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18. IMPAIRMENT LOSSES FOR LONG-LIVED ASSETS
For the year ended March 31, 2009, the majority of the impairment losses were recorded on long-lived property, plant and
equipment located in Japan. The Digital Media & Consumer Products division recognized a loss of ¥57,995 million ($591,786
thousand), primarily in its plasma TV business, due to 1) the decision to reorganize sourcing for glass panel components from
in-house manufacturing to an outside supplier; 2) patents with lower-than-expected future license income; and, 3) a specific
type of electronic parts that were projected to have lower production because of smaller demand in the market. The Power
& Industrial Systems division recognized a loss of ¥32,961 million ($336,337 thousand) primarily in its automotive products
business whose profitability has deteriorated because of a significant deterioration of the automotive market. The Information
& Telecommunication Systems division recognized a loss of ¥21,139 million ($215,704 thousand) primarily due to 1) its
semiconductor and financial institution-related businesses whose profitability have deteriorated because of smaller demand
in the markets; 2) a decline in the expected selling price of certain assets held for sale caused by a deterioration of the real
estate market; and, 3) a decline in the estimated recoverable value because of the bankruptcy of a customer. The High
Functional Materials & Components division recognized a loss of ¥12,888 million ($131,510 thousand) primarily in its
semiconductor-related and automotive-related products businesses whose profitabilities have deteriorated because of a
significant deterioration in these markets. The fair value estimates used to determine these losses were based primarily on
discounted future cash flows.
For the year ended March 31, 2008, the majority of the impairment losses were recorded on long-lived property, plant and
equipment located in Japan. The Digital Media & Consumer Products division recognized a loss of ¥68,791 million primarily
due to its plasma TV business for which the Company and certain subsidiaries have recognized losses for consecutive periods
because of severe market competition accompanied by falling prices. These impairment losses included patents with lower-
than-expected future license income. The Power & Industrial Systems division recognized a loss of ¥9,298 million primarily
due to its electric power selling business whose profitability has deteriorated due to rising fuel prices. The High Functional
Materials & Components division recognized a loss of ¥7,172 million primarily due to rapid falling prices of LCD drivers for
which a subsidiary supplies material for the related semiconductors. The fair value estimates used to determine these losses
were based primarily on discounted future cash flows.
For the year ended March 31, 2007, the majority of the impairment losses were recorded on long-lived property, plant and
equipment located in Japan. The High Functional Materials & Components division recognized a loss of ¥4,351 million
primarily due to a specific type of material for semiconductors that was projected to have lower production because of
smaller demand in the market. The Digital Media & Consumer Products division recognized a loss of ¥1,305 million primarily
due to a specific type of electronic parts that was projected to have lower production because of smaller demand in the
market. The Electronic Devices division recognized a loss of ¥1,294 million primarily due to projection television tubes that
were scheduled to reduce their production. The fair value estimates used to determine these losses were based primarily
on discounted future cash flows.
19. RESTRUCTURING CHARGES
Certain losses incurred in the reorganization of the Company’s operations are considered restructuring charges. Components
and related amounts of the restructuring charges, before the related tax effects, for the years ended March 31, 2009, 2008
and 2007 are as follows:
Millions of yen
Thousands of
U.S. dollars
2009 2008 2007 2009
Special termination benefits . . . . . . . . . . . . . . . . . . . . . . ¥21,517 ¥15,676 ¥3,868 $219,561
Loss on fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,410 2,434 115 14,388
¥22,927 ¥18,110 ¥3,983 $233,949
77
Hitachi, Ltd.
Annual Report 2009