
subordinated notes, and financial institutions, including us, provide senior financing in the form of senior loans.
The subordinated financing of these entities absorbs the expected variability generated from the assets held and
as such, we are not considered as the primary beneficiary.

Repackaged Instruments

This category primarily comprises the following:

Investments in Financially-Engineered Products

We are involved in special purpose entities that have been established to issue financial products through the

engineering and repackaging of existing financial instruments, such as collateralized debt obligations, or CDOs,
and synthetic CDOs. These special purpose entities are considered as VIEs because they do not have substantive
decision making ability. These special purpose entities are arranged and managed by parties that are not related
to us. Our involvement with these entities is for investment purposes. In most cases, we participate as one of
many other investors and we typically hold investments in senior tranches or tranches with high credit ratings.
Therefore, we are not considered as the primary beneficiary except in limited circumstances where we hold the
majority of instruments issued by a single-tranche vehicle.

105

Investments in Securitized Financial Instruments

We hold investments in special purpose entities that issue securitized financial products. The assets held by

the special purpose entities include credit card receivables and residential mortgage loans. These entities are
established and managed by parties that are unrelated to us and our involvement with these entities is for our own
investment purposes. In all cases, we participate as one of many other investors and we hold investments with
high credit ratings. Therefore, we are not considered as the primary beneficiary of these entities.

Others

This category primarily comprises the following:

Financing Vehicles of our Customers

We are involved with several entities that are established by our customers. These entities borrow funds
from financial institutions and extend loans to their group entities. These entities effectively work as fund-raising
vehicles for their respective group companies and enable the groups to achieve efficient financing by integrating
their financing activities into a single entity. In all cases we are not considered as the primary beneficiary, either
because we participate as one of two or more lenders, and therefore, our participation is less than a majority,
and/or there is a substantive third-party guarantee provided with respect to our loans.

Funding Vehicles

We have established several wholly-owned, off-shore vehicles which issue securities, typically preferred

stock that is fully guaranteed by us, to investors unrelated to us to fund purchases of debt instruments issued by
us. These entities are considered as VIEs because our investment in the vehicles’ equity is not considered at risk
and substantive as the entire amount raised by the vehicles was used to purchase debt instruments issued by us.
As the third-party investors participate in the economics of these financing vehicles, as well as the vehicles
themselves, these financing vehicles are not considered as our subsidiaries.

Securitization of our Assets

We establish entities to securitize our own financial assets that include, among others, corporate and retail
loans and lease receivables. The entities used for securitization, which typically take the form of special purpose
companies and trusts, are established by us and, in most cases, issue senior and subordinate interests or financing.
Where we retain subordinate interests or financing, we are considered as the primary beneficiary of the entities and
we consolidate them. In some cases, all financing is provided by us but there is a substantive third-party guarantee,
or most of the interests or financing issued by the entities is transferred to investors unrelated to us. In these cases
we do not consider ourselves as the primary beneficiary.

Trust Arrangements

We offer, primarily through our wholly-owned trust banking subsidiary, MUTB, a variety of trust products
and services including securities investment trusts, pension trusts and trusts used as securitization vehicles. In a
typical trust arrangement, however, we manage and administer assets on behalf of the customers in an agency,
fiduciary and trust capacity and do not assume risks associated with the entrusted assets. The trusts are generally
considered as VIEs because the trust beneficiaries, who provide all of the equity at risk, usually do not have
substantive decision making ability. We, however, are not considered as the primary beneficiary because the trust
beneficiaries receive and absorb expected losses and residual returns on the performance and operations of trust
assets under management by us.

With respect to the jointly operated designated money in trusts, however, MUTB is exposed to the risks

involved with the entrusted assets, where MUTB provides the trust beneficiaries with guarantees on the
repayment of trust principal through face value guarantees. In these products, MUTB pools money from general

106

investors and invests it in financial assets that are of high credit standing, including bank deposits, government
bonds, high-quality corporate bonds and high-quality corporate loans including loans to banking account of
MUTB. MUTB manages and administers the trust assets in the capacity of a trustee and receives fees as
compensation for services it provides. With respect to most of the jointly operated designated money in trusts,
MUTB provides, as a sponsor of the products, the face value guarantees under which it is required to compensate
a loss on the stated principal of the trust beneficial interests. MUTB is not considered as the primary beneficiary
of these products because the event of loss is highly remote and in fact the face value guarantee has never been
called upon in the trusts’ operational history that extends over decades. In addition, the trusts have substantial
investments in loans to banking account of MUTB and MUTB’s face value guarantee is considered as
non-substantive to the extent of the self guarantee.

Fees on trust products that we offer for the fiscal years ended March 31, 2008 and 2009 were ¥156.4 billion

and ¥125.5 billion, respectively.

Troubled Borrowers

During the normal course of business, our borrowers may experience financial difficulties and sometimes

enter into certain transactions that require us to assess whether they would be considered as VIEs due to their
difficult financial position. While in most cases such borrowers are not considered as VIEs when the transactions
take place, in limited circumstances they are considered as VIEs due to insufficient equity. In all cases, however,
we are not considered as the primary beneficiary based on our assessment of scenario-based probability-weighted
cash flows analysis.

F. Tabular Disclosure of Contractual Obligations

In the normal course of our business, we enter into contractual agreements whereby we commit to future

purchases of products or services from unaffiliated parties. The following table shows a summary of our
contractual cash obligations at March 31, 2009:

Payments due by period

Less than
1 year

1-3 years

3-5 years

(in billions)

Over
5 years

Total

Contractual cash obligations:

Time deposit obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . .
Capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥48,918
1,444
25
44
16

¥ 9,408
3,047
31
61
20

¥1,454
1,783
6
33
55

¥ 126
6,934
3
67
35

¥59,906
13,208
65
205
126

Total(1)(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥50,447

¥12,567

¥3,331

¥7,165

¥73,510

Notes:
(1) The total amount of expected future pension payments is not included in the above table or the total amount of commitments outstanding
at March 31, 2009 as such amount is not currently determinable. We expect to contribute approximately ¥49.2 billion for pension and
other benefits for our employees for the fiscal year ending March 31, 2010. For further information, see Note 16 to our consolidated
financial statements included elsewhere in this Annual Report.

(2) The above table does not include unrecognized tax benefits and interest and penalties related to income tax associated with FIN No. 48.

For further information, see Note 10 to our consolidated financial statements included elsewhere in this Annual Report.

Purchase obligations include any legally binding contractual obligations that require us to spend more than

¥100 million annually under the contract. Purchase obligations in the table primarily include commitments to
make investments into corporate recovery or private equity investment funds.

G. Safe Harbor

See the discussion under “Forward-Looking Statements.”

107

Item 6.
A. Directors and Senior Management

Directors, Senior Management and Employees.

The following table sets forth the members of our board of directors as of July 31, 2009, together with their

respective dates of birth, positions and experience:

Position in MUFG

Business Experience

Name
(Date of Birth)

Ryosuke Tamakoshi
(July 10, 1947)

Chairman

Haruya Uehara

(July 25, 1946)

Deputy Chairman
and Chief Audit
Officer

Nobuo Kuroyanagi

President and CEO

(December 18, 1941)

May 1970
June 1997
June 1999
April 2000
July 2001
January 2002
March 2002

Joined Sanwa Bank
Director of Sanwa Bank
Senior Executive Officer of Sanwa Bank
President of Sanwa Bank California
President of United California Bank
Senior Executive Officer of UFJ Bank
Retired from President of United California

May 2002

Deputy President and Senior Executive

Bank

June 2002
May 2004
June 2004
October 2005
January 2006
April 2008
April 1969
June 1996
June 1998

Officer of UFJ Bank

Deputy President of UFJ Bank
Chairman of UFJ Bank
President and CEO of UFJ Holdings
Chairman of MUFG (incumbent)
Deputy Chairman of BTMU
Retired from Deputy Chairman of BTMU
Joined Mitsubishi Trust Bank
Director of Mitsubishi Trust Bank
Managing Director of Mitsubishi Trust

Bank

June 2001

Senior Managing Director of Mitsubishi

Trust Bank

June 2002
June 2003
April 2004
June 2004
October 2005

Deputy President of Mitsubishi Trust Bank
Director of MTFG
President of Mitsubishi Trust Bank
Chairman and Co-CEO of MTFG
Deputy Chairman and Chief Audit Officer

June 2008

April 1965
June 1992
April 1996
June 1996

of MUFG (incumbent)

President of MUTB
Chairman of MUTB (incumbent)
Joined Mitsubishi Bank
Director of Mitsubishi Bank
Director of Bank of Tokyo-Mitsubishi
Managing Director of Bank of

Tokyo-Mitsubishi

June 2001

Non-Board Member Managing Director of

Bank of Tokyo-Mitsubishi
Deputy President of Bank of

Tokyo-Mitsubishi

Director of MTFG
President of Bank of Tokyo-Mitsubishi
President and CEO of MTFG
President and CEO of MUFG (incumbent)
President of BTMU
Chairman of BTMU (incumbent)

June 2002

June 2003
June 2004

October 2005
January 2006
April 2008

108

Name
(Date of Birth)

Kyota Omori

(March 14, 1948)

Position in MUFG

Business Experience

Deputy President and
Chief Compliance
Officer

April 1972
June 1999
June 2001

Joined Mitsubishi Bank
Director of Bank of Tokyo-Mitsubishi
Non-Board Member Director of Bank of

Tokyo-Mitsubishi

May 2003

Non-Board Member Managing Director of

June 2003

Bank of Tokyo-Mitsubishi
Managing Director of Bank of

Tokyo-Mitsubishi

May 2004

Non-Board Member Managing Director of

June 2005
October 2005
January 2006
October 2007

Bank of Tokyo-Mitsubishi
Managing Officer of MTFG
Managing Officer of MUFG
Managing Executive Officer of BTMU
Senior Managing Executive Officer of

BTMU

April 2008

Retired from Senior Managing Executive

June 2008

April 1973
June 2000
June 2001

Officer of BTMU

Senior Managing Officer of MUFG
Deputy President and Chief Compliance

Officer of MUFG (incumbent)

Joined Bank of Tokyo
Director of Bank of Tokyo-Mitsubishi
Non-Board Member Director of Bank of

Tokyo-Mitsubishi

May 2004

Non-Board Member Managing Director of

Bank of Tokyo-Mitsubishi

January 2006
April 2008

Managing Executive Officer of BTMU
Retired from Managing Executive Officer

June 2008

April 1974
June 2002

October 2005
June 2006
May 2007
June 2007

of BTMU

Senior Managing Officer of MUFG
Director of MUS (incumbent)
Senior Managing Director and Chief Risk

Management Officer of MUFG
(incumbent)

Joined Mitsubishi Trust Bank
Director (Non-Board Member Director) of

Mitsubishi Trust Bank
Executive Officer of MUTB
Managing Director of MUTB
Managing Officer of MUFG
Retired from Managing Director of MUTB
Director of BTMU (incumbent)
Senior Managing Director and Chief

Financial Officer of MUFG (incumbent)

Saburo Sano

(May 24, 1949)

Senior Managing
Director and
Chief Risk
Management
Officer

Hiroshi Saito

(July 13, 1951)

Senior Managing
Director and
Chief Financial
Officer

Nobushige Kamei

(November 20, 1952)

Senior Managing
Director and
Chief Planning
Officer

April 1975
January 2002
May 2004
January 2006
May 2009

Joined Sanwa Bank
Executive Officer of UFJ Bank
Senior Executive Officer of UFJ Bank
Managing Executive Officer of BTMU
Retired from Managing Executive Officer

of BTMU

Senior Managing Officer of MUFG
Director of MUTB (incumbent)
Senior Managing Director and Chief

Planning Officer of MUFG (incumbent)

June 2009

109

Name
(Date of Birth)

Position in MUFG

Business Experience

Shintaro Yasuda

Director

(December 23, 1946)

Katsunori Nagayasu
(April 6, 1947)

Director

Fumiyuki Akikusa

(October 9, 1949)

Director

April 1970
June 1998
June 1999
May 2000

Joined Toyo Trust Bank
Director of Toyo Trust Bank
Executive Officer of Toyo Trust Bank
Senior Executive Officer of Toyo Trust

Bank

June 2000
March 2001

Managing Director of Toyo Trust Bank
Retired from Managing Director of Toyo

Trust Bank

April 2001
January 2002

Senior Executive Officer of UFJ Holdings
Retired from Senior Executive Officer of

May 2003

May 2004
June 2004
October 2005

June 2008

May 1970
June 1997
June 2000

UFJ Holdings

Director and Senior Executive Officer of

UFJ Trust Bank

Deputy President and Senior Executive

Officer of UFJ Trust Bank
President of UFJ Trust Bank
Director of UFJ Holdings
Director of MUFG (incumbent)
Deputy President of MUTB
Deputy Chairman of MUTB (incumbent)

Joined Mitsubishi Bank
Director of Bank of Tokyo-Mitsubishi
Retired from Director of Bank of Tokyo-

Mitsubishi

April 2001
October 2001

Managing Director of Nippon Trust Bank
Director of MTFG
Managing Director of Mitsubishi Trust

June 2002

Retired from Managing Director of

Bank

Mitsubishi Trust Bank

Managing Director of Bank of Tokyo-

Mitsubishi

April 2004
June 2004
January 2005

Director and Managing Officer of MTFG
Managing Officer of MTFG
Senior Managing Director of Bank of

May 2005

Deputy President of Bank of Tokyo-

Tokyo-Mitsubishi

October 2005
December 2005
January 2006
June 2006
April 2008

Mitsubishi

Managing Officer of MUFG
Retired from Managing Officer of MUFG
Deputy President of BTMU
Deputy President of MUFG
Director of MUFG (incumbent)
President of BTMU (incumbent)

April 1972
June 2000
June 2001

Joined Mitsubishi Bank
Director of Bank of Tokyo-Mitsubishi
Non-Board Member Director of Bank of

Tokyo-Mitsubishi

May 2003

Non-Board Member Managing Director of

Bank of Tokyo-Mitsubishi

110

Name
(Date of Birth)

Position in MUFG

Business Experience

May 2004
June 2004

May 2005
June 2005

Managing Officer of MTFG
Managing Director of Bank of Tokyo-

Mitsubishi

Retired from Managing Officer of MTFG
Retired from Managing Director of Bank

of Tokyo-Mitsubishi

Senior Managing Director and Principal

Executive Officer of Mitsubishi
Securities

October 2005

Director and Principal Executive Officer of

June 2006

June 2008

April 1973
April 1999
June 1999
March 2001
April 2001
January 2002

MUS

Deputy President of MUS
Director of MUFG (incumbent)
President of MUS (incumbent)

Joined Tokai Bank
Executive Officer of Tokai Bank
Director of Tokai Bank
Retired from Director of Tokai Bank
Executive Officer of UFJ Holdings
Retired from Executive Officer of UFJ

Holdings

May 2005

Senior Executive Officer of UFJ Bank
Retired from Senior Executive Officer of

UFJ Bank

June 2005

Senior Executive Officer of UFJ Tsubasa

Securities

October 2005
June 2008

Senior Executive Officer of MUS
Senior Managing Director of MUS

(incumbent)

Director of MUFG (incumbent)

April 1974
June 2001

April 2003

March 2004

Joined Mitsubishi Trust Bank
Director (Non-Board Member Director) of

Mitsubishi Trust Bank

Managing Director (Non-Board Member
Director) of Mitsubishi Trust Bank
Managing Director of Mitsubishi Trust

Bank

June 2004
June 2005

Director of MTFG
Senior Managing Director of Mitsubishi

Trust Bank

Director of MUFG
Senior Managing Director of MUTB
Managing Officer of MUFG
President of MUTB (incumbent)
Director of MUFG (incumbent)

Joined Mitsubishi Trust Bank
General Manager of Asset Management

and Administration Planning Division of
MTFG

Executive Officer of MTFG
Director (Non-Board Member Director) of

Mitsubishi Trust Bank

October 2005

June 2007
June 2008

April 1978
April 2004

June 2005

111

Kazuo Takeuchi

(August 15, 1950)

Director

Kinya Okauchi

Director

(September 10, 1951)

Kaoru Wachi

Director

(December 9, 1955)

Name
(Date of Birth)

Position in MUFG

Business Experience

October 2005

June 2008

Executive Officer of MUFG
Executive Officer of MUTB
Managing Director of MUTB (incumbent)
Director of MUFG (incumbent)

Takashi Oyamada

Director

(November 2, 1955)

April 1979
May 2004

Joined Mitsubishi Bank
General Manager of Corporate Policy

Division of MTFG

Co-General Manager of Corporate
Planning Office of Bank of
Tokyo-Mitsubishi

July 2004

Co-General Manager of Corporate Policy

June 2005

October 2005
January 2006
January 2009
June 2009

Division of MTFG

Executive Officer of MTFG
Non-Board Member Director of Bank of

Tokyo-Mitsubishi

Executive Officer of MUFG
Executive Officer of BTMU
Managing Executive Officer of BTMU
Managing Director of BTMU (incumbent)
Director of MUFG (incumbent)

Akio Harada

Director

April 1965

Public Prosecutor, Tokyo District Public

(November 3, 1939)

April 1988

Prosecutors Office

General Manager of Personnel Division,
Minister’s Secretariat, Ministry of
Justice

April 1992

Chief Public Prosecutor, Morioka District

Public Prosecutors Office

December 1993 Deputy Vice Minister, Ministry of Justice
January 1996

Director General of Criminal Affairs

Bureau, Ministry of Justice

June 1998

Administrative Vice Minister, Ministry of

Justice

December 1999

Chief Prosecutor, Tokyo High Prosecutors

July 2001
June 2004
October 2004

Office

Prosecutor General
Retired from Prosecutor General
Admitted to the Bar
Joined the Dai-Ichi Tokyo Bar Association
Attorney at law at Hironaka Law Office

(incumbent)

July 2005

President of Tokyo Woman’s Christian

June 2006

Director of MUFG (incumbent)

University (incumbent)

Ryuji Araki

Director

(January 29, 1940)

April 1962
September 1992 Director, Member of the Board of Toyota

Joined the Toyota Motor Co., Ltd.

June 1997

Managing Director, Member of the Board

Motor Corporation (“Toyota”)

of Toyota

June 1999

Senior Managing Director, Member of the

Board of Toyota

112

Name
(Date of Birth)

Position in MUFG

Business Experience

June 2001

Vice President, Member of the Board and

June 2002

June 2005

Representative Director of Toyota
Auditor of Aioi Insurance Company,

Limited (“Aioi Insurance”)

Senior Advisor to the Board of Toyota
Chairman and Representative Director of

Aioi Insurance

Chairman of Toyota Financial Corporation.

June 2007
June 2008

June 2009

July 1971
March 1994
March 1997
December 1999
June 2004
October 2005
April 2008
January 2009

(“TFS”)

Advisor of TFS (incumbent)
Advisor of Toyota (incumbent)
Advisor of Aioi Insurance (incumbent)
Director of MUFG (incumbent)

Joined IBM Japan, Ltd. (“IBM Japan”)
Director of IBM Japan
Managing Director of IBM Japan
President of IBM Japan
Director of MTFG
Director of MUFG (incumbent)
President and Chairman of IBM Japan
Chairman of IBM Japan (incumbent)

Takuma Otoshi

(October 17, 1948)

Director

The following table sets forth our corporate auditors as of July 31, 2009, together with their respective dates

of birth, positions and experience:

Name
(Date of Birth)

Shota Yasuda

(July 23, 1948)

Position in MUFG

Corporate Auditor
(Full-Time)

Tetsuo Maeda

(June 10, 1951)

Corporate Auditor
(Full-Time)

July 1971
June 1998
June 2001

May 2002

January 2006
June 2007

Business Experience

Joined Mitsubishi Bank
Director of Bank of Tokyo-Mitsubishi
Non-Board Member Director of Bank of

Tokyo-Mitsubishi

Managing Director (Non-Board Member
Director) of Bank of Tokyo-Mitsubishi

Senior Managing Director of BTMU
Retired from Senior Managing Director of

BTMU

Corporate Auditor (Full-Time) of MUFG

(incumbent)

April 1974
May 2000
January 2002
May 2003

Joined Toyo Trust Bank
Executive Officer of Toyo Trust Bank
Executive Officer of UFJ Trust Bank
Senior Executive Officer of UFJ Trust

Bank

September 2004

Director and Senior Executive Officer of

UFJ Trust Bank

October 2005
June 2006
June 2009

Managing Director of MUTB
Senior Managing Director of MUTB
Retired from Senior Managing Director of

MUTB

Corporate Auditor (Full-Time) of MUFG

(incumbent)

113

Name
(Date of Birth)

Position in MUFG

Business Experience

Tsutomu Takasuka

Corporate Auditor

April 1967

Became a member of the Japanese Institute

(February 11, 1942)

June 1985
February 1990
September 2002
April 2004

of Certified Public Accountants
Partner at Mita Audit Corporation
Partner at Tohmatsu & Co.
Resigned Tohmatsu & Co.
Professor, Department of Business
Administration, Bunkyo Gakuin
University (incumbent)

October 2004

Full-time Corporate Auditor of Bank of

Tokyo-Mitsubishi

June 2005
October 2005
January 2006

Corporate Auditor of MTFG
Corporate Auditor of MUFG (incumbent)
Full-time Corporate Auditor of BTMU

(incumbent)

Kunie Okamoto

Corporate Auditor

June 1969

Joined Nippon Life Insurance Company

(September 11, 1944)

July 1995
March 1999
March 2002
April 2005
June 2005
October 2005

Yasushi Ikeda

(April 18, 1946)

Corporate Auditor

April 1972

April 1977

(“Nippon Life”)

Director of Nippon Life
Managing Director of Nippon Life
Senior Managing Director of Nippon Life
President of Nippon Life (incumbent)
Corporate Auditor of UFJ Holdings
Corporate Auditor of MUFG (incumbent)

Admitted to the Bar
Joined the Tokyo Bar Association
Partner of the law firm Miyake Imai &

Ikeda (incumbent)

June 2009

Corporate Auditor of MUFG (incumbent)

The board of directors and corporate auditors may be contacted through our headquarters at Mitsubishi UFJ

Financial Group, Inc., 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan.

All directors and corporate auditors were elected at a general meeting of shareholders. The regular term of
office of a director is one year from the date of election, and the regular term of office of a corporate auditor is
four years from the date of assumption of office. Directors and corporate auditors may serve their terms until the
close of the annual general meeting of shareholders held in the last year of their terms. Directors and corporate
auditors may serve any number of consecutive terms. No family relationship exists among any of our directors or
corporate auditors. None of our directors is party to a service contract with MUFG or any of its subsidiaries that
provides for benefits upon termination of employment.

B. Compensation

The aggregate amount of remuneration, including bonuses but excluding retirement allowances, paid by

MUFG and its subsidiaries during the fiscal year ended March 31, 2009 to our directors and corporate auditors
was ¥1,196 million and ¥151 million, respectively.

Prior to June 28, 2007, in accordance with customary Japanese practice, when a director or corporate auditor

retired, a proposal to pay a retirement allowance was submitted at the annual ordinary general meeting of
shareholders for approval. The retirement allowance consisted of a one-time payment of a portion of the
allowance paid at the time of retirement and periodic payments of the remaining amount for a prescribed number
of years. After the shareholders’ approval was obtained, the retirement allowance for a director or corporate
auditor was fixed by the board of directors or by consultation among the corporate auditors in accordance with
our internal regulations and practice and generally reflected the position of the director or corporate auditor at the
time of retirement, the length of his service as a director or corporate auditor and his contribution to our

114

performance. MUFG did not set aside reserves for any retirement payments for directors and corporate auditors
made under this practice. Pursuant to a one-time shareholders’ approval in June 2007 for the retirement
allowances to be paid to the directors and corporate auditors who were elected prior to that date at the time of
their retirement, the aggregate amount of retirement allowance paid by MUFG and its subsidiaries during the
fiscal year ended March 31, 2009 to our directors and corporate auditors who have retired from their respective
positions held at MUFG or, if such directors and corporate auditors concurrently held positions at MUFG’s
subsidiaries, who have retired from such positions, was ¥124 million and ¥1 million, respectively.

As part of our compensation structure, on June 28, 2007, our shareholders approved the creation of a stock-
based compensation plan for our directors, corporate auditors and certain of our officers. On November 21, 2007,
the board of directors adopted a plan entitled “First Series of Stock Acquisition Rights of Mitsubishi UFJ
Financial Group, Inc.” for our directors, corporate auditors and certain of our officers. Under the stock-based
compensation plan, on December 6, 2007, we allotted an aggregate of 3,224 stock acquisition rights to our
directors and an aggregate of 493 stock acquisition rights to our corporate auditors for their respective services to
MUFG and its subsidiaries. Each stock acquisition right represents a right to purchase 100 shares of MUFG
common stock at ¥1 per share of common stock. The stock acquisition rights were subject to a one-year vesting
period. The rights are exercisable until December 5, 2037, but only after the date on which a grantee’s service as
a director or corporate auditor terminates. The fair value of each stock acquisition right was ¥103,200.

As part of our compensation structure, on June 27, 2008, the board of directors adopted another stock-based
compensation plan entitled “Second Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”
for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 15, 2008, we allotted an aggregate of 4,690 stock acquisition rights to our directors and an aggregate of 495
stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries. Each
stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share of
common stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 14, 2038, but only after the date on which a grantee’s service as a director, corporate auditor or officer
terminates. The fair value of each stock acquisition right was ¥92,300.

As part of our compensation structure, on June 26, 2009, the board of directors adopted another stock-based

compensation plan entitled “Third Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”
for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 14, 2009, we allotted an aggregate of 6,466 stock acquisition rights to our directors and an aggregate of 872
stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries. Each
stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share of
common stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 13, 2039, but only after the date on which a grantee’s service as a director, corporate auditor or officer
terminates. The fair value of each stock acquisition right was ¥48,700.

115

As of July 31, 2009, our directors and corporate auditors held the following numbers of shares of our

common stock:

Directors

Ryosuke Tamakoshi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Haruya Uehara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nobuo Kuroyanagi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kyota Omori . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saburo Sano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hiroshi Saito . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nobushige Kamei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shintaro Yasuda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Katsunori Nagayasu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fumiyuki Akikusa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kazuo Takeuchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kinya Okauchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kaoru Wachi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takashi Oyamada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akio Harada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ryuji Araki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takuma Otoshi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corporate Auditors

Number of Shares
Registered

58,330
16,320
33,716
12,300
25,500
7,240
71,080
11,910
7,440
15,146
16,420
11,500
3,800
9,850
—
—
3,000
Number of Shares
Registered

Shota Yasuda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tetsuo Maeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tsutomu Takasuka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kunie Okamoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yasushi Ikeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,150
8,473
—
536
—

C. Board Practices

Our Articles of Incorporation provide for a board of directors of not more than twenty members and not
more than seven corporate auditors. Our corporate officers are responsible for executing our business operations,
and our directors oversee these officers and set our fundamental strategies.

We currently have seventeen directors. Our board of directors has ultimate responsibility for the

administration of our affairs. By resolution, our board of directors shall appoint, from the directors,
representative directors who may represent us severally. Our board of directors shall appoint a president and may
also appoint a chairman, deputy chairmen, deputy presidents, senior managing directors and managing directors
from their members by resolution. Deputy presidents assist the president, and senior managing directors and
managing directors assist the president and deputy presidents, if any, in the management of our day-by-day
operations.

We currently have three outside directors as members of our board of directors. Under the Company Law,

an outside director is defined as a person who has never been an executive director, executive officer, manager or
any other type of employee of the company or any of its subsidiaries prior to his or her appointment.

Under the Company Law, a resolution of the board of directors is required if any director wishes to engage
in any business that is in competition with us or any transaction with us excluding those in the ordinary course of
business. Additionally, no director may vote on a proposal, arrangement or contract in which that director is
deemed to have a specific interest.

Neither the Company Law nor our Articles of Incorporation contain special provisions as to the borrowing

power exercisable by a director, the retirement age of our directors and corporate auditors or a requirement of our
directors and corporate auditors to hold any shares of our capital stock.

116

The Company Law requires a resolution of the board of directors for a company to determine the execution

of important businesses, to acquire or dispose of material assets, to borrow substantial amounts of money, to
employ or discharge managers and other important employees, and to establish, change or abolish branch offices
or other material corporate organizations, to float bonds, to establish internal control systems, and to exempt a
director from liability to the company in accordance with applicable laws and regulations.

We currently have five corporate auditors, including three outside corporate auditors. An outside corporate

auditor is defined under the Company Law as a person who has not served as a director, account assistant,
executive officer, manager or any other type of employee of the company or any of its subsidiaries prior to his or
her appointment.

Our corporate auditors, who are not required to be certified public accountants, have various statutory

duties, including principally:

•

•

•

the examination of the financial statements, business reports, proposals and other documents which our
board of directors prepares and submits to a general meeting of shareholders;

the examination of our directors’ administration of our affairs; and

the preparation and submission of a report on their examination to a general meeting of shareholders.

Our corporate auditors are obligated to attend meetings of our board of directors, and to make statements at

the meetings if they deem necessary, although they are not entitled to vote at the meetings. Our corporate
auditors comprise the board of corporate auditors, which determines matters relating to the performance of
audits. The Company Law provides that a company that has or is required to have a board of corporate auditors
must have three or more corporate auditors, and at least half of the corporate auditors must be outside corporate
auditors. In a company that has or is required to have a board of corporate auditors, one or more of the corporate
auditors must be designated by the board of corporate auditors to serve on a full-time basis.

Under the Company Law and our Articles of Incorporation, we may exempt, by resolution of the board of

directors, our directors and corporate auditors from liabilities to the company arising in connection with their
failure to execute their duties without gross negligence, within the limits stipulated by applicable laws and
regulations. In addition, we have entered into a liability limitation agreement with each outside director and
outside corporate auditor which limits the maximum amount of their liability to the company arising in
connection with a failure to execute their duties without gross negligence to the greater of either ¥10 million or
the aggregate sum of the amounts prescribed in paragraph 1 of Article 425 of the Company Law and Articles 113
and 114 of the Company Law Enforcement Regulations.

The Company Law permits two types of governance systems for large companies, including MUFG. The

first system is for companies with corporate auditors, and the other is for companies with audit, nomination and
compensation committees. We have elected to adopt a corporate governance system based on corporate auditors.

Under the Company Law, if a company has corporate auditors, the company is not obligated to have any
outside directors or to have any audit, nomination or compensation committees. Although we have adopted a
board of corporate auditors, we have three outside directors as part of our efforts to further enhance corporate
governance. In an effort to further enhance our corporate governance, we have also voluntarily established a
internal audit and compliance committee and a nomination and compensation committee to support our board of
directors.

Internal Audit and Compliance Committee. The internal audit and compliance committee, a majority of
which is comprised of outside directors and specialists, deliberates important matters relating to internal audits,
internal control of financial information, financial audits, compliance, corporate risk management, and other
internal control systems. This committee makes reports and proposals to the board of directors about important
matters for deliberation and necessary improvement measures. We aim to enhance the effectiveness of internal

117

audit functions by utilizing the external view points provided by the internal audit and compliance committee
members. The chairman of the internal audit and compliance committee is Akio Harada, who is an outside
director. The other members of this committee are Ryuji Araki, an outside director, Kouji Tajika, a certified
public accountant, Yoshinari Tsutsumi, an attorney-at-law, and Haruya Uehara, a deputy chairman and the chief
audit officer. The internal audit and compliance committee met fourteen times between April 2008 and March
2009.

Nomination and Compensation Committee. The nomination and compensation committee was established
through the integration of the nomination committee and the compensation committee on June 27, 2008. Prior to
the integration, the nomination committee, a majority of which was comprised of outside directors, deliberated
matters relating to the appointment and dismissal of our directors and the directors of our subsidiaries. The
nomination committee met one time between April 2008 and June 2008. The compensation committee, a
majority of which was also comprised of outside directors, deliberated matters relating to the compensation
framework of our directors and the directors of our subsidiaries, as well as the compensation of our top
management and the top management of our subsidiaries. The compensation committee met five times between
April 2008 and June 2008. The integrated nomination and compensation committee has assumed the
responsibilities of the two former committees and met two times between July 2008 and March 2009. The
nomination and compensation committee makes reports and proposals to the board of directors about important
matters for deliberation and necessary improvement measures. The chairman of the nomination and
compensation committee is Takuma Otoshi, an outside director. The other members of this committee are Akio
Harada, Ryuji Araki, and Nobuo Kuroyanagi, President and CEO.

For additional information on our board practices and the significant differences in corporate governance
practices between MUFG and US companies listed on the New York Stock Exchange, see “—A. Directors and
Senior Management.” and “Item 16.G. Corporate Governance.”

118

D. Employees

As of March 31, 2009, we had approximately 79,500 employees, an increase of approximately 1,200
employees compared with the number of employees as of March 31, 2008. In addition, as of March 31, 2009, we
had approximately 42,600 part-time and temporary employees. The following tables show the percentages of our
employees in our different business units and in different locations as of March 31, 2009:

Business unit

Bank of Tokyo-Mitsubishi UFJ:

Retail Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets Unit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operations and Systems Unit
Corporate Center/Independent Divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19%
12
24
1
9
5

Mitsubishi UFJ Trust and Banking Corporation:

Trust-Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administration and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mitsubishi UFJ Securities:

Sales Marketing Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Investment Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Center and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mitsubishi UFJ NICOS:

Business Marketing Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Risk Management & Risk Assets Administration Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operations Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Systems Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6
2
2
1
3

6
0
1
1
3

2
1
1
0
1
0

100%

119

Location

Bank of Tokyo-Mitsubishi UFJ:

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46%
15
2
7
0

Mitsubishi UFJ Trust and Banking Corporation:

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mitsubishi UFJ Securities:

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mitsubishi UFJ NICOS:

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13
0
1
0

10
0
1
0

5
0
0
0
0

100%

Most of our employees are members of our employees’ union, which negotiates on behalf of employees in

relation to remuneration and working conditions. We believe our labor relations to be good.

E.

Share Ownership

The information required by this item is set forth in “—B. Compensation.”

120

Item 7. Major Shareholders and Related Party Transactions.

A. Major Shareholders

Common Stock

As of March 31, 2009, we had 665,597 registered shareholders of our common stock. The ten largest

holders of our common stock appearing on the register of shareholders as of March 31, 2009, and the number and
the percentage of such shares held by them, were as follows:

Name

Number of shares
held

Percentage of
total shares in issue

. . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (Trust account)(1)
. . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (Trust account 4G)(1)
. . . . . . . . . . . . . . . .
The Master Trust Bank of Japan, Ltd. (Trust account)(1)
Nippon Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Bank of New York Mellon as Depositary Bank for DR Holders(2)
. . . . .
Meiji Yasuda Life Insurance Company(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toyota Motor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meiji Yasuda Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Chase Manhattan Bank, N.A. London Secs Lending Omnibus

671,885,900
635,316,500
489,585,800
285,603,153
263,905,468
175,000,000
149,263,153
139,185,671

Account

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi Heavy Industries, Ltd.(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129,374,761
120,914,991

5.76%
5.45
4.20
2.45
2.26
1.50
1.28
1.19

1.11
1.03

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,060,035,397

26.27%

Includes the shares held in trust accounts, which do not disclose the names of beneficiaries.

Notes:
(1)
(2) An owner of record for our American depositary shares.
(3) These shares are those held in a pension trust account with The Master Trust Bank of Japan, Ltd. for the benefit of retirement plans with

voting rights retained by Meiji Yasuda Life Insurance Company.

(4) These shares are those held in a pension trust account with The Master Trust Bank of Japan, Ltd. for the benefit of retirement plans with

voting rights retained by Mitsubishi Heavy Industries, Ltd.

As of March 31, 2009, 298,628 shares, representing less than 0.01% of our outstanding common stock, were

held by our directors and corporate auditors. Our major shareholders do not have different voting rights.

As of March 31, 2009, 1,460,869,339 shares, representing 12.54% of our outstanding common stock, were

owned by 292 US shareholders of record who are resident in the United States, one of whom is the ADR
depository’s nominee holding 263,905,468 shares, or 2.26%, of our issued common stock.

Preferred Stock

The shareholders of our preferred stock, which are non-voting, appearing on the register of shareholders as

of March 31, 2009, and the number and the percentage of such shares held by them, were as follows:

First series of class 3 preferred stock

Name

Number of shares
held

Percentage of
total shares in issue

Tokio Marine & Nichido Fire Insurance Co., Ltd. . . . . . . . . . . . . . . . . . . . . . .
Meiji Yasuda Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nippon Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,000,000
40,000,000
20,000,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100,000,000

40%
40
20

100%

121

First series of class 5 preferred stock

Name

Number of shares
held

Percentage of
total shares in issue

Nippon Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meiji Yasuda Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taiyo Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Daido Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tokio Marine & Nichido Fire Insurance Co., Ltd. . . . . . . . . . . . . . . . . . . . . . .
Nipponkoa Insurance Company, Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Aioi Insurance Company, Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,000,000
40,000,000
20,000,000
20,000,000
20,000,000
12,000,000
4,000,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

156,000,000

25.64%
25.64
12.82
12.82
12.82
7.69
2.56

100%

Class 11 preferred stock

Name

Number of shares
held

Percentage of
total shares in issue

UFJ Trustee Services PVT. (Bermuda) Limited as the trustee of

UFJ International Finance (Bermuda) Trust

. . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,000

1,000

100%

100%

B. Related Party Transactions

We and our banking subsidiaries had, and expect to have in the future, banking transactions and other
transactions in the ordinary course of business with our related parties. Although for the fiscal year ended
March 31, 2009, such transactions included, but were not limited to, call money, loans, electronic data
processing, leases and management of properties, those transactions were immaterial and were made at
prevailing market rates, terms and conditions and do not involve more than the normal risk of collectibility or
present other unfavorable features.

None of our directors or corporate auditors, and none of the close members of their respective families, has

had any transactions or has any presently proposed transactions that are material or any transactions that are
unusual in their nature or conditions, involving goods, services or tangible or intangible assets, to which we were,
are or will be a party.

No loans have been made to our directors or corporate auditors other than in the normal course of business,

on normal commercial terms and conditions, involving the normal risk of collectibility, and presenting normal
features. In addition, no loans have been made to our directors or executive officers or corporate auditors other
than as permitted under Section 13(k) of the US Securities Exchange Act and Rule 13k-1 promulgated
thereunder.

No family relationship exists among any of our directors or corporate auditors. No arrangement or

understanding exists between any of our directors or corporate auditors and any other person pursuant to which
any director or corporate auditor was elected to their position at MUFG.

As part of our compensation structure, we have granted stock acquisition rights to our directors and
corporate auditors. For a detailed discussion of the stock acquisition rights, see “Item 6.B. Directors, Senior
Management and Employees—Compensation.”

C.

Interests of Experts and Counsel

Not applicable.

122

Item 8.

Financial Information.

A. Consolidated Statements and Other Financial Information

The information required by this item is set forth in our consolidated financial statements starting on
page F-1 of this Annual Report and in “Selected Statistical Data” starting on page A-1 of this Annual Report.

Legal Proceedings

From time to time, we are involved in various litigation matters. Although the final resolution of any such

matters could have a material effect on our consolidated operating results for a particular reporting period, based
on our current knowledge and consultation with legal counsel, we believe the current litigation matters, when
ultimately determined, will not materially affect our results of operations or financial position.

Distributions

Our board of directors submits a recommendation for a year-end dividend for our shareholders’ approval at

the ordinary general meeting of shareholders customarily held in June of each year. The year-end dividend is
usually distributed immediately following shareholders’ approval to holders of record at the end of the preceding
fiscal year. In addition to year-end dividends, we may make cash distributions by way of interim dividends to
shareholders of record as of September 30 of each year as distribution of surplus by resolution of our board of
directors. On June 26, 2009, we paid year-end dividends in the amount of ¥5 per share of common stock for the
fiscal year ended March 31, 2009.

See “Item 10.B. Memorandum and Articles of Association” for additional information on our dividends

policy.

Under the Japanese foreign exchange regulations currently in effect, dividends paid on shares held by
non-residents of Japan may be converted into any foreign currency and repatriated abroad. Under the terms of the
deposit agreement pursuant to which ADSs are issued, the depositary is required, to the extent that in its
judgment it can convert Japanese yen on a reasonable basis into US dollars and transfer the resulting US dollars
to the United States, to convert all cash dividends that it receives in respect of deposited shares into US dollars
and to distribute the amount received, after deduction of any applicable withholding taxes, to the holders of
ADSs. See “Item 10.D. Additional Information—Exchange Controls—Foreign Exchange and Foreign Trade
Law.”

B.

Significant Changes

Other than as described in this Annual Report, no significant changes have occurred since the date of our

consolidated financial statements included in this Annual Report.

123

Item 9.

The Offer and Listing.

A. Offer and Listing Details

Market Price Information

The following table shows, for the periods indicated, the reported high and low sale prices for shares of our
common stock on the Tokyo Stock Exchange, or the TSE, and of the ADSs on the New York Stock Exchange, or
the NYSE.

Price per share on the TSE

Price per ADS on the NYSE

High

Low

High

Low

(yen)

(US$)

Fiscal year ended March 31, 2005 . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2006 . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2007 . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2008

First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter

Fiscal year ended March 31, 2009

First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal year ending March 31, 2010

April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August (through August 18) . . . . . . . . . . . . . . . . . . .

1,230
1,810
1,950

1,430
1,390
1,252
1,068

1,173
1,036
946
590
553

550
699
670
613
619

800
873
1,260

1,240
990
881
782

856
741
427
377
377

470
519
582
528
580

10.40
15.54
16.75

11.72
11.48
11.22
9.90

11.11
9.67
9.14
6.34
5.61

5.57
6.84
6.74
6.33
6.53

7.12
7.95
11.01

10.41
8.28
8.04
7.95

8.66
6.87
4.50
3.71
3.71

4.79
5.39
6.08
5.66
6.10

Note: The amounts in this table prior to 2007 have been adjusted to reflect the 1,000-for-one stock split of our common stock, effective as of

September 30, 2007.

B. Plan of Distribution

Not applicable.

C. Markets

The primary market for our common stock is the TSE. Our common stock is also listed on the Osaka
Securities Exchange and the Nagoya Stock Exchange in Japan. ADSs, each representing one share of common
stock, are quoted on the NYSE under the symbol, “MTU.”

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

124

F. Expenses of the Issue

Not applicable.

Item 10. Additional Information.

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

Our Corporate Purpose

Article 2 of our Articles of Incorporation provides that our corporate purpose is to carry on the following

businesses:

•

•

administration of management of banks, trust banks, specialized securities companies, insurance
companies or other companies which we may own as our subsidiaries under the Japanese Banking Law;
and

any other businesses incidental to the foregoing businesses mentioned in the preceding clause.

Board of Directors

For discussion of the provisions of our Articles of Incorporation as they apply to our directors, see

“Item 6.C. Directors, Senior Management and Employees—Board Practices.”

Common Stock

We summarize below the material provisions of our Articles of Incorporation, our share handling

regulations and the Company Law (Law No. 86 of 2005, also known as the Companies Act) as they relate to a
type of joint stock company known as kabushiki kaisha, within which we fall. Because it is a summary, this
discussion should be read together with our Articles of Incorporation and share handling regulations, which have
been filed as exhibits to this Annual Report.

General

A joint stock company is a legal entity incorporated under the Company Law. The investment and rights of

the shareholders of a joint stock company are represented by shares of stock in the company and shareholders’
liability is limited to the amount of the subscription for the shares.

As of June 26, 2009, our authorized common share capital was comprised of 33,000,000,000 shares of

common stock with no par value.

As of March 31, 2009, a total of 11,648,360,720 shares of common stock (including 9,080,212 shares of
common stock held by us and our consolidated subsidiaries as treasury stock) had been issued. Each of the shares
issued and outstanding was fully paid and non-assessable.

As of June 26, 2009, we were authorized to issue 920,001,000 shares of preferred stock, including
120,000,000 shares of class 3 preferred stock, 400,000,000 shares of each of the first to fourth series of class 5
preferred stock (provided the aggregate number of shares authorized to be issued with respect to the four series of
class 5 preferred stock does not exceed 400,000,000 shares), 200,000,000 shares of each of the first to fourth
series of class 6 preferred stock (provided the aggregate number of shares authorized to be issued with respect to
the four series of class 6 preferred stock does not exceed 200,000,000 shares), 200,000,000 shares of each of the

125

first to fourth series of class 7 preferred stock (provided the aggregate number of shares authorized to be issued
with respect to the four series of class 7 preferred stock does not exceed 200,000,000 shares), and 1,000 shares of
class 11 preferred stock. As of March 31, 2009, we had 100,000,000 shares of class 3 preferred stock,
156,000,000 shares of first series class 5 preferred stock, and 1,000 shares of class 11 preferred stock issued and
outstanding.

We may issue shares from our authorized but unissued share capital following a resolution to that effect by
our board of directors. An increase in our authorized share capital is only possible by amendment of our Articles
of Incorporation, which generally requires shareholders’ special approval.

In order to assert shareholder rights against us, a shareholder must have its name and address registered on

our register of shareholders, in accordance with the Company Law and our share handling regulations. The
registered holder of deposited shares underlying the ADSs is the depositary for the ADSs, or its nominee.
Accordingly, holders of ADSs will not be able to assert shareholder rights other than as provided in the
agreement among us, the depositary and the holders of the ADSs.

A law to establish a new central clearing system for shares of listed companies and to eliminate the issuance

and use of certificates for such shares became effective on January 5, 2009. Under the “Law Concerning Book-
Entry Transfer of Corporate Bonds, Stocks etc.,” a new central clearing system was established and the shares of
all Japanese companies listed on any Japanese stock exchange are now subject to the new central clearing
system. As of January 5, 2009, we are deemed to be a company which shall no longer issue share certificates for
our shares, and all existing share certificates for such shares have become automatically null and void, without us
being required to collect those share certificates from shareholders. The transfer of such shares is effected
through entry in the books maintained under the new central clearing system. Only shares that were deposited
with the Japan Securities Depository Center as of January 5, 2009 are immediately transferable under the new
central clearing system.

Dividends

Dividends are distributed in proportion to the number of shares owned by each shareholder on the record
date for the dividend. Dividends for each financial period may be distributed following shareholders’ approval at
a general meeting of shareholders.

Payment of dividends on common stock is subject to the preferential dividend rights of holders of preferred

stock.

Under the Banking Law and our Articles of Incorporation, our financial accounts are closed on March 31 of

each year, and dividends, if any, are paid to shareholders of record as of March 31 following shareholders’
approval at a general meeting of shareholders. In addition to year-end dividends, our board of directors may by
resolution declare an interim cash dividend to shareholders of record as of September 30 of each year. Under the
Company Law, distribution of dividends will take the form of distribution of surplus (as defined below). We will
be permitted to make distributions of surplus to our shareholders any number of times per fiscal year pursuant to
resolutions of our general meetings of shareholders, subject to certain limitations described below. Distributions
of surplus are in principle required to be authorized by a resolution of a general meeting of shareholders.
Distributions of surplus would, however, be permitted to be made pursuant to a resolution of our board of
directors if:

(a) our Articles of Incorporation so provide (our Articles of Incorporation currently contain no such

provisions);

(b)

the normal term of office of our directors is one year; and

(c)

certain conditions concerning our non-consolidated annual financial statements and certain documents
for the latest fiscal year as required by an ordinance of the Ministry of Justice are satisfied.

126

In an exception to the above rule, even if the requirements described in (a) through (c) are not met, we are

permitted to make distributions of surplus in cash to our shareholders by resolutions of the board of directors
once per fiscal year as mentioned above concerning interim cash dividend.

Under the Company Law, distributions of surplus may be made in cash or in kind in proportion to the
number of shares of common stock held by each shareholder. A resolution of a general meeting of shareholders
or our board of directors authorizing a distribution of surplus must specify the kind and aggregate book value of
the assets to be distributed, the manner of allocation of such assets to shareholders, and the effective date of the
distribution. If a distribution of surplus is to be made in kind, we may, pursuant to a resolution of a general
meeting of shareholders or (as the case may be) our board of directors, grant to our shareholders the right to
require us to make such distribution in cash instead of in kind. If no such right is granted to shareholders, the
relevant distribution of surplus must be approved by a special resolution of a general meeting of shareholders
(see the description of a “special resolution” in “—Voting Rights”).

Under the Company Law, we may make distribution of surplus to the extent that the aggregate book value
of the assets to be distributed to shareholders does not exceed the distributable amount (as defined below) as of
the effective date of such distribution of surplus. The amount of surplus (the “surplus”) at any given time shall be
the amount of our assets and the book value of our treasury stock after subtracting the amounts of items (1)
through (5) below as they appear on our non-consolidated balance sheet as of the end of our last fiscal year, and
after reflecting the changes in our surplus after the end of our last fiscal year, by adding the amounts of items (6),
(7) and (8) below and/or subtracting the amounts of items (9), (10) and (11) below:

(1) our liabilities;

(2) our stated capital;

(3) our additional paid-in capital;

(4) our accumulated legal reserve;

(5) other amounts as are set out in an ordinance of the Ministry of Justice;

(6)

(7)

(8)

(if we transferred our treasury stock after the end of the last fiscal year) the transfer price of our
treasury stock after subtracting the book value thereof;

(if we decreased our stated capital after the end of the last fiscal year) the amount of decrease in our
stated capital (excluding the amount transferred to additional paid-in capital or legal reserve);

(if we decreased our additional paid-in capital or legal reserve after the end of the last fiscal year) the
amount of decrease in our additional paid-in capital or legal reserve (excluding the amount transferred
to stated capital);

(9)

(if we cancelled our treasury stock after the end of the last fiscal year) the book value of the cancelled
treasury stock;

(10) (if we distributed surplus to shareholders after the end of the last fiscal year) the amount of the assets

distributed to shareholders by way of such distribution of surplus; and

(11) other amounts as are set out in an ordinance of the Ministry of Justice.

A distributable amount (the “distributable amount”) at any given time shall be the aggregate amount of

(a) the surplus, (b) the amount of profit as recorded for the period after the end of our last fiscal year until the
date of an extraordinary settlement of account (if any) as is set out in an ordinance of the Ministry of Justice and
(c) the transfer price of our treasury stock in the same period, after subtracting the amounts of the following
items:

(1)

(2)

the book value of our treasury stock;

(if we transferred our treasury stock after the end of the last fiscal year) the transfer price of our
treasury stock;

127

(3)

the losses recorded for the period after the end of our last fiscal year until the date of an extraordinary
settlement of account (if any) as set out in an ordinance of the Ministry of Justice; and

(4) other amounts as set out in an ordinance of the Ministry of Justice.

In Japan, the “ex-dividend” date and the record date for any dividends precede the date of determination of

the amount of the dividend to be paid. The market price of shares generally becomes ex-dividend on the third
business day prior to the record date. Under our Articles of Incorporation, we are not obligated to pay any
dividends which are left unclaimed for a period of five years after the date on which they first became payable.

Capital and Reserves

Under the Company Law, we may reduce our additional paid-in capital or legal reserve (without limitation

as to the amount of such reduction) as mentioned previously, generally by resolution of a general meeting of
shareholders and, if so resolved in the same resolution, may account for the whole or any part of the amount of
such reduction as stated capital. We may also reduce our stated capital generally by special resolution of a
general meeting of shareholders and, if so resolved in the same resolution, such reduction may account for the
whole or any part of the amount of such reduction as additional paid-in capital or legal reserve. Conversely, we
may reduce our surplus and increase either (i) stated capital or (ii) additional paid-in capital and/or legal reserve
by the same amount, in either case by resolution of a general meeting of shareholders.

Stock Splits

Stock splits of our outstanding stock may be effected at any time by resolution of the board of directors.

When a stock split is to be effected, we may increase the authorized share capital to cover the number of shares
to be increased by the stock split by amending our Articles of Incorporation by resolution of the board of
directors without approval by special resolution of the general meeting of shareholders, unless more than one
class of stock is issued and outstanding. We must give public notice of the stock split, specifying a record date at
least two weeks prior to the record date.

We conducted a stock split pursuant to which each of our shares of common and preferred stock were split

into 1,000 shares of the respective classes of securities, effective as of September 30, 2007. Our Articles of
Incorporation were amended to increase the authorized share capital to cover the number of shares increased by
the stock split, which amendment became effective simultaneously with the effectiveness of the stock split.

Unit Share (tan-gen kabu) System

We adopt the unit share system, where 100 shares of either common or preferred stock shall each constitute

a unit, as the amendment of our Articles of Incorporation to provide for such system has been approved at the
shareholders’ meetings on June 27 and 28, 2007.

Under the unit share system, each unit is entitled to one voting right. A holder of less than one unit has no

voting right. Our Articles of Incorporation provide that the holders of shares constituting less than a full unit will
not have shareholder rights except for those specified in the Company Law or an ordinance of the Ministry of
Justice, including rights (i) to receive dividends, (ii) to receive cash or other assets in case of consolidation or
split of shares, stock-for-stock exchange or stock-for-stock transfer, corporate split or merger or (iii) to be
allotted rights to subscribe for free for new shares and stock acquisition rights when such rights are granted to
shareholders. Shareholders may require us to purchase shares constituting less than a unit at the current market
price. In addition, holders of shares constituting less than a unit may require us to sell them such number of
shares, which, when combined with the number of shares already held by such holder, shall constitute a whole
unit of share; provided that we will be obliged to comply with such request only when we own a sufficient
number of shares to accommodate the desired sale and purchase. The board of directors may reduce the number
of shares constituting a unit or cease to use the unit share system by amendments to the Articles of Incorporation
without shareholders’ approval even though amendments to the Articles of Incorporation generally require a
special resolution of the general meeting of shareholders.

128

General Meeting of Shareholders

The ordinary general meeting of our shareholders is usually held in June of each year in Tokyo. In addition,
we may hold an extraordinary general meeting of shareholders whenever necessary by giving at least two weeks’
advance notice to shareholders who are entitled to vote at the relevant general meeting of shareholders. The
record date for ordinary general meetings of our shareholders is March 31.

Any shareholder holding at least 300 voting rights or 1% of the total number of voting rights for six
consecutive months or longer may propose a matter to be considered at a general meeting of shareholders by
submitting a written request to a director at least eight weeks prior to the date of the meeting. The number of
minimum voting rights, minimum percentage and time period necessary for exercising the minority shareholder
rights described above may be decreased or shortened if our Articles of Incorporation so provide. Our Articles of
Incorporation currently contain no such provisions.

Voting Rights

A holder of shares of our common stock is generally entitled to one voting right for each unit of common

stock held. The following shares of common stock are not entitled to voting rights even when such shares
constitute a whole unit, and such shares of common stock are not considered when determining whether a
quorum exists for a shareholders’ meeting:

•

•

•

treasury stock;

shares held by a company in which we, we and our subsidiaries or our subsidiaries owns 25% or more of
the total voting rights; and

shares issued after the record date as a result of conversion of convertible stock, exercise of stock
acquisition rights, and fractional shareholders becoming a shareholder of a whole unit share.

On the other hand, holders of certain class of preferred stock shall be entitled to a voting right for each unit
of preferred stock held under certain conditions provided for by relevant laws or regulations and our Articles of
Incorporation. For example, when a proposal to pay the full amount of preferential dividends on any class of
preferred stock in compliance with the terms of such preferred stock is not included in the agenda of the relevant
shareholders meeting. See “—Preferred Stock.”

Under our Articles of Incorporation, except as otherwise provided by law or by other provisions of our
Articles of Incorporation, a resolution can be adopted at a shareholders’ meeting by the holders of a majority of
the voting rights represented at the meeting. The Company Law and our Articles of Incorporation require a
quorum of not less than one-third of the total number of voting rights for election of our directors and corporate
auditors.

The Company Law and our Articles of Incorporation provide that a quorum of not less than one-third of
outstanding voting rights, excluding those owned by our subsidiaries and affiliates of which we own, directly or
indirectly, 25 percent or more, must be present at a shareholders’ meeting to approve specified corporate actions,
such as:

•

•

•

•

•

•

the amendment of our Articles of Incorporation, except in some limited cases;

the repurchase of our own stock from a specific shareholder other than our subsidiary;

the consolidation of shares;

the offering to persons other than shareholders of stock at a specially favorable price, or of stock
acquisition rights or bonds or notes with stock acquisition rights with specially favorable conditions;

the removal of a director who was elected by cumulative voting or corporate auditor;

the exemption from liability of a director or corporate auditor, with certain exceptions;

129

•

•

•

•

•

•

•

a reduction in stated capital with certain exceptions in which a shareholders’ resolution is not required;

a distribution of in-kind dividends which meets certain requirements;

the transfer of the whole or an important part of our business, except in some limited circumstances;

the acquisition of the whole business of another company, except in some limited circumstances;

a dissolution, merger or consolidation, except for certain types of mergers;

a stock-for-stock exchange (kabushiki-kokan) or stock-for-stock transfer (kabushiki-iten), except in
some limited circumstances; and

a corporate split, except in some limited circumstances.

A special resolution representing at least two-thirds of the voting rights represented at the meeting is

required to approve these actions.

Our Articles of Incorporation do not include any provision that grants shareholders cumulative voting rights

at elections of directors or corporate auditors.

Subscription Rights

Holders of our shares have no preemptive rights under our Articles of Incorporation. Under the Company
Law, however, our board of directors may determine that shareholders be given subscription rights in connection
with a particular issue of new shares. In this case, these subscription rights must be given on uniform terms to all
shareholders, and if a specified record date is set, it must be announced in a public notice at least two weeks prior
to the record date. A notification to each individual shareholder must also be given at least two weeks prior to the
subscription date.

Under the Company Law, rights to subscribe for new shares may not be transferred; however, we may allot

stock acquisition rights to shareholders without consideration, and such rights will be transferable.

Stock Acquisition Rights

We may issue stock acquisition rights (shinkabu yoyakuken), which in the United States are often in the

form of warrants, or bonds with stock acquisition rights that cannot be detached (shinkabu yoyakuken-tsuki
shasai), which in the United States are often in the form of convertible bonds or bonds with non-detachable
warrants. Except where the issuance would be on “specially favorable” conditions, the issuance of stock
acquisition rights or bonds with stock acquisition rights may be authorized by a resolution of our board of
directors. Upon exercise of the stock acquisition rights, the holder of such rights may acquire shares by paying
the applicable exercise price or, if so determined by a resolution of our board of directors, by making a substitute
payment, such as having the convertible bonds redeemed for no cash in lieu of the exercise price.

Liquidation Rights

Upon our liquidation, the assets remaining after payment of all debts, liquidation expenses, taxes and
preferred distributions to holders of shares of our preferred stock will be distributed among the holders of shares
of our common stock in proportion to the number of shares they own.

Transfer Agent

MUTB is the transfer agent for our common stock. The office of MUTB for this purpose is located at 4-5,

Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan. MUTB maintains our register of shareholders.
MUTB will maintain our register of lost share certificates until January 5, 2010, as required by the New Share
Settlement Law.

130

Reports to Shareholders

We furnish to our shareholders notices, in Japanese, of shareholders’ meetings, annual business reports,

including our financial statements, and notices of resolutions adopted at our shareholders’ meetings.

Record Dates

As stated above, March 31 is the record date for the payment of annual dividends, if any, and the

determination of shareholders entitled to vote at ordinary general meetings of our shareholders. September 30 is
the record date for the payment of interim dividends, if any. In addition, by a resolution of our board of directors
and after giving at least two weeks’ prior public notice, we may at any time set a record date in order to
determine the shareholders who are entitled to the rights pertaining to our shares.

Repurchase of Our Shares

We may repurchase our own shares:

•

•

•

•

through the Tokyo Stock Exchange or other stock exchanges on which our shares are listed, if
authorized by a resolution of a general meeting of shareholders or our board of directors;

by way of a tender offer, if authorized by a resolution of a general meeting of shareholders or our board
of directors;

from a specific party, if authorized by a special resolution of a general meeting of shareholders and we
give notice thereof to shareholders prior to such general meeting, in general;

from all shareholders of a specific class of shares offering to sell their shares, if authorized by a
resolution of a general meeting of shareholders or our board of directors and we give a public notice or
notice thereof to all of the shareholders (if we repurchase any class of preferred stock, notices to all
shareholders of the relevant class of preferred stock); or

•

from our subsidiaries, if authorized by a resolution of the board of directors.

When the repurchase is made by us from a specific party, as authorized by a special resolution of a general

meeting of shareholders, any shareholder may make a demand to a director, five days or more prior to the
relevant shareholders’ meeting, that we also repurchase the shares held by that shareholder. However, no such
right will be available if the shares have a market price, and if the purchase price does not exceed the then market
price calculated in a manner set forth in an ordinance of the Ministry of Justice.

Repurchase of our own shares described above must satisfy various specified requirements. In general, the
same restrictions on the distributable amount as described in the seventh paragraph under “—Common Stock—
Dividends.” are applicable to the repurchase of our own shares, so the total amount of the repurchase price may
not exceed the distributable amount.

We may hold our own shares so repurchased without restrictions. In addition, we may cancel or dispose of

our repurchased shares by a resolution of our board of directors. As of March 31, 2009, we (excluding our
subsidiaries) owned 958,031 shares of treasury stock.

Preferred Stock

The following is a summary of information concerning the shares of our preferred stock, including brief
summaries of the relevant provisions of our Articles of Incorporation, the share handling regulations and the
Company Law as currently in effect. The detailed rights of our preferred stock are set out in our Articles of
Incorporation and the resolutions of our board of directors relating to the issuance of the relevant stock.

131

General

As of March 31, 2009, we were authorized under our Articles of Incorporation to issue seven classes of
preferred stock totaling 1,076,901,000 shares of preferred stock, including 120,000,000 shares of class 3 preferred
stock, 400,000,000 shares of each of the first to fourth series of class 5 preferred stock (provided the aggregate
number of shares authorized to be issued with respect to the four series of class 5 preferred stock does not exceed
400,000,000 shares), 200,000,000 shares of each of the first to fourth series of class 6 preferred stock (provided the
aggregate number of shares authorized to be issued with respect to the four series of class 6 preferred stock does not
exceed 200,000,000 shares), 200,000,000 shares of each of the first to fourth series of class 7 preferred stock
(provided the aggregate number of shares authorized to be issued with respect to the four series of class 7 preferred
stock does not exceed 200,000,000 shares), 27,000,000 shares of class 8 preferred stock, 1,000 shares of class 11
preferred stock and 129,900,000 shares of class 12 preferred stock. Following the amendment of our Articles of
Incorporation, as of June 26, 2009, we were authorized to issue five classes of preferred stock totaling 920,001,000
shares of preferred stock, including 120,000,000 shares of class 3 preferred stock, 400,000,000 shares of each of the
first to fourth series of class 5 preferred stock (provided the aggregate number of shares authorized to be issued with
respect to the four series of class 5 preferred stock does not exceed 400,000,000 shares), 200,000,000 shares of each
of the first to fourth series of class 6 preferred stock (provided the aggregate number of shares authorized to be
issued with respect to the four series of class 6 preferred stock does not exceed 200,000,000 shares), 200,000,000
shares of each of the first to fourth series of class 7 preferred stock (provided the aggregate number of shares
authorized to be issued with respect to the four series of class 7 preferred stock does not exceed 200,000,000
shares), and 1,000 shares of class 11 preferred stock. Our preferred stock has equal preference over our shares of
common stock with respect to dividend entitlements and distribution of assets upon our liquidation. However,
holders of shares of our preferred stock are not entitled to vote at general meetings of shareholders, subject to the
exceptions provided under our Articles of Incorporation. As of March 31, 2009, 100,000,000 shares of class 3
preferred stock, 156,000,000 shares of first series class 5 preferred stock and 1,000 shares of class 11 preferred
stock had been outstanding, but there were no shares of class 6 or 7 preferred stock outstanding. We may, at any
time, following necessary authorization as described in the first paragraph under “Repurchase of Our Shares,”
purchase and cancel, at fair value, any shares of preferred stock outstanding out of the distributable amount.

Class 3, first to fourth series of class 5 and first to fourth series of class 6 preferred shareholders are not
entitled to request acquisition of their shares of preferred stock in exchange for our shares of common stock but
we may acquire shares of class 3, first to fourth series of class 5 and first to fourth series of class 6 preferred
stock at our discretion pursuant to the terms and conditions provided by our Articles of Incorporation and the
resolution of our board of directors. We may acquire shares of class 3 preferred stock at ¥2,500 per share, in
whole or in part, on or after February 18, 2010. The provisions for acquisition of shares of first to fourth series of
class 5 and first to fourth series of class 6 preferred stock will be determined by the board of directors at the time
of issuance of such preferred stock. When issued, any holder of shares of first to fourth series of class 6 preferred
stock or first to fourth series of class 7 preferred stock may request acquisition of shares of such preferred stock
in exchange for shares of our common stock during the period determined by resolution of the board of directors
adopted at the time of issuance of such shares of preferred stock. Any shares of first to fourth series of class 6
preferred stock or first to fourth series of class 7 preferred stock for which no request for acquisition in exchange
for shares of our common stock is made during such period will be mandatorily acquired on the day immediately
following the last day of such period (the “Mandatory Acquisition Date”) in the number obtained by dividing an
amount equivalent to the subscription price per each relevant share of preferred stock by the average daily
closing price of our common stock as reported by the Tokyo Stock Exchange for the 30 trading days
commencing on the 45th trading day prior to the Mandatory Acquisition Date. Any holder of shares of class 11
preferred stock may request acquisition of shares of the relevant preferred stock in exchange for shares of our
common stock during the period as provided for in the attachment to our Articles of Incorporation. Any shares of
class 11 preferred stock for which no request for acquisition in exchange for shares of our common stock is made
during such period will be mandatorily acquired on the Mandatory Acquisition Date in the number obtained by
dividing an amount equivalent to the subscription price per each relevant share of preferred stock by the average
daily closing price of our common stock as reported by the Tokyo Stock Exchange for the 30 trading days
commencing on the 45th trading day prior to the Mandatory Acquisition Date.

132

Preferred Dividends

In priority to the payment of dividends to holders of our common stock, the amount of preferred dividends

payable each fiscal year for each class of our preferred stock is set forth below:

•

•

•

•

•

class 3 preferred stock: ¥60.00 per share as set by the resolution of our board of directors dated
January 27, 2005 and amended to reflect the stock split pursuant to our Articles of Incorporation;

first to fourth series of class 5 preferred stock: to be set by resolution of our board of directors at the
time of issuance, up to a maximum of ¥250.00 per share;

first to fourth series of class 6 preferred stock: to be set by resolution of our board of directors at the
time of issuance, up to a maximum of ¥125.00 per share;

first to fourth series of class 7 preferred stock: to be set by resolution of our board of directors at the
time of issuance, up to a maximum of ¥125.00 per share; and

class 11 preferred stock: ¥5.30 per share.

In the event that our board of directors decides to pay an interim dividend to holders of record of our
common stock as of September 30 of any year, we will, in priority to the payment of that interim dividend, pay a
preferred interim dividend in the amount specified in our Articles of Incorporation to holders of record of our
preferred stock as of September 30 of the same time. The amount of any preferred interim dividend will be
deducted from the preferred dividend payable on the relevant class of our preferred stock for the same fiscal year.

No preferred dividend will be paid on any of our preferred stock converted into our common stock for the

period from the date following the record date for the preferred dividend or preferred interim dividend last
preceding the relevant conversion date to the relevant conversion date, but the common stock issued upon
conversion will be entitled to receive any dividend payable to holders of record of common stock upon the next
succeeding record date for common stock dividends.

No payment of dividends on our preferred stock or any other shares can be made unless we have a sufficient

distributable amount and a resolution to distribute such distributable amount is obtained at the relevant ordinary
general meeting of shareholders, in the case of annual preferred dividends, or at the board of directors, in the case
of preferred interim dividends.

Dividends on our preferred stock are non-cumulative. If the full amount of any dividend is not declared on
our preferred stock in respect of any fiscal year, holders of our preferred stock do not have any right to receive
dividends in respect of the deficiency in any subsequent fiscal year, and we will have no obligation to pay the
deficiency or to pay any interest regardless of whether or not dividends are paid in respect of any subsequent
fiscal year. The holders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of our profits.

Liquidation Rights

In the event of our voluntary or involuntary liquidation, record holders of our preferred stock are entitled,

equally in rank as among themselves, to receive before any distribution out of our residual assets is made to
holders of our common stock, a distribution out of our residual assets of:

•

•

•

•

•

¥2,500 per share of class 3 preferred stock;

¥2,500 per share of first to fourth series of class 5 preferred stock;

¥2,500 per share of first to fourth series of class 6 preferred stock;

¥2,500 per share of first to fourth series of class 7 preferred stock; and

¥1,000 per share of class 11 preferred stock.

The holders of our preferred stock are not entitled to any further dividends or other participation in or

distribution of our residual assets upon our liquidation.

133

Voting Rights

No holder of our preferred stock has the right to receive notice of, or to vote at, a general meeting of
shareholders, except as otherwise specifically provided under our Articles of Incorporation or other applicable
law. Under our Articles of Incorporation, holders of our preferred stock will be entitled to receive notice of, and
have one voting right per unit of preferred stock at, our general meetings of shareholders:

•

•

from the commencement of our ordinary general meeting of shareholders if an agenda for approval to
declare a preferred dividend is not submitted to such meeting; or

from the close of any ordinary general meeting of shareholders if a proposed resolution to declare a
preferred dividend is not approved at such meeting.

In each case, holders of our preferred stock will be entitled to receive notice of and vote at the relevant
general meetings of shareholders unless and until such time as a resolution of an ordinary general meeting of
shareholders declaring a preferred dividend is passed.

American Depositary Shares

The Bank of New York Mellon will issue the American depositary receipts, or ADRs. Each ADR will
represent ownership interests in American depositary shares, or ADSs. As a result of the 1,000-for-one stock split
that became effective on September 30, 2007, each ADS represents one share of our common stock. Each ADS is
held by The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU, acting as custodian, at its principal office in Tokyo,
on behalf of The Bank of New York Mellon, acting as depositary. Each ADS will also represent securities, cash
or other property deposited with The Bank of New York Mellon but not distributed to ADS holders. The Bank of
New York Mellon’s corporate trust office is located at 101 Barclay Street, New York, New York 10286 and its
principal executive office is located at One Wall Street, New York, New York 10286.

You may hold ADSs either directly or indirectly through your broker or other financial institution. If you

hold ADSs directly, you are an ADS holder. This description assumes you hold your ADSs directly. If you hold
the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the
rights of ADS holders described in this section. You should consult with your broker or financial institution to
find out what those procedures are.

The Bank of New York Mellon will actually be the registered holder of the common stock, so you will have

to rely on it to exercise your rights as a shareholder. Our obligations and the obligations of The Bank of
New York Mellon are set out in a deposit agreement among us, The Bank of New York Mellon and you, as an
ADS holder. The deposit agreement and the ADSs are governed by New York law.

The following is a summary of the material terms of the deposit agreement. Because it is a summary, it does
not contain all the information that may be important to you. For more complete information, you should read the
entire deposit agreement and the form of ADR.

Share Dividends and Other Distributions

The Bank of New York Mellon has agreed to pay to you the cash dividends or other distributions it or the
custodian receives on shares of common stock or other deposited securities, after deducting its fees and expenses.
You will receive these distributions in proportion to the number of shares your ADSs represent.

Cash. The Bank of New York Mellon will convert any cash dividend or other cash distribution we pay on

our common stock into US dollars, if it can do so on a reasonable basis and can transfer the US dollars to the
United States. If that is not possible or if any approval from the Japanese government is needed and cannot be
obtained, the deposit agreement allows The Bank of New York Mellon to distribute the Japanese yen only to

134

those ADS holders to whom it is possible to do so. The Bank of New York Mellon will hold the Japanese yen it
cannot convert for the account of the ADS holders who have not been paid. It will not invest the Japanese yen
and it will not be liable for any interest.

Before making a distribution, any withholding taxes that must be paid under Japanese law will be deducted.
See “—Taxation—Japanese Taxation.” The Bank of New York Mellon will distribute only whole US dollars and
cents and will round fractional cents to the nearest whole cent. If the relevant exchange rates fluctuate during a
time when The Bank of New York Mellon cannot convert the Japanese currency, you may lose some or all of the
value of the distribution.

