Panasonic 2008 Annual Report Download

Download and view the complete annual report

Please find the complete 2008 Panasonic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

Panasonic
We Are
Annual Report 2008
For the year ended March 31, 2008

Table of contents

  • Page 1
    Annual Report 2008 For the year ended March 31, 2008 Panasonic We Are

  • Page 2
    ... realizing a ubiquitous networking society and coexistence with the global environment, Matsushita will continue striving for global excellence by working to drive a sustained increase in corporate value. As part of this drive, we plan to change our name to Panasonic Corporation on October 1, 2008.

  • Page 3
    ..., CORPORATE AUDITORS AND EXECUTIVE OFFICERS CORPORATE SOCIAL RESPONSIBILITY SPECIAL FEATURE ON THE ENVIRONMENT: "eco ideas" Strategy RISK FACTORS FINANCIAL SECTION BUSINESS DOMAIN COMPANIES AND GROUP COMPANIES INVESTOR INFORMATION Disclaimer Regarding Forward-Looking Statements This Annual Report...

  • Page 4
    ...dividends per share, the number of shares at the end of the applicable period has been used. 2. Cash dividends per share reflect those paid during each fiscal year. 3. In order to be consistent with financial reporting practices generally accepted in Japan, operating profit is presented as net sales...

  • Page 5
    ...200 2.0 0 2004 2005 2006 2007 2008 0 0 2004 2005 2006 2007 2008 Capital Investment Depreciation 0 2004 2005 2006 2007 2008 R&D Expenditures [left scale] R&D Expenditures/Sales Ratio [right scale] 0 Stockholders' Equity [left scale] ROE [right scale] Matsushita Electric Industrial Co., Ltd...

  • Page 6
    ... 2007. By achieving the targets of the GP3 plan, we will enhance our corporate value and continue practicing shareholder-oriented management whereby we aim to actively return profits to shareholders via dividends and share buybacks. This year marks the 90th anniversary of the Company's founding...

  • Page 7
    Kunio Nakamura, Chairman Fumio Ohtsubo, President Matsushita Electric Industrial Co., Ltd. 2008 5

  • Page 8
    ... digital AV products, home appliances and other products in other regions. In particular, strong sales were recorded in emerging markets, such as the BRICs countries and Vietnam. With regard to "expansion of four strategic businesses"-digital AV business, automotive electronics business, businesses...

  • Page 9
    ... energy-saving products. Fiscal 2008 Overview Double-digit growth in overseas sales (of consumer products) Expansion of four strategic businesses Continuous selection and concentration Transform Matsushita into a manufacturingoriented company •฀Driven฀by฀digital฀AV฀products฀and฀home...

  • Page 10
    ...and energy, healthcare and devices. In terms of ROE, Matsushita aims to improve ROE by continuing to develop its management, financial and tax strategies. In specific terms, in each business domain, the Company will work to improve Capital Cost Management (CCM)*2 mainly by improving operating profit...

  • Page 11
    .... First, we are taking actions in five countries where growth is particularly buoyant overseas: the four BRICs countries (Brazil, Russia, India and China) as well as Vietnam. The aim of our actions is to launch competitive products and to Matsushita Electric Industrial Co., Ltd. 2008 Answer 9

  • Page 12
    ... the Olympic Games. Matsushita will support the Beijing Olympic Games in August 2008, which is a major sports and athletics event watched by the whole world. Taking full advantage of our rights as an official sponsor, we plan to increase sales and our brand value in the host country China and other...

  • Page 13
    ...2007. IPS Alpha Technology, Ltd., which became a Matsushita subsidiary based on this alliance, plans to construct a new LCD panel plant in Himeji, Hyogo Prefecture, Japan. Construction of this new plant costing a total of approximately ¥300 billion will begin in August 2008. Operations at the plant...

  • Page 14
    In addition, we plan to expand our business by taking VIERA Link worldwide and capitalizing fully on its inherent synergies. VIERA Link allows users to simply and conveniently control flat-panel VIERA TVs and a variety of AV equipment linked to them with just one remote control. We will also lay the...

