Toshiba 1998 Annual Report Download

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Annual Report 1998
Year Ended March 31, 1998

Table of contents

  • Page 1
    A n n u a l Re p o r t 1998 Ye a r En d e d M a rch 3 1 , 1 9 9 8

  • Page 2
    ... responsive business activities. As good corporate citizens, we actively contribute to further the goals of society. COMMITMENT TO THE FUTURE By continually developing innovative technologies centering on the fields of Electronics and Energy, we strive to create products and services that enhance...

  • Page 3
    ...statem ents. 4. Beginning with the fiscal year ended March 31, 1998, revenues and expenses from financial services, real estate leasing and sales, and other operations are reported as operating activities, whereas they were reported as non-operating activities in prior periods. Prior-period data for...

  • Page 4
    To Our Sh a r e h o l d e r s In f iscal 1997, t he year ended M arch 31, 1998, Toshiba's consolidat ed net sales declined 1 percent t o ¥5,458.5 billion (US$41,352 million). This chief ly ref lect s low er PC prices in Nort h America, a det eriorat ing market f or semiconduct or memory chips, ...

  • Page 5
    ...with IBM Corp . an d Siem en s AG. W e are con fid en t of catch in g u p to th e cycle of p rice flu ctu ation s becau se of ou r ability to ach ieve red u ction s in ch ip size. W e n ow h ave th e tech n ology n eed ed to m ass p rod u ce 0.15-m icron d esign ru le d evices with sm aller cap ital...

  • Page 6
    ...ragin g sign s. VCR op eration s retu rn ed to p rofitability in th e year's secon d h alf. W e m oved all VCR op eration s to Sin gap ore an d switch ed to p rod u ction u n d er con sign m en t. In h om e ap p lian ces, we d ifferen tiate ou rselves by con cen tratin g on d evelop in g h igh ly ap...

  • Page 7
    ... th is age of m ega-com p etition . W e p led ge th at th e p eop le of Tosh iba will d o th eir best to ach ieve th ese goals, an d ask for th e con tin u ed su p p ort of ou r sh areh old ers an d bu sin ess p artn ers in th is u n d ertakin g. Ju ly 1998 Fu m io Sato Ch...

  • Page 8
    ... ven tories sh rin k. Notebook m od els are accou n tin g for a stead ily risin g sh are of th e PC m arket. Tosh iba in ten d s to stay ah ead of th e com p etition by takin g fu ll ad van tage of its ability to develop an d m an u factu re key com pon en ts for PCs. Firm ly en tren ch ed as...

  • Page 9
    ... a gap betw een our product line and the market. Furthermore, an oversupply of TFT LCD panels led PC makers to step up output. Our inventories sw elled as a result. In the current fiscal year, w e plan to market economy-priced notebook models and introduce new slim notebook PCs and more mininotebook...

  • Page 10
    ... W ILL BE TECH N O LO GY GAIN S W ID ESPREAD TO SH IBA 'S RO LE ACCEPTAN CE? A. AS TH IS The " M agnia" series of global PC servers w ent on sale in t he U.S. in June 1998. Able t o combine t hese servers w it h PCs, net w orking equipment and relat ed support , Toshiba has great ly upgraded it...

  • Page 11
    ... al Space Develop m en t Agen cy. Particip ation in th e com m ercial satellite field h as ad d ed a secon d core bu sin ess to th e com p an y's aerosp ace sector. Tosh iba h as con clu d ed a con tract with th e U.S.'s Skybrid ge LP Corp . to in vest in th e $3.5 billion Skybrid ge Project led by...

  • Page 12
    ... Th ese cap abilities m ake th is p rocessor id eal for p ortable in form ation term in als, set-top boxes an d oth er m u ltim ed ia eq u ip m en t. Wit h a " Flash Pat h," dat a f rom a digit al camera or ot her device using a Smart M edia card can be easily uploaded t o a PC. Toshiba has f ormed...

  • Page 13
    ...a To sh i b a Corporat ion Corporat ion A n n u al A n n u al A. w ork equipment, set-top boxes and other multimedia equipment. Toshiba has combined various IP (intellectual property) cores, or functional blocks, to offer a range of system support. Portable terminals, image processing, CD-ROM and...

