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03
TOSHIBA Annual Report 2012
SCOPE OF CONSOLIDATION
As of the end of March 2012, Toshiba Group (“the Group”) comprised Toshiba Corporation (“the Company”) and 554
consolidated subsidiaries and its principal operations were in the Digital Products, Electronic Devices, Social Infrastructure
and Home Appliances business domains.
Of the consolidated subsidiaries, 96 were involved in Digital Products, 47 in Electronic Devices, 289 in Social
Infrastructure, 54 in Home Appliances and 68 in Others.
The number of consolidated subsidiaries was 56 more than at the end of March 2011. 196 affiliates were accounted for
by the equity method as of the end of March 2012.
RESULTS OF OPERATIONS
NET SALES AND INCOME (LOSS)
While the emerging economies, including China and India, continued to expand and the United States saw gradual
recovery, the global economy remained in severe circumstances due to financial uncertainties in some European
countries, fiscal austerity and concerns about the financial system. Although the global economy is expected to continue
to recover gradually, anxieties remain about the rise in crude oil prices and high levels of unemployment in the United
States and some European countries, and sovereign risk in some European countries.
The Japanese economy remained in a severe condition due to the impacts of the Great East Japan Earthquake,
exposure to sovereign risk in some European countries and the impact of sharp yen appreciation. There are also concerns
about crude oil prices and shortages of power generation capacity.
In these conditions, the Group, aiming to become an even stronger, a world-leading diversified electric and electronics
company by overcoming demanding business conditions, strongly promoted global business deployment and the
transformation of its business structure through strategic investments and acquisitions to build new business
foundations, with a close focus on growth businesses, including the integrated Storage Products business, the Smart
Community business and the Healthcare business. The Group also steadily advanced structural reforms, resulting in
improvement to its cost structure, the reorganization and consolidation of domestic and overseas facilities, expansion of
overseas procurement and production, in order to establish a business structure resistant to rapid business fluctuations
and exchange rate fluctuations.
The Company’s consolidated net sales for FY2011 were 6,100.3 billion yen ($74,393.4 million), a decrease of 298.2 billion
yen against the previous year. Although the Social Infrastructure segment saw higher sales, overall sales were lower,
mainly due to sales decreases in the Digital Products and Electronic Devices segments, reflecting the impacts of sharp
yen appreciation, the Great East Japan Earthquake, the floods in Thailand and market downturns. Consolidated operating
income (loss) was 206.6 billion yen ($2,520.1 million), a decrease of 33.7 billion yen. Although the Electronic Devices
segment and the Social Infrastructure segment saw increases, the Digital Products segment saw deterioration. Income
(Loss) from continuing operations, before income taxes and noncontrolling interests decreased by 43.1 billion yen to
152.4 billion yen ($1,858.6 million). Net income (loss) attributable to shareholders of the Company decreased by 64.1
billion yen to 73.7 billion yen ($898.8 million), mainly reflecting the impact of temporary increase of tax expenses due to a
revision of a section of the Corporation Tax Act in Japan.
KEY PERFORMANCE INDICATORS
Following are the key performance indicators (“KPIs”) that the Management of the Group uses in managing its business.
Net sales and operating income are basic indicators to measure the business results of the Group. Operating income is
regularly reviewed to support decision-making in allocations of resources and to assess performance. Operating income
ratio (ratio of operating income to net sales) is also KPIs. To assess financial position of the Group, the Management
emphasizes shareholders' equity ratio (ratio of equity attributable to shareholders of the Company to total assets) and
debt-to-equity ratio. Investments including capital expenditure and investments & loans for M&A and R&D activity are
indispensable for growth of the Group and accordingly total investments and R&D expenditure are KPIs. To measure
efficiency of investments and business results, the Management uses ROI (return on investment) and ROE (return on
equity), respectively.