Shares. The Bank of New York Mellon may distribute new ADSs representing any shares we may

distribute as a dividend or free distribution, if we furnish The Bank of New York Mellon promptly with
satisfactory evidence that it is legal to do so. The Bank of New York Mellon will only distribute whole ADSs. It
will sell shares which would require it to issue a fractional ADS and distribute the net proceeds in the same way
as it distributes cash dividends. If The Bank of New York Mellon does not distribute additional ADSs, each ADS
will also represent the new shares.

Rights to receive additional shares.

If we offer holders of our common stock any rights to subscribe for
additional shares of common stock or any other rights, The Bank of New York Mellon may, after consultation
with us, make those rights available to you. We must first instruct The Bank of New York Mellon to do so and
furnish it with satisfactory evidence that it is legal to do so. If we do not furnish this evidence and/or do not give
these instructions, and The Bank of New York Mellon decides that it is practical to sell the rights, The Bank of
New York Mellon will sell the rights and distribute the proceeds in the same way as it distributes cash dividends.
The Bank of New York Mellon may allow rights that are not distributed or sold to lapse. In that case, you will
receive no value for them.

If The Bank of New York Mellon makes rights available to you, upon instruction from you it will exercise

the rights and purchase the shares on your behalf. The Bank of New York Mellon will then deposit the shares and
issue ADSs to you. It will only exercise the rights if you pay it the exercise price and any other charges the rights
require you to pay.

US securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after the

exercise of the rights. For example, you may not be able to trade the ADSs freely in the United States. In this
case, The Bank of New York Mellon may issue the ADSs under a separate restricted deposit agreement which
will contain the same provisions as the deposit agreement, except for changes needed to put the restrictions in
place. The Bank of New York Mellon will not offer you rights unless those rights and the securities to which the
rights relate are either exempt from registration or have been registered under the US Securities Act with respect
to a distribution to you. We will have no obligation to register under the Securities Act those rights or the
securities to which they relate.

Other distributions. The Bank of New York Mellon will send to you anything else we distribute on
deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that
way, The Bank of New York Mellon has a choice. It may decide to sell what we distributed and distribute the net
proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case
ADSs will also represent the newly distributed property.

The Bank of New York Mellon is not responsible if it decides that it is unlawful or impractical to make a

distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or other
securities under the Securities Act. We also have no obligation to take any other action to permit the distribution
of ADSs, shares, rights or anything else to ADS holders. This means that you may not receive the distributions
we make on our shares or any value for them if it is illegal or impractical for us or The Bank of New York
Mellon to make them available to you.

135

Deposit, Withdrawal and Cancellation

The Bank of New York Mellon will issue ADSs if you or your broker deposits shares or evidence of rights
to receive shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as
stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will register the appropriate number of
ADSs in the names you request and will deliver the ADSs at its corporate trust office to the persons you request.

In certain circumstances, subject to the provisions of the deposit agreement, The Bank of New York Mellon

may issue ADSs before the deposit of the underlying shares. This is called a pre-release of ADSs. A pre-release
is closed out as soon as the underlying shares are delivered to the depositary. The depositary may receive ADSs
instead of the shares to close out a pre-release. The depositary may pre-release ADSs only on the following
conditions:

• Before or at the time of the pre-release, the person to whom the pre-release is made must represent to

the depositary in writing that it or its customer, as the case may be, owns the shares to be deposited;

•

•

The pre-release must be fully collateralized with cash or collateral that the depositary considers
appropriate; and

The depositary must be able to close out the pre-release on not more than five business days’ notice.

The pre-release will be subject to whatever indemnities and credit regulations that the depositary considers
appropriate. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as a
result of a pre-release.

You may turn in your ADSs at the Corporate Trust Office of The Bank of New York Mellon’s office. Upon
payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees,
The Bank of New York Mellon will deliver (1) the underlying shares to an account designated by you and
(2) any other deposited securities underlying the ADS at the office of the custodian. Or, at your request, risk and
expense, The Bank of New York Mellon will deliver the deposited securities at its Corporate Trust Office.

As a result of the stock split and the adoption of the unit share system on September 30, 2007, the ADSs
may only be presented for cancellation and release of the underlying shares of common stock or other deposited
securities in multiples of 100 ADSs. Holders of ADRs evidencing less than 100 ADSs are not entitled to delivery
of any underlying shares or other deposited securities unless ADRs, together with other ADRs presented by the
same holder at the same time, represent in the aggregate at least 100 ADSs. If any ADSs are surrendered but not
cancelled pursuant to the preceding sentence, The Bank of New York Mellon will execute and deliver an ADR or
ADRs evidencing the balance of ADSs not so cancelled to the person or persons surrendering the same.

Voting Rights

If you are an ADS holder on a record date fixed by The Bank of New York Mellon, you may instruct The

Bank of New York Mellon to vote the shares underlying your ADSs at a meeting of our shareholders in
accordance with the procedures set forth in the deposit agreement.

The Bank of New York Mellon will notify you of the upcoming meeting and arrange to deliver our voting

materials to you. The notice shall contain (a) such information as is contained in such notice of meeting, (b) a
statement that as of the close of business on a specified record date you will be entitled, subject to any applicable
provision of Japanese law and our Articles of Incorporation, to instruct The Bank of New York Mellon as to the
exercise of the voting rights, if any, pertaining to the amount of shares or other deposited securities represented
by your ADSs, and (c) a brief statement as to the manner in which such instructions may be given, including an
express indication that instructions may be given to The Bank of New York Mellon to give a discretionary proxy
to a person designated by us. Upon your written request, received on or before the date established by The Bank
of New York Mellon for such purpose, The Bank of New York Mellon shall endeavor in so far as practicable to

136

vote or cause to be voted the amount of shares or other deposited securities represented by your ADSs in
accordance with the instructions set forth in your request. So long as Japanese law provides that votes may only
be cast with respect to one or more whole shares or other deposited securities, The Bank of New York Mellon
will aggregate voting instructions to the extent such instructions are the same and vote such whole shares or other
deposited securities in accordance with your instructions. If, after aggregation of all instructions to vote received
by The Bank of New York Mellon, any portion of the aggregated instructions constitutes instructions with
respect to less than a whole share or other deposited securities, The Bank of New York Mellon will not vote or
cause to be voted the shares or other deposited securities to which such portion of the instructions apply. The
Bank of New York Mellon will not vote or attempt to exercise the right to vote that attaches to the shares or other
deposited securities, other than in accordance with the instructions of the ADS holders. If no instructions are
received by The Bank of New York Mellon from you with respect to any of the deposited securities represented
by your ADSs on or before the date established by The Bank of New York Mellon for such purpose, The Bank of
New York Mellon shall deem you to have instructed The Bank of New York Mellon to give a discretionary
proxy to a person designated by us with respect to such deposited securities and The Bank of New York Mellon
shall give a discretionary proxy to a person designated by us to vote such deposited securities, provided that no
such instruction shall be given with respect to any matter as to which we inform The Bank of New York Mellon
(and we have agreed to provide such information as promptly as practicable in writing) that (1) we do not wish
such proxy given, (2) substantial opposition exists or (3) such matter materially and adversely affects the rights
of holders of shares.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct The

Bank of New York Mellon to vote your shares. In addition, The Bank of New York Mellon is not responsible for
failing to carry out voting instructions or for the manner of carrying out voting instructions as long as it has acted
in good faith. This means that you may not be able to exercise your right to vote and there may be nothing you
can do if your shares are not voted as you requested.

Fees and Expenses

ADR holders must pay:

For:

$5.00 (or less) per 100 ADSs (or portion thereof) . . . . . . Each issuance of an ADS, including as a result of a

distribution of shares or rights or other property

Each cancellation of an ADS, including if the
agreement terminates

$0.02 (or less) per ADSs . . . . . . . . . . . . . . . . . . . . . . . . . To the extent permitted by securities exchange on
which the ADSs may be listed for trading any cash
payment

Registration or transfer fees . . . . . . . . . . . . . . . . . . . . . . . Transfer and registration of shares on the share

register of the foreign registrar from your name to the
name of The Bank of New York Mellon or its agent
when you deposit or withdraw shares

Expenses of The Bank of New York Mellon . . . . . . . . . . Conversion of foreign currency to US dollars cable,

telex and facsimile transmission expenses

Taxes and other governmental charges The Bank of

New York Mellon or BTMU, as custodian, have to
pay on any ADS or share underlying an ADS, for
example, stock transfer taxes, stamp duty or
withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . As necessary

137

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the
deposited securities underlying your ADSs. The Bank of New York Mellon may refuse to transfer your ADSs or
allow you to withdraw the deposited securities underlying your ADSs until those taxes or other charges are paid.
It may apply payments owed to you or sell deposited securities underlying your ADSs to pay any taxes owed and
you will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the number
of ADSs to reflect the sale and pay to you any property remaining after it has paid the taxes.

Reclassifications, Recapitalizations and Mergers

If we:

•

•

•

(1)

reclassify, split up or consolidate any of our shares or the deposited securities;

recapitalize, reorganize, merge, liquidate, consolidate or sell all or substantially all of our assets or take
any similar action; or

distribute securities on the shares that are not distributed to you, then,

the cash, shares or other securities received by The Bank of New York Mellon will become deposited
securities and each ADS will automatically represent its equal share of the new deposited securities
unless additional ADSs are issued; and

(2) The Bank of New York Mellon may, and will if we request, issue new ADSs or ask you to surrender

your outstanding ADSs in exchange for new ADSs, identifying the new deposited securities.

Amendment and Termination

We may agree with The Bank of New York Mellon to amend the deposit agreement and the ADSs without

your consent for any reason. If the amendment adds or increases fees or charges, except for taxes and other
governmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such
expenses, or prejudices an important right of ADS holders, it will only become effective three months after The
Bank of New York Mellon notifies you of the amendment. At the time an amendment becomes effective, you are
considered, by continuing to hold your ADS, to agree to the amendment and to be bound by the ADSs and the
deposit agreement as amended. However, no amendment will impair your right to receive the deposited securities
in exchange for your ADSs.

The Bank of New York Mellon will terminate the deposit agreement if we ask it to do so, in which case it

must notify you at least 30 days before termination. The Bank of New York Mellon may also terminate the
deposit agreement if The Bank of New York Mellon has told us that it would like to resign and we have not
appointed a new depositary bank within 60 days.

If any ADSs remain outstanding after termination, The Bank of New York Mellon will stop registering the

transfers of ADSs, will stop distributing dividends to ADS holders and will not give any further notices or do
anything else under the deposit agreement other than:

(1) collect dividends and distributions on the deposited securities;

(2)

sell rights and other property offered to holders of deposited securities; and

(3) deliver shares and other deposited securities in exchange for ADSs surrendered to The Bank of New

York Mellon.

At any time after one year following termination, The Bank of New York Mellon may sell any remaining
deposited securities. After that, The Bank of New York Mellon will hold the money it received on the sale, as
well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADS holders that

138

have not surrendered their ADSs. It will not invest the money and has no liability for interest. The Bank of
New York Mellon’s only obligations will be to account for the money and other cash and with respect to
indemnification and to retain depositary documents. After termination, our only obligations will be with respect
to indemnification and to pay certain amounts to The Bank of New York Mellon.

Limitations on Obligations and Liability to ADS Holders

The deposit agreement expressly limits our obligations and the obligations of The Bank of New York
Mellon. It also limits our liability and the liability of The Bank of New York Mellon. We and The Bank of
New York Mellon:

•

•

•

•

are only obligated to take the actions specifically set forth in the deposit agreement without negligence
or bad faith;

are not liable if either is prevented or delayed by law, any provision of our Articles of Incorporation or
circumstances beyond their control from performing their obligations under the deposit agreement;

are not liable if either exercises or fails to exercise discretion permitted under the deposit agreement;

have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the
deposit agreement on your behalf or on behalf of any other party unless indemnified to their satisfaction;
and

• may rely upon any advice of or information from legal counsel, accountants, any person depositing
shares, any ADS holder or any other person believed in good faith to be competent to give them that
advice or information.

In the deposit agreement, we and The Bank of New York Mellon agree to indemnify each other for
liabilities arising out of acts performed or omitted by the other party in accordance with the deposit agreement.

Requirements for Depositary Actions

Before The Bank of New York Mellon will issue or register transfer of an ADS, make a distribution on an

ADS, or permit withdrawal of shares, it may require:

•

•

•

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees
charged by third parties for the transfer of any shares or other deposited securities;

production of satisfactory proof of the identity and genuineness of any signature or other information it
deems necessary; and

compliance with regulations it may establish, from time to time, consistent with the deposit agreement,
including presentation of transfer documents.

The Bank of New York Mellon may refuse to deliver, transfer, or register transfers of ADSs generally when its

transfer books are closed, when our transfer books are closed or at any time if it or we think it advisable to do so.

You have the right to cancel your ADSs and withdraw the underlying shares at any time except:

• when temporary delays arise because: (1) The Bank of New York Mellon has closed its transfer books

or we have closed our transfer books; (2) the transfer of shares is blocked to permit voting at a
shareholders’ meeting; or (3) we are paying a dividend on the shares;

• when you or other ADS holders seeking to withdraw shares owe money to pay fees, taxes and similar

charges; or

• when it is necessary to prohibit withdrawals in order to comply with any laws or governmental
regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

139

Reports and Other Communications

The Bank of New York Mellon will make available for your inspection at its corporate trust office any
reports and communications, including any proxy soliciting material, that it receives from us, if those reports and
communications are both (a) received by The Bank of New York Mellon as the holder of the deposited securities
and (b) made generally available by us to the holders of the deposited securities. If we ask it to, The Bank of
New York Mellon will also send you copies of those reports it receives from us.

Inspection of Transfer Books

The Bank of New York Mellon will keep books for the registration and transfer of ADSs, which will be

open for your inspection at all reasonable times. You will only have the right to inspect those books if the
inspection is for the purpose of communicating with other owners of ADSs in connection with our business or a
matter related to the deposit agreement or the ADSs.

C. Material Contracts

Except as described elsewhere in this Annual Report, all material contracts entered into by us in the past two

years preceding the filing of this Annual Report were entered into in the ordinary course of business.

D. Exchange Controls

Foreign Exchange and Foreign Trade Law

The Foreign Exchange and Foreign Trade Law of Japan and the cabinet orders and ministerial ordinances

incidental thereto, collectively known as the Foreign Exchange Law, set forth, among other matters, the
regulations relating to the receipt by non-residents of Japan of payment with respect to shares to be issued by us
and the acquisition and holding of shares by non-residents of Japan and foreign investors, both as defined below.
It also applies in some cases to the acquisition and holding of ADSs representing such shares acquired and held
by non-residents of Japan and by foreign investors. Generally, the Foreign Exchange Law currently in effect does
not affect the right of a non-resident of Japan to purchase or sell an ADR outside Japan for non-Japanese
currency.

“Non-residents of Japan” are defined as individuals who are not resident in Japan and corporations whose

principal offices are located outside Japan. Generally, the branches and offices of non-resident corporations
which are located in Japan are regarded as residents of Japan while the branches and offices of Japanese
corporations located outside Japan are regarded as non-residents of Japan.

“Foreign investors” are defined as:

•

•

•

•

individuals not resident in Japan;

corporations which are organized under the laws of foreign countries or whose principal offices are
located outside Japan;

corporations of which 50% or more of the shares are directly or indirectly held by individuals not
resident of Japan and corporations which are organized under the laws of foreign countries or whose
principal offices are located outside Japan; and

corporations, a majority of officers (or a majority of officers having the power of representation) of
which are non-resident individuals.

Dividends and Proceeds of Sales

Under the Foreign Exchange Law, dividends paid on, and the proceeds of sales in Japan of, shares held by

non-residents of Japan may in general be converted into any foreign currency and repatriated abroad. The
acquisition of our shares by non-residents by way of a stock split is not subject to any notification or reporting
requirements.

140

Acquisition of Shares

In general, a non-resident who acquires shares from a resident of Japan is not subject to any prior filing
requirement, although the Foreign Exchange Law empowers the Minister of Finance of Japan to require a prior
approval for any such acquisition in certain limited circumstances.

If a foreign investor acquires our shares, and, together with parties who have a special relationship with that
foreign investor, holds 10% or more of our issued shares as a result of such acquisition, the foreign investor must
file a report of such acquisition with the Minister of Finance and any other competent Minister by the fifteenth
day of the month immediately following the month to which the date of such acquisition belongs. In certain
limited circumstances, however, a prior notification of such acquisition must be filed with the Minister of
Finance and any other competent Minister, who may modify or prohibit the proposed acquisition.

Deposit and Withdrawal under American Depositary Facility

The deposit of shares with us, in our capacity as custodian and agent for the depositary, in Tokyo, the
issuance of ADSs by the depositary to a non-resident of Japan in respect of the deposit and the withdrawal of the
underlying shares upon the surrender of the ADSs are not subject to any of the formalities or restrictions referred
to above. However, where as a result of a deposit or withdrawal the aggregate number of shares held by the
depositary, including shares deposited with us as custodian for the depositary, or the holder surrendering ADSs,
as the case may be, would be 10% or more of the total outstanding shares, a report will be required, and in
specified circumstances, a prior notification may be required, as noted above.

Reporting of Substantial Shareholdings

The Financial Instruments and Exchange Law of Japan requires any person who has become, beneficially
and solely or jointly, a holder of more than 5% of the total issued shares of capital stock of a company listed on
any Japanese financial instruments exchange or whose shares are traded on the over-the-counter market in Japan
to file with the director of a competent finance bureau within 5 business days a report concerning such
shareholdings.

A similar report must also be filed in respect of any subsequent change of 1% or more in any such holding

ratio or any change in material matters set out in reports previously filed, with certain exceptions. For this
purpose, shares issuable to such person upon exchange of exchangeable securities, conversion of convertible
securities or exercise of share subscription warrants or stock acquisition rights (including those incorporated in
bonds with stock acquisition rights) are taken into account in determining both the number of shares held by such
holder and the issuer’s total issued shares of capital stock. Copies of such report must also be furnished to the
issuer of such shares and all Japanese financial instruments exchanges on which the shares are listed or (in the
case of shares traded over-the-counter) the Japan Securities Dealers Association.

E. Taxation

Japanese Taxation

The following sets forth the material Japanese tax consequences to owners of shares or ADSs who are
non-resident individuals or non-Japanese corporations without a permanent establishment in Japan to which the
relevant income is attributable, which we refer to as “non-resident holders” in this section. The statements regarding
Japanese tax laws below are based on the laws in force and as interpreted by the Japanese taxation authorities as at
the date of this Annual Report and are subject to changes in the applicable Japanese laws, double taxation treaties,
conventions or agreements or interpretations thereof occurring after that date. This summary is not exhaustive of all
possible tax considerations that may apply to a particular investor, and potential investors are advised to satisfy
themselves as to the overall tax consequences of the acquisition, ownership and disposition of shares or ADSs,
including specifically the tax consequences under Japanese law, the laws of the jurisdiction of which they are
resident and any tax treaty between Japan and their country of residence, by consulting their own tax advisers.

141

For the purpose of Japanese tax law and the Tax Convention (as defined below), a US holder of ADSs will

be treated as the owner of the shares underlying the ADSs evidenced by the ADRs.

Generally, a non-resident holder of shares or ADSs is subject to Japanese withholding tax on dividends paid

by us. In the absence of any applicable tax treaty, convention or agreement reducing the maximum rate of
withholding tax, the rate of Japanese withholding tax applicable to dividends paid by us to non-resident holders is
7% for dividends to be paid on or before December 31, 2011 pursuant to Japanese tax law. After such date, the
maximum withholding rate for US holders (as defined below), which is generally set at 10% of the gross amount
distributed, shall be applicable pursuant to the Tax Convention (as defined below).

On March 30, 2004, the Convention between the Government of the United States of America and Japan for

the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the
“Tax Convention”), became effective to replace its predecessor, which was signed on March 8, 1971 (the “Prior
Treaty”). The Tax Convention establishes the maximum rate of Japanese withholding tax which may be imposed
on dividends paid to a US resident not having a permanent establishment in Japan. Under the Tax Convention,
the maximum withholding rate for US holders (as defined below) is generally set at 10% of the gross amount
distributed. However, the maximum rate is 5% of the gross amount distributed if the recipient is a corporation
and owns directly or indirectly, on the date on which entitlement to the dividends is determined, at least 10% of
the voting shares of the paying corporation. Furthermore, the amount distributed shall not be taxed if the
recipient is (i) a pension fund which is a US resident, provided that such dividends are not derived from the
carrying on of a business, directly or indirectly, by such pension fund or (ii) a parent company with a controlling
interest in the paying company and satisfies certain other requirements. US holders (as defined below) are urged
to consult their own tax advisors with respect to their eligibility for benefits under the Prior Treaty and the Tax
Convention.

Japanese tax law provides in general that if the Japanese statutory rate is lower than the maximum rate
applicable under tax treaties, conventions or agreements, the Japanese statutory rate shall be applicable. The rate
of Japanese withholding tax applicable to dividends paid by us to non-resident holders is 7% for dividends to be
paid on or before December 31, 2011 and 15% thereafter, except for dividends paid to any individual
non-resident holder who holds 5% or more of our issued shares for which the applicable rate is 20%.

Non-resident holders of shares who are entitled to a reduced rate of Japanese withholding tax on payments

of dividends on the shares or ADSs by us are required to submit an Application Form for the Income Tax
Convention regarding Relief from Japanese Income Tax on Dividends in advance through us to the relevant tax
authority before the payment of dividends. A standing proxy for non-resident holders may provide this
application service for the non-resident holders. Non-resident holders who do not submit an application in
advance will generally be entitled to claim a refund from the relevant Japanese tax authority of withholding taxes
withheld in excess of the rate of an applicable tax treaty.

Gains derived from the sale or other disposition of shares or ADSs within or outside Japan by a non-resident

holder are not, in general, subject to Japanese income or corporation taxes or other Japanese taxes.

Any deposits or withdrawals of shares by a non-resident holder in exchange for ADSs are not subject to

Japanese income or corporation tax.

Japanese inheritance and gift taxes, at progressive rates, may be payable by an individual who has acquired
shares or ADSs as legatee, heir or donee, even if none of the individual, the decedent or the donor is a Japanese
resident.

US Taxation

The following sets forth the material US federal income tax consequences of the ownership of shares and
ADSs by a US holder, as defined below. This summary is based on US federal income tax laws, including the US

142

Internal Revenue Code of 1986, or the Code, its legislative history, existing and proposed Treasury regulations
thereunder, published rulings and court decisions, and the Tax Convention (as defined above), all of which are
subject to change, possibly with retroactive effect.

The following summary is not a complete analysis or description of all potential US federal income tax
consequences to a particular US holder. It does not address all US federal income tax considerations that may be
relevant to all categories of potential purchasers, certain of which (such as banks or other financial institutions,
insurance companies, dealers in securities, tax-exempt entities, non-US persons, persons holding a share or an
ADS as part of a “straddle,” “hedge,” conversion or integrated transaction, holders whose “functional currency”
is not the US dollar, holders liable for alternative minimum tax and holders of 10% or more of our voting shares)
are subject to special tax treatment. This summary does not address any foreign, state, local or other tax
consequences of investments in our shares or ADSs.

This summary addresses only shares or ADSs that are held as capital assets within the meaning of

Section 1221 of the Code.

As used herein, a “US holder” is a beneficial owner of shares or ADSs, as the case may be, that is, for US

federal income tax purposes:

•

•

•

•

a citizen or resident of the United States;

a corporation or other entity taxable as a corporation created or organized under the laws of the United
States or any political subdivision thereof;

an estate, the income of which is subject to US federal income tax regardless of its source; or

a trust

•

•

the administration of which is subject to (1) the supervision of a court within the United States and
(2) the control of one or more US persons as described in Section 7701(a)(30) of the Code; or

that has a valid election in effect under applicable US Treasury regulations to be treated as a US
person.

A “Non-US holder” is any beneficial holder of shares or ADSs that is not a US holder.

If a partnership holds shares or ADSs, the tax treatment of a partner will generally depend on the status of

the partner and the activities of the partnership. If you are a partner of a partnership holding shares or ADSs, you
should consult your tax advisor.

We urge US holders to consult their own tax advisors concerning the US federal, state and local and other
tax consequences to them of the purchase, ownership and disposition of shares or ADSs.

This summary is based in part on representations by the depositary and assumes that each obligation under

the deposit agreement and any related agreement will be performed in accordance with their respective terms.
For US federal income tax purposes, holders of ADSs will be treated as the owners of the shares represented by
the ADSs. Accordingly, withdrawals or deposits of shares in exchange for ADSs generally will not be subject to
US federal income tax.

The US Treasury has expressed concerns that intermediaries in the chain of ownership between the holder

of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the
beneficial ownership of the underlying shares (for example, pre-releasing ADSs to persons who do not have
beneficial ownership of the securities underlying the ADSs). Accordingly, the discussion on the creditability of
Japanese taxes and the availability of the reduced rate of tax for dividends received by certain non-corporate US
holders, each as described below, could be affected by actions taken by intermediaries in the chain of ownership
between the holder of ADSs and MUFG if, as a result of such actions, the holders of ADSs are not properly

143

treated as beneficial owners of the underlying shares. We are not aware of any intention to take any such actions,
and accordingly, the remainder of this discussion assumes that holders of ADSs will be properly treated as
beneficial owners of the underlying shares.

Special adverse US federal income tax rules apply if a US holder holds shares or ADSs of a company that is

treated as a “passive foreign investment company” (a “PFIC”) for any taxable year during which the US holder
held shares or ADSs. Based upon proposed Treasury regulations and upon certain management estimates, we do
not expect MUFG to be a PFIC for US federal income tax purposes in the current year or in future years.
However, there can be no assurance that the described proposed regulations will be finalized in their current
form, and the determination of whether MUFG is a PFIC is based upon, among other things, the composition of
our income and assets and the value of our assets from time to time. US holders should consult their own tax
advisors as to the potential application of the PFIC rules to their ownership and disposition of shares or ADSs.
This discussion assumes that we are not, and will not become, a PFIC.

Taxation of Dividends

US holders will include the gross amount of any distribution received with respect to shares or ADSs
(before reduction for Japanese withholding taxes), to the extent paid out of the current or accumulated earnings
and profits (as determined for US federal income tax purposes) of MUFG, as ordinary income in their gross
income. The amount of distribution of property other than cash will be the fair market value of such property on
the date of the distribution. Dividends received by a US holder will not be eligible for the “dividends-received
deduction” allowed to US corporations in respect of dividends received from other US corporations. To the
extent that an amount received by a US holder exceeds such holder’s allocable share of our current earnings and
profits, such excess will be applied first to reduce such holder’s tax basis in its shares or ADSs, thereby
increasing the amount of gain or decreasing the amount of loss recognized on a subsequent disposition of the
shares or ADSs. Then, to the extent such distribution exceeds such US holder’s tax basis, such excess will be
treated as capital gain. The amount of the dividend will be the US dollar value of the Japanese yen payments
received. This value will be determined at the spot Japanese yen/US dollar rate on the date the dividend is
received by the depositary in the case of US holders of ADSs, or by the shareholder in the case of US holders of
shares, regardless of whether the dividend payment is in fact converted into US dollars at that time. If the
Japanese yen received as a dividend are not converted into US dollars on the date of receipt, a US holder will
have basis in such Japanese yen equal to their US dollar value on the date of receipt, and any foreign currency
gains or losses resulting from the conversion of the Japanese yen will generally be treated as US source ordinary
income or loss.

If a US holder is eligible for benefits under the Tax Convention, the holder may be able to claim a reduced

rate of Japanese withholding tax. All US holders should consult their tax advisors about their eligibility for
reduction of Japanese withholding tax. A US holder may claim a deduction or a foreign tax credit, subject to
other applicable limitations, only for tax withheld at the appropriate rate. A US holder should not be allowed a
foreign tax credit for withholding tax for any portion of the tax that could have been avoided by claiming benefits
under the Tax Convention. For foreign tax credit limitation purposes, the dividend will be income from sources
outside the United States. The limitation on foreign taxes eligible for credit is calculated separately with respect
to specific classes of income. For this purpose, dividends we pay will constitute “passive income” or, in the case
of certain US holders, “financial services income.” The rules governing US foreign tax credits are very complex
and US holders should consult their tax advisors regarding the availability of foreign tax credits under their
particular circumstances.

Subject to applicable exceptions with respect to short-term and hedged positions, qualified dividends
received by non-corporate US holders prior to January 1, 2011 from a qualified corporation may be eligible for
reduced rates of taxation. Qualified corporations include those foreign corporations eligible for the benefits of a
comprehensive income tax treaty with the United States that the US Treasury Department determines to be
satisfactory for these purposes and that includes an exchange of information provision. The Tax Convention
meets these requirements. We believe that MUFG is a qualified foreign corporation and that dividends received

144

by US investors with respect to shares or ADSs of MUFG will be qualified dividends. Dividends received by US
investors from a foreign corporation that was a PFIC in either the taxable year of the distribution or the preceding
taxable year are not qualified dividends.

Taxation of Capital Gains

Upon a sale or other disposition of shares or ADSs, a US holder will recognize a gain or loss in an amount

equal to the difference between the US dollar value of the amount realized and the US holder’s tax basis,
determined in US dollars, in such shares or ADSs. Such gains or losses will be capital gains or losses and will be
long-term capital gains or losses if the US holder’s holding period for such shares or ADSs exceeds one year. A
US holder’s adjusted tax basis in its shares or ADSs will generally be the cost to the holder of such shares or
ADSs. Any such gains or losses realized by a US holder upon disposal of the shares or ADSs will generally be
income or loss from sources within the United States for foreign tax credit limitation purposes. The deductibility
of capital losses is subject to limitations under the Code.

Information Reporting and Backup Withholding

Dividends paid on shares or ADSs to a US holder, or proceeds from a US holder’s sale or other disposition
of shares or ADSs, may be subject to information reporting requirements. Those dividends or proceeds from sale
or disposition may also be subject to backup withholding unless the US holder:

•

•

is a corporation or other exempt recipient, and, when required, demonstrates this fact; or

provides a correct taxpayer identification number on a properly completed US Internal Revenue Service
Form W-9 or substitute form, certifies that the US holder is not subject to backup withholding, and
otherwise complies with applicable requirements of the backup withholding rules.

Backup withholding is not an additional tax. Any amount withheld under these rules will be creditable
against the US holder’s US federal income tax liability or refundable to the extent that it exceeds such liability if
the US holder provides the required information to the Internal Revenue Service. If a US holder is required to
and does not provide a correct taxpayer identification number, the US holder may be subject to penalties imposed
by the Internal Revenue Service. All holders should consult their tax advisors as to their qualification for the
exemption from backup withholding and the procedure for obtaining an exemption.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We file periodic reports and other information with the SEC. You may read and copy any document that we
file with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of its public reference rooms. The SEC also
maintains a web site that contains reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC (http://www.sec.gov). Some of this information may also be
found on our website at http://www.mufg.jp.

I. Subsidiary Information

Please refer to discussion under “Item 4.C. Information on the Company—Organizational Structure.”

145

Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk.

Numerous changes in our business environment have occurred as a result of deregulation and globalization

of the financial industry, the advancement of information technology and changes in economic conditions. We
aim to be a global and comprehensive financial group encompassing leading commercial and trust banks, and
securities firms in Japan. Risk management plays an increasingly important role as the risks faced by financial
groups such as us increase in scope and variety.

We identify various risks arising from businesses based on uniform criteria, and implement integrated risk
management to ensure a stronger financial condition and to maximize shareholder value. Based on this policy,
we identify, measure, control and monitor a wide variety of risks so as to achieve a stable balance between
earnings and risks. We undertake risk management to create an appropriate capital structure and to achieve
optimal allocation of resources.

Risk Classification

At the holding company level, we broadly classify and define risk categories faced by the Group including

those that are summarized below. Group companies perform more detailed risk management based on their
respective operations.

Type of Risk

Credit Risk

Market Risk

Liquidity Risk

Operational Risk

• Operations Risk

• Information Asset Risk

• Reputation Risk

Definition

The risk of financial loss in credit assets (including off-balance sheet
instruments) caused by deterioration in the credit conditions of counterparties.
This category includes country risk.

Market risk is the risk of financial loss where the value of our assets and
liabilities could be adversely affected by changes in market variables such as
interest rates, securities prices and foreign exchange rates. Market liquidity risk
is the risk of financial loss caused by the inability to secure market transactions
at the required volume or price levels as a result of market turbulence or lack of
trading liquidity.

The risk of incurring loss if a poor financial position at a group company
hampers the ability to meet funding requirements or necessitates fund
procurement at interest rates markedly higher than normal.

The risk of loss resulting from inadequate or failed internal processes, people or
systems, or from external events.

The risk of incurring loss that might be caused by negligence of correct
operational processing, or by incidents or misconduct by either officers or staff,
as well as risks similar to this risk.

The risk of loss caused by loss, alteration, falsification or leakage of
information, or by destruction, disruption, errors or misuse of information
systems, as well as risks similar to this risk.

The risk of loss due to deterioration in reputation as a consequence of the
spread of rumors among customers or in the market, or as a consequence of
inadequate response to the circumstance by MUFG, as well as risks similar to
this risk.

146

Risk Management System

We have adopted an integrated risk management system to promote close cooperation among the holding
company and group companies. The holding company and the major subsidiaries (which include The Bank of
Tokyo-Mitsubishi UFJ, Ltd., or BTMU, Mitsubishi UFJ Trust and Banking Corporation, or MUTB, and
Mitsubishi UFJ Securities Co., Ltd., or MUS) each appoint Chief Risk Management Officers and establish
independent risk management divisions. At the Risk Management Committees, our management members
discuss and dynamically manage various types of risks from both qualitative and quantitative perspectives. The
board of directors determines risk management policies for various types of risk based on the discussions held by
these committees.

The holding company seeks to enhance group-wide risk identification, to integrate and improve the Group’s

risk management system and related methods, to maintain asset quality, and to eliminate concentrations of
specific risks. Group-wide risk management policy is determined at the holding company level and each group
company implements and improves its own risk management system based on this policy.

Business Continuity Management

Based on a clear critical response rationale and associated decision-making criteria, we have developed
systems to ensure that operations are not interrupted or can be restored to normal quickly in the event of a natural
disaster or system failure so as to minimize any disruption to customers and markets. A crisis management team
within the holding company is the central coordinating body in the event of any emergency. Based on
information collected from crisis management personnel at the major subsidiaries, this central body would assess
the overall impact of a crisis on the Group’s business and establish task forces that could implement all
countermeasures to restore full operations. We have business continuity plans to maintain continuous operational
viability in the event of natural disasters, system failures and other types of emergencies. Regular training drills
are conducted to upgrade the practical effectiveness of these systems.

Implementation of Basel II

Basel II is a comprehensive regulatory framework for ensuring the soundness and stability of the
international banking system. It is based on “three pillars”: (1) minimum capital requirements, (2) the self-
regulation of financial institutions based on supervisory review process, and (3) market discipline through the
disclosure of information. The goal of Basel II is to have these three pillars mutually reinforce each other to
ensure the effectiveness of regulations. In addition, with respect to credit risk and operational risk, as compared
to the previous framework, Basel II provides more risk-sensitive approaches and a range of options for
measuring risks and determining the capital requirements. As a result, Basel II also reflects the nature of risks at
each bank more closely. Basel II has been applied to Japanese banks since March 31, 2007.

Based on the principles of Basel II, MUFG has adopted the Advanced Internal Ratings-Based Approach to

calculate its capital requirements for credit risk since March 31, 2009. The Standardized Approach is used for
some subsidiaries that are considered to be immaterial to our overall capital requirements and a few subsidiaries
have adopted a phased rollout of the internal ratings-based approach. MUFG has adopted the Standardized
Approach to calculate its capital requirements for operational risk. As for market risk, MUFG has adopted the
Internal Models Approach mainly to calculate general market risk and adopted the Standardized Method to
calculate specific risk.

Credit Risk Management

Credit risk is the risk of losses due to deterioration in the financial condition of a borrower. We have

established risk management systems to maintain asset quality, manage credit risk exposure and achieve earnings
commensurate with risk.

147

Our major banking subsidiaries apply a uniform credit rating system for asset evaluation and assessment,
loan pricing, and quantitative measurement of credit risk. This system also underpins the calculation of capital
requirements and management of credit portfolios. We continually seek to upgrade credit portfolio management,
or CPM, expertise to achieve an improved risk-adjusted return based on the Group’s credit portfolio status and
flexible response capability to economic and other external changes.

Credit Risk Management System

The credit portfolios of our major banking subsidiaries are monitored and assessed on a regular basis by the

holding company to maintain and improve asset qualities. A uniform credit rating and asset evaluation and
assessment system is used to ensure timely and proper evaluation of all credit risks.

Under our credit risk management system, each major banking subsidiary manages its respective credit risk

on a consolidated and global basis, while the holding company oversees and manages credit risk on an overall
group-wide basis. The holding company also convenes regular committee meetings to monitor credit risk
management at banking subsidiaries and to issue guidance where necessary.

Each major banking subsidiary has in place a system of checks and balances in which a credit administration

section that is independent of the business promotion sections screens individual transactions and manages the
extension of credit. At the management level, regular meetings of Credit & Investment Management Committee
and related deliberative bodies ensure full discussion of important matters related to credit risk management.
Besides such checks and balances and internal oversight systems, credit examination sections also undertake
credit testing and evaluation to ensure appropriate credit risk management.

The following diagram summarizes the credit risk management framework for our major banking

subsidiaries:

Board of Directors/Executive Committee
Credit & Investment Management Committee/
related deliberative bodies

Monitoring by MUFG
Credit Management
Committee

(cid:129)Decisions regarding important matters
(cid:129)Delegation of authority

Regular report

(cid:129)Discussion of important matters
(cid:129)Transaction report

Credit administration
sections

Credit screening
and management

Business promotion
sections

Quantitative risk
monitoring

Credit risk management
sections

Credit testing and evaluation

Credit examination sections

Credit Rating System

MUFG and its major banking subsidiaries have introduced an integrated credit rating system to evaluate

credit risk. The credit rating system consists primarily of borrower rating, facility risk rating, structured finance
rating and asset securitization rating.

Country risk is also rated on a uniform group-wide basis. Our country risk rating is reviewed periodically to

take into account relevant political and economic factors, including foreign currency availability.

148

Risk exposure for small retail loans, such as residential mortgage loans, is managed by grouping loans into

various pools and assigning ratings at the pool level.

Borrower rating

Our borrower rating classifies borrowers into 15 grades based on evaluations of their expected debt-service

capability over the next three to five years.

The following table sets forth our borrower grades:

Definition of MUFG Borrower Rating

Borrower
rating

1-2

3-5

6-8

9

Definition

Borrower capacity to meet financial obligations deemed high and stable

Borrower capacity to meet financial obligations deemed free of problems

Borrower capacity to meet short-term financial obligations deemed free of problems

Borrower capacity to meet financial obligations deemed slightly insufficient

10-12

Close monitoring of borrower required due to one or more of following conditions:

[1] Borrower who has problems meeting financial obligations (e.g. principal repayments or interest
payments in arrears)
[2] Borrower whose business performance is poor or unsteady, or in an unfavorable financial
condition
[3] Borrower who has problems with loan conditions (e.g. interest rates have been reduced or
deferred)

Causes for concern identified in borrower’s business management necessitate ongoing monitoring,
despite only minor problems or significant ongoing improvement

Emergence of serious causes for concern in borrower’s business management signal need for caution
in debt repayment due to major problems or requiring protracted resolution

Borrower meeting the definition of rating 10 or 11 and holds restructured loan, or borrower with loan
contractually past due 90 days or more due to particular reasons, such as an inheritance-related issue

Borrower with respect to whom losses are expected due to major debt repayment problems (that is,
although not yet bankrupt, borrower deemed likely to become bankrupt due to financial difficulties
and failure to make significant progress with restructuring plans)

Although not legally or officially bankrupt, borrower in virtual bankruptcy due to serious financial
difficulties, without any realistic prospect of business recovery

Borrower legally or officially bankrupt and subject to specific procedures, such as legal liquidation/
business suspension/winding up of business/private liquidation

10

11

12

13

14

15

Facility risk rating

Facility risk rating is used to evaluate and classify the quality of individual credit facilities, including
guarantees and collateral. Ratings are assigned by quantitatively measuring the estimated loss rate of a facility in
the event of a default.

149

Structured finance rating and asset securitization rating

These ratings are also used to evaluate and classify the quality of individual credit facilities, including
guarantees and collateral, and focus on the structure, including the applicable credit period, of each credit facility.
In evaluating the debt service potential of a credit facility, we scrutinize its underlying structure to determine the
likelihood of the planned future cash flows being achieved.

Pool assignment

Each major banking subsidiary has its own system for pooling and rating small retail loans designed to

reflect the risk profile of its loan portfolios.

Asset Evaluation and Assessment System

The asset evaluation and assessment system is used to classify assets held by financial institutions according

to the probability of collection and the risk of any impairment in value based on borrower classifications
consistent with the borrower ratings and the status of collateral, guarantees, and other factors.

The system is used to conduct write-offs and allocate allowances against credit risk in a timely and adequate

manner.

Quantitative Analysis of Credit Risk

MUFG and its major banking subsidiaries manage credit risk by monitoring credit amount and expected

losses, and run simulations based on internal models to estimate the maximum amount of credit risk. These
models are used for internal management purposes, including loan pricing and measuring economic capital.

When quantifying credit risk amounts using the internal models, MUFG and its major banking subsidiaries

consider various parameters, including, probability of default, or PD, loss given default, or LGD, and exposure at
default, or EAD, used in their borrower ratings, facility risk ratings and pool assignments as well as any credit
concentration risk in particular borrower groups or industry sectors. MUFG and its major banking subsidiaries
also share credit portfolio data in appropriate cases.

Loan Portfolio Management

We aim to achieve and maintain levels of earnings commensurate with credit risk exposure. Products are

priced to take into account expected losses, based on the internal credit ratings.

We assess and monitor loan amounts and credit exposure by credit rating, industry and region. Portfolios are

appropriately managed to limit concentrations of risk in specific categories by establishing Large Credit
Guidelines.

To manage country risk, we have established specific credit ceilings by country. These ceilings are reviewed

when there is any material change in a country’s credit standing, in addition to regular review.

Continuous CPM Improvement

With the prevalence of securitized products and credit derivatives in global markets, we seek to supplement

conventional CPM techniques with advanced methods based on the use of such market-based instruments.

150

Through credit risk quantification and portfolio management, we aim to improve the risk return profile of

the Group’s credit portfolio, using financial markets to rebalance credit portfolios in a dynamic and active
manner based on an accurate assessment of credit risk. The following diagram summarizes our CPM framework:

Credit Portfolio Management (CPM) Framework

Implementation of Basel II

Risk quantification

Quantitative monitoring of credit risk
Portfolio risk concentration checks

Market-based advanced CPM

Risk-based earnings management

Risk-based pricing management

E
x
e
c
u
t
e

b
u
s
i
n
e
s
s

s
t
r
a
t
e
g
i
e
s

O
b
j
e
c
t
i
v
e

c
r
e
d
i
t

r
a
t
i
n
g

s
y
s
t
e
m

Asset evaluation and assessment

Appropriate write-offs and
allowance

Risk Management of Strategic Equity Portfolio

Strategic equity investment risk is the risk of loss caused by a decline in the prices of our equity

investments.

We use quantitative analysis to manage the risks associated with the portfolio of equities held for strategic
purposes. According to internal calculations, the market value of our strategically held (Tokyo Stock Exchange-
listed) stocks as of March 31, 2009 was subject to a variation of approximately ¥4.6 billion per point of
movement in the TOPIX index.

We seek to manage and reduce strategic equity portfolio risk based on such types of simulation. The aim is
to keep this risk at appropriate levels compared with Tier 1 capital while generating returns commensurate with
the degree of risk exposure.

Market Risk Management

Market risk is the risk that the value of our assets and liabilities could be adversely affected by changes in

market variables such as interest rates, securities prices, or foreign exchange rates.

Management of market risk at MUFG aims to control related risk exposure across the Group while ensuring

that earnings are commensurate with levels of risk.

Market Risk Management System

We have adopted an integrated system to manage market risk from its trading and non-trading activities.
The holding company monitors group-wide market risk, while each of the major subsidiaries manages its market
risks on a consolidated and global basis.

At each of the major subsidiaries, checks and balances are maintained through a system in which back and

middle offices operate independently from front offices. In addition, separate Asset-Liability Management, or

151

 
 
 
 
 
ALM, Committee, ALM Council and Risk Management Meetings are held at each of the major subsidiaries
every month to deliberate important matters related to market risk and control.

The holding company and the major subsidiaries allocate economic capital commensurate with levels of

market risk and determined within the scope of their capital bases. The major subsidiaries have established
quantitative limits relating to market risk based on their allocated economic capital. In addition, in order to keep
losses within predetermined limits, the major subsidiaries have also set limits for the maximum amount of losses
arising from market activities. The following diagram summarizes the market risk management system of each
major subsidiary:

Management System of Our Major Subsidiaries

Board of Directors / Executive Committee
ALM Committee / ALM Council / Risk Management Meeting

Delegation of 
authority

Trading result report

Report

Front Office

Quantitative risk monitoring

Confirmation of contracts and agreements

Middle Office 
(Market risk management 
departments)

Back Office

Market Risk Management and Control

At the holding company and the major subsidiaries, market risk exposure is reported to the Chief Risk
Management Officers on a daily basis. At the holding company, the Chief Risk Management Officer monitors
market risk exposure across the Group as well as the major subsidiaries’ control over their quantitative limits for
market risk and losses. Meanwhile, the Chief Risk Management Officers at the major subsidiaries monitor their
own market risk exposure and their control over their quantitative limits for market risk and losses. In addition,
various analyses on risk profiles, including stress testing, are conducted and reported to the Executive
Committees and the Corporate Risk Management Committees on a regular basis. At the business unit levels in
the major subsidiaries, the market risks on their marketable assets and liabilities, such as interest rate risk and
foreign exchange rate risk, are controlled by entering into various hedging transactions using marketable
securities and derivatives.

As part of our market risk management activities, we use certain derivative financial instruments to manage

our interest rate and currency exposures. We maintain an overall interest rate risk management strategy that
incorporates the use of interest rate contracts to minimize significant unplanned fluctuations in earnings that are
caused by interest rate volatility. We enter into interest rate swaps and other contracts as part of our interest rate
risk management strategy primarily to alter the interest rate sensitivity of its loans, investment securities and
deposit liabilities. Our principal objectives in risk management include asset and liability management. Asset and
liability management is viewed as one of the methods for us to manage its interest rate exposures on interest-
bearing assets and liabilities. Interest rate contracts, which are generally non-leveraged generic interest rate and
basis swaps, options and futures, allow us to effectively manage our interest rate risk position. Option contracts
primarily consist of caps, floors, swaptions and options on index futures. Futures contracts used for asset and
liability management activities are primarily index futures providing for cash payments based upon the
movement of an underlying rate index. We enter into forward exchange contracts, currency swaps and other
contracts in response to currency exposures resulting from on-balance-sheet assets and liabilities denominated in
foreign currencies in order to limit the net foreign exchange position by currency to an appropriate level.

152

These market risk management activities are performed in accordance with the predetermined rules and
procedures. The internal auditors as well as independent accounting auditors regularly verify the appropriateness
of the management controls over these activities and the risk evaluation models adopted.

Market Risk Measurement Model

Market risks consist of general risks and specific risks. General market risks result from changes in entire
markets, while specific risks relate to changes in the prices of individual stocks and bonds which are independent
of the overall direction of the market.

To measure general market risks, MUFG uses the VaR method which estimates changes in the market value

of portfolios within a certain period by statistically analyzing past market data. Since the daily variation in
market risk is significantly greater than that in other types of risk, MUFG measures and manages market risk
using VaR on a daily basis.

Market risk for trading and non-trading activities is measured using a uniform market risk measurement

model. The principal model used for these activities is historical simulation (HS) model (holding period, 10
business days; confidence interval, 99%; and observation period, 701 business days). The HS model calculates
VaR amounts by estimating the profit and loss on the current portfolio by applying actual fluctuations in market
rates and prices over a fixed period in the past. This method is designed to capture certain statistically infrequent
movements, such as a fat tail, and accounts for the characteristics of financial instruments with non-linear
behavior. Independent auditors, who were engaged only in the particular audit, verified the accuracy and
appropriateness of this internal market risk model. The holding company and banking subsidiaries use the HS
model to calculate Basel II regulatory capital adequacy ratios. MUFG has notified the Financial Services Agency
of its use as the internal market risk model, and received approval for its use of the model in March 2007.

In calculating VaR using the HS method, we have implemented an integrated market risk measurement
system throughout the Group. Our major subsidiaries calculate their VaR based on the risk and market data
prepared by the information systems of their front offices and other departments. The major subsidiaries provide
this risk data to the holding company, which calculates overall VaR taking into account the diversification effect
among all portfolios of the major subsidiaries.

For the purpose of internally evaluating capital adequacy on an economic capital basis in terms of market

risk, we use this market risk measurement model to calculate risk amounts based on a holding period of one year
and a confidence interval of 99%.

Monitoring and managing our sensitivity to interest rate fluctuations is the key to managing market risk in
MUFG’s non-trading activities. The major banking subsidiaries take the following approach to measuring risks
concerning core deposits, loan prepayments and early deposit withdrawals.

To measure interest rate risk relating to deposits without contract-based fixed maturities, the amount of
“core deposits” is calculated through a statistical analysis based on deposit balance trend data and the outlook for
interest rates on deposits, business decisions, and other factors. The amount of “core deposit” is categorized into
various groups of maturity terms of up to five years (2.5 years on average) to recognize interest rate risk. The
calculation assumptions and methods to determine the amount of core deposits and maturity term categorization
are regularly reviewed.

Meanwhile, deposits and loans with contract-based maturities are sometimes cancelled or repaid before their

maturity dates. To measure interest rate risk for these deposits and loans, we reflect these early termination
events mainly by applying early termination rates calculated based on a statistical analysis of historical
repayment and cancellation data together with historical market interest rate data.

153

Summaries of Market Risks (Fiscal Year Ended March 2009)

Trading activities

The aggregate VaR for our total trading activities as of March 31, 2009 was ¥17.29 billion, comprising
interest-rate risk exposure of ¥15.98 billion, foreign exchange risk exposure of ¥3.78 billion, and equity-related
risk exposure of ¥2.26 billion. Compared with the VaR as of March 31, 2008, we experienced a large increase in
market risk during the fiscal year ended March 31, 2009, particularly our exposure to interest rate risk and
foreign exchange risk.

Our average daily VaR for the fiscal year ended March 31, 2009 was ¥16.36 billion. Based on a simple sum

of figures across market risk categories, interest rate risk accounted for approximately 67%, foreign exchange
risk for approximately 22% and equity-related risk for approximately 8% of our total trading activity market
risks.

Due to the nature of trading operations which involves frequent changes in trading positions, market risk

varied substantially during the fiscal year, depending on our trading positions.

The following tables set forth the VaR related to our trading activities by risk category for the periods

indicated:

April 1, 2007—March 31, 2008

Average Maximum(1) Minimum(1) Mar 31, 2008 Mar 31, 2008

Former method

New method(2)

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . .
Less diversification effect . . . . . . . . . . . . . . .

¥10.99
8.80
5.90
1.92
3.32
1.31
0.21
(2.65)

¥16.72
14.80
11.26
4.54
7.88
8.39
0.51
—

(in billions)
¥5.88
3.69
1.97
0.73
0.70
0.17
0.06
—

¥ 6.61
5.65
3.88
0.94
0.70
1.39
0.23
(1.36)

New method(2)

¥ 6.91
5.97
3.93
1.20
0.70
1.43
0.23
(1.42)

April 1, 2008—March 31, 2009

Average Maximum(1) Minimum(1) Mar 31, 2009

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less diversification effect . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥16.36
14.25
8.82
5.49
4.84
1.78
0.32
(4.83)

¥27.73
26.76
15.60
9.70
11.89
4.49
0.74
—

¥8.68
7.32
3.69
1.12
0.97
0.74
0.06
—

¥17.29
15.98
9.16
6.97
3.78
2.26
0.21
(4.94)

(in billions)

Assumption for VaR calculations:

Historical simulation method
Holding period: 10 business days
Confidence interval: 99%
Observation period: 701 business days

Notes:
(1) The maximum and minimum VaR overall and for various risk categories were taken from different days. A simple summation of VaR by

risk category is not equal to total VaR due to the effect of diversification.

(2) As of the fiscal year ended March 31, 2009, we adopted a new method which is designed to more accurately measure the risk of
statistically infrequent fluctuations with respect to corporate bonds and securitized paper for internal risk management purposes.

154

The average daily VaR by quarter in the fiscal year ended March 31, 2009 was as follows:

Quarter

April—June 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July—September 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October—December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January—March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Daily average VaR

(in billions)
¥11.22
12.48
22.50
19.29

The quantitative market risk figures from trading activities tend to fluctuate widely due to the market
sensitive nature of trading business. During the fiscal year ended March 31, 2009, the revenue from our trading
activities has been relatively stable, keeping positive numbers in 150 days out of 260 trading days in the period.
During the same period, there were 100 days with positive revenue exceeding ¥1 billion and 66 days with
negative revenue exceeding minus ¥1 billion.

Non-trading Activities

The aggregate VaR for our total non-trading activities as of March 31, 2009, excluding market risks related
to our strategic equity portfolio and measured using the same standards as trading activities, was ¥503.3 billion.
Market risks related to interest rates equaled ¥472.3 billion and equities-related risks equaled ¥58.3 billion.
Compared with the VaR for MUFG at March 31, 2008, the increase in the overall market risk was ¥237.7 billion.
Market risks related to interest rates increased ¥246.6 billion. Equity related risks decreased ¥13.7 billion.

Based on a simple sum of figures across market risk categories, interest rate risks accounted for

approximately 89% of our total non-trading activity market risks. Looking at a breakdown of interest rate related
risk by currency, at March 31, 2009, the yen accounted for approximately 29% while the US dollar
approximately 62%.

The following table shows the VaR related to our non-trading activities by risk category for the fiscal year

ended March 31, 2009:

April 1, 2008—March 31, 2009

Average Maximum(1) Minimum(1) Mar 31, 2009

Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥331.1
161.0
179.5
0.7
68.8
367.5

¥485.8
220.8
330.0
2.2
92.2
514.1

¥223.6
126.1
91.6
0.0
42.5
257.1

¥472.3
153.3
324.7
0.0
58.3
503.3

(in billions)

Assumption for VaR calculations:

Historical simulation method
Holding period: 10 business days
Confidence interval: 99%
Observation period: 701 business days

Note:
(1) The maximum and minimum VaR overall for each category and in total were taken from different days. The equities-related risk figures
do not include market risk exposure from our strategic equity portfolio. A simple summation of VaR by risk category is not equal to total
VaR due to the effect of diversification.

155

The average daily interest rate VaR by quarter in the fiscal year ended March 31, 2009 was as follows.

Quarter

April—June 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July—September 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October—December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January—March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Daily average VaR

(in billions)
¥281.72
284.93
414.99
493.09

Comparing the proportion of each currency’s interest rate VaR to the total interest rate VaR as of March 31,

2009 against that as of March 31, 2008, there were a 24 percentage point decrease in Japanese yen from 53% to
29%, a 26 percentage point increase in US dollar from 36% to 62%, and a 2 percentage point decrease in Euro
from 9% to 7%.

Backtesting

We conduct backtesting in which a VaR is compared with actual realized and unrealized losses on a daily

basis to verify the accuracy of our VaR measurement model. We also conduct additional backtesting using other
methods, including testing VaR against hypothetical losses and testing VaR by various changing parameters such
as confidence intervals and observation periods used in the model.

Actual losses never exceeded VaR in the fiscal year ended March 31, 2009. This means that our VaR model

provided reasonably accurate measurements of market risk during the fiscal year.

Stress Testing

We have adopted an HS-VaR model, which calculates a VaR as a statistically possible amount of losses in a

fixed confidence interval based on historical market volatility. However, the HS-VaR model is not designed to
capture certain abnormal market fluctuations. In order to complement this weakness of the model, MUFG
conducts portfolio stress testing to measure potential losses using a variety of scenarios.

The holding company and the major subsidiaries conduct stress testing on a daily, monthly and quarterly
basis to monitor their overall portfolio risk by applying various scenarios. For example, the holding company
tests estimated potential losses resulting from scenarios reflecting the market conditions at the time of testing,
scenarios based on extreme historic market conditions, such as Black Monday or the 1994 bond sell-off, and
scenarios involving the largest fluctuations in markets over a specific period in the past.

Daily stress testing at the holding company estimates maximum potential losses in each market on the

current trading portfolio based on the worst ten-day historical volatility recorded during the VaR observation
period of 701 days. As of March 31, 2009, the maximum predicted losses at the Group level on this basis were
¥12.5 billion for trading activities and ¥432.9 billion for non-trading activities, compared to ¥8.4 billion and
¥282.8 billion, respectively, as of March 31, 2008.

In light of increased market volatility since the second half of 2007, we have implemented additional tests

under various stress scenarios to supplement VaR and are applying the test results to risk management.

Liquidity Risk Management

Liquidity risk is the risk of incurring losses if a poor financial position hampers the ability to meet funding

requirements, or necessitates fund procurement at interest rates markedly higher than normal.

Our major subsidiaries maintain appropriate liquidity in both Japanese yen and foreign currencies by

managing their funding sources and mechanism, such as liquidity gap, liquidity-supplying products such as
commitment lines, and buffer assets.

156

We have established a group-wide system for managing liquidity risk by categorizing the risk in the

following three stages: Normal, With-Concern, and Critical. The front offices and risk management offices of the
major subsidiaries and the holding company exchange information and data on liquidity risk even at the Normal
stage. At higher alert stages, we centralize information about liquidity risk and discuss issues relating to group-
wide liquidity control actions among group companies, if necessary. We have also established a system for
liaison and consultation on funding in preparation for contingency, such as natural disasters, wars and terrorist
attacks. The holding company and the major subsidiaries conduct group-wide contingency preparedness drills on
a regular basis to ensure smooth implementation in the event of an emergency.

Operational Risk Management

Operational risk refers to the risk of loss caused by either internal control issues, such as inadequate
operational processes or misconduct, system failures, or external factors such as a natural disaster. The term
includes a broad range of risks that could lead to losses, including operations risk, information asset risk,
reputation risk, legal risk, and tangible asset risk. These risks that comprise operational risk are referred to as
sub-category risks.

MUFG’s board of directors has approved the MUFG Operational Risk Management Policy as a group-wide

policy for managing operational risk. This policy sets forth the core principles regarding operational risk
management, including the definition of operational risk, and the risk management system and processes. The
policy also requires the board of directors and the Executive Committee to formulate fundamental principles of
operational risk management and establish and maintain an appropriate risk management system. The Chief Risk
Management Officer is responsible for recognizing, evaluating, and appropriately managing operational risk in
accordance with the fundamental principles formulated by the board of directors and the Executive Committee. A
division in charge of operational risk management must be established that is independent of business promotion
sections to manage overall operational risk in a comprehensive manner. These fundamental principles have also
been approved by the boards of directors of the major subsidiaries, providing a consistent framework for
operational risk management of the Group. The diagram below sets forth the operational risk management
system of each major banking subsidiary:

Management System of Our Major Banking Subsidiaries

Board of Directors/Executive Committee
committees regarding risk management

Reporting on risk profile

Instruction

Head Office and
Branches

Instruction

Reporting

Division in charge of Operational Risk
Management 

Coordination

Divisions in charge of Sub-category Risk
Management

As set forth in the following diagram, we have established a risk management framework for loss data
collection, control self assessment (CSA), and measurement of operational risk in order to appropriately identify,
recognize, evaluate, measure, control, monitor and report operational risk.

We have also established group-wide reporting guidelines with respect to loss data collection and its
monitoring. We focus our efforts on ensuring accurate assessment of the status of operational risk losses and the
implementation of appropriate countermeasures, while maintaining databases of internal and external loss events.

157

The following diagram summarizes our operational risk management framework:

Risk Management Framework

identify and recognize

evaluate and measure

control

monitor and report

incident
occured

causal analysis

implement preventive
measures

monitoring

record

major incidents and misconduct

create potential loss
scenario

internal loss 
data

external loss
data

prompt reporting to
the management and
relevant supervisers

risk measurement

allocate economic
capital to 
business units
/subsidiaries

monitoring of
economic capital

risk evaluation and management through Control Self-Assessment

Operations Risk Management

Operations risk refers to the risk of loss that is attributable to the actions of executives or employees,
whether accidental or the result of neglect or deliberate misconduct. The Group companies offer a wide range of
financial services, ranging from commercial banking products such as deposits, exchange services and loans to
trust and related services covering pensions, securities, real estate and securitization, as well as transfer agent
services. Cognizant of the potentially significant impact that operations risk-related events could have in terms of
both economic losses and damage to our reputation, our banking subsidiaries continue to improve their
management systems to create and apply appropriate operations risk-related controls.

Specific ongoing measures to reduce operations risk include the development of databases to manage,

analyze and prevent the recurrence of related loss events; efforts to tighten controls over administrative
procedures and related operating authority, while striving to improve human resources management; investments
in systems to improve the efficiency of administrative operations; and programs to expand and upgrade internal
auditing and operational guidance systems.

Senior management receives regular reports on the status of our businesses from an operations risk

management perspective. We work to promote the sharing within the Group of information and expertise
concerning any operational incidents and the measures implemented to prevent any recurrence.

Efforts to upgrade the management of operations risk continue with the aim of providing our customers with

a variety of high-quality services.

158

Information Asset Risk Management

Information asset risk refers to the risk of loss caused by loss, alteration, falsification or leakage of

information, or by destruction, disruption, errors or misuse of information systems, as well as risks similar to this
risk. In order to ensure proper handling of information and prevent loss or leakage of information, our major
banking subsidiaries strive to better manage and reduce such risks through the appointment of managers with
specific responsibilities for information security issues, the establishment of internal procedures, training courses
designed for all staff, and the implementation of measures to ensure stable IT systems control. We have also
formulated the Personal Information Protection Policy as the basis for ongoing programs to protect the
confidentiality of personal information.

Systems planning, development and operations include appropriate design and extensive testing phases to

ensure that systems are designed to help prevent failures while providing sufficient safeguards for the security of
personal information. The status of the development of any mission-critical IT systems is reported regularly to
senior management. We have developed disaster countermeasures systems and have also been investing in
duplication of the Group’s IT infrastructure to minimize damage in the event of any system failure. Emergency
drills are conducted to help increase staff preparedness.

With the aim of preventing any recurrence, we also work to promote sharing of information within the

Group related to the causes of any loss or leakage of information, or system failure.

Compliance

Basic Policy

The MUFG Group’s policy is to strictly observe laws, regulations and internal rules, and conduct its
business in a fair, trustworthy and highly transparent manner based on the Group’s management philosophy of
obtaining the trust and confidence of society as a whole. Furthermore, we have established an ethical framework
and code of conduct as the basic ethical guidelines for the Group’s directors and employees. We have expressed
our commitment to building a corporate culture in which we act with integrity and fairness in conformity with
these guidelines.

Despite these measures, in the past fiscal years, we have received administrative orders from government

authorities in Japan and abroad. We view these actions with the deepest concern. In response, we have been
working to ensure an appropriate compliance structure in Japan and abroad across the MUFG Group to enable
sound and appropriate business management.

Ethical Framework

We, the directors and employees of MUFG, will comply with this Ethical Framework and Code of Conduct

as the basis of our daily work, seeking to put into practice the management philosophy of our global
comprehensive financial group and to build a corporate culture in which we act with integrity and fairness.

1. Establishment of trust

We will remain keenly aware of the Group’s social responsibilities and public mission and will exercise care

and responsibility in the handling of customer and other information.

By conducting sound and appropriate business operations and disclosing corporate information in a timely

and appropriate manner we will seek to establish enduring public trust in the Group.

2. Putting customers first

We will always consider our customers, and through close communication will endeavor to satisfy them and

gain their support by providing financial services that best meet their needs.

159

3. Strict observance of laws, regulations and internal rules

We will strictly observe applicable laws, regulations and internal rules, and will conduct our business in a

fair and trustworthy manner that conforms to societal norms. As a global comprehensive financial group we will
also respect internationally accepted standards.

4. Respect for human rights and the environment

We will respect the character and individuality of others, work to maintain harmony with society, and place

due importance on the protection of the global environment that belongs to all mankind.

5. Disavowal of anti-social elements

We will stand resolutely against any anti-social elements that threaten public order and safety.

Compliance Framework

Management and coordination of compliance-related matters are the responsibility of separate compliance

management divisions established at the holding company and the major subsidiaries. Each compliance
management division formulates compliance programs and organizes training courses to promote compliance,
and regularly reports to each company’s board of directors and Executive Committee on the status of compliance
activities.

The holding company and each major subsidiary have also established voluntary committees, such as an
Internal Audit and Compliance Committee, where members from outside the Group account for a majority, and a
Compliance Committee. Through these measures, we have established a structure for deliberating key issues
related to compliance. Additionally, the holding company has the Group Chief Compliance Officer, or CCO,
Committee which deliberates important matters related to compliance and compliance-related issues for which
the Group should share a common understanding.

CCO of Holding Company

Directors responsible for compliance at the holding company and the major subsidiaries have been named

the CCOs of their respective companies. The CCOs of the major subsidiaries have also been appointed as the
deputy CCOs of the holding company to assist the CCO of the holding company. This system promotes the
prompt reporting of group-wide compliance-related information to the holding company and also allows the
CCO of the holding company to effectively provide compliance-related guidance, advice, and instructions to
MUFG Group companies.

Group CCO Committee

A Group CCO Committee has been established under the Executive Committee of the holding company.
The committee consists of the CCO of the holding company as the committee chairman and the CCOs of the
major subsidiaries.

By timely holding meetings, the Group CCO Committee seeks to promote greater sharing of compliance-
related information among the MUFG Group companies and works to strengthen the Group’s incident prevention
controls and to help the Group companies respond to unforeseen problems. The Committee also continues to
strive to improve compliance systems throughout the Group.

160

The following diagram summarizes our compliance framework:

Holding Company (MUFG)

Board of Corporate Auditors

Board of Directors

Internal Audit and Compliance
Committee

Executive Committee

Group Compliance Committee

CCO (Chief Compliance Officer)

Group CCO Committee

Internal reporting system

Compliance Management Division
(Coordinates compliance issues)

Consultation
and report

Guidance advice
and Instruction

Bank of Tokyo Mitsubishi UFJ Mitsubishi UFJ Trust and Banking Mitsubishi UFJ Securities Other Subsidiaries

Group Companies

Internal Reporting System and Accounting Auditing Hotline

The major subsidiaries have established internal reporting systems that aim to identify compliance issues
early so that any problems can be quickly rectified. This system includes an independent external compliance
hotline. Furthermore, the holding company has set up an MUFG Group Compliance Helpline that acts in pararell
with group-company internal reporting systems and provides a reporting channel for directors and employees of
group companies.

In addition to these internal reporting systems, the holding company has also established an accounting

auditing hotline that provides a means to report any problems related to MUFG accounting.

MUFG Accounting Auditing Hotline

MUFG has set up an accounting auditing hotline to be used to make reports related to instances of improper
practices (violations of laws and regulations) and inappropriate practices, or of practices raising questions about
such impropriety or inappropriateness, regarding accounting and internal control or audits related to accounting
in Group companies. The reporting process works as follows, and may be carried out via letter or e-mail:

Hokusei Law Office
Address: Kojimachi 4-3-4, Chiyoda-ku, Tokyo
e-mail: MUFG-accounting-audit-hotline@hokusei-law.com

When reporting information please pay attention to the following:

•

Please include the name of the company concerned, and provide detailed information with respect to the
matter. Without detailed factual information there is a limit to how much our investigations can achieve.

• Anonymous information will be accepted.

• No information regarding the identity of the informant will be passed on to third parties without the

approval of the informant him- or herself. However, this excludes instances where disclosure is legally
mandated, or to the extent that the information is necessary for surveys or reports, when data may be
passed on following the removal of the informant’s name.

161

•

•

Please submit reports in either Japanese or English.

If the informant wishes, we will endeavor to report back to the informant on the response taken within a
reasonable period of time following the receipt of specific information, but cannot promise to do so in
all instances.

Internal Audit

The Role of Internal Audit

Internal audit functions within MUFG seek to provide independent verification of the adequacy and

effectiveness of internal control systems. This includes monitoring the status of risk management and compliance
systems, which are critical to the maintenance of sound and appropriate business operations. Internal audit results
are reported to senior management. An additional role of internal audit is to make suggestions to help improve or
rectify any issues or specific problems that are identified.

Group Internal Audit Framework

The board of directors at the holding company level has instituted MUFG’s internal audit policy to define

the policy, function and organizational position of internal audits. Separate internal audit divisions have been
created within the holding company and the major subsidiaries such as BTMU, MUTB and MUS. Through close
cooperation and collaboration among the internal audit divisions in each of these companies, these internal audit
divisions provide coverage for the entire group and also support the board of directors in monitoring and
overseeing all MUFG operations.

In addition to having primary responsibility for initiating and preparing plans and proposals related to

internal audits of the entire group, the Internal Audit Division at the holding company monitors and, as
necessary, guides, advises and administers the internal audit divisions of subsidiaries and affiliated companies.
The internal audit divisions within the major subsidiaries conduct audits of the respective head office and branch
operations of these companies. In addition, each of these internal audit divisions undertakes direct audits of their
respective subsidiaries, and monitors and oversees the separate internal audit functions established within them.
This helps to evaluate and verify the adequacy and effectiveness of internal controls within MUFG on a
consolidated basis.

Implementing Effective and Efficient Internal Audits

To ensure that internal audit processes use available resources with optimal effectiveness and efficiency, the

internal audit divisions implement risk-focused internal audits in which the nature and magnitude of the
associated risks are considered in determining audit priorities and the frequency and depth of internal audit
activities. The internal audit divisions ensure that audit personnel attend key meetings, collect important internal
control documents and access databases to facilitate efficient off-site monitoring.

Measures to Enhance Internal Audit Independence and Supervision by the Boards of Directors

To strengthen the respective boards of directors’ monitoring and supervision of operational execution status
and to enhance the independence of the internal audit divisions, the holding company and the major subsidiaries
have established internal audit and compliance committees. These committees receive direct reports from the
internal audit divisions on important internal audit-related matters, including the results of all internal audits and
internal auditing plans requiring board approval. The deliberations of the internal audit and compliance
committees concerning such matters are then reported to the respective boards of directors. This structure is
intended to enhance the independence of internal audit functions from functions responsible for business
execution.

Item 12. Description of Securities Other than Equity Securities.

Not applicable.

162

Item 13. Defaults, Dividend Arrearages and Delinquencies.

None.

PART II

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.

None.

Item 15. Controls and Procedures.

Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management,
including the Chief Executive Officer, or CEO, and the Chief Financial Officer, or CFO, of the effectiveness of
our disclosure controls and procedures, as defined in Rule 13a-15(e) under the US Securities Exchange Act of
1934, as of the end of the period covered by this Annual Report.

Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were

effective as of March 31, 2009.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) under the US Securities Exchange Act of 1934. Our internal control over
financial reporting is a process designed by, or under the supervision of, MUFG’s principal executive and
principal financial officers, and effected by MUFG’s board of directors, management, and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with US GAAP and includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of MUFG;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of MUFG are being made only in accordance with authorizations of management and directors
of MUFG; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of MUFG’s assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting, no matter how well designed, may

not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

Our management evaluated the effectiveness of our internal control over financial reporting as of March 31,
2009 based on the criteria established in “Internal Control—Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on the evaluation, management has concluded
that MUFG maintained effective internal control over financial reporting as of March 31, 2009.

The effectiveness of our internal control over financial reporting as of March 31, 2009 has been audited by

Deloitte Touche Tohmatsu LLC, an independent registered public accounting firm, as stated in its report,
presented on page 165.

163

Changes in Internal Control Over Financial Reporting

During the period covered by this Annual Report, there has been no change in our internal control over
financial reporting that has materially affected or is reasonably likely to materially affect our internal control
over financial reporting except the changes stated below.

Since our merger with the UFJ group, we have been integrating our operations with those of the UFJ group.

The integration of the existing systems of The Bank of Tokyo Mitsubishi UFJ, Ltd., or BTMU, into a new
common IT system was completed in December 2008, and the integration of the existing systems of Mitsubishi
UFJ Trust and Banking Corporation, or MUTB, was also completed in December 2008.