  • Page 14
    ... involving imaging. We have good momentum in system LSIs. Our " TX System RISC" series processors, w hich are based on Users in many indust ries are adopt ing t he " TX Syst em RISC" series of processors, w hich draw on M IPS Technologies' archit ect ure. Net w orking devices, print ers, mobile dat...

  • Page 15
    ...h ase-th ree production lin e th at boosted productivity. Alth ough prices d eclin ed d u rin g th e secon d h alf, LCD sales for th e en tire year were u n ch an ged from th e prior year's level. Volatility p ersists in th e LCD m arkets d u e to sh ifts in th e balan ce between su p p ly an d d em...

  • Page 16
    ... g Tosh iba's lead in g-ed ge exp ertise in th e n u clear p ower field . Overseas, p articu larly in Asia, Tosh iba is aggressively p rom otin g its tech n ical p rowess in ABW Rs. Th is h as led to an ord er for reactor facilities for th e Lu n gm en Nu clear Power Station in Taiwan . Tosh iba is...

  • Page 17
    ... 20 ~ 30 percent. In combined-cycle generation, w hich cuts carbon dioxide emissions as w ell as raises Q. Q. W ITH SLO W IN G , W H AT W ILL BE TH E SEGM EN T 'S PRIM ARY SO U RCES O F SALES AN D EARN IN GS ? Toshiba w as select ed as t he main cont ract or t o build a new react or shroud at TEPCO...

  • Page 18
    ... and track record are w ell know n in Asia as w ell. In China, there are many nuclear pow er projects being planned. Thailand, Indonesia and other countries have show n strong interest in building nuclear pow er stations. In 1996, Toshiba created an organization w ith Hitachi to promote ABWR exports...

  • Page 19
    ... d Sou th east Asia. Having earned t he t rust of cust omers w orldw ide, small, general-use VF-S7/S7e invert ers are in increasing demand. To sh i b a Corporat ion Tow ering over suburban Tokyo, Toshiba's new 150-met er-t all, ult ra-high-speed elevat or t ow er covers research t hemes as diverse...

  • Page 20
    ... sh ad ow-m ask flat p ictu re tu be. Th is revolu tion ary TV u ses Tosh iba's Su p er Brigh tron tu be to p rod u ce a sh arp , vivid im age. In ad d ition , th e im age is u n iform from th e screen 's cen ter to th e ed ges, th u s en h an cin g text legibility. A m em ber of th e FACE lin eu...

  • Page 21
    ... of our small color TVs are made in Indonesia and China. Our fan and heater lines have been shifted to Toshiba Home Technology Corp. Profitability rose in both cases. Other examples abound. When the VCR business stagnated, w e moved everything to Toshiba Video Products in Singapore. In December 1997...

  • Page 22
    ... Ltd. in China in response to rising local demand. At Dalian Toshiba Television, product ion of 21- t o 29-inch color TVs commenced in December 1997. In t he near f ut ure, t he f acilit y w ill begin assembling 34-inch models and project ion TVs. Q. Q. W H AT ARE T O SH IBA 'S PLAN S FO R STIM...

  • Page 23
    ...st 1997, th is m od el h as a CMOS sen sor an d bu ilt-in PC card in terface for "Sm artMed ia" solid -state flop p y-d isk card s (SSFDC). HOUSEHOLD A PPLIA NCES Sales of h ou seh old ap p lian ces were d own sh arp ly. Fierce p rice com p etition was th e m ain reason . In resp on se, Tosh iba con...

  • Page 24
    ...en t system in trod u ced in Ap ril 1997 led to h igh er p rod u ctivity. In Complement ing t he qualit y of Toshiba's product s, Toshiba Logist ics of f ers a comprehensive line of t ransport at ion and inst allat ion services. Act ivit ies ext end even t o such massive project s as pow er generat...

  • Page 25
    ...th resh old -voltage CMOS tech n ology to cu t p ower con su m p tion . Oth er ad van ces in clu d e im p roved resistan ce to errors to keep m ovin g im ages sh arp an d a con cep t to sep arate com p ression of foregrou n d objects an d backgrou n d s. â- THE FIRST FLAT PICTURE TUBE WITH A SHADOW...

