Nikon 2007 Annual Report Download

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NIKON ANNUAL REPORT 2007

Table of contents

  • Page 1
    NIKON ANNUAL REPORT 2007

  • Page 2
    ... TECHNOLOGY, INCLUDING DIGITAL CAMERAS AND RELATED PRODUCTS, BINOCULARS AND OPHTHALMIC FRAMES. WE ALSO MANUFACTURE AND SELL A DIVERSE RANGE OF INDUSTRIAL PRECISION EQUIPMENT, INCLUDING SEMICONDUCTOR PRODUCTION EQUIPMENT SUCH AS IC AND LCD STEPPERS AND SCANNERS, MICROSCOPES AND MEASURING INSTRUMENTS...

  • Page 3
    ...344 2,952 8.4 43.3 1. Per share of common stock is computed based on the weighted average number of shares outstanding during the year. 2. U.S. Dollar figures are translated for reference only at ¥118.05 to U.S. $1.00, the approximate exchange rate at March 31, 2007. NIKON ANNUAL REPORT 2007 01

  • Page 4
    ...MANAGEMENT PLAN ANNOUNCED IN MARCH 2006 WERE ACHIEVED IN THE FIRST YEAR, WITH OPERATING INCOME SURPASSING ¥100 BILLION. EVEN SO, THE RAPIDLY CHANGING BUSINESS CONDITIONS ALLOW US NO TIME TO REST ON OUR LAURELS. ICHIRO TERATO REPRESENTATIVE DIRECTOR, EXECUTIVE VICE PRESIDENT AND CFO 02 NIKON ANNUAL...

  • Page 5
    ... modules and promotion of simplified design as well as increased sales of LCD scanners for large LCD glass substrates. In the imaging products business, strong sales of digital single-lens reflex (SLR) cameras and interchangeable lenses helped segment sales rise 8.0% in year-on-year terms to...

  • Page 6
    ... Nikon's brand positioning within the compact digital camera market. We are also focusing our efforts on developing the next generation of digital cameras to help people find new ways of deriving pleasure from images. Instruments Customers are steadily adopting our latest live cell imaging systems...

  • Page 7
    ...in both respects over the past year. We have taken the innovation and creativity of our younger employees and combined these with Nikon's strengths in core and elemental technologies to create original new products. In future we aim to listen more closely to customer feedback to help us find ways of...

  • Page 8
    REVIEW OF OPERATIONS: PRECISION EQUIPMENT 06 NIKON ANNUAL REPORT 2007

  • Page 9
    ...PROMOTE THE USE OF STANDARDIZED MODULES AND SIMPLIFIED DESIGNS. NSR-S610C ArF immersion scanner THE STATE-OF-THE-ART NSR-S610C ArF IMMERSION SCANNER HAS ATTRACTED A LOT OF ATTENTION WITHIN THE INDUSTRY. THIS MODEL IS POSITIONED TO BE A MAJOR GROWTH DRIVER FOR NIKON'S IC STEPPER AND SCANNER BUSINESS...

  • Page 10
    PRECISION EQUIPMENT NSR-SF150 SCAN FIELD i-LINE STEPPER Delivering powerful performance for non-critical layers in next-generation memory and MPU, the NSR-SF150 is based on a new platform that leverages Nikon's Skyhook Technology. LCD SCANNER FX-83S Supporting the world's largest 8th generation ...

  • Page 11
    ... in the future. By developing these technologies, Nikon aims to build a business with substantial growth potential and a highly profitable earnings structure. KAZUO USHIDA DIRECTOR, MEMBER OF THE BOARD & SENIOR EXECUTIVE OFFICER PRESIDENT OF PRECISION EQUIPMENT COMPANY NIKON ANNUAL REPORT 2007 09

  • Page 12
    REVIEW OF OPERATIONS: IMAGING PRODUCTS 10 NIKON ANNUAL REPORT 2007

  • Page 13
    ... PRODUCTS BUSINESS, SALES INCREASED 8.0% COMPARED WITH THE PREVIOUS YEAR TO ¥449,790 MILLION, AND OPERATING INCOME CLIMBED 32.9% TO ¥45,678 MILLION, POSTING A RECORD HIGH IN BOTH FOR THE SECOND CONSECUTIVE YEAR. THIS REFLECTED FAVORABLE SALES OF DIGITAL SLR CAMERAS AND INTERCHANGEABLE LENSES. D40...