  • Page 15
    ... ideas that will benefit the lives of people around the world, and to share this commitment with all employees, as we work toward realizing our business philosophy. Answer Brand Promise The฀promise฀which฀the฀Panasonic฀brand฀makes฀to฀customers Panasonic generates ideas for life...

  • Page 16
    ...it a consolidated subsidiary from the perspective of advancing Japan's electrical machinery industry. Since then, JVC has conducted development, manufacturing and sales businesses for TVs, videos, audio, camcorders and other products under the proprietary brands of Victor and JVC in a spirit of self...

  • Page 17
    ... corporate value of the former company. Question 10 What are your policies on capital structure and returning profits to shareholders? Holding net cash allows us to make rapid decisions in response to changes in the operating environment. While maintaining a certain level of funds, we plan to use...

  • Page 18
    ... business-use AV equipment, communications network-related equipment, traffic-related systems, car AVC equipment, healthcare equipment, etc. HOME APPLIANCES 13% Refrigerators, room air conditioners, washing machines, clothes dryers, vacuum cleaners, electric irons, microwave ovens, rice cookers...

  • Page 19
    ...in sales of digital AV products such as flat-panel TVs and digital cameras, in addition to favorable sales of automotive electronics and mobile phones. Trillions of yen 5 4 3 2 1 0 Billions of yen 250 200 150 100 50 Profit/sales ratio % 10 8 6 4 2 2004 2005 2006 2007 2008 0 2004 2005 2006 2007...

  • Page 20
    ... as flat-panel TVs and digital cameras increased significantly thanks to a vertically integrated business model that enhances product and cost competitiveness through the in-house manufacturing of key components and devices. In information and communications equipment, sales rose in the mobile phone...

  • Page 21
    ... In the AVC business, Matsushita is currently promoting its "3D2" value chain strategy which is helping to drive global AVC business expansion. This approach attempts to build competitive advantages for three product groups- digital TVs (DTV), DVDs, and SD Memory Cards-by leveraging three core...

  • Page 22
    ...January 8, 2008; Matsushita estimate. *4 The In-Plane-Switching mode system utilizes horizontally oriented liquid crystal molecules to provide for wider viewing angles. *5 IPS Alpha Technology, Ltd. plans to build a new production plant in Himeji, Hyogo Prefecture, with an annual production capacity...

  • Page 23
    ...mode (approx. 24Mbps). *2 As of February 20, 2008. In digital video cameras, Matsushita launched new HD camcorders with better picture quality and a more compact design, which were well received by the market. Particularly popular were models with the world's first* "face detection" function, which...

  • Page 24
    ...and other office products; and optical devices such as optical disc drives. In fiscal 2008, in home networks, TV door intercom systems with wireless color monitor handsets continued to be well supported by Japanese consumers. In addition, Matsushita recorded strong sales of its HD-PLC* adapter which...

  • Page 25
    ... sales of car navigation systems, centered on the Strada series, which let passengers view highP705iµ for NTT DoCoMo quality terrestrial digital TV broadcasts. Matsushita This mobile phone, the world's launched Portable Navigation Device (PND) products thinnest clamshell-type 3G mobile handset...

  • Page 26
    .... In the third, mobility, the Company is involved in electronic settlement systems using IC cards, together with a wide variety of other businesses. In fiscal 2008, in the security field, Matsushita posted firm sales of security systems centered on surveillance cameras, amid rising demand for...

  • Page 27
    ... high-value-added products. In addition, the Company plans to grow sales of washing machines, air conditioners, and refrigerators, particularly in China and other parts of Asia, and accelerate efforts in Europe and elsewhere to ensure growth globally. Matsushita Electric Industrial Co., Ltd. 2008...

