Nikon 2005 Annual Report Download

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annual report
2005

Table of contents

  • Page 1
    annual report 2005

  • Page 2
    ... products, such as digital cameras, as well as binoculars and other optical products for consumers, such as glasses frames, which complement our diverse array of industrial precision equipment that includes semiconductor-related equipment, notably steppers, microscopes and measuring instruments...

  • Page 3
    ... Nikon Corporation and Consolidated Subsidiaries Years ended March 31, 2005 and 2004 Millions of Yen Millions of U.S. Dollars % 2005 FOR THE YEAR Net sales Operating income Net income Per share of common stock (Yen and U.S. dollars): Basic net income Diluted net income Cash dividends applicable...

  • Page 4
    ... our new senior management team. Stepper roadmap clarified with the advent of immersion technology Our first objective is to make the current twowheeler run better. In the precision equipment business, the key to long-term growth is to establish Nikon as the clear technological leader. During the...

  • Page 5
    From left: Michio Kariya, Ichiro Terato

  • Page 6
    ... strong position by expanding this market further, focusing on interchangeable lenses, digital camera accessories and related services. We are confident we can grow profits in this segment of the market. In the compac t sec tor, our urgent need is to compress development and production lead times...

  • Page 7
    ... Products 55.5% digital cameras, film cameras, interchangeable camera lenses, film scanners Instruments 7.9% biological microscopes, industrial microscopes, measuring instruments, inspection equipment Other 3.3% sport optics products, surveying instruments, ophthalmic frames and sunglasses...

  • Page 8
    precision equipment accuracy+ 6

  • Page 9
    ... to solve the problem, because it also reduces throughput due to insufficient energy density. The POLANO polarized illumination func tion developed by Nikon solves this issue, creating beams of spolarized light without reducing illumination levels. The resulting improvement in image contrast is...

  • Page 10
    review of operations Kazuo Ushida Managing Director, Member of the Board & Senior Executive Officer President of Precision Equipment Company precision equipment Profitable at the operating level after two years of losses A recovery in the semiconduc tor market and higher levels of investment in ...

  • Page 11
    ...-edge IC scanners, it now takes about six months from lens fabrication to final installation, which is roughly half the previous figure. Simplified design has played a part in this achievement, covering all processes from development and design to technical and manufac turing steps. Nikon teams...

  • Page 12
    imaging products imagination+ 10

  • Page 13
    ... clear portrait pictures include D-Lighting, which automatically adds light and detail to underexposed and backlit images, and advanced In-Camera Red-Eye Fix, which digitally corrects the annoying phenomenon of red-eye in photos taken with a ï¬,ash. Nikon D50 further expands market for digital SLR...

  • Page 14
    ... to the market in the fastest time frame possible by shortening all processes, from product planning to development, design, production and sales. Improving corporate structure and reinventing corporate culture are critical to expand future business with cutting-edge digital technology. We created...

  • Page 15
    ... production line from lens units to final assembly at the core factory for compact digital cameras at Nikon Imaging (China) Co., Ltd. development costs by applying basic development technologies to a variety of models, while also designing to share the same parts and components to increase supply...

  • Page 16
    instruments curiosity+ 14

  • Page 17
    DIGITAL ECLIPSE C1si Spec tral imaging confocal laser scanning microscope system VMR-K3040ZC measuring example (solder bumps on printed circuit board) Height and direc tion measurement results are shown in order from low position to high position in blue, green, yellow and red, respec tively NEXIV...

  • Page 18
    ... on different market segments. The revised organizational structure divides the Instruments Company broadly into biosciences and industrial instruments. Authority is delegated extensively to product development teams in each half. Nikon hopes that this new system will promote a more open exchange of...

  • Page 19
    ... and edge detection. generating images at resolutions exceeding those produced by current microscopes. By combining hardware and software, Nikon aims to create new businesses by engineering innovative solutions to customer needs. Shift in focus within industrial measuring equipment sector Nikon has...

  • Page 20
    ...ï¬,at in Japan, increased sales of binoculars and laser rangefinders in the U.S. market contributed to its overall growth. 4. Sales of ophthalmic products declined amid depressed demand and fiercer competition in the markets for frames and sunglasses. Aggressive development of new businesses Nikon...