  • Page 26
    ...ts of operation s. Each division an d operatin g base in Japan h as its own con feren ce, wh ich con stan tly seeks to im prove en viron m en tal program s. In fiscal 1997, Tosh iba establish ed a Recyclin g Prom otion Grou p . Th e aim is to p rep are for th e m an d atory h ou seh old ap p lian ce...

  • Page 27
    ... of the compressor and fan motor to create a better air flow . This greatly reduced the amount of heat generated. New ideas like this have allow ed us to cut refrigerator pow er consumption by roughly 20 percent annually over the past several years. For example, a 34- kilow att-hour model today is...

  • Page 28
    ... Vice Presid en ts Mako to Nakagaw a Ko ich i Suzuki Ko taro Hyuga Mo ch ih iro Nakazaw a To sh iyuki Osh im a Hiro o Okuh ara Haruo Nakatsuka Susum u Ko h yam a Atsuto sh i Nish ida Tadash i Matsum o to Hiro sh i Nish io ka Takesh i Nakagaw a Kao ru Kubo Masaki Matsuh ash i Masaich i Ko ga Tetsuya...

  • Page 29
    ...statem ents. 3. Beginning with the fiscal year ended March 31, 1998, revenues and expenses from financial services, real estate leasing and sales, and other operations are reported as operating activities, whereas they were reported as non-operating activities in prior periods. Prior-period data for...

  • Page 30
    ... an d Sou th east Asia. Services & Oth er-Sales ad van ced 13 p ercen t com p ared with th e p reviou s year, to ¥420.0 billion (US$3,182 m illion ). Th is growth was m ain ly d u e to a n ewly con solid ated su bsid iary, Tosh iba Bu ild in g & Lease Co., Ltd . Most sales rep resen t t ran sact io...

  • Page 31
    ... r fiscal year, m ain ly becau se o f gro wt h in PC resu lt s. CD-ROM d rives, h ard d isk d rives an d oth er PC p erip h erals, an d m ed ical system s also p erform ed well. Lower m em ory p rices were resp on sible for a sm all d eclin e in sem icon d u ctor sales. Net Incom e Cost of sales in...

  • Page 32
    ...Million s of yen Years ended March 31 1998 1997 1996 Th ou san d s of U.S. d ollars 1998 Net sales: In form ation & Com m u n ication System s Un affiliated cu stom ers ...In tersegm en t ...Total ...Electron ic Devices & Materials Un affiliated cu stom ers ...In tersegm en t ...Total ...Power & In...

  • Page 33
    ... Net sales: Jap an Un affiliated cu stom ers ...Â¥ 3,847,070 In tersegm en t ...961,017 Total ...Overseas Un affiliated cu stom ers ...In tersegm en t ...Total ...North Am erica Un affiliated cu stom ers ...In tersegm en t ...Total ...Asia Un affiliated cu stom ers ...In tersegm en t ...Total ...Eu...

  • Page 34
    ... n etworkin g tech n ology, p ortable PCs an d DVD, ach ievin g fin er d esign ru les in sem icon d u ctor p rod u ction , p olysilicon -typ e LCDs, com bin ed -cycle p ower gen eration , n u clear p ower p lan ts, lith iu m -ion rech argeable batteries, fu el cells an d en viron m en tal system...

  • Page 35
    ... ed earn in gs an d th e recogn ition of a m in im u m p en sion liability ad ju stm en t cau sed sh areh old ers' eq u ity to d ecrease by ¥63.2 billion com p ared with th e p reviou s year, to ¥1,201.6 billion (US$9,103 m illion ). CA SH FLOW S Net cash p rovid ed by op eratin g activities...

  • Page 36
    ... Sh e e t s Toshiba Corporation and its subsidiaries As of March 31, 1998 and 1997 Million s of yen Th ou san d s of U.S. d ollars (Note 3) 1998...plan t an d equipm en t (Note 8) : Lan d ...Bu ild in gs ...Mach in ery an d eq u ip m en t ...Con stru ction in p rogress ...Less - Accu m u lated d ep...