  • Page 14
    ...this product, from cameras. During the year under review, Nikon has now created a wider range of Nikon launched photo-finishing software digital SLR cameras extending all the way from called Capture NX. With next generation highentry-level to high-end models. Plans call for quality image-editing and...

  • Page 15
    ... in various fields where appropriate. In this way, Nikon hopes to avoid the trap of clinging too tightly to existing paradigms or technologies developed in-house. MAKOTO KIMURA DIRECTOR, MEMBER OF THE BOARD & SENIOR EXECUTIVE OFFICER PRESIDENT OF IMAGING COMPANY NIKON ANNUAL REPORT 2007 13

  • Page 16
    REVIEW OF OPERATIONS: INSTRUMENTS 14 NIKON ANNUAL REPORT 2007

  • Page 17
    ... ACHIEVED STEADY GROWTH IN SALES BY MARKETING SYSTEMIZED PRODUCTS. AGGRESSIVE PRODUCT DEVELOPMENT ALSO HELPED THE INDUSTRIAL INSTRUMENTS BUSINESS RECORD SUBSTANTIALLY HIGHER SALES. SEGMENT SALES POSTED A RECORD HIGH OF ¥61,171 MILLION, INCREASING 11.5% OVER THE PREVIOUS YEAR. OPERATING INCOME ROSE...

  • Page 18
    ... launched in the year under review included the MM-400/800 series of industrial microscopes for high-precision measurement, observation and digital imaging of samples. Going forward, the industrial instruments business is focused on creating a stronger development-led sales system around the world...

  • Page 19
    ...capabilities to provide customer-oriented services and to develop related solutions. Through dynamic use of direct sales activities, Nikon is working to create a system that is capable of rapid assessment of market needs. Nikon is also focusing on developing a more skilled sales force. This reflects...

  • Page 20
    ... year, despite efforts to expand sales of space-related equipment and optical components. 2. The sport optics products business recorded significantly higher sales, reflecting favorable sales growth in markets in North America and Europe. 3. Sales increased in glass-related operations. Nikon focused...

  • Page 21
    ... to Nikon Group profits, since it is fairly insensitive to the silicon investment cycle and should generate stable demand for consumables. Nikon Rayfact 2.0x high-performance lens launched for line-scanning sensors The degree of precision required in the external inspection of printed circuit boards...

  • Page 22
    ...RESPONSIBILITIES AS A CORPORATE CITIZEN. CSR PROMOTION SYSTEM To fulfill and promote its CSR activities, the Nikon Group has established separate subcommittees under the CSR Committee to focus on different themes of im portance. In the past, CSR activities concerning environmental issues and social...

  • Page 23
    ...of behavior for Group employees, Environment Since it issued the "Nikon Basic Environmental the establishment of the "Compliance Management Policy" in 1992, Nikon Group Section" for the full-time promotion of has continued with environmental activities pertaining to business ethics, and preservation...

  • Page 24
    ... various committees and subcommittees throughout the corporation to address issues and themes of organization-wide importance. Please refer to the "Nikon CSR Report" for further details on our CSR activities (http://www.nikon.co.jp/main/eng/portfolio /csr/index.htm). 22 NIKON ANNUAL REPORT 2007

  • Page 25
    ... and India. With regard to Nikon Group business segments, vigorous capital investment in the semiconductor and LCD markets resulted in steady performance in Precision Equipment and Instruments. In Imaging Products, the digital camera market continued to expand. Net Sales by Industry Segment Years...

  • Page 26
    ... realizes excellent image quality as a mid-range camera, compact design and ease-of-use. Amid intensifying competition in the compact digital camera market, Nikon strove to expand sales through the proactive launch of new products in its COOLPIX line. The Instruments Business registered net sales of...