  • Page 28
    ... released this new product simultaneously in China and Japan. As for all-electric products such as IH cooking equipment and natural-refrigerant water heating systems, the Company's "one million-person trial campaign" in Japan led to increased sales of products, helping Matsushita maintain its...

  • Page 29
    ... to save energy. Looking forward, the Company will strive to increase sales centering on washing machines, air conditioners and refrigerators, and will also aim to boost market share in Japan by positioning all-electric products as a driving force for expansion in home appliances. Matsushita will...

  • Page 30
    ... eco-friendly air conditioning system and the installation of thermal insulating material in the roof. At the same time, the Company increased its production capacity by operating a new factory in Thailand, part of an ongoing aggressive overseas expansion drive. Looking forward, the Company plans to...

  • Page 31
    ... used in various products ranging from AV equipment and information and communication devices to home appliances and industrial equipment. Components and devices are increasingly important in helping equipment become more sophisticated, smaller and lighter, and more energy efficient. Matsushita...

  • Page 32
    ... efficiency and design quality for electronic equipment. During fiscal 2008, sales growth was achieved thanks to the strong performance of system LSIs, primarily for digital cameras and other digital AV products. In addition, sales of image sensors used primarily in digital cameras and automotive...

  • Page 33
    ... rate DVD-compatible car speaker system sensors used in car navigation systems and digital cameras and light touch switches for mobile phones. In the past, Matsushita's Device Application Center, which has both development and sales functions, was located only in Japan, but now the Company has...

  • Page 34
    ... for use in digital cameras and other digital equipment. In addition, responding to increasing demand for electronic equipment that consumes less electricity, Matsushita developed the EVOLTA dry alkaline battery, which offers long life in a wide range of products beyond just digital AV equipment. In...

  • Page 35
    ..., electronic and plastic materials and automation controls. The electrical construction materials business unit at MEW recorded a rise in sales of home fire alarms during fiscal 2008, while sales of high-performance products, including wiring devices and home-use distribution panelboards designed...

  • Page 36
    .... Centered on electronic and plastic materials, automation controls, and lighting devices, MEW will expand its overseas business with a particular emphasis on China, India, and other countries in Asia. High performance home-use distribution panelboards designed for all-electric homes * A device...

  • Page 37
    OTHER Factory Automation In the factory automation (FA) business, Matsushita aims to contribute to the development of client businesses through innovative manufacturing processes in circuit manufacturing technology. As mobile phones, notebook PCs, digital AV equipment and other products get smaller...

  • Page 38
    ... company in AVC products is now positioned under the control of a business domain company. With this structure, Matsushita is conducting a sweeping review of management of production, sales and inventories, and at the same time strengthening the startup of promotional activities when new products...

  • Page 39
    ...home appliances, and strengthening sales of systems products. As part of measures to address these issues, Matsushita saw the August 2008 Beijing Summer Olympic Games as a good business opportunity to grow flat-panel TV sales, and thus undertook the Group's biggest promotion ever in China, the VIERA...

  • Page 40
    ...furniture stores, participating in events for owners of luxury sports cars, and displaying large-screen plasma TVs and discussing business at stud bull auction sites. In fiscal 2008, in addition to these measures, Matsushita endeavored to develop new customer segments by promoting Internet sales and...

  • Page 41
    ...AV products and home appliances by increasing the number of high-end imported models and locally produced models. Looking forward, Matsushita will strive to establish its brand image in Vietnam by improving in-store demonstrations centered on VIERA flatpanel TVs and LUMIX digital cameras in 15 major...

  • Page 42
    ... working on a digital AV equipment platform strategy for the HD network era. The Company developed a new generation of UniPhier® system LSIs compatible with MPEG-4 AVC/H.264, and in fiscal 2008 these system LSIs were included in such products as BD recorders, HD camcorders, and VIERA mobile phones...

  • Page 43
    ... use less electricity; development for commercializing next-generation mobile phones; network-compatible digital TVs and other networkable products; fuel cell cogeneration systems for energy creation; and robots designed to provide support in everyday situations for the benefit of people. Matsushita...