  • Page 37
    ... m on stock, ¥50 p ar valu e - Au th orized - 10,000,000,000 sh ares Issu ed an d ou tstan d in g: 1998 - 3,218,999,545 sh ares ...1997 - 3,218,999,545 sh ares ...Ad d ition al p aid -in cap ital ...Legal reserve ...Retain ed earn in gs ap p rop riated for cash d ivid en d s ...Retain ed earn in gs...

  • Page 38
    ...co n so lidated co m pan ies ...Equity in in co m e o f affiliated co m pan ies ...Net in co m e ...Retain ed earn in gs: Balan ce at begin n in g of year ...Cash d ivid en d s ...Tran sfer to legal reserve ...Balan ce at en d of year ... (5,727) (1,387) (4,340) 11,677 7,337 1,310 52,553 14,524 67...

  • Page 39
    ...u sed in in vestin g activities ...Cash flo w s fro m fin an cin g activities: Proceed s from lon g-term d ebt ...Rep aym en t of lon g-term d ebt ...Divid en d s p aid ...(Decrease) in crease in sh ort-term borrowin gs ...Net cash p rovid ed by fin an cin g activities ...Effect o f ex ch an ge rate...

  • Page 40
    ...rren t exch an ge rates at year en d . In com e an d exp en se item s are tran slated at average exch an ge rates p revailin g d u rin g th e year. Th e effects of th ese tran slation ad ju stm en ts are rep orted in th e cu m u lative tran slation ad ju stm en t com p on en t of sh areh old ers' eq...

  • Page 41
    ...e plan s are am ortized over th e average rem ain in g service period of em ployees expected to receive ben efits (See Note 9). Net incom e per sha re - Th e com p an y ad op ted Statem en t of Fin an cial Accou n tin g Stan d ard s (SFAS) No. 128, "Earn in gs p er Sh are" (EPS) in th e year en ded...

  • Page 42
    ..., n et of related taxes, exclu d ed from earn in gs an d rep orted in a sep arate com p on en t of sh areh old ers' eq u ity u n til realized . However, th e com p an y h as n ot ad op ted th is stan d ard wh ich becam e effective for th e fiscal year begin n in g Ap ril 1, 1994. Th e effects on...

  • Page 43
    ...years en d ed March 31, 1998 an d 1997 were ¥28,099 m illion ($212,871 th ou san d ) an d ¥6,452 m illion , resp ectively. Th e gross realized losses on th ose sales for th e years en d ed March 31, 1998 an d 1997 were ¥351 m illion ($2,659 th ou san d ) an d ¥64 m illion , resp ectively. To sh...

  • Page 44
    ...sales-typ e an d d irect fin an cin g leases m ain ly of in form ation system s, m ed ical eq u ip m en t, agricu ltu ral an d in d u strial eq u ip m en t an d oth ers. Oth er fin an ce receivables rep...receivables are as follows: In vestm en t in fin an cin g leases Year ending March 31 Million s of...

  • Page 45
    ...,864 Th ou san d s of U.S. d ollars Million s of yen Years ended March 31 1998 1997 1998 Sales ...Net in com e ... ¥1,059,466 ¥ 23,831 ¥1,120,148 ¥ 44,101 $8,026,258 $ 180,538 A su m m ary of tran saction s an d balan ces with th e affiliated com p an ies accou n ted for by th e eq u ity...

  • Page 46
    ... borrowin gs p rim arily con sist of overd rafts an d sh ort-term n otes in Eu ro yen , of wh ich ¥5,125 m illion ($38,826 th ou san d ) an d ¥3,866 m illion at March 31, 1998 an d 1997, resp ectively, are secu red by a p led ge of certain fixed assets an d fin an ce receivables; th...

  • Page 47
    ... cost an d th e projected ben efit obligation . Net p eriod ic p en sion cost for 1998 an d 1997 in clu d ed th e followin g com p on en ts: Million s of yen Years ended March 31 1998 1997 Th ou san d s of U.S. d ollars 1998 Service cost - ben efits earn ed d u rin g th e year ...In terest cost on...