164

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group):

We have audited the internal control over financial reporting of Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group) (“MUFG”) and subsidiaries (together, the “MUFG Group”)
as of March 31, 2009, based on the criteria established in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. The MUFG Group’s management is
responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting included in the accompanying Management’s Annual
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the MUFG
Group’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

The MUFG Group’s internal control over financial reporting is a process designed by, or under the
supervision of, the MUFG Group’s principal executive and principal financial officers, or persons performing
similar functions, and effected by the MUFG Group’s board of directors, management, and other personnel to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. The MUFG
Group’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the MUFG Group; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the MUFG Group are being made only in accordance with authorizations of
management and directors of the MUFG Group; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the MUFG Group’s assets that could have a
material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of

collusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal
control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the MUFG Group maintained, in all material respects, effective internal control over
financial reporting as of March 31, 2009, based on the criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States), the accompanying consolidated balance sheets of the MUFG Group as of March 31, 2008 and
2009, and the related consolidated statements of operations, changes in equity from nonowner sources,
shareholders’ equity, and cash flows for each of the three years in the period ended March 31, 2009 (all

165

expressed in Japanese Yen) and our report dated August 31, 2009 expressed an unqualified opinion on those
financial statements and included explanatory paragraphs relating to i) the restatement discussed in Notes 6, 11,
15 and 25 to the consolidated financial statements, and ii) the changes in methods of accounting for a) defined
benefit pension and other postretirement plans, b) stock-based compensation, c) uncertainty in income taxes, d)
leveraged leases, e) defined benefit pension and other postretirement plans, f) fair value measurements, g) fair
value option for financial assets and liabilities and h) netting of cash collateral against derivative exposures all
described in Note 1 to the consolidated financial statements.

/s/ Deloitte Touche Tohmatsu LLC
DELOITTE TOUCHE TOHMATSU LLC

Tokyo, Japan
August 31, 2009

166

Item 16A. Audit Committee Financial Expert.

Our board of corporate auditors has determined that Mr. Tsutomu Takasuka is an “audit committee financial
expert” as defined in Item 16A of Form 20-F and is “independent” as defined in the listing standards of the New
York Stock Exchange. Mr. Takasuka, a corporate auditor, has spent most of his business career auditing Japanese
corporations as a certified public accountant and has been a professor at Bunkyo Gakuin University since April
2004. Mr. Takasuka is an “outside corporate auditor” under Japanese law.

Item 16B. Code of Ethics.

We have adopted a code of ethics, which constitutes internal rules named ethical framework and code of

conduct, compliance rules and compliance manual, each of which applies to our principal executive officer,
principal financial officer, principal accounting officer and persons performing similar functions.

Our compliance rules set forth the necessity of adherence to our ethical framework and code of conduct by

our directors, executive officers and employees. These rules also set forth the roles and responsibilities of our
employees, compliance officers, Compliance Division and others in the event of a breach of the compliance
rules.

Our compliance manual was created to identify, and to promote compliance by our directors, executive

officers and employees with, the relevant laws and regulations in conjunction with our ethical framework and
code of conduct and compliance rules. This manual also sets forth the procedures regarding the handling of
conflicts of interest for our directors and the promotion of conduct that meets our ethical framework and code of
conduct and compliance rules for employees.

A copy of the sections of our ethical framework and code of conduct, compliance rules, compliance manual,
and rules of employment relating to the “code of ethics” (as defined in paragraph (b) of Item 16B. of Form 20-F)
is attached as Exhibit 11 to this Annual Report. There were no material changes to the code of ethics from the
previous code of ethics. For a detailed discussion of our current compliance structure, see “Item 11. Quantitative
and Qualitative Disclosures about Credit, Market and Other Risk— Compliance.” No waivers of the ethical
framework and code of conduct, compliance rules, compliance manual and rules of employment have been
granted to our principal executive officer, principal financial officer, principal accounting officer, directors and
corporate auditors, during the fiscal year ended March 31, 2009.

Item 16C. Principal Accountant Fees and Services.

Fees and Services of Deloitte Touche Tohmatsu LLC

The aggregate fees billed by Deloitte Touche Tohmatsu LLC, our independent auditor, for the fiscal years

ended March 31, 2008 and 2009 are presented in the following table:

2008

2009

(in millions)

Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,801
302
245
71

¥5,524
700
213
44

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,419

¥6,481

The description of our fees billed for each category described above is as follows:

Audit fees—Audit fees are primarily for annual audit of our financial statements, review of our semi-annual
condensed financial statements, statutory audit of our financial statements and audits of our subsidiary financial
statements and attestation services relating to the implementation of Section 404 of the Sarbanes-Oxley Act.

167

Audit-related fees—Audit-related fees primarily include accounting consultations, agreed upon procedures

on internal controls, employee benefit plan audit and advisory services relating to the implementation of
Section 404 of the Sarbanes-Oxley Act.

Tax fees—Tax fees relate primarily to tax compliance, including assistance with preparation of tax return

filings, tax advisory and tax planning services.

All other fees—All other fees primarily include agreed upon procedures related to advice on operational risk

management, and to operational audits of our overseas branches.

Pre-Approval Policies and Procedures for Services by Deloitte Touche Tohmatsu LLC

Our board of corporate auditors performs the pre-approval function required by applicable SEC rules and

regulations. Effective May 1, 2003, our board of corporate auditors has established pre-approval policies and
procedures that MUFG and its subsidiaries must follow before engaging Deloitte Touche Tohmatsu LLC to
perform audit and permitted non-audit services.

When MUFG or a subsidiary intends to engage Deloitte Touche Tohmatsu LLC to perform audit and
permitted non-audit services, it must make an application for pre-approval on either a periodic or case-by-case
basis.

•

Periodic application is an application for pre-approval made each fiscal year for services that are
expected to be provided by Deloitte Touche Tohmatsu LLC during the next fiscal year.

• Case-by-case application is an application for pre-approval made on a case-by-case basis for services to

be provided by Deloitte Touche Tohmatsu LLC that are not covered by the periodic application.

Pre-approval is resolved in principle by our board of corporate auditors prior to engagement, although if
necessary a full-time corporate auditor may consider any case-by-case application for pre-approval on behalf of
the board of corporate auditors prior to the next scheduled board meeting. Such decisions made individually by a
full-time corporate auditor are reported to and ratified by the board of corporate auditors as appropriate at the
next scheduled board meeting.

Fees approved pursuant to the procedures described in paragraph 2-01(c)(7)(i)(c) of Regulation S-X, which

provides for an exception to the general requirement for pre-approval in certain circumstances, were
approximately 0.3% and less than 0.1% of the total fees for fiscal years ended March 31, 2008 and 2009,
respectively.

Item 16D. Exemptions From the Listing Standards for Audit Committees.

In reliance upon the general exemption contained in Rule 10A-3(c)(3) under the US Securities Exchange

Act of 1934, MUFG does not have an audit committee. Rule 10A-3 provides an exemption from the listing
standards of the New York Stock Exchange, or the NYSE, relating to audit committees for foreign companies
like MUFG that have a board of corporate auditors established pursuant to applicable Japanese law and Articles
of Incorporation. MUFG’s reliance on Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect the
ability of its board of corporate auditors to act independently and to satisfy the other requirements of Rule 10A-3.

168

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

Issuer Purchases of Common Stock

Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs

Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs

Total Number of
Shares Purchased(1)

Average Price
Paid per Share

April 1 to April 30, 2008 . . . . . . . . . . . . . . . . . . .
May 1 to May 31, 2008 . . . . . . . . . . . . . . . . . . . . .
June 1 to June 30, 2008 . . . . . . . . . . . . . . . . . . . . .
July 1 to July 31, 2008 . . . . . . . . . . . . . . . . . . . . .
August 1 to August 31, 2008 . . . . . . . . . . . . . . . .
September 1 to September 30, 2008 . . . . . . . . . . .
October 1 to October 31, 2008 . . . . . . . . . . . . . . .
November 1 to November 30, 2008 . . . . . . . . . . .
December 1 to December 31, 2008 . . . . . . . . . . .
January 1 to January 31, 2009 . . . . . . . . . . . . . . .
February 1 to February 28, 2009 . . . . . . . . . . . . .
March 1 to March 31, 2009 . . . . . . . . . . . . . . . . .

12,374
14,124
15,716
26,418
20,114
248,643,919
17,564
10,095
31,908
3,936
8,422
15,130

¥ 967.13
1,075.96
1,069.60
966.07
876.15
963.00
828.74
585.16
501.58
537.10
459.16
438.78

—
—
—
—
—
248,443,047
—
—
—
—
—
—

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248,819,720

¥ 962.86

248,443,047

—
—
—
—
—
—(2)
—
—
—
—
—
—

—(2)

We have not made any purchases of our shares other than the above for the fiscal year ended March 31,

2009.

Notes:
(1) A total of 196,473 shares were purchased other than through a publicly announced plan or program during the fiscal year ended

March 31, 2009, including our purchases of shares constituting less than one unit (100 shares) from registered holders of such shares at
the current market price of those shares.

(2) During the fiscal year ended March 31, 2009, the following share repurchase plan or program was publicly announced:

Name of plan

Date of
announcement

Repurchase of own shares (common stock)

July 31, 2008

from subsidiaries

Amount/Shares
Approved

248,443,047 shares
¥239,250,654,261

Expiration
date

September 25, 2008

The plan was implemented to repurchase from The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU, and Mitsubishi UFJ Banking
Corporation, or MUTB, the shares of our common stock that BTMU and MUTB respectively received in the share exchange transaction
in August 2008 between us and Mitsubishi UFJ NICOS Co., Ltd.

Following the expiration of the above program, we have not adopted any new plan or program.

Item 16F. Change in Registrant’s Certifying Accountant.

Not applicable.

169

Item 16G. Corporate Governance.

The New York Stock Exchange, or the NYSE, allows NYSE-listed companies that are foreign private

issuers, such as MUFG, with certain exceptions, to follow home-country practices in lieu of the corporate
governance practices followed by US companies pursuant to the NYSE’s Listed Company Manual. The
following sections summarize the significant differences between MUFG’s corporate governance practices and
those followed by US listed companies under the NYSE’s Listed Company Manual.

1. A NYSE-listed US company must have a majority of directors that meet the independence requirements

under Section 303A of the NYSE’s Listed Company Manual.

As of August 21 2009, MUFG has three outside directors as members of its board of directors. For

companies employing the corporate auditor system such as MUFG, the task of overseeing the management of the
company is assigned to the corporate auditors as well as the board of directors. At least half of the corporate
auditors are required to be an “outside corporate auditor” as defined below.

Under the Company Law of Japan, an “outside director” is defined as a director who has not served as an
executive director, executive officer, manager or any other type of employee of the relevant company or any of
its subsidiaries prior to his or her appointment.

For MUFG and other large Japanese companies employing a corporate governance system based on a board

of corporate auditors, the Company Law has no independence or similar requirement with respect to directors.

2. A NYSE-listed US company must have an audit committee composed entirely of independent directors.

Under the Company Law, MUFG and other Japanese companies (excluding companies with committees

established pursuant to the Company Law) are not obliged to establish an audit committee.

As discussed above, MUFG employs a corporate auditor system as stipulated by the Company Law.
Accordingly, MUFG has established a board of corporate auditors consisting of corporate auditors with a
statutory duty to audit MUFG directors’ performance of their professional duties and to review and report on the
manner and results of the audit of MUFG’s financial statements, for the benefit of MUFG’s shareholders.

The Company Law requires companies employing the corporate auditor system, including MUFG, to elect

at least three corporate auditors through a resolution adopted at a general meeting of shareholders. At least half of
the corporate auditors must be an “outside corporate auditor,” which is defined as a corporate auditor who has not
served as a director, account assistant, executive officer, manager, or any other employee of the relevant
company or any of its subsidiaries.

As of August 21 2009, MUFG had five corporate auditors, three of whom are outside corporate auditors.

3. A NYSE-listed US company must have a compensation committee composed entirely of independent

directors.

Under the Company Law, MUFG and other Japanese companies (excluding companies with committees

established pursuant to the Company Law) are not obliged to establish a compensation committee.

The maximum aggregate amounts of compensation for MUFG’s directors and corporate auditors are

approved at MUFG’s general meeting of shareholders. The amount and allocation of compensation for each
MUFG director are then proposed to, and voted upon by, the board of directors. The amount and allocation of
compensation for each MUFG corporate auditor are determined through discussions and agreement among
MUFG’s corporate auditors.

170

4. A NYSE-listed US company must have a nominating or corporate governance committee composed

entirely of independent directors.

Under the Company Law, MUFG and other Japanese companies (excluding companies with committees
established pursuant to the Company Law) are not obliged to establish a nominating or corporate governance
committee.

MUFG’s directors are elected or dismissed at MUFG’s general meeting of shareholders in accordance with
the relevant provisions of the Company Law and MUFG’s Articles of Incorporation. MUFG’s corporate auditors
are also elected or dismissed at MUFG’s general meeting of shareholders. A proposal by MUFG’s board of
directors to elect a corporate auditor needs the consent of its board of corporate auditors. MUFG’s board of
corporate auditors is empowered to adopt a resolution requesting that MUFG’s directors submit a proposal for
election of a corporate auditor to MUFG’s general meeting of shareholders.

The corporate auditors have the right to state their opinion concerning the election or dismissal of a

corporate auditor at MUFG’s general meeting of shareholders.

5. A NYSE-listed US company must obtain shareholder approval with respect to any equity compensation

plan.

Under the Company Law, a public company seeking to issue “stock acquisition rights” (granting the holder
thereof the right to acquire from the issuer shares of its stock at a prescribed price) must obtain approval from its
board of directors, rather than its shareholders.

When stock acquisition rights are issued under terms and conditions that are especially favorable to the
recipients thereof, such issuance must be approved by a “special resolution” of a general meeting of shareholders.
Under MUFG’s Articles of Incorporation, the quorum to pass a special resolution is established when there is at
least one-third of the total outstanding voting rights, and the approval of at least two-thirds of the voting rights
represented at the relevant general meeting of shareholders of MUFG is required to pass the special resolution.

6. A NYSE-listed US company must adopt and disclose Corporate Governance Guidelines and a Code of

Business Conduct and Ethics, and it must also disclose any exemptions granted to directors or executives.

Under the Company Law, the Financial Instruments and Exchange Law of Japan and applicable stock

exchange rules, Japanese companies, including MUFG, are not obliged to adopt and disclose corporate
governance guidelines and a code of business conduct and ethics for directors, officers or employees. However,
to further enhance its disclosure, MUFG has decided to disclose the details of its corporate governance in its
Annual Securities Report and related disclosure reports.

MUFG has also adopted a code of ethics, compliance rules and a compliance manual which it believes are
compliant with the requirements for a Code of Ethics as set forth under Section 406 of the Sarbanes-Oxley Act.
MUFG has disclosed the relevant sections of its code of ethics, compliance rules and compliance manual as an
exhibit to this Annual Report. No exemptions from MUFG’s code of ethics, compliance rules or compliance
manual were granted to its directors or executives during the fiscal year ended March 31, 2009.

7. A NYSE-listed US company must hold regularly scheduled executive sessions where participants are

limited to non-management directors.

Under the Company Law, Japanese corporations are not obliged to hold executive sessions where
participants are limited to non-management directors. Such executive sessions are also not required under
MUFG’s internal corporate governance rules.

171

PART III

Item 17. Financial Statements.

In lieu of responding to this item, we have responded to Item 18 of this Annual Report.

Item 18. Financial Statements.

The information required by this item is set forth in our consolidated financial statements starting on

page F-1 of this Annual Report.

Item 19. Exhibits.
Exhibit

Description

1(a)

1(b)

1(c)

1(d)

2(a)
2(b)

4(a)

4(b)

4(c)

4(d)

4(e)

8

11

12

13

15

Articles of Incorporation of Mitsubishi UFJ Financial Group, Inc., as amended on June 26, 2009.
(English translation)
Board of Directors Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on June 29,
2006. (English translation)*
Corporation Meetings Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on July 31,
2006. (English translation)*
Share Handling Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on June 26, 2009.
(English Translation)
Form of American Depositary Receipt.*
Form of Deposit Agreement, amended and restated as of December 22, 2004, among Mitsubishi Tokyo
Financial Group, Inc. (subsequently renamed Mitsubishi UFJ Financial Group, Inc.), The Bank of New
York Mellon and the holders from time to time of American Depositary Receipts issued thereunder.*
Share Exchange Agreement, dated May 28, 2008, between Mitsubishi UFJ Financial Group, Inc. and
Mitsubishi UFJ NICOS Co., Ltd. (English translation)**
Agreement and Plan of Merger among UnionBanCal Corporation, The Bank of Tokyo-Mitsubishi
UFJ, Ltd. and Merger Sub, dated as of August 18, 2008.**
Securities Purchase Agreement dated as of September 29, 2008 by and between Morgan Stanley and
Mitsubishi UFJ Financial Group, Inc., the first amendment thereto entered into on October 3, 2008,
the second amendment thereto entered into on October 8, 2008 and the third amendment thereto
entered into on October 13, 2008, and Amended Certificate of Designations of Preferences and
Rights of the 10% Series B Non-Cumulative Non-Voting Perpetual Convertible Preferred Stock
($1,000 Liquidation Preference per Share) of Morgan Stanley and Certificate of Designations of
Preferences and Rights of the 10% Series C Non-Cumulative Non-Voting Perpetual Preferred Stock
($1,000 Liquidation Preference per Share) of Morgan Stanley.
Investor Agreement dated as of October 13, 2008 by and between Morgan Stanley and Mitsubishi
UFJ Financial Group, Inc., and the first amendment thereto entered into on October 27, 2008.
Registration Rights Agreement dated as of October 13, 2008 by and between Morgan Stanley and
Mitsubishi UFJ Financial Group, Inc.
Subsidiaries of the Company—see “Item 4.C. Information on the Company—Organizational
Structure.”
Ethical framework and code of conduct, compliance rules, compliance manual and rules of employment
of Mitsubishi UFJ Financial Group, Inc. applicable to its directors and managing officers, including its
principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions. (English translation of relevant sections)***
Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) (17 CFR
240.15d-14(a)).
Certifications required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR
240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).
Consent of independent registered public accounting firm.

Notes:
*
Incorporated by reference to our annual report on Form 20-F (File No. 333-98061-99) filed on September 28, 2006.
Incorporated by reference to our annual report on Form 20-F (File No. 333-98061-99) filed on September 19, 2008.
**
*** Incorporated by reference to our annual report on Form 20-F (File No. 333-98061-99) filed on September 21, 2007.

172

SELECTED STATISTICAL DATA

Due to close integration of our foreign and domestic activities, it is difficult to make a precise determination

of the assets, liabilities, income and expenses of our foreign operations. The foreign operations as presented
include the business conducted by overseas subsidiaries and branches, and the international business conducted
by the several international banking related divisions headquartered in Japan. Our management believes that the
results appropriately represent our domestic and foreign activities.

On October 1, 2005, Mitsubishi Tokyo Financial Group, Inc., or MTFG, merged with UFJ Holdings, Inc.

with MTFG being the surviving entity. Upon consummation of the merger, MTFG changed its name to
Mitsubishi UFJ Financial Group, Inc., or MUFG. The merger was accounted for under the purchase method of
accounting, and the assets and liabilities of UFJ Holdings and its subsidiaries were recorded at fair value as of
October 1, 2005. Therefore, numbers as of and for the fiscal year ended March 31, 2005 reflect the financial
position and results of MTFG and its subsidiaries, or the MTFG Group, only. Numbers as of March 31, 2006
reflect the financial position of MUFG and its subsidiaries, or the MUFG Group, while numbers for the fiscal
year ended March 31, 2006 comprised the results of the MTFG Group for the six months ended September 30,
2005 and the results of the MUFG Group from October 1, 2005 to March 31, 2006. Numbers as of and for the
fiscal years ended March 31, 2007, 2008 and 2009 reflect the financial position and results of the MUFG Group.

A-1

I. Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential

Average Balance Sheets, Interest and Average Rates

The following table shows our average balances, interest and average interest rates for the fiscal years ended

March 31, 2007, 2008 and 2009. Average balances are generally based on a daily average while a month-end
average is used for certain average balances when it is not practicable to obtain applicable daily averages. The
average balances determined by such methods are considered to be representative of our operations.

Fiscal years ended March 31,

2007

2008

2009

Average
balance

Interest
income

Average
rate

Average
balance

Interest
income

Average
rate

Average
balance

Interest
income

Average
rate

(in millions, except percentages)

Assets:
Interest-earning assets:

Interest-earning deposits in other

banks:
Domestic . . . . . . . . . . . . . . . . ¥
Foreign . . . . . . . . . . . . . . . . . .

696,025 ¥

5,561,241

17,250
233,784

2.48% ¥
4.20

715,565 ¥

7,161,894

27,905
230,639

3.90% ¥
3.22

644,550 ¥

5,103,530

11,900
112,932

1.85%
2.21

Total . . . . . . . . . . . . . . . . . .

6,257,266

251,034

4.01

7,877,459

258,544

3.28

5,748,080

124,832

2.17

Call loans, funds sold, and
receivables under resale
agreements and securities
borrowing transactions:
Domestic . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . .

5,253,790
3,863,096

21,681
140,792

Total . . . . . . . . . . . . . . . . . .

9,116,886

162,473

Trading account assets:

Domestic . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . .

6,133,100
2,056,877

Total . . . . . . . . . . . . . . . . . .

8,189,977

58,151
41,767

99,918

Investment securities(1):

Domestic . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . .

39,170,309
10,474,119

305,411
449,390

Total . . . . . . . . . . . . . . . . . .

49,644,428

754,801

Loans(2):

Domestic . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . .

78,942,886 1,721,442
926,061
16,615,898

Total . . . . . . . . . . . . . . . . . .

95,558,784 2,647,503

Total interest-earning assets:

Domestic . . . . . . . . . . . . . . . . 130,196,110 2,123,935
38,571,231 1,791,794
Foreign . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . 168,767,341 3,915,729

Non-interest-earning assets:

Cash and due from banks . . . . . .
Other non-interest-earning

assets(3) . . . . . . . . . . . . . . . . . .
Allowance for credit losses . . . .

3,308,678

17,267,978
(1,054,890)

Total non-interest-earning

assets(3) . . . . . . . . . . . . . .

19,521,766

Total assets from discontinued

operations . . . . . . . . . . . . . . . . .

22,040

Total assets(3) . . . . . . . . . . . . . . . . . ¥188,311,147

0.41
3.64

1.78

0.95
2.03

1.22

0.78
4.29

1.52

2.18
5.57

2.77

1.63
4.65

2.32

6,755,706
7,357,362

46,405
262,170

14,113,068

308,575

4,347,140
2,629,800

66,046
44,302

6,976,940

110,348

34,451,745
12,012,930

345,242
553,597

46,464,675

898,839

76,926,024 1,709,133
20,109,157 1,081,372

97,035,181 2,790,505

123,196,180 2,194,731
49,271,143 2,172,080

172,467,323 4,366,811

0.69
3.56

2.19

1.52
1.68

1.58

1.00
4.61

1.93

2.22
5.38

2.88

1.78
4.41

2.53

5,264,909
6,846,958

30,626
248,114

12,111,867

278,740

7,305,737
13,556,131

72,511
388,023

20,861,868

460,534

31,950,811
2,411,191

352,235
121,092

34,362,002

473,327

76,520,426 1,607,122
951,239
23,638,502

100,158,928 2,558,361

121,686,433 2,074,394
51,556,312 1,821,400

173,242,745 3,895,794

0.58
3.62

2.30

0.99
2.86

2.21

1.10
5.02

1.38

2.10
4.02

2.55

1.70
3.53

2.25

2,901,241

23,726,071
(1,147,943)

25,479,369

—

¥197,946,692

2,922,401

21,240,425
(1,191,181)

22,971,645

—

¥196,214,390

Notes:
(1) Tax-exempt income of tax-exempt investment securities has not been calculated on a tax equivalent basis because the effect of such

calculation would not be material.

(2) Average balances on loans outstanding include all nonaccrual and restructured loans. See “III. Loan Portfolio.” The amortized portion of

net loan origination fees (costs) is included in interest income on loans, representing an adjustment to the yields of an insignificant amount.
(3) Effective April 1, 2008, we discontinued netting our derivative assets and liabilities under master netting agreements and we now present them

on a gross basis. See Note 1 “Netting of Cash Collateral against Derivative Exposures” under “Accounting Changes” section for the detail.
We restated the average balances of “Other non-interest-earning assets” for the fiscal years ended March 31, 2007 and 2008. Accordingly,
“Total non-interest-earning assets” and “Total assets” have been restated for the fiscal years ended March 31, 2007 and 2008.

A-2

Fiscal years ended March 31,

2007

2008

2009

Average
balance

Interest
expense

Average
rate

Average
balance

Interest
expense

Average
rate

Average
balance

Interest
expense

Average
rate

(in millions, except percentages)

Liabilities and shareholders’

equity:

Interest-bearing liabilities:

Deposits:

Domestic . . . . . . . . . . . . . . ¥ 90,667,366 ¥ 290,589
545,310
Foreign . . . . . . . . . . . . . . .

14,510,114

0.32% ¥ 92,850,670 ¥ 442,938
651,018
18,289,382
3.76

0.48% ¥ 95,431,983 ¥ 381,109
355,347
16,459,276
3.56

0.40%
2.16

Total

. . . . . . . . . . . . . . . 105,177,480

835,899

0.79

111,140,052 1,093,956

0.98

111,891,259

736,456

0.66

Call money, funds purchased,

and payables under
repurchase agreements and
securities lending
transactions:
Domestic . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . .

10,880,404
3,795,292

131,616
152,536

1.21
4.02

11,425,960
7,289,632

164,593
282,664

1.44
3.88

11,263,438
7,395,052

89,694
285,182

0.80
3.86

Total

. . . . . . . . . . . . . . .

14,675,696

284,152

1.94

18,715,592

447,257

2.39

18,658,490

374,876

2.01

Due to trust account—

Domestic . . . . . . . . . . . . . .

1,981,427

5,863

0.30

1,653,717

8,014

0.48

1,479,736

6,843

0.46

Other short-term borrowings

and trading account
liabilities:
Domestic . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . .

9,135,721
2,416,109

73,643
101,602

0.81
4.21

7,247,750
3,231,819

66,893
139,470

0.92
4.32

7,289,639
3,599,444

82,807
87,717

1.14
2.44

Total

. . . . . . . . . . . . . . .

11,551,830

175,245

1.52

10,479,569

206,363

1.97

10,889,083

170,524

1.57

Long-term debt:

Domestic . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . .

9,667,805
3,741,775

160,412
124,392

1.66
3.32

10,053,815
4,109,237

172,659
158,845

1.72
3.87

9,251,228
3,915,063

160,773
149,917

1.74
3.83

Total

. . . . . . . . . . . . . . .

13,409,580

284,804

2.12

14,163,052

331,504

2.34

13,166,291

310,690

2.36

Total interest-bearing liabilities:

Domestic . . . . . . . . . . . . . . 122,332,723
24,463,290
Foreign . . . . . . . . . . . . . . .

662,123
923,840

0.54
3.78

123,231,912
855,097
32,920,070 1,231,997

0.69
3.74

124,716,024
31,368,835

721,226
878,163

0.58
2.80

Total

. . . . . . . . . . . . . . . 146,796,013 1,585,963

1.08

156,151,982 2,087,094

1.34

156,084,859 1,599,389

1.02

Non-interest-bearing

liabilities(1)

. . . . . . . . . . . . . .

31,674,086

31,837,328

32,154,903

Total liabilities from

discontinued operations . . .

17,644

Total shareholders’ equity . . . . .

9,823,404

Total liabilities and

—

9,957,382

—

7,974,628

shareholders’ equity(1)

. . . . ¥188,311,147

¥197,946,692

¥196,214,390

Net interest income and

interest rate spread . . . . . . .

¥2,329,766

1.24%

¥2,279,717

1.19%

¥2,296,405

1.23%

Net interest income as a

percentage of total interest-
earning assets . . . . . . . . . . .

1.38%

1.32%

1.33%

Note:
(1) Effective April 1, 2008, we discontinued netting our derivative assets and liabilities under master netting agreements and we now present

them on a gross basis. See Note 1 “Netting of Cash Collateral against Derivative Exposures” under “Accounting Changes” section for
the detail. We restated average balances of “Non-interest-bearing liabilities” for the fiscal years ended March 31, 2007 and 2008.
Accordingly, “Total liabilities and shareholders’ equity” have been restated for the fiscal years ended March 31, 2007 and 2008.

A-3

The percentage of total average assets attributable to foreign activities was 23.3%, 28.0% and 30.1%,

respectively, for the fiscal years ended March 31, 2007, 2008 and 2009.

The percentage of total average liabilities attributable to foreign activities was 23.9%, 29.1% and 31.0%,

respectively, for the fiscal years ended March 31, 2007, 2008 and 2009.

Analysis of Net Interest Income

The following table shows changes in our net interest income by changes in volume and by changes in rate

for the fiscal year ended March 31, 2008 compared to the fiscal year ended March 31, 2007 and the fiscal year
ended March 31, 2009 compared to the fiscal year ended March 31, 2008.

Fiscal year ended March 31, 2007
versus
fiscal year ended March 31, 2008

Fiscal year ended March 31, 2008
versus
fiscal year ended March 31, 2009

Increase (decrease)
due to changes in

Increase (decrease)
due to changes in

Volume(1)

Rate(1)

Net change

Volume(1)

Rate(1)

Net change

(in millions)

Interest income:
Interest-earning deposits in other banks:

Domestic . . . . . . . . . . . . . . . . . . . . . ¥
Foreign . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . .

Call loans, funds sold, and receivables

under resale agreements and securities
borrowing transactions:

497 ¥ 10,158 ¥ 10,655 ¥

(54,692)

(3,145)

(1,443) ¥ (14,562) ¥ (16,005)
(117,707)
(62,418)
(55,289)

(44,534)

7,510

(56,732)

(76,980)

(133,712)

51,547

52,044

Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

7,437
124,514

17,287
(3,136)

24,724
121,378

Total . . . . . . . . . . . . . . . . . . . . .

131,951

14,151

146,102

(9,629)
(18,188)

(27,817)

(6,150)
4,132

(15,779)
(14,056)

(2,018)

(29,835)

Trading account assets:

Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

(16,934)
9,652

24,829
(7,117)

7,895
2,535

29,365
294,215

(22,900)
49,506

6,465
343,721

Total . . . . . . . . . . . . . . . . . . . . .

(7,282)

17,712

10,430

323,580

26,606

350,186

Investment securities(2):

Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

(36,791)
69,274

76,622
34,933

39,831
104,207

(25,062)
(442,481)

32,055
9,976

6,993
(432,505)

Total . . . . . . . . . . . . . . . . . . . . .

32,483

111,555

144,038

(467,543)

42,031

(425,512)

Loans:

Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

(43,980)
187,850

31,671
(32,539)

(12,309)
155,311

(8,560)
142,025

(93,451)
(272,158)

(102,011)
(130,133)

Total . . . . . . . . . . . . . . . . . . . . .

143,870

(868)

143,002

133,465

(365,609)

(232,144)

Total interest income:

Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

(89,771)
442,837

160,567
(62,551)

70,796
380,286

(15,329)
(79,718)

(105,008)
(270,962)

(120,337)
(350,680)

Total

. . . . . . . . . . . . . . . . . . . . ¥353,066 ¥ 98,016 ¥451,082 ¥ (95,047) ¥(375,970) ¥(471,017)

Notes:
(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “net

change.”

(2) Tax-exempt income of tax-exempt investment securities has not been calculated on a tax equivalent basis because the effect of such

calculation would not be material.

A-4

Fiscal year ended March 31, 2007
versus
fiscal year ended March 31, 2008

Fiscal year ended March 31, 2008
versus
fiscal year ended March 31, 2009

Increase (decrease)
due to changes in

Increase (decrease)
due to changes in

Volume(1)

Rate(1)

Net change

Volume(1)

Rate(1)

Net change

(in millions)

Interest expense:
Deposits:

Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

¥

7,158
134,525

¥145,191
(28,817)

¥ 152,349
105,708

¥ 10,309
(43,261)

¥ (72,138) ¥ (61,829)
(295,671)
(252,410)

Total . . . . . . . . . . . . . . . . . . . .

141,683

116,374

258,057

(32,952)

(324,548)

(357,500)

Call money, funds purchased, and

payables under repurchase
agreements and securities lending
transactions:

Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

6,861
135,497

26,116
(5,369)

32,977
130,128

(1,313)
4,065

(73,586)
(1,547)

(74,899)
2,518

Total . . . . . . . . . . . . . . . . . . . .

142,358

20,747

163,105

2,752

(75,133)

(72,381)

Due to trust account—Domestic . . . . . .

(970)

3,121

2,151

(832)

(339)

(1,171)

Other short-term borrowings and
trading account liabilities:

Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(15,219)
35,137

8,469
2,731

Total . . . . . . . . . . . . . . . . . . . .

19,918

11,200

(6,750)
37,868

31,118

389
8,959

9,348

15,525
(60,712)

15,914
(51,753)

(45,187)

(35,839)

Long-term debt:

Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . .

6,524
12,964

19,488

5,723
21,489

27,212

12,247
34,453

(13,783)
(7,495)

1,897
(1,433)

(11,886)
(8,928)

46,700

(21,278)

464

(20,814)

Total interest expense:

Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

4,354
318,123

188,620
(9,966)

192,974
308,157

(5,230)
(37,732)

(128,641)
(316,102)

(133,871)
(353,834)

Total

. . . . . . . . . . . . . . . . . . .

¥322,477

¥178,654

¥ 501,131

¥(42,962) ¥(444,743) ¥(487,705)

Net interest income:

Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

¥ (94,125) ¥ (28,053) ¥(122,178) ¥(10,099) ¥ 23,633
45,140
124,714

(52,585)

(41,986)

72,129

¥ 13,534
3,154

Total

. . . . . . . . . . . . . . . . . . .

¥ 30,589

¥ (80,638) ¥ (50,049) ¥(52,085) ¥ 68,773

¥ 16,688

Note:
(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “net

change.”

A-5

II.

Investment Portfolio

The following table shows information as to the value of our investment securities available for sale and

being held to maturity at March 31, 2007, 2008 and 2009:

2007

Amortized
cost

Estimated
fair value

Net
unrealized
gains
(losses)

At March 31,

2008

Amortized
cost

Estimated
fair value

(in millions)

2009

Net
unrealized
gains
(losses)

Amortized
cost

Estimated
fair value

Net
unrealized
gains
(losses)

Securities available for sale:

Domestic:

Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . . . ¥20,939,737 ¥20,980,858 ¥

Corporate bonds . . . . . . . . . . . . .
Marketable equity securities . . .
Other securities . . . . . . . . . . . . .

4,583,458
4,430,995
820,836

4,666,221
8,301,479
823,259

41,121 ¥16,133,001 ¥16,185,893 ¥
82,763
3,870,484
2,423

4,094,185
5,993,883
720,370

3,998,366
4,009,747
714,627

52,892 ¥23,846,153 ¥23,892,774
3,776,958
95,819
3,937,517
1,984,136
739,494
5,743

3,698,535
3,318,143
737,866

¥ 46,621
78,423
619,374
1,628

Total domestic . . . . . . . . . . . .

30,775,026

34,771,817

3,996,791

24,855,741

26,994,331

2,138,590

31,600,697

32,346,743

746,046

Foreign:

U.S. Treasury and other U.S.

government agencies
bonds . . . . . . . . . . . . . . . . . . .

Other governments and official

institutions bonds . . . . . . . . . .
Mortgage-backed securities . . . .
Other securities . . . . . . . . . . . . .

2,080,476

2,094,353

13,877

1,912,224

1,918,466

6,242

87,998

91,044

3,046

1,388,746
2,654,875
4,400,437

1,443,758
2,720,421
4,649,433

55,012
65,546
248,996

1,725,342
3,376,511
4,706,437

1,752,357
3,375,585
4,688,562

27,015
(926)
(17,875)

97,563
559,937
347,422

99,587
555,397
297,316

2,024
(4,540)
(50,106)

Total foreign . . . . . . . . . . . . .

10,524,534

10,907,965

383,431

11,720,514

11,734,970

14,456

1,092,920

1,043,344

(49,576)

Total . . . . . . . . . . . . . . . . . . ¥41,299,560 ¥45,679,782 ¥4,380,222 ¥36,576,255 ¥38,729,301 ¥2,153,046 ¥32,693,617 ¥33,390,087

¥696,470

Securities being held to maturity:

Domestic:

Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . . . ¥ 2,809,445 ¥ 2,808,716 ¥

Other securities . . . . . . . . . . . . .

164,291

165,477

(729) ¥ 2,601,852 ¥ 2,618,946 ¥
1,186

204,181

206,437

17,094 ¥ 1,352,213 ¥ 1,369,652
188,789
187,015
2,256

¥ 17,439
1,774

Total domestic . . . . . . . . . . . .

2,973,736

2,974,193

457

2,806,033

2,825,383

19,350

1,539,228

1,558,441

19,213

Foreign:

U.S. Treasury and other U.S.

government agencies
bonds . . . . . . . . . . . . . . . . . . .

Other governments and official

institutions bonds . . . . . . . . . .
Other securities . . . . . . . . . . . . .

Total foreign . . . . . . . . . . . . .

7,451

7,842

6,691
45,221

59,363

6,663
45,862

60,367

391

(28)
641

1,004

4,592

5,256

5,010
24,031

33,633

5,010
24,748

35,014

664

—
717

82,491

83,892

1,401

122,463
1,068,171

123,153
1,060,960

690
(7,211)

1,381

1,273,125

1,268,005

(5,120)

Total . . . . . . . . . . . . . . . . . . ¥ 3,033,099 ¥ 3,034,560 ¥

1,461 ¥ 2,839,666 ¥ 2,860,397 ¥

20,731 ¥ 2,812,353 ¥ 2,826,446

¥ 14,093

Nonmarketable equity securities presented in Other investment securities in the consolidated financial
statements were primarily carried at costs of ¥623,430 million, ¥513,975 million and ¥1,390,315 million, at
March 31, 2007, 2008 and 2009, respectively. The corresponding estimated fair values at those dates were not
readily determinable. Investment securities held by certain subsidiaries subject to specialized industry accounting
principles in AICPA Guides presented in Other investment securities were carried at fair value of
¥47,529 million, ¥66,038 million and ¥43,809 million, at March 31, 2007, 2008 and 2009, respectively.

A-6

The following table presents the book values, maturities and weighted average yields of investment

securities available for sale and being held to maturity, excluding equity securities, at March 31, 2009. Weighted
average yields are calculated based on amortized cost. Yields on tax-exempt obligations have not been calculated
on a tax equivalent basis because the effect of such calculation would not be material:

Maturities within
one year

Maturities after
one year but
within five years

Maturities after
five years but
within ten years

Maturities after
ten years

Total

Amount Yield

Amount Yield

Amount Yield

Amount Yield

Amount Yield

(in millions, except percentages)

Securities available for sale:

Domestic:

Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . . . ¥11,740,550 0.13% ¥6,794,256 0.98% ¥3,408,923 1.34% ¥1,949,045 1.18% ¥23,892,774 0.63%

Corporate bonds . . . . . . . . . . . . .
Other securities . . . . . . . . . . . . . .

457,228 0.99
213,707 1.17

2,620,392 1.16
218,828 1.18

655,680 1.26
283,633 1.49

43,658 1.34
23,326 1.53

3,776,958 1.16
739,494 1.31

Total domestic . . . . . . . . . . . . 12,411,485 0.18

9,633,476 1.03

4,348,236 1.34

2,016,029 1.18

28,409,226 0.71

Foreign:

U.S. Treasury and other U.S.

government agencies bonds . .

40,504 4.22

48,983 3.97

1,163 9.43

394 8.25

91,044 4.14

Other governments and official

institutions bonds . . . . . . . . . .
Mortgage-backed securities . . . .
Other securities . . . . . . . . . . . . . .

29,727 3.82
59 4.79
32,758 1.86

65,730 3.55
21,510 3.91
89,656 2.63

1,925 4.46
139,968 3.97
94,247 3.94

2,205 5.10
393,860 4.82
58,391 3.82

99,587 3.69
555,397 4.57
275,052 3.34

Total foreign . . . . . . . . . . . . . .

103,048 3.35

225,879 3.30

237,303 3.98

454,850 4.66

1,021,080 4.08

Total . . . . . . . . . . . . . . . . . . ¥12,514,533 0.20% ¥9,859,355 1.08% ¥4,585,539 1.49% ¥2,470,879 1.86% ¥29,430,306 0.84%

Securities being held to maturity:

Domestic:

Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . . . ¥

Other securities . . . . . . . . . . . . . .

225,288 0.64% ¥1,072,542 1.21% ¥
16,352 1.61

169,666 1.43

17,844 1.00% ¥
— —

36,539 1.36% ¥ 1,352,213 1.12%

997 1.87

187,015 1.45

Total domestic . . . . . . . . . . . .

241,640 0.71

1,242,208 1.24

17,844 1.00

37,536 1.38

1,539,228 1.16

Foreign:

U.S. Treasury and other U.S.

government agencies bonds . .

Other governments and official

institutions bonds . . . . . . . . . .
Other securities . . . . . . . . . . . . . .

— —

79,440 2.36

— —

3,051 7.45

82,491 2.55

2,947 2.19
2,017 5.38

119,516 2.74
1,780 2.70

— —
200,929 2.28

— —
863,445 4.26

122,463 2.73
1,068,171 3.89

Total foreign . . . . . . . . . . . . . .

4,964 3.49

200,736 2.59

200,929 2.28

866,496 4.27

1,273,125 3.69

Total . . . . . . . . . . . . . . . . . . ¥

246,604 0.76% ¥1,442,944 1.43% ¥ 218,773 2.18% ¥ 904,032 4.15% ¥ 2,812,353 2.31%

Excluding U.S. Treasury and other U.S. government agencies bonds and Japanese national government
bonds, the following table sets forth the securities of individual issuers held in our investment securities portfolio
which exceeded 10% of our consolidated total shareholders’ equity at March 31,2009:

Japanese government agency bonds issued by Japan Housing Finance Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥643,426

¥640,095

Amortized
cost

Estimated
fair value

(in millions)

A-7

III. Loan Portfolio

The following table shows our loans outstanding, before deduction of allowance for credit losses, by
domicile and type of industry of borrower at March 31 of each of the five fiscal years ended March 31, 2009.
Classification of loans by industry is based on the industry segment loan classification as defined by the Bank of
Japan for regulatory reporting purposes and is not necessarily based on use of proceeds:

2005(3)

2006(3)

2007(3)

2008(3)

2009

At March 31,

(in millions)

Domestic:

Manufacturing . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . .
Wholesale and retail
. . . . . . . . .
Banks and other financial

institutions(1)
Communication and

. . . . . . . . . . . . .

information services . . . . . . .
Other industries . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Consumer

¥ 6,355,895
951,800
6,522,713
3,567,246
5,129,782

¥10,546,566
1,835,104
11,026,786
7,220,040
9,134,683

¥10,869,329
1,812,454
10,432,600
6,902,660
9,317,518

¥11,178,924
1,728,534
10,857,072
6,553,980
9,308,599

¥ 12,922,822
1,803,541
10,436,795
6,750,442
9,760,805

3,602,591

5,054,477

4,358,275

4,671,499

4,836,047

784,301
7,209,900
6,863,283

1,177,137
13,591,354
20,362,015

1,167,630
10,559,974
21,954,409

1,150,438
10,806,144
21,517,672

732,652
9,515,861
20,542,398

Total domestic . . . . . . . . . .

40,987,511

79,948,162

77,374,849

77,772,862

77,301,363

Foreign:

Governments and official

institutions . . . . . . . . . . . . . . .

212,750

332,213

374,157

316,761

351,134

Banks and other financial

institutions(1)

. . . . . . . . . . . . .
Commercial and industrial
. . . .
Other . . . . . . . . . . . . . . . . . . . . .

917,409
7,527,695
1,277,329

1,101,152
11,776,784
2,337,237

1,694,951
13,470,223
2,459,577

2,100,057
16,189,725
2,706,750

2,687,004
17,550,544
2,510,521

Total foreign . . . . . . . . . . .

9,935,183

15,547,386

17,998,908

21,313,293

23,099,203

Total

. . . . . . . . . . . . .

50,922,694

95,495,548

95,373,757

99,086,155

100,400,566

Unearned income, unamortized

premiums—net and deferred loan
fees—net . . . . . . . . . . . . . . . . . . . .

(18,678)

11,287

(50,913)

(84,076)

(90,225)

Total(2) . . . . . . . . . . . .

¥50,904,016

¥95,506,835

¥95,322,844

¥99,002,079

¥100,310,341

Notes:
(1) Loans to the so-called non-bank finance companies are generally included in the “Banks and other financial institutions” category.

Non-bank finance companies are primarily engaged in consumer lending, factoring and credit card businesses.

(2) The above table includes loans held for sale of ¥36,424 million, ¥41,904 million, ¥113,580 million, ¥505,626 million and

¥119,596 million at March 31, 2005, 2006, 2007, 2008 and 2009, respectively, which are carried at the lower of cost or estimated fair
value.

A-8

(3) Classification of loans by industry at March 31, 2005, 2006, 2007, and 2008 has been restated as follows:

At March 31,

2005

2006

2007

2008

As
previously
reported

As
restated

As
previously
reported

As
restated

As
previously
reported

As
restated

As
previously
reported

As
restated

(in millions)

Domestic:

Manufacturing . . . . . . . . ¥ 6,498,384 ¥ 6,355,895 ¥10,766,623 ¥10,546,566 ¥10,988,248 ¥10,869,329 ¥11,322,092 ¥11,178,924
Construction . . . . . . . . .
1,728,534
10,857,072
Real estate . . . . . . . . . . .
6,553,980
Services . . . . . . . . . . . . .
Wholesale and retail . . .
9,308,599
Banks and other
financial
institutions . . . . . . . . .

1,812,454
10,432,600
6,902,660
9,317,518

1,835,104
11,026,786
7,220,040
9,134,683

1,759,436
8,247,964
6,707,417
9,436,939

1,843,033
8,307,407
7,069,095
9,430,037

1,994,180
9,050,666
6,760,142
9,791,718

990,217
5,809,522
3,815,090
5,268,124

951,800
6,522,713
3,567,246
5,129,782

3,602,591

4,358,275

4,671,499

4,825,368

3,693,034

5,054,477

4,484,294

5,556,519

Communication and

information
services . . . . . . . . . . .
Other industries . . . . . . .
Consumer . . . . . . . . . . .

787,982
6,791,057
7,334,101

784,301
7,209,900
6,863,283

1,188,789
11,770,712
23,068,813

1,177,137
13,591,354
20,362,015

1,170,036
10,264,718
23,817,981

1,167,630
10,559,974
21,954,409

1,152,727
10,412,330
23,908,589

1,150,438
10,806,144
21,517,672

Total domestic . . . .

40,987,511

40,987,511

79,948,162

79,948,162

77,374,849

77,374,849

77,772,862

77,772,862

Foreign:

Governments and

official institutions . .

Banks and other
financial
institutions . . . . . . . . .

Commercial and

212,750

212,750

332,213

332,213

374,157

374,157

316,761

316,761

917,409

917,409

1,101,152

1,101,152

1,694,951

1,694,951

2,100,057

2,100,057

industrial . . . . . . . . . .
Other . . . . . . . . . . . . . . .

7,527,695
1,277,329

7,527,695
1,277,329

11,776,784
2,337,237

11,776,784
2,337,237

13,468,916
2,460,884

13,470,223
2,459,577

16,188,426
2,708,049

16,189,725
2,706,750

Total foreign . . . . .

9,935,183

9,935,183

15,547,386

15,547,386

17,998,908

17,998,908

21,313,293

21,313,293

Total

. . . . . . .

50,922,694

50,922,694

95,495,548

95,495,548

95,373,757

95,373,757

99,086,155

99,086,155

Unearned income,

unamortized premiums—
net and deferred loan
fees—net . . . . . . . . . . . . . .

(18,678)

(18,678)

11,287

11,287

(50,913)

(50,913)

(84,076)

(84,076)

Total . . . . . . . ¥50,904,016 ¥50,904,016 ¥95,506,835 ¥95,506,835 ¥95,322,844 ¥95,322,844 ¥99,002,079 ¥99,002,079

A-9

Maturities and Sensitivities of Loans to Changes in Interest Rates

The following table shows the maturities of our loan portfolio at March 31, 2009:

One year or less One to five years Over five years

Total

(in millions)

Maturity

Domestic:

Manufacturing . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail
. . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . .
Communication and information

services . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 8,189,764
1,077,231
2,813,525
2,920,098
6,526,845
2,583,425

316,440
6,337,794
2,392,616

Total Domestic . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,157,738
10,488,006

¥ 4,012,303
623,516
3,501,064
3,012,479
2,872,522
2,061,914

360,913
2,025,082
4,096,950

22,566,743
8,537,721

¥

720,755
102,794
4,122,206
817,865
361,438
190,708

¥ 12,922,822
1,803,541
10,436,795
6,750,442
9,760,805
4,836,047

55,299
1,152,985
14,052,832

21,576,882
4,073,476

732,652
9,515,861
20,542,398

77,301,363
23,099,203

Total

. . . . . . . . . . . . . . . . . . . . . .

¥43,645,744

¥31,104,464

¥25,650,358

¥100,400,566

The above loans due after one year which had predetermined interest rates and floating or adjustable interest

rates at March 31, 2009 are shown below.

Predetermined rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating or adjustable rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥18,599,489
25,544,136

(in millions)
¥ 1,834,463
10,776,734

¥20,433,952
36,320,870

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥44,143,625

¥12,611,197

¥56,754,822

Domestic

Foreign

Total

A-10

Nonaccrual, Past Due and Restructured Loans

We generally discontinue the accrual of interest income on loans when substantial doubt exists as to the full

and timely collection of either principal or interest, or when principal or interest is contractually past due one
month or more with respect to loans of banking subsidiaries, including BTMU and MUTB, and 90 days or more
with respect to loans of certain foreign banking subsidiaries.

The following table shows the distribution of our nonaccrual loans, restructured loans and accruing loans

which are contractually past due 90 days or more as to principal or interest payments at March 31 of each of the
five fiscal years ended March 31, 2009, based on the domicile and type of industry of the borrowers:

2005

2006

2007

2008

2009

At March 31,

(in millions)

Nonaccrual loans:

Domestic:

Manufacturing . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail
. . . . . . . . . . . . . . .
Banks and other financial

¥ 115,229
48,750
165,296
183,294
88,844

¥ 128,055
38,406
190,703
70,339
130,216

¥

82,206
45,027
142,681
140,464
133,344

¥ 109,023
44,322
164,521
142,795
156,816

¥

87,649
55,760
263,831
104,594
139,000

institutions . . . . . . . . . . . . . . . . . . . . .

4,364

15,794

16,712

10,591

14,826

Communication and information

services . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .
Consumer

12,048
22,702
56,072

13,034
29,523
319,116

32,035
140,224
301,819

45,115
36,192
318,861

36,853
20,615
372,944

Total domestic . . . . . . . . . . . . . . . . . .

696,599

935,186

1,034,512

1,028,236

1,096,072

Foreign:

Governments and official

institutions . . . . . . . . . . . . . . . . . . . . .

466

52

47

45

4,279

Banks and other financial

institutions . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . .
Commercial and industrial
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .

45,091
54,913
23,835

Total foreign . . . . . . . . . . . . . . . . . . .

124,305

38,796
30,387
5,413

74,648

3,730
46,536
1,519

51,832

2,793
111,852
1,529

116,219

56,628
81,990
10,553

153,450

Total

. . . . . . . . . . . . . . . . . . . . . . . . .

¥ 820,904

¥1,009,834

¥1,086,344

¥1,144,455

¥1,249,522

Restructured loans:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 431,036
23,153

¥ 937,160
74,676

¥ 548,569
42,117

¥ 492,230
25,035

¥ 457,838
63,750

Total

. . . . . . . . . . . . . . . . . . . . . . . . .

¥ 454,189

¥1,011,836

¥ 590,686

¥ 517,265

¥ 521,588

Accruing loans contractually past due 90

days or more:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

9,232
879

10,111

¥

¥

21,896
1,112

23,008

¥

¥

20,649
1,821

22,470

¥

¥

14,954
2,998

17,952

¥

¥

15,047
6,440

21,487

Total

. . . . . . . . . . . . . . . . . . . . . . . . .

¥1,285,204

¥2,044,678

¥1,699,500

¥1,679,672

¥1,792,597

A-11

Gross interest income which would have been accrued at the original terms on domestic nonaccrual and
restructured loans outstanding during the fiscal year ended March 31, 2009 was approximately ¥86.2 billion, of
which ¥42.0 billion was included in the results of operations for the fiscal year. Gross interest income which
would have been accrued at the original terms on foreign nonaccrual and restructured loans outstanding for the
fiscal year ended March 31, 2009 was approximately ¥7.2 billion, of which ¥5.5 billion was included in the
results of operations for the fiscal year.

Foreign Loans Outstanding

We had no cross-border outstandings to borrowers in any foreign country which in total exceeded 0.75% of

consolidated total assets at March 31, 2007, 2008 and 2009. Cross-border outstandings are defined, for this
purpose, as loans (including accrued interest), acceptances, interest-earning deposits with other banks, other
interest-earning investments and any other monetary assets denominated in Japanese yen or other non-local
currencies. Material local currency loans outstanding which are neither hedged nor funded by local currency
borrowings are included in cross-border outstandings.

Guarantees of outstandings of borrowers of other countries are considered to be outstandings of the

guarantor. Loans made to, or deposits placed with, a branch of a foreign bank located outside the foreign bank’s
home country are considered to be loans to, or deposits with, the foreign bank. Outstandings of a country do not
include principal or interest amounts of which are supported by written, legally enforceable guarantees by
guarantors of other countries or the amounts of outstandings to the extent that they are secured by tangible, liquid
collateral held and realizable by BTMU, MUTB and their subsidiaries outside the country in which they operate.

In addition to credit risk, cross-border outstandings are subject to country risk that as a result of political or
economic conditions in a country, borrowers may be unable or unwilling to pay principal and interest according
to contractual terms. Other risks related to cross-border outstandings include the possibility of insufficient
foreign exchange and restrictions on its availability.

In order to manage country risk, we establish various risk management measures internally. Among other

things, we regularly monitor economic conditions and other factors globally and assess country risk in each
country where we have cross-border exposure. For purposes of monitoring and controlling the amount of credit
exposed to country risk, we set a country limit, the maximum amount of credit exposure for an individual
country, in consideration of the level of country risk and our ability to bear such potential risk. We also
determine our credit policy for each country in accordance with our country risk level and our business plan with
regard to the country. Assessment of country risk, establishment of country limits, and determination of country
credit policies are subject to review and approval by our senior management and are updated periodically.

Loan Concentrations

At March 31, 2009, there were no concentrations of loans to a single industry group of borrowers, as defined
by the Bank of Japan industry segment loan classifications, which exceeded 10% of our consolidated total loans,
except for loans in a category disclosed in the table of loans outstanding above.

Credit Risk Management

We have a credit rating system, under which borrowers and transactions are graded on a worldwide basis.

We calculate probability of default by statistical means and manage our credit portfolio based on this credit
rating system. For a detailed description of this system and other elements of our risk management structure, see
“Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Credit Risk
Management.”

A-12

IV. Summary of Loan Loss Experience

The following table shows an analysis of our loan loss experience by type of borrowers’ business for each of

the five fiscal years ended March 31, 2009:

Allowance for credit losses at beginning of

Holdings(1)

fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions resulting from the merger with UFJ
. . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . .
Charge-offs:
Domestic:

Fiscal years ended March 31,

2005

2006

2007

2008

2009

(in millions, except percentages)

¥888,120

¥ 739,872

¥1,012,227

¥1,112,453

¥1,134,940

—
108,338

287,516
110,167

—
358,603

—
385,740

—
626,947

Manufacturing . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . .
Communication and information

services . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . .

81,370
10,634
44,433
11,848
26,822
8,920

1,312
6,468
25,692

Total domestic . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . .

217,499
80,440

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

297,939

Recoveries:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,063
15,254

37,317

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(2)

260,622
4,036

Allowance for credit losses at end of fiscal

17,241
6,798
16,911
41,722
15,397
701

2,621
2,644
49,496

153,531
11,202

164,733

11,356
17,242

28,598

136,135
10,807

27,043
18,902
12,845
26,274
43,169
1,790

16,322
5,396
137,461

289,202
13,912

303,114

35,466
4,953

40,419

262,695
4,318

41,587
24,097
11,775
39,336
70,173
13,873

30,868
9,865
138,370

379,944
6,540

386,484

28,475
2,117

30,592

83,121
44,180
76,734
64,418
118,144
25,310

19,632
10,472
117,021

559,032
44,266

603,298

23,692
2,754

26,446

355,892
(7,361)

576,852
(28,397)

year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥739,872

¥1,012,227

¥1,112,453

¥1,134,940

¥1,156,638

Allowance for credit losses applicable to

foreign activities:

Balance at beginning of fiscal year . . . . .

¥245,835

¥

91,701

¥ 123,080

¥ 109,654

¥ 136,656

Balance at end of fiscal year

. . . . . . . . . .

¥ 91,701

¥ 123,080

¥ 109,654

¥ 136,656

¥ 307,343

Provision (credit) for credit losses . . . . . .

¥ (91,903) ¥

587

¥

(8,516) ¥

38,637

¥ 240,015

Ratio of net charge-offs during the fiscal year
to average loans outstanding during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.51%

0.19%

0.27%

0.37%

0.58%

Notes:
(1) Additions resulting from the merger with UFJ Holdings represent the allowance for credit losses for acquired loans outside the scope of

SOP 03-3. The allowance for credit losses on loans within the scope of SOP 03-3 was not carried over.

(2) Others primarily include losses/(gains) from foreign exchange translation.

A-13

The following table shows an allocation of our allowance for credit losses at March 31 of each of the five

fiscal years ended March 31, 2009:

2005

2006

At March 31,

2007

2008

2009

% of
loans in
each
category
to total
loans(1)

Amount

% of
loans in
each
category
to total
loans(1)

% of
loans in
each
category
to total
loans(1)

Amount

Amount

% of
loans in
each
category
to total
loans(1) Amount

% of
loans in
each
category
to total
loans

Amount

(in millions, except percentages)

Domestic:

Manufacturing . . . . . . . ¥ 90,530
44,750
Construction . . . . . . . .
94,844
Real estate . . . . . . . . . .
145,726
Services . . . . . . . . . . . .
Wholesale and retail
93,982
. .
Banks and other
financial
institutions . . . . . . . .

22,237

12.48% ¥ 130,734
28,142
1.87
99,947
12.81
71,653
7.01
132,519
10.07

11.05% ¥ 108,303
41,016
85,183
123,020
129,701

1.92
11.55
7.56
9.57

11.40% ¥ 125,824
43,043
112,899
126,832
141,870

1.90
10.94
7.24
9.77

11.28% ¥ 112,412
45,234
116,460
88,829
115,109

1.74
10.96
6.61
9.39

12.87%
1.80
10.39
6.72
9.72

7.07

51,500

5.29

73,925

4.57

59,200

4.72

38,189

4.82

Communication and

information
services . . . . . . . . . .
Other industries . . . . . .
. . . . . . . . . .
Consumer

Foreign:

Governments and

official
institutions . . . . . . . .

Banks and other
financial
institutions . . . . . . . .

Commercial and

13,621
60,948
72,916

1.54
14.16
13.48

16,971
115,930
234,073

1.23
14.23
21.32

33,699
175,989
224,926

1.22
11.07
23.02

37,251
97,019
244,652

1.16
10.91
21.72

37,549
65,363
223,865

0.73
9.48
20.46

193

0.42

1,227

0.35

420

0.39

880

0.32

2,349

0.35

10,840

1.80

13,680

1.15

3,668

1.78

6,858

2.12

76,518

2.68

industrial . . . . . . . . .
Other . . . . . . . . . . . . . .
Unallocated . . . . . . . . . . . . .

70,101
10,567
8,617

14.78
2.51
—

104,443
3,730
7,678

12.33
2.45
—

103,259
2,307
7,037

14.12
2.58
—

126,693
2,225
9,694

16.34
2.73
—

211,307
17,169
6,285

17.48
2.50
—

Total . . . . . . . . . . . . ¥739,872 100.00% ¥1,012,227 100.00% ¥1,112,453 100.00% ¥1,134,940 100.00% ¥1,156,638 100.00%

Allowance as a percentage

of loans . . . . . . . . . . . . . .

1.45%

1.06%

1.17%

1.15%

1.15%

Allowance as a percentage

of nonaccrual and
restructured loans and
accruing loans
contractually past due 90
days or more . . . . . . . . . .

57.57%

49.51%

65.46%

67.57%

64.52%

Note:
(1) Percentages of loans in each category to total loans at March 31, 2005, 2006, 2007 and 2008 have been restated as follows:

A-14

2005

2006

2007

2008

As previously
reported

As
restated

As previously
reported

As
restated

As previously
reported

As
restated

As previously
reported

As
restated

At March 31,

12.76%
1.94
11.41
7.49
10.35

12.48%
1.87
12.81
7.01
10.07

11.27%
2.09
9.48
7.08
10.25

11.05%
1.92
11.55
7.56
9.57

11.52%
1.93
8.71
7.41
9.89

11.40%
1.90
10.94
7.24
9.77

11.43%
1.78
8.32
6.77
9.52

11.28%
1.74
10.96
6.61
9.39

Domestic:

Manufacturing . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail
. . . . . . . . . . .
Banks and other financial

institutions . . . . . . . . . . . . . . . . .

7.25

7.07

5.82

5.29

4.70

4.57

4.87

4.72

Communication and information

services . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . .
Consumer

Foreign

Governments and official

1.55
13.34
14.40

1.54
14.16
13.48

1.24
12.33
24.16

1.23
14.23
21.32

1.23
10.76
24.98

1.22
11.07
23.02

1.16
10.51
24.13

1.16
10.91
21.72

institutions . . . . . . . . . . . . . . . . .

0.42

0.42

0.35

0.35

0.39

0.39

0.32

0.32

Banks and other financial

institutions . . . . . . . . . . . . . . . . .
Commercial and industrial
. . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . .

1.80
14.78
2.51

1.80
14.78
2.51

1.15
12.33
2.45

1.15
12.33
2.45

1.78
14.12
2.58

1.78
14.12
2.58

2.12
16.34
2.73

2.12
16.34
2.73

Total . . . . . . . . . . . . . . . . . . .

100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

While the allowance for credit losses contains amounts allocated to components of specifically identified
loans as well as a group on portfolio of loans, the allowance for credit losses is available for credit losses in the
entire loan portfolio and the allocations shown above are not intended to be restricted to the specific loan
category. Accordingly, as the evaluation of credit risks changes, allocations of the allowance will be changed to
reflect current conditions and various other factors.

A-15

V. Deposits

The following table shows the average amount of, and the average rate paid on, the following deposit

categories for the fiscal years ended March 31, 2007, 2008 and 2009:

Fiscal years ended March 31,

2007

2008

2009

Average
amount

Average
rate

Average
amount

Average
rate

Average
amount

Average
rate

(in millions, except percentages)

Domestic offices:

Non-interest-bearing demand

deposits . . . . . . . . . . . . . . . .

¥ 15,847,384

—% ¥ 13,738,148

—% ¥ 12,896,727

—%

Interest-bearing demand

deposits . . . . . . . . . . . . . . . .
Deposits at notice . . . . . . . . . .
Time deposits . . . . . . . . . . . . .
Certificates of deposit . . . . . . .

Foreign offices:

Non-interest-bearing demand

43,943,651
2,447,318
39,121,506
5,154,891

0.13
2.71
0.39
0.27

44,493,991
2,479,141
41,016,140
4,861,398

0.24
2.54
0.59
0.62

44,359,163
1,890,640
43,895,395
5,286,785

0.17
0.83
0.58
0.66

deposits . . . . . . . . . . . . . . . .

2,509,494

—

2,141,934

—

2,280,553

—

Interest-bearing deposits,

principally time deposits
and certificates of
deposit . . . . . . . . . . . . . . . . .

14,510,114

3.76

18,289,382

3.56

16,459,276

2.16

Total . . . . . . . . . . . . . . . .

¥123,534,358

¥127,020,134

¥127,068,539

Deposits at notice represent interest-bearing demand deposits which require the depositor to give two or

more days notice in advance of withdrawal.

The average amounts of total deposits by foreign depositors included in domestic offices for the fiscal years

ended March 31, 2007, 2008 and 2009 were ¥523,819 million, ¥489,751 million and ¥439,346 million,
respectively.

At March 31, 2009, the balances and remaining maturities of time deposits and certificates of deposit issued
by domestic offices in amounts of ¥10 million (approximately US$101 thousand at the Federal Reserve Bank of
New York’s noon buying rate on March 31, 2009) or more and total foreign deposits issued in amounts of
US$100,000 or more are shown in the following table:

Time
deposits

Certificates of
deposit

(in millions)

Total

Domestic offices:

Three months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Over three months through six months . . . . . . . . . . . . . . . . . . . .
Over six months through twelve months . . . . . . . . . . . . . . . . . . .
Over twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 8,262,846
5,550,348
5,459,330
3,437,991

¥3,892,250
231,006
382,270
41,491

¥12,155,096
5,781,354
5,841,600
3,479,482

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥22,710,515

¥4,547,017

¥27,257,532

Foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,546,556

A-16

VI. Short-Term Borrowings

The following table shows certain additional information with respect to our short-term borrowings for the

fiscal years ended March 31, 2007, 2008 and 2009:

Fiscal years ended March 31,

2007

2008

2009

(in millions, except percentages)

Call money, funds purchased, and payables under repurchase agreements and securities

lending transactions:

Average balance outstanding during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum balance outstanding at any month-end during the fiscal year . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate on balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

¥14,675,696
17,890,479
15,893,355

¥18,715,592
19,530,303
18,769,133

¥18,658,490
18,427,340
18,427,340

1.94%
2.30%

2.39%
2.35%

2.01%
0.97%

Due to trust account:

Average balance outstanding during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum balance outstanding at any month-end during the fiscal year . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate on balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

¥ 1,981,427
2,229,225
1,539,973

¥ 1,653,717
2,171,467
1,461,006

¥ 1,479,736
1,796,846
1,796,846

0.30%
0.44%

0.48%
0.49%

0.46%
0.42%

Other short-term borrowings:

Average balance outstanding during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum balance outstanding at any month-end during the fiscal year . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate on balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

¥ 7,566,200
8,549,745
5,734,473

¥ 5,729,422
6,802,404
6,016,893

¥ 6,664,948
9,190,011
7,867,378

1.44%
2.17%

2.17%
1.82%

1.61%
0.85%

A-17

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets as of March 31, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations for the Fiscal Years ended March 31, 2007, 2008 and 2009 . . . . .
Consolidated Statements of Changes in Equity from Nonowner Sources for the Fiscal Years ended

March 31, 2007, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Shareholders’ Equity for the Fiscal Years ended March 31, 2007, 2008 and

Page

F-2
F-3
F-4

F-5

F-6
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-7
Consolidated Statements of Cash Flows for the Fiscal Years ended March 31, 2007, 2008 and 2009 . . . .
F-8
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-8
1. Basis of Financial Statements and Summary of Significant Accounting Policies . . . . . . . . . . . . . .
F-28
2. Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-29
3. Business Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-31
4. Trading Account Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-32
5. Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-37
6. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-43
7. Allowance for Credit Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-43
8. Premises and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-44
9. Goodwill and Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-48
10. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-52
11. Pledged Assets and Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-54
12. Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-54
13. Call Loans and Funds sold, and Call Money and Funds Purchased . . . . . . . . . . . . . . . . . . . . . . . .
F-55
14. Due to Trust Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-55
15. Short-term Borrowings and Long-term Debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-59
16. Severance Indemnities and Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-68
17. Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-69
18. Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-73
19. Common Stock and Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-75
20. Retained Earnings, Legal Reserve and Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-76
21. Regulatory Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-82
22. Earnings (Loss) per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-83
23. Derivative Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-88
24. Obligations Under Guarantees and Other Off-balance-sheet Instruments . . . . . . . . . . . . . . . . . . .
25. Variable Interest Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-93
26. Commitments and Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-101
27. Fees and Commissions Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-102
28. Business Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-103
29. Foreign Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-105
30. Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-108
31. Stock-based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-118
32. Parent Company Only Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-125
33. SEC Registered Funding Vehicles Issuing Non-dilutive Preferred Securities . . . . . . . . . . . . . . . . F-127
34. Events Since March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-128

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group):

We have audited the accompanying consolidated balance sheets of Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group) (“MUFG”) and subsidiaries (together, the “MUFG Group”)
as of March 31, 2008 and 2009, and the related consolidated statements of operations, changes in equity from
nonowner sources, shareholders’ equity, and cash flows for each of the three years in the period ended March 31,
2009 (all expressed in Japanese Yen). These financial statements are the responsibility of MUFG’s management.
Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial
position of the MUFG Group as of March 31, 2008 and 2009, and the results of their operations and their cash
flows for each of the three years in the period ended March 31, 2009, in conformity with accounting principles
generally accepted in the United States of America.

As discussed in the respective footnotes to the consolidated financial statements, certain disclosures in

Notes 6, 11, 15 and 25 have been restated.

As discussed in Note 1 to the consolidated financial statements, MUFG changed its methods of accounting
for defined benefit pension and other postretirement plans (recognition provision) and stock-based compensation
in the fiscal year ended March 31, 2007 and its methods of accounting for uncertainty in income taxes and
leveraged leases in the fiscal year ended March 31, 2008 and its methods of accounting for defined benefit
pension and other postretirement plans (measurement date provision), fair value measurements, fair value option
for financial assets and financial liabilities, and netting of cash collateral against derivative exposures in the fiscal
year ended March 31, 2009.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States), MUFG Group’s internal control over financial reporting as of March 31, 2009, based on the
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated August 31, 2009 expressed an unqualified
opinion on MUFG Group’s internal control over financial reporting.

/s/ Deloitte Touche Tohmatsu LLC
DELOITTE TOUCHE TOHMATSU LLC

Tokyo, Japan
August 31, 2009

F-2

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
MARCH 31, 2008 AND 2009

ASSETS

Cash and due from banks (Note 11)
Interest-earning deposits in other banks (including ¥22,768 million measured at fair value under fair value option at March 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥

2009) (Notes 11 and 30)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements (including ¥36,066 million measured at fair value under fair value option at March 31, 2009)

(Note 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets (including assets pledged that secured parties are permitted to sell or repledge of ¥4,813,360 million in 2008
and ¥10,643,443 million in 2009) (including ¥10,832,557 million measured at fair value under fair value option at March 31,
2009) (Notes 1, 4, 11 and 30)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities (Notes 5 and 11):

Securities available for sale—carried at estimated fair value (including assets pledged that secured parties are permitted to sell or
repledge of ¥6,795,674 million in 2008 and ¥1,899,512 million in 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities being held to maturity—carried at amortized cost (including assets pledged that secured parties are permitted to sell or
repledge of ¥174,915 million in 2008 and ¥165,818 million in 2009) (estimated fair value of ¥2,860,397 million in 2008 and
¥2,826,446 million in 2009)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2008

2009

(in millions)

4,090,690 ¥

3,071,252

6,320,827
1,210,238

7,105,819
8,329,371

3,543,551
407,448

2,530,405
6,797,025

18,444,633

30,281,525

38,729,301

33,390,087

2,839,666
580,013

2,812,353
1,434,124

Total investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,148,980

37,636,564

Loans, net of unearned income, unamortized premiums and deferred loan fees (including assets pledged that secured parties are

permitted to sell or repledge of ¥3,774,314 million in 2008 and ¥3,729,490 million in 2009) (Notes 6 and 11) . . . . . . . . . . . . . . . .
Allowance for credit losses (Notes 6 and 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99,002,079
(1,134,940)

100,310,341
(1,156,638)

Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97,867,139

99,153,703

Premises and equipment—net (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customers’ acceptance liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets—net (Notes 3 and 9)
Goodwill (Notes 3 and 9)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets (Notes 10 and 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (Notes 1, 6, 11, 16 and 17)

1,075,806
339,773
71,003
1,338,924
1,074,137
899,432
5,449,311

1,043,416
267,747
59,144
1,191,941
379,426
2,172,789
4,963,481

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥195,766,083 ¥193,499,417

Deposits (Notes 11 and 12):

Domestic offices:

LIABILITIES AND SHAREHOLDERS’ EQUITY

Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 14,693,953 ¥ 15,023,660
95,802,559
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94,807,696

Overseas offices:

Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing (including ¥4,235 million measured at fair value under fair value option at March 31, 2009) (Note 30) . . . . . .