  • Page 21
    ... by holding corporate ethics training sessions for employees and senior management. By setting forth the Nikon Group Privac y Protec tion Polic y in advance of the full-scale introduc tion of the information management rules, and revising and distributing our Information Management Regulations to...

  • Page 22
    ... to Long-Term Environmental Targets Greenhouse Gas Emissions 35% reduc tion in average annual emissions normalized against cost of sales by fiscal 2010, and at least 29% by fiscal 2008, both compared to levels for fiscal 2002 Zero Emissions Introduce zero-emission systems at all plants and major...

  • Page 23
    ... regard to Nikon Group business segments, in Precision Equipment and Instruments, recovery in the semiconductor market and expansion of the LCD market spurred revitalized capital investment. In Imaging Products, the digital camera market continued to grow. Net Sales by Industry Segment Years ended...

  • Page 24
    ... steppers to Asia in Precision Equipment, and higher sales of industrial microscopes to Asia in Instruments. Meanwhile, Precision Equipment posted increased sales due to steady growth in digital SLR cameras and the positive effects of an expanding digital camera market. Overall sales in Japan surged...

  • Page 25
    ... assets Inventories Property, plant and equipment Investments and other assets Total current liabilities Short-term borrowings Long-term debt, less current portion Shareholders' equity 100.0% 68.1 38.8 17.3 14.6 42.0 6.0 23.7 30.9 100.0% 67.5 39.2 17.6 14.9 41.1 7.2 27.0 28.2 FINANCIAL REVIEW AND...

  • Page 26
    ...(Note 1) 2005 ASSETS Current assets Cash and cash equivalents Notes and accounts receivable - trade: Customers Unconsolidated subsidiaries and associated companies Allowance for doubtful receivables Inventories (Note 5) Deferred tax assets (Note 10) Other current assets Total current assets 121,622...

  • Page 27
    ... subsidiaries and associated companies Income taxes payable Accrued expenses Other current liabilities (Note 10) Total current liabilities Long-term liabilities Long-term debt (Note 6) Liability for employees' retirement benefits (Note 7) Retirement allowances for directors and corporate auditors...

  • Page 28
    ...effect of accounting change for the retirement benefits to directors, corporate auditors and officers Equity in earnings of unconsolidated subsidiaries and associated companies Other-net Other income-net Income before income taxes and minority interest Income taxes (Note 10) Current Deferred Total...

  • Page 29
    ...' equity Nikon Corporation and Consolidated Subsidiaries Years ended March 31, 2005 and 2004 Thousands Outstanding Number of Shares of Common Stock Common Stock Capital Surplus Millions of Yen Unrealized Foreign Gain (Loss) on Currency Retained Available-for- Translation Earnings sale Securities...

  • Page 30
    ... and accounts receivable-trade Increase in inventories Increase (decrease) in notes and accounts payable-trade Other-net Total adjustments Net cash provided by operating activities Investing activities: Capital expenditures Proceeds from sales of property, plant and equipment Purchases of investment...

  • Page 31
    ... the country in which Nikon Corporation (the "Company") is incorporated and operates. The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has been made at the rate of ¥107.39 to U.S.$1, the rate of exchange at March 31...

  • Page 32
    ... if all directors and corporate auditors retired at each balance sheet date. (i) Research and Development Costs The Group is active in research and development, and such costs are charged to income as incurred. (j) Leases All leases are accounted for as operating leases by the Company and its...

  • Page 33
    ...amount, which is the higher of the discounted cash ï¬,ows from the continued use and eventual disposition of the asset or the net selling price at disposition. The Company expects to adopt these pronouncements as of April 1, 2005 and is currently in the process of assessing the effect of adoption of...

  • Page 34
    ... the second half period. Effect of this change to segment information is mentioned in the applicable note. 4. INVESTMENT SECURITIES Investment securities at March 31, 2005 and 2004 consisted of the following: Millions of Yen 2005 2004 Thousands of U.S. Dollars 2005 Non-Current : Equity securities...