  • Page 44
    ... pools*2 for intellectual property rights related to technical standards for digital products, enabling the effective use of intellectual property rights to grow business, through such means as creating and expanding markets. During fiscal 2008, the Company continued to utilize international patent...

  • Page 45
    ... legal authority to receive reports from Directors, employees and accounting auditors. Full-time Senior Auditors also attend important meetings and conduct checks in order to ensure effective monitoring. To augment internal auditing functions in the Group, Matsushita has assigned eight non-statutory...

  • Page 46
    ...Executive Officers and Corporate Auditors. Meeting twice yearly, this committee has a Companywide remit and is responsible for discussing and sharing information concerning compliance issues and communicating compliance action policy. Matsushita also works to ensure compliance in its global business...

  • Page 47
    ... enhance corporate value by ensuring trade secrets, personal information, technical data and other information held by the Company are used and shared safely. 3. Formulate common global rules, build a global implementation framework and conduct regular training programs for all Matsushita employees...

  • Page 48
    ...world by fiscal 2010. Matsushita also strives to maximize its corporate value by utilizing cash flows generated by business activities for actively distributing profits to shareholders through its own share repurchases and the payment of cash dividends, as well as for acquiring intellectual property...

  • Page 49
    ...'s Web site: http://panasonic.co.jp/corp/news/official.data/data.dir/ en080428-3/en080428-3.html Evaluation of measures by the Board of Directors and rationale for evaluation Matsushita's current mid-term management plan was formulated as a specific measure to increase the Company's corporate value...

  • Page 50
    ...-listed U.S. companies Corporate Governance Practices Followed by Matsushita A NYSE-listed U.S. company must have a majority of directors meeting the independence requirements under Section 303A of the NYSE Listed Company Manual. The Company Law does not require independent directors on the board...

  • Page 51
    ... Section 303A of the NYSE Listed Company Manual. The nominating/corporate governance committee must be composed entirely of independent directors. Under the Company Law, Matsushita's Directors must be elected and/or dismissed at a general meeting of shareholders. The Board of Directors nominates...

  • Page 52
    ...for Asia and Oceania/President, Panasonic Asia Pacific Pte. Ltd. Kazunori Takami In charge of Corporate Marketing Division for National Brand Home Appliances and Corporate Marketing Division for National Brand Wellness Products Yoshitaka Hayashi In charge of Global Procurement and Global Logistics...

  • Page 53
    ... Office, Corporate Information Security Division, and Corporate Business Ethics Yoshiyuki Miyabe In charge of Digital Network & Software Technology Masatsugu Kondo In charge of Alternative Energy Generation Technology Takashi Toyama President, Panasonic System Solutions Company /Director...

  • Page 54
    ...into the fabric of the organization in order to help create a sustainable society in all regions around the world. Greater transparency/ accountability Global procurement Human rights and OHS Shareholders/ Investors Business partners Groupwide CSR Promotion Framework Realizing a sustainable society...

  • Page 55
    ...One Tree for One Home Appliance" Matsushita conducted a campaign whereby it planted one tree in Vietnam for every eligible eco product purchased by customers in Japan. In total, the Company planted approximately 500,000 trees in Vietnam with the support of customers. n Using Waste Materials to Teach...

  • Page 56
    ... in 2009 Steady Growth with Profitability Green Products Value for a New Lifestyle (For One Products Household) Green Marketing Clean Factories Product Recycling GP3 Plan Global Progress Global Profit Global Panasonic Reduce environmental impact in all business activities Key issues •฀Rapidly...

  • Page 57
    ...12%* compared with energy sources used in ordinary homes. As of March 31, 2008, there were approximately 300 household fuel cell systems in operation. The first commercial household fuel cell system was installed in the Prime Minister's Official Residence in February 2005. * Matsushita estimate, CO2...

