Nikon 2008 Annual Report Download
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Table of contents
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Page 1
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Page 2
... well as CSR measures, shareholder returns, and our forecasts for the next ï¬scal year.
Segments/Products
Precision Equipment
LCD Scanner FX-83S ArF Immersion Scanner NSR-S610C
Imaging Products
Digital Compact Camera COOLPIX S510 Digital SLR Camera Nikon D3
Instruments
Confocal Microscope A1...
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Page 3
...'s expanding needs, and will nurture these new developments into future core businesses.
billion
Â¥20
billion
Â¥4
2.1%
2.7%
p20
p25
Five-Year Summary Management's Discussion and Analysis
p28
Financial Statements Independent Auditors' Report
p51
Corporated Data and Investor Information
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Page 4
... a "Strong Nikon."
We focused on two main reform measures: Rapid responses to changes in the business environment, and collaborative development of products by the design and marketing departments. We achieved record-high levels of sales for the ï¬fth consecutive ï¬scal year, operating income for...
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Page 5
...year ended March 2007, and managed to hold proï¬t decline to a minimum. The Imaging Company strengthened its product lineup with the introduction of the D3 and D300 ï¬,agship models, and the entry-level D60 model of digital SLR (single-lens reï¬,ex) cameras, successfully
opening new markets. Sales...
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Page 6
.... Top management will also issue speciï¬c directives to the person making the report as necessary. This system enhances the speed of executive decision-making, and allows us to develop and introduce products in response to market changes. Each of the internal companies-Precision Equipment, Imaging...
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Page 7
... is the Core Technology Center, which develops advanced elemental technology and conducts basic research. Optical and precision technologies have up to now mainly been used for IC steppers and scanners, but it is increasingly possible to employ these for digital cameras, microscopes and other...
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Page 8
...2009 due
Benefit to Shareholders Stable dividend payment based on business performance and flexible execution of acquisition of own shares
Â¥220 billion to produce next-generation products, develop core and basic technologies, and improve productivity. Thank you for your continued support of Nikon...
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Page 9
Review of Operations
Precision Equipment Company
...p.8
Imaging Company
...p.12
Instruments Company
...p.16
Other
...p.20
Nikon Annual Report 2008 7
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Page 10
... as the high-productivity NSR-S210D KrF scanner. These models will be given a full-scale market launch in the year ending March 2009. In the LCD steppers and scanners ï¬eld, we took steps to increase sales of existing models, such as the FX-83S compatible with 8th generation glass plates, and began...
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Page 11
... demonstrate Nikon's technical capabilities. At the same time, we will enhance competitiveness for i-line steppers, KrF scanners for non-critical layers, in addition to cutting-edge ArF scanners including immersion-type in order to secure high earnings and a large market share.
Nikon Annual Report...
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Page 12
...reviewing the production process, and have adopted a platform in which the modules are shared among models as much as possible.
Multi-Lens Projection Optical System Allows LCD Scanners to Adapt to the 10th Generation
The key to the market for LCD steppers and scanners is for the most part the trend...
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Page 13
...advantage of Nikon's LCD steppers and scanners using the multi-lens projection optical system.
CHALLENGES
The main issue in the IC steppers and scanners business is attaining a leading market share for cutting-edge ArF immersion scanners, while in the LCD steppers and scanners business the focus is...
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Page 14
..." mode. 2. Among competing models with optical vibration reduction as of August 30, 2007 (according to research conducted by Nikon Corporation).
Years ended March 31
Operating Income
(Millions of yen) 100,000
Years ended March 31
586,147
80,000
83,974
415,686
400,000 300,000 200,000 100,000...
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Page 15
...models. Nikon is expanding in both directions, maintaining its position as the leading imaging company. We plan to continue developing more attractive products, and further strengthen our lineup.
Maintaining Our Position as the Leading Company for Digital SLR Cameras
Nikon had a 40% share worldwide...
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Page 16
... phones. Developed through the use of Wi-Fi technology improved by a number of original Nikon reï¬nements, my Picturetown enables the direct transfer of pictures to the Internet and supports picture transfer to various imaging devices as well as Internet services. Photos taken with a digital camera...
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Page 17
... the market peak for ï¬lm SLR cameras most sales were in developed countries. Sales regions will widen considerably with the growth in markets following economic development in emerging countries.
CHALLENGES
Nikon had a 40% share worldwide of shipments of digital SLR cameras during the year ended...
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Page 18
... Nikon introduced system products including the inverted research microscope ECLIPSE Ti, and the high-speed, high-resolution imaging confocal microscope A1. We also worked to expand sales of the BioStation series of integrated cell culture observation systems. In the industrial instruments business...
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Page 19
... the BioStation IM (cell IMaging), a time-lapse imaging system that takes images of live cells at
Intense Development of Industrial Products to Open New Markets
In the industrial instruments business, Nikon has a large proportion of sales to the semiconductor industry, so scaling back of investment...
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Page 20
... industry. Nikon's measuring systems are non-contact, and are distinctive in their ability to measure height as well as surface area. We are currently developing instruments to measure automotive and other components in short periods of time. These devices utilize optical sensor and image processing...
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Page 21
... to produce the products as IC steppers and scanners, and image processing derived from digital cameras.
OPPORTUNITIES
In the bioscience business Nikon is focusing on sales of high-end microscopes and the BioStation series, targeting global markets. Sales are rising centered on the United States...
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Page 22
... frames and sunglasses business continued to face a harsh market environment. Nikon decided to withdraw from this business to optimize Group management, and sales activities ceased on March 31, 2008.
Absolute Encoder MAR-MK32A (Launched in April 2007)
Encoders are measuring instruments used...