2,132,110
17,606,369

2,212,386
15,292,447

Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129,240,128

128,331,052

Call money and funds purchased (Notes 11 and 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under securities lending transactions (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust account (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings (including ¥3,755 million measured at fair value under fair value option at March 31, 2009)

(Notes 11, 15 and 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities (Notes 1 and 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations to return securities received as collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (including ¥532,641 million measured at fair value under fair value option at March 31, 2009) (Notes 11, 15

and 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities (Notes 1, 10, 11, 16 and 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,288,720
11,892,902
4,587,511
1,461,006

2,235,858
11,911,615
4,279,867
1,796,846

6,016,893
7,961,578
5,094,993
71,003
298,152

7,867,378
9,492,561
2,708,800
59,144
251,285

13,675,250
4,687,832

13,273,288
5,056,828

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187,275,968

187,264,522

Commitments and contingent liabilities (Notes 24 and 26)
Shareholders’ equity (Note 21):

Capital stock (Notes 18 and 19):

Preferred stock—aggregate liquidation preference of ¥336,801 million in 2008 and ¥640,001 million in 2009, with no stated

value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common stock—authorized, 33,000,000,000 shares; issued, 10,861,643,790 shares in 2008 and 11,648,360,720 shares in

2009, with no stated value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings (Accumulated deficit) (Notes 20 and 34):

Appropriated for legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unappropriated retained earnings (Accumulated deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other changes in equity from nonowner sources, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost—503,153,835 common shares in 2008 and 9,080,212 common shares in 2009 . . . . . . . . . . . . . . . . . . . . . .

247,100

442,100

1,084,708
5,791,300

1,127,552
6,095,820

239,571
935,309
919,420
(727,293)

239,571
(845,778)
(813,695)
(10,675)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,490,115

6,234,895

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥195,766,083 ¥193,499,417

See the accompanying notes to Consolidated Financial Statements.

F-3

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEARS ENDED MARCH 31, 2007, 2008 AND 2009

Interest income:
Loans, including fees (Note 6)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities:

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements and securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

2008

2009

(in millions)

¥2,647,503
251,034

¥ 2,790,505
258,544

¥ 2,558,361
124,832

641,705
113,096
99,918
26,546
135,927

771,763
127,076
110,348
24,969
283,606

309,835
163,492
460,534
15,010
263,730

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,915,729

4,366,811

3,895,794

Interest expense:
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements and securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings and trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt

835,899
27,870
256,282
5,863
175,245
284,804

1,093,956
45,180
402,077
8,014
206,363
331,504

736,456
24,973
349,903
6,843
170,524
310,690

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,585,963

2,087,094

1,599,389

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses (Notes 6 and 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,329,766
358,603

2,279,717
385,740

2,296,405
626,947

Net interest income after provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,971,163

1,893,977

1,669,458

Non-interest income:
Fees and commissions (Note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account profits (losses)—net (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities gains (losses)—net (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of loans (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,407,193
(162,005)
404,813
238,277
(56,879)
23,093
93,444

1,317,047
1,295,933
398,396
(1,373,072)
(34,485)
11,789
162,506

1,188,512
(206,153)
(257,807)
(658,679)
(60,051)
6,401
162,876

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,947,936

1,778,114

175,099

Non-interest expense:
Salaries and employee benefits (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expenses—net (Notes 8 and 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outsourcing expenses, including data processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation of premises and equipment (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets (Note 9)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance premiums, including deposit insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interest in income (loss) of consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes and public charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for repayment of excess interest (Note 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

862,401
179,342
237,979
267,921
118,940
264,930
184,760
112,773
16,915
62,209
79,683
106,245
—
290,070

909,771
173,183
218,088
248,265
179,567
252,890
78,679
112,444
39,400
65,286
83,439
2,826
893,721
402,177

873,371
171,902
209,750
267,790
132,121
278,241
126,885
113,803
(36,259)
62,943
85,743
47,865
845,842
392,528

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,784,168

3,659,736

3,572,525

Income (loss) from continuing operations before income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,134,931
552,826

Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations—net (Note 2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

582,105
(817)

12,355
553,045

(540,690)
(1,746)

(1,727,968)
(259,928)

(1,468,040)
—

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 581,288

¥ (542,436)

¥(1,468,040)

Income allocable to preferred shareholders:
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beneficial conversion feature (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income allocable to preferred shareholders of Mitsubishi UFJ NICOS Co., Ltd. :
Effect of induced conversion of Mitsubishi UFJ NICOS Co., Ltd. Class 1 stock (Note 3) . . . . . . . . . . . . . . . . . . . . . .

¥

13,629
267,432

¥

6,669
7,909

¥

—

—

6,399
9,478

7,676

Net income (loss) available to common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 300,227

¥ (557,014)

¥(1,491,593)

Earnings (loss) per share (Notes 20 and 22):
Basic earnings (loss) per common share—income (loss) from continuing operations available to common

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings (loss) per common share—net income (loss) available to common shareholders . . . . . . . . . . . . . . . . .
Diluted earnings (loss) per common share—income (loss) from continuing operations available to common

shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings (loss) per common share—net income (loss) available to common shareholders . . . . . . . . . . . . . . . .

¥

29.94
29.86

29.76
29.68

¥

(53.88)
(54.05)

¥

(137.84)
(137.84)

(53.88)
(54.05)

(137.84)
(137.84)

(in Yen)

See the accompanying notes to Consolidated Financial Statements.

F-4

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FROM NONOWNER SOURCES
FOR THE FISCAL YEARS ENDED MARCH 31, 2007, 2008 AND 2009

Fiscal year ended March 31, 2007:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources:

Total

Net unrealized holding gains on investment securities available for sale . . . . . . .
Reclassification adjustment for gains included in net income . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized losses on derivatives qualifying for cash flow hedges . . . . . . . . . .
Reclassification adjustment for losses included in net income . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net income . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total changes in equity from nonowner sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

Total

Fiscal year ended March 31, 2008:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources:

Total

Total

Net unrealized holding losses on investment securities available for sale . . . . . . .
Reclassification adjustment for losses included in net loss . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on derivatives qualifying for cash flow hedges . . . . . . . . . .
Reclassification adjustment for losses included in net loss . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net loss . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net loss . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total changes in equity from nonowner sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

Total

Fiscal year ended March 31, 2009:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other changes in equity from nonowner sources:

Total

Total

Net unrealized holding losses on investment securities available for sale . . . . . . .
Reclassification adjustment for losses included in net loss . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on derivatives qualifying for cash flow hedges . . . . . . . . . .
Reclassification adjustment for gains included in net loss . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for gains included in net loss . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustment for losses included in net loss . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total changes in equity from nonowner sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

Total

Gains (Losses)
before income
tax expense
(benefit)

Income tax
(expense)
benefit

(in millions)

Gains (Losses)
net of income
tax expense
(benefit)

¥

581,288

¥

764,721
(247,921)
516,800
(3,161)
2,762
(399)
(2,563)
32,537
(6,420)
26,117

¥ (308,419)
100,767
(207,652)
1,214
(1,056)
158
1,019
(626)
283
(343)

¥(3,640,989)
1,384,037
(2,256,952)
2,327
2,018
4,345
(66,009)
(17,168)
(83,177)
(115,347)
162
(115,185)

¥1,476,878
(561,877)
915,001
(805)
(867)
(1,672)
26,800
6,449
33,249
30,985
690
31,675

¥(2,070,470)
624,355
(1,446,115)
15,300
(7,303)
7,997
(720,944)
(9,428)
(730,372)
(316,123)
11,101
(305,022)

¥ 840,721
(252,940)
587,781
(6,132)
2,878
(3,254)
288,984
3,645
292,629
16,927
(1,962)
14,965

456,302
(147,154)
309,148
(1,947)
1,706
(241)
(1,544)
31,911
(6,137)
25,774
914,425

¥

¥ (542,436)

(2,164,111)
822,160
(1,341,951)
1,522
1,151
2,673
(39,209)
(10,719)
(49,928)
(84,362)
852
(83,510)
¥(2,015,152)

¥(1,468,040)

(1,229,749)
371,415
(858,334)
9,168
(4,425)
4,743
(431,960)
(5,783)
(437,743)
(299,196)
9,139
(290,057)
¥(3,049,431)

See the accompanying notes to Consolidated Financial Statements.

F-5

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE FISCAL YEARS ENDED MARCH 31, 2007, 2008 AND 2009

Preferred stock (Note 18):
Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of Class 5 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

2008

2009

(in millions)

¥

¥

247,100
—

247,100

¥

¥

247,100
—

247,100

¥

¥

247,100
195,000

442,100

Common stock (Note 19):
Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,084,708
—

¥ 1,084,708
—

¥ 1,084,708
42,844

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,084,708

¥ 1,084,708

¥ 1,127,552

Capital surplus (Note 19):
Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on exchange of shares of treasury stock for shares of Mitsubishi UFJ Securities Co., Ltd. (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on induced conversion of shares of Mitsubishi UFJ NICOS Co., Ltd. Class 1 stock (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beneficial conversion feature of preferred stock (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense (Note 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock option and other share based compensation payouts as a result of UnionBanCal Corporation’s privatization (Note 31)
. . . . . . . . . . . . . . . . . . . . . . .
Losses on sales of shares of treasury stock, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of SFAS No. 123R implementation of UnionBanCal Corporation (Note 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of Class 5 preferred stock (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock and sale of treasury stock (Note 19)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net

¥ 5,566,894
—
—
267,432
3,257
—
(1,048)
(1,468)
—
—
(538)

¥ 5,834,529
(56,134)
—
7,909
5,747
—
(456)
—
—
—
(295)

¥ 5,791,300
—
71,103
9,478
14,418
(21,063)
(7,500)
—
194,183
43,906
(5)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,834,529

¥ 5,791,300

¥ 6,095,820

Retained earnings appropriated for legal reserve (Note 20):
Balance at beginning of fiscal year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

239,571

239,571

¥

¥

239,571

239,571

¥

¥

239,571

239,571

Unappropriated retained earnings (Accumulated deficit) (Note 20):
Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends:

Common stock—¥9.00 in 2007, ¥13.00 in 2008 and ¥14.00 in 2009 per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock (Class 3)—¥60.00 in 2007, in 2008 and in 2009 per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock (Class 8)—¥23.85 in 2007, ¥15.90 in 2008 and ¥7.95 in 2009 per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock (Class 9)—¥18.60 in 2007 per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock (Class 10)—¥19.40 in 2007 per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock (Class 12)—¥17.25 in 2007 and ¥11.50 in 2008 and in 2009 per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beneficial conversion feature of preferred stock (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of SFAS No. 123R implementation of UnionBanCal Corporation (Note 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FIN No. 48 adjustment (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FSP SFAS No. 13-2 adjustment (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on exchange of shares of treasury stock for shares of Mitsubishi UFJ NICOS Co., Ltd. (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on sales of shares of treasury stock for shares of Mitsubishi UFJ NICOS Co., Ltd. (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on sales of shares of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of induced conversion of Mitsubishi UFJ NICOS Co., Ltd. Class 1 stock (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SFAS No. 158 adjustment (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SFAS No. 157 adjustment (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SFAS No. 159 adjustment (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,424,634
581,288

¥ 1,636,803
(542,436)

¥

935,309
(1,468,040)

(89,526)
(6,000)
(570)
(1,482)
(2,910)
(2,667)
(267,432)
1,468
—
—
—
—
—
—
—
—
—
—

(134,664)
(6,000)
(282)
—
—
(387)
(7,909)
—
(4,091)
(5,725)
—
—
—
—
—
—
—
—

(146,937)
(6,000)
(140)
—
—
(259)
(9,478)
—
—
—
(47,507)
(35,966)
(119,223)
(7,676)
(132)
27,317
32,979
(25)

Balance at end of fiscal year (Note 34)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,636,803

¥

935,309

¥ (845,778)

Accumulated other changes in equity from nonowner sources, net of taxes:
Net unrealized gains on investment securities available for sale (Note 5):

Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SFAS No. 159 adjustment (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,006,500
309,148
—

¥ 2,315,648
(1,341,951)
—

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,315,648

Net unrealized gains (losses) on derivatives qualifying for cash flow hedges (Note 23):

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of fiscal year
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minimum pension liability adjustments (Note 16):

Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply SFAS No. 158 (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pension liability adjustments (Note 16):
Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply SFAS No. 158 (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SFAS No. 158 adjustment (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

¥

¥

¥

973,697

(909)
2,673

1,764

¥

¥

¥

¥

(668)
(241)

(909)

(4,464)
(1,544)
6,008

— ¥

— ¥
—
—

— ¥

¥

¥

¥

¥

973,697
(858,334)
(20,150)

95,213

1,764
4,743

6,507

—
—
—

—

— ¥
—
172,776
—

172,776
(49,928)
—
—

¥

122,848
(437,743)
—
(131,574)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

172,776

Foreign currency translation adjustments:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of fiscal year
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (121,153)
25,774

¥

¥

122,848

¥ (446,469)

(95,379)
(83,510)

¥ (178,889)
(290,057)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

(95,379)

¥ (178,889)

¥ (468,946)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,392,136

¥

919,420

¥ (813,695)

Treasury stock:
Balance at beginning of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of shares of treasury stock (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales of shares of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of shares of treasury stock for shares of Mitsubishi UFJ Securities Co., Ltd. (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) resulting from changes in voting interests in its consolidated subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of shares of treasury stock for shares of Mitsubishi UFJ NICOS Co., Ltd. (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (774,969)
(292,200)
65,627
—
7
—

¥(1,001,535)
(151,365)
1,779
425,530
(1,702)
—

¥ (727,293)
(2,919)
537,542
—
(2,883)
184,878

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (1,001,535)

¥ (727,293)

¥

(10,675)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,433,312

¥ 8,490,115

¥ 6,234,895

See the accompanying notes to Consolidated Financial Statements.

F-6

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED MARCH 31, 2007, 2008 AND 2009

Cash flows from operating activities:

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Loss from discontinued operations—net (Note 2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities losses (gains)—net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange losses (gains)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for deferred income tax expense (benefit)
Decrease (increase) in trading account assets, excluding foreign exchange contracts (Note 1)
. . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in trading account liabilities, excluding foreign exchange contracts (Note 1) . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in accrued interest receivable and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in accrued interest payable and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in accrued income taxes and decrease (increase) in income tax receivables . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in allowance for repayment of excess interest (Note 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in collaterals for derivative transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net

2007

2008

2009

(in millions)

¥

581,288

¥

(542,436)

¥

(1,468,040)

817
383,870
—
184,760
358,603
(238,277)
(3,908)
56,879
434,993
302,006
(978,508)
157,769
127,769
116,933
92,741
46,964
(61,687)

1,746
432,457
893,721
78,679
385,740
1,373,072
(1,544,073)
34,485
446,253
(3,996,790)
2,904,153
(79,266)
90,984
(17,843)
(22,290)
82,720
(138,105)

—
410,362
845,842
126,885
626,947
658,679
983,290
60,051
(401,367)
(4,334,635)
1,541,797
37,407
(76,143)
103,164
(3,316)
(414,933)
163,507

(1,140,503)

Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,563,012

383,207

Cash flows from investing activities:

Proceeds from sales of investment securities available for sale (including proceeds from securities under fair value option

for the fiscal year ended March 31, 2009) (Note 5)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proceeds from maturities of investment securities available for sale (including proceeds from securities under fair value

option for the fiscal year ended March 31, 2009) (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of investment securities available for sale (including purchases of securities under fair value option for the fiscal
year ended March 31, 2009) (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturities of investment securities being held to maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of investment securities being held to maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of common stock investment in ACOM CO., LTD., an affiliated company of MUFG . . . . . . . . . . . . . . . . . . . . . .
Purchases of other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in interest-earning deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in call loans, funds sold, and receivables under resale agreements and securities borrowing

transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures for premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of consolidated VIEs and subsidiaries—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net

36,262,585

51,204,443

76,089,849

28,187,867

26,300,910

29,796,236

(63,170,653)
47,334
(623,171)
255,743
—
(119,626)
410,203
462,314

(3,912,447)
23,728
(119,024)
(184,205)
41,243
(53,964)

(74,640,265)
543,799
(354,008)
153,436
—
(78,352)
(5,942,696)
(806,005)

(4,071,034)
71,671
(187,745)
(231,300)
117,626
86,391

(114,572,826)
1,497,026
(296,772)
37,773
(152,971)
(958,616)
(6,266,505)
2,264,774

4,556,274
36,269
(154,607)
(191,834)
110,010
(60,111)

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,492,073)

(7,833,129)

(8,266,031)

Cash flows from financing activities:

Net increase (decrease) in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase in call money, funds purchased, and payables under repurchase agreements and securities lending

transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of common stock, net of stock issue expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of new shares of preferred stock, net of stock issue expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for redemption of preferred stock issued by a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to acquire treasury stock (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments related to privatization of UnionBanCal Corporation (Note 3) (Note 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net

(889,962)

5,472,395

2,619,867

4,016,307
(886,416)
(4,847,764)
3,254,073
(2,661,783)
—
—
(120,000)
64,041
(292,182)
(103,047)
(23,584)
—
(5,764)

3,731,613
(78,967)
202,589
2,344,448
(2,662,527)
—
—
—
1,173
(151,365)
(141,159)
(22,990)
—
28,174

2,621,516
335,840
2,566,975
2,876,261
(2,752,600)
280,460
388,623
—
187,147
(2,697)
(153,217)
(16,429)
(410,373)
(54,326)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,496,081)

8,723,384

8,487,047

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,458

(32,435)

(99,951)

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,399,684)

1,241,027

(1,019,438)

Cash and cash equivalents at beginning of fiscal year (including cash and cash equivalents identified as discontinued

operations of ¥14,069 million in 2007, ¥2,194 million in 2008 and nil in 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,249,347

2,849,663

4,090,690

Cash and cash equivalents at end of fiscal year (including cash and cash equivalents identified as discontinued

operations of ¥2,194 million in 2007, nil in 2008 and 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,849,663

¥ 4,090,690

¥

3,071,252

Supplemental disclosure of cash flow information:
Cash paid during the fiscal year for:
Interest
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash investing and financing activities:
Obtaining assets by entering into capital lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . .
Acquisition of minority interests in Mitsubishi UFJ Securities Co., Ltd. in exchange for treasury stock (Note 3)
Acquisition of minority interests in Mitsubishi UFJ NICOS Co., Ltd. in exchange for treasury stock (Note 3)
. . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to securities from loans resulting from securitizations (Note 6)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to trading account assets from investment securities available for sale (Note 30)
Transfer to investment securities being held to maturity from trading account assets (Note 5)
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Union Bank's term borrowing issued in its fiscal year ended December 31, 2008, but settled on January 2, 2009 . . . . . . . . . . . . .

¥ 1,547,702
3,864

¥ 2,055,790
145,806

¥

1,643,730
38,275

35,942
—
—
—
—
—
—

18,739
369,588
—
—
—
—
—

5,408
—
131,445
60,671
10,448,079
1,053,029
91,030

See the accompanying notes to Consolidated Financial Statements.

F-7

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES

Description of Business

Mitsubishi UFJ Financial Group, Inc. (“MUFG”) is a holding company for The Bank of Tokyo-Mitsubishi

UFJ, Ltd. (“BTMU”), Mitsubishi UFJ Trust and Banking Corporation (“MUTB”), Mitsubishi UFJ Securities
Co., Ltd. (“MUS”), Mitsubishi UFJ NICOS Co., Ltd. (“Mitsubishi UFJ NICOS”), and other subsidiaries.
Through its subsidiaries and affiliated companies, MUFG engages in a broad range of financial operations,
including commercial banking, investment banking, trust banking and asset management services, securities
businesses, and credit card businesses, and provides related services to individual and corporate customers. See
Note 28 for more information by business segment.

Basis of Financial Statements

The accompanying consolidated financial statements are stated in Japanese yen, the currency of the country

in which MUFG is incorporated and principally operates. The accompanying consolidated financial statements
have been prepared on the basis of accounting principles generally accepted in the United States of America
(“US GAAP”). In certain respects, the accompanying consolidated financial statements reflect adjustments which
are not included in the consolidated financial statements issued by MUFG and certain of its subsidiaries in
accordance with applicable statutory requirements and accounting practices in their respective countries of
incorporation. The major adjustments include those relating to (1) investment securities, (2) derivative financial
instruments, (3) allowance for credit losses, (4) income taxes, (5) consolidation, (6) premises and equipment,
(7) transfer of financial assets, (8) accrued severance indemnities and pension liabilities, (9) goodwill and other
intangible assets and (10) lease transactions.

Fiscal periods of certain subsidiaries, which end on or after December 31, and MUFG’s fiscal year, which

ends on March 31, have been treated as coterminous. For the fiscal years ended March 31, 2007, 2008 and 2009,
the effect of recording intervening events for the three-month periods ended March 31 on MUFG’s proportionate
equity in net income of subsidiaries with fiscal periods ended on or after December 31, would have resulted in a
decrease of ¥0.20 billion to net income, an increase of ¥14.02 billion to net loss and an increase of ¥2.42 billion
to net loss, respectively. No intervening events occurred during each of the three-month periods ended March 31,
2007, 2008 and 2009 which, if recorded, would have had material effects to consolidated total assets, loans, total
liabilities, deposits or total shareholders’ equity as of March 31, 2007, 2008 and 2009.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to

make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to management judgment primarily relate to the allowance for credit
losses on loans and off-balance-sheet credit instruments, valuation allowances of deferred tax assets, tax reserves,
valuation of financial instruments, goodwill, intangible assets, investment securities and accrued severance
indemnities and pension liabilities.

F-8

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Summary of Significant Accounting Policies

Significant accounting policies applied in the accompanying consolidated financial statements are

summarized below:

Consolidation—The consolidated financial statements include the accounts of MUFG and its subsidiaries

over which control is exercised through either majority ownership of voting stock and/or other means, including,
but not limited to, the possession of the power to direct or cause the direction of management and policies of
entities. In situations in which the MUFG Group has less than 100% but greater than 50% of ownership in
entities, such entities are consolidated and minority interests are also recorded in Other liabilities. Intercompany
items have been eliminated. Investments in affiliated companies (companies over which the MUFG Group has
the ability to exercise significant influence) are accounted for by the equity method of accounting and are
reported in Other assets. The MUFG Group’s equity interest in the earnings of these equity investees and gains or
losses realized on disposition of such investments are reported in Equity in earnings (losses) of equity method
investees.

Variable interest entities are consolidated when the MUFG Group has a variable interest that will absorb a
majority of the entity’s expected losses, receive a majority of the entity’s expected residual returns, or both. See
Note 25 for the details of variable interest entities.

Assets that the MUFG Group holds in an agency, fiduciary or trust capacity are not assets of the

MUFG Group and, accordingly, are not included in the accompanying consolidated balance sheets.

Cash Flows—For the purposes of reporting cash flows, cash and cash equivalents are defined as those
amounts included in the consolidated balance sheets under the caption Cash and due from banks with original
maturities of 90 days or less. Cash flows from qualified hedging activities are classified in the same category as
the items being hedged.

Translation of Foreign Currency Financial Statements and Foreign Currency Transactions—Financial
statements of overseas entities are translated into Japanese yen using the respective fiscal year-end exchange
rates for assets and liabilities. Income and expense items are translated at average rates of exchange for the
respective fiscal periods.

Foreign currency translation gains and losses related to the financial statements of overseas entities of the
MUFG Group, net of related income tax effects, are credited or charged directly to Foreign currency translation
adjustments, a component of accumulated other changes in equity from nonowner sources. Tax effects of gains
and losses on foreign currency translation of financial statements of overseas entities are not recognized unless it
is apparent that the temporary differences will reverse in the foreseeable future.

Foreign currency-denominated assets and liabilities are translated into the functional currencies of the

individual entities included in consolidation at the respective fiscal year-end foreign exchange rates. Foreign
currency-denominated income and expenses are translated using average rates of exchange for the respective
fiscal periods. Gains and losses from such translation are included in Foreign exchange gains (losses)—net, as
appropriate.

Repurchase Agreements, Securities Lending and Other Secured Financing Transactions—Securities sold
with agreements to repurchase (“repurchase agreements”), securities purchased with agreements to resell (“resale
agreements”) and securities lending and borrowing transactions are accounted for as sales of securities with
related off-balance-sheet forward repurchase commitments or purchases of securities with related off-balance-
sheet forward resale commitments, if they meet the relevant conditions for the surrender of control as provided

F-9

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

by Statement of Financial Accounting Standards (“SFAS”) No. 140, “Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement No. 125.” If the
conditions are not met, the transactions are treated as secured financing or lending.

Collateral—For secured lending transactions, including resale agreements, securities borrowing transactions,

commercial lending and derivative transactions, the MUFG Group, as a secured party, generally has the right to
require the counterparties to provide collateral, including letters of credit, cash, securities and other financial assets.
For most securities lending transactions, the MUFG Group maintains strict levels of collateralization governed by
daily mark-to-market analysis. Financial assets pledged as collateral are generally negotiable financial instruments
and are permitted to be sold or repledged by secured parties. If the MUFG Group sells these financial assets
received as collateral, it recognizes the proceeds from the sale and its obligation to return the collateral. For secured
borrowing transactions, principally repurchase agreements and securities lending transactions and derivative
transactions, where the secured party has the right to sell or repledge financial assets pledged as collateral, the
MUFG Group separately discloses those financial assets pledged as collateral in the consolidated balance sheets.

Trading Account Securities—Securities and money market instruments held in anticipation of short-term
market movements and for resale to customers are included in Trading account assets, and short trading positions
of these instruments are included in Trading account liabilities. Trading positions are carried at fair value on the
consolidated balance sheets and recorded on a trade date basis. Changes in the fair value of trading positions are
recognized currently in Trading account profits (losses)—net, as appropriate. The MUFG Group has elected fair
value option accounting for certain foreign securities under SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities, including an amendment of FASB Statement No. 115.” See Note 30 for a further
discussion of fair value option accounting.

Investment Securities—Debt securities for which the MUFG Group has both the ability and positive intent to

hold to maturity are classified as Securities being held to maturity and carried at amortized cost. Debt securities
that the MUFG Group may not hold to maturity and marketable equity securities, other than those classified as
Trading account securities, are classified as Securities available-for-sale, and are carried at their fair values, with
unrealized gains and losses reported on a net-of-tax basis within accumulated other changes in equity from
nonowner sources, which is a component of shareholders’ equity. Other investment securities include
nonmarketable equity securities carried at their acquisition costs, and also securities held by subsidiaries that are
investment companies or brokers and dealers in securities. Such securities held by those subsidiaries are not
within the scope of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” and are
subject to the specialized industry accounting principles in American Institute of Certified Public Accountants
(“AICPA”) Audit and Accounting Guides for “Investment Companies” and “Brokers and Dealers in Securities”
(the “AICPA Guides”) applicable for those subsidiaries. Securities of those subsidiaries are carried at their fair
values.

Individual debt and equity securities are written down to fair value with the resulting losses charged to

operations when, in the opinion of management, a decline in estimated fair value below the cost of such
securities is other than temporary. Such impairment loss is included in Investment securities gains (losses)—net
in the consolidated statements of operations. In determining other than temporary declines in fair value to be
recognized as an impairment loss on investment securities, the MUFG Group generally considers factors such as
the ability and positive intent to hold the investments for a period of time sufficient to allow for any anticipated
recovery in fair value, the financial condition of the issuer, the extent of decline in fair value, and the length of
time that the decline in fair value below cost has existed. See Note 5 for a further discussion of other-than-
temporary impairment. Interest and dividends on investment securities are reported in Interest income. Dividends
are recognized when the shareholder right to receive the dividend is established. Gains and losses on disposition
of investment securities are computed using the average cost method and are recognized on the trade date.

F-10

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Derivative Financial Instruments—The MUFG Group engages in derivative activities involving swaps,
forwards, futures, options, and other types of derivative contracts. Derivatives are used in trading activities to
generate trading revenues and fee income for its own account and to respond to the customers’ financial needs.
Derivatives are also used to manage its market risk exposures to fluctuations in interest and foreign exchange
rates, equity and commodity prices, and counterparty credit risk.

Derivatives entered into for trading purposes are carried at fair value and are reported as Trading account

assets or Trading account liabilities. Prior to the adoption of SFAS No. 157, “Fair Value Measurements,” the
MUFG Group deferred trade date gains or losses on derivatives where the fair values of those derivatives were
not obtained from a quoted market price, supported by comparison to other observable market transactions, or
based upon a valuation technique which incorporated observable market data. See Accounting Changes—Fair
Value Measurements for details related to adoption of SFAS No. 157. The fair values of derivative contracts
executed with the same counterparty under legally enforceable master netting agreements are presented on a
gross basis. See Accounting Changes—Netting of Cash Collateral against Derivative Exposures for further
information. Changes in the fair value of such contracts are recognized currently in Foreign exchange gains
(losses)—net with respect to foreign exchange contracts and in Trading account profits (losses)—net with respect
to interest rate contracts and other types of contracts.

Embedded features that are not clearly and closely related to the host contracts and meet the definition of
derivatives are separated from the host contracts and measured at fair value unless the contracts embedding the
derivatives are measured at fair value in their entirety.

Derivatives are also used to manage exposures to fluctuations in interest and foreign exchange rates arising
from mismatches of asset and liability positions. Certain of those derivatives are designated by the MUFG Group
and qualify for hedge accounting. A derivative is designated as a hedging instrument at the inception of each
such hedge relationship and the MUFG Group documents, for such individual hedging relationships, the risk
management objective and strategy, including identifying the item being hedged, identifying the specific risk
being hedged and the method used to assess the hedge’s effectiveness. In order for a hedging relationship to
qualify for hedge accounting, the changes in the fair value of the derivative instruments must be highly effective
in achieving offsetting changes in fair values or variable cash flows of the hedged items attributable to the risk
being hedged. Any ineffectiveness, which arises during the hedging relationship, is recognized in Non-interest
income or expense in the period in which it arises. All qualifying hedging derivatives are valued at fair value and
included in Other assets or Other liabilities. The fair values of derivative contracts executed with the same
counterparty under legally enforceable master netting agreements are presented on a gross basis. See Accounting
Changes—Netting of Cash Collateral against Derivative Exposures for further information. For fair value hedges
of interest-bearing assets or liabilities, the change in the fair value of the hedged item and the hedging
instruments is recognized in net interest income to the extent that it is effective. For all other fair value hedges,
the change in the fair value of the hedged item and change in fair value of the derivative are recognized in
non-interest income or expense. For cash flow hedges, the unrealized changes in fair value to the extent effective
are recognized in accumulated other changes in equity from nonowner sources. Amounts realized on cash flow
hedges related to variable rate loans are recognized in net interest income in the period when the cash flow from
the hedged item is realized. The fair value of cash flow hedges related to forecasted transactions, if any, is
recognized in non-interest income or expense in the period when the forecasted transaction occurs. Any
difference that arises from gains or losses on hedging derivatives offsetting corresponding gains or losses on the
hedged items, and gains and losses on derivatives attributable to the risks excluded from the assessment of hedge
effectiveness are recognized in non-interest income or expense.

Loans—Loans originated by the MUFG Group (“originated loans”) are carried at the principal amount
outstanding, adjusted for unearned income and deferred net nonrefundable loan fees and costs. Originated loans

F-11

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

held and intended for dispositions or sales in secondary markets are transferred to the held-for-sale classification
and carried at the lower of cost or estimated fair value generally on an individual loan basis. Loan origination
fees, net of certain direct origination costs, are deferred and recognized over the contractual life of the loan as an
adjustment of yield using the method that approximates the interest method. Interest income on loans that are not
impaired is accrued and credited to interest income as it is earned. Unearned income and discounts or premiums
on purchased loans are deferred and recognized over the contractual lives of the loans using a method that
approximates the interest method when such purchased loans are outside the scope of Statement of Position
(“SOP”) 03-3 issued by the AICPA, “Accounting for Certain Loans or Debt Securities Acquired in a Transfer,”
as described below.

Originated loans are considered impaired when, based on current information and events, it is probable that
the MUFG Group will be unable to collect the scheduled payments of principal or interest when due according to
the contractual terms of the loan agreement. Factors considered by management in determining impairment
include payment status, collateral value, and the probability of collecting scheduled principal and interest
payments when due. Originated loans that experience insignificant payment delays and payment shortfalls
generally are not classified as impaired. Management determines the significance of payment delays and
payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the
loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment
record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a
loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective
interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral
dependent.

Originated loans are generally placed on nonaccrual status when substantial doubt exists as to the full and
timely collection of either principal or interest, or when principal or interest is contractually past due one month
or more with respect to loans of domestic banking subsidiaries, including BTMU and MUTB, and 90 days or
more with respect to loans of certain foreign banking subsidiaries. A nonaccrual loan may be restored to an
accrual status when interest and principal payments become current and management expects that the borrower
will make future contractual payments as scheduled. When a loan is placed on nonaccrual status, interest accrued
but not received is generally reversed against interest income. Cash receipts on nonaccrual loans, for which the
ultimate collectibility of principal is uncertain, are applied as principal reductions; otherwise, such collections are
credited to income. The MUFG Group does not capitalize any accrued interest in the principal balances of
impaired loans at each balance sheet date.

In accordance with SOP 03-3 adopted by the MUFG Group on April 1, 2005, impaired loans acquired for

which it is probable that the MUFG Group will be unable to collect all contractual receivables are initially
recorded at the present value of amounts expected to be received and the related valuation allowances are not
carried over or created initially. Accretable yield is limited to the excess of the investor’s estimate of
undiscounted cash flows over the investor’s initial investment in the loan and subsequent increases in cash flows
expected to be collected are recognized prospectively through adjustment of the loan’s yield over its remaining
life after reduction of any remaining allowance for credit losses for the loan established after its acquisition, if
any, while any decrease in such cash flows below those initially expected at acquisition plus additional cash
flows expected to be collected arising from changes in estimate after acquisition are recognized as impairments.

Loan Securitization—The MUFG Group securitizes and services commercial and industrial loans in the
normal course of business. The MUFG Group accounts for a transfer of loans in a securitization transaction as a
sale if it meets relevant conditions for the surrender of control. Otherwise, the transfer is accounted for as a
collateralized borrowing transaction. Interests in loans sold through a securitization accounted for as a sale may
be retained in the form of subordinated tranches or beneficial interests. These retained interests are primarily

F-12

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recorded in Securities available for sale. The previous carrying amount of the loans involved in the transfer is
allocated between the loans sold and the retained interests based on their relative fair values at the date of the
securitization. Since quoted market prices are generally not available, the MUFG Group usually estimates fair
value of these retained interests based on the present value of future expected cash flows by using modeling
techniques that involve management’s best estimates of key assumptions, which may include default rates,
recovery rates, and discount rates. See Accounting Changes—Fair Value Measurements and Note 30 for details
of fair value measurements after adoption of SFAS No. 157.

Allowance for Credit Losses—The MUFG Group maintains an allowance for credit losses to absorb

probable losses inherent in the loan portfolio. Actual credit losses (amounts deemed uncollectible, in whole or in
part), net of recoveries, are deducted from the allowance for credit losses, as net charge-offs, generally based on
detailed loan reviews and a credit assessment by management at each balance sheet date. The MUFG Group
generally applies its charge-off policy to all loans in its portfolio regardless of the type of borrower. The
provision for credit losses, which is a charge against earnings, is added to bring the allowance to a level which, in
management’s opinion, is adequate to absorb probable losses inherent in the credit portfolio.

A key element relating to the policies and discipline used in determining the allowance for credit losses is

the credit classification and the related borrower categorization process. The categorization is based on
conditions that may affect the ability of borrowers to service their debt, taking into consideration current
financial information, historical payment experience, credit documentation, public information, analyses of
relevant industry segments and current trends. In determining the appropriate level of the allowance, the MUFG
Group evaluates the probable loss by category of loan based on its type and characteristics.

The allowance for credit losses for non-homogeneous loans consists of an allocated allowance for

specifically identified problem loans, an allocated allowance for country risk exposure, a formula allowance and
an unallocated allowance. An allocated allowance is also established for large groups of smaller-balance
homogeneous loans.

The credit loss allowance for individual customers represents the impairment allowance determined in

accordance with SFAS No. 114, “Accounting by Creditors for Impairment of a Loan.” The MUFG Group
measures the impairment of a loan, based on the present value of expected future cash flows discounted at the
loan’s effective interest rate, or on the loan’s observable market price, or based on the fair value of the collateral
if the loan is collateral dependent, when it is probable that the MUFG Group will be unable to collect all amounts
due according to the contractual terms of the loan agreement. For certain subsidiaries, some impaired loans are
aggregated for the purpose of measuring impairment using historical loss factors. Generally, the MUFG Group’s
impaired loans include nonaccrual loans, restructured loans and other loans specifically identified as impaired.

The credit loss allowance for country risk exposure is a country-specific allowance for substandard, special

mention and unclassified loans. The allowance is established to supplement the formula allowance for these
loans, based on an estimate of probable losses relating to the exposure to countries that are identified by
management to have a high degree of transfer risk. The measure is generally based on a function of default
probability and the recovery ratio with reference to external credit ratings. For the allowance for specifically
identified cross-border problem loans, the MUFG Group incorporates transfer risk in its determination of related
allowance for credit losses.

The formula allowance is calculated for groups of loans collectively evaluated for impairment that cannot be

attributed to specific loans by applying loss factors to outstanding substandard, special mention and unclassified
loans. The evaluation of inherent loss for these loans involves a high degree of uncertainty, subjectivity and
judgment. In determining the formula allowance, the MUFG Group, therefore, relies on a statistical analysis that

F-13

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

incorporates historical loss factor percentages of total loans outstanding. Corresponding to the periodic
impairment identification and self-assessment process, the estimation of the formula allowance is back-tested by
comparing the allowance with the actual results subsequent to the balance sheet date. The results of such back-
testing are evaluated by management to determine whether the manner and level of formula allowance needs to
be changed in subsequent years.

The unallocated allowance represents an estimate of additional losses inherent in the loan portfolio and is
composed of attribution factors, which are based upon management’s evaluation of various conditions that are
not directly or indirectly measured in the determination of the allocated allowance. The conditions evaluated in
connection with the unallocated allowance may include existing general economic and business conditions
affecting the key lending areas of the MUFG Group, credit quality trends, collateral values, loan volumes and
concentrations, seasoning of the loan portfolio, specific industry conditions within portfolio segments, recent loss
experience in particular segments of the portfolio, duration of the current business cycle, bank regulatory
examination results and findings of the MUFG Group’s internal credit examiners.

Allowance for Off-Balance-Sheet Credit Instruments—The MUFG Group maintains an allowance for credit

losses on off-balance-sheet credit instruments, including commitments to extend credit, guarantees, standby
letters of credit and other financial instruments. The allowance is recorded as a liability in Other liabilities. The
MUFG Group adopts the same methodology used in determining the allowance for loan credit losses. Potential
credit losses related to derivatives are considered in the fair valuation of the derivatives.

Net changes in the allowance for off-balance-sheet credit instruments are accounted for as Other

non-interest expenses.

Premises and Equipment—Premises and equipment are stated at cost less accumulated depreciation and

amortization. Depreciation is charged to operations over the estimated useful lives of the related assets.
Leasehold improvements are depreciated over the terms of the respective leases or the estimated useful lives of
the improvements, whichever is shorter. MUFG, BTMU and MUTB apply the declining-balance method in
depreciating their premises and equipment, while other subsidiaries mainly apply the straight-line method, at
rates principally based on the following estimated useful lives:

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Years

15 to 50
2 to 20
7 to 39

Maintenance, repairs and minor improvements are charged to operations as incurred. Major improvements
are capitalized. Net gains or losses on dispositions of premises and equipment are included in Other non-interest
income or expense, as appropriate.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that

the carrying amount of an asset may not be recoverable. Recoverability of an asset to be held and used is
measured by a comparison of the carrying amount to future undiscounted net cash flows expected to be generated
by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount
by which the carrying amount of the asset exceeds the fair value. For purposes of recognition and measurement
of an impairment loss, a long-lived asset or assets are grouped with other assets and liabilities at the lowest level
with independent and identifiable cash flows. Assets to be disposed of by sale are reported at the lower of the
carrying amount or fair value less estimated cost to sell.

F-14

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Asset retirement obligations related to restoration of certain leased properties upon lease termination are
recorded in Other liabilities with a corresponding increase in leasehold improvements. The amounts represent the
present value of expected future cash flows associated with returning such leased properties to their original
condition. The difference between the gross and present value of expected future cash flows is accreted over the
life of the related leases as a non-interest expense.

Goodwill—The MUFG Group reports the excess of the cost of investments in subsidiaries over its share of

the fair value of net assets at the date of acquisition as Goodwill. Goodwill related to investments in equity
method investees is included in Other assets as a part of the carrying amount of investments in equity method
investees.

Goodwill arising from a business combination is not amortized but is tested for impairment in accordance

with SFAS No. 142, “Goodwill and Other Intangible Assets.” Goodwill is recorded at a designated reporting unit
level for the purpose of assessing impairment. A reporting unit is an operating segment, or an identified business
unit one level below an operating segment. An impairment loss is recognized to the extent that the carrying
amount of goodwill exceeds its implied fair value.

Intangible assets—Intangible assets consist of software, core deposit intangibles, customer relationships,
trade names and other intangible assets. These are amortized over their estimated useful lives unless they have
indefinite useful lives. Amortization of intangible assets is computed in a manner that best reflects the economic
benefits of the intangible assets as follows:

Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Core deposit intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Straight-line

3 to 10
5 to 18 Declining-balance
12 to 27 Declining-balance

5 to 40

Straight-line

Useful lives
(years)

Amortization method

Intangible assets having indefinite useful lives, primarily certain customer relationships, are not amortized

but are subject to annual impairment tests. An impairment exists if the carrying value of an indefinite-lived
intangible asset exceeds its fair value. For other intangible assets subject to amortization, an impairment is
recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair value of the
intangible asset.

The MUFG Group capitalizes certain costs associated with the acquisition or development of internal-use

software. Costs subject to capitalization are salaries and employee benefits for employees who are directly
associated with and who devote time to the internal-use computer software project, to the extent of time spent
directly on the project. Once the software is ready for its intended use, the MUFG Group begins to amortize
capitalized costs on a straight-line basis.

Accrued Severance and Pension Liabilities—The MUFG Group has defined benefit pension plans and other

postretirement benefit plans, including severance indemnities plans. The liabilities related to these plans are
computed and recognized based on actuarial computations. Net actuarial gains and losses that arise from
differences between actual experiences and assumptions are generally amortized over the average remaining
service period of participating employees if it exceeds the corridor, which is defined as the greater of 10% of plan
assets or the projected benefit obligation. Prior to the adoption of SFAS No. 158, “Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106,
and 132(R)” (“SFAS No. 158”), an excess of the accumulated benefit obligation over the plan assets was

F-15

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recognized in the consolidated balance sheets as the minimum liability, and a corresponding intangible assets was
recognized up to the amount equal to the total of unrecognized prior service cost and unrecognized net obligation
at transition. To the extent that the minimum liability exceeds the intangible asset, it was recognized in
accumulated other changes in equity from nonowner sources. The costs of the plans, based on actuarial
computations of current and future employee benefits, were charged to Salaries and employee benefits.

The MUFG Group adopted the recognition provisions of SFAS No. 158 as of March 31, 2007 and the
measurement date provisions of SFAS No. 158 as of April 1, 2008. See Accounting Changes—Defined Benefit
Pension and Other Postretirement Plans and Note 16 for further information.

Long-Term Debt—Premiums, discounts and issuance costs of long-term debt are amortized based on the

method that approximates the interest method over the terms of the long-term debt.

Obligations under Guarantees—The MUFG Group provides customers with a variety of guarantees and

similar arrangements, including standby letters of credit, financial and performance guarantees, credit
protections, and liquidity facilities. The MUFG Group recognizes guarantee fee income over the guarantee period
based on the contractual terms of the guarantee contracts. It is the MUFG Group’s dominant business practice to
receive a guarantee fee at the inception of the guarantee, which approximates market value of the guarantee and
is initially recorded as a liability, which is then recognized as guarantee fee income ratably over the guarantee
period.

Allowance for repayment of excess interest—The MUFG Group maintains an allowance for repayment of
excess interest, under SFAS No. 5, “Accounting for Contingencies,” based on an analysis of past experience of
reimbursement of excess interest, borrowers’ profile and recent trend of borrowers’ demand for reimbursement.
The allowance is recorded as a liability in Other liabilities.

Fees and Commissions—Revenue recognition of major components of fees and commissions is as follows:
‰

Fees on funds transfer and collection services, service charges on deposit accounts, fees and
commissions on securities business, fees on real estate business, insurance commissions, fees and
commissions on stock transfer agency services, fees on investment funds business, and fees and
commissions from other services are generally recognized as revenue when the related services are
performed or recognized over the period that the service is provided.

‰

‰

Fees from trade-related financing services are recognized over the period of the financing.

Trust fees are recognized on an accrual basis, generally based on the volume of trust assets under
management and/or the operating performance for the accounting period of each trust account. With
respect to trust accounts with guarantee of trust principal, trust fees are determined based on the profits
earned by individual trust account during the trust accounting period, less deductions, including
provision for reserve, impairment for individual investments and dividends paid to beneficiary
certificate holders. The trust fees for these trust accounts are accrued based on the amounts expected to
be earned during the accounting period of each trust account.

‰ Annual fees and royalty and other service charges related to credit card business are recorded on a

‰

‰

straight-line basis as services are provided.

Interchange income from credit card business is recognized as billed.

Fees on guarantees are generally recognized over the contractual periods of the respective guarantees.
Amounts initially recorded as a liability corresponding to the obligations at fair value are generally
recognized as revenue over the terms of the guarantees as the MUFG Group is deemed to be released
from the risk under guarantees.

F-16

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Income Taxes—The provision for income taxes is determined using the asset and liability method of

accounting for income taxes. Under this method, deferred income taxes reflect the net tax effects of
(1) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes, and (2) operating loss and tax credit carryforwards. A valuation
allowance is recognized for any portion of the deferred tax assets where it is considered more likely than not that
it will not be realized. The provision for deferred taxes is based on the change in the net deferred tax asset or
liability during the fiscal year.

Free Distributions of Common Shares—As permitted by the Company Law, Japanese companies, upon

approval by the Board of Directors, may make a free distribution of shares, in the form of a “stock split” as
defined, to shareholders. In accordance with generally accepted accounting practice in Japan, such distribution
does not give rise to any change in capital stock or capital surplus accounts. Common shares distributed are
recorded as shares issued on the distribution date. See Note 19 for further information.

Earnings (Loss) per Common Share—Basic earnings per share (“EPS”) excludes dilutive effects of potential

common shares and is computed by dividing income available to common stock shareholders by the weighted
average number of common shares outstanding for the period, while diluted EPS gives effect to all dilutive
potential common shares that were outstanding during the period. See Note 22 for the computation of basic and
diluted EPS.

Treasury Stock—The MUFG Group presents its treasury stock, including shares of MUFG owned by its
subsidiaries and affiliated companies, as a reduction of shareholders’ equity on the consolidated balance sheets at
cost and accounts for treasury stock transactions under an average cost method. Gains (losses) on sales of the
treasury stock are charged to capital surplus, and unappropriated retained earnings, pursuant to the provision of
Accounting Principles Board (“APB”) Opinion No. 6, “Status of Accounting Research Bulletins.”

Comprehensive Income (Loss)—The MUFG Group’s comprehensive income (loss) includes net income

(loss) and other changes in equity from nonowner sources. All changes in unrealized gains and losses on
investment securities available-for-sale, unrealized gains and losses on derivatives qualifying for cash flow
hedges, pension liability adjustments and foreign currency translation adjustments constitute the MUFG Group’s
changes in equity from nonowner sources and are presented, with related income tax effects, in the consolidated
statements of changes in equity from nonowner sources.

Stock-Based Compensation—MUFG and certain of its subsidiaries have stock-based compensation plans.

The MUFG Group adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”) on
April 1, 2006 under the modified prospective method, which resulted in a decrease in income from continuing
operations before income tax expense of ¥1,969 million and a decrease in income from continuing operations, net
of taxes, of ¥1,026 million for the fiscal year ended March 31, 2007, which includes estimated forfeitures for
restricted stock and the amortization of compensation costs related to unvested stock options. The corresponding
impact on both basic and diluted earnings per share was a reduction of ¥0.10 per share for the fiscal year ended
March 31, 2007. Subsequent to adoption of SFAS No. 123R, stock-based compensation expenses were
recognized based on the grant-date fair value of share based compensation plans over the period during which an
employee is required to provide service in exchange for the plans. See Accounting Changes—Share-Based
Payment and Note 31 for further discussion of the adoption of SFAS No. 123R and stock-based compensation
plans.

F-17

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Split

Effective September 30, 2007, MUFG declared a stock split whereby each common and preferred share was

split into 1,000 common and preferred shares. As a result, the number of shares and per share information have
been retroactively adjusted.

Reclassifications

Certain reclassifications and format changes have been made to the consolidated financial statements for the

fiscal years ended March 31, 2007 and 2008 to conform to the presentation for the fiscal year ended March 31,
2009.

These reclassifications and format changes include the presentation of “Net decrease (increase) in collaterals

for derivative transactions” as a separate line item in the consolidated statements of cash flows.

The MUFG Group’s total assets and liabilities have increased significantly, for all financial statements
presented, due to the retrospective adoption of an FASB Staff Position (“FSP”) on FASB Interpretation (“FIN”)
No. 39, “Amendment of FASB Interpretation No. 39” (“FSP FIN No. 39-1”). See Accounting Changes—Netting of
Cash Collateral against Derivative Exposures for further information.

These reclassifications and format changes did not result in a change to previously reported net loss or

shareholders’ equity.

Change in Accounting Estimates

MUFG and its domestic subsidiaries have reviewed the salvage values of premises and equipment and
decided to change the estimated salvage values of these assets to ¥1 during the fiscal year ended March 31, 2008.
Under the provision of SFAS No. 154, “Accounting Changes and Error Corrections, a replacement of APB
Opinion No. 20 and FASB Statement No. 3,” a change in salvage values of depreciable assets is treated as a
change in accounting estimate. The effect of this change has been reflected on a prospective basis beginning
April 1, 2007. This change had an adverse impact on income from continuing operations before income tax
expense and net loss of ¥53 billion and ¥31 billion, respectively, and a corresponding impact on both basic and
diluted loss per share of ¥3.04 per share for the fiscal year ended March 31, 2008.

The MUFG Group periodically updates underlying assumptions to make a current estimate of allowance for

credit losses. During the fiscal year ended March 31, 2008, in addition to such routine update of estimates to
reflect current conditions, BTMU adopted an advanced estimation to determine appropriate level of formula
allowance, which is estimated based primarily on the default ratio and recoverable ratio. Previously, recoverable
ratio was computed from the major cases of a default event such as legal bankruptcy. During the fiscal year
ended March 31, 2008, BTMU began incorporating other credit events for its recoverable ratio to better reflect
broader cases of default. In addition, BTMU made an adjustment for the impact of heterogeneous size of
borrowers among its loan portfolio to estimate the appropriate level of the formula allowance for the fiscal year
ended March 31, 2008. Since the default ratio is statistically computed by counting one credit event as one
regardless of the size of borrowers, BTMU commenced making an additional reserve by looking to monetary
level of past defaults in addition to the number of defaults. Similarly, during the fiscal year ended March 31,
2009, MUTB adopted an advanced estimation to determine appropriate level of formula allowance, which is
estimated based primarily on the default ratio and recoverable ratio. Previously, recoverable ratio was computed
according to the amount of the secured part of loan or appraisal of the collateral, which was discounted by a

F-18

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

certain rate. Due to the accumulation of the historical data, MUTB has begun incorporating the historical
recovery data of unsecured portion of loan and of the respective collaterals for its respective recoverable ratios
since the fiscal year ended March 31, 2009. For the fiscal year ended March 31, 2008, the effect from those
changes had a positive impact on income from continuing operations before income tax expense and net loss of
¥45 billion and ¥27 billion, respectively, and a corresponding impact on both basic and diluted loss per share of
¥2.60 per share. For the fiscal year ended March 31, 2009, the effect from those changes had a positive impact on
loss from continuing operations before income tax benefit and net loss of ¥104 billion and ¥62 billion,
respectively, and a corresponding impact on both basic and diluted loss per share of ¥5.69 per share.

The MUFG Group observed that the market for collateralized loan obligations (“CLOs”) backed by general

corporate loans became significantly inactive compared with normal market activity due to the reduction in
liquidity of certain debt securities resulting from the global financial market instability in the second half of the
fiscal year ended March 31, 2009. Under such circumstances, the MUFG Group concluded that the unadjusted
non-binding quotes from broker-dealers became less reflective of the fair value as defined by SFAS No. 157 with
respect to the CLOs backed by general corporate loans. Consequently, the MUFG Group changed the valuation
method for estimating the fair value of such CLOs from the method adopting unadjusted quotes from
independent broker-dealers to the estimation method by weighting the internal model prices and the non-binding
broker-dealer quotes during the second half of the fiscal year ended March 31, 2009. This change in valuation
method was treated as a change in accounting estimate and has been accounted for prospectively. This change in
valuation method had a positive impact on loss from continuing operations before income tax benefit and net loss
of ¥ 251 billion and ¥ 149 billion, respectively, and a corresponding impact on both basic and diluted loss per
share of ¥ 13.77 per share for the fiscal year ended March 31, 2009. This change also had a positive impact on
the ending balance of the accumulated other changes in equity from nonowner sources, net of taxes, of ¥ 38
billion at March 31, 2009. See Note 30 for the details of the valuation method.

Accounting Changes

Defined Benefit Pension and Other Postretirement Plans—In September 2006, the Financial Accounting

Standards Board (the “FASB”) issued SFAS No. 158. SFAS No. 158 requires entities to recognize a net liability
or asset to report the funded status of their defined benefit pension and other postretirement plans in its
consolidated statement of financial position and recognize changes in the funded status of defined benefit
pension and other postretirement plans in the year in which the changes occur in comprehensive income. SFAS
No. 158 also clarifies that defined benefit assets and obligations should be measured as of the date of the entity’s
fiscal year-end statement of financial position. The requirement to recognize the funded status as of the date of
the statement of financial position is effective for fiscal years ending after December 15, 2006. The requirement
to measure plan assets and benefit obligations as of the date of the statement of financial position is effective for
fiscal years ending after December 15, 2008.

The MUFG Group adopted the recognition provisions of SFAS No. 158 as of March 31, 2007 which

resulted in an increase in accumulated other changes in equity from nonowner sources of ¥178,784 million, net of
taxes, and had no impact on how the MUFG Group determined its net periodic benefit costs.

The MUFG Group adopted the measurement date provisions of SFAS No. 158 on April 1, 2008 which

changed the measurement date for plan assets and benefit obligations of BTMU and some of its domestic
subsidiaries from December 31 to March 31 by using an approach that remeasured plan assets and benefit
obligations as of March 31, 2008. The MUFG Group recognized ¥411 million in gains on settlement during the
period from January 1, 2008 to March 31, 2008 and recorded a decrease in the beginning balance of retained
earnings as of April 1, 2008 by ¥132 million, net of taxes, and a decrease in the beginning balance of
accumulated other changes in equity from nonowner sources as of April 1, 2008 by ¥131,574 million, net of

F-19

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

taxes, as a result of adopting this provision. The impact on the beginning balance of accumulated other changes
in equity from nonowner sources upon adoption of the measurement date provisions of SFAS No. 158 as of
April 1, 2008 is mainly due to a decrease in the fair value of plan assets of ¥175,680 million and an increase in
benefit obligations of ¥32,382 million, net of ¥4,333 million in settlements during the period from
January 1, 2008 to March 31, 2008 recognized as lump-sum payments for the fiscal year ended March 31, 2008.
The increase was caused by a decline in the discount rate from December 31, 2007 to March 31, 2008.

Uncertainty in Income Taxes—In June 2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in
Income Taxes.” FIN No. 48 requires recognition of a tax benefit to the extent of management’s best estimate of
the impact of a tax position based on the technical merits of the position, provided it is more likely than not that
the tax position will be sustained upon examination, including resolution of any related appeals or litigation
processes. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting
in interim periods, disclosure, and transition. The MUFG Group adopted FIN No. 48 on April 1, 2007, which
reduced the beginning balance of retained earnings by ¥4,091 million. The MUFG Group classifies accrued
interest and penalties, if applicable, related to income taxes as income tax expenses.

Leveraged Leases—In July 2006, the FASB issued an FSP on SFAS No. 13, “Accounting for a Change or

Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease
Transaction.” This FSP requires that if, during the lease term, the projected timing of the income tax cash flows
generated by a leveraged lease is revised, the rate of return and the allocation of income shall be recalculated
from the inception of the lease. At adoption, the cumulative effect of applying the provisions of this FSP shall be
reported as an adjustment to the beginning balance of retained earnings as of the beginning of the period in which
it is adopted. This FSP is effective in fiscal years beginning after December 15, 2006. The MUFG Group adopted
this FSP on April 1, 2007, which reduced the beginning balance of retained earnings by ¥5,725 million, net of
taxes. The reduction to retained earnings at adoption will be recognized in interest income over the remaining
terms of the affected leases as tax benefits are realized.

Fair Value Measurements—In September 2006, the FASB issued SFAS No. 157. SFAS No. 157 defines fair
value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that
require or permit fair value measurements, the FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute. Accordingly, SFAS No. 157 does not
require any new fair value measurements. Under SFAS No. 157, fair value refers to the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. SFAS No. 157 clarifies the principle that fair value should be based on the assumptions
market participants would use when pricing the asset or liability. In support of this principle, SFAS No. 157
establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair
value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to
unobservable data, for example, the reporting entity’s own data. Under SFAS No. 157, fair value measurements
would be separately disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal
years, with early adoption permitted. SFAS No. 157 shall be applied prospectively, except for the provisions
related to block discounts, and existing derivative and hybrid financial instruments measured at fair value under
SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as modified by SFAS No. 155,
“Accounting for Certain Hybrid Financial Instruments”, using the transaction price in accordance with the
guidance in the FASB Emerging Issues Task Force (the “EITF”) Issue No. 02-3 “Issues Involved in Accounting
for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk
Management Activities.” SFAS No. 157 nullifies the guidance in EITF Issue No. 02-3 which requires the deferral
of trade date gains or losses on derivatives where the fair value of those derivatives were not obtained from a

F-20

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

quoted market price, supported by comparison to other observable market transactions, or based upon a valuation
technique incorporating observable market data. SFAS No. 157 also precludes the use of a blockage factor when
measuring financial instruments traded in an active market at fair value and requires consideration of
nonperformance risk when measuring liabilities at fair value. Effective April 1, 2008, the MUFG Group adopted
SFAS No. 157. Upon adoption of SFAS No. 157, the difference between the carrying amount and fair value of
the derivatives measured using the guidance in EITF Issue No. 02-3 was recognized as a cumulative effect to the
beginning balance of retained earnings as of April 1, 2008 in the amount of ¥27,317 million, net of taxes.

In February 2008, the FASB issued an FSP on SFAS No. 157, “Application of FASB Statement No. 157 to

FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13” (“FSP SFAS No. 157-1”) and an FSP on
SFAS No. 157, “Effective Date of FASB Statement No. 157” (“FSP SFAS No. 157-2”). FSP SFAS No. 157-1
amends SFAS No. 157 to exclude SFAS No. 13, “Accounting for Leases,” and other accounting pronouncements
that address fair value measurements for purposes of lease classification or measurement under SFAS No. 13.
However, this scope exception does not apply to assets acquired and liabilities assumed in a business
combination that are required to be measured at fair value under SFAS No. 141, or SFAS No. 141R, “Business
Combinations” (“SFAS No. 141R”), regardless of whether those assets and liabilities are related to leases. FSP
SFAS No. 157-2 applies to nonfinancial assets and nonfinancial liabilities, except for items that are recognized or
disclosed at fair value in an entity’s financial statements on a recurring basis and defers the effective date of
SFAS No. 157 to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years
for those items. The MUFG Group adopted these FSPs on April 1, 2008 and applied SFAS No. 157 to all
financial assets and liabilities measured and disclosed on a fair value basis, excluding the nonfinancial assets and
liabilities as described in FSP SFAS No. 157-2. The nonrecurring nonfinancial assets and nonfinancial liabilities
for which the MUFG Group has not applied the provisions of SFAS No. 157 include premises and equipment,
intangible assets and goodwill measured at fair value for impairment.

In October 2008, the FASB issued an FSP on SFAS No. 157, “Determining the Fair Value of a Financial

Asset When the Market for That Asset Is Not Active” (“FSP SFAS No. 157-3”), to clarify how an entity would
determine fair value in a market that is not active. FSP SFAS No. 157-3 was effective upon issuance. The
adoption of FSP SFAS No. 157-3 did not have a material impact on the MUFG Group’s financial position and
results of operations. See Note 30 for a further discussion of the adoption of SFAS No. 157.

Fair Value Option for Financial Assets and Financial Liabilities—In February 2007, the FASB issued
SFAS No. 159. SFAS No. 159 allows entities to choose, at specified election dates, to measure eligible financial
assets and liabilities and certain other items at fair value that are not otherwise required to be measured at fair
value. If a company elects the fair value option for an eligible item, changes in that item’s fair value in
subsequent reporting periods must be recognized in current earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. Early adoption is permitted subject to certain conditions. The MUFG Group
adopted SFAS No. 159 on April 1, 2008. The MUFG Group elected the fair value option for foreign securities
classified as available-for-sale held by BTMU and MUTB in the amount of ¥10,448,079 million, whose
unrealized gains and losses were reported within accumulated other changes in equity from nonowner sources as
of March 31, 2008. BTMU and MUTB economically manage, through their asset and liability management
activities, risks associated with their foreign currency-denominated financial assets and liabilities related to
fluctuation of foreign exchange rates. However, prior to the adoption of SFAS No. 159 for these securities, gains
and losses on translation of these securities were reflected in other changes in equity from nonowner sources,
while gains and losses on translation of foreign currency-denominated financial liabilities were included in
current earnings. The MUFG Group elected the fair value option for these securities to mitigate accounting
mismatches related to fluctuations of foreign exchange rates. As a result of adopting the fair value option on
these securities, MUFG recorded an increase in the beginning balance of retained earnings as of April 1, 2008 of

F-21

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

¥20,150 million, net of taxes. In addition, the MUFG Group elected the fair value option for certain financial
instruments held by MUS’s foreign subsidiaries, which increased the beginning balance of retained earnings as of
April 1, 2008 of ¥12,829 million, net of taxes.

Netting of Cash Collateral against Derivative Exposures—In April 2007, the FASB staff issued FSP FIN

No. 39-1. This FSP permits offsetting of fair value amounts recognized for the right to reclaim cash collateral (a
receivable) or obligation to return cash collateral (a payable) against fair value amounts recognized for derivative
instruments executed with the same counterparty under the same master netting arrangements, and amends FIN
No. 39 to replace the terms “conditional contracts” and “exchange contracts” with the term “derivative
instruments”, as defined in SFAS No. 133. Upon adoption of this FSP, a reporting entity is permitted to change
its accounting policy to offset or not offset fair value amounts recognized for derivative instruments under master
netting arrangements, however, the effect of applying this FSP is required to be recognized as a change in
accounting principle through retrospective application for all financial statements presented unless it is
impracticable to do so. This FSP is effective for the fiscal year beginning after November 15, 2007. Effective
April 1, 2008, the MUFG Group discontinued netting its derivative assets and liabilities under master netting
agreements and present them on a gross basis. Cash collateral paid and cash collateral received continue to be
presented on a gross basis. This change has significantly increased the MUFG Group’s total assets and liabilities
retrospectively for all financial statements presented and is accounted for as a change in accounting principle.
This change did not result in a change in previously reported total shareholders’ equity.

The effects of adoption of FSP FIN No. 39-1 on the MUFG Group’s March 31, 2008 consolidated balance

sheet were as follows:

March 31, 2008

As previously
reported

As adjusted

(in millions)

Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 13,411,755
5,447,892
190,731,786
2,927,411
4,687,702
190,731,786

¥ 18,444,633
5,449,311
195,766,083
7,961,578
4,687,832
195,766,083

Accordingly, consolidated statements of cash flows were also adjusted for the fiscal year ended March 31,

2007 and 2008.

Income tax benefits on Share-Based Payment Awards—In June 2007, the EITF reached a consensus on

Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards”
(“EITF 06-11”), which was ratified by the FASB in June 2007. EITF 06-11 requires that realized tax benefits
from dividends or dividend equivalents paid on equity-classified share-based payment awards that are charged to
retained earnings should be recorded as an increase to additional paid-in capital and included in the pool of
excess tax benefits available to absorb tax deficiencies on share-based payment awards. EITF 06-11 is effective
prospectively for the income tax benefits on dividends declared in fiscal years beginning after December 15,
2007. The MUFG Group adopted EITF 06-11 on April 1, 2008, which had no material impact on its financial
position and results of operations.

Hierarchy of GAAPs—In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally

Accepted Accounting Principles.” The main objective of SFAS No. 162 is to include the GAAP Hierarchy within

F-22

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the accounting literature established by the FASB rather than within AICPA’s Statement on Auditing Standards
No. 69, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” SFAS
No. 162 is effective from November 15, 2008. Adoption of SFAS No. 162 had no material impact on the MUFG
Group’s financial position and results of operations.

Disclosures about Credit Derivatives and Certain Guarantees—In September 2008, the FASB staff issued

an FSP on SFAS No. 133 and FIN No. 45 “Disclosures about Credit Derivatives and Certain Guarantees: An
Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date
of FASB Statement No. 161 (“FSP SFAS No. 133-1 and FIN No. 45-4”). This FSP amends SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities,” to require sellers of credit derivatives to
disclose additional information about its credit derivatives and hybrid instruments that have embedded credit
derivatives. In addition, the FSP amends FIN No. 45, “Guarantor’s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others—an interpretation of FASB Statements
No. 5, 57, and 107 and rescission of FASB interpretation No. 34,” and requires guarantors to additionally
disclose the current status of the payment/performance risk of the guarantee so that the disclosure will provide
similar information to the disclosure relating to credit derivatives and hybrid instruments that have embedded
credit derivatives under SFAS No. 133, as amended by this FSP. This FSP is effective for the annual or interim
reporting periods ending after November 15, 2008. The MUFG Group adopted this FSP on March 31, 2009,
which had no material impact on its financial position and results of operations. See Notes 23 and 24 for
additional disclosures provided upon adoption of this FSP.

Disclosure about Transfers of Financial Assets and Involvement with Variable Interest Entities—In
December 2008, the FASB issued an FSP on SFAS No. 140 and FIN No. 46R, “Disclosures by Public Entities
(Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities” (“FSP SFAS
No. 140-4 and FIN No. 46R-8”). This FSP requires enhanced disclosures about continuing involvements with
transferred financial assets and involvement with variable interest entities. The requirements apply to transferors,
sponsors, servicers, primary beneficiaries and holders of significant variable interests in a variable interest entity
or qualifying special purpose entity. This FSP is effective prospectively for the first interim or annual reporting
period ending after December 15, 2008, with disclosures of comparative information in period earlier than the
effective date encouraged. The MUFG Group adopted this FSP on March 31, 2009, which had no material impact
on its financial position and results of operations. See Note 6 and Note 25 for additional disclosures provided
upon adoption of this FSP.

Impairment Guidance for Beneficial Interests—In January 2009, the FASB issued an FSP on EITF 99-20,
“Amendments to the Impairment Guidance of EITF Issue No. 99-20” (“FSP EITF 99-20-1”). This FSP amends
the impairment guidance in EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on
Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a transferor in a Securitized
Financial Assets” (“EITF 99-20”). This FSP revises EITF 99-20’s impairment guidance for beneficial interests to
make it consistent with the requirements of SFAS No. 115, “Accounting for Certain Investments in Debt and
Equity Securities” for determining whether an impairment of debt and equity securities has occurred. The SFAS
No. 115 impairment model enables greater judgment to be exercised in determining whether an other than
temporary impairment needs to be recorded. The impairment model previously provided for in EITF 99-20
limited management’s use of judgment in applying the impairment model. This FSP is effective prospectively for
interim and annual reporting periods ending after December 15, 2008 with retrospective application prohibited.
The MUFG Group adopted this FSP on March 31, 2009, which did not have a material impact on its financial
position and results of operations.

Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements—In September 2006, the EITF reached a consensus on EITF Issue No. 06-4, “Accounting for
Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance

F-23

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Arrangements.” This EITF requires that an agreement by the employer to share a portion of the proceeds of a life
insurance policy with the employee during the postretirement period is a postretirement benefit arrangement for
which a liability must be recorded. The MUFG Group adopted this EITF on April 1, 2008, which did not have a
material impact on its financial position and results of operations.

Recently Issued Accounting Pronouncements

Investment Company Accounting—In June 2007, the AICPA issued SOP 07-1, “Clarification of the Scope

of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity
Method Investors for Investments in Investment Companies.” SOP 07-1 provides guidance for determining
whether an entity is within the scope of the AICPA Audit and Accounting Guide Investment Companies (the
“AICPA Guide”). The statement also addresses whether the specialized industry accounting principles of the
AICPA Guide should be retained by a parent company in consolidation or by an investor that has the ability to
exercise significant influence over the investment company and applies the equity method of accounting to its
investment in the entity. In addition, in May 2007, the FASB staff issued an FSP on FIN No. 46R, “Application
of FIN No. 46R to Investment Companies” (“FSP FIN No. 46R-7”), which amends FIN No. 46R, “Consolidation
of Variable Interest Entities—An Interpretation of ARB No. 51,” to make permanent the temporary deferral of
the application of FIN No. 46R to entities within the scope of the revised audit guide under SOP 07-1. These new
standards were expected to be effective for fiscal years beginning on or after December 15, 2007, with earlier
application encouraged. However, in February 2008, the FASB issued an FSP on SOP 07-1, “Effective Date of
AICPA Statement of Position 07-1” (“FSP SOP 07-1-1”), to delay indefinitely the effective dates of SOP 07-1
and the application of FSP FIN No. 46R-7 in order to address implementation issues. For entities that have not
yet adopted the provisions of SOP 07-1 and FSP FIN No. 46R-7, early adoption will not be permitted during the
indefinite deferral.

Business Combinations—In December 2007, the FASB issued SFAS No. 141R. SFAS No. 141R will
significantly change the accounting for business combinations while retaining the fundamental requirements in
SFAS No. 141, that the acquisition method of accounting (which SFAS No. 141 called the purchase method) be
used for all business combinations and for an acquirer to be identified for each business combination. SFAS
No. 141R further expands the definitions of a business and the fair value measurement and reporting in a
business combination. SFAS No. 141R states that all business combinations (whether full, partial or step
acquisitions) will result in all the assets acquired and liabilities assumed and any noncontrolling (minority)
interests in the acquiree being recorded at their acquisition-date fair values with limited exceptions. Certain forms
of contingent considerations and certain acquired contingencies will be recorded at their acquisition-date fair
value. SFAS No. 141R also states acquisition costs will generally be expensed as incurred, restructuring costs
will be expensed in periods after the acquisition date, and changes in deferred tax asset valuation allowances and
income tax uncertainties after the acquisition date generally will affect income tax expense. SFAS No. 141R also
includes a substantial number of new disclosure requirements to disclose all information needed to evaluate and
understand the nature and financial effect of the business combination. SFAS No. 141R applies prospectively to
business combinations for which the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008 with early adoption prohibited. The MUFG Group has not
completed the study of what effect SFAS No. 141R will have on its financial position and results of operations.