  • Page 58
    ... Administration of China. Example 3: Building Management Based on Concept of Energy Tuning The head office building of Matsushita Electric Works, Ltd. (MEW) in Shiodome, Tokyo, strives to continuously fine-tune and improve the control and operation of the building's lighting and air-conditioning as...

  • Page 59
    ... trends in the countries or regions in which Matsushita's products and services are sold. Economic downturns and resulting declines in demand in Matsushita's major markets worldwide may thus adversely affect the Company's business, operating results and financial condition. Currency exchange rate...

  • Page 60
    ... product formats, such as next-generation home and mobile networking products, data storage devices, and software systems. Despite these efforts, Matsushita's competitors may succeed in developing de facto standards for future products before Matsushita can. In such cases, the Company's competitive...

  • Page 61
    ... liability insurance, whereby the Company could incur significant expenses. Due to negative publicity concerning these problems, Matsushita's business, operating results and financial condition may be adversely affected. Matsushita may fail to protect its proprietary intellectual properties, or...

  • Page 62
    .... If these associated companies do not generate profits, Matsushita's business results and financial condition may be adversely affected. American Depositary Share (ADS) holders have fewer rights than shareholders and may not be able to enforce judgments based on U.S. securities laws The rights of...

  • Page 63
    ... ...CONSOLIDATED STATEMENTS OF CASH FLOWS...NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ... 62 68 70 71 72 73 MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ...107 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ...108 Matsushita Electric Industrial Co., Ltd. 2008 61

  • Page 64
    ..., and continued price declines caused by continuously intensifying global competition, mainly in digital products. Under these circumstances, the Matsushita Group worked to accelerate growth strategies in fiscal 2008, the first year of the new three-year mid-term management plan GP3. Specifically...

  • Page 65
    ... mainly to expanded sales in flat-panel TVs, digital cameras, automotive electronics equipment and mobile phones, as well as cost rationalization effects. Particularly in plasma TVs, despite price declines under ever-intensified global competition, the Company expanded lineups of full HD models and...

  • Page 66
    ..., and light touch switches used for mobile phones. In semiconductors, in addition to favorable sales of image sensors for digital cameras, a significant sales increase was recorded in system LSIs primarily for digital AV equipment. In batteries, although Information by Business Segment sales of...

  • Page 67
    ...China, sales gains were recorded mainly in flat-panel TVs, air-conditioners, semiconductors and electronic components and devices, resulting in overall increased sales. Millions of yen 2008 2007 2006 Domestic Sales ...Overseas Sales: North and South America ...Europe ...Asia and Others ...Total...

  • Page 68
    ...common share. Accordingly, total dividends for fiscal 2008, including the interim cash dividend, amounted to 35.00 yen per common share. Millions of yen 2007 2006 Total assets (at year-end) ...Stockholders' equity (at year-end) ...Capital investment* ** Purchases of property, plant and equipment...

  • Page 69
    ... above table. The Company implemented capital investment primarily to increase production capacity in strategic business areas such as semiconductors and digital AV equipment, particularly plasma TVs, while curbing capital investment in a number of business areas, in line with increasing management...

  • Page 70
    ... Matsushita Electric Industrial Co., Ltd. and Subsidiaries March 31, 2008 and 2007 Millions of yen Assets Current assets: Cash and cash equivalents (Note 8) ...Time deposits (Note 8) ...Short-term investments (Notes 4 and 17) ...Trade receivables (Note 15): Related companies (Note 3) ...Notes...

  • Page 71
    ...-term debt (Notes 5, 8 and 17) ...Retirement and severance benefits (Note 9) ...Other liabilities (Note 10) ...Total noncurrent liabilities ...Minority interests ...Stockholders' equity: Common stock (Note 11): Authorized-4,950,000,000 shares Issued-2,453,053,497 shares (2,453,053,497 shares in 2007...

  • Page 72
    CONSOLIDATED STATEMENTS OF INCOME Matsushita Electric Industrial Co., Ltd. and Subsidiaries Years ended March 31, 2008, 2007 and 2006 Millions of yen 2008 2007 2006 Revenues, costs and expenses: Net sales: Related companies (Note 3) ...Other ...Total net sales Cost of sales (Notes 3 and 15) ......