  • Page 27
    Balance Sheet Analysis March 31, 2007 and 2006 2007 (% of Total Assets) 2006 Total assets Total current assets Inventories Property, plant and equipment Investments and other assets Total current liabilities Short-term borrowings Long-term debt, less current portion Equity 100.0% 69.9 32.9 15.5 ...

  • Page 28
    CONSOLIDATED BALANCE SHEETS Nikon Corporation and Consolidated Subsidiaries March 31, 2007 and 2006 Thousands of U.S. Dollars (Note 1) 2007 Millions of Yen 2007 2006 ASSETS Current assets Cash and cash equivalents Notes and accounts receivable - trade: Customers Unconsolidated subsidiaries and ...

  • Page 29
    ... and associated companies Income taxes payable Accrued expenses Other current liabilities (Note 11) Total current liabilities Long-term liabilities Long-term debt (Notes 6) Liability for employees' retirement benefits (Note 7) Retirement allowances for directors and corporate auditors (Note...

  • Page 30
    ...106 464,421 Yen U.S. Dollars (Note 1) Per share of common stock (Note 2 (s)) : Basic net income Diluted net income Cash dividends applicable to the year See Notes to Consolidated Financial Statements. ¥ 146.36 131.42 18.00 ¥ 78.16 69.33 10.00 $ 1.24 1.11 0.15 28 NIKON ANNUAL REPORT 2007

  • Page 31
    ... Sale Securities Accounting Adjustments Treasury Stock Total Minority Interests Total Equity BALANCE, April 1, 2006 Reclassified balance as of April 1, 2006 (Note 2.j) Conversion of convertible bonds Net Income Cash dividends, U.S.$0.11 per share Bonuses to directors and corporate auditors...

  • Page 32
    ... Depreciation and amortization Provision for employees' retirement benefits Provision for retirement allowance for directors and corporate auditors Loss on sales or disposal of property, plant and equipment Gain on sales of property, plant and equipment Gain on sales of investment securities Other...

  • Page 33
    ... Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment of the Company and its consolidated domestic subsidiaries is principally computed using the declining-balance method, while the straight-line method is applied to buildings...

  • Page 34
    ... balance sheet as of March 31, 2007 is presented in line with this new accounting standard. (k) Research and Development Costs The Group is active in research and development, and such costs are charged to income as incurred. (l) Leases All leases are accounted for as operating leases by the Company...

  • Page 35
    ... No.13, "Accounting Treatment for Bonuses to Directors and Corporate Auditors," which encouraged companies to record bonuses to directors and corporate auditors on the accrual basis with a related charge to income, but still permitted the direct reduction of such bonuses from retained earnings after...

  • Page 36
    ... manufacturing costs and estimated direct selling expenses. The replacement cost may be used in place of the net selling value, if appropriate. The standard also requires that inventories held for trading purposes be measured at the market price. Lease Accounting- On March 31, 2007, the ASBJ issued...

  • Page 37
    ...for-sale at March 31, 2007 and 2006 were as follows : Millions of Yen 2007 Available for sale 2006 Available for sale Thousands of U.S. Dollars 2007 Available for sale Due in one year or less Due after one year through five years Total ¥ ¥ 1 1 2 ¥ ¥ 0 0 $ $ 9 4 13 35 NIKON ANNUAL REPORT...

  • Page 38
    ... expenses for the idle buildings and machines of the plants in Shinagawa, Tokyo and Ohtawara, Tochigi due to no possibility of using them and the carrying amount of the relevant machinery was written down to the recoverable amount for the year ended March 31, 2006. The Group reviewed its long-lived...

  • Page 39
    ... subsidiaries have non-contributory funded pension plans. Certain foreign subsidiaries also have contributory pension plans. The Group accounted for the liability for retirement benefits based on the projected benefit obligations and plan assets at the balance sheet date. Retirement allowances...

  • Page 40
    ... period of prior service cost 2.50% 2.00% 10 years 10 years 2.50% 2.00% 10 years 10 years 8. EQUITY On and after May 1, 2006, Japanese companies are subject to a new corporate law of Japan (the "Corporate Law"), which reformed and replaced the Commercial Code of Japan (the "Code") with various...