  • Page 35
    ... of Yen 2005 2004 Thousands of U.S. Dollars 2005 Loans, principally from banks and insurance companies: 2005: 0.50%-5.510% due 2006-2013 2004: 0.50%-5.510% due 2004-2011 Bonds Total Less: Current portion Long-term debt, less current portion ¥ 11,723 145,500 157,223 (7,090) ¥ 150,133 ¥ 11,098...

  • Page 36
    ... 2010 Thereafter Total ¥ 7,090 77,571 21,712 5,900 10,399 34,551 ¥ 157,223 66,024 722,326 202,180 54,944 96,832 321,736 $1,464,042 $ The yen zero coupon convertible bonds were issued with stock acquisition rights to subscribe for shares of common stock of the Company. The stock acquisition...

  • Page 37
    ... surplus. The Code permits Japanese companies, upon approval of the Board of Directors, to issue shares to existing shareholders without consideration as a stock split. Such issuance of shares generally does not give rise to changes within the shareholders' accounts. The Code also provides that...

  • Page 38
    ... warranty costs Employees' salaries Employees' retirement benefit plan Employees' bonuses and others Research and development costs ¥ 42,551 5,305 27,963 3,256 11,926 33,561 ¥ 30,823 4,005 27,502 5,295 11,801 30,165 $ 396,230 49,402 260,384 30,317 111,051 312,514 10. INCOME TAXES The Company...

  • Page 39
    ...Research and development costs incurred were ¥33,561 million ($312,514 thousand) and ¥30,165 million for the fiscal years ended March 31, 2005 and 2004, respectively. 12. LEASE PAYMENTS Total lease payments under financing lease arrangements that do not transfer ownership of the leased property...

  • Page 40
    ... Unrealized Gain (Loss) Fair Value Foreign exchange forward contracts : Selling USD Selling EUR Buying JPY Buying USD Buying EUR Total... hedge accounting and related amounts are included with the associated assets and liabilities, and were excluded from disclosure of market value information in the...

  • Page 41
    ...prior month of the date of option grant. (b) Appropriations of Retained Earnings The Company's shareholders approved appropriation of retained earnings as follows: Millions of Yen Thousands of U.S. Dollars Year-end cash dividends, ¥4.00 ($0.04) per share Bonuses to directors and corporate auditors...

  • Page 42
    ...,142 6,997 17,177 209,134 209,134 IC steppers, LCD steppers, etc. Cameras, Interchangeable camera lenses, Digital cameras, etc. Microscopes, Measuring instruments, Inspection equipment etc. Sport optics products, Ophthalmic frames, Surveying instruments, etc. Notes: 1. Amortization of Goodwill is...

  • Page 43
    ... (888) ¥ 30,545 ¥ (19,282) ¥ 633,426 ¥ Thousands of U.S. Dollars Japan North America Europe Asia Total (Eliminations) or corporate Consolidated For the year ended March 31, 2004 Net sales Outside customers Intersegment sales Total Operating expenses Operating income (loss) Assets ¥ 196,562...

  • Page 44
    ... machines (both lithography equipment used to manufacture semiconductor devices) that were infringing Nikon's patents in the U.S. The ITC dismissed Nikon's request for an exclusion order. Subsequently, Nikon Corporation, Nikon Precision Inc. and Nikon Research Corporation of America filed a Notice...

  • Page 45
    independent auditors' report 43

  • Page 46
    ... business, development of basic technology common to the Nikon Group, protection of intellectual property and manufacturing technology Precision Equipment Company 5 Development, manufacture and sales of IC and LCD steppers Imaging Company 6 Development, manufacture and sales of digital cameras...

  • Page 47
    ... microscopes Development, manufacture, sales and servicing of surveying instruments Development, manufacture, sales and servicing of ophthalmic lenses * Development and support of computer software * Logistics * Employee welfare activities Processing, assembly and packing of parts for optical...

  • Page 48
    ... of Core Technology Center, General Manager of Intellectual Property Headquarters, Core Technology Center Vice President of Corporate Strategy Center Vice President of Precision Equipment Company General Manager of Development Management Department, Imaging Company Vice President of Business...

  • Page 49
    ... Agent and Registrar The Mitsubishi Trust and Banking Corporation Transfer Agent Department 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan (As of March 31, 2005) Price Range of Common Stock (Â¥) 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 1st 2nd 3rd 4th 1st...

  • Page 50
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