  • Page 73
    ...' EQUITY Matsushita Electric Industrial Co., Ltd. and Subsidiaries Years ended March 31, 2008, 2007 and 2006 Millions of yen 2008 2007 2006 Common stock (Note 11): Balance at beginning of year ...Balance at end of year ...Capital surplus (Note 11): Balance at beginning of year ...Transfer from...

  • Page 74
    ..., plant and equipment ...(Increase) decrease in time deposits ...Purchase of shares of newly consolidated subsidiaries ...Proceeds from sale of shares of subsidiaries and dividends received ...Other ...Net cash provided by (used in) investing activities ...Cash flows from financing activities (Note...

  • Page 75
    ... fiscal 2008 by geographical market was as follows: Japan-50%, North and South America-14%, Europe-13%, and Asia and Others-23%. The Company is not dependent on a single supplier, and has no significant difficulty in obtaining raw materials from suppliers. * MEW stands for Matsushita Electric Works...

  • Page 76
    ... of income. (e) Leases (See Note 5) The Company accounts for leases in accordance with Statement of Financial Accounting Standards (SFAS) No. 13, "Accounting for Leases." Leases of the assets under certain conditions are recorded as capital leases in property, plant and equipment in the consolidated...

  • Page 77
    ...include the period of time the fair value has been below the carrying amount or cost basis of investment, financial condition and prospects of each investee, and other relevant factors. Investments in associated companies, cost method investments and available-for-sale securities are reduced to fair...

  • Page 78
    ... employee service using a fair-value-based method of accounting for stock-based employee compensation plans. The Company had continuously applied the intrinsicbased-method of accounting prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related...

  • Page 79
    ... the new disclosure requirements under SFAS No. 161. (w) Reclassifications Certain reclassifications have been made to the prior years' notes to consolidated financial statements in order to conform with the presentation used for the year ended March 31, 2008. Matsushita Electric Industrial...

  • Page 80
    ... new shares of its common stock to third parties. As a result, the Company's shareholding of JVC decreased from 52.4% to 36.8%, and JVC and its subsidiaries became associated companies under equity method. JVC is engaged in both hardware and entertainment software businesses. Financial information...

  • Page 81
    ... in associated companies include equity securities which have quoted market values at March 31, 2008 and 2007 compared with related carrying amounts as follows: Millions of yen 2008 2007 Carrying amount ...Market value ... ¥30,644 35,921 ¥3,311 6,129 Matsushita Electric Industrial Co...

  • Page 82
    ..., for other-than-temporary impairment of availablefor-sale securities, mainly reflecting the aggravated market condition of certain industries in Japan. The write-down is included in other deductions in the consolidated statements of income. 80 Matsushita Electric Industrial Co., Ltd. 2008

  • Page 83
    ... 2,209 million yen and 4,153 million yen, respectively. At March 31, 2008, equity securities with a book value of 19,880 million yen was pledged as collateral for the deferred payments of certain taxes based on the Japanese Custom Act and Consumption Tax Law. Matsushita Electric Industrial Co., Ltd...

  • Page 84
    ...result in the Company's continuing involvement. At March 31, 2008 and 2007, the gross book value of land, buildings, and machinery and equipment under capital leases, including the above-mentioned saleleaseback transactions was 207,999 million yen and 151,920 million yen, and the related accumulated...

  • Page 85
    ... of 18,324 million yen of property, plant and equipment during fiscal 2007. The Company closed a domestic factory that manufactured air conditioner devices and recorded an impairment loss related to buildings, and machinery and equipment, as the Company estimated that the carrying amounts would...

  • Page 86
    ... fiscal 2007 related to goodwill of JVC due primarily to profit performance in JVC's consumer electronics business being lower than the Company's expectation. The fair value was determined by using the estimated present fair value of future cash flows or quoted market prices. Acquired intangible...