Noncontrolling Interests—In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in

Consolidated Financial Statements—an amendment of ARB No. 51.” SFAS No. 160 requires a company to
clearly identify and present ownership interests in subsidiaries held by parties other than the parent in the
consolidated financial statements within the equity section but separate from the parent’s equity. It also requires
the following changes: (1) the amount of consolidated net income attributable to the parent and to the
noncontrolling interest should be clearly identified and presented on the face of the consolidated statements of

F-24

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

operations; (2) changes in parent’s ownership interest while the parent retains its controlling financial interest in
its subsidiary should be accounted for as equity transactions; and (3) when a subsidiary is deconsolidated, any
retained noncontrolling equity investment in the former subsidiary and the gain or loss on the deconsolidation of
the subsidiary should be measured at fair value. SFAS No. 160 is effective for financial statements issued for
fiscal years beginning on or after December 15, 2008 with early adoption prohibited. The MUFG Group has not
completed the study of what effect SFAS No. 160 will have on its financial position and results of operations.

Disclosure about Derivative Instruments and Hedging Activities—In March 2008, the FASB issued SFAS
No. 161, “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement
No. 133.” SFAS No. 161 requires enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and
(c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance,
and cash flows. The significant additional disclosures required by SFAS No. 161 include (1) a tabular summary of
the fair values of derivative instruments and their gains and losses, (2) disclosure of credit-risk-related contingent
features in order to provide more information regarding an entity’s liquidity from using derivatives, and (3) cross-
referencing within footnotes to make it easier for financial statement users to locate important information about
derivative instruments. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008, with early
application encouraged. It encourages but does not require comparative disclosures for earlier periods at initial
adoption. SFAS No. 161 will only affect the MUFG Group’s disclosures of derivative instruments and related
hedging activities, and will not affect its financial position and results of operations.

Accounting for Transfers of Financial Assets and Repurchase Financing Transactions—In February 2008,

the FASB issued an FSP on SFAS No. 140, “Accounting for Transfers of Financial Assets and Repurchase
Financing Transactions” (“FSP SFAS No. 140-3”). This FSP requires that an initial transfer of a financial asset
and a repurchase financing that was entered into contemporaneously with, or in contemplation of, the initial
transfer be evaluated together as a linked transaction under SFAS No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities—a replacement of FASB Statement No. 125”
unless certain criteria are met. FSP SFAS No. 140-3 is effective for the fiscal years beginning on or after
November 15, 2008, with early adoption prohibited. The MUFG Group has not completed the study of what
effect FSP SFAS No. 140-3 will have on its financial position and results of operations.

Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating
Securities—In June 2008, the FASB issued an FSP on EITF Issue No. 03-6, “Determining Whether Instruments
Granted in a Share-Based Payment Transaction are Participating Securities” (“FSP EITF No. 03-6-1”). FSP EITF
No. 03-6-1 concludes that unvested share-based payment awards which contain nonforfeitable rights to dividends
should be considered equivalent to participating securities and included in the computation of EPS using the
two-class method under SFAS No. 128, “Earnings Per Share.” FSP EITF No. 03-6-1 is effective retrospectively for
the fiscal years beginning on or after December 15, 2008 with early adoption prohibited. The MUFG Group has not
completed the study of what effect FSP EITF No. 03-6-1 will have on its financial position and results of operations.

Employers’ Disclosures and Postretirement Benefit Plan Assets—In December 2008, the FASB issued an

FSP on SFAS No. 132R, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP SFAS
No. 132R-1”). The FSP contains amendments to SFAS No. 132R, “Employers’ Disclosures about Pensions and
Other Postretirement Benefits,” that are intended to enhance the transparency surrounding the types of assets and
associated risks in an employer’s defined benefit pension or other postretirement plan. This FSP expands the
disclosures set forth in SFAS No. 132R by adding required disclosures about: (1) how investment allocation
decisions are made by management, (2) major categories of plan assets, and (3) significant concentrations of risk.
Additionally, the FSP requires an employer to disclose information about the valuation of plan assets similar to
that required under SFAS No. 157. The new disclosures are required to be included in financial statements for

F-25

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

fiscal years ending after December 15, 2009 with early application permitted. This FSP only requires additional
disclosures, and will not affect the MUFG Group’s financial position and results of operations.

Recognition and Presentation of Other-Than-Temporary Impairments—In April 2009, the FASB staff
issued an FSP on SFAS No. 115 and SFAS No. 124, “Recognition and Presentation of Other-Than-Temporary
Impairment” (“FSP SFAS No. 115-2 and SFAS No. 124-2”). This FSP amends the other-than-temporary
impairment guidance for debt securities and improves the presentation and disclosure of other-than-temporary
impairments on debt and equity securities in the financial statements. This FSP requires an entity to recognize an
other-than-temporary impairment of a debt security if the entity has the intent to sell the debt security or if it is
more likely than not the entity will be required to sell the debt security before recovery of its amortized cost
basis. In addition, this FSP requires an entity to recognize the credit component of an other-than-temporary
impairment of a debt security in earnings and the noncredit component in other comprehensive income when the
entity does not intend to sell the debt security and if it is more likely than not that the entity will not required to
sell the debt security before recovery of its amortized cost basis. This FSP also requires additional disclosures
regarding the calculation of credit losses, as well as factors considered in reaching a conclusion that an
investment is not other than temporarily impaired. This FSP is effective for interim and annual reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The MUFG
Group has not completed the study of what effect this FSP will have on its financial position and results of
operations.

Measurement of Fair Value in Inactive Markets—In April 2009, the FASB staff issued an FSP on SFAS

No. 157, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP SFAS No. 157-4”). This FSP
provides additional guidance for estimating fair value when the volume and level of activity for the asset or
liability have significantly decreased and includes guidance on identifying circumstances that indicate a
transaction is not orderly. This FSP also amends the disclosure provisions of SFAS No. 157 to require entities to
disclose on interim and annual periods the inputs and valuation techniques used to measure fair value and
provide, by major categories of debt and equity securities identified in accordance with SFAS No. 115, the SFAS
No. 157 hierarchy and Level 3 roll-forward disclosures. This FSP is effective prospectively for interim and
annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15,
2009. The impact of the adoption is not expected to be significant on the MUFG Group’s financial position and
results of operations.

Interim Disclosures about Fair Value of Financial Instruments—In April 2009, the FASB staff issued an

FSP on SFAS No. 107 and APB Opinion No. 28, “Interim Disclosures about Fair Value of Financial
Instruments” (“FSP SFAS No. 107-1 and APB Opinion No. 28-1”). This FSP amends the guidance in SFAS
No. 107, “Disclosures about Fair Value of Financial Instruments,” to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded companies as well as in annual financial
statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those
disclosures in summarized financial information at interim reporting periods. This FSP is effective for interim
reporting periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15,
2009. This FSP only requires additional disclosures, and will not affect the MUFG Group’s financial position and
results of operations.

Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies—In April 2009, the FASB staff issued an FSP on SFAS No. 141R, “Accounting for Assets
Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies” (“FSP SFAS
No. 141R-1”). This FSP amends and clarifies SFAS No. 141R to require that assets acquired and liabilities
assumed in a business combination that arise from contingencies be recognized at fair value, as determined in

F-26

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

accordance with SFAS No. 157, if the acquisition date fair value can be reasonably determined. If the acquisition
date fair value of such an asset or liability cannot be reasonably determined, the asset or liability would be
measured using existing accounting guidance. This FSP is effective for assets or liabilities arising from
contingencies in business combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after December 15, 2008. The MUFG Group has not completed the
study of what effect this FSP will have on its financial position and results of operations.

Subsequent Events—In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”

(“SFAS No. 165”). SFAS No. 165 distinguishes between the date that the financial statements are issued from
the date that the financial statements are available to be issued and requires that the disclosure identify the date
through which an entity has evaluated subsequent events on that basis. This disclosure should also highlight that
an entity has not evaluated subsequent events after that date. SFAS No. 165 shall be effective for interim or
annual financial periods ending after June 15, 2009. The MUFG Group does not expect SFAS No. 165 to have a
significant impact on its financial position and results of operations.

Amendment of Accounting for Transfers of Financial Assets—In June 2009, the FASB issued SFAS
No. 166, “Accounting for Transfers of Financial Assets—An Amendment of FASB Statement No. 140” (“SFAS
No. 166”) which clarifies the application of certain derecognition concepts in SFAS No. 140 and eliminates the
concept of a qualifying special purpose entity from SFAS No. 140. SFAS No. 166 clarifies the concept of
“surrendered control” to consider any continuing involvement with the transferred assets regardless of when the
terms were agreed. In addition, SFAS No. 166 introduces the term “participating interest” to establish specific
conditions for reporting a transfer of a portion of a financial asset as a sale. Finally, SFAS No. 166 eliminates
certain alternatives with respect to initial recognition and measurement and requires that a transferor recognize
and initially measure all assets obtained including a transferor’s beneficial interest and liabilities incurred as a
result of a transfer of financial assets accounted for as a sale, at fair value. SFAS No. 166 is effective for the first
annual reporting period beginning after November 15, 2009, and interim periods within that year. Early adoption
is prohibited. The MUFG Group has not completed the study of what effect SFAS No. 166 will have on its
financial position and results of operations.

Amendment of Accounting for Consolidation of Variable Interest Entities—In June 2009, the FASB issued

SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”(“SFAS No. 167”). SFAS No. 167 changes
certain aspects of FIN No. 46(R). SFAS No. 167 changes the current guidance by modifying the characteristics
for assessing a primary beneficiary to include entities that have the power to direct the activities of the variable
interest entity which significantly impact its economic performance and the right to absorb losses or receive
benefits that could potentially be significant to the entity. This must be reassessed on an ongoing basis. In
addition, SFAS No. 167 amends the identification of variable interest entities by eliminating the scope exception
for qualified special purpose entities and adding an additional reconsideration event for determining whether an
entity is a variable interest entity. SFAS No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, and interim periods within that year. Early adoption is prohibited. The MUFG Group has
not completed the study of what effect SFAS No. 167 will have on its financial position and results of operations.

The Codification and the Hierarchy of GAAPs—In June 2009, the FASB voted to approve the “FASB

Accounting Standards Codification” (the “Codification”) to be the single source of authoritative
non-governmental US GAAP and issued SFAS No. 168, “The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (SFAS
No. 168”). The Codification is not meant to change US GAAP, but is intended to improve the ease of researching
US GAAP issues. The Codification reorganizes existing US GAAP pronouncements, relevant portions of
authoritative content issued by the US Securities and Exchange Commission (“SEC”), and SEC staff
interpretations and administrative guidance, into approximately 90 accounting topics. Once the Codification is
launched on July 1, 2009, it is the single source of authoritative US GAAP. On the effective date of

F-27

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

SFAS No. 168, the Codification supersedes all then-existing non-SEC accounting and reporting standards to
become the single source of authoritative non-governmental US GAAP. All other nongrandfathered non-SEC
accounting literature not included in the Codification will become nonauthoritative. SFAS No. 168 represents the
final standard that the FASB will issue in the form of Statements, FASB Staff Positions, or Emerging Issues Task
Force Abstracts. All subsequent standards will be issued as “Accounting Standard Updates,” which will serve
only to update the Codification. The Codification and SFAS No. 168 are effective for financial statements issued
for interim and annual periods ending after September 15, 2009.

2. DISCONTINUED OPERATIONS

During the fiscal year ended March 31, 2006, UnionBanCal Corporation (“UNBC”), a U.S. subsidiary of

BTMU whose results were reported as a separate business segment, signed a definitive agreement to sell its
international correspondent banking operations to Wachovia Bank, N.A., effective October 6, 2005, and the
principal legal closing of the transaction took place on the same day, with UNBC receiving ¥25,220 million in
cash from Wachovia Bank, N.A. At the principal closing, no loans or other assets were acquired by Wachovia
Bank, N.A., and no liabilities were assumed. UNBC continued to operate the international business over a
transition period of several months. All of UNBC’s offices designated for disposal were closed as of June 30,
2006. During the fiscal year ended March 31, 2007, UNBC received an additional ¥466 million as a contingent
purchase price payment.

The MUFG Group accounted for these transactions as discontinued operations in accordance with
SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” and presented the results of
discontinued operations as a separate line item in the consolidated statements of operations. In addition, assets to
be disposed or sold, accounted for at the lower of cost or fair value, and liabilities to be extinguished or assumed
in connection with discontinued operations were presented as separate assets and liabilities, respectively, in the
consolidated balance sheets.

Interest expense was attributed to discontinued operations based on average net assets. The amount of
interest expense allocated to discontinued operations for the fiscal years ended March 31, 2007, 2008 and 2009
was ¥209 million, nil and nil, respectively.

During the fiscal year ended March 31, 2008, UNBC entered into a Deferred Prosecution Agreement with
the United States Department of Justice (“DOJ”) relating to past violations of Bank Secrecy Act and other anti-
money laundering regulations that occurred in UNBC’s now discontinued international banking business. As part
of this agreement, UNBC paid the DOJ ¥2,545 million for the fiscal year ended March 31, 2008. The
¥2,545 million payment and ¥194 million of related legal and other outside services costs were allocated to
discontinued operations as these past violations pertained to UNBC’s international banking business. The income
tax benefit of ¥69 million for the fiscal year ended March 31, 2008 reflects the nondeductibility of the
¥2,545 million payment to the DOJ.

The components of loss from discontinued operations for the fiscal years ended March 31, 2007, 2008 and

2009 were as follows:

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,604

¥ — ¥ —

2007

2008

2009

(in millions)

Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interest in loss of consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit
Loss from discontinued operations—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-28

¥(2,451) ¥(2,739) ¥ —
—
—
—
¥ (817) ¥(1,746) ¥ —

466
(434)
(734)

—
(924)
(69)

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

3. BUSINESS DEVELOPMENTS

Mitsubishi UFJ NICOS Co., Ltd.

On April 1, 2007, the merger between UFJ NICOS Co., Ltd. (“UFJ NICOS”) and DC Card Co., Ltd. (“DC
Card”), two credit card subsidiaries of BTMU, came into effect with UFJ NICOS being the surviving entity and
UFJ NICOS renamed Mitsubishi UFJ NICOS. Each share of DC Card’s common stock was exchanged for 30
shares of UFJ NICOS’s common stock. The assets and liabilities acquired through the purchase of the minority
interest in DC Card were measured based on their fair value as of April 1, 2007. The MUFG Group initially
recorded approximately ¥4 billion of intangible assets.

On November 6, 2007, MUFG acquired ¥120 billion of new common shares in Mitsubishi UFJ NICOS. As
a result, the MUFG Group has approximately 76% ownership of Mitsubishi UFJ NICOS compared with its prior
holding of approximately 66%. The assets and liabilities acquired through the purchase of Mitsubishi UFJ
NICOS shares were measured based on their fair value. The MUFG Group initially recorded approximately
¥19 billion of goodwill and approximately ¥16 billion of intangible assets. The objectives of this additional
investment are to strengthen the financial base of Mitsubishi UFJ NICOS, utilize its financial resources
effectively, and develop a new credit business strategy due to the changing business environment for consumer
finance companies in Japan.

The MUFG Group reorganized the capital structure of Mitsubishi UFJ NICOS, a 76%-owned subsidiary, by

eliminating the only outstanding class of capital stock other than the common stocks and by having The
Norinchukin Bank (“Norinchukin”) become the sole minority shareholder. This reorganization was carried out in
order to further enhance the strategic integrity and flexibility of the MUFG Group and to strive for effective
utilization of managerial resources within the MUFG Group.

Pursuant to such reorganization, on August 1, 2008, MUFG acquired, through a share exchange, all the
outstanding Mitsubishi UFJ NICOS common stock and all the outstanding Mitsubishi UFJ NICOS Class 1 stock
whereby MUFG issued MUFG common stock at a ratio of 0.37 shares of MUFG common stock for every one
share of Mitsubishi UFJ NICOS common stock and 1.39 shares of MUFG common stock for every one share of
Mitsubishi UFJ NICOS Class 1 stock. MUFG, then, sold 244 million shares of Mitsubishi UFJ NICOS common
stock to Norinchukin. Furthermore, MUFG converted all of Mitsubishi UFJ NICOS Class 1 stock acquired from
Norinchukin into Mitsubishi UFJ NICOS common stock. As a result, the ownership by MUFG of Mitsubishi UFJ
NICOS decreased to approximately 85% from 100%.

The foregoing reorganization was accounted for as follows:

The assets and liabilities acquired through the purchase of the minority interest of Mitsubishi UFJ NICOS
were accounted for using the purchase method of accounting and were recorded based on their fair value as of
August 1, 2008. The MUFG common stock issued in the share exchange were valued at ¥131 billion based on the
average market price for a reasonable period before and after the date the terms of the acquisition were agreed to
and announced. As a result, MUFG owned all the outstanding Mitsubishi UFJ NICOS common stocks. The
MUFG Group recorded approximately ¥23 billion of goodwill and ¥27 billion of intangible assets.

The acquisition of Mitsubishi UFJ NICOS Class 1 stock and the sale of Mitsubishi UFJ NICOS common
stock were treated as one unit of account within the context of MUFG’s conversion of the Class 1 stock. The
foregoing transactions were accounted for as: (i) capital transaction representing an induced conversion by
Norinchukin of Mitsubishi UFJ NICOS Class 1 stock for approximately 186.6 million shares of Mitsubishi UFJ
NICOS common stock, and (ii) the sale by MUFG of approximately 57.4 million shares of Mitsubishi UFJ
NICOS common stock, and (iii) issuance of 69.5 million shares of MUFG common stock. As a result, MUFG

F-29

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recognized a credit to capital surplus of ¥71 billion and recognized ¥8 billion as a direct charge to retained
earnings representing the effect of the inducement calculated based on the excess number of Mitsubishi UFJ
NICOS common stock deemed received by Norinchukin (over the number of Mitsubishi UFJ NICOS common
stock that it would have otherwise received had it converted Mitsubishi UFJ NICOS Class 1 stock under its
contractual terms). In addition, gains on the sale of the 57.4 million shares of Mitsubishi UFJ NICOS common
stock of ¥6 billion were recognized in the statements of operations. Furthermore, net loss attributable to common
stockholders was increased by ¥8 billion attributable to the effect of the induced conversion in the calculation of
earnings per share.

All the MUFG common stock issued to effect the foregoing transactions were previously held as treasury
stocks. The difference between their carrying amounts and the amount at which the corresponding reissuance was
measured was respectively recorded in capital surplus and unappropriated retained earnings, pursuant to the
provision of APB Opinion No. 6, “Status of Accounting Research Bulletins”.

kabu.com Securities Co., Ltd.

BTMU acquired approximately 20% ownership of kabu.com Securities Co., Ltd. (“kabu.com Securities”), a

retail online securities company in Japan through tender offers, valuing the transaction at approximately
¥41 billion, resulting in MUFG’s ownership to approximately 51% during the fiscal year ended March 31, 2008.
The assets and liabilities acquired through purchases of the minority interest of kabu.com Securities were
measured based on their fair value. The MUFG Group recorded approximately ¥78 billion of goodwill and
approximately ¥10 billion of intangible assets. The purpose of the acquisition is to strengthen the retail online
securities business and enhance comprehensive Internet-based financial services the MUFG Group provides.

Mitsubishi UFJ Securities Co., Ltd.

On September 30, 2007, MUFG and MUS executed a share exchange. The share exchange ratio was set at

1.02 shares of MUFG common stock to one share of MUS common stock, valuing the transaction at
approximately ¥370 billion. The share exchange ratio was calculated based on the MUFG’s stock after the stock
split, which was effective on September 30, 2007. MUFG’s treasury stock was exchanged for the shares of MUS
common stock and there was no issuance of new shares. Losses on the share exchange were charged to Capital
surplus for the fiscal year ended March 31, 2008. As a result of the share exchange, MUS became a wholly
owned subsidiary of MUFG. MUFG previously owned approximately 60% of MUS. The assets and liabilities
acquired through the purchase of the minority interest of MUS were measured based on their fair value as of
September 30, 2007. The MUFG Group initially recorded approximately ¥23 billion of goodwill and ¥98 billion
of intangible assets. The purpose of making MUS a wholly-owned subsidiary is, among other factors, to seize the
opportunities presented by the deregulation of the Japanese financial markets and further enhance cooperation
between group companies.

UnionBanCal Corporation

BTMU acquired approximately 36% ownership of UNBC through cash tender offers, valuing the

transaction at approximately ¥389 billion. The offer expired on September 26, 2008, with purchase of the shares
being effective on October 1, 2008. After the offer, BTMU owned approximately 97 % of UNBC’s outstanding
common stock and acquired the remaining 3 % on November 4, 2008. As a result of the tender offers, followed
by the second-step merger, UNBC became a wholly owned subsidiary of BTMU. BTMU previously owned
approximately 64% of UNBC. The assets and liabilities acquired through the purchase of the minority interest of
UNBC were measured based on their fair value as of October 1, 2008. The MUFG Group initially recorded
approximately ¥175 billion of goodwill and ¥67 billion of intangible assets. The purpose of making UNBC a
wholly-owned subsidiary is to achieve greater management flexibility and aim to further strengthen the MUFG
Group’s presence in the United States.

F-30

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. TRADING ACCOUNT ASSETS AND LIABILITIES

The following table shows trading account assets and liabilities, carried at estimated fair value, at March 31,
2008 and 2009. Effective April 1, 2008, the MUFG Group discontinued netting its derivative assets and liabilities
under master netting agreements and now present them on a gross basis. The balances at March 31, 2008 shown
below were also retrospectively adjusted to conform with the above change. See Note 1, “Netting of Cash
Collateral against Derivative Exposures” under “Accounting Changes” section for the detail.

Trading account assets(2):

Trading securities:

Japanese government, prefectural and municipal bonds . . . . . . . . . . . . . . .
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities, foreign governments bonds, mortgage-backed

securities and other securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total
Trading derivative assets:
Interest rate contracts:

2008

2009

(in millions)

¥ 4,540,158
1,401,970

¥ 4,998,168
1,934,438

3,940,292
9,882,420

13,363,095
20,295,701

Forwards and futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swaps and swap-related products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

17,911
4,539,518
312,364
4,869,793

15,152
6,620,766
504,394
7,140,312

Foreign exchange contracts:

Forwards and futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts, mainly commodity and credit-related contracts . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

1,473,413
952,094
799,541
3,225,048
467,372
¥18,444,633

628,826
844,899
763,650
2,237,375
608,137
¥30,281,525

Total

Trading account liabilities(2):

Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading derivative liabilities:
Interest rate contracts:

¥

226,797

¥

102,956

Forwards and futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swaps and swap-related products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options written . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

17,701
4,243,572
305,131
4,566,404

37,791
5,997,508
557,555
6,592,854

Foreign exchange contracts:

Forwards and futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options written . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts, mainly commodity and credit-related contracts . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

1,252,258
941,007
614,498
2,807,763
360,614
¥ 7,961,578

510,048
1,122,994
648,430
2,281,472
515,279
¥ 9,492,561

Total

Notes:
(1) At March 31, 2009, equity securities, foreign governments bonds, mortgage-backed securities and other securities were mainly

comprised of the securities measured at fair value under fair value option. See Note 30 for further information on fair value option
accounting.

(2) See Note 30 for the methodologies and assumptions used to estimate fair values.

F-31

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The MUFG Group performs trading activities through market-making, sales and arbitrage, while

maintaining risk levels within appropriate limits in accordance with its risk management policy. Net trading gains
(losses) for the fiscal years ended March 31, 2007, 2008 and 2009 were comprised of the following:

Interest rate and other derivative contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account securities, excluding derivatives . . . . . . . . . . . . . . . . . . . .

¥212,778
192,035

¥ 520,564
(122,168)

¥

555,505
(813,312)

Trading account profits (losses)—net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange derivative contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

404,813
(72,263)

398,396
26,832

(257,807)
(829,605)

Net trading gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥332,550

¥ 425,228

¥(1,087,412)

2007

2008

2009

(in millions)

5.

INVESTMENT SECURITIES

The amortized costs and estimated fair values of investment securities available for sale and being held to

maturity at March 31, 2008 and 2009 were as follows:

2008

2009

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Estimated
fair
value

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Estimated
fair
value

(in millions)

Securities available for sale:

Debt securities:

Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . . . ¥16,133,001 ¥

Japanese prefectural and

73,835 ¥ 20,943 ¥16,185,893 ¥23,846,153 ¥ 55,409

¥

8,788 ¥23,892,774

municipal bonds . . . . . . . . . .

203,090

5,267

127

208,230

277,895

4,684

101

282,478

Foreign governments and

official institutions bonds . . .
Corporate bonds . . . . . . . . . . . .
Mortgage-backed securities . . .
Other debt securities . . . . . . . . .
Marketable equity securities . . . . .

3,637,566
5,281,321
3,439,490
3,566,554
4,315,233

37,728
137,543
4,675
11,056
2,086,557

4,471
10,895
5,505
103,543
58,131

3,670,823
5,407,969
3,438,660
3,474,067
6,343,659

185,561
3,791,045
676,326
576,298
3,340,339

5,247
86,310
8,232
5,151
730,038

177
8,327
16,320
54,292
110,596

190,631
3,869,028
668,238
527,157
3,959,781

Total

. . . . . . . . . . . . . . . . . . . . . . . . . ¥36,576,255 ¥2,356,661 ¥203,615 ¥38,729,301 ¥32,693,617 ¥895,071

¥198,601 ¥33,390,087

Securities being held to maturity:

Debt securities:

Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . . . ¥ 2,601,852 ¥

Japanese prefectural and

18,825 ¥

1,731 ¥ 2,618,946 ¥ 1,352,213 ¥ 19,032

¥

1,593 ¥ 1,369,652

municipal bonds . . . . . . . . . .

71,966

1,108

Foreign governments and

official institutions bonds . . .
Corporate bonds . . . . . . . . . . . .
Other debt securities . . . . . . . . .

9,602
154,313
1,933

664
1,887
—

—

—
22
—

73,074

51,961

753

—

52,714

10,266
156,178
1,933

204,954
143,236
1,059,989

2,337
1,647
11,208

246
7
19,038

207,045
144,876
1,052,159

Total

. . . . . . . . . . . . . . . . . . . . . . . . . ¥ 2,839,666 ¥

22,484 ¥

1,753 ¥ 2,860,397 ¥ 2,812,353 ¥ 34,977

¥ 20,884 ¥ 2,826,446

In the second half of the fiscal year ended March 31, 2009, it was observed that there was a rare

circumstance where the liquidity of certain foreign investment securities was significantly reduced due to the
global financial market turmoil lasting for a substantial period of time, and resulted in difficulties selling these

F-32

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

securities at prices that would be realized under normal market conditions. In light of this rare circumstance, the
MUFG Group changed its intent to hold certain foreign investment securities until their maturities. According to
this change of the intent, BTMU reclassified these investment securities, which consist of asset-backed securities,
from the trading category to the “Other debt securities” of the held-to-maturity category on January 30, 2009.
The reclassification of these investment securities was made at fair value of ¥1,053,029 million on the date of
reclassification. While these trading securities were measured at fair value with their unrealized holding gains
and losses recognized in earnings, the reclassified held-to-maturity investment securities are measured at
amortized cost as of the balance sheet date. The carrying amount of the reclassified investment securities was
¥1,056,339 million at March 31, 2009.

Investment securities other than securities available for sale or being held to maturity (i.e., nonmarketable

equity securities presented in Other investment securities) were primarily carried at cost of ¥513,975 million and
¥1,390,315 million, at March 31, 2008 and 2009, respectively, because their fair values were not readily
determinable. The MUFG Group periodically monitors the status of each investee including the credit ratings and
changes in the MUFG Group’s share of net assets in the investees as compared with its shares at the time of
investment, or utilizes commonly accepted valuation models for certain nonmarketable equity securities issued
by public companies which are convertible to marketable common stock in the future, to determine if impairment
losses, if any, are to be recognized on these nonmarketable securities. The impairment of cost-method
investments is not evaluated when valuation models are not applicable if there are no identified events or changes
in circumstances that may have a significant adverse effect on the fair value of the investment. The MUFG Group
did not estimate the fair value of such investments in accordance with paragraph 14 and 15 of SFAS No. 107.
These investments had aggregate costs of ¥167,803 million and ¥163,813 million, at March 31, 2008 and 2009,
respectively. Investment securities held by certain subsidiaries subject to specialized industry accounting
principles in AICPA Guides presented in Other investment securities were carried at fair value of
¥66,038 million and ¥43,809 million at March 31, 2008 and 2009, respectively.

See Note 30 for the methodologies and assumptions used to estimate the fair values.

The amortized cost and estimated fair values of debt securities being held to maturity and the estimated fair
values of debt securities available for sale at March 31, 2009 by contractual maturity are shown below. Expected
maturities may differ from contractual maturities because borrowers may have the right to call or prepay
obligations with or without penalties. Securities not due at a single maturity date and securities embedded with
call or prepayment options, such as mortgage-backed securities, are included in the table below based on their
original final maturities.

Held-to-maturity

Available for sale

Amortized
cost

Estimated
fair value

Estimated
fair value

(in millions)

Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from one year to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from five years to ten years . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after ten years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 246,604
1,442,944
218,773
904,032

¥ 247,197
1,463,261
214,068
901,920

¥12,514,533
9,859,355
4,585,539
2,470,879

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,812,353

¥2,826,446

¥29,430,306

For the fiscal years ended March 31, 2007, 2008 and 2009, gross realized gains on sales of investment

securities available for sale were ¥360,406 million, ¥324,715 million and ¥224,507 million, respectively, and
gross realized losses on sales of investment securities available for sale were ¥66,190 million, ¥239,635 million
and ¥75,165 million, respectively.

F-33

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the fiscal years ended March 31, 2007, 2008 and 2009, losses resulting from impairment of investment

securities to reflect the decline in value considered to be other than temporary were ¥162,959 million,
¥1,543,779 million and ¥858,874 million, respectively, which were included in Investment securities gains
(losses)—net in the consolidated statements of operations. The losses of ¥1,543,779 million for the fiscal year
ended March 31, 2008 included losses of ¥1,169,069 million from debt securities available for sale mainly
classified as Foreign governments and official institutions bonds and Mortgage-backed securities, and
¥331,259 million from marketable equity securities. The losses of ¥858,874 million for the fiscal year ended
March 31, 2009 included losses of ¥155,489 million from debt securities available for sale mainly classified as
Japanese national government bonds and corporate bonds, and ¥660,719 million from marketable equity
securities.

The following table shows the unrealized gross losses and estimated fair values of investment securities

available for sale and being held to maturity at March 31, 2008 and 2009 by length of time that individual
securities in each category have been in a continuous loss position:

At March 31, 2008:

Securities available for sale:

Debt securities:

Japanese national government and

Less than 12 months

12 months or more

Total

Estimated
fair value

Unrealized
losses

Estimated
fair value

Unrealized
losses

Estimated
fair value

Unrealized
losses

Number of
securities

(in millions)

Japanese government agency bonds . . ¥7,193,164

¥ 20,943

¥

— ¥ — ¥7,193,164

¥ 20,943

Japanese prefectural and municipal

bonds . . . . . . . . . . . . . . . . . . . . . . . . . .

23,113

127

—

—

23,113

127

Foreign governments and official

institution bonds . . . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . .
Mortgage-backed securities . . . . . . . . . . .
Other securities . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . .

137,363
262,242
34,295
854,265
542,296

4,391
10,895
240
101,552
58,131

12,920
—
333,492
32,171
—

80
—
5,265
1,991
—

150,283
262,242
367,787
886,436
542,296

4,471
10,895
5,505
103,543
58,131

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥9,046,738

¥196,279

¥378,583

¥7,336

¥9,425,321

¥203,615

51

3

74
1,097
280
325
239

2,069

Securities being held to maturity:

Debt securities:

Japanese national government and

Japanese government agency bonds . . ¥

Corporate bonds . . . . . . . . . . . . . . . . . . . .

4,398
10,185

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥

14,583

¥

¥

1
21

22

¥243,025
3,996

¥1,730
1

¥ 247,423
14,181

¥247,021

¥1,731

¥ 261,604

¥

¥

1,731
22

1,753

10
16

26

F-34

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2009:

Securities available for sale:

Debt securities:

Less than 12 months

12 months or more

Total

Estimated
fair value

Unrealized
losses

Estimated
fair value

Unrealized
losses

Estimated
fair value

Unrealized
losses

Number of
securities

(in millions)

Japanese national government and
Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . ¥ 8,449,806

Japanese prefectural and municipal

¥

8,788

¥

— ¥ — ¥ 8,449,806

¥

8,788

bonds . . . . . . . . . . . . . . . . . . . . . . . .

33,437

101

—

—

33,437

101

Foreign governments and official

institution bonds . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . .
Mortgage-backed securities . . . . . . . . .
Other securities . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . .

7,860
667,722
108,635
29,804
820,181

176
8,327
8,535
1,077
110,564

152
—
72,017
98,703
48

1
—
7,785
53,215
32

8,012
667,722
180,652
128,507
820,229

177
8,327
16,320
54,292
110,596

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥10,117,445

¥137,568

¥170,920

¥61,033

¥10,288,365

¥198,601

Securities being held to maturity:

Debt securities:

Japanese national government and
Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . ¥

Foreign government and Official

institutions bonds . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . .

2,524

¥

81

¥ 23,244

¥ 1,512

¥

25,768

¥

1,593

34,316
1,603
670,774

246
4
19,038

—
2,701
—

—
3
—

34,316
4,304
670,774

246
7
19,038

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥

709,217

¥ 19,369

¥ 25,945

¥ 1,515

¥

735,162

¥ 20,884

97

30

19
5,178
138
228
225

5,915

5

6
8
75

94

The MUFG Group has determined that unrealized losses on investments at March 31, 2008 and 2009 are

temporary based on its ability and positive intent to hold the investments for a period of time sufficient to allow
for any anticipated recovery and the results of its review conducted to identify and evaluate investments that have
indications of possible impairments. Impairment is evaluated considering various factors, and their relative
significance varies from case to case. The MUFG Group’s review includes, but is not limited to, consideration of
the following factors:

The length of time that fair value of the investment has been below cost—The MUFG Group generally
deems a continued decline of fair value below cost for six months or more to be other than temporary. Certain
securities held by BTMU, MUTB and certain other subsidiaries, which primarily consist of debt securities issued
by the Japanese national government and generally considered to be of minimal credit risk, were determined not
to be impaired in some cases, on the basis of the respective subsidiary’s ability and positive intent to hold such
securities to maturity.

The extent to which the fair value of investments has been below cost as of the end of the reporting period—
The MUFG Group’s investment portfolio is exposed to volatile equity prices affected by many factors including
investors’ perspectives as to future economic factors and the issuers’ performance, as well as cyclical market price
fluctuation due to changes in market interest rates, foreign exchange rates, and changes in credit spreads etc. In view
of the diversity and volume of equity investments as well as the fact that the majority of investments in debt
securities are in high-grade fixed-rate bonds, including sovereign bonds, the MUFG Group generally deems the
decline in fair value below cost of 20% or more as an indicator of an other than temporary decline in fair value.

The financial condition and near-term prospects of the issuer—The MUFG Group considers the financial

condition and near-term prospects of the issuer primarily based on the credit standing of the issuers as
determined by its credit rating system.

F-35

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2009, unrealized losses on certain other debt securities being held to maturity held by BTMU,

all of which have been in a continuous loss position for less than 12 months, are considered temporary, since
BTMU has the ability and positive intent to hold the investments for a period of time sufficient to allow for any
anticipated recovery in fair value. Unrealized losses on marketable equity securities of which have been in a
continuous loss position for less than 12 months are also considered temporary, since the MUFG Group primarily
makes these investments for strategic purposes to maintain long-term relationship with its customers.

Certain securities held by UNBC, which primarily consist of debt securities backed by the full faith and credit
of the U.S. government and corporate asset-backed and debt securities, were determined not to be impaired in some
cases, on the basis of a cash flow analysis of such securities and/or UNBC’s ability and positive intent to hold such
securities to maturity. As shown in the table above, there were no material unrealized losses that have been in a
continuous loss position for 12 months or more, except for unrealized losses on certain mortgage-backed securities
and other debt securities held by UNBC at March 31, 2009. Mortgage-backed securities in an unrealized loss
position for 12 months or more are primarily securities guaranteed by a Government-Sponsored Enterprise (“GSE”)
such as U.S. Federal National Mortgage Association (“Fannie Mae”) or Federal Home Loan Mortgage Corporation
(“Freddie Mac”) and relatively small amounts of AAA-rated private label mortgage securities. These securities are
collateralized by residential mortgage loans and may be prepaid at par prior to maturity. All of the unrealized losses
on the mortgage-backed securities resulted from rising interest rates subsequent to purchase and in the case of
private label mortgage securities, additional credit spread widening since purchase. Since the securities do not have
observable credit quality issues and the Company has the ability and intent to hold the mortgage-backed securities
until recovery of the par amount, which could be maturity, the unrealized loss is considered temporary. Other debt
securities in an unrealized loss position for 12 months or more primarily consisted of credit card receivable
securities and collateralized loan obligations held by UNBC. Unrealized losses on such securities arise from rising
interest rates, widening credit spreads, credit quality of the underlying collateral, and the market’s opinion of the
performance of the fund managers. Cash flow analysis of the underlying collateral provides an estimate of other-
than-temporary impairment, which is performed quarterly on lower rated securities. Any security with a change in
credit rating is also subject to cash flow analysis to determine whether or not an other-than-temporary impairment
exists. The fair value of the collateralized loan obligation portfolio was adversely impacted by the liquidity crisis
caused by the subprime loan industry and by the overall financial market crisis. Although none of the collateralized
loan obligations in UNBC’s portfolio contain subprime loan assets, widening credit spreads caused their value to
decline. Since the securities do not have observable credit quality issues and the UNBC has the ability and intent to
hold the other debt securities until recovery of the carrying value, which could be maturity, the unrealized loss is
considered temporary.

Preferred Stock Investment in Morgan Stanley

MUFG purchased on October 13, 2008 preferred stock issued by Morgan Stanley for $9 billion. Morgan

Stanley is a leading global financial services firm providing a wide range of investment banking, securities,
investment management and wealth management services. The investments in Morgan Stanley preferred stock
are carried at cost on the consolidated balance sheet at March 31, 2009. In addition, the MUFG Group has loans,
guarantees and other market transactions with Morgan Stanley and its subsidiaries. Those transactions were made
in the ordinary course of business and the aggregate outstanding amount of these transactions as of March 31,
2009 was not significant to the MUFG Group or to Morgan Stanley.

The $9 billion investment in Morgan Stanley preferred stock consisted of $7.8 billion of 7,839,209 shares of
newly created 10% Series B Non-cumulative Non-voting Perpetual Convertible Preferred Stock and $1.2 billion
of 1,160,791 shares of newly created 10% Series C Non-cumulative Non-voting Perpetual Preferred Stock. The
Series B Preferred Stock is convertible any time at the option of MUFG at a conversion price of $25.25 per

F-36

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

common stock. In addition, one half of the Series B Preferred Stock mandatorily converts into Morgan Stanley
common stock when the closing price of the common stock is above 150 percent of the conversion price for a
certain period that occurs after the first anniversary of the issuance date and any outstanding Series B Preferred
Stock mandatorily converts on the same basis two years after the issuance date. Furthermore, the conversion of
the Morgan Stanley preferred stock is subject to certain ownership limits on the part of MUFG. The Series C
Preferred Stock may be redeemed by Morgan Stanley, at its option, starting on or after October 15, 2011 at a
redemption price of $1,100 per share. The Morgan Stanley preferred stock ranks senior to the Morgan Stanley
common stock as to dividends and liquidation with liquidation preference of the Series B Preferred Stock and
Series C Preferred Stock at $1,000 per share.

6. LOANS

Loans at March 31, 2008 and 2009, by domicile and type of industry of borrowers are summarized below:

Classification of loans by industry is based on the industry segment loan classification as defined by the

Bank of Japan.

Domestic:

2008(3)

2009

(in millions)

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail
Banks and other financial institutions(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer

¥11,178,924
1,728,534
10,857,072
6,553,980
9,308,599
4,671,499
1,150,438
10,806,144
21,517,672

¥ 12,922,822
1,803,541
10,436,795
6,750,442
9,760,805
4,836,047
732,652
9,515,861
20,542,398

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,772,862

77,301,363

Foreign:

Governments and official institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial and industrial
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

316,761
2,100,057
16,189,725
2,706,750

351,134
2,687,004
17,550,544
2,510,521

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,313,293

23,099,203

Unearned income, unamortized premiums—net and deferred loan fees—net . . . . .

(84,076)

(90,225)

Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99,002,079

¥100,310,341

Notes:
(1) Loans to the so-called non-bank finance companies are generally included in the “Banks and other financial institutions” category.

Non-bank finance companies are primarily engaged in consumer lending, factoring and credit card businesses.

(2) The above table includes loans held for sale of ¥505,626 million and ¥119,596 million at March 31, 2008 and 2009, respectively, which

are carried at the lower of cost or estimated fair value.

F-37

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(3) Classification of loans by industry at March 31, 2008 has been restated as follows:

As previously
reported

As restated

(in millions)

Domestic:

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,322,092
1,759,436
8,247,964
6,707,417
9,436,939
4,825,368
1,152,727
10,412,330
23,908,589

¥11,178,924
1,728,534
10,857,072
6,553,980
9,308,599
4,671,499
1,150,438
10,806,144
21,517,672

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,772,862

77,772,862

Foreign:

Governments and official institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

316,761
2,100,057
16,188,426
2,708,049

316,761
2,100,057
16,189,725
2,706,750

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,313,293

21,313,293

Unearned income, unamortized premiums—net and deferred loan fees—net

. . . . . . . . . . . . . . . . . . . . . . . . . .

(84,076)

(84,076)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99,002,079

¥99,002,079

Nonaccrual and restructured loans were ¥1,661,720 million and ¥1,771,110 million at March 31, 2008 and
2009, respectively. Had interest on these loans been accrued pursuant to the original terms, gross interest income on
such loans for the fiscal years ended March 31, 2008 and 2009 would have been approximately ¥92.6 billion and
¥93.4 billion, respectively, of which approximately ¥68.0 billion and ¥47.5 billion, respectively, were included in
interest income on loans in the accompanying consolidated statements of operations. Accruing loans contractually
past due 90 days or more were ¥17,952 million and ¥21,487 million at March 31, 2008 and 2009, respectively.

The MUFG Group provided commitments to extend credit to customers with restructured loans. The

amounts of such commitments were ¥16,897 million and ¥40,001 million at March 31, 2008 and 2009,
respectively. See Note 24 for further discussion of commitments to extend credit.

Impaired Loans

The MUFG Group’s impaired loans primarily include nonaccrual loans and restructured loans. A summary

of the recorded balances of impaired loans and related impairment allowance at March 31, 2008 and 2009 is
shown below:

2008

2009

Recorded
loan balance

Impairment
allowance

Recorded
loan balance

Impairment
allowance

(in millions)

Requiring an impairment allowance . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
Not requiring an impairment allowance(1)

¥1,131,739
311,813

¥563,285
—

¥1,168,477
407,755

¥618,560
—

Total(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,443,552

¥563,285

¥1,576,232

¥618,560

Notes:
(1) These loans do not require an allowance for credit losses under SFAS No. 114 since the fair values of the impaired loans equal or exceed

(2)

the recorded investments in the loans.
In addition to impaired loans presented in the above table, there were loans held for sale that were impaired of ¥11,911 million at
March 31, 2008 and there were no loans held for sale that were impaired at March 31, 2009.

F-38

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The average recorded investments in impaired loans were approximately ¥1,395 billion, ¥1,397 billion and

¥1,556 billion, respectively, for the fiscal years ended March 31, 2007, 2008 and 2009.

For the fiscal years ended March 31, 2007, 2008 and 2009, the MUFG Group recognized interest income of
approximately ¥36.0 billion, ¥48.3 billion and ¥40.0 billion, respectively, on impaired loans. Interest income on
nonaccrual loans was recognized on a cash basis when ultimate collectibility of principal was certain; otherwise,
cash receipts were applied as principal reductions. Interest income on accruing impaired loans, including
restructured loans, was recognized on an accrual basis to the extent that the collectibility of interest income was
reasonably certain based on management’s assessment.

Loans Acquired in a Transfer

In accordance with SOP 03-3, the following table sets forth information primarily about loans of the UFJ

Holdings Group acquired in connection with the merger, for which it is probable, at acquisition, that the MUFG
Group will be unable to collect all contractually required payments receivable.

2008

2009

(in millions)

Loans acquired during the fiscal year:
Contractually required payments receivable at acquisitions . . . . . . . . . . . . . . . . . . . . . . .
Cash flows expected to be collected at acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of loans at acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

38,703
6,680
6,099

¥ 28,827
6,366
6,366

Accretable yield for loans within the scope of SOP 03-3:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassifications from nonaccretable difference . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 184,448
581
(86,346)
(4,521)
27,901

¥122,063
—
(50,386)
—
10,542

Balance at end of fiscal year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 122,063

¥ 82,219

Loans within the scope of SOP 03-3:

. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding balance at beginning of fiscal year
Outstanding balance at end of fiscal year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carrying amount at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carrying amount at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,224,057
879,762
455,906
287,322

¥879,762
654,150
287,322
248,511

Nonaccruing loans within the scope of SOP 03-3:

Carrying amount at acquisition date during fiscal year . . . . . . . . . . . . . . . . . . . . . . .
Carrying amount at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions within the scope of SOP 03-3:

Balance of allowance for loan losses at beginning of fiscal year
. . . . . . . . . . . . . . .
Additional provisions during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions of allowance during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance of allowance for loan losses at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

¥

¥

2,137
95,794

¥

6,366
73,260

12,391
35,952
6,668
19,779

¥ 19,779
36,862
6,960
23,443

The MUFG Group considered prepayments in the determination of contractual cash flows and cash flows

expected to be collected based on historical results.

F-39

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Lease Receivable

As part of its financing activities, the MUFG Group enters into leasing arrangements with customers. The
MUFG Group’s leasing operations are performed through leasing subsidiaries and consist principally of direct
financing leases involving various types of data processing equipment, office equipment and transportation
equipment.

As of March 31, 2008 and 2009, the components of the investment in direct financing leases were as

follows:

Minimum lease payment receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estimated residual values of leased property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less—unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥970,477
44,048
(73,184)

¥889,521
34,097
(68,493)

Net investment in direct financing leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥941,341

¥855,125

2008

2009

(in millions)

Future minimum lease payment receivables under noncancelable leasing agreements as of March 31, 2009

were as follows:

Direct
financing
leases

(in millions)

Fiscal year ending March 31:

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥277,184
224,870
172,025
102,517
55,804
57,121

Total minimum lease payment receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥889,521

Government-led Loan Restructuring Program

Under the legislation enacted by the Japanese Diet in June 1996, which incorporates the restructuring
program for the loans of seven failed housing-loan companies (the “Jusen”), the Deposit Insurance Corporation
(“DIC”) established a Housing Loan Administration Corporation (“HLAC”) to collect and dispose of the loans of
the liquidated Jusen. In 1999, HLAC merged with the Resolution and Collection Bank Limited to create the
Resolution and Collection Corporation (“RCC”), which is wholly owned by the DIC.

Financial institutions, including the MUFG Group, waived the repayment of substantial amounts of the
loans to the Jusen and transferred the remaining balances to HLAC. Financial institutions were requested to make
loans to HLAC to finance its collection activities, and in the fiscal year ended March 31, 1997, the MUFG Group
made loans of ¥407,078 million with an original maturity term of 15 years. The 15-year term loans to HLAC,
which are guaranteed by the DIC under the legislation and the loan agreements, mature in 2011 and earn interest
at TIBOR (Tokyo Interbank Offered Rate) plus 0.125%. On October 1, 2005, the MUFG Group acquired, at fair
value, loans of the UFJ Holdings Group to HLAC in connection with the merger with UFJ Holdings. During the

F-40

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

fiscal years ended March 31, 2008 and 2009, certain of these loans were repaid before maturity. At March 31,
2008 and 2009, outstanding loans to RCC were ¥210,148 million and ¥193,628 million, respectively.

Under this restructuring program, a Financial Stabilization Fund (the “Special Fund”) was established
within the DIC, and the Bank of Japan and other financial institutions established another fund (the “New
Fund”). These funds are principally invested in Japanese government bonds. The MUFG Group made
non-interest-earning deposits of ¥176,089 million with the Special Fund and the New Fund in the fiscal year
ended March 31, 1997. The deposit balances as of March 31, 2008 and 2009, which are included in Other assets,
were ¥365,146 million and ¥372,114 million, respectively, reflecting a present value discount and subsequent
amortization of the discount during the period until the expected maturity date. The non-interest-earning deposits
with these funds are expected to mature in 15 years from the deposit dates, which coincides with the planned
operational lifespan of RCC.

It is uncertain what losses (so-called “stage two loss”), if any, may ultimately be incurred by the RCC

through the collection of the Jusen loans during the 15-year term. If any such losses ultimately occur, the
Japanese government will be liable for half of such losses, and the investment income to be earned by the Special
Fund during the 15 years is to be used to cover the remaining losses. The investment income to be earned by the
New Fund during the 15 years is to be used to compensate for a portion of the public funds used for the Jusen
restructuring.

At this time management believes all loans and deposits will be collectible according to their respective

terms.

Sales of Loans

The MUFG Group originates various types of loans to corporate and individual customers in Japan and

overseas in the normal course of its business. In order to improve its loan quality, BTMU and MUTB actively
disposed of nonperforming loans. Most of such nonperforming loans were disposed of by sales to third parties
without any continuing involvement. Management of BTMU and MUTB generally approves disposals after
significant sales terms, including prices, are negotiated. As such, loans are disposed of by sales shortly after the
loans are transferred to the held-for-sale classification. The net gains on the sales of loans were ¥31,243 million
and ¥14,771 million for the fiscal years ended March 31, 2007 and 2008, respectively. The net losses on the sales
of loans was ¥1,728 million for the fiscal year ended March 31, 2009.

Loan Securitization

The MUFG Group had no significant transfers of loans in securitization transactions accounted for as sales

for the fiscal years ended March 31, 2007 and 2008. The MUFG Group securitized loans without recourse of
¥68,090 million to the special purpose entity which was in form of trust accounting and which issued senior
beneficial interests and subordinated beneficial interests in the fiscal year ended March 31, 2009. The MUFG
Group’s retained interests consisted of senior beneficial interests of ¥60,671 million which were recorded as
investment securities. The subordinated beneficial interests of ¥7,419 million were sold and the gains or losses
recognized were not material. The carrying amount of the investment securities was allocated between the senior
beneficial interests and the subordinated beneficial interests based on their relative fair values at the date of the
securitization. The senior beneficial interests are carried at their fair values and the unrealized holding gains and
losses are excluded from earnings and reported as a net amount in a separate component of shareholders’ equity
until realized. The purpose of the special purpose entity is to hold and manage only loans without recourse. The
MUFG Group provides servicing for beneficial interests in the securitized loans. However no servicing assets or
liabilities were recorded as a result of these transactions since the MUFG Group received adequate

F-41

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

compensation. The MUFG Group did not provide contractual or noncontractual financial support to the special
purpose entity or subordinated beneficial interests holders. And there were no liquidity arrangements, guarantees
or other commitments provided by third parties related to the transferred financial assets. At March 31, 2009, key
economic assumptions used in measuring the fair value of the senior beneficial interests were as follows:

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.21 - 1.15%
1.84 - 5.33%

2009

At March 31, 2009, the sensitivities of the fair value to an immediate adverse change of 10% and 20% were

as follows:

Discount rate:

2009

Impact of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99.72 - 99.85%
99.44 - 99.70%

Credit spread:

Impact of 10% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of 20% adverse change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98.99 - 99.53%
97.97 - 99.07%

The sensitivities are hypothetical. In this table, the effect of a variation in a particular assumption on the fair
value of the senior beneficial interests was calculated without changing any other assumption; in reality, changes
could be correlated and changes in one factor may result in changes in another, which might magnify or
counteract the sensitivities.

There were no other loans that were managed with the securitized loans, and both the transferred assets and

the retained assets had no delinquencies at the end of March 31, 2009. No credit losses had been incurred from
those loans for the fiscal year ended March 31, 2009.

Related Party Loans

In some cases, the banking subsidiaries of MUFG make loans to related parties, including their directors and

executive officers, in the course of their normal commercial banking business. At March 31, 2008 and 2009,
outstanding loans to such related parties were not significant.

In the opinion of management, these related party loans were made on substantially the same terms,
including interest rates and collateral requirements, as those terms prevailing at the date these loans were made.
For the fiscal years ended March 31, 2007, 2008 and 2009, there were no loans to related parties that were
charged-off. Additionally, at March 31, 2008 and 2009, there were no loans to related parties that were impaired.

F-42

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7. ALLOWANCE FOR CREDIT LOSSES

Changes in the allowance for credit losses for the fiscal years ended March 31, 2007, 2008 and 2009 are

shown below:

2007

2008

2009

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less—Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,012,227
358,603
303,114
40,419

(in millions)
¥1,112,453
385,740
386,484
30,592

¥1,134,940
626,947
603,298
26,446

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

262,695
4,318

355,892
(7,361)

576,852
(28,397)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,112,453

¥1,134,940

¥1,156,638

Note:
(1) Others principally include losses/(gains) from foreign exchange translation.

As explained in Note 6, nonperforming loans were actively disposed of by sales during recent years. The

allocated allowance for credit losses for such loans was removed from the allowance for credit losses and
transferred to the valuation allowance for loans held for sale upon a decision to sell. Net charge-offs in the above
table include the decrease in the allowance for credit losses due to loan disposal activity amounting to ¥4.6 billion,
¥5.9 billion and ¥13.2 billion for the fiscal years ended March 31, 2007, 2008 and 2009, respectively.

8. PREMISES AND EQUIPMENT

Premises and equipment at March 31, 2008 and 2009 consisted of the following:

2008

2009

(in millions)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 430,968
585,196
639,228
355,484
6,679

¥ 413,257
566,310
653,211
356,985
16,290

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,017,555
941,749

2,006,053
962,637

Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,075,806

¥1,043,416

Premises and equipment include capitalized leases, principally related to data processing equipment, which

amounted to ¥124,433 million and ¥113,188 million at March 31, 2008 and 2009, respectively. Accumulated
depreciation on such capitalized leases at March 31, 2008 and 2009 amounted to ¥72,176 million and
¥77,777 million, respectively.

BTMU has entered into sales agreements to sell its buildings and land and, under separate agreements,
leased those properties back for their business operations, including bank branches. BTMU either provided
nonrecourse financings to the buyers for the sales proceeds or invested in the equities of the buyers. As a result,
BTMU was considered to have continuing involvement with the properties. For accounting and reporting

F-43

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

purposes, these transactions were accounted for under the financing method with the sales proceeds recognized
as a financing obligation. The properties were reported on the consolidated balance sheets and depreciated. The
financing obligation at March 31, 2008 and 2009 were ¥74,954 million and ¥56,053 million, respectively.

For the fiscal years ended March 31, 2007, 2008 and 2009, the MUFG Group recognized ¥12,602 million,
¥4,732 million and ¥7,480 million, respectively, of impairment losses for long-lived assets, primarily real estate
which was either formerly used for its banking operations and is no longer used or real estate that is being used
where recovery of carrying amount is doubtful. In addition, ¥319 million, ¥60 million and ¥2,955 million of
impairment losses were recognized for real estate held for sale for the fiscal years ended March 31, 2007, 2008
and 2009, respectively. These losses are included in Other non-interest expenses. In computing the amount of
impairment losses, fair value was determined primarily based on market prices, if available, or the estimated
price based on an appraisal.

9. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The table below presents the changes in the carrying amount of goodwill by business segment during the

fiscal years ended March 31, 2008 and 2009:

Integrated
Retail
Banking
Business
Group

Integrated Corporate Banking Business Group

Domestic

Overseas

Total

Other than
UNBC

UNBC

Overseas
Total

Integrated
Trust
Assets
Business
Group

Global
Markets

Total

(in millions)

Fiscal year ended March 31, 2008:
Balance at March 31, 2007 . . . . . . . . . . . ¥ 726,206 ¥ 854,425 ¥148,065 ¥ 91,286 ¥239,351 ¥1,093,776 ¥22,527
Goodwill acquired during the fiscal

¥2,300 ¥1,844,809

year(2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . . . . . . .
Reduction due to elimination of valuation
allowance for deferred tax assets . . . . .
Foreign currency translation adjustments
. . . . . . . . . . . . . . . . . . . . . . .

and other

108,982
25,169
(10,154) (883,567)

(8,694)

(2,990)

—
—

—

1,578
—

1,578

26,747
— (883,567)

—

—

(2,990)

(11,839)

6,963

3,606

274

3,880

10,843

—
—

—

—

— 135,729
— (893,721)

—

—

(11,684)

(996)

Balance at March 31, 2008 . . . . . . . . . . . ¥ 804,501 ¥

— ¥151,671 ¥ 93,138 ¥244,809 ¥ 244,809 ¥22,527

¥2,300 ¥1,074,137

Fiscal year ended March 31, 2009:
Balance at March 31, 2008 . . . . . . . . . . . ¥ 804,501 ¥
Goodwill acquired during the fiscal

— ¥151,671 ¥ 93,138 ¥244,809 ¥ 244,809 ¥22,527

¥2,300 ¥1,074,137

year(2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . . . . . . .
Reduction due to sales of subsidiaries . . .
Reduction due to elimination of valuation
allowance for deferred tax assets . . . . .
Foreign currency translation adjustments
. . . . . . . . . . . . . . . . . . . . . . .

and other

25,860
(829,901)
—

1,713
(1,206)
—

— 175,262 175,262
—
—
—
(9,666)
— (9,666)

176,975
(1,206)
(9,666)

—
(14,735)
—

(103)

(357)

—

(46)

—

—

—

—

— (41,532) (41,532)

(41,578)

—

—

— 202,835
— (845,842)
(9,666)
—

—

—

(103)

(41,935)

Balance at March 31, 2009 . . . . . . . . . . . ¥

— ¥

461 ¥151,671 ¥217,202 ¥368,873 ¥ 369,334 ¥ 7,792

¥2,300 ¥ 379,426

Notes:
(1) See Note 28 for the business segment information of the MUFG Group.
(2) See Note 3 for the goodwill acquired in connection with various acquisitions.

F-44

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Goodwill impairment losses of ¥893,721 million and ¥845,842 million were recognized for the fiscal years
ended March 31, 2008 and 2009, respectively. Reporting units for which impairment losses were recognized are
as follows:

Business Segment

Reporting Unit

Integrated Retail Banking Business Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MUS-Retail
Integrated Retail Banking Business Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BTMU-Retail
Integrated Retail Banking Business Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mitsubishi UFJ NICOS-Retail
Integrated Corporate Banking Business Group—Domestic . . . . . . . . . . . . . . . . . . . . BTMU-Corporate
Integrated Corporate Banking Business Group—Domestic . . . . . . . . . . . . . . . . . . . . MUTB-Real Estate
Integrated Corporate Banking Business Group—Domestic . . . . . . . . . . . . . . . . . . . . MUS-Corporate
Integrated Trust Assets Business Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MUTB-Trust

Impairment loss

2008

2009

(in millions)

¥ 10,154

—
¥
— 636,322
— 193,579
—
—
1,206
14,735

828,786
14,950
39,831
—

¥893,721

¥845,842

For the fiscal year ended March 31, 2008, the MUFG group recognized ¥893,721 million as an impairment
of goodwill, mainly due to the global financial market instability. MUFG’s stock price declined from ¥1,330 at
March 31, 2007 to ¥860 at March 31, 2008. It led to decrease market capitalization and negatively affected the
fair value of reporting units for the purpose of periodical goodwill impairment testing. As a result, goodwill
relating to MUS-Retail, BTMU-Corporate, MUTB-Real Estate and MUS-Corporate reporting units got impaired.

Since the financial crisis continues, or much worse than that of last year, MUFG’s stock price decreased to
¥476 at March 31, 2009, and market capitalization continuously diminished. That made forecast weak and led us
negatively affect the fair value of reporting units furthermore. As a result of readjustment of future projections
performed by management, the fair value of most reporting units which is based on discounted cash flows fell
below the carrying amount of them.

For the fiscal year ended March 31, 2009, based on these situations, the MUFG group recognized ¥845,842
million as an impairment of goodwill relating to BTMU-Retail, Mitsubishi UFJ NICOS-Retail, MUS-Corporate
and MUTB-Trust reporting units.

The fair value of those reporting units was estimated using the expected present value of future cash flow.

F-45

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other Intangible Assets

The table below presents the gross carrying amount, accumulated amortization and net carrying amount, in

total and by major class of intangible assets at March 31, 2008 and 2009:

2008

Gross
carrying
amount

Accumulated
amortization

Net
carrying
amount

Gross
carrying
amount

(in millions)

2009

Accumulated
amortization

Net
carrying
amount

Intangible assets subject to

amortization:

Software . . . . . . . . . . . . . . . . . . ¥1,117,276 ¥533,887 ¥ 583,389 ¥1,119,020 ¥583,143 ¥ 535,877
372,166
Core deposit intangibles . . . . . .
122,528
Customer relationships . . . . . . .
54,733
Trade names . . . . . . . . . . . . . . .
3,646
Other . . . . . . . . . . . . . . . . . . . . .

265,402
85,533
8,007
2,782

597,967
259,795
57,467
5,048

393,488
188,548
52,581
2,703

204,479
71,247
4,886
2,345

637,568
208,061
62,740
6,428

Total

. . . . . . . . . . . . . . . . . ¥2,037,553 ¥816,844

1,220,709 ¥2,033,817 ¥944,867

1,088,950

Intangible assets not subject to

amortization:

Indefinite-lived customer

relationships . . . . . . . . . . . . .
Indefinite-lived trade names . . .
Other . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . .

100,817
6,192
11,206

118,215

¥1,338,924

64,162
4,459
34,370

102,991

¥1,191,941

Intangible assets subject to amortization acquired during the fiscal year ended March 31, 2008 amounted to

¥353,517 million, which primarily consisted of ¥227,608 million of software, ¥104,913 million of customer
relationships and ¥18,601 million of trade names. The weighted average amortization periods for these assets are
5 years, 15 years and 39 years, respectively. There is no significant residual value estimated for these assets.
Intangible assets not subject to amortization acquired during the fiscal year ended March 31, 2008 amounted to
¥67,789 million, which primarily consisted of ¥61,417 million of customer relationships.

Intangible assets subject to amortization acquired during the fiscal year ended March 31, 2009 amounted to

¥263,129 million, which primarily consisted of ¥157,291 million of software, ¥50,138 million of core deposit
intangibles and ¥44,153 million of customer relationships. The weighted average amortization periods for these
assets are 6 years, 5 years and 16 years, respectively. There is no significant residual value estimated for these
assets. Intangible assets not subject to amortization acquired during the fiscal year ended March 31, 2009
amounted to ¥24,577 million.

For the fiscal years ended March 31, 2007, 2008 and 2009, the MUFG Group recognized ¥184,760 million,

¥78,679 million and ¥126,885 million, respectively, of impairment losses for intangible assets whose carrying
amount exceeded their fair value. In computing the amount of impairment losses, fair value was determined
primarily based on market prices, if available, the estimated value based on appraisal, or the discounted expected
future cash flows.

F-46

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The impairment loss for the fiscal year ended March 31, 2007 included a loss of ¥183,959 million relating to

customer relationships and trade names in the Integrated Retail Banking Business Group, which were both
subject to and not subject to amortization. These intangible assets were initially valued based on discounted
expected future cash flows. The future cash flows were negatively revised due to the adverse change in the
business environment for consumer finance companies attributable to an ensuing action toward legal revisions of
consumer lending law to lower the interest rate permissible on consumer loans and, accordingly, the MUFG
Group reevaluated these intangible assets and recognized impairment losses.

The impairment loss for the fiscal year ended March 31, 2008 included a loss of ¥77,107 million relating to

customer relationships in the Integrated Retail Banking Business Group and Integrated Corporate Banking
Business Group—Domestic, which were subject to amortization. These intangible assets were valued based on
discounted expected future cash flows. Estimated future cash flows were revised downwards due to the global
financial market instability. Accordingly, the MUFG Group reevaluated these intangible assets and recognized
impairment losses.

The impairment loss for the fiscal year ended March 31, 2009 included losses of ¥83,088 million and

¥36,672 million relating to customer relationships in the Integrated Retail Banking Business Group and
Integrated Trust Assets Business Group, which were subject to and not subject to amortization, respectively.
These intangible assets were valued based on discounted expected future cash flows. Estimated future cash flows
were revised downwards due to the global financial market instability. Accordingly, the MUFG Group
reevaluated these intangible assets and recognized impairment losses.

The estimated aggregate amortization expense for intangible assets for the next five fiscal years is as

follows:

Fiscal year ending March 31:

(in millions)

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥220,660
192,497
160,974
127,284
83,096

F-47

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10.

INCOME TAXES

The detail of current and deferred income tax expense (benefit) for the fiscal years ended March 31, 2007,

2008 and 2009 was as follows:

2007

2008

2009

(in millions)

Current:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 67,470
50,363

¥ 41,437
65,355

¥

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117,833

106,792

27,180
114,259

141,439

Deferred:

Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

420,204
14,789

470,859
(24,606)

(293,849)
(107,518)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

434,993

446,253

(401,367)

Income tax expense (benefit) from continuing operations . . . . . . . . . . . . . .
Income tax benefit from discontinued operations . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) reported in shareholders’ equity relating to:

552,826
(734)

553,045
(69)

(259,928)
—

Investment securities available for sale . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives qualifying for cash flow hedges . . . . . . . . . . . . . . . . . . . .
Minimum pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . .

207,652
(158)
(1,019)
—
343

(915,001)
1,672
—
(33,249)
(31,675)

(587,781)
3,254
—
(292,629)
(14,965)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

206,818

(978,253)

(892,121)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥758,910

¥(425,277) ¥(1,152,049)

Reconciliation of Effective Income Tax Rate

Income taxes in Japan applicable to the MUFG Group are imposed by the national, prefectural and

municipal governments, and in the aggregate resulted in a normal effective statutory rate of approximately 40.6%
for the fiscal years ended March 31, 2007, 2008 and 2009. Foreign subsidiaries are subject to income taxes of the
countries in which they operate.

F-48

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A reconciliation of the effective income tax rate reflected in the accompanying consolidated statements of
operations to the combined normal effective statutory tax rate for the fiscal years ended March 31, 2007, 2008
and 2009 is as follows:

Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit and payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lower tax rates applicable to income of subsidiaries . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realization of previously unrecognized tax effects of subsidiaries . . . . . . . .
Nontaxable dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax and interest expense for FIN No. 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net

2007

40.6%
0.2
0.9
0.8
(0.5)
0.6
7.2
—
(1.4)
—
0.9
—
(0.6)

2008

2009

40.6% 40.6%
24.9
101.8
10.2
(79.0)
143.7
1,400.7
(5.0)
(152.3)
2,937.4
36.3
8.5
8.5

(0.2)
(0.3)
(0.7)
—
0.6
(2.4)
(1.7)
0.5
(19.9)
(1.5)
(1.0)
1.0

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48.7% 4,476.3% 15.0%

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities are computed for each tax jurisdiction using currently enacted tax rates

applicable to periods when the temporary differences are expected to reverse. The tax effects of the items
comprising the MUFG Group’s net deferred tax assets at March 31, 2008 and 2009 were as follows:

2008

2009

(in millions)

Deferred tax assets:

Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment, including sale-and-leaseback transactions . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities (including trading account assets at fair value under fair

value option at March 31, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued severance indemnities and pension plans . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 678,935
1,059,865
28,053
364,009
142,861
38,068

¥ 798,020
775,298
22,637
394,606
124,582
44,868

—
—
(704,072)

809,996
269,799
(729,874)

1,607,719

2,509,932

Deferred tax liabilities:

Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued severance indemnities and pension plans . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

287,442
299,876
54,747
107,543
72,648

822,256

—
247,003
50,965
—
76,972

374,940

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 785,463

¥2,134,992

F-49

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note:
(1) At March 31, 2008 and 2009, ¥321 billion and ¥329 billion, respectively, of the valuation allowance related to gross deferred tax assets
was attributable to the merger with UFJ Holdings and to the acquisition of noncontrolling interest of Mitsubishi UFJ NICOS and MUS.
For the fiscal years ended March 31, 2008 and 2009, the tax benefit of ¥12 billion and less than ¥1 billion, respectively, attributed to the
merger or the acquisition was recognized by eliminating the valuation allowance and was applied to reduce goodwill.

The valuation allowance was provided primarily against deferred tax assets recorded at MUFG and its
subsidiaries with operating loss carryforwards. The amount of the valuation allowance is determined based on a
review of future taxable income (exclusive of reversing temporary differences and carryforwards) and future
reversals of existing taxable temporary differences. Future taxable income is developed from forecasted
operating results, based on recent historical trends and approved business plans, the eligible carryforward periods
and other relevant factors. For certain subsidiaries where strong negative evidence exists, such as the existence of
significant amounts of operating loss carryforwards, cumulative losses and the expiration of unused operating
loss carryforwards in recent years, a valuation allowance was recognized against the deferred tax assets as of
March 31, 2008 and 2009 to the extent that it is more likely than not that they will not be realized. The net
changes in the valuation allowance for deferred tax assets were an increase of ¥194,609 million and
¥25,802 million for the fiscal years ended March 31, 2008 and 2009, respectively. The increase for the fiscal year
ended March 31, 2009 reflected an increased valuation allowance for certain subsidiaries to capture the
continuing global economic slowdown. This was partly offset by a decrease in MUFG’s valuation allowance due
mainly to future dividend income from the investment in Morgan Stanley.

Income taxes are not provided on undistributed earnings of certain foreign subsidiaries that are considered

to be indefinitely reinvested in the operations of such subsidiaries. At March 31, 2009, the undistributed earnings
of such foreign subsidiaries amounted to approximately ¥21,640 million. Determination of the amount of
unrecognized deferred tax liabilities with respect to these undistributed earnings is not practicable because of the
complexity associated with its hypothetical calculation including foreign withholding taxes and foreign tax
credits. MUFG has neither plans nor the intention to dispose of investments in such foreign subsidiaries and,
accordingly, does not expect to record capital gains or losses, or otherwise monetize the undistributed earnings of
such foreign subsidiaries.

Operating Loss and Tax Credit Carryforwards

At March 31, 2009, the MUFG Group had operating loss carryforwards of ¥1,830,012 million and tax credit

carryforwards of ¥1,423 million for tax purposes. Such carryforwards, if not utilized, are scheduled to expire as
follows:

Operating loss
carryforwards

Tax credit
carryforwards

(in millions)

Fiscal year ending March 31:

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 and thereafter
No definite expiration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 183,610
151,530
1,029,957
218,046
28,379
128,827
68,266
21,397

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,830,012

¥ 522
—
—
—
—
—
693
208

¥1,423

F-50

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Uncertainty in Income Tax

The MUFG Group adopted the provisions of FIN No. 48 on April 1, 2007. As a result, the MUFG Group

recognized the liability of ¥13,559 million, including interest and penalties, for uncertain tax benefits, which
resulted in a decrease to retained earnings by ¥4,091 million. The following is a roll-forward of the MUFG
Group’s FIN No. 48 unrecognized tax benefits for the fiscal years ended March 31,2008 and 2009:

2008

2009

(in millions)

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross amount of increases for current year’s tax positions . . . . . . . . . . . . . . . .
Gross amount of increases for prior years’ tax positions . . . . . . . . . . . . . . . . . .
Gross amount of decreases for prior years’ tax positions . . . . . . . . . . . . . . . . .
Net amount of changes relating to settlements with tax authorities . . . . . . . . .
Decreases due to lapse of applicable statutes of limitations . . . . . . . . . . . . . . .
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥34,969
14,764
4,202
(3,861)
179
(1,291)
(4,198)

Balance at end of fiscal year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥44,764

¥44,764
23,960
15,104
(5,459)
447
(14)
(5,945)

¥72,857

The total amount of unrecognized tax benefits at March 31, 2008 and 2009 that, if recognized, would affect
the effective tax rate are ¥11,013 and ¥25,471 million, respectively. The remainder of the uncertain tax positions
has offsetting amounts in other jurisdictions or is temporary difference.