  • Page 41
    ... 2,294 186,000 45,000 141,000 1,048 2,343 210,000 17,000 193,000 1,225 2,411 1,273 2,902 840 99,000 Black-Scholes option pricing model 41.841% six years ¥12.50 per share 1.215% NIKON ANNUAL REPORT 2007 39

  • Page 42
    ... as follows: Years ended March 31 2007 2006 Normal statutory tax rate Tax credit for research and development costs Tax difference of consolidated subsidiaries Tax exemption for foreign subsidiaries Consolidated adjustment on unrealizable profits in inventories Tax effect on retained earnings for...

  • Page 43
    ... lease payments under financing lease arrangements that do not transfer ownership of the leased property to the Company and its domestic subsidiaries were ¥2,480 million ($21,006 thousand) and ¥2,461 million for the fiscal years ended March 31, 2007 and 2006, respectively. The minimum rental...

  • Page 44
    ...10,000 ¥ 30,000 ¥ ¥ 271 (242) 29 ¥ ¥ 271 (242) 29 Derivatives which qualified for hedge accounting and related amounts are included with the associated assets and liabilities, and were excluded from disclosure of market value information in the preceding table. 42 NIKON ANNUAL REPORT 2007

  • Page 45
    ...416,479 ¥ 69.33 $ 0.59 18. SUBSEQUENT EVENTS The company's shareholders meeting held on June 28, 2007 approved as follows: Appropriations of Retained Earnings Millions of Yen Thousands of U.S. Dollars Cash dividends, ¥11.50 ($0.10) per share ¥ 4,593 $ 38,911 NIKON ANNUAL REPORT 2007 43

  • Page 46
    ... 117,517 11,698 49,458 257,786 257,786 IC steppers, LCD steppers Digital cameras, Film cameras, Interchangeable camera lenses Microscopes, Measuring instruments, Inspection equipment Sport optics products, Ophthalmic frames, Surveying instruments Notes: 1. Amortization of Goodwill is included in...

  • Page 47
    ...(i), Stock Options had been formerly accounted for as a decrease of retained earnings. Effective from the period ended March 31, 2007, the Company and its subsidiaries in Japan adopted Accounting Standards Board of Japan Statement No.8 "Accounting for subscription rights to NIKON ANNUAL REPORT 2007...

  • Page 48
    ... amounts calculated by the previous method. (c) Export Sales For the years ended March 31, 2007 and 2006 Millions of Yen, % 2007 (A)/(B) 2006 (A)/(B) Thousands of U.S. Dollars 2007 Export sales (A) North America Europe Asia Other Area Total Net sales (B) Note: "Other Area" consists principally of...

  • Page 49
    INDEPENDENT AUDITORS' REPORT NIKON ANNUAL REPORT 2007 47

  • Page 50
    ... Development Headquarters Information System Headquarters Intellectual Property Headquarters Business Administration Center Core Technology Center Research & Development Headquarters Production Technology Headquarters Precision Equipment Company Sales Headquarters Development Headquarters Production...

  • Page 51
    ... Development and support of computer software Employee welfare activities, procurement, patent invetigation, insurance, logistics, transportation and management of buildings and equipment Processing, assembly and packing of parts for optical instruments Manufacture of devices for IC/LCD steppers...

  • Page 52
    ... of Sales Department of LCD Equipment Division, Precision Equipment Company General Manager of Production Headquarters, Imaging Company General Manager of Administration Department, Business Administration Center General Manager of Development Headquarters, Imaging Company 50 NIKON ANNUAL REPORT...

  • Page 53
    INVESTOR INFORMATION Nikon Corporation Fuji Bldg., 2-3, Marunouchi 3- chome, Chiyoda-ku, Tokyo 100-8331, Japan Tel : +81-3-3214-5311 Fax : +81-3-321 6 -1454 Date of Establishment July 25, 1917 Number of Employees 22,705 (Consolidated) Common Stock Authorized : 1,000,000,000 shares Issued : 400,101,...

  • Page 54
    Fuji Bldg., 2-3, Marunouchi 3-chome, Chiyoda-ku Tokyo 100-8331, Japan www.nikon.co.jp/eng/ Printed in Japan