  • Page 87
    ...with the decline of their market value during fiscal 2008, 2007 and 2006, respectively. The impairment loss is included in other deductions in the consolidated statements of income. 8. Long-term Debt and Short-term Borrowings Long-term debt at March 31, 2008 and 2007 is set forth below: Millions of...

  • Page 88
    .... At March 31, 2008 and 2007, investments and advances, and property, plant and equipment with a book value of 6,218 million yen and 6,061 million yen respectively, was pledged as collateral by subsidiaries for secured yen loans from banks. At March 31, 2008 and 2007, short-term loans subject to...

  • Page 89
    ...funded benefit pension plans, the unfunded lump-sum payment plans, and the cash balance pension plans, and the fair value of the plan assets at March 31, 2008 and 2007 are as follows: Millions of yen 2008 2007 Change in benefit obligations: Benefit obligations at beginning of year ...Service cost...

  • Page 90
    ... returns. The weighted-average asset allocations of the Company's pension plans at March 31, 2008 and 2007 are as follows: 2008 2007 Asset category: Equity securities ...Debt securities ...Life insurance company general accounts ...Other ...Total ... 43% 44 9 4 100% 45% 43 7 5 100% 88 Matsushita...

  • Page 91
    ... and debt securities using the guidelines of the "basic" portfolio in order to generate a total return that will satisfy the expected return on a mid-term to long-term basis. The Company evaluates the difference between expected return and actual return of invested plan assets on an annual basis to...

  • Page 92
    ...Millions of yen 2008 2007 Deferred tax assets: Inventory valuation ...Expenses accrued for financial statement purposes but not currently included in taxable income ...Property, plant and equipment ...Retirement and severance benefits ...Tax loss carryforwards ...Other ...Total gross deferred tax...

  • Page 93
    ...the Company's major jurisdictions resulting in a range of open tax years. The open tax years for the Company and its significant subsidiaries in Japan, the United States of America, the United Kingdom and China range between fiscal 2004 and fiscal 2007. Matsushita Electric Industrial Co., Ltd. 2008...

  • Page 94
    ...127,610, 137,733 and 119,422 shares of its treasury stock for the years ended March 31, 2008, 2007 and 2006, respectively. The difference between sales price and book value was charged to capital surplus in the consolidated balance sheets. The Company Law of Japan provides that an amount equal to 10...

  • Page 95
    ...holding gains of available-for-sale securities: Unrealized holding gains (losses)...service benefit arising during the period ...Less: Amortization of prior service benefit included in net periodic benefit cost ...Net prior service benefit...512 ¥112,424 Matsushita Electric Industrial Co., Ltd. 2008 93

  • Page 96
    ...2007 Translation adjustments: Translation adjustments arising during the period ...Less: Reclassification adjustment for (gains) losses included in net income ...Net translation adjustments ...Unrealized holding gains of available-for-sale securities...94 Matsushita Electric Industrial Co., Ltd. 2008

  • Page 97
    ... at domestic and overseas manufacturing plants and sales offices. An analysis of the accrued restructuring charges for the years ended March 31, 2008, 2007 and 2006 is as follows: Millions of yen 2008 2007 2006 Balance at beginning of the year ...New charges ...Cash payments ...Balance at...

  • Page 98
    ... 328 million yen mainly in Japan. JVC JVC segment incurred restructuring charges in the amount of 531 million yen mainly in Asia. Other Other segment incurred restructuring charges in the amount of 225 million yen mainly in domestic sales companies. 96 Matsushita Electric Industrial Co., Ltd. 2008

  • Page 99
    ... business segment: AVC Networks AVC Networks segment restructured mainly to address price declines in digital AV products. The restructuring activities mainly consisted of the implementation of early retirement programs. Total restructuring charges amounted to 3,447 million yen. Home Appliances Home...