The MUFG Group classifies accrued interest and penalties, if applicable, related to income taxes as Income

tax expenses. Interest and penalties (not included in the “unrecognized tax benefits” above) are a component of
Accrued and other liabilities. The following is a roll-forward of the interest and penalties recognized in the
consolidated financial statements for the fiscal years ended March 31, 2008 and 2009:

2008

2009

(in millions)

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total interest and penalties in the consolidated statements of operations . . . . . . . . . . . . . . . . .
Total cash settlements and foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,540
1,532
(1,025)

¥ 4,047
2,588
(793)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,047

¥ 5,842

The MUFG Group is subject to ongoing tax examinations by the tax authorities of the various jurisdictions.

The following are the major tax jurisdictions in which the MUFG Group operates and the status of years under
audit or open to examination:

Jurisdiction

Tax years

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2009
1994 and forward
2003 and forward
2001 and forward

The U.S. Federal income tax returns of a certain affiliate for the years 1994 to 2001 have been examined by
the Internal Revenue Service (“IRS”) and are currently being appealed. It is reasonably possible that the case will
be settled by accepting a settlement offer during the next 12 months. As a result, the total amounts of
unrecognized tax benefits may decrease by up to ¥2,416 million and the related accrued interest and penalties
may decrease by up to ¥1,334 million. The federal income tax returns for the years 2002 and 2003 are currently
under examination.

F-51

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The MUFG Group does not anticipate any other material increases or decreases to unrecognized tax benefits

within the next 12 months. However, the MUFG Group is under continuous examinations by the tax authorities
in various domestic and foreign jurisdictions and many of these examinations are resolved every year. Therefore,
the MUFG Group’s estimate of unrecognized tax benefits is subject to change based on new developments and
information.

Income (Loss) from Continuing Operations before Income Tax Expense (Benefit)

Income (loss) from continuing operations before income tax expense (benefit) by jurisdiction for the fiscal

years ended March 31, 2007, 2008 and 2009 was as follows:

Domestic income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 894,685
240,246

(in millions)
¥(164,500) ¥(1,750,035)
22,067

176,855

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,134,931

¥ 12,355

¥(1,727,968)

2007

2008

2009

11. PLEDGED ASSETS AND COLLATERAL

Pledged Assets

At March 31, 2009, assets mortgaged, pledged, or otherwise subject to lien were as follows:

Trading account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(in millions)

¥11,918,919
4,046,148
6,317,430
78,841

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥22,361,338

The above pledged assets were classified by type of liabilities to which they related as follows:

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements and securities lending transactions . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings and long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(in millions)

¥

484,255
588,847
12,320,598
8,939,398
28,240

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥22,361,338

In addition, at March 31, 2009, certain investment securities, principally Japanese national government and
Japanese government agency bonds and loans, and other assets aggregating ¥19,248,043 million were pledged as
collateral for acting as a collection agent of public funds, for settlement of exchange at the Bank of Japan and
Tokyo Bankers Association, for derivative transactions and for certain other purposes.

The MUFG Group engages in on-balance sheet securitizations. Securitizations of mortgage and apartment

loans, which do not qualify for sales treatment, are accounted for as secured borrowings. The amount of loans in
the table above combines the carrying amount of these transactions with the carrying amount of the associated
liabilities included in other short-term borrowings and long-term debt.

F-52

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Under Japanese law, Japanese banks are required to maintain certain reserves on deposit with the Bank of

Japan based on the amount of deposit balances and certain other factors. There are similar reserve deposit
requirements for foreign offices engaged in banking businesses in foreign countries. At March 31, 2008 and
2009, the reserve funds maintained by the MUFG Group, which are included in Cash and due from banks and
Interest-earning deposits in other banks, were ¥2,359,024 million and ¥2,015,698 million, respectively. Average
reserves during the fiscal years ended March 31, 2008 and 2009 were ¥1,565,247 million and ¥1,682,655 million,
respectively.

Collateral

The MUFG Group accepts and provides financial assets as collateral for transactions, principally
commercial loans, repurchase agreements and securities lending transactions, call money, and derivatives.
Financial assets eligible for such collateral include, among others, marketable equity securities, trade and notes
receivable and certificates of deposit.

Secured parties, including creditors and counterparties to certain transactions with the MUFG Group, may
sell or repledge financial assets provided as collateral. Certain contracts, however, may not be specific about the
secured party’s right to sell or repledge collateral under the applicable statutes and, therefore, whether or not the
secured party is permitted to sell or repledge collateral would differ depending on the interpretations of specific
provisions of the existing statutes, contract or certain market practices. If the MUFG Group determines, based on
available information, that a financial asset provided as collateral might not be sold or repledged by the secured
parties, such collateral is not separately reported in the consolidated balance sheets. If a secured party is
permitted to sell or repledge financial assets provided as collateral by contract or custom under the existing
statutes, the MUFG Group reports such pledged financial assets separately on the face of the consolidated
balance sheets. At March 31, 2009, the MUFG Group pledged ¥25,093 billion of assets that may not be sold or
repledged by the secured parties.

Certain banking subsidiaries accept collateral for commercial loans and certain banking transactions under a
standardized agreement with customers, which provides that these banking subsidiaries may require the customers
to provide collateral or guarantees with respect to the loans and other banking transactions. Financial assets pledged
as collateral are generally negotiable and transferable instruments, and such negotiability and transferability is
authorized by applicable legislation. In principle, Japanese legislation permits these banking subsidiaries to repledge
financial assets accepted as collateral unless otherwise prohibited by contract or relevant statutes. Nevertheless, the
MUFG Group did not sell or repledge nor does it plan to sell or repledge such collateral accepted in connection with
commercial loans before a debtor’s default or other credit events specified in the agreements as it is not customary
within the banking industry in Japan to dispose of collateral before a debtor’s default and other specified credit
events. Derivative agreements commonly used in the marketplace do not prohibit a secured party’s disposition of
financial assets received as collateral, and in resale agreements and securities borrowing transactions, securities
accepted as collateral may be sold or repledged by the secured parties. At March 31, 2008 and 2009, the fair value
of the collateral accepted by the MUFG Group that is permitted to be sold or repledged was approximately ¥26,302
billion(1) and ¥21,632 billion, respectively, of which approximately ¥10,358 billion(2) and ¥6,730 billion,
respectively, was sold or repledged. The amount includes the collateral that may be repledged under the current
Japanese legislation but the MUFG Group does not dispose of before the counterparties’ default in accordance with
the customary practice within the Japanese banking industry.

Notes:
(1) The fair value of the collateral accepted by the MUFG Group that is permitted to be sold or repledged has been restated from

approximately ¥25,966 billion to approximately ¥26,302 billion.

(2) The fair value of the collateral accepted by the MUFG Group that was sold or repledged has been restated from approximately ¥10,228

billion to approximately ¥10,358 billion.

F-53

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The MUFG Group did not elect to adopt the netting provisions allowed under FSP FIN No. 39-1, which
allows an entity to offset the fair value amounts recognized for cash collateral paid or cash collateral received
against the fair value amounts recognized for derivative instruments executed with the same counterparty under a
master netting agreement. At March 31, 2008 and March 31, 2009, the cash collateral paid, which was included
in other assets, was ¥228,188 million and ¥625,931 million, respectively and the cash collateral received, which
was included in other liabilities, was ¥406,428 million and ¥389,238 million, respectively.

12. DEPOSITS

The balances of time deposits, including certificates of deposit (“CDs”), issued in amounts of ¥10 million
(approximately US$101 thousand at the Federal Reserve Bank of New York’s noon buying rate on March 31,
2009) or more with respect to domestic deposits and issued in amounts of US$100,000 or more with respect to
foreign deposits were ¥26,665,839 million and ¥12,687,960 million, respectively, at March 31, 2008, and
¥27,257,532 million and ¥11,546,556 million, respectively, at March 31, 2009.

The maturity information at March 31, 2009 for domestic and foreign time deposits, including CDs, is

summarized as follows:

Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after one year through two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after two years through three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after three years through four years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after four years through five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥37,309,158
6,059,004
3,210,485
652,509
742,477
124,150

¥11,608,323
47,729
91,129
15,601
43,615
1,379

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥48,097,783

¥11,807,776

Domestic

Foreign

(in millions)

13. CALL LOANS AND FUNDS SOLD, AND CALL MONEY AND FUNDS PURCHASED

A summary of funds transactions for the fiscal years ended March 31, 2007, 2008 and 2009 is as follows:

Average balance during the fiscal year:

Call money and funds purchased . . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . .

Net funds purchased position . . . . . . . . . . . . . . . . . . .

Call money and funds purchased:

Outstanding at end of fiscal year:

Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal range of maturities . . . . . . . . . . .
Weighted average interest rate . . . . . . . . . .
Maximum balance at any month-end during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average interest rate paid during the

fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

2008

2009

(in millions, except percentages and days)

¥

¥

2,787,474
971,791

1,815,683

¥

¥

3,426,605
990,473

2,436,132

¥

¥

3,051,725
1,080,630

1,971,095

¥
2,544,637
1 day to 30 days

¥

2,288,720
1 day to 30 days

¥
2,235,858
1 day to 30 days

2.33%

1.71%

0.33%

¥

3,078,633

¥

4,081,646

¥

4,133,609

1.00%

1.32%

0.82%

F-54

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Average balances are generally based on a daily average while a month-end average is used for certain

average balances when it is not practicable to obtain applicable daily averages.

14. DUE TO TRUST ACCOUNT

MUTB holds assets on behalf of its customers in an agent, fiduciary or trust capacity. Such trust account

assets are not the MUFG Group’s proprietary assets and are managed and accounted for separately.

However, excess cash funds of individual trust accounts are often placed with MUTB which manages the

funds together with its own funds in its proprietary account. Due to trust account reflects a temporary placement
of the excess funds from individual trust accounts and, in view of the MUFG Group’s funding, due to trust
account is similar to short-term funding, including demand deposits and other overnight funds purchased. The
balance changes in response to the day-to-day changes in the excess funds placed by the trust accounts. A
summary of due to trust account transactions for the fiscal years ended March 31, 2007, 2008 and 2009 is as
follows:

2007

2008

2009

Average balance outstanding during the fiscal year . . . . . . . . . . . . . .
Maximum balance at any month-end during the fiscal year . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . .

(in millions, except percentages)
¥1,653,717
2,171,467

¥1,479,736
1,796,846

¥1,981,427
2,229,225

0.30%

0.48%

0.46%

15. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

At March 31, 2008 and 2009, the MUFG Group had unused lines of credit for short-term financing
amounting to ¥9,668,470 million and ¥13,242,174 million, respectively. The amounts principally consist of the
lines of collateralized intraday overdrafts without interest charges and collateralized overnight loans on bills at
the official discount rate granted by the Bank of Japan, which are used to cover shortages in the Bank of Japan
account and to meet liquidity needs. The MUFG Group may borrow from the Bank of Japan on demand up to the
total amount of collateral eligible for credit extension.

Other short-term borrowings at March 31, 2008 and 2009 were comprised of the following:

2008

2009

(in millions, except percentages)

Domestic offices:

Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings from the Bank of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings from other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,710,156
2,037,400
202,167
15,927

¥1,228,573
3,473,323
357,150
122,578

Total domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,965,650

5,181,624

Foreign offices:

Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings from other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less unamortized discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total

1,380,037
591,244
80,273

2,051,554

6,017,204
311

1,141,938
1,518,991
24,845

2,685,774

7,867,398
20

Other short-term borrowings—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,016,893

¥7,867,378

Weighted average interest rate on outstanding balance at end of fiscal year . . . . .

1.82%

0.85%

F-55

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-term debt (with original maturities of more than one year) at March 31, 2008 and 2009 was comprised

of the following:

MUFG:

2008

2009

(in millions)

Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsubordinated debt:

¥

— ¥

51

Fixed rate bonds, payable in Japanese yen, due 2009-2011, principally 0.59%-1.21% . . . . . . . . . . . . . .

549,900

330,000

Subordinated debt(1):

Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally

2.42%-4.78%(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . .
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 6.25%(3)
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17%(3)
. . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, no
stated maturity, principally 6.20%(2),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .

Floating rate borrowings, payable in Japanese yen, no stated maturity, principally 3.58%-3.70%(3)

1,500
501
1,582

600
16,210

2,500
491
1,298

421
16,210

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

570,293

350,971

BTMU:

Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligation under sale-and-leaseback transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsubordinated debt(1):

¥

119,166
57,925

¥

41,158
56,053

Fixed rate bonds, payable in Japanese yen, due 2009-2027, principally 0.60%-2.69% . . . . . . . . . . . . . .
Fixed rate borrowings, payable in Japanese yen, due 2009-2023, principally 0.25%-4.24% . . . . . . . . .
Fixed rate borrowings, payable in US dollars, due 2009-2018, principally 6.37%-7.49% . . . . . . . . . . .
Fixed rate borrowings, payable in other currencies excluding Japanese yen, US dollars, due 2009-

2013, principally 4.20%-5.65%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds, payable in Japanese yen, due 2014, principally 2.00%(3) . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, due 2015, principally 1.02%-1.24%(3)
. . . . . . . . . .
Floating rate borrowings, payable in US dollars, due 2008, principally 4.90% . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in other currencies excluding Japanese yen, US dollars, due 2009,

1,801,293
46,884
7,029

1,495,272
30,824
2,260

4,675
20,000
8,000
30,057

3,781
20,000
5,000
—

principally 1.72%-7.00%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,446

1,995

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,919,384

1,559,132

Subordinated debt(1):

Fixed rate bonds, payable in Japanese yen, due 2010-2020, principally 1.13%-2.75%(3)
. . . . . . . . . . . .
Fixed rate borrowings, payable in Japanese yen, due 2010-2035, principally 1.17%-3.62%(3) . . . . . . . .
Fixed rate bonds, payable in US dollars, due 2010-2011, principally 7.40%-8.40% . . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in US dollars, due 2009-2013, principally 6.76%-8.36%(3) . . . . . . . . . .
Adjustable rate bonds, payable in Japanese yen, due 2018-2022, principally 2.00%-2.49%(3)
. . . . . . . .
Adjustable rate borrowings, payable in Japanese yen, due 2012-2028, principally 0.81%-2.90%(3) . . . .
Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally

1.34%-4.78%(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in US dollars, due 2015-2017, principally 1.55%-2.18%(3) . . . . . .
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 2.15%-6.25%(3)
. . .
. . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds, payable in Euro, due 2015, principally 3.50%(3)
. . . . . . . . . .
Adjustable rate borrowings, payable in Euro, due 2015-2017, principally 2.31%-5.60%(3)
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17%(3)
. . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, due
2017, principally 2.75%(2),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, no
stated maturity, principally 6.20%(2),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, due 2010-2027, principally 0.95%-1.13%(3) . . . . . .
. . . . . . . . .
Floating rate borrowings, payable in Japanese yen, no stated maturity, principally 3.58%(3)

667,942
407,000
408,268
275,522
10,000
766,039

840,449
266,047
423,303
158,190
142,371
208,020

1,244,737
201,446
396,111
280,177
142,000
800,500

992,900
241,943
245,577
129,840
116,856
170,740

55,030

38,624

113,062
18,000
150,700

79,355
18,000
150,700

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,909,943

5,249,506

Obligations under loan securitization transaction accounted for as secured borrowings, due 2009-2044,

principally 1.40%-7.02%(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,123,962

3,040,196

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,130,380

9,946,045

F-56

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2008

2009

(in millions)

Other subsidiaries:

Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsubordinated debt(1):

¥

31,621

¥

24,072

Fixed rate bonds and notes, payable in Japanese yen, due 2009-2038, principally 0.00%-18.00% . . .
Fixed rate bonds and notes, payable in US dollars, due 2009-2038, principally 0.00%-10.00% . . . . .
Fixed rate bonds and notes, payable in Euro, due 2008, principally 1.55% . . . . . . . . . . . . . . . . . . . . .
Fixed rate bonds and notes, payable in other currencies excluding Japanese yen, US dollars, Euro,

654,493
12,718
120

507,042
142,906
—

due 2009-2038, principally 0.50%-19.50%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,242

3,061

Floating/Adjustable rate bonds and notes, payable in Japanese yen, due 2009-2038, principally

0.00%-16.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,183,185

1,171,095

Floating/Adjustable rate bonds and notes, payable in US dollars, due 2009-2038, principally

0.00%-22.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate bonds and notes, payable in Euro, due 2014, principally 0.00% . . . . . . . . . . . . . . . . . . .
Floating rate bonds and notes, payable in other currencies excluding Japanese yen, US dollars,

Euro, due 2009-2038, principally 0.00-10.00%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other institutions, due 2035, principally 1.64%-3.58% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113,329
2,081

2,109
7,137

168,207
348

2,823
5,725

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,979,414

2,001,207

Subordinated debt(1):

Fixed rate bonds and notes, payable in Japanese yen, due 2009-2018, principally 1.74%-4.00%(3)
. .
Fixed rate bonds and notes, payable in US dollars, due 2012-2030, principally 5.25%-10.88% . . . . .
Adjustable rate bonds and notes, payable in Japanese yen, due 2014-2020, principally

220,753
136,564

154,732
116,494

0.86%-3.35%(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

166,500

190,800

Adjustable rate bonds and notes, payable in Japanese yen, no stated maturity, principally

1.16%-3.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75,400

147,400

Floating rate bonds and notes, payable in Japanese yen, due 2009-2014, principally

0.26%-2.90% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate bonds and notes, payable in US dollars, due 2009-2010, principally 3.12%-3.44% . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other miscellaneous debt

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Obligations under loan securitization transaction accounted for as secured borrowings, due 2009-2015,

121,500
—
207

720,924

192,890
1,381
2

803,699

principally 0.42%-7.29% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242,618

147,294

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,974,577

2,976,272

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 13,675,250

¥ 13,273,288

Notes:
(1) Adjustable rate debts are debts where interest rates are reset in accordance with the terms of the debt agreements, and floating rate debts

are debts where interest rates are repriced in accordance with movements of market indicies.

(2) Minor currencies, such as British pound, Brazilian real, Chinese yuan, Indonesian rupiah, Hong Kong dollars etc, have been summarized

into “Other currencies” classification.

(3) Classification of Long-term debt by type, interest, due date and currency at March 31, 2008 has been restated as follows:

F-57

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the fiscal year
ended March 31, 2008

As
previously
reported

As
restated

(in millions)

MUFG:

Subordinated debt:

Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally 2.42%-4.78% . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 6.25% . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17% . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, no stated maturity,

¥

principally 6.20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, no stated maturity, principally 3.58%-3.70% . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in US dollars, no stated maturity, principally 6.25% . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, no stated maturity,

— ¥
—
—

1,500
501
1,582

—
17,710
501
1,582

600
16,210
—
—

principally 6.20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

600

—

BTMU:

Unsubordinated debt:

Adjustable rate bonds, payable in Japanese yen, due 2014, principally 2.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate bonds, payable in Japanese yen, due 2014, principally 1.38% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, due 2015, principally 1.02%-1.24% . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subordinated debt:

Fixed rate bonds, payable in Japanese yen, due 2010-2020, principally 1.13%-2.75% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in Japanese yen, due 2010-2035, principally 1.17%-3.62% . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in US dollars, due 2009-2013, principally 6.76%-8.36% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds, payable in Japanese yen, due 2018-2022, principally 2.00%-2.49% . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in Japanese yen, due 2012-2028, principally 0.81%-2.90% . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally 1.34%-4.78% . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in US dollars, due 2015-2017, principally 1.55%-2.18% . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 2.15%-6.25% . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds, payable in Euro, due 2015, principally 3.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in Euro, due 2015-2017, principally 2.31%-5.60% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17% . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, due 2017,

—
20,000
14,336

677,942
463,676
354,916
—
127,800
—
—
—
—
—
—

20,000
—
8,000

667,942
407,000
275,522
10,000
766,039
840,449
266,047
423,303
158,190
142,371
208,020

principally 2.75% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

55,030

Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, no stated maturity,

principally 6.20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate bonds, payable in Euro, due 2015, principally 3.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, due 2010-2027, principally 0.95%-1.13% . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, no stated maturity, principally 3.58% . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in US dollars, due 2008-2017, principally 3.03%-8.98% . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Euro, due 2015-2017, principally 4.72%-5.27% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable other currencies excluding Japanese yen, US dollars, Euro, due 2017,

—
158,190
1,590,711
—
609,957
350,391

113,062
—
18,000
150,700
—
—

principally 6.10%-6.20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

168,092

—

Obligations under loan securitization transaction accounted for as secured borrowings, due 2009-2044,

principally 1.40%-7.02% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,117,626

3,123,962

Other subsidiaries:

Subordinated debt:

Fixed rate bonds and notes, payable in Japanese yen, due 2009-2018, principally 1.74%-4.00% . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds and notes, payable in Japanese yen, due 2014-2020, principally 0.86%-3.35% . . . . . . . . . . . . . . . . . .

240,753
146,500

220,753
166,500

The MUFG Group uses derivative financial instruments for certain debts to manage its interest rate and
currency exposures. The derivative financial instruments include swaps, forwards, options and other types of
derivatives. As a result of these derivative instruments, the effective rates reflected in the table above may differ
from the coupon rates. The interest rates for the adjustable and floating rate debt shown in the above table are
those in effect at March 31, 2008 and 2009.

Certain debt agreements permit the MUFG Group to redeem the related debt, in whole or in part, prior to

maturity at the option of the issuer on terms specified in the respective agreements.

F-58

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a summary of maturities of long-term debt subsequent to March 31, 2009:

MUFG

BTMU

Other
subsidiaries

Total

(in millions)

Fiscal year ending March 31:

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥100,020
230,015
9
3
2
20,922

¥ 864,411
1,142,506
881,654
678,037
753,529
5,625,908

¥ 504,408
520,641
302,956
238,349
119,290
1,290,628

¥ 1,468,839
1,893,162
1,184,619
916,389
872,821
6,937,458

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥350,971

¥9,946,045

¥2,976,272

¥13,273,288

16. SEVERANCE INDEMNITIES AND PENSION PLANS

Defined Benefit Pension Plans

The MUFG Group has funded contributory and non-contributory defined benefit pension plans (“pension

benefits”), which cover substantially all of their employees and provide for lifetime annuity payments
commencing at age 65 based on eligible compensation at the time of severance, rank, years of service and other
factors.

BTMU and certain domestic subsidiaries, MUS, Mitsubishi UFJ NICOS and some subsidiaries of MUFG
have non-contributory Corporate Defined Benefit Pension plans (“CDBPs”) which provide benefits to all their
domestic employees. MUTB has a contributory CDBP similar to these non-contributory CDBPs.

In addition to the CDBPs, BTMU and MUTB have non-contributory closed Tax-Qualified Pension Plans
(“closed TQPPs”), which are defined benefit pension plans that provide benefits to certain retired employees,
excluding directors in Japan, based on eligible compensation at the time of severance, years of service and other
factors. MUTB also has a contributory closed TQPP in addition to the non-contributory closed TQPPs.

The MUFG Group also offers qualified and nonqualified defined benefit pension plans in foreign offices

and subsidiaries for their employees. The qualified plans are non-contributory defined pension plans, which
provide benefits upon retirement based on years of service and average compensation and cover substantially all
of the employees of such foreign offices and subsidiaries. With respect to the offices and subsidiaries in the
United States of America, the qualified plans are funded on a current basis in compliance with the requirement of
the Employee Retirement Income Security Act of the United States of America. The nonqualified plans are non-
contributory defined benefit pension plans, under which certain employees earn pay and interest credits on
compensation amounts above the maximum stipulated by applicable laws under the qualified plans.

Severance Indemnities Plans

The MUFG Group has severance indemnities plans (“SIP”s) under which their employees in Japan, other

than those who are directors, are entitled, under most circumstances, upon mandatory retirement at normal
retirement age or earlier termination of employment, to lump-sum severance indemnities based on eligible
compensation at the time of severance, rank, years of service and other factors. Under SIPs, benefit payments in
the form of a lump-sum cash payment with no option to receive annuity payments, upon mandatory retirement at
normal retirement age or earlier termination of employment, are provided. When a benefit is paid in a single
payment to a benefit payee under the plans, the payment represents final relief of the obligation.

F-59

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other Postretirement Plans

The MUFG Group’s foreign offices and subsidiaries, primarily in the United States of America, provide
their employees with certain postretirement medical and life insurance benefits (“other benefits”). Plan assets are
generally invested in government securities, corporate bonds and mutual funds.

Net periodic cost of pension benefits and other benefits for the fiscal years ended March 31, 2007, 2008 and

2009 include the following components:

Domestic subsidiaries

Foreign offices and subsidiaries

2007

Pension
benefits
and SIP

2008

Pension
benefits
and SIP

2009

Pension
benefits
and SIP

2007

2008

2009

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

(in millions)

Service cost—benefits

earned during the fiscal
year . . . . . . . . . . . . . . . . . ¥ 41,123

Interest costs on projected

¥ 38,247 ¥ 39,443 ¥ 7,956

¥ 969 ¥ 7,894 ¥ 1,103 ¥ 7,448 ¥

945

benefit obligation . . . . . .

36,203

36,861

32,926

10,706

1,234

11,976

1,502

11,301

1,369

Expected return on plan

assets . . . . . . . . . . . . . . .

(71,015)

(72,884)

(68,710) (16,195)

(1,353) (18,396)

(1,639)

(16,820)

(1,373)

Amortization of net

actuarial loss (gain) . . . .

(1,172)

(5,591)

1,653

3,797

530

2,978

500

2,133

Amortization of prior

service cost . . . . . . . . . . .

Amortization of net
obligation at
transition . . . . . . . . . . . . .

Loss (gain) on settlements

and curtailment . . . . . . . .
. .

Net periodic benefit cost

(4,197)

(7,543)

(7,373)

221

(89)

125

(87)

2,184

493

(5)

5

237

—

240

77

—

—
(3,569)
¥ (443) ¥ (16,699) ¥ 2,397 ¥ 6,490 ¥ 1,528 ¥ 4,577 ¥ 1,619

(6,282)

4,463

—

—

—

—
¥ 4,139

—
¥ 1,375

320

(78)

192

The following table summarizes the assumptions used in computing the present value of the projected

benefit obligations and the net periodic benefit cost:

Domestic subsidiaries

Foreign offices and subsidiaries

2007

2008

2009

2007

2008

2009

Pension
benefits
and SIP

Pension
benefits
and SIP

Pension
benefits
and SIP

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

2.12% 2.27% 1.93% 5.42% 5.15% 5.87% 6.02% 5.74% 6.01%

2.27

2.07

1.66

5.87

6.02

5.74

6.01

5.70

5.77

2.95

2.98

3.10

4.63

— 4.64

— 4.51

2.98

3.10

3.07

4.64

— 4.51

— 4.64

—

—

Weighted-average assumptions used:
Discount rates in determining

expense . . . . . . . . . . . . . . . . . . . . . .
Discount rates in determining benefit
obligation . . . . . . . . . . . . . . . . . . . .

Rates of increase in future

compensation level for determining
expense . . . . . . . . . . . . . . . . . . . . . .

Rates of increase in future

compensation level for determining
benefit obligation . . . . . . . . . . . . . .

Expected rates of return on plan

assets . . . . . . . . . . . . . . . . . . . . . . .

3.36

3.09

3.13

8.13

8.25

8.04

8.25

7.84

8.00

F-60

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables present the assumed health care cost trend rates for foreign offices and subsidiaries,
which are used to measure the expected cost of benefits for the next year, and the effect of a one-percentage-
point change in the assumed health care cost trend rate:

Initial trend rate . . . . . . . . . . . . . . . . . . . . . . . .
Ultimate trend rate . . . . . . . . . . . . . . . . . . . . . .
Year the rate reaches the ultimate trend rate . .

9.36%
5.00%
2013

9.36%
5.00%
2014

9.00%
5.00%
2011

8.00%
5.00%
2012

UNBC

Other than UNBC

2008(1)

2009(1)

2008(1)

2009(1)

UNBC

Other than UNBC

One-percentage-
point increase

One-percentage-
point decrease

One-percentage-
point increase

One-percentage-
point decrease

(in millions)

Effect on total of service and interest cost

components . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect on postretirement benefit obligation . . .

¥ 254
2,147

¥ (210)
(1,825)

¥

53
510

¥ (42)
(407)

Note:
(1) Fiscal periods of UNBC and foreign subsidiaries end on December 31. Therefore, above tables present the rates and amounts at

December 31, 2007 and 2008, respectively.

F-61

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth the combined funded status and amounts recognized in the accompanying

consolidated balance sheets at March 31, 2008 and 2009:

Domestic subsidiaries

Foreign offices and subsidiaries

2008

2009

2008

2009

Non-contributory
pension benefits
and SIP

Contributory
pension
benefits

Non-contributory
pension benefits
and SIP

Contributory
pension
benefits

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

(in millions)

¥1,324,314

¥358,221

¥1,332,116

¥ 382,611 ¥214,794 ¥24,609 ¥215,559 ¥ 26,028

—
33,297
28,980
—
270
(50)
25,624
(60,231)
(21,435)
1,347

—
—

—
4,950
7,881
1,096
—
—
22,359
(11,896)
—
—

—
—

36,715
34,044
25,778
—
598
(13)
50,900
(54,832)
(16,993)
382

—
—

—
5,399
7,148
1,088
—
—
5,645
(12,831)
—
—

—
7,894
11,976
—
—
—
154
(6,943)
(414)
—

—
1,103
1,502
346
—
—
1,604
(1,778)
(23)
—

—
7,448
11,301
10
—
267
8,915
(6,811)
(156)
—

—
945
1,369
439
—
—
1,745
(1,717)
(18)
—

—
—
— (11,902)

— (7,817)
(49,193)

(1,335)

(738)
(5,063)

Change in benefit obligation:

Benefit obligation at beginning of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments due to adoption of

SFAS No. 158 measurement date
provisions(1) . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . .
Acquisitions . . . . . . . . . . . . . . . . . . . .
Amendments . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . .
Lump-sum payment
. . . . . . . . . . . . .
Curtailment loss . . . . . . . . . . . . . . . . .
Fair value adjustment amount related

to UNBC’s privatization . . . . . . . . .
Translation adjustments . . . . . . . . . .

Benefit obligation at end of fiscal

year . . . . . . . . . . . . . . . . . . . . . . . . . .

1,332,116

382,611

1,408,695

389,060

215,559 26,028

179,523

22,990

Change in plan assets:

Fair value of plan assets at beginning of
. . . . . . . . . . . . . . . . . . . . .

fiscal year
Adjustments due to adoption of

SFAS No. 158 measurement date
provisions(1) . . . . . . . . . . . . . . . . . .
Actual return (loss) on plan assets . . . .
Employer contributions . . . . . . . . . . .
Acquisitions . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . .
Benefits paid . . . . . . . . . . . . . . . . . . .
Fair value adjustment amount related
to UNBC’s privatization . . . . . . . .
Translation adjustments . . . . . . . . . .

Fair value of plan assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . .

Reconciliation of funded status:

Funded status . . . . . . . . . . . . . . . . . . .
Contributions to or benefits paid

from plan assets during the three
months ended March 31, 2008 . . .

1,724,464

631,807

1,854,921

541,751

244,024 19,631

249,337

19,817

—
143,708
46,131
849
—
(60,231)

—
—

—
(86,673)
7,417
—
1,096
(11,896)

—
—

(175,680)
(420,174)
45,131
381
—
(54,832)

—
—

—
(128,307)
5,639
—
1,088
(12,831)

—
14,526
10,133
—
—
(6,943)

—
1,239
1,229
—
346
(1,778)

—
(37,479)
3,051
—
10
(6,811)

—
(3,366)
1,017
—
439
(1,717)

—
—
— (12,403)

— (13,843)
(48,736)

(850)

(1,395)
(3,412)

1,854,921

541,751

1,249,747

407,340

249,337 19,817

145,529

11,383

522,805

159,140

(158,948)

18,280

33,778

(6,211)

(33,994)

(11,607)

9,332

—

—

—

—

—

—

—

Net amount recognized . . . . . . . . . . .

¥ 532,137

¥159,140

¥ (158,948)

¥ 18,280 ¥ 33,778 ¥ (6,211) ¥ (33,994) ¥(11,607)

Amounts recognized in the consolidated

balance sheets:

Prepaid benefit cost . . . . . . . . . . . . . .
Accrued benefit cost . . . . . . . . . . . . .

¥ 583,251
(51,114)

Net amount recognized . . . . . . . . . . .

¥ 532,137

¥159,140
—

¥159,140

¥

7,335
(166,283)

¥ 18,280 ¥ 51,579 ¥ — ¥

2,912 ¥

— (17,801)

(6,211)

(36,906)

—
(11,607)

¥ (158,948)

¥ 18,280 ¥ 33,778 ¥ (6,211) ¥ (33,994) ¥(11,607)

Note:
(1) For the fiscal year ended March 31, 2009, benefit obligations and plan assets are measured at March 31 in accordance with the

measurement date provisions of SFAS No. 158. However, for the fiscal year ended March 31, 2008 and prior fiscal years, benefit
obligations and plan assets of BTMU and certain domestic subsidiaries were measured at December 31. The change in benefit obligation
and fair value of plan assets during the period from January 1, 2008 to March 31, 2008 are reflected in “Adjustments due to adoption of
SFAS No. 158 measurement date provisions.”

F-62

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The aggregated accumulated benefit obligations of these plans at March 31, 2008 and 2009 were as follows;

Domestic
subsidiaries

Foreign offices
and subsidiaries

2008

2009

2008

2009

(in millions)

Aggregated accumulated benefit obligations . . . . . . . . . . . . .

¥1,687,671

¥ 1,781,607

¥195,573

¥ 170,293

The projected benefit obligations, accumulated benefit obligations and fair value of plan assets for the plans

with accumulated benefit obligations in excess of plan assets at March 31, 2008 and 2009 were as follows:

Domestic
subsidiaries

Foreign offices
and subsidiaries

2008

2009

2008

2009

(in millions)

Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligations . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 133,715
127,258
82,483

¥ 1,374,296
1,359,075
1,214,578

¥ 36,067
35,698
18,291

¥ 157,314
141,260
120,403

In accordance with BTMU’s, MUTB’s, MUS’s, Mitsubishi UFJ NICOS’s and other subsidiaries’

employment practices, certain early-terminated employees are entitled to special lump-sum termination benefits.
The amounts charged to operations for such early termination benefits for the fiscal years ended March 31, 2007,
2008 and 2009 were ¥13,137 million, ¥49,054 million and ¥11,247 million, respectively. The ¥49,054 million
charged to operations for the fiscal year ended March 31, 2008 mainly consists of ¥36,613 million related to
Mitsubishi UFJ NICOS of which ¥9,361 million is included in accrued benefit costs.

The MUFG Group adopted the recognition provision of SFAS No. 158 at March 31, 2007. The MUFG
Group recognized the overfunded status or underfunded status of all plans as prepaid benefit cost or accrued
benefit cost on the consolidated balance sheet at March 31, 2007 with an adjustment to accumulated other
changes in equity from nonowner sources, net of taxes. SFAS No. 158 did not change the determination of net
periodic benefit costs.

The following table presents the incremental effect of applying the recognition provision of SFAS No. 158

on individual line items on the consolidated balance sheet at March 31, 2007:

Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

¥

Before
application of
SFAS No. 158

1,266,188

Effect of adjustment
Increase/(Decrease)

(in millions)
¥ (1,108)

636,246

¥ (80,088)

4,851,683

¥283,742

After
application of
SFAS No. 158

¥

¥

¥

1,265,080

556,158

5,135,425

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥186,000,365

¥202,546

¥186,202,911

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

4,995,761

¥ 23,762

¥

5,019,523

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥175,745,837

¥ 23,762

¥175,769,599

Accumulated other changes in equity from nonower sources,
net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

2,213,352

¥178,784

¥

2,392,136

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 10,254,528

¥178,784

¥ 10,433,312

F-63

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the fiscal year ended March 31, 2009, the MUFG Group adopted the measurement date provision of
SFAS No. 158 which changed the measurement date for the plan assets and benefit obligations of BTMU and
certain domestic subsidiaries to coincide with the MUFG Group’s fiscal year-end date. The MUFG Group
recorded a decrease in beginning balance of retained earnings by ¥132 million, net of taxes, and a decrease in the
beginning balance of accumulated other changes in equity from nonowner sources by ¥131,574 million, net of
taxes, as a result of adopting this provision.

The following table presents the amounts recognized in accumulated other changes in equity from nonowner

sources of the MUFG Group at March 31, 2008 and 2009:

Domestic subsidiaries

2008

2009

Foreign offices and subsidiaries

2008

2009

Pension benefits
and SIP

Pension benefits
and SIP

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

(in millions)

Net actuarial loss (gain) . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . .
Net obligation at transition . . . . . . . . . . . . .

Gross pension liability adjustments . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(159,187)
(80,798)
52

(239,933)
98,103

¥ 729,352
(72,388)
(1)

¥ 30,767 ¥ 6,976 ¥ 71,275 ¥ 9,572
(385)
478

107
(528)
— 1,162

260
—

656,963
(261,442)

30,874
(11,914)

7,610
(2,916)

71,535
(28,200)

9,665
(3,756)

Net pension liability adjustments . . . . . . . .

¥(141,830)

¥ 395,521

¥ 18,960 ¥ 4,694 ¥ 43,335 ¥ 5,909

The following table presents the changes in equity from nonowner sources in the fiscal year ended

March 31, 2008 and 2009:

Domestic subsidiaries

2008

2009

Foreign offices and subsidiaries

2008

2009

Pension benefits
and SIP

Pension benefits
and SIP

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

(in millions)

Adjustment due to adoption of SFAS No. 158
measurement date provisions . . . . . . . . . . .
Net actuarial loss arising during the year . . . .
Prior service cost arising during the year . . . .
. . . .
Amortization of net actuarial loss (gain)
Amortization of prior service cost
. . . . . . . . .
Amortization of net obligation at transition . .
Curtailment and settlement . . . . . . . . . . . . . . .
Fair value adjustment amount related to

UNBC’s privatization . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . .

Total changes in Other comprehensive

¥ —
64,852
(137)
5,591
7,543
(493)
7,639

—
—

¥221,504
673,815
320
(1,653)
7,373
5
(4,468)

¥ — ¥ — ¥

4,433
80
(2,978)
(125)

1,969
(1)
(500)
87
— (240)
—
—

— ¥ —
6,481
1
(320)
78
(192)
—

62,766
271
(2,133)
(77)
—
—

—
—
— (1,821)

— (7,976)
(12,190)

(332)

(1,994)
(1,999)

income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥84,995

¥896,896

¥ (411) ¥ 983 ¥ 40,661

¥ 2,055

F-64

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the expected amounts that will be amortized from accumulated other changes

in equity from nonowner sources as components of net periodic benefit cost, before taxes, for the fiscal year
ending March 31, 2010:

Domestic
subsidiaries

Foreign offices
and subsidiaries

Pension benefits
and SIP

Pension
benefits

Other
benefits

(in millions)

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net obligation at transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 53,264
(9,805)
(1)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 43,458

¥ 945
38
—

¥ 983

¥ 813
(69)
119

¥ 863

Asset allocation

The weighted-average asset allocations of plan assets for the pension benefits and other benefits at March

31, 2008 and 2009 were as follows:

Domestic subsidiaries

Foreign office and subsidiaries

Asset category

Pension fund

Japanese equity securities(2) . . . . . . . . . . . . . . .
Japanese debt securities(3)
. . . . . . . . . . . . . . . .
Non-Japanese equity securities . . . . . . . . . . . .
Non-Japanese debt securities . . . . . . . . . . . . . .
General account of life insurance

companies(4) . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term assets . . . . . . . . . . . . . . . . . . . . . . .

Employee retirement benefit trust, primarily

2008(1)

Pension
benefits
and SIP

2009

Pension
benefits
and SIP

11.89%
22.78
10.12
7.16

10.83%
29.14
8.44
9.05

2008(1)

2009

Pension
benefits

Other
benefits

Pension
benefits

Other
benefits

0.47% —% 0.60% —%

—
63.36
27.56

—
54.00
24.00

4.47
0.29
1.60

7.58
0.34
1.48

— 22.00
—
—

4.28
4.33

—
56.68
30.75

2.25
7.08
2.64

—
54.00
23.00

23.00
—
—

Japanese equity securities . . . . . . . . . . . . . . . . . .

41.69

33.14

—

—

—

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Notes:
(1) Upon the adoption of the SFAS No. 158 measurement date provisions on April 1, 2008, the fair value of plan assets are measured at end

(2)

(3)

of fiscal year, whereas they were measured at December 31 until the adoption date. Therefore, plan assets as of March 31, 2008 above
were measured at December 31, 2007.
Japanese equity securities include common stocks issued by the MUFG Group and their affiliated companies in the amounts of
¥8,161 million (0.34% of plan assets) and ¥6,203 million (0.37% of plan assets) to the pension benefits and SIPs at December 31, 2007
and March 31, 2009, respectively.
Japanese debt securities include debt securities issued by the MUFG Group and their affiliated companies in the amounts of
¥4,004 million (0.17% of plan assets) and ¥1,904 million (0.11% of plan assets) to the pension benefits and SIPs at December 31, 2007
and March 31, 2009, respectively.

(4) “General account of life insurance companies” is a contract with life insurance companies that guarantees a return of approximately

1.24% (from April 2007 to March 2008) and 1.17% (from April 2008 to March 2009), which is mainly invested in assets with low
market risk such as Japanese debt securities. In terms of pension plan asset allocation, MUFG regards the general account in the same
category as Japanese debt securities, because it is generally believed that there is a high degree of correlation between their
performances. MUFG carefully monitors life insurance companies by credit rating and other assessments.

F-65

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Investment policies

MUFG’s investment policy for plan assets is based on an asset liability matching strategy which is intended

to maintain adequate liquidity for benefit payments and to achieve a stable increase in the plan assets in the
medium and long term through proper risk control and return maximization. As a general rule, investment
policies for plan assets are reviewed periodically for some plans and in the following situations for all plans:
(1) large fluctuations in pension plan liabilities caused by modifications to pension plans, or (2) changes in the
market environment. The plan assets allocation strategies are the principal determinant in achieving expected
investment returns on the plan assets. Actual asset allocations may fluctuate within acceptable ranges due to
market value variability. Plan assets are managed by a combination of internal and external asset management
companies and are rebalanced when market fluctuations cause an asset category to fall outside of its strategic
asset allocation range. Performance of each plan asset category is compared against established indices and
similar plan asset groups to evaluate whether the risk associated with the portfolio is appropriate for the level of
return.

The weighted-average target asset allocation of plan assets for the pension benefits and other benefits at

March 31, 2009 was as follows:

Asset category

Japanese equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Japanese equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Domestic
subsidiaries

Foreign offices
and subsidiaries

Pension
benefits
and SIP

27.1%
44.9
15.7
8.2
—
4.1

Pension
benefits

Other
benefits

—% —%
—
59.0
32.5
8.5
—

—
70.0
30.0
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0% 100.0% 100.0%

Basis and procedure for estimating long-term return of each asset category

MUFG’s expected long-term rate of return on plan assets for domestic defined benefit pension plans and
SIPs is based on a building-block methodology, which calculates the total long-term rate of return of the plan
assets by aggregating the weighted rate of return derived from both long-term historical performance and
forward-looking return expectations from each asset category.

MUFG has determined the expected long-term rate of return for each asset category as below:

‰

‰

Japanese equity securities: the rate for Japanese debt securities plus a premium for the risk associated
with Japanese equity securities

Japanese debt securities: economic growth rate of Japan

‰ Non-Japanese equity securities: the rate for non-Japanese debt securities plus a premium for the risk

associated with non-Japanese equity securities

‰ Non-Japanese debt securities: global economic growth rate

Foreign offices and subsidiaries periodically reconsider the expected long-term rate of return for their plan

assets. They evaluate the investment return volatility of different asset categories and compare the liability

F-66

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

structure of their pension and other benefits to those of other companies, while considering their funding policy
to maintain a funded status sufficient to meet participants’ benefit obligations, and reduce long-term funding
requirements and pension costs. Based on this information, foreign offices and subsidiaries update the expected
long-term rate of return.

Cash flows

The MUFG Group expects to contribute to the plan assets for the fiscal year ending March 31, 2010 based

upon its current funded status and expected asset return assumptions as follows:

For the pension benefits of domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the pension benefits of foreign offices and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the other benefits of foreign offices and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥37.0 billion
11.0 billion
1.2 billion

Estimated future benefit payments

The following table presents benefit payments expected to be paid, which include the effect of expected

future service for the fiscal years indicated:

Domestic
subsidiaries

Foreign offices
and subsidiaries

Pension benefits
and SIP

Pension
benefits

Other
benefits

(in millions)

Fiscal year ending March 31:

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter (2015-2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 82,076
82,987
83,698
84,602
85,545
442,396

¥ 6,252
6,109
6,723
7,091
7,889
52,327

¥1,371
1,469
1,565
1,635
1,713
9,594

Defined Contribution Plans

The MUFG Group maintains several qualified defined contribution plans in its domestic and foreign offices

and subsidiaries, all of which are administered in accordance with applicable local laws and regulations. Each
office and subsidiary matches eligible employee contributions up to a certain percentage of benefits-eligible
compensation per pay period, subject to plan and legal limits. Terms of the plan, including matching percentage
and vesting periods, are individually determined by each office and subsidiary.

The cost of these defined contribution plans charged to operations for the fiscal years ended March 31,

2007, 2008 and 2009 were ¥4,928 million, ¥4,951 million and ¥5,242 million, respectively.

F-67

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

17. OTHER ASSETS AND LIABILITIES

Major components of other assets and liabilities at March 31, 2008 and 2009 were as follows:

2008

2009

(in millions)

Other assets:

Accounts receivable: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Receivables from brokers, dealers and customers for securities

transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest-earning deposits with the Special Fund and the New Fund

(See Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash collateral paid (See Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 581,359
870,368
503,536

¥ 727,644
885,921
555,745

365,146
793,970
228,188
2,106,744

372,114
28,527
625,931
1,767,599

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,449,311

¥4,963,481

Other liabilities:

Accounts payable: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables to brokers, dealers and customers for securities transactions . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for off-balance-sheet credit instruments . . . . . . . . . . . . . . . . . . . . . . . .
Accrued benefit cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantees and indemnifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash collateral received (See Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued and other liabilities(1)

¥ 618,496
758,409
113,969
97,338
84,517
663,816
72,831
406,428
1,872,028

¥1,456,738
691,256
37,797
84,609
214,796
232,225
63,386
389,238
1,886,783

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,687,832

¥5,056,828

Note:
(1) The balances of Other and Accrued and other liabilities at March 31, 2008 have been adjusted from ¥2,105,325 million and

¥1,871,898 million to ¥2,106,744 million and ¥1,872,028 million, respectively. See Note 1 “Netting of Cash Collateral against
Derivative Exposures” under “Accounting Changes” section for the detail.

Investments in equity method investees include marketable equity securities carried at ¥166,400 million and

¥242,263 million at March 31, 2008 and 2009, respectively. Corresponding aggregated market values were
¥173,285 million and ¥251,481 million, respectively.

The MUFG Group periodically evaluates whether a loss in value of investments in equity method investees

is other than temporary. As a result of evaluations, the MUFG Group recognized other than temporary declines in
the value of an investment and recorded impairment losses related to certain affiliated companies of
¥11,387 million, ¥57,113 million and, ¥60,871 million for the fiscal years ended March 31, 2007, 2008 and 2009,
respectively. The impairment losses are included in Equity in earnings (losses) of equity method investees in the
consolidated statements of operations.

F-68

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18. PREFERRED STOCK

Pursuant to the Articles of Incorporation, MUFG was authorized to issue 120,000,000 shares of Class 3
Preferred Stock, 400,000,000 shares of Class 5 Preferred Stock, 200,000,000 shares of Class 6 Preferred Stock,
200,000,000 shares of Class 7 Preferred Stock and 1,000 share of Class 11 Preferred Stock without par value.

All classes of preferred stock are non-voting and have preference over common stock for the payment of

dividends and the distribution of assets in the event of a liquidation or dissolution of MUFG. They are all
non-cumulative and non-participating with respect to dividend payments. Shareholders of Class 3, Class 5 and
Class 11 Preferred Stock receive a liquidation distribution at ¥2,500, ¥2,500 and ¥1,000 per share, respectively,
and do not have the right to participate in any further liquidation distributions.

The number of preferred stock issued and outstanding at March 31, 2007, 2008 and 2009 was as follows:

Outstanding at
March 31, 2007 Net change

Outstanding at
March 31, 2008

Net change

Outstanding at
March 31, 2009

(number of
shares)

Preferred stock:

Class 3 . . . . . . . . . . . . . . . . . . . . .
Class 5 . . . . . . . . . . . . . . . . . . . . .
Class 8 . . . . . . . . . . . . . . . . . . . . .
Class 11 . . . . . . . . . . . . . . . . . . . .
Class 12 . . . . . . . . . . . . . . . . . . . .

100,000,000
—
17,700,000
1,000
33,700,000

— 100,000,000
—
—
—
—

17,700,000
1,000
33,700,000

— 156,000,000
(17,700,000)
—
(33,700,000)

— 100,000,000
156,000,000
—
1,000
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

151,401,000

— 151,401,000

104,600,000

256,001,000

None of Class 6 and 7 Preferred Stock has been issued.

The aggregate liquidation preference of preferred stock issued and outstanding at March 31, 2007, 2008 and

2009 was as follows:

Aggregate amount at
March 31, 2007

Net change

Aggregate amount at
March 31, 2008

Net change

Aggregate amount at
March 31, 2009

Preferred stock:

Class 3 . . . . . . . . . . . .
Class 5 . . . . . . . . . . . .
Class 8 . . . . . . . . . . . .
Class 11 . . . . . . . . . . .
Class 12 . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . .

¥250,000
—
53,100
1
33,700

¥336,801

¥ —
—
—
—
—

¥ —

(in millions)

¥250,000
—
53,100
1
33,700

¥336,801

¥
—
390,000
(53,100)
—
(33,700)

¥303,200

¥250,000
390,000
—
1
—

¥640,001

Preferred stock included in Capital stock on the consolidated balance sheets at March 31, 2007, 2008 was

¥247,100 million, which consisted of ¥122,100 million of Class 1, and ¥125,000 million of Class 3 Preferred
Stock. Preferred stock included in Capital stock on the consolidated balance sheets at March 31, 2009 was
¥442,100 million, which consisted of ¥122,100 million of Class 1, ¥125,000 million of Class 3 and
¥195,000 million of Class 5 Preferred Stock.

The portion of proceeds from the sale of shares that is designated as capital stock is determined by

resolution of the Board of Directors of MUFG, however, at least 50% of the issue price of newly issued shares is

F-69

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

required to be designated as capital stock at the time of incorporation or share issuance under the Company Law.
Proceeds in excess of amounts designated as capital stock are designated as capital surplus. However, these
provisions are not applied in company reorganization, such as merger, company split and share exchange.
Preferred Stock Classes 8 through 12 were issued in exchange for UFJ Holdings’ preferred stock and recorded in
Capital surplus.

On April 2, 2001, MUFG issued 81,400 shares of Class 1 Preferred Stock at an aggregate issue price of
¥244,200 million. ¥122,100 million was included in Preferred stock and the remaining amount was included in
Capital surplus, net of stock issue expenses. MUFG redeemed 40,700 shares during the fiscal year ended
March 31, 2005 and the remaining 40,700 shares during the fiscal year ended March 31, 2006. At each
redemption, Capital surplus decreased by ¥122,100 million, totaling ¥244,200 million, as provided in the
Commercial Code of Japan (“Code”) and the Articles of Incorporation of MUFG.

On February 17, 2005, MUFG issued 100,000 shares of Class 3 Preferred Stock at ¥2.5 million per share,

the aggregate amount of the issue price being ¥250.0 billion.

On October 3, 2005, MUFG issued 200,000 shares of Class 8 Preferred Stock, 150,000 shares of Class 9
Preferred Stock, 150,000 shares of Class 10 Preferred Stock, 1 share of Class 11 Preferred Stock and 200,000
shares of Class 12 Preferred Stock in exchange for Class II, IV, V, VI and VII Preferred Stock of UFJ Holdings
at an exchange ratio of 1 share of MUFG’s Class 8, 9, 10, 11 and 12 Preferred Stock for each share of UFJ
Holdings’ Class II, IV, V, VI and VII Preferred Stock, respectively.

On October 4, 2005, 69,300 shares of Class 8 Preferred Stock and 57,850 shares of Class 9 Preferred Stock

were converted into 122,763.51 and 127,096.45 shares of common stock, respectively, for the repayment of
public funds.

On December 6, 2005, 51,900 shares of Class 8 Preferred Stock and 24,700 shares of Class 12 Preferred

Stock were converted into 91,939.77 and 31,030.15 shares of common stock, respectively, for the repayment of
public funds.

On February 28, 2006, 51,800 shares of Class 8 Preferred Stock and 12,450 shares of Class 9 Preferred
Stock were converted into 91,762.63 and 22,733.70 shares of common stock, respectively, for the repayment of
public funds.

On April 27, 2006, 45,400 shares of Class 12 Preferred Stock were converted into 57,035.18 shares of

common stock.

On May 23, 2006, 9,300 shares of Class 8 Preferred Stock and 89,357 shares of Class 10 Preferred Stock
originally issued by UFJ Holdings and held by the RCC were exchanged for 179,639 shares of common stock.
The aggregate face amounts of the preferred stock exchanged were ¥27,900 million and ¥178,714 million,
respectively. Subsequent to the exchanges, MUFG purchased 179,639 shares of common stock and an additional
7,923 shares of common stock as treasury stock for an aggregate amount of ¥286,970 million.

On June 8, 2006, 79,700 shares of Class 9 Preferred Stock, 60,643 shares of Class 10 Preferred Stock and
16,700 shares of Class 12 Preferred Stock were exchanged for 277,245 shares of common stock. The aggregate
face amounts of the preferred stock exchanged were ¥159,400 million, ¥121,286 million and ¥16,700 million,
respectively. Subsequent to the exchanges, these shares of common stock were sold in the open market. As a
result, MUFG completed the repayment of all public funds received by the MUFG Group in accordance with the
Law Concerning Emergency Measures for the Early Strengthening of Financial Functions.

F-70

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On June 29, 2006, 9,300 shares of Class 8 Preferred Stock, 79,700 shares of Class 9 Preferred Stock,
150,000 shares of Class 10 Preferred Stock and 16,700 shares of Class 12 Preferred Stock, which had been
recorded as treasury stock, were retired.

On February 14, 2007, 22,800 shares of Class 12 Preferred Stock were exchanged for 28,643 shares of

common stock.

On February 19, 2007, 45,400 shares of Class 12 Preferred Stock were exchanged for 57,035 shares of

common stock.

On March 13, 2007, 11,300 shares of Class 12 Preferred Stock were exchanged for 14,195 shares of

common stock.

On March 29, 2007, 79,500 shares of Class 12 Preferred Stock, which had been recorded as treasury stock,

were retired.

On September 30, 2007, a share of all classes of Preferred Stock was divided into 1,000 shares.

On August 1, 2008, 17,700,000 shares of Class 8 Preferred Stock were exchanged for 43,895,180 shares of

common stock.

On September 25, 2008, 17,700,000 shares of Class 8 Preferred Stock, which had been recorded as treasury

stock, were retired.

On September 30, 2008, 22,400,000 shares of Class 12 Preferred Stock were exchanged for 28,140,710

shares of common stock.

On October 31, 2008, 22,400,000 shares of Class 12 Preferred Stock, which had been recorded as treasury

stock, were retired.

On November 17, 2008, MUFG issued 156,000,000 shares of Class 5 Preferred Stock at ¥ 2,500 per share,

the aggregate amount of the issue price being ¥390.0 billion.

Through the period from February 3, 2009 to February 16, 2009, 11,300,000 shares of Class 12 Preferred

Stock were exchanged for 14,681,040 shares of common stock.

On February 27, 2009, 11,300,000 shares of Class 12 Preferred Stock, which had been recorded as treasury

stock, were retired.

Preferred Stock Issued as of March 31, 2009

Class 3 Preferred Stock

Class 3 Preferred Stock is redeemable at the option of MUFG. At the time of issuance, the Board of
Directors determines an issue price, an annual dividend, and redemption terms, including a redemption price.

Class 3 Preferred Stock was issued by means of a third party allocation to Meiji Yasuda Life Insurance
Company, Tokio Marine & Nichido Fire Insurance Co., Ltd. and Nippon Life Insurance Company. The preferred
stock does not have voting rights at any general meetings of shareholders, unless otherwise provided by
applicable laws and regulations. Preferred dividends are set to be ¥60 per share annually.

F-71

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Class 5 Preferred Stock

Class 5 Preferred Stock is redeemable at the option of MUFG. At the time of issuance, the Board of
Directors determines an issue price, an annual dividend (not to exceed ¥250 per share), and redemption terms,
including a redemption price.

Class 5 Preferred Stock was issued by means of a third party allocation to Nippon Life Insurance Company,
Meiji Yasuda Life Insurance Company, TAIYO LIFE INSURANCE COMPANY, DAIDO LIFE INSURANCE
COMPANY, Tokio Marine & Nichido Fire Insurance Co., Ltd., NIPPONKOA Insurance Company, Limited and
Aioi Insurance Company, Limited. The preferred stock does not have voting rights at any general meetings of
shareholders, unless otherwise provided by applicable laws and regulations. Preferred dividends are set to be
¥115 per share annually, except as of March 31, 2009. Preferred dividends were ¥43 per share as of March 31,
2009.

Class 11 Preferred Stock

Class 11 preferred stockholders are entitled to receive annual non-cumulative dividends of ¥5.30 per share

with priority over common stockholders.

Class 11 Preferred Stock is convertible into fully paid shares of MUFG common stock at the election of

holders from establishment of MUFG to July 31, 2014, except during certain excluded periods, at an initial
conversion price of ¥918.70 per share of common stock, subject to anti-dilution adjustments. The conversion
price was subject to reset annually on July 15 from 2006 to 2013 to the average market price of the common
stock for the 30 trading day period, if the average market price was less than the conversion price prior to the
reset but not less than ¥918.70 per share. The acquisition price and the acquisition floor price of Class 11
Preferred Stock were adjusted as ¥889.60 per share on December 15, 2008, and ¥888.40 per share on January 14,
2009, in accordance with the provisions relating to the adjustment of the acquisition price set forth in the terms
and conditions of Class 11 Preferred Stock.

All Class 11 Preferred Stock outstanding on August 1, 2014 will be mandatorily converted into shares of

common stock at a conversion ratio of ¥1,000 divided by the higher of the average market price of the common
stock for the 30 trading day period beginning 45 trading days prior to August 1, 2014 or ¥802.60.

Beneficial Conversion Feature

Convertible preferred stock contains a beneficial conversion feature if the effective conversion price (either
initially or after being reset) for a share of common stock upon conversion is less than the market price of a share
of common stock when the preferred stock was issued. MUFG accounts for the beneficial conversion features of
its preferred stock under the recognition and measurement principles of EITF Issue No. 98-5, “Accounting for
Convertible Securities with Beneficial Conversions Features or Contingently Adjustable Conversion Ratios” and
EITF Issue No. 00-27, “Application of EITF Issue No. 98-5 to Certain Convertible Instruments.”

Beneficial conversion feature discounts are measured as the excess of the market price of a share of
common stock when the preferred stock is issued over the initial or reset preferred stock conversion price per
share of common stock. Beneficial conversion feature discounts are charged to Capital surplus when recognized
and amortized to retained earnings as non-cash preferred dividends using the effective yield method. Initial
beneficial conversion feature discounts are amortized over the period from the issuance date of the preferred
stock to the mandatory conversion date. Contingent beneficial conversion feature discounts are recognized when
the reset conversion price is determinable and amortized over the period from the conversion price reset date to
the mandatory conversion date. Any remaining unamortized beneficial conversion feature discount when
preferred stock is converted at the option of the holder before the mandatory conversion date is immediately
charged to retained earnings as a non-cash preferred dividend.

F-72

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The changes in the unamortized discount arising from beneficial conversion features of the preferred stock

during the fiscal years ended March 31, 2007, 2008 and 2009 were as follows:

Class 8

Class 11

Class 12

Total

(in millions)

Fiscal year ended March 31, 2008:
Balance at March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization to retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,490
¥ 1
(3,330) —

¥12,237
(4,579)

¥16,728
(7,909)

Balance at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,160

¥ 1

¥ 7,658

¥ 8,819

Fiscal year ended March 31, 2009:
Balance at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Addition on conversion price/ratio reset . . . . . . . . . . . . . . . . . . . . . . . .
Amortization to retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charged to retained earnings on conversion of preferred stock . . . . . .

¥ 1,160
—
(1,160)
—

¥ 1
—
(1)
—

¥ 7,658
659
(3,618)
(4,699)

¥ 8,819
659
(4,779)
(4,699)

Balance at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ — ¥— ¥ — ¥ —

19. COMMON STOCK AND CAPITAL SURPLUS

The changes in the number of issued shares of common stock during the fiscal years ended March 31, 2007,

2008 and 2009 were as follows:

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by conversion of
Class 8 Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by conversion of
Class 9 Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by conversion of
Class 10 Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by conversion of
Class 12 Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . .

Issuance of new shares of common stock by way of

Offering (Public Offering) . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by way of Third-
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Party Allotment

2007

2008

2009

10,247,851,610

(shares)
10,861,643,790

10,861,643,790

16,474,000

145,532,000

273,899,000

177,887,180

—

—

—

—

—

—

—

—

43,895,180

—

—

42,821,750

634,800,000

65,200,000

Balance at end of fiscal year

. . . . . . . . . . . . . . . . . . . . . . . .

10,861,643,790

10,861,643,790

11,648,360,720

Under the Company Law, issuances of common stock, including conversions of bonds and notes, are

required to be credited to the common stock account for at least 50% of the proceeds and to the legal capital
surplus account (“legal capital surplus”) for the remaining amounts.

The Company Law permits Japanese companies, upon approval by the Board of Directors, to issue shares in

the form of a “stock split,” as defined in the Company Law (see Note 1). Also, prior to April 1, 1991, Japanese
companies were permitted to issue free share distributions. BTMU and MUTB from time to time made free share
distributions. These free distributions usually ranged from 5% to 10% of outstanding common stock and
publicly-owned corporations in the United States issuing shares in similar transactions would be required to
account for them as stock dividends as of the shareholders’ record date by reducing retained earnings and

F-73

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

increasing the appropriate capital accounts by an amount equal to the fair value of the shares issued. The
application of such United States accounting practice to the cumulative free distributions made by BTMU and
MUTB at March 31, 2009, would have increased capital accounts by ¥1,910,106 million with a corresponding
decrease in unappropriated retained earnings (accumulated deficit).

The Company Law permits that common stock, legal reserve, additional paid-in capital, and other capital
surplus and retained earnings can be transferred among these accounts under certain conditions upon the approval
of a shareholders’ meeting. The Company Law limits the increase of paid in capital in case disposition of
treasury stock and issuance of common stock are performed at the same time.

Common Stock Issued during the fiscal year ended March 31, 2009

On December 15, 2008, MUFG issued 634,800,000 shares of common stock by way of offering and sold
300,000,000 shares of common stock through a secondary offering of shares by way of sale of Treasury stock.
Both types of stock were offered at ¥399.80 per share (issue price and selling price at ¥417.00 per share) for
¥253,793 million and ¥119,940 million, respectively. As a result, ¥29,811 million was included in Capital stock,
and the same amount was also included in Capital surplus.

On December 16, 2008, MUFG sold 65,200,000 shares of common stock through a secondary offering of

shares by way of over-allotment, in which an underwriter borrows securities from certain shareholder(s) of
MUFG to sell the shares, at a selling price of ¥417.00 per shares for ¥27,188 million. In connection with the
secondary offering by way of over-allotment, on January 14, 2009, MUFG issued 65,200,000 new shares of
common stock by way of third-party allotment at ¥399.80 per share for ¥26,067 million. As a result, ¥13,033
million was included in Capital stock, and the same amount was also included in Capital surplus.

As for Capital surplus, the fee retained by MUFG’s subsidiary as underwriting compensation, net of stock

issue expense, was included in the total Capital surplus balance in addition to the balance mentioned above.

Treasury Stock

The Company Law permits Japanese companies to effect purchases of their own shares pursuant to a

resolution by the shareholders at an annual general meeting until the conclusion of the following ordinary general
meeting of shareholders, and to hold such shares as their treasury stock indefinitely regardless of purpose.
However, the Company Law requires the amount of treasury stock purchased should be within the amount of
retained earnings available for dividends. Disposition of treasury stock is subject to the approval of the Board of
Directors and is to follow the procedures similar to a public offering of shares for subscription.

UFJ Holdings was a recipient of public funds from the RCC. These public funds were injected in the form
of a preferred stock investment and UFJ preferred stock was exchanged as part of the merger for newly issued
preferred stock of MUFG.

Related to the repayment of public funds received, the RCC converted certain preferred stock held into
common stock. Subsequent to the conversions, the RCC sold these shares of common stock in the open market.
Primarily in response to the sales by the RCC, MUFG repurchased a total of ¥1,047,882 million its common
stock from the market on October 5, 2005, December 7, 2005, March 1, 2006 and May 24, 2006.

Parent Company Shares Held by Subsidiaries and Affiliated Companies

At March 31, 2009, certain subsidiaries and affiliated companies owned shares of common stock of MUFG.

Such shares are included in treasury stock in the consolidated balance sheets and deducted from the MUFG
Group’s shareholders’ equity.

F-74

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20. RETAINED EARNINGS, LEGAL RESERVE AND DIVIDENDS

In addition to the Company Law, Japanese banks, including BTMU and MUTB, are required to comply with

the Banking Law of Japan (the “Banking Law”).

Legal Reserve Set Aside as Appropriation of Retained Earnings and Legal Capital Surplus

Under the Company Law

The Company Law provides that an amount at least equal to 10% of the aggregate amount of cash dividends

and certain appropriations of retained earnings associated with cash outlays applicable to each period shall be
appropriated and set aside as a legal reserve until the aggregate amount of legal reserve set aside as an
appropriation of retained earnings and the legal capital surplus equals 25% of stated capital as defined in the
Company Law.

Under the Banking Law

The Banking Law provides that an amount at least equal to 20% of the aggregate amount of cash dividends
and certain appropriations of retained earnings associated with cash outlays applicable to each fiscal period shall
be appropriated and set aside as a legal reserve until the aggregate amount of legal reserve set aside as
appropriation of retained earnings and the legal capital surplus equals 100% of stated capital as defined in the
Company Law.

Transfer of Legal Reserve

Under the Company Law

Under the Company Law, Japanese companies, including MUFG, were permitted, pursuant to a resolution

by the shareholders at a general meeting, to make legal reserve set aside as appropriation of retained earnings and
legal capital surplus available for dividends until the aggregate amount of the legal reserve and legal capital
surplus equals 25% of stated capital as defined in the Company Law.

Under the Company Law, Japanese companies, including MUFG, BTMU and MUTB, are permitted,
primarily pursuant to a resolution by the shareholders at a general meeting, to transfer legal capital surplus and
legal reserve to stated capital and/or retained earnings without limitations of thresholds, thereby effectively
removing the thresholds provided for in the Company Law and Banking Law at the company’s discretion.

Under the Banking Law

Under the Banking Law, Japanese banks, including BTMU and MUTB, were permitted, pursuant to a

resolution by the shareholders at a general meeting, to make legal reserve set aside as an appropriation of
retained earnings and legal capital surplus available for dividends until the aggregate amount of the legal reserve
and legal capital surplus equals 100% of stated capital as defined in the Company Law.

Unappropriated Retained Earnings (Accumulated Deficit) and Dividends

In addition to the provision that requires an appropriation for legal reserve as described above, the Company

Law and the Banking Law impose certain limitations on the amount available for dividends.

Under the Company Law, the amount available for dividends is based on the amount recorded in MUFG’s

general books of account maintained in accordance with accounting principles generally accepted in Japan
(“Japanese GAAP”). The adjustments included in the accompanying consolidated financial statements but not

F-75

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recorded in MUFG’s general books of account, as explained in Note 1, have no effect on the determination of
retained earnings available for dividends under the Company Law. Under the Banking Law, MUFG, BTMU and
MUTB have to meet the minimum capital adequacy requirements and distributions of retained earnings of
MUFG, BTMU and MUTB, which are otherwise distributable to shareholders, are restricted in order to maintain
the minimum 4.0% Tier I capital for capital adequacy purpose.

MUFG was established on April 2, 2001 with common stock of ¥924,400 million, preferred stock of
¥222,100 million, legal capital surplus of ¥2,838,693 million and no retained earnings in accordance with the
Code and Japanese GAAP.

On October 1, 2005, MUFG started with common stock and preferred stock of ¥1,383,052 million, legal
capital surplus of ¥3,577,570 million and retained earnings of ¥757,458 million in accordance with the Code and
Japanese GAAP.

MUFG’s amount available for dividends, at March 31, 2009, was ¥4,470,846 million, which is based on the

amount recorded in MUFG’s general books of account under Japanese GAAP.

Annual dividends, including those for preferred stock, are approved by the shareholders at an annual general

meeting held subsequent to the fiscal year to which the dividends are applicable. In addition, a semi-annual
interim dividend payment may be made by resolution of the Board of Directors, subject to limitations imposed by
the Company Law and the Banking Law.

In the accompanying consolidated statements of shareholders’ equity, dividends and appropriations to legal

reserve shown for each fiscal year represent dividends approved and paid during the fiscal year and the related
appropriation to legal reserve.

21. REGULATORY CAPITAL REQUIREMENTS

Japan

MUFG, BTMU, MUTB and MUS are subject to various regulatory capital requirements promulgated by the
regulatory authorities of the countries in which they operate. Failure to meet minimum capital requirements will
initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on
MUFG’s consolidated financial statements.

In Japan, MUFG, BTMU, and MUTB are subject to regulatory capital requirements promulgated by the

FSA in accordance with the provisions of the Banking Law and related regulations. A banking institution is
subject to the minimum capital requirements both on a consolidated basis and a stand-alone basis, and is required
to maintain the minimum capital irrespective of whether it operates independently or as a subsidiary under the
control of another company. When a bank holding company manages operations of its banking subsidiaries, it is
required to maintain the minimum capital adequacy ratio on a consolidated basis in the same manner as its
subsidiary banks. The FSA provides two sets of capital adequacy guidelines. One is a set of guidelines applicable
to Japanese banks and bank holding companies with foreign offices conducting international operations, as
defined, and the other is applicable to Japanese banks and bank holding companies that are not engaged in
international operations conducted by foreign offices.

Under the capital adequacy guidelines applicable to a Japanese banking institution with international

operations conducted by foreign offices, a minimum capital ratio of 8.0% is required.

F-76

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Basel Committee on Banking Supervision of the Bank for International Settlements (“BIS”) sets capital

adequacy standards for all internationally active banks to ensure minimum level of capitals.

The Basel Committee worked over recent years to revise the 1988 Accord, and in June 2004, “International

Convergence of Capital Measurement and Capital Standards: A Revised Framework” called Basel II was
released. MUFG calculated capital ratios as of March 31, 2008 and 2009 in accordance with Basel II.

Basel II is based on “three pillars”: (1) minimum capital requirements, (2) the self-regulation of financial
institutions based on supervisory review process, and (3) market discipline through the disclosure of information.
The framework of the 1988 Accord, Basel I, is improved and expanded to be included in “minimum capital
requirements” as the first pillar of Basel II.

As for the denominator of the capital ratio, retaining the Basel I Framework, Basel II provides more risk-

sensitive approaches and a range of options for determining the risk-weighted assets.

“Credit Risk”

The revised Framework provides options for determining the risk-weighted assets for credit risk to allow
banks to select approaches that are most appropriate for their level of risk assessment while the Basel I
Framework provided a sole measurement approach. Banks choose one of three approaches: “Standardized
Approach”, “Foundation Internal Ratings-Based Approach (“FIRB”)” or “Advanced Internal Ratings-Based
Approach (“AIRB”)”.

“Market Risk”

In the “Amendment to the Capital Accord to incorporate market risks” of the year 1996, a choice between
two methodologies “the Standardized Methodology” and “Internal Models Approach” is permitted.
“Combination of Internal Models Approach and the Standardized Methodology” is also allowed under
certain conditions. This is unchanged in Basel II.

“Operational Risk”

Operational risk, which is defined as the risk of loss resulting from inadequate or failed internal processes,
people and systems or from external events, is newly added in Basel II. Basel II presents three methods for
calculating operational risk capital charges: (i) the Basic Indicator Approach; (ii) the Standardized
Approach; or (iii) Advanced Measurement Approaches (“AMA”). Banks adopt one of the three approaches
to determine the risk-weighted assets for operational risk.