  • Page 48
    ...are exp en sed as in cu rred . Ad vertisin g exp en ses am ou n ted to ¥79,693 m illion ($603,735 th ou san d ) an d ¥75,709 m illion for th e years en d ed March 31, 1998 an d 1997, resp ectively. 1 2 . FOR EI GN EX CH A N GE GA I N S A N D LOSSES: For th e years en d ed March 31, 1998 an d 1997...

  • Page 49
    ... t for th e years en d ed March 31, 1998 an d 1997. Du e to a ch an ge in Jap an ese in com e tax regu lation s, th e n orm al statu tory tax rate in Jap an was red u ced to ap p roxim ately 47.7 p ercen t effective Ap ril 1, 1998. Th e revised tax rate was u sed in th e m easu rem en t of d eferred...

  • Page 50
    ... cap ital. Cash d ivid en d s, wh ich are exp ected to be form ally ap p roved at th e sh areh old ers' m eetin g in Ju n e 1998, an d will be p ayable su bseq u en tly, are sh own as retain ed earn in gs ap p rop riated for cash d ivid en d s. An an alysis of th e ch an ges for th e years en d ed...

  • Page 51
    ... s an d losses related to q u alifyin g h ed ges of firm com m itm en ts d en om in ated in foreign cu rren cies are d eferred an d are recogn ized in in com e wh en th e h ed ged tran saction occu rs. In terest rate swap agreem en ts an d cu rren cy swap agreem en ts are u sed to lim it th e com...

  • Page 52
    ... gs d ep osits, it was assu m ed th at th e carryin g am ou n t ap p roxim ated fair valu e for th e m ajority of th ese in stru m en ts becau se of th eir sh ort m atu rities. Qu oted m arket p rices were u sed for m arketable secu rities an d a p art of oth er in vestm en ts. Oth er tech n iq...

  • Page 53
    ... th e con solid ated balan ce sh eets of Tosh iba Corp oration an d its su bsid iaries as of March 31, 1998 an d 1997, an d t h e relat ed co n so lid at ed st at em en t s o f o p erat io n s an d ret ain ed earn in gs an d of cash flows for th e years th en en d ed , stated in yen . Th ese fin...

  • Page 54
    ..., U.S.A. Tosh iba In tern ation al Corp oration Houston, Texas, U.S.A. Tosh iba Am erica Electron ic Com p on en ts, In c. Irvine, California, U.S.A. Tosh iba Disp lay Devices In c. Horseheads, New York, U.S.A. Dom in ion Sem icon d u ctor, L.L.C. Manassas, V irginia, U.S.A. Tosh iba Am erica Ven...

  • Page 55
    ...s S.R.L. Rom e, Italy Electron ics Italian a S.R.L. Milan, Italy Med ical System s S.A. Madrid, Spain Electron ics Esp añ a S.A. Madrid, Spain Mid d le Ea st Tosh iba Gu lf FZE Dubai, UAE Asia Tosh iba (Ch in a) Co., Ltd . Beijing, The People's Republic of China Tech n ology Develop m en t (Sh an...

  • Page 56
    ... Plan t Ken setsu Co., Ltd . Tosh iba Sh u token Lifestyle-Electron ics Corp oration Tosh iba Vid eo Prod u cts Jap an Co., Ltd . Plu s 187 oth er d om estic su bsid iaries CON SOLI D A T ED OV ER SEA S SU B SI D I A R I ES Ch an gzh ou Tosh iba Tran sform er Co., Ltd . Dalian Tosh iba Television...

  • Page 57
    ...: 10,000,000,000 sh ares Issu ed : 3,218,999,545 sh ares No. of sh areh old ers: 433,240 Average h old in g: 7,430 sh ares Tran sfer Agen t Th e Mitsu i Tru st an d Ban kin g Co., Ltd . Headquarters 1-1, Sh ibau ra 1-ch om e, Min ato-ku Tokyo 105-8001, Jap an Hibiya Office 1-6, Uch isaiwai-ch o 1-ch...

  • Page 58
    Prin ted in Jap an