  • Page 100
    ...140, "Accounting for Transfer and Servicing of Financial Assets and Extinguishments of Liabilities." Interest expenses and income taxes paid, and noncash investing and financing activities for the three years ended March 31, 2008 are as follows: Millions of yen 2008 2007 2006 Cash paid: Interest...

  • Page 101
    ...present value of future cash flows using appropriate current discount rates. Derivative financial instruments The fair value of derivative financial instruments, all of which are used for hedging purposes, are estimated by obtaining quotes from brokers. Matsushita Electric Industrial Co., Ltd. 2008...

  • Page 102
    ...'s obligations as a guarantor under those guarantees at March 31, 2008 and 2007 was insignificant. As discussed in Note 5, in connection with the sale and lease back of certain machinery and equipment, the Company guarantees a specific value of the leased assets. For each guarantee provided, the...

  • Page 103
    ..., and housing business. "JVC" includes products marketed under the brand name of JVC or Victor. "Other" includes electronic-parts-mounting machines, industrial robots and industrial equipment. The healthcare business was transferred to Panasonic Shikoku Electronics Co., Ltd. at April 1, 2007. As...

  • Page 104
    Information by segment for the three years ended March 31, 2008 is shown in the tables below: By Business Segment: Millions of yen 2008 2007 2006 Sales: AVC Networks: Customers ...Intersegment ...Total ...Home Appliances: Customers ...Intersegment ...Total ...Components and Devices: Customers ...

  • Page 105
    ...2008 2007 2006 Segment profit: AVC Networks ...Home Appliances ...Components and Devices ...MEW and PanaHome ...JVC ...Other ...Corporate and eliminations ...Total segment profit ...Interest income ...Dividends...849 16,994 12,092 16,688 ¥ 386,526 Matsushita Electric Industrial Co., Ltd. 2008 103

  • Page 106
    ...'s location and property, plant and equipment are as follows: Millions of yen 2008 2007 2006 Sales: Japan ...North and South America ...Europe ...Asia and Others ...Consolidated total ...United States of America included in North and South America ...Property, plant and equipment: Japan ...North...

  • Page 107
    ... this information as supplemental information in light of the disclosure requirements of the Japanese Financial Instruments and Exchange Law, which a Japanese public company is subject to: Millions of yen 2008 2007 2006 Sales: Japan: Customers ...Intersegment ...Total ...North and South America...

  • Page 108
    106 Matsushita Electric Industrial Co., Ltd. 2008

  • Page 109
    ... registered public accounting firm, KPMG AZSA & Co. has issued an audit report on our evaluation of internal control over financial reporting as of March 31, 2008. June 30, 2008 Fumio Ohtsubo President Makoto Uenoyama Director (In charge of Accounting and Finance) Matsushita Electric Industrial...

  • Page 110
    ... with the standards of the Public Company Accounting Oversight Board (United States), Matsushita Electric Industrial Co., Ltd. and subsidiaries' internal control over financial reporting as of March 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the...

  • Page 111
    ... in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Matsushita Electric Industrial Co., Ltd. and subsidiaries as of March 31, 2008 and 2007, and the related consolidated statements of income, stockholders' equity, and...

  • Page 112
    ... Panasonic Communications Co., Ltd. Panasonic Mobile Communications Co., Ltd. Panasonic Automotive Systems Company Panasonic System Solutions Company Panasonic Shikoku Electronics Co., Ltd. Corporate Headquarters Investor Relations Office Matsushita Electric Industrial Co., Ltd. Investor Relations...

  • Page 113
    ... not been reviewed under Statements on Auditing Standards No. 100 "Interim Financial Information," by Matsushita's independent registered public accounting firm. Major Shareholders (As of March 31, 2008) Name Share ownership (in thousands of shares) Percentage of total issued shares (%) Breakdown...

  • Page 114
    http://panasonic.net/ Matsushita Electric Industrial Co., Ltd. Cert no. SGS-COC-003692 This annual report is printed with soy ink on FSC-certified paper made using wood that comes from well-managed forests. Printed in Japan