Banks need to obtain approval from their supervisors prior to adopting the following approaches to calculate

capital requirements for each risk:

‰

‰

‰

the Internal Ratings-Based (“IRB”) Approach for credit risk

the Internal Models Approach for market risk

the Standardized Approach and AMA for operational risk

On the other hand, as for the numerator of the capital ratio, Basel II takes over in principle the eligible

regulatory capital stipulated in Basel I.

Capital is classified into three tiers, referred to as Tier I, Tier II and Tier III capital and deductions from capital.

F-77

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Tier I capital generally consists of shareholders’ equity items, including common stock, preferred stock, capital
surplus, minority interests and retained earnings, less any recorded goodwill and other items such as treasury stock.
Tier II capital generally consists of general reserves for credit losses up to 1.25% of risk-weighted assets, 45% of the
unrealized gains on investment securities available for sale, 45% of the land revaluation excess, the balance of
perpetual subordinated debt and the balance of subordinated term debt with an original maturity of over five years
subject to some limitations, up to 50% of Tier I capital. Preferred stock is includable in Tier I capital unless the
preferred stock has a fixed maturity, in which case, such preferred stock will be a component of Tier II capital. Tier
III capital generally consists of short-term subordinated debt with an original maturity of at least two years, subject
to certain limitations. At least 50% of a bank’s capital base must be maintained in the form of Tier I capital.

Deductions include a banks’ holdings of capital issued by other banks, or deposit-taking institutions and
investments in subsidiaries engaged in banking and financial activities which are not consolidated in accordance
with Japanese GAAP.

Due to a change in credit risk measurement by adopting Basel II, general provisions for credit losses can be

included in Tier II capital according to the proportion of credit risk-weighted assets subject to the Standardized
Approach only. Under the IRB approach, the capital is adjusted by the amount of the difference between total
eligible provisions and total expected losses calculated within the IRB approach. Under certain conditions, banks
are also required to deduct from regulatory capital securitization exposure, any increase in equity capital resulting
from a securitization transaction and expected losses on equity exposures under the Probability of Default/Loss
Given Default approach.

If a banking institution is not engaged in international operations conducted by foreign offices, it is subject

to another set of capital adequacy requirements with a minimum capital ratio of 4.0%. Such guidelines
incorporate measures of risk under the risk-weighted approach similar to the guidelines applicable to banking
institutions with international operations. Qualifying capital is classified into Tier I and Tier II capital.

The Banking Law and related regulations require that one of three categories be assigned to banks and bank
holding companies, based on its risk-adjusted capital adequacy ratio if the bank fails to meet the minimum target
capital adequacy ratio. These categories indicate capital deterioration, which may be subject to certain prompt
corrective action by the FSA.

MUFG, BTMU and MUTB have international operations conducted by foreign offices, as defined, and are

subject to the 8.0% capital adequacy requirement.

The MUFG Group’s proprietary assets do not include trust assets under management and administration in a

capacity of agent or fiduciary and, accordingly trust account assets are generally not included in the capital
measure. However, guarantees for trust principal are counted as off-balance-sheet items requiring a capital
charge in accordance with the capital adequacy guidelines.

In Basel II, MUFG, and most of its major subsidiaries, adopted FIRB as of March 31, 2008 and adopted
AIRB as of March 31, 2009 to calculate capital requirements for credit risk. MUFG adopted the Standardized
Approach to calculate capital requirements for operational risk, as of March 31, 2008 and 2009. As for market
risk, MUFG adopted the Internal Models Approach mainly to calculate general market risk and adopted the
Standardized Methodology to calculate specific risk, as of March 31, 2008 and 2009.

F-78

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The risk-adjusted capital amounts and ratios of MUFG, BTMU and MUTB presented in the following table

are based on amounts calculated in accordance with Japanese GAAP as required by the FSA:

Actual

For capital
adequacy purposes

Amount

Ratio

Amount

Ratio

(in millions, except percentages)

Consolidated:

At March 31, 2008:

Total capital (to risk-weighted assets):

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥12,215,857
10,611,064
1,650,220

11.19% ¥8,726,050
7,574,951
11.20
1,005,213
13.13

8.00%
8.00
8.00

Tier I capital (to risk-weighted assets):

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,293,762
7,037,578
1,248,993

7.60
7.43
9.94

4,363,025
3,787,475
502,607

4.00
4.00
4.00

At March 31, 2009:

Total capital (to risk-weighted assets):

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,478,440
9,637,052
1,447,919

11.77% ¥7,799,477
6,413,908
12.02
911,627
12,70

8.00%
8.00
8.00

Tier I capital (to risk-weighted assets):

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,575,189
6,127,624
1,159,785

7.76
7.64
10.17

3,899,738
3,206,954
455,814

4.00
4.00
4.00

Stand-alone:

At March 31, 2008:

Total capital (to risk-weighted assets):

BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,675,813
1,607,250

11.44% ¥6,760,684
998,714
12.87

8.00%
8.00

Tier I capital (to risk-weighted assets):

BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,467,550
1,192,890

7.65
9.55

3,380,342
499,357

4.00
4.00

At March 31, 2009:

Total capital (to risk-weighted assets):

BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,431,674
1,411,772

12.74% ¥5,920,101
903,726
12.49

8.00%
8.00

Tier I capital (to risk-weighted assets):

BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,175,439
1,112,966

8.34
9.85

2,960,050
451,863

4.00
4.00

MUS and other securities subsidiaries in Japan and overseas are also subject to regulatory capital
requirements of the countries or jurisdictions in which they operate. In Japan, the Financial Instruments and
Exchange Law and related ordinance require financial instruments firms to maintain a minimum capital ratio of
120% calculated as a percentage of capital accounts less certain fixed assets, as determined in accordance with
Japanese GAAP, against amounts equivalent to market, counterparty credit and operations risks. Specific
guidelines are issued as a ministerial ordinance which details the definition of essential components of the capital
ratios, including capital, deductible fixed asset items and risks, and related measures. Failure to maintain a
minimum capital ratio will trigger mandatory regulatory actions. A capital ratio of less than 140% will call for
regulatory reporting and a capital ratio of less than 100% may lead to a suspension of all or part of the business
for a period of time and cancellation of a registration.

F-79

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2008 and 2009, MUS’s capital accounts less certain fixed assets of ¥619,275 million and
¥502,823 million, were 299.4% and 353.7% of the total amounts equivalent to market, counterparty credit and
operations risks, respectively.

Management believes, as of March 31, 2009, that MUFG, BTMU, MUTB and other regulated securities

subsidiaries met all capital adequacy requirements to which they are subject.

United States of America

In the United States of America, UNBC and its banking subsidiary Union Bank, N.A. (On December 18,

2008, Union Bank changed its name from Union Bank of California, N.A.), BTMU’s largest subsidiaries
operating outside Japan, are subject to various regulatory capital requirements administered by U.S. Federal
banking agencies, including minimum capital requirements. Under the capital adequacy guidelines and the
regulatory framework for prompt corrective action, UNBC and Union Bank must meet specific capital guidelines
that involve quantitative measures of UNBC’s and Union Bank’s assets, liabilities, and certain off-balance-sheet
items as calculated under U.S. regulatory accounting practices. UNBC’s and Union Bank’s capital amounts and
Union Bank’s prompt corrective action classification are also subject to qualitative judgments by the regulators
about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require UNBC and Union Bank

to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined) and of Tier I capital (as defined) to quarterly average assets (as
defined).

Although Basel II is not yet effective in the U.S., the U.S. banking and thrift agencies published in July
2007 an interagency notice regarding the implementation of Basel II in the U.S. The agencies agreed to resolve
major outstanding issues and lead to finalization of a rule implementing the advanced approaches for computing
large banks’ risk-based capital requirements. The agencies also agreed to proceed promptly to issue a proposed
rule that would provide all non-core banks with the option to adopt a standardized approach.

The figures on the tables below are calculated according to Basel I as Basel II is not yet effective in the U.S.

UNBC’s and the Union Bank’s actual capital amounts and ratios are presented as follows:

Actual

For capital
adequacy purposes

Amount

Ratio

Amount

Ratio

(in millions, except percentages)

UNBC:

At December 31, 2007:

. . . . . . .
Total capital (to risk-weighted assets)
Tier I capital (to risk-weighted assets) . . . . . . .
Tier I capital (to quarterly average assets)(1) . . .

At December 31, 2008:

. . . . . . .
Total capital (to risk-weighted assets)
Tier I capital (to risk-weighted assets) . . . . . . .
Tier I capital (to quarterly average assets)(1) . . .

$6,124
4,534
4,534

$7,240
5,467
5,467

11.21%
8.30
8.27

11.63%
8.78
8.42

$4,369
2,184
2,194

$4,980
2,490
2,597

8.00%
4.00
4.00

8.00%
4.00
4.00

Note:
(1) Excludes certain intangible assets.

F-80

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Actual

For capital
adequacy purposes

Ratios OCC
requires to be
“well capitalized”

Amount

Ratio

Amount

Ratio

Amount

Ratio

(in millions, except percentages)

Union Bank:

At December 31, 2007:

Total capital (to risk-weighted assets) . . . . . .
Tier I capital (to risk-weighted assets) . . . . . .
Tier I capital (to quarterly average

$5,631
4,449

10.38% $4,339
2,169
8.20

8.00% $5,423
3,254
4.00

10.00%
6.00

assets)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,449

8.20

2,171

4.00

2,714

5.00

At December 31, 2008:

Total capital (to risk-weighted assets) . . . . . .
Tier I capital (to risk-weighted assets) . . . . . .
Tier I capital (to quarterly average

$6,831
5,380

11.01% $4,962
2,481
8.67

8.00% $6,203
3,722
4.00

10.00%
6.00

assets)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,380

8.31

2,590

4.00

3,237

5.00

Note:
(1) Excludes certain intangible assets.

Management believes, as of December 31, 2008, that UNBC and Union Bank met all capital adequacy

requirements to which they are subject.

As of December 31, 2007 and 2008, the most recent notification from the U.S. Office of the Comptroller of
the Currency (“OCC”) categorized Union Bank as “well capitalized” under the regulatory framework for prompt
corrective action. To be categorized as “well capitalized,” Union Bank must maintain a minimum total risk-based
capital ratio of 10%, a Tier I risk-based capital ratio of 6%, and a Tier I leverage ratio of 5% as set forth in the
table. There are no conditions or events since that notification that management believes have changed
Union Bank’s category.

F-81

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

22. EARNINGS (LOSS) PER COMMON SHARE

Reconciliations of net income (loss) and weighted average number of common shares outstanding used for

the computation of basic earnings (loss) per common share to the adjusted amounts for the computation of
diluted earnings (loss) per common share for the fiscal years ended March 31, 2007, 2008 and 2009 are as
follows:

Income (loss) (Numerator):
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations—net

Net income (loss)
Income allocable to preferred shareholders:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beneficial conversion feature . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of induced conversion of Mitsubishi UFJ NICOS Co.,

2007

2008

2009

(in millions)

¥

582,105 ¥ (540,690) ¥ (1,468,040)
—
(1,746)

(817)

581,288

(542,436)

(1,468,040)

(13,629)
(267,432)

(6,669)
(7,909)

(6,399)
(9,478)

Ltd. Class 1 stock (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

(7,676)

Net income (loss) available to common shareholders . . . . . . . . . . . . .

300,227

(557,014)

(1,491,593)

Effect of dilutive instruments:
Convertible debt—MUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock options—UNBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) available to common shareholders and assumed

(985)
(835)

—
—

—
—

conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

298,407

¥ (557,014) ¥ (1,491,593)

Shares (Denominator):
Weighted average common shares outstanding . . . . . . . . . . . . . . . . .
Effect of dilutive instruments:
Convertible preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,053,408

10,305,911

10,821,091

1

—

—

Weighted average common shares for diluted computation . . . . . . . .

10,053,409

10,305,911

10,821,091

2007

2008

2009

(thousands of shares)

Earnings (loss) per common share:
Basic earnings (loss) per common share:

Income (loss) from continuing operations available to common
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) available to common shareholders . . . . . . . . .

Diluted earnings (loss) per common share:

Income (loss) from continuing operations available to common
shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .

Net income (loss) available to common shareholders . . . . . . . . .

2007

2008

(in yen)

2009

¥

¥

¥

¥

29.94
(0.08)

29.86

29.76
(0.08)

29.68

¥

¥

¥

¥

(53.88) ¥
(0.17)

(137.84)
—

(54.05) ¥

(137.84)

(53.88) ¥
(0.17)

(137.84)
—

(54.05) ¥

(137.84)

F-82

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the fiscal year ended March 31, 2007, Class 11 Preferred Stock, 1⁄4% Convertible Bonds due 2014
issued by MUS and stock options issued by MUS and UNBC that could potentially dilute earnings per common
share in the future were included in the computation of diluted earnings per common share. Class 8, Class 9,
Class 10, and Class 12 Preferred Stock, convertible preferred stock issued by The Senshu Bank Ltd. (“Senshu
Bank”) and Mitsubishi UFJ NICOS and certain stock options issued by UNBC and MU Hands-on Capital Ltd.
could potentially dilute earnings per common share but were not included in the computation of diluted earnings
per common share due to their antidilutive effects.

For the fiscal year ended March 31, 2008, Class 8, Class 11 and Class 12 Preferred Stock, convertible
preferred stock issued by Senshu Bank and Mitsubishi UFJ NICOS, 1⁄4% Convertible Bonds due 2014 issued by
MUS and stock options issued by MUFG, MUS, kabu.com Securities, UNBC, MU Hands-on Capital Ltd. and
Palace Capital Partners A Co., Ltd. could potentially dilute earnings per common share but were not included in
the computation of diluted earnings per common share due to their antidilutive effects.

For the fiscal year ended March 31, 2009, Class 11 Preferred Stock, convertible preferred stock issued by

Senshu Bank and Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd. and stock options issued by MUFG,
kabu.com Securities, MU Hands-on Capital Ltd. and FOODSNET Corporation could potentially dilute earnings
per common share but were not included in the computation of diluted earnings per common share due to their
antidilutive effects.

In computing the number of the potentially dilutive common shares for the fiscal year ended March 31,

2007, Class 11 Preferred Stock has been based on the conversion price at March 31, 2007 (i.e., ¥918.7).

23. DERIVATIVE FINANCIAL INSTRUMENTS

The MUFG Group uses various derivative financial instruments both for trading purposes and for purposes

other than trading (primarily risk management purposes) in the normal course of business to meet the financial
needs of its customers, as a source of revenue and to manage its exposures to a variety of risks. The MUFG
Group is a party to derivatives, including swaps, forwards, options and other types of derivatives, dealing
primarily with market risk associated with interest rate, foreign currency, equity and commodity prices, and
credit risk associated with counterparty’s nonperformance of transactions.

Market risk is the possibility that future changes in market indices make the financial instruments less
valuable. Credit risk is the possibility that a loss may result from a counterparty’s failure to perform according to
the terms and conditions of the contract, which may exceed the value of underlying collateral. To reduce credit
risk, the MUFG Group may require collateral or guaranties based on a case-by-case assessment of
creditworthiness of each customer and evaluation of the instrument. The MUFG Group also uses master netting
agreements in order to mitigate overall counterparty credit risk.

Trading Activities

The MUFG Group’s trading activities include dealing and other activities measured at fair value with gains
and losses recognized currently in earnings. As part of its trading activities, the MUFG Group offers a variety of
derivative financial instruments and debt instruments for managing interest rate and foreign exchange risk to its
domestic and foreign corporate and financial institution customers. The MUFG Group also enters into other types
of derivative transactions, including equity and credit-related contracts, for its own account.

F-83

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Risk Management Activities

As part of its risk management activities, the MUFG Group uses certain derivative financial instruments to

manage its interest rate and currency exposures. The MUFG Group maintains an overall interest rate risk
management strategy that incorporates the use of interest rate contracts to minimize significant unplanned
fluctuations in earnings that are caused by interest rate volatility. The MUFG Group’s goal is to manage interest
rate sensitivity so that movements in interest rates do not adversely affect net interest income. As a result of
interest rate fluctuations, hedged fixed-rate assets and liabilities appreciate or depreciate in market value. Gains
or losses on the derivative instruments that are linked to the hedged fixed-rate assets and liabilities are expected
to substantially offset this unrealized appreciation or depreciation. Interest income and interest expense on
hedged variable-rate assets and liabilities, respectively, increase or decrease as a result of interest rate
fluctuations. Gains and losses on the derivative instruments that are linked to these hedged assets and liabilities
are expected to substantially offset this variability in earnings.

The MUFG Group enters into interest rate swaps and other contracts as part of its interest rate risk

management strategy primarily to alter the interest rate sensitivity of its loans, investment securities and deposit
liabilities. The MUFG Group’s principal objectives in risk management include asset and liability management.
Asset and liability management is viewed as one of the methods for the MUFG Group to manage its interest rate
exposures on interest-bearing assets and liabilities. Interest rate contracts, which are generally non-leveraged
generic interest rate and basis swaps, options and futures, allow the MUFG Group to effectively manage its
interest rate risk position. Option contracts primarily consist of caps, floors, swaptions and options on index
futures. Futures contracts used for asset and liability management activities are primarily index futures providing
for cash payments based upon the movement of an underlying rate index. The MUFG Group enters into forward
exchange contracts, currency swaps and other contracts in response to currency exposures resulting from
on-balance-sheet assets and liabilities denominated in foreign currencies in order to limit the net foreign
exchange position by currency to an appropriate level.

The risk management activities reduce the MUFG Group’s risk exposures economically, however,
derivatives used for risk management activities often fail to meet certain conditions to qualify for hedge
accounting and the MUFG Group accounts for such derivatives as trading positions.

For the fiscal years ended March 31, 2008 and 2009, except for derivative transactions conducted by certain

foreign subsidiaries, the MUFG Group accounted for derivatives held for risk management purposes as trading
positions and measured them at fair value.

Embedded Derivatives

Features embedded in other non-derivative hybrid contracts are separated from the host contracts and
measured at fair value when they are not clearly and closely related to the host contracts and meet the definition
of a derivative. The change in the fair value of such an embedded derivative is recognized currently in earnings,
unless it qualifies as a hedge. The fair value of the embedded derivative is presented in the consolidated balance
sheets with the host contract. The MUFG Group accounts for credit-linked notes as host contracts with embedded
derivatives and measures the entire contracts at fair value.

Credit Derivatives

The MUFG Group enters into credit derivatives to manage credit risk exposures, to facilitate client

transactions, and for proprietary trading purpose, under which they provide counterparties protection against the
risk of default on a set of debt obligations issued by a specified reference entity or entities. Types of these credit
derivatives include principally single name credit default swaps, index and basket credit default swaps and credit-
linked notes. The MUFG Group will have to perform under a credit derivative if a credit event as defined under

F-84

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the contract occurs. Such credit events include bankruptcy, dissolution or insolvency of the referenced entity,
default and restructuring of the obligations of the referenced entity. The MUFG Group’s counterparties are
banks, broker-dealers, insurance and other financial institutions. The contractual or notional amounts of these
instruments represent the maximum potential amounts of future payments without consideration of possible
recoveries under recourse provisions or from collateral held or pledged. The table below summarizes certain
information regarding protection sold through credit default swaps and credit-linked notes as of March 31, 2009:

Protection sold

Maximum potential/Notional amount
by expiration period

Less than
1 year

1-5 years

Over
5 years

(in millions)

Total

Estimated
fair value

(Asset)/
Liability(1)

Single name credit default swaps:

Investment grade(2)
Non-investment grade
Not rated

. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .

¥212,209
29,923
—

¥1,895,384
257,401
15,911

¥ 57,741
1,277
—

¥2,165,334
288,601
15,911

¥ 136,879
38,339
595

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

242,132

2,168,696

59,018

2,469,846

175,813

Index and basket credit default swaps held by

BTMU:

Investment grade(2)
Non-investment grade
Not rated

. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Index and basket credit default swaps held by

MUS:

Investment grade(2)
Non-investment grade
Not rated

. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Index and basket credit default swaps held by

MUTB:

Normal
Close Watch(3)

. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total index and basket credit default

45,429
1,991
—

47,420

10,000
—
—

10,000

42,000
3,000

45,000

450,247
39,555
17,342

507,144

393,922
5,000
1,291

400,213

30,000
3,000

33,000

7,835
—
—

7,835

2,000
—
—

2,000

—
—

—

503,511
41,546
17,342

562,399

405,922
5,000
1,291

412,213

72,000
6,000

78,000

27,096
4,521
9,922

41,539

40,838
1,920
(3)

42,755

3,241
1,361

4,602

swaps sold

. . . . . . . . . . . . . . . . . . . . .

102,420

940,357

9,835

1,052,612

88,896

Total credit default swaps sold

. . . . . . . .

¥344,552

¥3,109,053

¥ 68,853

¥3,522,458

¥ 264,709

Credit-linked notes(4)

. . . . . . . . . . . . . . . . . . .

¥

1,455

¥

71,597

¥229,800

¥ 302,852

¥(220,416)

Notes:
(1) Fair value amounts are shown on a gross basis prior to cash collateral or counterparty netting.
(2) The MUFG Group considers ratings of Baa3/BBB- or higher to meet the definition of investment grade.
(3) Reference entities classified as “Close Watch” require close scrutiny because their business performance is unstable or their financial

condition is unfavorable.

(4) Fair value amounts shown represent the fair value of the hybrid instruments.

F-85

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Single name credit default swaps — A credit default swap protects the buyer against the loss of principal on

a bond or loan in case of a default by the issuer. The protection buyer pays a periodic premium over the life of
the contracts and is protected for the period. The MUFG Group in turn will have to perform under a credit default
swap if a credit event as defined under the contracts occurs. In order to provide an indication of the current
payment/performance risk of the credit default swaps, the external credit ratings, primarily Moody’s and S&P
credit ratings, of the underlying reference entity of the credit default swaps are disclosed.

Index and basket credit default swaps — Index and basket credit default swaps are credit default swaps that
reference multiple names through underlying baskets or portfolios of single name credit default swaps. Typically,
in the event of a default on one of underlying names, the MUFG Group will have to pay a pro rata portion of the
total notional amount of the credit default index or basket contract. In order to provide an indication of the
current payment/performance risk of these credit default swaps, BTMU and MUS ratings scale is based upon the
entity’s internal ratings, which generally correspond to ratings defined by primarily Moody’s and S&P, of the
underlying reference entities comprising the basket or index were calculated and disclosed. The current payment/
performance risk of these credit default swaps, MUTB rating scale is based upon the entity’s internal ratings,
which is the same credit rating system utilized for estimating probabilities of default within its loan portfolio.

Credit-linked notes (“CLNs”) — The MUFG Group has invested in CLNs, which are hybrid instruments
containing embedded derivatives, in which credit protection has been sold to the issuer of the note. If there is a
credit event of a reference entity underlying the CLN, the principal balance of the note may not be repaid in full
to the Company. As part of its financing activities, MUS and other securities subsidiaries in Japan and overseas
issue CLNs.

The MUFG Group may economically hedge its exposure to credit derivatives by entering into offsetting
derivative contracts. At March 31, 2009, the carrying value and notional value of credit protection sold in which
the MUFG Group held purchased protection with identical underlying referenced entities were approximately
¥201 billion and ¥2,605 billion, respectively.

Collateral is held by the MUFG Group in relation to these instruments. Collateral requirements are
determined at the counterparty level and cover numerous transactions and products as opposed to individual
contracts.

UNBC

Derivative positions are integral components of UNBC’s designated asset and liability management
activities. UNBC uses interest rate derivatives to manage the sensitivity of UNBC’s net interest income to
changes in interest rates. These instruments are used to manage interest rate risk relating to specified groups of
assets and liabilities, primarily London Interbank Offered Rate (“LIBOR”)-based commercial loans, certificates
of deposit and subordinated debt.

Cash Flow Hedges

Hedging Strategies for Variable Rate Loans and Certificates of Deposit and Other Time Deposits

UNBC engages in several types of cash flow hedging strategies for which the hedged transactions are
forecasted future loan interest payments, and the hedged risk is the variability in those payments due to changes
in the designated benchmark rate, e.g., U.S. dollar LIBOR. In these strategies, the hedging instruments are
matched with groups of variable rate loans such that the tenor of the variable rate loans and that of the hedging
instrument are identical. Cash flow hedging strategies include the utilization of purchased floor, cap, collar and
corridor options and interest rate swaps. At December 31, 2008, the weighted average remaining life of the
currently active (excluding any forward positions) cash flow hedges was approximately 1.1 years.

F-86

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

UNBC uses purchased interest rate floors to hedge the variable cash flows associated with 1-month LIBOR
or 3-month LIBOR indexed loans. Payments received under the floor contract offset the decline in loan interest
income caused by the relevant LIBOR index falling below the floor’s strike rate.

UNBC uses interest rate floor corridors to hedge the variable cash flows associated with 1-month LIBOR or
3-month LIBOR indexed loans. Net payments to be received under the floor corridor contracts offset the decline
in loan interest income caused by the relevant LIBOR index falling below the corridor’s upper strike rate, but
only to the extent the index falls to the lower strike rate. The corridor will not provide protection from declines in
the relevant LIBOR index to the extent it falls below the corridor’s lower strike rate.

UNBC uses interest rate collars to hedge the variable cash flows associated with 1-month LIBOR or
3-month LIBOR indexed loans. Net payments to be received under the collar contract offset the decline in loan
interest income caused by the relevant LIBOR index falling below the collar’s floor strike rate while net
payments to be paid will reduce the increase in loan interest income caused by the LIBOR index rising above the
collar’s cap strike rate.

UNBC uses interest rate swaps to hedge the variable cash flows associated with 1-month LIBOR or 3-month

LIBOR indexed loans. Payments to be received (or paid) under the swap contract will offset the fluctuations in
loan interest income caused by changes in the relevant LIBOR index. As such, these instruments hedge all
fluctuations in the loans’ interest income caused by changes in the relevant LIBOR index.

UNBC uses purchased interest rate caps to hedge the variable interest cash flows associated with the
forecasted issuance and rollover of short-term, fixed rate CDs. In these hedging relationships, UNBC hedges the
LIBOR component of the CD rates, which is 3-month LIBOR, based on the CDs’ original term to maturity,
which reflects their repricing frequency. Net payments to be received under the cap contract offset the increase in
interest expense caused by the relevant LIBOR index rising above the cap’s strike rate.

UNBC uses interest rate cap corridors to hedge the variable cash flows associated with the forecasted
issuance and rollover of short-term, fixed rate CDs. In these hedging relationships, UNBC hedges the LIBOR
component of the CD rates, either 1-month LIBOR, 3-month LIBOR, or 6-month LIBOR, based on the original
term to maturity of the CDs, which reflects their repricing frequency. Net payments to be received under the cap
corridor contract offset the increase in deposit interest expense caused by the relevant LIBOR index rising above
the corridor’s lower strike rate, but only to the extent the index rises to the upper strike rate. The corridor will not
provide protection from increases in the relevant LIBOR index to the extent it rises above the corridor’s upper
strike rate.

Hedging transactions are structured at inception so that the notional amounts of the hedge are matched with

an equal principal amount of loans or CDs, the index and repricing frequencies of the hedge match those of the
loans or CDs, and the period in which the designated hedged cash flows occurs is equal to the term of the hedge.
As such, most of the ineffectiveness in the hedging relationship results from the mismatch between the timing of
reset dates on the hedge versus those of the loans or CDs. For the year ended December 31, 2008, UNBC
recognized a net gain of ¥55 million due to ineffectiveness, which is recognized in other noninterest expense,
compared to a net gain of ¥12 million for the year ended December 31, 2006 and a net loss of ¥2 million for the
year ended December 31, 2007.

For cash flow hedges, based upon amounts included in accumulated other changes in equity from nonowner
sources at March 31, 2009, the MUFG Group expects to realize approximately ¥11 billion in net interest income
for the fiscal year ending March 31, 2010. This amount could differ from amounts actually realized due to
changes in interest rates and the addition of other hedges subsequent to March 31, 2009.

F-87

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair Value Hedges

Economic Hedging Strategy for “MarketPath” Certificates of Deposit

UNBC engages in an economic hedging strategy in which interest bearing CDs issued to customers, which

are tied to the changes in the Standard and Poor’s 500 index (“S&P 500”), are exchanged for a fixed rate of
interest. UNBC accounts for the embedded derivative in the CDs at fair value. A total return swap that
encompasses the value of a series of options that had individually hedged each CD is valued at fair value. The
change in fair value of the embedded derivative and the hedging instrument are recognized as interest expense.

Hedging Strategy for Subordinated Debt

UNBC engages in an interest rate hedging strategy in which one or more interest rate swaps are associated
with a specified interest bearing liability, UNBC’s ten-year, subordinated debt issuance, in order to convert the
liability from a fixed rate to a floating rate instrument. This strategy mitigates the changes in fair value of the
hedged liability caused by changes in the designated benchmark interest rate, U.S. dollar LIBOR.

The fair value hedging transactions for the issuances of the subordinated debt were structured at inception to

mirror all of the provisions of the subordinated debt, which allows UNBC to assume that no ineffectiveness
exists.

Other

UNBC uses To-Be-Announced (“TBA”) contracts to fix the price and yield of anticipated purchases or sales

of mortgage-backed securities that will be delivered at an agreed upon date. This strategy hedges the risk of
variability in the cash flows to be paid or received upon settlement of the TBA contract.

24. OBLIGATIONS UNDER GUARANTEES AND OTHER OFF-BALANCE-SHEET INSTRUMENTS

Obligations under Guarantees

The MUFG Group provides customers with a variety of guarantees and similar arrangements, including

standby letters of credit, financial and performance guarantees, credit protections, liquidity facilities, other
off-balance-sheet credit-related supports and similar instruments, in order to meet the customers’ financial and
business needs. The table below summarizes the contractual or notional amounts with regard to obligations under
guarantees and similar arrangements at March 31, 2008 and 2009. The contractual or notional amounts of these
instruments represent the maximum potential amounts of future payments without consideration of possible
recoveries under recourse provisions or from collateral held or pledged.

For certain types of derivatives, such as written interest rate options and written currency options, the
maximum potential future payments are unlimited. Accordingly, it is impracticable to estimate the maximum
potential amount of future payments. As such, the notional amounts of the related contracts, other than the
maximum potential payments, are included in the table.

The MUFG Group mitigates credit risk exposure resulting from guarantees by utilizing various techniques,

including collateralization in the form of cash, securities, and real properties based on management’s credit
assessment of the guaranteed parties and the related credit profile. In order to manage the credit risk exposure,
the MUFG Group also enters into sub-participation contracts with third parties who will fund a portion of the
credit facility and bear its share of the loss to be incurred in the event that the borrower fails to fulfill its
obligations. The following table includes guarantees of ¥187.3 billion and ¥189.0 billion at March 31, 2008 and
2009, respectively, which are participated out to third parties. The contractual or notional amounts summarized in

F-88

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the following table do not necessarily bear any direct relationship to the future actual credit exposure, primarily
because of those risk management techniques.

At March 31, 2008:

Maximum
potential/
Contractual
or Notional
amount

Standby letters of credit and financial guarantees . . . . . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantees for the repayment of trust principal
. . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

¥ 5,254
2,351
59,295
1,468
4,085
720

Amount by expiration period

Less than
1 year

1-5 years

Over
5 years

(in billions)

¥ 2,262
1,495
34,131
206
3,046
720

¥ 1,527
718
22,270
1,254
168
—

¥1,465
138
2,894
8
871
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥73,173

¥41,860

¥25,937

¥5,376

At March 31, 2009:

Maximum
potential/
Contractual
or Notional
amount

Standby letter of credit and financial guarantees . . . . . . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantee for repayment of trust principal . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,550
2,489
67,954
1,234
3,158
128

Amount by expiration period

Less than
1 year

1-5 years

Over
5 years

(in billions)

¥ 2,095
1,573
29,656
173
2,098
128

¥ 1,113
785
34,946
1,055
382
—

¥1,342
131
3,352
6
678
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥79,513

¥35,723

¥38,281

¥5,509

Nature of Guarantee Contracts

Standby letters of credit and financial guarantees generally include an obligation of an issuer or a designated

third party to guarantee the performance of the customer to the beneficiary under the terms of contracts such as
lending contracts and other similar financial transactions. The MUFG Group is required to make payments to the
guaranteed parties in the events that the customers fail to fulfill the obligations under the contracts. The
guarantees whose contractual maturities are over 5 years are mainly comprised of guarantees of housing loans.

Performance guarantees are the contracts that contingently require the MUFG Group to make payments to
the guaranteed party based on another party’s failure to perform under an obligating agreement, except financial
obligation. For example, performance guarantees include guarantees of completion of construction projects.

Derivative instruments that are deemed to be included within the definition of guarantees as prescribed in

FIN No. 45 include certain written options and credit default swaps. In order for the MUFG Group to determine
if those derivative instruments meet the definition of guarantees as prescribed in FIN No. 45, the MUFG Group
has to track whether the counterparties are actually exposed to the losses that will result from the adverse change
in the underlyings. Accordingly, the MUFG Group has disclosed information on all credit default swaps and
certain written options for which there is a possibility of meeting the definition of guarantees as prescribed in

F-89

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FIN No. 45, regardless of whether the counterparties have assets or liabilities related to the underlyings of the
derivatives. However, credit derivatives sold by the MUFG Group at March 31, 2009 are excluded from this
presentation, as they are disclosed in Note 23.

Guarantees for the repayment of trust principal include guarantees which the MUFG Group provides for the
repayment of principal of certain types of trust products, including certain jointly operated designated money in
trusts and loan trusts. The MUFG Group manages and administers trust assets in a capacity of agent or fiduciary
on behalf of its customers and trust assets are segregated from the assets of the MUFG Group, which keeps
separate records for the trust activities. The MUFG Group, in principle, does not assume any risks associated
with the trust assets under management, however, as permitted by applicable laws, the MUFG Group provides
guarantees for the repayment of principal of such trust products. At March 31, 2008 and 2009, the contract
amounts of such guarantees for repayment of trust principal were ¥1,468 billion and ¥1,235 billion, respectively.
The accounting methods used for the segregated records of trust activities are different from financial accounting
principles and practices. However, the MUFG Group follows an approach similar to those used for its own assets
to identify an impairment of an asset included in the trusts with guaranteed principal, with inherent variations
applicable to trust accounting. Amounts of loans deemed to be impaired are written off directly and are charged
to the trust account profits earned during the trust accounting period. Write-downs of securities are also directly
charged to the trust account profits. The amounts of trust assets written-off in the segregated records were
¥9 million and ¥9 million, for the fiscal years ended March 31, 2008 and 2009, respectively. These amounts were
reflected in the segregated records as deductions before net profits earned by trust accounts for the accounting
period. In addition, a part of trust account profits is set aside as a reserve to absorb losses in the trust asset
portfolios in the segregated records in accordance with relevant legislation concerning the trust business and/or
trust agreements. Statutory reserves for loan trusts are established at a rate of 4.0% of the trust fees up to the
amounts of 0.5% of the trust principal in accordance with the legislation. Reserves for jointly operated designated
money in trusts are established at a rate of 0.3% of the balance of loans and other assets in the trust account
assets in accordance with the related trust agreement. The amounts of such reserves set aside in the segregated
records were ¥1,839 million and ¥1,196 million at March 31, 2008 and 2009, respectively. The MUFG Group is
required to provide an allowance for off-balance-sheet instruments on such guarantees in the financial statements
only when the principal is deemed to be impaired. Management believes that the MUFG Group will not incur any
losses on the guarantees.

Liabilities of trust accounts represent the trustee’s potential responsibility for temporary payments to
creditors of liabilities of trust accounts making use of funds of the MUFG Group, unless there are the certain
agreements with trust creditors that have provisions limiting the MUFG Group’s responsibility as a trustee to the
trust account assets. A trust may incur external liabilities to obtain certain services during the terms of the trust
arrangement. While, in principle, any liabilities of a trust are payable by the trust account and its beneficiaries, a
trustee’s responsibility may be interpreted to encompass temporary payments for the trust account liabilities
when the trust account does not maintain sufficient liquidity available for such liabilities unless the agreement
with trust creditors does not limit the trustee’s responsibility to the trust account assets. At March 31, 2008 and
2009, there were liabilities of ¥4,085 billion and ¥3,158 billion, respectively, in the segregated records of trust
accounts including the amounts related to liabilities with provisions limiting trustee responsibility. Liabilities of
trust accounts principally included obligations to return collateral under security lending transactions. The
MUFG Group has experienced no significant losses on such responsibilities and its exposure to the risk
associated with the temporary payments is judged to be remote because trust account liabilities are generally
covered by the corresponding trust account assets; the MUFG Group continuously monitors the liabilities of trust
accounts and assesses the trust account’s ability to perform its obligations to prevent any unfavorable outcomes;
and the MUFG Group claims its recourse for its temporary payments against the trust account assets and the
beneficiaries.

F-90

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other includes security lending indemnifications. Security lending indemnifications are the indemnifications
for institutional customers of securities lending transactions against counterparty default. All lending transactions
are collateralized, primarily by cash.

Carrying Amount

At March 31, 2008 and 2009, the carrying amounts of the liabilities related to guarantees and similar
instruments set forth above were ¥1,145,698 million and ¥1,364,620 million, respectively, which are included in
Other liabilities and Trading account liabilities. However, credit derivatives sold by the MUFG Group at
March 31, 2009 are excluded from this presentation, as they are disclosed as Fair Value in Note 23. In addition,
Other liabilities also include an allowance for off-balance-sheet instruments of ¥58,316 million and ¥46,757
million, respectively, related to these transactions.

Performance Risk

The MUFG Group monitors the performance risk of its guarantees using the same credit rating system
utilized for estimating probabilities of default within its loan portfolio. The MUFG Group credit rating system is
consistent with both the method of evaluating credit risk under Basel II and those of third-party credit rating
agencies. On certain underlying referenced credits or entities, ratings are not available. Such referenced credits
are included in the “Not rated” category.

Presented in the table below is the maximum potential amount of future payments classified based upon
internal credit ratings as of March 31, 2009. The determination of the maximum potential future payments is
based on the notional amount of the guarantees without consideration of possible recoveries under recourse
provisions or from collateral held or pledged. Such amounts bear no relationship to the anticipated losses, if any,
on these guarantees.

At March 31, 2009:

Standby letters of credit and financial guarantees . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount by borrower grade

Maximum
potential/
Contractual
or Notional
amount

¥4,550
2,489

¥7,039

Normal

Close
watch(1)

(in billions)
¥307
106

¥4,213
2,368

¥6,581

¥413

Likely to
become
Bankrupt
or Legally/
Virtually
Bankrupt(2)

¥18
5

¥23

Not
rated

¥12
10

¥22

Notes:
(1) Borrowers classified as “Close watch” require close scrutiny because their business performance is unstable or their financial condition is

unfavorable.

(2) Borrowers classified as “Likely to become Bankrupt” are not yet bankrupt, but are in financial difficulty with poor progress in achieving
their business restructuring plans or are likely to bankrupt in the future. Borrowers classified as “Legally or Virtually Bankrupt” are
considered to be legally bankrupt or are virtually bankrupt.

The guarantees the MUFG Group does not classify based upon internal credit ratings are as follows.

The MUFG Group records all derivative contracts at fair value. Aggregate market risk limits have been

established, and market risk measures are routinely monitored against these limits. The MUFG Group also
manages its exposure to these derivative contracts through a variety of risk mitigation strategies, including, but

F-91

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

not limited to, offsetting economic hedge positions. The MUFG Group expects the risk of loss to be remote and
believes that the notional amounts of the derivative contracts generally exceed its exposure.

Guarantees for the repayment of trust principal include guarantees which the MUFG Group provides for the
repayment of principal of certain types of trust products, including certain jointly operated designated money in
trusts and loan trusts. The MUFG Group stably manages and administers such trust products with attention to
risk and the profitability of trust assets. Management believes that the MUFG Group will not incur any losses on
the guarantees.

Liabilities of trust accounts represent the trustee’s potential responsibility for temporary payments to
creditors of liabilities of trust accounts making use of funds of the MUFG Group. The MUFG Group has
experienced no significant losses on such responsibilities and its exposure to the risk associated with the
temporary payments is judged to be remote because trust account liabilities are generally covered by the
corresponding trust account assets.

The MUFG Group conducts securities lending transactions for institutional customers as a fully disclosed

agent. At times, securities lending indemnifications are issued to guarantee that a security lending customer will
be made whole in the event the borrower does not return the security subject to the lending agreement and
collateral held is insufficient to cover the market value of the security. All lending transactions are collateralized,
primarily by cash. At March 31, 2009, the MUFG Group had no exposure that would require it to pay under this
securities lending indemnification, since the collateral market value exceeds the securities lent.

Other Off-balance-sheet Instruments

In addition to obligations under guarantees set forth above, the MUFG Group issues other off-balance-sheet

instruments for purposes other than trading. Such off-balance-sheet instruments consist of lending-related
commitments, including commitments to extend credit and commercial letters of credit that the MUFG Group
provides to meet the financing needs of its customers. Once the MUFG Group issues these financial instruments,
the MUFG Group is required to extend credit to or make certain payments to the customers or beneficiaries
specified pursuant to the underlying contracts unless otherwise provided in the contracts. Since many of these
commitments expire without being drawn upon, the total commitment amounts do not necessarily represent
future cash requirements. At March 31, 2009, approximately 73% of these commitments will expire within one
year, 25% from one year to five years and 2% after five years. The table below summarizes the contractual
amounts with regard to these commitments at March 31, 2008 and 2009:

2008

2009

(in billions)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit
Commitments to make investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥61,906
762
114
26

¥59,373
530
144
8

Commitments to extend credit, which generally have fixed expiration dates or other termination clauses, are

legally binding agreements to lend to customers. Commitments are different from guarantees in that the
commitments are generally revocable or have provisions that enable the MUFG Group to avoid payments in the
event of violations of any conditions of the contracts and certain deterioration of the potential borrowers’
financial condition. Commitments to extend credit may expire without being drawn upon. Therefore, the total
commitment amounts do not necessarily represent future cash requirements.

F-92

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Commercial letters of credit, used for facilitating trade transactions, are generally secured by underlying
goods. The MUFG Group continually monitors the type and amount of collateral and other security, and requires
counterparties to provide additional collateral or guarantors as necessary.

Commitments to make investments are legally binding contracts to make additional contributions to
corporate recovery or private equity investment funds in accordance with limited partnership agreements. Some
of these funds, in which the MUFG Group has significant variable interests, are described in Note 25.

25. VARIABLE INTEREST ENTITIES

In the normal course of its business, the MUFG Group has financial interests in various entities which may

be deemed to be variable interest entities (“VIEs”) such as asset-backed conduits, various investment funds,
special purpose entities created for structured financing, repackaged instruments, and entities created for the
securitization of the MUFG Group’s assets.

The following tables present the total assets of consolidated and non-consolidated VIEs, as well as the
maximum exposure to loss to non-consolidated VIEs at March 31, 2008. In addition, the following tables present
the assets and liabilities of consolidated VIEs, the total assets of non-consolidated VIEs, the maximum exposure
to loss resulting from its involvement with non-consolidated VIEs, and the assets and liabilities of non-
consolidated VIEs recorded on the consolidated balance sheet at March 31, 2009.

Consolidated VIEs

At March 31, 2008:

Asset-backed conduits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securitization conduits of client properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special purpose entities created for structured financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repackaged instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securitization of the MUFG group’s assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated assets

(in millions)
¥ 6,693,615
1,012
1,842,667(1)
121,574(2)
121,951(3)

3,466,385

328,422(4)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥12,575,626

Consolidated VIEs

At March 31, 2008:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans(6)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated assets

(in millions)
¥

263,726(5)

1,526,753
498,827
9,791,399

494,921(7)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥12,575,626

Notes:
(1) The amount of Investment funds at March 31, 2008 has been restated from ¥1,857,463 million to ¥1,842,667 million.
(2) The amount of Special purpose entities created for structured financing at March 31, 2008 has been restated from ¥56,353 million to

¥121,574 million.

(3) The amount of Repackaged instruments at March 31, 2008 has been restated from ¥108,348 million to ¥121,951 million.
(4) The amount of Others at March 31, 2008 has been restated from ¥328,450 million to ¥328,422 million.
(5) The amount of Cash at March 31, 2008 has been restated from ¥263,420 million to ¥263,726 million.
(6) The amount of Loans at March 31, 2008 has been restated from ¥6,354,329 million to ¥6,433,125 million. In addition, the difference

between ¥6,433,125 million and ¥9,791,399 million is resulted from the inclusion of the amount of Securitization of the MUFG group’s
assets which had been disclosed out of the column.

(7) The amount of All other assets at March 31, 2008 has been restated from ¥401,912 million to ¥494,921 million.

F-93

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidated VIEs

Consolidated assets

Consolidated liabilities

At March 31, 2009:

Total

Cash

Trading
account
assets

Investment
securities

Loans

All
other
assets

Other
short-term
borrowings

Long-term
debt

All
other
liabilities

Total

(in millions)

Asset-backed

conduits . . . . . . . . ¥ 6,450,238 ¥125,301 ¥

1,284,010

51,016

904 ¥400,038 ¥5,912,685 ¥ 11,310 ¥ 6,457,106 ¥5,816,673 ¥ 395,614 ¥244,819
34,006 127,436

1,782 240,104

163,903

25,998

2,461

965,110

Investment funds . . .
Special purpose

entities created for
structured
financing . . . . . . .

Repackaged

instruments . . . . .

Securitization of the
MUFG group’s
assets . . . . . . . . . .
Others . . . . . . . . . . .

164,614

1,515

—

—

159,990

3,109

165,726

12,736

152,740

250

85,679

71

84,569

1,039

—

—

91,866

540

84,743

6,583

2,994,713
195,709

2,282
37,017

—
823

— 2,900,834
121,377
—

91,597
36,492

3,049,217
194,873

— 3,046,444
36,889

121,643

2,773
36,341

Total . . . . . . . . . ¥11,174,963 ¥217,202 ¥1,051,406 ¥427,075 ¥9,096,668 ¥382,612 ¥10,122,691 ¥5,954,053 ¥3,750,436 ¥418,202

Significant Non-consolidated VIEs

At March 31, 2008:

Assets

Maximum
exposure

(in millions)

Asset-backed conduits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special purpose entities created for structured financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repackaged instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 13,309,410
22,176,202
8,262,297
82,485,858
9,509,108

¥1,991,526
1,104,978
2,145,160
2,365,456
2,022,406

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥135,742,875

¥9,629,526

Significant Non-consolidated VIEs

On-balance sheet assets

On-balance
sheet liabilities

At March 31, 2009:

Assets

Maximum
exposure

Total

Trading
account
assets

Investment
securities

Loans

Other
assets Total

Trading
account
liabilities

Asset-backed conduits . . . . . . . . . . . . . . . ¥ 11,055,771 ¥2,091,098 ¥1,305,466 ¥
Investment funds . . . . . . . . . . . . . . . . . . .
Special purpose entities created for

12,175,644

940,640

877,816 177,933

(in millions)
1,540 ¥

50,569 ¥1,253,357 ¥ — ¥ — ¥ —
—

407,313 45,926 —

246,644

structured financing . . . . . . . . . . . . . . .
Repackaged instruments . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,328,660 1,816,391 1,529,732
20,580
57,393,642 1,823,526 1,738,573 430,501
4,055
8,906,982 1,612,938 1,183,634

84,932
799,351
349,426

1,417,528
508,721
830,153

6,692 —
— —
— 565

—
—
565

Total . . . . . . . . . . . . . . . . . . . . . . . . . ¥101,860,699 ¥8,284,593 ¥6,635,221 ¥634,609 ¥1,530,922 ¥4,417,072 ¥52,618 ¥565

¥565

A portion of the assets and liabilities of consolidated VIEs presented in the table above were derived from
transactions between consolidated VIEs and the MUFG Group, the primary beneficiary, and were eliminated as
intercompany transactions. The eliminated amounts of assets were ¥210,222 million of Cash and due from banks
and Interest-earning deposits in other banks, ¥1,431 million of Trading account assets, ¥27,440 million of
Investment securities, ¥235,110 million of Loans and ¥4,849 million of All other assets at March 31, 2008, and
¥176,185 million of Cash and due from banks and Interest-earning deposits in other banks, ¥902 million of
Trading account assets, ¥25,708 million of Investment securities, ¥259,838 million of Loans and ¥8,428 million
of All other assets at March 31, 2009. The eliminated amounts of liabilities were ¥4,137,196 million of Other
short-term borrowings, ¥1,640,992 million of Long-term debt and ¥70,759 million of All other liabilities at
March 31, 2009.

F-94

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In general, the creditors or beneficial interest holders of consolidated VIEs have recourse only to the assets

of those VIEs and do not have recourse to other assets of the MUFG Group, except where the MUFG Group
provides credit support as in the case of certain asset-backed conduits.

Maximum exposure to loss on each type of entity is determined, based on the carrying amount of any on-

balance-sheet assets and any off-balance-sheet liability held, net of any recourse liabilities. Therefore, the
maximum exposure to loss represents the theoretical maximum loss the MUFG Group could possibly incur at
each balance sheet date and does not reflect the likelihood of ever incurring such a loss. The difference between
the amount of on-balance-sheet assets and liabilities and the maximum exposure to loss primarily comprises the
difference between the remaining undrawn commitments and the amounts of guarantees.

Analysis of Each Transaction Category

Asset-Backed Conduits

This category primarily comprises the following:

Multi-Seller Conduits (MUFG-sponsored Asset-Backed Commercial Paper (“ABCP”) Conduits and Other
ABCP Conduits)

The MUFG Group administers several conduits under asset-backed financing programs under which the

conduits purchase financial assets from the MUFG Group’s customers, primarily trade accounts receivables, by
issuing short-term financing instruments, primarily commercial paper, to third-party investors. Under the asset-
backed financing programs, the MUFG Group acts as an agent for the conduits, which enter into agreements with
the MUFG Group’s customers where the customers transfer assets to the conduits in exchange for monetary
consideration. The MUFG Group also underwrites commercial paper for the conduits that is secured by the assets
held by them and provides program-wide liquidity and credit support facilities to the conduits. The MUFG Group
receives fees related to the services it provides to the conduits and the program-wide liquidity and credit support.
Because of the program-wide credit support that the MUFG Group provides as a sponsor in respect to the
financing by the conduits, it is exposed to the majority of the expected variability of the conduits. Therefore, the
MUFG Group considers itself to be the primary beneficiary and consolidates the multi-seller conduits. While the
MUFG Group has significant involvement with the conduits, it has never provided financial or any other support
that are not contractually required to provide in the past. In addition, the assets purchased by the conduits are of
high quality in their credit standing and mostly short-term in nature. Therefore, the MUFG Group believes the
risks involved in these transactions are significantly limited relative to the transaction size.

In addition to the entities described above, the MUFG Group participates as a provider of financing to
several conduits that are administered by third parties. Most of these conduits are established under a multi-seller
asset-backed financing program and the MUFG Group provides financing along with other financial institutions.
With respect to these conduits, the MUFG Group is not considered as the primary beneficiary because the MUFG
Group’s participation in the financing is not significant relative to the total financing provided by third parties or
there is sufficient funding or financial support that is subordinate to the financing provided by the MUFG Group.

Asset-Backed Conduits (MUFG-sponsored Asset-Backed Loan (“ABL”) Programs and Other Programs)

The MUFG Group administers several conduits under asset-backed financing program where the MUFG
Group provides financing to fund the conduits’ purchases of financial assets, comprising primarily trade accounts
receivables, from its customers. The MUFG Group acts as an agent and sponsor for the conduits, which enter into
agreements with the MUFG Group’s customers where the customers transfer assets to the conduits in exchange

F-95

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

for monetary consideration. In most cases the MUFG Group is the sole provider of financing that is secured by
the assets held by the conduits and because of this reason, the MUFG Group is considered as the primary
beneficiary. The MUFG Group has never provided financial or any other support that are not contractually
required to provide in the past. In addition, the assets purchased by the conduits are of high quality in their credit
standing and mostly short-term in nature. Therefore, the MUFG Group believes the risks involved in these
transactions are significantly limited relative to the transaction size.

In addition, the MUFG Group is involved with entities, which take in most cases, the form of a trust, where
originators of financial assets, which primarily comprise lease receivables, entrust the assets with trust banks and
receive beneficial certificates in exchange. The originators then transfer the beneficiary certificates to the MUFG
Group in exchange for cash. Because the MUFG Group participates in a majority of the economics generated
from these entities through the beneficiary certificates that it holds, it is considered as the primary beneficiary
and the MUFG Group consolidates these trusts.

The MUFG Group also participates as a provider of financing the ABL programs that are managed by third
parties. The MUFG Group is not considered as the primary beneficiary of the entities used in these programs as
the MUFG Group’s participation to financing is not significant relative to the total financing provided by the
third parties or there is sufficient funding or financial support that is subordinate to the financing provided by the
MUFG Group.

Investment Funds

This category primarily comprises the following:

Corporate Recovery Funds

These entities are established by fund managers, which are unrelated to the MUFG Group, for the purpose
of investing in debt or equity instruments issued by distressed companies. After investment, the fund managers
work closely with the management of the issuers and attempt to enhance corporate value by various means
including corporate restructuring and reorganization. Their exit strategies include, among other things, sales to
others and Initial Public Offerings (“IPOs”).

Typically, these entities take the form of a limited partnership which is entirely funded by general and limited

partner interests. In some cases, the general partners of the partnerships are entities that have no substantive decision
making ability. The fund managers that establish these partnerships assume investment management and day-to-day
operation by entering into asset management contracts with the general partners. These partnerships are, therefore,
financing vehicles and as such are considered as VIEs. In other cases, the general partners have substantive decision
making ability but the partnerships are considered as VIEs when the general partners’ investments in the
partnerships are considered as non-substantive, usually based on the percentage interest held, and they do not have
substantive limited partner interests.

The MUFG Group participates in these partnerships as a limited partner. While the MUFG Group’s share in

partnership interests is limited in most cases, the MUFG Group is the only limited partner in some cases and it
consolidates these partnerships as the primary beneficiary.

Private Equity Funds

The MUFG Group is involved in venture capital funds that are established by either the MUFG Group’s
entities or fund managers unrelated to the MUFG Group. These entities have specific investment objectives in

F-96

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

connection with their acquisition of equity interests, such as providing financing and other support to start-up
businesses, medium and small entities in a particular geographical area, and to companies with certain
technology or companies in a high-growth industry.

These entities typically take the form of limited partnerships and usually are entirely funded by general and

limited partner interests. The general partners of the partnerships in some cases are entities that have no
substantive decision making ability. The fund managers that establish these partnerships assume investment
management and day-to-day operation by entering into asset management contracts with the general partners.
These partnerships are therefore financing vehicles and as such are considered as VIEs. In other cases, the
general partners have substantive decision making ability and the partnerships are considered as VIEs even when
the general partners’ investments in the partnerships are considered as non-substantive, usually based on the
percentage interest held, and they do not have substantive limited partner interests.

The MUFG Group participates in these partnerships as a general partner or a limited partner. While the

MUFG Group’s share in partnership interests is limited in most cases, the MUFG Group provides most of the
financing to the partnerships in some cases and it consolidates them as the primary beneficiary.

Investment Trusts

The MUFG Group invests in investment trusts that are professionally managed collective investment
schemes which pool money from many investors and invest in, among others, equity and debt securities. Most of
these funds take the form of a trust where there is a separation in investment decisions, which is assumed by an
investment manager who has no investment in a trust, and ownership through beneficiary interests issued by a
trust are owned by investors. Therefore, these investment trusts are considered as VIEs. The MUFG Group
consolidates investment trusts when it owns a majority of the interests issued by investment trusts.

Buy-out Financing Vehicles

The MUFG Group provides financing to buy-out vehicles. The vehicles are established by equity

investments from, among others, private equity funds or the management of target companies for the purpose of
purchasing equity shares of target companies. Along with other financial institutions, the MUFG Group provides
financing to buy-out vehicles in the form of loans. While the buy-out vehicles’ equity is normally substantive in
amount and the rights and obligations associated with it, in some cases the vehicles have equity that is
insufficient to absorb variability primarily because the amount provided by equity investors is nominal in nature.
These vehicles are considered as VIEs and an assessment as to whether the MUFG Group is the primary
beneficiary is required. In most cases, however, the MUFG Group mitigates its risk by requiring third-party
guarantees with collateral or reducing its exposure to an adequate level by providing loans as one of several
lenders. As a result, the MUFG Group is not considered as the primary beneficiary of these entities.

Special Purpose Entities Created for Structured Financing

This category primarily comprises the following:

Leveraged Leasing Vehicles

These entities are established to raise funds to purchase or build equipment and machinery including

commercial vessels, passenger and cargo aircrafts, production equipment and other machinery, for the purpose of
leasing them to lessees who use the equipment and machinery as part of their business operations. These entities
typically take the form of a limited partnership or a special purpose company where they fund their purchases of

F-97

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

equipment and machinery via senior and subordinate financing. In some cases, the entities are funded only by
senior financing or there is a guarantee provided to the senior financing by parties unrelated to those providing
the senior financing. In most cases, the MUFG Group participates in the senior financing and does not participate
in the subordinate financing or provide guarantees. The subordinate financing or the third-party guarantee is
substantive and would absorb expected variability generated by the assets held by the entities. In exceptional
cases where there is no guarantee from a third-party or there is not sufficient subordinate financing, the MUFG
Group consolidates the entities as the primary beneficiary. In some limited cases, the MUFG Group provides a
residual value guarantee to the leased assets. Based on expected loss analysis, the MUFG Group determined that
it does not participate in the majority of expected variability of the entities involved and does not consolidate
these entities.

Project Financing Vehicles

These entities are established to raise funds in connection with, among other things, production of natural
resources, construction and development of urban infrastructure (including power plants and grids, highways and
ports), and the development of real estate properties or complexes. These projects typically involve special
purpose companies which issue senior and subordinate financing to raise funds in connection with the various
projects. The subordinate financing is usually provided by parties that will ultimately make use of the assets
constructed or developed. By contrast, the senior financing is typically provided by financial institutions,
including the MUFG Group. Because the MUFG Group’s participation in the financing is limited or there is
sufficient subordinate financing, the MUFG Group is not considered as the primary beneficiary of these entities
and does not consolidate these entities.

Sale and Leaseback Vehicles

The MUFG Group is involved with vehicles that acquire assets, primarily real estate, from the MUFG
Group’s clients and other unrelated parties where the sellers of the assets continue to use the assets through
leaseback agreements. These vehicles typically take the form of a limited partnership where the general partner
has effectively no decision making ability because an equity holder of the general partner serves a perfunctory
role. Therefore, these vehicles are considered as VIEs. The subordinated financing of these vehicles is usually
provided by the sellers of the assets, with the MUFG Group providing senior financing for the vehicles. The
subordinated financing of these entities absorbs the expected variability generated from the assets held and as
such, the MUFG Group is not considered as the primary beneficiary.

Securitization of Client Real Estate Properties

These entities are established for the purpose of securitizing real estate properties held by the MUFG
Group’s customers. In most cases, these entities take the form of a limited partnership or a special purpose
company. These entities are designed to have non-substantive decision making ability because the general
partner or an equity holder serves a perfunctory role. The entities are typically funded by senior and subordinated
financing where the original owners of the properties provide the subordinated financing, primarily in the form of
partnership interests or subordinated notes, and financial institutions, including the MUFG Group, provide senior
financing in the form of senior loans. The subordinated financing of these entities absorbs the expected
variability generated from the assets held and as such, the MUFG Group is not considered as the primary
beneficiary.

F-98

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Repackaged Instruments

This category primarily comprises the following:

Investments in Financially-Engineered Products

The MUFG Group is involved in special purpose entities that have been established to issue financial
products through the engineering and repackaging of existing financial instruments, such as collateralized debt
obligations (“CDOs”) and synthetic CDOs. These special purpose entities are considered as VIEs because they
do not have substantive decision making ability. These special purpose entities are arranged and managed by
parties that are not related to the MUFG Group. The MUFG Group’s involvement with these entities is for
investment purposes. In most cases, the MUFG Group participates as one of many other investors and the MUFG
Group typically holds investments in senior tranches or tranches with high credit ratings. Therefore, the MUFG
Group is not considered as the primary beneficiary except in limited circumstances where the MUFG Group
holds the majority of instruments issued by a single-tranche vehicle.

Investments in Securitized Financial Instruments

The MUFG Group holds investments in special purpose entities that issue securitized financial products.
The assets held by the special purpose entities include credit card receivables and residential mortgage loans.
These entities are established and managed by parties that are unrelated to the MUFG Group and the MUFG
Group’s involvement with these entities is for its own investment purposes. In all cases, the MUFG Group
participates as one of many other investors and the MUFG Group holds investments with high credit ratings.
Therefore, the MUFG Group is not considered as the primary beneficiary of these entities.

Securitization of the MUFG Group’s Assets

The MUFG Group establishes entities to securitize its own financial assets that include, among others,
corporate and retail loans and lease receivables. The entities used for securitization, which typically take the form
of special purpose company and trusts, are established by the MUFG Group and, in most cases, issue senior and
subordinate interests or financing. Where the MUFG Group retains subordinate interests or financing, it is
considered as the primary beneficiary of the entities and the MUFG Group consolidates them. In some cases, all
financing is provided by the MUFG Group but there is a substantive third-party guarantee, or most of the
interests or financing issued by the entities is transferred to investors unrelated to the MUFG Group. In these
cases, the MUFG Group does not consider itself as the primary beneficiary.

Others

This category primarily comprises the following:

Financing Vehicles of the MUFG Group’s Customers

The MUFG Group is involved with several entities that are established by the MUFG Group’s customers.

These entities borrow funds from financial institutions and extend loans to their group entities. These entities
effectively work as fund-raising vehicles for their respective group companies and enable the groups to achieve
efficient financing by integrating their financing activities into a single entity. In all cases the MUFG Group is
not considered as the primary beneficiary, either because it participates as one of two or more lenders, and
therefore, its participation is less than a majority, and/or there is a substantive third-party guarantee provided with
respect to the MUFG Group’s loans.

F-99

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Funding Vehicles

The MUFG Group has established several wholly-owned, off-shore vehicles which issue securities,

typically preferred stock that is fully guaranteed by the MUFG Group, to investors unrelated to us to fund
purchases of debt instruments issued by the MUFG Group. These entities are considered as VIEs because the
MUFG Group’s investment in the vehicles’ equity is not considered at risk and substantive as the entire amount
raised by the vehicles was used to purchase debt instruments issued by the MUFG Group. As the third-party
investors participate in the economics of these financing vehicles, as well as the vehicles themselves, these
financing vehicles are not considered as the MUFG Group’s subsidiaries.

Trust Arrangements

The MUFG Group offers, primarily through its wholly-owned trust banking subsidiary, MUTB, a variety of
trust products and services including securities investment trusts, pension trusts and trusts used as securitization
vehicles. In a typical trust arrangement, however, the MUFG Group manages and administers assets on behalf of
the customers in an agency, fiduciary and trust capacity and does not assume risks associated with the entrusted
assets. The trusts are generally considered as VIEs because the trust beneficiaries, who provide all of the equity
at risk, usually do not have substantive decision making ability. The MUFG Group, however, is not considered as
the primary beneficiary because the trust beneficiaries receive and absorb expected losses and residual returns on
the performance and operations of trust assets under management of the MUFG Group.

With respect to the jointly operated designated money in trusts, however, MUTB is exposed to the risks

involved with the entrusted assets, where MUTB provides the trust beneficiaries with guarantees on the
repayment of trust principal through face value guarantees. In these products, MUTB pools money from general
investors and invests it in financial assets that are of high credit standing, including bank deposits, government
bonds, high-quality corporate bonds and high-quality corporate loans including loans to banking account of
MUTB. MUTB manages and administers the trust assets in the capacity of a trustee and receives fees as
compensation for services it provides. With respect to most of the jointly operated designated money in trusts,
MUTB provides, as a sponsor of the products, the face value guarantees under which it is required to compensate
a loss on the stated principal of the trust beneficial interests. MUTB is not considered as the primary beneficiary
of these products because the event of loss is highly remote and in fact the face value guarantee has never been
called upon in the trusts’ operational history that extends over decades. In addition, the trusts have substantial
investments in loans to banking account of MUTB and MUTB’s face value guarantee is considered as
non-substantive to the extent of the self guarantee.

Troubled Borrowers

During the normal course of business, the borrowers from the MUFG Group may experience financial
difficulties and sometimes enter into certain transactions that require the MUFG Group to assess whether they
would be considered as VIEs due to their difficult financial position. While in most cases such borrowers are not
considered as VIEs when the transactions take place, in limited circumstances they are considered as VIEs due to
insufficient equity. In all cases, however, the MUFG Group is not considered as the primary beneficiary based on
its assessment of scenario-based probability-weighted cash flow analysis.

F-100

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

26. COMMITMENTS AND CONTINGENT LIABILITIES

Lease Commitments

The MUFG Group leases certain technology systems, office space and equipment under noncancelable

agreements expiring through the fiscal year 2046.

Future minimum rental commitments for noncancelable leases at March 31, 2009 were as follows:

Capitalized
leases

Operating
leases

(in millions)

Fiscal year ending March 31:

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥26,486
20,653
11,779
4,565
2,296
3,368

¥ 44,481
32,842
27,859
22,199
11,117
67,420

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69,147

¥205,918

Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,866)

Present value of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥65,281

Total rental expense for the fiscal years ended March 31, 2007, 2008 and 2009 was ¥112,055 million,

¥107,289 million and ¥110,433 million, respectively.

Repayment of Excess Interest

The Japanese government is implementing regulatory reforms affecting the consumer lending industry. In

December 2006, the Diet passed legislation to reduce the maximum permissible interest rate under the
Investment Deposit and Interest Rate Law, which is currently 29.2% per annum, to 20% per annum. The
reduction in interest rates will be implemented by mid-2010. Under the reforms, all interest rates will be subject
to the lower limits imposed by Interest Rate Restriction Law, which will compel lending institutions to lower the
interest rates they charge borrowers.

Currently, consumer finance companies are able to charge interest rates exceeding the limits stipulated by

the Interest Rate Restriction Law so long as the payment is made voluntarily by the borrowers and the lender
complies with various notice and other requirements. Accordingly, MUFG’s consumer finance subsidiaries and
equity method investee have offered loans at interest rates above the Interest Rate Restriction Law, though they
are in the process of lowering the interest rates to below the Interest Rate Restriction Law.

In 2006, the Supreme Court of Japan passed decisions in a manner more favorable to borrowers requiring

reimbursement of previously paid interest exceeding the limits stipulated by the Interest Rate Restriction Law in
certain circumstances. Due to such decisions and other regulatory changes, borrowers’ claims for reimbursement
of excess interest significantly increased during the fiscal year ended March 31, 2007. As a result, MUFG’s
consumer finance subsidiaries increased the allowance for repayment of excess interest for the fiscal year ended
March 31, 2007. At March 31, 2008 and 2009, the allowance for repayment of excess interest established by
MUFG’s consumer finance subsidiaries, which was included in Other liabilities, was ¥80,187 million and

F-101

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

¥76,876 million, respectively. For the fiscal years ended March 31, 2007, 2008 and 2009, an MUFG’s equity
method investee had a negative impact of ¥77,552 million, ¥2,982 million and ¥15,829 million, respectively, on
Equity in losses of equity method investees in the consolidated statement of operations.

Litigation

The MUFG Group is involved in various litigation matters. Management, based upon their current

knowledge and the results of consultation with counsel, makes appropriate levels of litigation reserve.
Management believes that the amounts of the MUFG Group’s liabilities, when ultimately determined, will not
have a material adverse effect on the MUFG Group’s results of operations and financial position.

27. FEES AND COMMISSIONS INCOME

Details of fees and commissions income for the fiscal years ended March 31, 2007, 2008 and 2009 were as

follows:

2007

2008

2009

Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on funds transfer and service charges for collections . . . . . . . . . . . .
Fees and commissions on international business . . . . . . . . . . . . . . . . . . .
Fees and commissions on credit card business . . . . . . . . . . . . . . . . . . . . .
Service charges on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on securities business . . . . . . . . . . . . . . . . . . . . . .
Fees on real estate business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on stock transfer agency services . . . . . . . . . . . . .
Guarantee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on investment funds business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 146,045
151,293
70,175
164,240
37,457
136,596
60,154
52,209
73,715
88,254
152,861
274,194

(in millions)
¥ 156,302
152,902
69,717
137,970
36,109
130,738
44,461
43,023
72,292
86,317
161,467
225,749

¥ 125,451
147,658
64,128
141,421
31,586
112,143
19,770
28,065
62,878
77,592
130,654
247,166

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,407,193

¥1,317,047

¥1,188,512

Trust fees consist primarily of fees earned by fiduciary asset management and administration services for

corporate pension plans, investment funds, etc. Fees on funds transfer and service charges for collection are
earned by providing settlement services such as domestic fund remittances and domestic collection services. Fees
and commissions on international business primarily consist of fees from international fund transfer and
collection services, and trade-related financing services. Fees and commissions on credit card business are
composed of interchange income, annual fees, royalty and other service charges from franchisees. Service
charges on deposits are fees charged for deposits such as checking account deposits. Fees and commissions on
securities business include underwriting, brokerage and advisory services and arrangement fees on
securitizations. Fees on real estate business primarily consist of fees from real estate agent services. Insurance
commissions are earned by acting as agent for insurance companies to sell insurance products. Fees and
commissions on stock transfer agency services consist of fees earned primarily by stock title transfers and agency
services for the calculation and payment of dividends. Guarantee fees are earned by providing guarantees on
residential mortgage loans. Fees on investment funds business primarily consist of management fees for
investment funds. Other fees and commissions include various arrangement fees and agent fees excluding the
fees mentioned above.

F-102

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

28. BUSINESS SEGMENTS

The business segment information, set forth below, is derived from the internal management reporting
system used by management to measure the performance of the MUFG Group’s business segments. The business
segment information, set forth below, is based on the financial information prepared in accordance with Japanese
GAAP as adjusted in accordance with internal management accounting rules and practices. Accordingly, the
format and information is not consistent with the consolidated financial statements prepared on the basis of US
GAAP. A reconciliation is provided for the total amounts of segments’ total operating profit with income from
continuing operations before income tax expense (benefit) under US GAAP.

See Note 29 for financial information relating to the MUFG Group’s operations by geographic area. The

geographic financial information is consistent with the basis of the accompanying consolidated financial
statement.

The following is a brief explanation of the MUFG Group’s business segments.

Integrated Retail Banking Business Group—Covers all domestic retail businesses, including commercial
banking, trust banking and securities businesses. This business group integrates the retail business of BTMU,
MUTB, MUS, Mitsubishi UFJ NICOS and other subsidiaries as well as retail product development, promotion
and marketing in a single management structure. At the same time, the business group has developed and
implemented MUFG Plaza, a one-stop, comprehensive financial services concept that provides integrated
banking, trust and securities services.

Integrated Corporate Banking Business Group—Covers all domestic and overseas corporate businesses,
including commercial banking, investment banking, trust banking and securities businesses as well as UNBC.
Through the integration of these business lines, diverse financial products and services are provided to our
corporate clients. The business group has clarified strategic domains, sales channels and methods to match the
different growth stages and financial needs of our corporate customers. UNBC is a bank holding company,
whose primary subsidiary, Union Bank, is one of the largest commercial banks in California by both total assets
and total deposits. Union Bank provides a wide range of financial services to consumers, small businesses,
middle market companies and major corporations, primarily in California, Oregon and Washington but also
nationally and internationally. As a result of the tender offer that was completed in September 2008, and the
second-step merger that was completed in November 2008, UNBC became MUFG’s wholly owned subsidiary.

Integrated Trust Assets Business Group—Covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and the
global network of BTMU. The business group provides a full range of services to corporate and other pension
funds, including stable and secure pension fund management and administration, advice on pension schemes, and
payment of benefits to scheme members.

Global Markets—Consists of the treasury operations of BTMU and MUTB. Global Markets also conducts
asset liability management and liquidity management and provides various financial operations such as money
markets and foreign exchange operations and securities investments.

Other—Consists mainly of the corporate centers of MUFG, BTMU and MUTB. The elimination of

duplicated amounts of net revenue among business segments is also reflected in Other.

F-103

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Effective April 1, 2008, there were changes made in the managerial accounting methods, including those
regarding revenue and expense distribution among MUFG’s business segments. The presentation set forth below
has been reclassified to conform to the new basis of managerial accounting.

Integrated
Retail
Banking
Business
Group

Integrated Corporate Banking Business Group

Domestic

Overseas

Total

Other than

UNBC UNBC

Overseas
total

Integrated
Trust
Assets
Business
Group

Global
Markets Other

Total

(in billions)
Fiscal year ended March 31, 2007:

Net revenue . . . . . . . . . . . . . . . ¥1,304.1
690.9

BTMU and MUTB: . . . . .

¥1,283.3
1,063.3

¥301.4
210.8

¥324.3 ¥625.7 ¥1,909.0
1,274.1

— 210.8

¥194.2
80.5

¥380.1 ¥ 14.9
(36.8)
375.6

¥3,802.3
2,384.3

Net interest

income . . . . . . . . .
Net fees . . . . . . . . . .
Other . . . . . . . . . . . .

Other than BTMU and

MUTB* . . . . . . . . . . . .
Operating expenses . . . . . . . . .

489.9
170.6
30.4

613.2
917.1

515.8
396.4
151.1

220.0
537.0

126.2
58.3
26.3

90.6
178.7

— 126.2
— 58.3
— 26.3

324.3
200.8

414.9
379.5

642.0
454.7
177.4

634.9
916.5

1.2
80.6
(1.3)

113.7
103.8

276.5
(10.9)
110.0

(41.4)
(17.2)
21.8

1,368.2
677.8
338.3

4.5
57.7

51.7
176.8

1,418.0
2,171.9

Operating profit (loss) . . . . . . . ¥ 387.0

¥ 746.3

¥122.7

¥123.5 ¥246.2 ¥ 992.5

¥ 90.4

¥322.4 ¥(161.9) ¥1,630.4

Fiscal year ended March 31, 2008:

Net revenue . . . . . . . . . . . . . . . ¥1,332.7
742.2

BTMU and MUTB: . . . . .

¥1,171.8
990.6

¥301.5
193.4

¥296.4 ¥597.9 ¥1,769.7
1,184.0

— 193.4

¥198.5
84.5

¥290.6 ¥ 28.6
(36.3)
286.0

¥3,620.1
2,260.4

Net interest

income . . . . . . . . .
Net fees . . . . . . . . . .
Other . . . . . . . . . . . .

Other than BTMU and

MUTB* . . . . . . . . . . . .
Operating expenses . . . . . . . . .

578.6
144.9
18.7

590.5
955.9

516.4
357.2
117.0

181.2
573.6

105.3
52.5
35.6

108.1
183.8

— 105.3
— 52.5
— 35.6

296.4
187.6

404.5
371.4

621.7
409.7
152.6

585.7
945.0

1.0
83.2
0.3

114.0
98.5

179.8
(14.5)
120.7

(19.6)
(12.3)
(4.4)

1,361.5
611.0
287.9

4.6
59.0

64.9
190.5

1,359.7
2,248.9

Operating profit (loss) . . . . . . . ¥ 376.8

¥ 598.2

¥117.7

¥108.8 ¥226.5 ¥ 824.7

¥100.0

¥231.6 ¥(161.9) ¥1,371.2

Fiscal year ended March 31, 2009:

Net revenue . . . . . . . . . . . . . . . ¥1,319.6
736.4

BTMU and MUTB: . . . . .

¥ 952.7
810.7

¥350.8
255.9

¥256.8 ¥607.6 ¥1,560.3
1,066.6

— 255.9

¥171.1
72.1

¥311.6 ¥ (24.0) ¥3,338.6
2,098.7
(79.7)
303.3

Net interest

income . . . . . . . . .
Net fees . . . . . . . . . .
Other . . . . . . . . . . . .

Other than BTMU and

MUTB* . . . . . . . . . . . .
Operating expenses . . . . . . . . .

616.0
110.3
10.1

583.2
977.0

475.8
337.3
(2.4)

142.0
569.4

110.6
97.8
47.5

94.9
171.6

— 110.6
— 97.8
— 47.5

256.8
157.3

351.7
328.9

586.4
435.1
45.1

493.7
898.3

0.9
72.5
(1.3)

99.0
93.3

230.2
(15.1)
88.2

18.9
(38.8)
(59.8)

1,452.4
564.0
82.3

8.3
62.3

55.7
181.9

1,239.9
2,212.8

Operating profit (loss) . . . . . . . ¥ 342.6

¥ 383.3

¥179.2

¥ 99.5 ¥278.7 ¥ 662.0

¥ 77.8

¥249.3 ¥(205.9) ¥1,125.8

*

Includes MUFG and its subsidiaries other than BTMU and MUTB.

Reconciliation

As set forth above, the measurement bases and the income and expenses items covered are very different
between the internal management reporting system and the accompanying consolidated statements of operations.
Therefore, it is impracticable to present reconciliations of the business segments’ total information, other than
operating profit, to corresponding items in the accompanying consolidated statements of operations.

F-104

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A reconciliation of the operating profit under the internal management reporting system for the fiscal years

ended March 31, 2007, 2008 and 2009 above to income (loss) from continuing operations before income tax
expense (benefit) shown on the consolidated statements of operations is as follows:

Operating profit:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account profits (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity investment securities losses—net
Debt investment securities gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interest in loss (income) of consolidated subsidiaries . . . . . . . . . . .
Provision for repayment of excess interest . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

2008

2009

¥1,630
(359)
199
(11)
234
(223)
(57)
—
(185)
(17)
—
(76)

(in billions)
¥ 1,371
(386)
81
(224)
(1,197)
1,433
(34)
(894)
(79)
(39)
(3)
(17)

¥ 1,126
(627)
(392)
(538)
(104)
(48)
(60)
(846)
(127)
36
(48)
(100)

Income (loss) from continuing operations before income tax expense (benefit) . . . .

¥1,135

¥

12

¥(1,728)

29. FOREIGN ACTIVITIES

Foreign operations include the business conducted by overseas offices, as well as international business
conducted from domestic offices, principally several international banking-related divisions of BTMU’s and
MUTB’s Head Office in Tokyo, and involve various transactions with debtors and customers residing outside
Japan. Close integration of the MUFG Group’s foreign and domestic activities makes precise estimates of the
amounts of assets, liabilities, income and expenses attributable to foreign operations difficult and necessarily
subjective. Assets, income and expenses attributable to foreign operations are allocated to geographical areas
based on the domicile of the debtors and customers.

F-105

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Generally, interest rates with respect to funds borrowed and loaned between domestic and foreign operations

are based on prevailing money market rates appropriate for the transactions. In general, the MUFG Group has
allocated all direct expenses and a proportionate share of general and administrative expenses to income derived
from foreign loans and other transactions by the MUFG Group’s foreign operations. The following table sets
forth estimated total assets at March 31, 2007, 2008 and 2009, and estimated total revenue, total expense, income
(loss) from continuing operations before income tax expense (benefit) and net income (loss) for the respective
fiscal years then ended:

Domestic

Japan

United
States of
America

Foreign

Total

Europe

Asia/Oceania
excluding Japan

Other
areas(1)

(in millions)

Fiscal year ended March 31, 2007:

Total revenue(2)

. . . . . . . . . . . . . . . . .

¥

3,667,946

¥ 1,191,629

¥

540,653

¥ 270,158

¥ 193,279

¥

5,863,665

Total expense(3) . . . . . . . . . . . . . . . . .

3,431,105

728,720

286,173

186,650

96,086

4,728,734

Income from continuing operations

before income tax expense . . . . . .

Net income . . . . . . . . . . . . . . . . . . . .

236,841

63,027

462,909

248,884

254,480

169,174

83,508

44,204

97,193

55,999

1,134,931

581,288

Total assets at end of fiscal year(4)

. .

145,510,242

19,453,015

12,735,831

6,692,219

4,538,162

188,929,469

Fiscal year ended March 31, 2008:

Total revenue(2)

. . . . . . . . . . . . . . . . .

¥

4,690,998

¥

228,069

¥

699,785

¥ 442,056

¥

84,017

¥

6,144,925

Total expense(3) . . . . . . . . . . . . . . . . .

4,410,795

745,661

607,989

258,143

109,982

6,132,570

Income (loss) from continuing
operations before income tax
expense (benefit) . . . . . . . . . . . . . .

280,203

(517,592)

91,796

Net income (loss)

. . . . . . . . . . . . . . .

(227,095)

(637,319)

121,257

183,913

232,242

(25,965)

12,355

(31,521)

(542,436)

Total assets at end of fiscal year(4)

. .

140,607,568

20,620,865

19,970,118

8,318,426

6,249,106

195,766,083

Fiscal year ended March 31, 2009:

Total revenue(2)

. . . . . . . . . . . . . . . . .

¥

2,924,414

¥

568,655

¥

233,703

¥ 329,672

¥

14,449

¥

4,070,893

Total expense(3) . . . . . . . . . . . . . . . . .

4,255,471

771,697

469,444

219,205

83,044

5,798,861

Income (loss) from continuing
operations before income tax
expense (benefit) . . . . . . . . . . . . . .

(1,331,057)

(203,042)

(235,741)

Net income (loss)

. . . . . . . . . . . . . . .

(1,064,387)

(223,501)

(229,462)

110,467

119,442

(68,595)

(1,727,968)

(70,132)

(1,468,040)

Total assets at end of fiscal year . . . .

142,996,407

23,092,047

14,981,793

7,473,868

4,955,302

193,499,417

Notes:
(1) Other areas primarily include Canada, Latin America and the Caribbean.
(2) Total revenue is comprised of Interest income and Non-interest income.
(3) Total expense is comprised of Interest expense, Provision for credit losses and Non-interest expense.
(4) The effects of adoption of FSP FIN No. 39-1 on the estimated total assets at March 31, 2007 and 2008 were as follows:

F-106

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Domestic

Japan

United
States of
America

Foreign

Total

Europe

Asia/Oceania
excluding Japan

Other
areas

(in millions)

As previously reported

Fiscal year ended March 31, 2007:

Total assets at end of fiscal

year . . . . . . . . . . . . . . . . . . . . . .

¥ 143,106,520

¥ 19,215,047

¥ 12,672,389

¥ 6,671,657

¥ 4,537,298

¥ 186,202,911

Fiscal year ended March 31, 2008:

Total assets at end of fiscal

year . . . . . . . . . . . . . . . . . . . . . .

136,672,848

19,980,528

19,584,983

8,245,060

6,248,367

190,731,786

As adjusted

Fiscal year ended March 31, 2007:

Total assets at end of fiscal

year . . . . . . . . . . . . . . . . . . . . . .

¥ 145,510,242

¥ 19,453,015

¥ 12,735,831

¥ 6,692,219

¥ 4,538,162

¥ 188,929,469

Fiscal year ended March 31, 2008:

Total assets at end of fiscal

year . . . . . . . . . . . . . . . . . . . . . .

140,607,568

20,620,865

19,970,118

8,318,426

6,249,106

195,766,083

The following is an analysis of certain asset and liability accounts related to foreign activities at March 31,

2008 and 2009:

2008(1)

2009

(in millions)

Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-earning deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

593,080
5,795,209

¥

384,326
2,696,266

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,388,289

¥ 3,080,592

Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,325,632

¥16,486,676

Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,911,318

¥ 3,223,798

Loans—net of unearned income, unamortized premiums and deferred loan fees . . .

¥21,214,828

¥23,024,766

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥19,350,699

¥17,117,994

Funds borrowed:

Call money, funds purchased, and payables under repurchase agreements and

securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt

¥ 7,857,525
2,051,554
3,841,507

¥ 4,720,582
2,672,063
3,848,553

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,750,586

¥11,241,198

Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,514,267

¥ 4,138,599

Note:
(1) The effects of adoption of FSP FIN No.39-1 on trading account assets and trading account liabilities at March 31, 2008 were as follows:

Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,227,474

¥6,325,632

Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,616,821

¥3,514,267

As previously
reported

As adjusted

(in millions)

F-107

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

30. FAIR VALUE

Effective April 1, 2008, the MUFG Group adopted SFAS No. 157 for all financial assets and liabilities
measured and disclosed on a fair basis. In accordance with FSP SFAS No. 157-2, the nonrecurring nonfinancial
assets and nonfinancial liabilities for which the MUFG Group has not applied the provisions of SFAS No. 157
include premises and equipment, intangible assets and goodwill measured at fair value for impairment. SFAS
No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

SFAS No. 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to

measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in
active markets and the lowest priority to unobservable data, for example, the reporting entity’s own data. Based
on the observability of the inputs used in the valuation techniques, the following three-level hierarchy is
established by SFAS No. 157:

‰

‰

‰

Level 1—Unadjusted quoted prices for identical instruments in active markets.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar instruments in
active markets; quoted prices for identical or similar instruments in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data for substantially the full
term of the instruments.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant
to the fair value of the instruments.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of

input that is significant to the fair value measurement.

The MUFG Group has an established and documented process for determining fair values in accordance
with SFAS No. 157. When available, quoted market prices are used to determine fair value. If quoted market
prices are not available, fair value is based upon valuation techniques that use, where possible, current
market-based or non-market-based parameters, such as interest rates, yield curves, foreign exchange rates,
volatilities and credit curves. The fair values of liabilities are determined by discounting future cash flows at a
rate which incorporates the MUFG Group’s own creditworthiness. In addition, valuation adjustments may be
made to ensure the financial instruments are recorded at fair value. These adjustments include, but not limited to,
amounts that reflect counterparty credit quality, liquidity risk and model risk.

The following section describes the valuation methodologies adopted by the MUFG Group to measure fair

values of certain financial instruments. The discussion includes the general classification of such financial
instruments in accordance with the valuation hierarchy, a brief explanation of the valuation techniques, the
significant inputs to those models, and any additional significant assumptions.

Interest-earning Deposits in Other Banks

Certain interest-earning deposits are measured at fair value by using discounted cash flows due to adoption
of SFAS No. 159. Cash flows are estimated based on the terms of the contracts and discounted by markets rates
applicable to the maturity of the contracts, which are adjusted to reflect credit risks on counterparties. As the
inputs into the valuation are readily observable, these deposits are classified in Level 2 of the valuation hierarchy.

Receivables Under Resale Agreements

Certain receivables under resale agreements are measured at fair value by using discounted cash flows due

to adoption of SFAS No. 159. Cash flows are estimated based on the terms of the contracts and discounted by the

F-108

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

interest rates applicable to the maturity of the contracts, which are adjusted to reflect credit risks on
counterparties. These receivables are classified in Level 2 of the valuation hierarchy.

Trading Accounts Assets and Liabilities—Trading Securities

When quoted prices are available in an active market, the MUFG Group adopts the quoted market prices to

measure the fair values of securities and such securities are classified in Level 1 of the valuation hierarchy.
Examples of Level 1 securities include certain Japanese and foreign government bonds and exchange traded
equity securities.

When quoted market prices are available but not traded actively, such securities are classified in Level 2 of
the valuation hierarchy. When quoted market prices are not available, the MUFG Group estimates fair values by
using internal valuation techniques, quoted price of securities with similar characteristics or non-binding prices
obtained from independent pricing vendors. Examples of such instruments include commercial paper, certain
prefectural and municipal bonds, corporate debt securities and asset-backed securities. Such securities are
generally classified in Level 2 of the valuation hierarchy.

When there is less liquidity for securities or significant inputs adopted to the fair value measurements are
less observable, such securities are classified in Level 3 of the valuation hierarchy. Examples of such Level 3
securities include collateralized loan obligations (“CLOs”) backed by general corporate loans that are measured
by weighting the estimated amounts from the internal models and the non-binding quotes from the independent
broker-dealers. The weight of the broker-dealer quote is determined based on the result of inquiries to the broker
-dealers for their basis of the fair value calculation. Key inputs of the internal models include projected cash flow
through an analysis of underlying loans, probability of default which incorporates market indices such as LCDX
which is an index of loan credit default swaps, repayment rate and discount rate reflecting liquidity premiums
based on historical market data. The MUFG Group has adopted this valuation method for the CLOs backed by
general corporate loans from the second half of the fiscal year ended March 31, 2009. See Note 1, “Change in
Accounting Estimates” section for details of the change in valuation method.

Trading Accounts Assets and Liabilities—Derivatives

Exchange-traded derivatives valued using quoted prices are classified in Level 1 of the valuation hierarchy.

Examples of Level 1 derivative include security future transactions and interest rate future transactions.
However, the majority of the derivative contracts entered into by the MUFG Group are traded over-the-counter
and valued using internally developed techniques as there are no quoted market prices existed for such
instruments. The valuation models and inputs vary depending on the types and contractual terms of the derivative
instruments. The principal models adopted to value those instruments include discounted cash flows, Black-
Scholes model and Hull-White model. The key inputs include interest rate yield curve, foreign currency
exchange rate, volatility, credit quality of the counterparty or the MUFG Group and spot price of the underlying.
These models are commonly accepted in the financial industry and key inputs to the models are readily
observable from an actively quoted market. Derivative instruments valued by such models and inputs are
generally classified in Level 2 of the valuation hierarchy. Examples of such Level 2 derivatives include plain
interest rate swaps, foreign currency forward contracts and currency option contracts.

Derivatives that are valued based on models with significant unobservable input are classified in Level 3 of

the valuation hierarchy. Examples of Level 3 derivatives include long-term interest rate or currency swaps and
certain credit derivatives, where significant inputs such as volatility, credit curves and the correlation of such
inputs are unobservable.

F-109

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Investment Securities

Investment securities include available for sale debt and equity securities, whose fair values are measured

using the same methodologies as the trading securities described above except for certain private placement
bonds issued by Japanese non-public companies. Fair values of certain private placement bonds issued by
Japanese non-public companies are measured based on discounted cash flow methods by using discount rate
applicable to the maturity of the bonds, which are adjusted to reflect credit risk of issuers. The private placement
bonds are generally utilized to finance medium or small size non-public companies as an alternative of loans.
These bonds are classified in either Level 2 or Level 3 of the valuation hierarchy depending on the significance
of the adjustment for unobservable credit worthiness input. This account also includes investments in
nonmarketable equity securities which are subject to specialized industry accounting practice in AICPA Guides.
The valuation of such nonmarketable equity securities involves significant management judgment due to the
absence of quoted market prices, lack of liquidity and the long term nature of these assets. Further, there may be
restriction of transfer on nonmarketable equity securities. The MUFG Group values such securities initially at
transaction price and subsequently adjusts valuations considering evidence such as current sales transactions of
similar securities, initial public offerings, recent equity issuances and change in financial condition of an investee
company. Nonmarketable equity securities are included in Level 3 of the valuation hierarchy.

Other Assets

Other assets measured at fair value mainly consist of securities that may be sold or repledged under

securities lending transactions under SFAS No. 140, money in trust for segregating cash deposited by customers
on security transactions and non-trading derivative assets. The securities under lending transaction mainly consist
of certain Japanese and foreign government bonds which are valued using the methodologies described in the
“Trading Accounts Assets and Liabilities—Trading Securities” above.

Money in trust for segregating cash deposited by customers on security transactions mainly consists of

certain Japanese government bonds which are valued using the methodologies described in the “Trading
Accounts Assets and Liabilities—Trading Securities” above and is included in Level 1 or Level 2 of the
valuation hierarchy depending on the component assets.

The fair values of non-trading derivative are measured using the methodologies described in the “Trading

Accounts Assets and Liabilities—Derivatives” above.

Obligations to Return Securities Received as Collateral

Obligations to return securities received as collateral under the securities lending transactions are measured

at fair values of the securities received as collateral. The securities received as collateral consist primarily of
certain Japanese and foreign government bonds, whose fair values are measured using the methodologies
described in the “Trading Accounts Assets and Liabilities—Trading Securities” above.

Deposits, Other Short-term Borrowings and Long-term Debt

Certain deposits, other short-term borrowings and long-term debt are measured at fair values due to
adoption of SFAS No. 159. These instruments under the fair value option are measured principally using
internally developed models such as the discounted cash flow method. Where the inputs into the valuation are
mainly based on observable inputs, these instruments are classified in Level 2 of the valuation hierarchy. Where
significant inputs are unobservable, they are classified in Level 3 of the valuation hierarchy.

Market Valuation Adjustments

Counterparty credit risk adjustments are applied to certain financial assets such as over-the-counter
derivatives. As not all counterparties have the same credit rating, it is necessary to take into account the actual

F-110

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

credit rating of a counterparty to arrive at the fair value. In addition, the counterparty credit risk adjustment takes
into account the effect of credit risk mitigants such as pledged collateral and legal right of offsets with the
counterparty.

Own credit risk adjustments which reflect own creditworthiness are applied to financial liabilities measured

at fair value in accordance with the requirements of SFAS No. 157.

Liquidity adjustments are applied mainly to the instruments classified in Level 3 of the fair value hierarchy

when recent prices of such instruments are not able to be observable in inactive or less active market. The
liquidity adjustments are based on the facts and circumstances of the markets including the availability of
external quotes and the time since the latest available quote.

Model valuation adjustments such as unobservable parameter valuation adjustments may be provided when

the fair values of instruments are determined based on internally developed models. Examples of such
adjustments include adjustments to the model price of certain derivative financial instruments where parameters
such as correlation are unobservable. Unobservable parameter valuation adjustments are applied to mitigate the
possibility of error in the model based estimate value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the financial instruments carried at fair value by level within the fair value

hierarchy as of March 31, 2009:

March 31, 2009

Level 1

Level 2

Level 3

Fair Value

(in millions)

Assets

Trading account assets:

Trading securities(1) . . . . . . . . . . . . . . . . . . . . . ¥13,132,900 ¥ 5,256,792 ¥1,906,009 ¥20,295,701
Trading derivative assets . . . . . . . . . . . . . . . .
9,985,824

9,596,896

364,855

24,073

Investment securities:

Securities available for sales . . . . . . . . . . . . . .
Other investment securities . . . . . . . . . . . . . . .
Others(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,390,087
26,909,603
43,809
—
855,039
597,822
. . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥40,664,398 ¥18,238,541 ¥5,667,521 ¥64,570,460

3,335,664
42,681
18,312

3,144,820
1,128
238,905

Total

Liabilities

Trading account liabilities:

Trading securities sold, not yet purchased . . . ¥
Trading derivative liabilities . . . . . . . . . . . . . .

98,114 ¥
86,412

4,842 ¥

— ¥

8,942,829

360,364

102,956
9,389,605

Obligations to return securities received as

collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

— 2,708,800
399,537
. . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 2,741,642 ¥ 9,631,979 ¥ 227,277 ¥12,600,898

2,557,116
—

151,684
532,624

(133,087)

Total

Notes:
(1)
(2)

(3)

Include securities under fair value option.
Include interest-earning deposits in other banks, receivables under resale agreements, securities under lending transactions, money in
trust for segregating cash deposited by customers on security transactions and non-trading derivatives.
Include deposits, other short-term borrowings, long-term debt and bifurcated embedded derivatives carried at fair value.

F-111

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Changes in Level 3 Recurring Fair Value Measurements

The following table presents a reconciliation of the assets and liabilities measured at fair value on a
recurring basis using significant unobservable inputs (Level 3) during the fiscal year ended March 31, 2009.
When a determination is made to classify a financial instrument within Level 3, the determination is based upon
the significance of the unobservable parameters to the overall fair value measurement. However, Level 3
financial instruments typically include, in addition to the unobservable or Level 3 components, observable
components (that is, components that are actively quoted and can be validated to external sources); accordingly,
the gains and losses in the table below include changes in fair value due in part to observable factors that are part
of the valuation methodology. The following tables reflect gains and losses for the fiscal year ended March 31,
2009 for all assets and liabilities categorized as Level 3 at March 31, 2009, including those transferred from or
into Level 3 during the year.

Total realized/
unrealized gains (losses)

Included
in
earnings

Included in
other
comprehensive
income

April 1,
2008(1)

Purchases,
sales,
issuances
and
settlements

Transfer
in of
Level 3—
beginning of
period(2)

Transfer
out of
Level 3—
end of
period(2)

(in millions)

March 31,
2009

Change in
unrealized
gains (losses)
included in
earnings for
assets and
liabilities
still held at
March 31,
2009

. . . . . ¥3,883,824 ¥(719,313)(4) ¥

— ¥(215,528)

¥ 12,400

¥(1,055,374)(7) ¥1,906,009

¥(375,940)(4)

Assets

Trading account assets:
Trading securities(3)
Trading derivatives

(Net) . . . . . . . . . . . . . . .

77,620

29,733(4)

(19,430)

(49,772)

5,577

(39,237)

4,491

26,838(4)

Investment securities:

Securities available for

sale . . . . . . . . . . . . . . . . 3,542,099

(10,654)(5)

(116,335)

(271,657)

285,054

(92,843)

3,335,664

(31,977)(5)

Other investment

securities . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . .

65,090
76,845

(18,321)(6)
21,336(6)

(894)
(24,347)

(5)
(19,456)

—
—

(3,189)
(36,066)

42,681
18,312

(18,800)(6)
175(6)

Total . . . . . . . . . . . . . . . . . . . ¥7,645,478 ¥(697,219)

¥(161,006)

¥(556,418)

¥303,031

¥(1,226,709)

¥5,307,157

¥(399,704)

Liabilities

Others . . . . . . . . . . . . . . . . . . ¥ 432,149 ¥(164,782)(6) ¥ 285,349

Total . . . . . . . . . . . . . . . . . . . ¥ 432,149 ¥(164,782)

¥ 285,349

¥

¥

374

374

¥

¥

— ¥ (445,043)

¥ (133,087) ¥ 28,826(6)

— ¥ (445,043)

¥ (133,087) ¥ 28,826

Notes:
(1) The amounts of assets categorized in Level 3 at April 1, 2008, which were reported in the Form 6-K for the six months ended

September 30, 2008, have been restated as follows:

April 1, 2008

As previously
reported
(Unaudited)

As restated

(in millions)

Assets

Trading account assets:

Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading derivatives (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,289,989
66,752

¥3,883,824
77,620

Investment securities:

Securities available for sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,979,858
¥8,478,534

3,542,099
¥7,645,478

F-112

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(2) Adopted the fair values as of the beginning of the fiscal year for transfer in and the fair values as of the end of the fiscal year for transfer

out.
Include trading securities under fair value option.
Included in trading account profits (losses)—net and in foreign exchange gains (losses)—net.
Included in investment securities gains (losses)—net.
Included in trading account profits (losses)—net.

(3)
(4)
(5)
(6)
(7) See Note 5 for the reclassification of certain foreign investment securities.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain financial assets may be measured at fair value on a nonrecurring basis. These assets are subject to
fair value adjustments that result from the application of the lower of cost or fair value accounting or writedowns
of individual assets. The following table presents the carrying value of financial instruments by level within the
fair value hierarchy as of March 31, 2009, with a nonrecurring change in fair value which has been recorded
during the fiscal year ended March 31, 2009:

March 31, 2009

Level 1

Level 2

Level 3

Total carrying
value

Total
losses

(in millions)

Assets

Investment securities . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

— ¥ — ¥ 24,912
394,677
35,487

42,391
1,905

6,117
222,563

¥ 24,912
443,185
259,955

¥ 40,640
229,889
67,656

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥228,680

¥44,296

¥455,076

¥728,052

¥338,185

Investment securities mainly include nonmarketable equity securities which were written down to fair value

during the period. The fair values are determined based on recent financial position and projected future cash
flows of investees.

Loans include loans held for sale and collateral dependent loans under SFAS No. 114. Loans held for sale

are recorded at the lower of cost or fair value. The fair value of the loans held for sale is based on secondary
market, recent transaction or discounted cash flows. These loans are principally classified in Level 3 of the
valuation hierarchy, and when quoted prices are available but not traded actively, such loans held for sale are
classified in Level 2 of the valuation hierarchy.

The collateral dependent loans under SFAS No. 114 are measured at fair value of the underlying collateral.

Collaterals are comprised mainly of real estate and exchange traded equity securities. The MUFG Group
maintains an established process for determining the fair value of real estate, using valuation techniques,
including, but not limited to, the valuation derived mainly from current transaction prices of comparable assets
and discounted cash flow models. Loans impaired under SFAS No. 114 that are based on underlying real estate
collateral are classified in Level 3 of the valuation hierarchy.

Other assets mainly consist of investments in equity method investees which were written down to fair value
due to impairment. When investments in equity method investees are marketable equity securities, the fair values
are determined based on quoted market price. Impaired investments in equity method investees which are
marketable equity securities are classified in either Level 1 or Level 2 of the valuation hierarchy. When
investments in equity method investees are nonmarketable equity securities, the fair values are determined using
the same methodologies as impaired nonmarketable equity securities described above. Impaired investments in
equity method investees which are nonmarketable equity securities are classified in Level 3 of the valuation
hierarchy.

F-113

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair Value Option

SFAS No. 159 allows entities to choose, at specified election dates, to measure eligible financial assets and

liabilities and certain other items at fair value that are not otherwise required to be measured at fair value.
Subsequent changes in fair value for designated items are required to be reported in income. Effective April 1,
2008, the MUFG Group elected the fair value option for foreign securities held by BTMU and MUTB, which
were previously classified as securities available for sale. The election was made to mitigate accounting
mismatches related to fluctuations of foreign exchange rates as the gains and losses on translation of these
securities were reflected in other changes in equity from nonowner sources, while the gains and losses on
translation of foreign currency-denominated financial liabilities were included in current earnings.

The MUFG Group also elected the fair value option for certain financial instruments held by MUS’s foreign

subsidiaries, because those financial instruments are managed on a fair value basis, and these exposures are
considered to be trading-related positions. These financial assets are included in Interest-earning deposits in other
banks and Receivables under resale agreements. These financial liabilities are included in Interest-bearing
deposits, Other short-term borrowings and Long-term debt. Unrealized gains and losses on such financial
instruments are recognized in the condensed consolidated statements of operations.

The following table presents the gains or losses recorded during the fiscal year ended March 31, 2009
related to the eligible instruments for which the MUFG Group elected the fair value option and the related net
gains upon adoption recorded as an increase to opening shareholders’ equity at April 1, 2008:

Balance
sheet
April 1,
2008 prior
to adoption

Net gains
upon
adoption

Balance
sheet
April 1,
2008 after
adoption of
fair value
option

Trading account
profits (losses)
fiscal year
ended
March 31,
2009

Foreign
exchange losses
fiscal year
ended
March 31,
2009

(in millions)

Total
changes in
fair value
included in
earnings
during the
fiscal year
ended
March 31,
2009

Financial assets:

Interest-earning deposits in other

banks . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

13,133

¥

— ¥

13,133

¥

115

¥

Receivables under resale

agreements(1)

. . . . . . . . . . . . . . . . . . . .

54,989

—

54,989

21,382

—

—

¥

115

21,382

Trading account securities (Previously
classified as securities available for
sale) . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,448,079

33,950(2) 10,448,079

(301,077)

(565,247)

(866,324)

Total . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,516,201

¥ 33,950

¥10,516,201

¥(279,580)

¥(565,247)

¥(844,827)

Financial liabilities:

Deposits in overseas offices:

Interest-bearing deposits(1) . . . . . . . . . .
Other short-term borrowings(1)
. . . . . . . .
Long-term debt(1) . . . . . . . . . . . . . . . . . . .

¥

28,491
5,458
642,979

¥

340
—
15,964

¥

28,151
5,458
627,015

¥

(3,485)
(1,331)
(234,614)

Total . . . . . . . . . . . . . . . . . . . . . . . . .

¥

676,928

¥ 16,304

¥

660,624

¥(239,430)

¥

¥

—
—
—

—

¥

(3,485)
(1,331)
(234,614)

¥(239,430)

Pre-tax cumulative effect of adopting the fair

value option . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in deferred income taxes . . . . . . . . . .

Cumulative effect of adopting the fair value

option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50,254
(17,275)

¥ 32,979

F-114

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Notes:
(1) Change in value attribute to the instrument-specific credit risk related to those financial assets and liabilities are not material.
(2) Net gains upon adoption were reclassified from accumulated other changes in equity from nonowner sources to the beginning balance of

retained earnings as of April 1, 2008.

The following table presents the differences between the aggregate fair value and the aggregate remaining
contractual principal balance outstanding as of March 31, 2009, for long-term receivables and debt instruments
for which the fair value option has been elected:

Financial Assets:

Receivables under resale agreements . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 35,909

¥ 36,066

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 35,909

¥ 36,066

Remaining
aggregate
contractual
amounts
outstanding

Fair value

(in millions)

Fair value
over (under)
remaining
aggregate
contractual
amounts
outstanding

¥

¥

157

157

Financial Liabilities:

Deposits in overseas offices: Interest-bearing deposits . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥
4,214
719,697

¥
4,235
532,641

¥
21
(187,056)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥723,911

¥536,876

¥(187,035)

Interest income and expense and dividend income related to the assets and liabilities for which the fair value

option is elected are measured based on the contractual rates specified in the transactions and reported in the
condensed consolidated statements of operations as either interest income or expense, depending on the nature of
the related asset or liability.

Estimated Fair Value of Financial Instruments

SFAS No. 107 requires disclosure of fair value of certain financial instruments and methodologies and

assumptions used to estimate fair values.

F-115

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a summary of carrying amounts and estimated fair values of financial instruments at

March 31, 2008 and 2009:

Financial assets:

Cash, due from banks, call loans and funds sold, and
receivables under resale agreements and securities
borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets, excluding derivatives . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for credit losses . . . . . . . . . . . . . . . .
Other financial assets(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments:

2008

2009

Carrying
amount

Estimated
fair value

Carrying
amount

Estimated
fair value

(in billions)

¥ 27,057
9,882
42,072
97,867
5,322

¥ 27,057
9,882
42,424
98,704
5,322

¥ 16,350
20,296
37,491
99,154
4,667

¥ 16,350
20,296
37,728
100,455
4,670

Trading activities(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Activities qualifying for hedges . . . . . . . . . . . . . . . . . . .

8,562
16

8,562
16

9,986
27

9,986
27

Financial liabilities:

Non-interest-bearing deposits, call money and funds

purchased, and payables under repurchase agreements and
securities lending transactions . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities, excluding derivatives . . . . . . . . .
Obligations to return securities received as collateral
. . . . . .
Due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments:

¥ 35,595
112,414
227
5,095
1,461
6,017
13,675
3,959

¥ 35,595
112,399
227
5,095
1,461
6,017
13,713
3,959

¥ 35,663
111,095
103
2,709
1,797
7,867
13,273
4,633

¥ 35,663
111,215
103
2,709
1,797
7,867
13,191
4,633

Trading activities(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,735

7,735

9,390

9,390

Note :
(1) The balances of Trading activities for Financial assets and Financial liabilities at March 31, 2008 have been adjusted from ¥3,529 billion
and ¥2,701 billion to ¥8,562 billion and ¥7,735 billion, respectively. Other financial assets have been adjusted from ¥5,321 billion to
¥5,322 billion. See Note 1 “Netting of Cash Collateral against Derivative Exposures” under “Accounting Changes” section for the
detail.

Not all of the financial instruments held by the MUFG Group are recorded at fair value on the consolidated

balance sheets. The methodologies and assumptions used to estimate fair value of financial instruments within
the scope of SFAS No. 107 that are not recorded at fair value on the consolidated balance sheets are summarized
below:

Cash, Due from Banks, Call Loans and Funds Sold, and Receivables Under Resale Agreements and

Securities Borrowing Transactions—For cash, due from banks including interest-earning deposits, call loans
and funds sold, and receivables under resale agreements and securities borrowing transactions, the carrying
amounts are a reasonable estimate of the fair values because of their short-term nature and limited credit risk.

Investment Securities—The fair values of investment securities other than those classified as available for
sale or being held to maturity (i.e., nonmarketable equity securities) are not readily determinable as they do not
have quoted market prices or secondary market prices available. The fair values of certain nonmarketable equity

F-116

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

securities, such as preferred stock convertible to marketable common stock in the future, issued by public
companies are determined by utilizing commonly accepted valuation models, such as option pricing models. It is
not practicable for the MUFG Group to estimate the fair value of other nonmarketable securities issued by
nonpublic companies for which a quoted market price is not available. For these securities, the MUFG Group is
unable to estimate fair value without incurring undue cost because they comprise investments in numerous
unlisted companies and each investment represents an insignificant percentage relative to each company.
Therefore, the above summary does not include the carrying amounts of such investment securities. The amounts
not included in the above summary are ¥78 billion and ¥146 billion at March 31, 2008 and 2009, respectively.

Loans—The fair values of loans are estimated for groups with similar characteristics, including type of

loan, credit quality and remaining maturity. In incorporating the credit risk factor, management concluded that
the allowance for credit losses adequately adjusts the related book values for credit risk. For floating- or
adjustable-rate loans, which mature or are repriced within a short period of time, the carrying values are
considered to be a reasonable estimate of fair values. For fixed-rate loans, market prices are not generally
available and the fair values are estimated by discounting the estimated future cash flows based on the contracted
maturity of the loans. The discount rates are based on the current market rates corresponding to the applicable
maturity. Where quoted market prices or estimated fair values are available, primarily for loans to refinancing
countries, loans held for sales and certain other foreign loans, the fair values are based on such market prices and
estimated fair values, including secondary market prices. For impaired loans, the fair values are generally
determined on an individual basis by discounting the estimated future cash flows and may be based on the
appraisal value of underlying collateral as appropriate.

Other Financial Assets—The estimated fair values of other financial assets, which primarily include
accrued interest receivable, customers’ acceptance liabilities and accounts receivable, approximate their carrying
amounts. The above summary does not include the carrying amounts of investments in equity method investees
amounting to ¥504 billion and ¥556 billion at March 31, 2008 and 2009, respectively.

Non-interest-bearing Deposits, Call Money and Funds Purchased, Payables Under Repurchase
Agreements and Securities Lending Transactions, and Obligations to Return Securities Received as
Collateral—The fair values of non-interest-bearing deposits are equal to the amounts payable on demand. For
call money and funds purchased, payables under repurchase agreements and securities lending transactions and
obligations to return securities received as collateral, the carrying amounts are a reasonable estimate of the fair
values because of their short-term nature and limited credit risk.

Interest–bearing Deposits—The fair values of demand deposits, deposits at notice, and certificates of
deposit maturing within a short period of time are the amounts payable on demand. Fair values of time deposits
and certificates of deposit maturing after a short period of time are estimated by discounting the estimated cash
flows using the rates currently offered for deposits of similar remaining maturities or the applicable current
market rates.

Due to Trust Account—For due to trust account, which represents a temporary placement of excess funds
from individual trust accounts managed by the trust banking subsidiary in their fiduciary and trust capacity, the
carrying amount is a reasonable estimate of the fair value since its nature is similar to short-term funding,
including demand deposits and other overnight funds purchased, in a manner that the balance changes in
response to the day-to-day changes in excess funds placed by the trust accounts.

Other Short-term Borrowings—For most other short-term borrowings, the carrying amounts are a

reasonable estimate of the fair values because of their short-term nature. For certain borrowings, fair values are
estimated by discounting the estimated future cash flows using applicable current market interest rates or
comparable rates for similar instruments, which represent the MUFG Group’s cost to raise funds with a similar
remaining maturity.

F-117

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-term Debt—For certain unsubordinated and subordinated debt, the fair values are estimated based on
quoted market prices of the instruments. The fair values of other long-term debt are estimated using a discounted
cash flow model based on rates applicable to the MUFG Group for debt with similar terms and remaining
maturities.

Other Financial Liabilities—The estimated fair values of other financial liabilities, which primarily include

accrued interest payable, bank acceptances, accounts payable and obligations under standby letters of credit and
guarantees, approximate their carrying amounts. The fair values of obligations under standby letters of credit and
guarantees are based on fees received or receivable by the MUFG Group.

The fair values of certain off-balance-sheet financial instruments held for purposes other than trading,
including commitments to extend credit and commercial letters of credit, are estimated using the fees currently
charged to enter into similar agreements, taking into account the remaining terms of the agreements and the
credit quality. The aggregate fair value of such instruments at March 31, 2008 and 2009 was not material.

The fair value estimates presented herein are based on pertinent information available to management at
March 31, 2008 and 2009. These amounts have not been comprehensively revalued since that date and, therefore,
current estimates of fair values may have changed significantly from the amounts presented herein.

31. STOCK-BASED COMPENSATION

The following describes stock-based compensation plans of MUFG, BTMU, MUTB, MUS and UNBC and

the impact of the adoption of SFAS No. 123R.

MUFG, BTMU, MUTB and MUS

MUFG, BTMU, MUTB and MUS elected to introduce a stock-based compensation plan for directors,
executive officers and corporate auditors (“officers”) and obtained the necessary shareholder approval at their
respective ordinary general meetings held in June 2007, while abolishing the retirement gratuities program for
these officers.

Following the approval, MUFG resolved at the meeting of the Board of Directors to issue stock

compensation type stock options (“Stock Acquisition Rights”) to officers of MUFG, BTMU, MUTB and MUS.
Usually, the Stock Acquisition Rights would be issued and granted to these officers once a year as a replacement
of the former retirement gratuities program.

The class of shares to be issued or transferred on exercise of the Stock Acquisition Rights is common stock

of MUFG. The number of shares to be issued or transferred on exercise of each Stock Acquisition Right
(“number of granted shares”) is 100 shares. In the event of stock split or stock merger of common stock of
MUFG, the number of granted shares shall be adjusted in accordance with the ratio of stock split or stock merger.
If any events occur that require the adjustment of the number of granted shares (e.g., mergers, consolidations,
corporate separations or capital reductions of MUFG), MUFG shall appropriately adjust the number of granted
shares to a reasonable extent.

The contractual term of the Stock Acquisition Rights is approximately 30 years from the date of grant. Some of
the Stock Acquisition Rights vest on the date of grant and the rest of the rights graded-vest depending on the holder’s
service period as officers. The Stock Acquisition Rights are only exercisable after the date on which the following
conditions are met: (1) holder as a director or an executive officer loses the status of both director and executive officer,
(2) holder as a corporate auditor loses the status of a corporate auditor. The exercise price is ¥1 per share.

F-118

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a summary of the Stock Acquisition Rights transactions of MUFG, BTMU, MUTB and

MUS for the fiscal year ended March 31, 2009:

For the fiscal year ended March 31, 2009

Number of
shares

Weighted-average
exercise price

Weighted-average
remaining
contractual term
(in years)

Aggregate
intrinsic value
(in millions)

Outstanding, beginning of the period . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited or Expired . . . . . . . . . . . . . . . . . . . .

2,798,000
3,263,600
(612,200)
(56,800)

Outstanding, end of the period . . . . . . . . . . . . . . . .

5,392,600

¥

¥

1
1
1
1

1

Exercisable, end of the period . . . . . . . . . . . . . . . .

—

¥ —

29.04

—

¥2,561

¥ —

The fair value of the Stock Acquisition Rights is estimated on the date of grant using the Black-Scholes
option pricing model that uses the assumptions described in the following table. The risk-free rate is based on the
Japanese government bonds yield curve in effect at the date of grant based on the expected term. The expected
volatility is based on the historical data from traded common stock of MUFG. The expected term is based on the
average service period of officers of MUFG, BTMU, MUTB and MUS, which represents the expected
outstanding period of the Stock Acquisition Rights granted. The expected dividend yield is based on the dividend
rate of common stock of MUFG at the date of grant.

For the fiscal year
ended March 31,

2008

2009

Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.95% 1.03%
31.07% 33.07%

4

4

1.02% 1.43%

The weighted-average grant-date fair value of the Stock Acquisition Rights granted during the fiscal year

ended March 31, 2008 and 2009 was ¥103,200 and ¥92,300.

The MUFG Group recognized ¥2,408 million and ¥2,583 million of compensation cost related to the Stock

Acquisition Rights with ¥980 million and ¥1,051 million of corresponding tax benefit during the fiscal year
ended March 31, 2008 and 2009. As of March 31, 2009, the total unrecognized compensation cost related to the
Stock Acquisition Rights was ¥562 million and it is expected to be recognized over a period of 3 months.

Cash received from exercise of the Stock Acquisition Rights for the fiscal year ended March 31, 2009 was
¥1 million. The actual tax benefit realized for the tax deductions from exercise of the Stock Acquisition Rights
was ¥630 million for the fiscal year ended March 31, 2009.

MUS

Under the Code and the Company Law, companies are permitted to purchase their own shares in the market

in order to implement a stock option plan when approved by the shareholders.

F-119

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Pursuant to resolutions approved at the general shareholders’ meetings, MUS offers stock option plans
which provide directors, executive officers, eligible employees and certain other persons with options to purchase
shares (at the respective exercise prices stipulated in each plan) as follows:

Date of approval at the shareholders’ meeting

Exercise period

Shares

June 29, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 28, 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 29, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . September 20, 2005 to March 31, 2006

July 1, 2002 to June 30, 2005
July 1, 2003 to June 30, 2006

2,057,000
2,272,000
1,992,060

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,321,060

The plans provide for the granting of stock options having an exercise price not less than the market value of

MUS’s common stock on the date of grant. The following table presents the stock option transactions for the
fiscal year ended March 31, 2007:

2007

Number of
shares

Weighted-average
exercise price

Outstanding, beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

310,000
(202,000)
(108,000)

Outstanding, end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exercisable, end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

¥812
812
812

¥ —

¥ —

MUS has not granted or modified any stock options after April 1, 2006, the effective date of SFAS

No. 123R.

UNBC

On November 4, 2008, all outstanding awards under the management stock plans discussed below were
canceled in exchange for the right to receive the cash value of those awards. These plans were terminated in
December 2008, and no additional awards will be granted under these plans.

Prior to their termination, UNBC had two management stock plans. The Year 2000 UnionBanCal

Corporation Management Stock Plan, as amended (the “2000 Stock Plan”), and the UnionBanCal Corporation
Management Stock Plan, restated effective June 1, 1997 (the “1997 Stock Plan”), had 20.0 million and
6.6 million shares, respectively, of UNBC’s common stock authorized to be awarded to key employees, outside
directors and consultants of UNBC at the discretion of the Executive Compensation and Benefits Committee of
the Board of Directors (the “Committee”). Employees on rotational assignment from BTMU are not eligible for
stock awards.

The Committee determined the term of each stock option grant, up to a maximum of ten years from the date

of grant. The exercise price of the options issued under the stock plans could not be less than the fair market
value on the date the option was granted. Beginning in 2006, the value of options was recognized as
compensation expense over the vesting period during which the employees were required to provide service.
Prior to January 1, 2006, UNBC’s unrecognized compensation expense for nonvested restricted stock reduced
retained earnings. The adoption of SFAS No. 123R resulted in an increase of unappropriated retained earnings
and a decrease of capital surplus by ¥1,468 million, respectively, in the consolidated financial statements. The

F-120

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

value of the restricted stock at the date of grant was recognized as compensation expense over its vesting period
with a corresponding credit adjustment to capital surplus. All cancelled or forfeited options and restricted stock
became available for future grants. SFAS No. 123R requires the cash flows resulting from the tax benefits of tax
deductions in excess of the compensation cost recognized for share-based compensation awards (i.e., excess tax
benefits) to be classified as financing cash flows. The ¥6,266 million of the excess tax benefits and ¥10,931
million of the exercise of stock options are classified as other cash inflows from financing activities, and ¥21,063
million of share-based compensation payouts as a result of privatization is classified as cash outflows from
financing activities, in the consolidated statement of cash flows for the fiscal year ended March 31, 2009.

Under the 2000 Stock Plan, UNBC granted stock options and restricted stock. Additionally under the Plan,
UNBC issued shares of common stock upon the vesting and settlement of restricted stock units, stock units and
performance shares settled in common stock. Under the 1997 Stock Plan, UNBC issued shares of common stock
upon exercise of outstanding stock options. UNBC issued new shares of common stock for all awards under the
stock plans. After taking into account the outstanding stock options and restricted stock, as well as the maximum
number of shares that might be issued upon vesting and settlement of outstanding restricted stock units, stock
units and performance shares settled in common stock, a total of 3,692,736 shares, 1,095,526 shares and zero
shares were available for future grants under the 2000 Stock Plan at December 31, 2006, 2007 and 2008,
respectively. The remaining shares under the 1997 Stock Plan were not available for future grants.

The Committee determined that performance share awards granted in 2006 and later were to be redeemed in

shares.

Stock Options

Under the 2000 Stock Plan, UNBC granted options to various key employees, including policy-making

officers, and to non-employee directors for selected years. Under both the 1997 and 2000 Stock Plans, options
granted to employees vest pro-rata on each anniversary of the grant date and became fully exercisable three years
from the grant date, provided that the employee had completed the specified continuous service requirement.
Generally, the options could vest earlier if the employee died, was permanently disabled, or retired under certain
grant, age, and service conditions or terminated employment under certain conditions. Options granted to
non-employee directors were fully vested on the grant date and exercisable 33 1⁄ 3 % on each anniversary under
the 1997 Stock Plan, and were fully vested and exercisable on the grant date under the 2000 Stock Plan.

The following is a summary of stock option transactions under the stock plans:

For the year ended December 31, 2008

Number of
shares

Weighted-average
exercise price

Weighted-average
remaining
contractual term
(in years)

Aggregate
intrinsic value
(in thousands)

Options outstanding, beginning of the period(1) . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancellation of options . . . . . . . . . . . . . . . . .

9,673,146
823,610
(2,307,005)
(101,195)
(8,088,556)

Options outstanding, end of the period(1)

. . . . . . .

Options exercisable, end of the period . . . . . . . . .

—

—

$51.14
51.06
47.58
58.11
52.06

$ —

$ —

Note:
(1) Options not expected to vest are included in options outstanding. Amounts are not material.

F-121

—

—

$ —

$ —

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The fair value of each option grant was estimated on the date of grant utilizing the Black-Scholes option

pricing model and using the assumptions noted in the following table. The Black-Scholes option pricing model
was applied to option tranches based on expected terms that result in ranges of input assumptions, such ranges
are disclosed below. Expected volatilities were based on historical data and implied volatilities from traded
options on UNBC’s stock, and other factors. UNBC used historical data to estimate option exercise and
employee terminations within the valuation model. The expected term of an option granted was derived from the
output of the option valuation model, which was based on historical data and represented the period of time that
the option granted was expected to be outstanding. The risk-free rate for periods within the contractual life of the
option was based on the U.S. Treasury yield curve in effect at the time of grant based on the expected term.

For the years ended December 31,

2006

2007

2008

Weighted-average fair value—per share . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rates (a range for 1 to 7 year tenors) . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average expected dividend yield . . . . . . . . . . . . . . . . . . . . .

$

$

12.31
4.3 - 5.05%

7.21
2.2 - 3.3%
16.6 - 22.9% 16.9 - 21.0% 22.2 - 27.4%
24.3%

7.04
3.71%

19.4%

19.8%

$

3.4 - 5.4

3.8 - 4.4

3.9 - 4.4

2.7%

4.3%

4.4%

The total intrinsic value of options exercised during 2006, 2007 and 2008 was $37.9 million, $16.0 million

and $44.5 million, with a corresponding tax benefit of $13.5 million, $5.7 million and $15.9 million,
respectively. The total intrinsic value of options that were canceled and settled in cash during 2008 as a result of
the Company's privatization was $173.4 million with a corresponding tax benefit of $61.6 million. The total fair
value of options vested during the years ended December 31, 2006, 2007 and 2008 was $28.9 million, $20.5
million and $13.0 million, respectively.

UNBC recognized $22.4 million, $13.0 million and $23.8 million of compensation cost for share-based

payment arrangements related to stock option awards with $8.4 million, $5.0 million and $9.2 million of
corresponding tax benefit during the years ended December 31, 2006, 2007 and 2008, respectively. In 2008,
compensation cost of $12.8 million with a corresponding tax benefit of $4.9 million was recorded for the
acceleration of expense due to UNBC's privatization. As of December 31, 2008, there was no unrecognized
compensation cost related to nonvested stock option awards as a result of UNBC's privatization.

Restricted Stock

In general, restricted stock awards were granted under the 2000 Stock Plan to key employees, and in 2005,

to non-employee directors. The awards of restricted stock granted to employees vest pro-rata on each anniversary
of the grant date and became fully vested four years from the grant date, provided that the employee had
completed the specified continuous service requirement. Generally, they vested earlier if the employee died, was
permanently and totally disabled, retired under certain grant, age, and service conditions or terminates
employment under certain conditions. The awards of restricted stock granted to existing non-employee directors
in 2005 vested in full in July 2006. Restricted stockholders had the right to vote their restricted shares and receive
dividends. The grant date fair value of awards was equal to the closing price on date of grant.

F-122

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a summary of UNBC’s nonvested restricted stock awards as of December 31, 2008 and

changes during the period ended December 31, 2008:

For the year ended December 31, 2008

Number of shares

Weighted-average
grant date
fair value

Nonvested restricted awards, beginning of the period . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

881,117
50,787
(900,004)
(31,900)

Nonvested restricted awards, end of the period . . . . . . . . . . . . . . . . . . . . . . . . .

—

$59.00
46.64
58.35
58.13

$ —

The total fair value of the restricted stock awards vested was $8.8 million during 2006, $15.6 million
during 2007 and $52.5 million during 2008, with a corresponding tax benefit of $3.1 million, $5.0 million and
$22.6 million, respectively. In 2008, the fair value of the restricted stock awards vested included $44.4 million,
with a corresponding tax benefit of $20.1 million, related to UNBC's privatization.

UNBC recognized $14.4 million, $14.4 million and $41.6 million of compensation cost for share-based
payment arrangements related to restricted stock awards with $5.4 million, $5.5 million and $16.0 million of
corresponding tax benefit during the years ended December 31, 2006, 2007 and 2008, respectively. In 2008,
compensation cost of $29.1 million with a corresponding tax benefit of $11.2 million was recorded for the
acceleration of expense due to the Company's privatization. At December 31, 2008, there was no unrecognized
compensation cost related to nonvested restricted awards.

Restricted Stock Units and Stock Units

Starting in 2006, UNBC granted restricted stock units to non-employee directors. These restricted stock units
consisted of an annual grant, and in the case of new non-employee directors, an annual grant and an initial grant. In
general, the annual grant vests in full on the first anniversary of the grant date, and the initial grant vests in three
equal installments on each of the first three anniversaries of the grant date. The grant date fair value of awards was
equal to the closing price on date of grant. During 2008, UNBC granted 25,410 restricted stock units with a
weighted-average grant date fair value of $41.41 per unit. There were no restricted stock units forfeited during 2008.
The total fair value of the restricted stock units that vested or cancelled during the year ended December 31, 2008
was $2.8 million. UNBC recognized $0.3 million, $1.0 million and $2.4 million of compensation cost with a
corresponding $0.1 million, $0.4 million and $0.9 million in tax benefits related to these grants in 2006, 2007 and
2008, respectively. In 2008, compensation cost of $1.1 million with a corresponding tax benefit of $0.4 million was
recorded for the acceleration of expense due to UNBC's privatization. As of December 31, 2008, there was no
unrecognized compensation cost related to restricted stock units.

The restricted stock unit participants did not have voting or other stockholder rights. However, the

participants’ stock unit accounts received dividend equivalents, reflecting the aggregate dividends earned based
on the total number of restricted stock units outstanding, in the form of additional restricted stock units.
Participants could elect to defer the delivery of vested shares of common stock at predetermined dates as defined
in the plan agreements. UNBC issued new shares under the 2000 Stock Plan upon vesting and settlement of these
grants, which were redeemable only in shares.

Non-employee directors could irrevocably elect to defer all or a portion of the cash retainer and/or fees
payable to them for services on the Board of Directors and its committees in the form of stock units. At the time

F-123

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

of deferral, a bookkeeping account was established on behalf of the director and credited with a number of fully
vested stock units. The director received a number of stock units equal to the number of shares of common stock
when the deferred compensation was payable. Dividend equivalents were credited to the stock unit accounts.
Stock units had no voting rights. UNBC issued new shares under the 2000 Stock Plan upon settlement of the
stock units.

As a result of UNBC’s privatization, all restricted stock units and stock units were cancelled and either paid

out in cash in 2008 or deferred based on the participant’s prior elections or applicable tax requirements and
recorded as a liability.

Performance Share Plan

Effective January 1, 1997, UNBC established a Performance Share Plan. At the discretion of the Committee,
eligible participants would earn performance share awards to be redeemed in cash and/or shares three years after
the date of grant. Performance shares were linked to stockholder value in two ways: (1) the market price of
UNBC’s common stock; and (2) return on equity, a performance measure closely linked to value creation.
Eligible participants generally received grants of performance shares annually. The plan was amended in 2004
increasing the total number of shares that can be granted under the plan to 2.6 million shares. The following is a
summary of shares granted and available for future grants under the Performance Share Plan:

For the years ended December 31,

2006

2007

2008

Performance shares:
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available for future grant, year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,100
2,132,333

70,614
2,063,219

91,750
—

Performance Shares—Redeemable in Cash

All performance shares granted prior to 2006 were redeemable in cash and therefore were accounted for as

liabilities. The value of a performance share under the liability method was equal to the average month-end
closing price of the UNBC’s common stock for the final six months of the performance period. All cancelled or
forfeited performance shares would become available for future grants. The following is a summary of
performance shares that are redeemable in cash under the Performance Share Plan:

For the years ended December 31,

2006

2007

2008

Fair value of performance shares that vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash payments made for performance shares that vested . . . . . . . . . . . . . . . . . . .
Fair value of performance shares that vested and deferred . . . . . . . . . . . . . . . . . .
Performance shares compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit related to compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability for cash settlement of performance shares, year end . . . . . . . . . . . . . . . .

$ 9.4
$ 5.8
$ 0.3
$ 1.8
$ 0.7
$11.7

(in millions)
$6.7
$7.8
—
$1.7
$0.6
$5.7

—
$5.7
—
—
—
—

The compensation cost related to these grants that are redeemable in cash was fully recognized as of

December 31, 2007.

F-124

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Performance Shares—Redeemable in Shares

Prior to UNBC's privatization, performance shares granted in 2006 and thereafter were redeemable in
shares. UNBC issued new shares under the 2000 Stock Plan upon vesting and settlement of these grants that were
redeemable in shares.

As a result of UNBC’s privatization, performance shares that were redeemable in shares under the

Performance Share Plan were canceled and will be settled in cash. A liability has been established for the amount
to be settled in 2009.

The following is a summary of performance shares that are redeemable in shares under the Performance

Share Plan:

For the years ended December 31,

2006

2007

2008

Performance shares granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average grant date fair value—per share . . . . . . . . . . . . . . . . . . . . . . . .
Performance shares forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of performance shares that vested during the year . . . . . . . . . . . . . . . .
Performance shares compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit related to compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability for cash settlement of performance shares, year end . . . . . . . . . . . . . . . .

(in millions, except the number of
shares and per share amounts)
70,614
62,100
$ 63.10
$ 69.96
1,500
1,050
$
0.6
0.2
$
4.8
2.8
1.8
1.1
$
— $
—

91,750
$ 51.42
—
21.0
14.0
5.4
25.3

$
$
$

$
$
$

As of December 31, 2008, there was no unrecognized compensation cost related to grants that were

redeemable in shares as a result of UNBC’s privatization.

32. PARENT COMPANY ONLY FINANCIAL INFORMATION

Distributions of retained earnings of BTMU and MUTB are restricted in order to meet the minimum capital

adequacy requirements under the Banking Law. Also, retained earnings of these banking subsidiaries are
restricted, except for ¥2,904,807 million, in accordance with the statutory reserve requirements under the
Company Law at March 31, 2009 (see Notes 20 and 21).

F-125

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the parent company only financial information of MUFG:

Condensed Balance Sheets

Assets:

2008

2009

(in millions)

Cash and interest-earning deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock investment in Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

50,140
9,393,894
—
118,504

¥

33,602
7,329,382
927,944
82,150

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥9,562,538

¥8,373,078

Liabilities and shareholders’ equity:

Short-term borrowings from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt from subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . .
Long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 174,000
332,645
549,900
15,878

¥1,032,670
720,373
330,051
55,089

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,072,423

2,138,183

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,490,115

6,234,895

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥9,562,538

¥8,373,078

Condensed Statements of Operations

2007

2008

2009

(in millions)

Income:

Dividends from subsidiaries and affiliated companies . . . . . . . . . . .
Dividends from Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management fees from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥500,776
—
11,749
228
(51)
557

¥

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

513,259

Expense:

Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense to subsidiaries and affiliated companies . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,592
15,008
6,719
3,294

34,613

¥

514,883
—
13,970
477
139
452

529,921

13,000
10,660
6,301
1,193

31,154

241,129
43,041
16,985
651
42,531
6,043

350,380

15,404
34,436
5,247
1,758

56,845

Equity in undistributed net income (loss) of subsidiaries and affiliated

companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105,074

(1,044,933)

(1,740,354)

Income (loss) before income tax expense (benefit) . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

583,720
2,432

(546,166)
(3,730)

(1,446,819)
21,221

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥581,288

¥ (542,436) ¥(1,468,040)

F-126

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Condensed Statements of Cash Flows

2007

2008

2009

(in millions)

Operating activities:

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 581,288
5,268

¥ (542,436) ¥(1,468,040)
1,793,971
1,035,759

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . .

586,556

493,323

325,931

Investing activities:

Proceeds from sales of stock investment in subsidiaries and an

affiliated company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

1,792

24,002

Purchases of equity investments in subsidiaries and affiliated

companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of other investment securities . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in interest-earning deposits with banks . . . .
Proceeds from capital repayment by a subsidiary . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

— (148,541)
—
—
(3,406)
(4,683)
118,018
52,085
5,988
571

(941,617)
(927,944)
21,267
—
(1,495)

Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . .

47,973

(26,149)

(1,825,787)

Financing activities:

Net increase in short-term borrowings from subsidiaries . . . . . . . . .
Proceeds from issuance of long-term debt to a subsidiary and

affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repayment of long-term debt
Repayment of long-term debt to subsidiaries and affiliated

12,980

116,620

879,460

1,415
(25,000)

500
(125,000)

391,997
(220,000)

companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(289,429)

(163,998)

(3,700)

Proceeds from issuance of common stock, net of stock issue

expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

278,725

Proceeds from issuance of preferred stock, net of stock issue

expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . .
Payments to acquire treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
62,984
(292,182)
(103,060)
(3,105)

—
781
(151,365)
(141,182)
979

388,623
184,617
(238,842)
(153,260)
(3,035)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . .

(635,397)

(462,665)

1,504,585

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of fiscal year

(868)
4,892

4,509
4,024

4,729
8,533

Cash and cash equivalents at end of fiscal year

. . . . . . . . . . . . . . . . . . . .

¥

4,024

¥

8,533

¥

13,262

33. SEC REGISTERED FUNDING VEHICLES ISSUING NON-DILUTIVE PREFERRED
SECURITIES

In February 2006, MUFG established MUFG Capital Finance 1 Limited, MUFG Capital Finance 2 Limited
and MUFG Capital Finance 3 Limited, wholly owned funding vehicles in the Cayman Islands, for the issuance of
preferred securities to enhance the flexibility of its capital management.

On March 17, 2006, MUFG Capital Finance 1 Limited, MUFG Capital Finance 2 Limited and MUFG

Capital Finance 3 Limited registered with the SEC and issued $2,300,000,000 in 6.346% non-cumulative

F-127

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

preferred securities, €750,000,000 in 4.850% non-cumulative preferred securities and ¥120,000,000,000 in
2.680% non-cumulative preferred securities (collectively, the “Preferred Securities”), respectively. Total net
proceeds before expenses were approximately $4.17 billion. All of the ordinary shares of MUFG Capital Finance
1 Limited, MUFG Capital Finance 2 Limited and MUFG Capital Finance 3 Limited are owned by MUFG.
MUFG fully and unconditionally guarantees the payment of dividends and payments on liquidation or
redemption of the obligations under the Preferred Securities.

The Preferred Securities entitle holders to receive a non-cumulative preferential cash dividend starting on

July 25, 2006 and on January 25 and July 25 of each year thereafter. The finance subsidiaries will not be
obligated to pay dividends on the Preferred Securities upon the occurrence of certain events relating to the
financial condition of MUFG. From July 25, 2016, dividends on the Preferred Securities will be re-calculated at a
floating rate per annum.

The dollar-denominated and euro-denominated preferred securities are subject to redemption on any
dividend payment date on or after July 25, 2016. The yen-denominated preferred securities are subject to
redemption on any dividend payment date on or after July 25, 2011. All the Preferred Securities are subject to
redemption in whole (but not in part) at any time upon the occurrence of specified events, in each case at the
option of each of the funding vehicles and subject to necessary government approvals.

The Preferred Securities are non-dilutive and not convertible into MUFG’s common shares. The Preferred

Securities were included as part of MUFG’s Tier I capital at March 31, 2008 and 2009 under its capital adequacy
requirements.

These funding vehicles are not consolidated in accordance with FIN No. 46R as more fully discussed in
Note 25. The funds raised through such funding vehicles are primarily loaned to the MUFG Group and presented
as Long-term debt in the consolidated balance sheet at March 31, 2008 and 2009.

34. EVENTS SINCE MARCH 31, 2009

Approval of Dividends

On June 26, 2009, the shareholders approved the payment of cash dividends to the shareholders of record on

March 31, 2009, of ¥30.00 per share of Class 3 Preferred Stock, ¥43.00 per share of Class 5 Preferred Stock,
¥2.65 per share of Class 11 Preferred Stock, totaling ¥9, 708 million, and ¥5.00 per share of Common stock,
totaling ¥58, 237 million.

MUTB’s termination to acquisition of NikkoCiti Trust and Banking

In December 2008, MUTB entered into an agreement with Nikko Citi Holdings Inc. and Citigroup
International LLC under which MUTB will purchase all of the issued shares of NikkoCiti Trust and Banking
Corporation for ¥25 billion in cash, subject to certain purchase price adjustments as well as pending regulatory
approvals and other closing conditions. However, on May 14, 2009, MUTB agreed with Nikko Citi Holdings Inc.
to cease from acquiring all of the issued shares of Nikko Citi Holdings Inc. due to the changes in its business
environment and strategy.

Strategic Global Alliance with Morgan Stanley

On May 22, 2009, MUFG acquired, for $705 million, an additional 29,375,000 shares of Morgan Stanley
common stock in public offerings. At the same time, MUFG sold back to Morgan Stanley 640,909 of the non-
cumulative non-convertible perpetual preferred stock for total consideration of $705 million.

F-128

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On June 11, 2009, MUFG acquired, for approximately $471 million, an additional 17,178,055 shares of

Morgan Stanley common stock relating to a second public offering. As a result of these transactions, MUFG’s
voting interest in Morgan Stanley remains at approximately 20% on a fully diluted basis. MUFG recorded those
newly acquired Morgan Stanley common stock, representing approximately 3.4% of voting rights, as available
for sale investments in its balance sheet.

Through MUFG’s capital alliance with Morgan Stanley, MUFG plans to pursue a global strategic alliance in
corporate and investment banking, retail, investment and other businesses. On June 30, 2009, MUFG announced
that the scope of the strategic alliance was expanded, from plans originally announced in March 2009, into new
geographies and businesses. These include:

‰ A global alliance in corporate and investment banking consisting of the creation of Morgan Stanley

MUFG Loan Partners, LLC. This loan marketing joint venture will generate attractive credit
opportunities for both companies and provide clients in the U.S., Canada and Latin America (subject to
clearance of any regulatory requirement in each jurisdiction) access to expanded, world-class lending
and capital markets services;

‰ A business referral arrangements in Asia, Europe, the Middle East and Africa, which will cover a

number of products and services including capital markets, loans, fixed income sales and other ancillary
businesses;

‰ A referral agreement for commodities transactions executed outside of Japan, which enables BTMU to
refer its clients to the Morgan Stanley Capital Group for commodity transactions and receive referral
fees upon deal completion; and

‰

Secondment of personnel to share best practices and expertise across a variety of business areas.

Incorporation of the Joint Holding Company of Bank of Ikeda and Senshu Bank

On May 25, 2009, BTMU, Senshu Bank, a consolidated subsidiary of BTMU, and The Bank of Ikeda
(“Bank of Ikeda”) entered into a business integration agreement. Under the term of this agreement, Senshu Bank
and Bank of Ikeda plan to establish a new holding company, to be incorporated on October 1, 2009. It is expected
that BTMU will have approximately 36% of voting rights of common stock issued by the new holding company.
In order to respect the business independence of the new financial group, consisting of Bank of Ikeda, Senshu
Bank and the new holding company, BTMU plans to divest a part of its share, and intends to exclude the new
holding company from an equity method affiliate of MUFG by September 30, 2014.

Issuance of “Non-dilutive” Preferred Securities by a Special Purpose Company

On May 28, 2009, MUFG established MUFG Capital Finance 9 Limited, a special purpose company in the

Cayman Islands, for the issuance of preferred securities to strengthen the capital base of BTMU.

On July 29, 2009, MUFG Capital Finance 9 Limited issued ¥130 billion in series A non-cumulative
perpetual preferred securities with a fixed dividend rate of 4.52% per annum until January 2020 and a non-step
up floating dividend rate after January 2020, ¥110 billion in series B non-cumulative perpetual preferred
securities with a fixed dividend rate of 4.02% per annum until January 2020 and a step up floating dividend rate
after January 2020, and ¥130 billion in series C non-cumulative perpetual preferred securities with a fixed
dividend rate of 4.02% per annum until January 2015 and a non-step up floating dividend rate after January 2015.
These securities are expected to be accounted for as MUFG’s Tier I capital under the BIS capital adequacy
requirements.

F-129

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Compensation Type Stock Options (Stock Acquisition Rights)

On July 14, 2009, MUFG allotted the directors, executive officers and corporate auditors of MUFG, BTMU,

MUTB and MUS stock acquisition rights to acquire an aggregate amount of 5,655,800 shares of MUFG’s
common stock. The stock acquisition rights have an exercise price of ¥1 per common share, and are exercisable
until July 13, 2039.

Redemption of “Non-dilutive” Preferred Securities Issued by a Special Purpose Company

On July 27, 2009, Sanwa Capital Finance 2 Limited, a special purpose company established in the Cayman
Islands, redeemed in total ¥130 billion of non-cumulative and non-dilutive perpetual preferred securities. These
securities were previously accounted for as part of MUFG’s Tier I capital at March 31, 2009 under the BIS
capital adequacy requirements.

* * * * *

F-130

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has

duly caused and authorized the undersigned to sign this Annual Report on its behalf.

Signature

MITSUBISHI UFJ FINANCIAL GROUP, INC.

By:
Name:
Title:

/s/ NOBUO KUROYANAGI

Nobuo Kuroyanagi
President and Chief Executive Officer

Date: September 2, 2009

(cid:47)(cid:133)(cid:136)(cid:195)(cid:202)(cid:62)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:192)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:136)(cid:195)(cid:202)(cid:171)(cid:192)(cid:136)(cid:152)(cid:204)(cid:105)(cid:96)(cid:202)(cid:156)(cid:152)(cid:202)(cid:192)(cid:105)(cid:86)(cid:222)(cid:86)(cid:143)(cid:105)(cid:96)(cid:202)(cid:171)(cid:62)(cid:171)(cid:105)(cid:192)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:195)(cid:156)(cid:222)(cid:202)(cid:136)(cid:152)(cid:142)(cid:176)

(cid:31)(cid:136)(cid:204)(cid:195)(cid:213)(cid:76)(cid:136)(cid:195)(cid:133)(cid:136)(cid:202)(cid:49)(cid:19)(cid:27)(cid:202)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:202)(cid:20)(cid:192)(cid:156)(cid:213)(cid:171)(cid:202)(cid:202)(cid:1)(cid:152)(cid:152)(cid:213)(cid:62)(cid:143)(cid:202)(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:211)(cid:228)(cid:228)(cid:153)(cid:202)(cid:202)(cid:202)(cid:21)

(cid:87)(cid:87)(cid:87)(cid:14)(cid:77)(cid:85)(cid:70)(cid:71)(cid:14)(cid:74)(cid:80)

(cid:33)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:0)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:0)(cid:18)(cid:16)(cid:16)(cid:25)

(cid:42)(cid:192)(cid:136)(cid:152)(cid:204)(cid:105)(cid:96)(cid:202)(cid:136)(cid:152)(cid:202)(cid:27)(cid:62)(cid:171)(cid:62)(cid:152)