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Page 23
... is used for a golf approach or on a short hole where the user is aiming directly for the ï¬,agstick, while the Distant Target Priority mode is used during summary surveys at construction sites or in woods to determine the distance to a target object at the farthest point.
Nikon Annual Report 2008...
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Page 24
... to develop a compliance structure for the Group globally, seeking highly transparent, fair and good-faith management emphasizing CSR in order to be an "excellent company" in the truest sense.
CSR Committee CSR Secretariat Conference Business Conduct Committee Export Control Committee Environmental...
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Page 25
... conduct of a survey on compliance awareness among Nikon Group employees in Japan, and feedback of its results to them.
Internal Control System
In 2005, Nikon further overhauled the structure of the Executive Committee engaged in the deliberation, resolution, communication and reporting of business...
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Page 26
...ï¬ciency of its activities this team will formulate, establish and implement measures centered on the Precision Equipment, Imaging Products, Instruments, and Glass businesses. The Environmental Committee evaluates results against the environmental targets set for each ï¬scal year, identiï¬es any...
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Page 27
... compact cameras.
state-of-the-art equipment and developing high-valueadded products, boosting cost-competitiveness through manufacturing innovations, and creating new businesses, beginning with the glass business. During the year, Nikon also advanced measures to strengthen internal control systems...
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Page 28
... number of units sold with the introduction of the D60 and the high-end D3 and D300 models, rounding out our product lineup. The Company also actively introduced new compact digital cameras, providing the market with models that accurately grasp customer needs. As a result, Imaging Products Business...
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Page 29
...for the purchase of property, plant and equipment and investment securities. Net cash used in ï¬nancing activities totaled Â¥38,664 million with expenditures for the repayment of short-term borrowings and the redemption of corporate bonds. As a result of these cash ï¬,ows, cash and cash equivalents...
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Page 30
...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 12) Other current assets Total current assets Property, plant and equipment...
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Page 31
... for directors and corporate auditors (Note 2(i)) Other long-term liabilities (Note 12) Total long-term liabilities Commitments and Contingent liabilities (Notes 14, 15, and 16) Equity Common stock (Note 9): Authorized - 1,000,000,000 shares; issued,400,101,468 shares in 2008 and 400,101,468 shares...
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Page 32
...
$
753,407
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.
Â¥ 189.00 181.23 25.00
Â¥ 146.36 131.42 18.00
$ 1.89 1.81 0.25
30
Nikon Annual Report 2008
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Page 33
... Number of Common Shares of Stock Common Stock BALANCE, March 31, 2006 Reclassiï¬ed balance as of April 1, 2006 (Note 2.k) Conversion of convertible bonds Net income Cash dividends, Â¥12.5 per share Bonuses to directors and corporate auditors Purchase of treasury stock Disposal of treasury stock...
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Page 34
... 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: Purchases of property, plant and equipment Proceeds from sales of property, plant and equipment Purchases of...
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Page 35
... of the country in which Nikon Corporation (the "Company") is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the approximate rate of ¥100.19 to U.S. $1, the rate of...
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Page 36
... of the Financial Instruments and Exchange Law) using the amount of interest in such partnerships calculated based on ownership percentage and the most recent ï¬nancial statements on the report date stipulated in the partnership agreement. (e) Inventories Inventories of the Company and its domestic...
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Page 37
... 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 30, 2007, the ASBJ issued ASBJ Statement No...
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Page 38
... and losses of deï¬ned beneï¬t plans recognized outside proï¬t or loss (3) Capitalization of intangible assets arising from development phases (4) Fair value measurement of investment properties, and the revaluation model for property, plant and equipment, and intangible assets (5) Retrospective...
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Page 39
...Gains Losses
Cost
Fair Value
March 31, 2008 Securities classiï¬ed as: Available-for-sale: Equity ...Dollars 2008
Available-for-sale: Equity securities Investment in a limited liability investment partnership Total
418 990 ¥ 1,408
Â¥
¥ 588 ¥ 588
$ 4,164 9,875 $ 14,039
Nikon Annual Report...
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Page 40
... of Yen 2008 2007
Thousands of U.S. Dollars 2008
Loans, principally from banks and insurance companies: 2008: 0.7400%-4.3600% due 2008-2013 2007: 0.5900%-4.3600% due 2008-2013 Bonds Total Less: Current portion Long-term debt, less current portion
¥ 18,535 49,500 68,035 (7,822) ¥ 60,213
Â¥ 20...
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Page 41
...: Year Ending March 31 2009 2010 2011 2012 2013 Thereafter Total
Millions of Yen Thousands of U.S. Dollars
¥ 7,822 10,657 44,796 60 4,700 ¥68,035
$ 78,068 106,365 447,110 599 46,911 $ 679,053
The yen zero coupon convertible bonds were issued with stock acquisition rights to subscribe for shares...
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Page 42
... 31, 2008 and 2007 were principally as set forth below:
2008 2007
Discount rate Expected rate of return on plans assets Recognition period of actuarial gain (loss) Amortization period of prior service cost
2.50% 2.00% 10 years 10 years
2.50% 2.00% 10 years 10 years
40
Nikon Annual Report 2008
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Page 43
...-in-kind (non-cash assets) to shareholders subject to a certain limitation and additional requirements. Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the company so stipulate. The Corporate Law provides certain...
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Page 44
... 69,000 10,000 59,000 141,000 63,000 78,000 193,000 29,000 164,000 178,000 21,000 157,000 26,100
26,100
Exercise price Average stock price at exercise Fair value price at grant date
1,321 3,550
1,048 3,458
1,225 3,107
1,273 3,130
2,902 840
1 3,259
42
Nikon Annual Report 2008
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Page 45
The assumptions used to measure the fair value of 2007 Stock Options which was granted at August 27, 2007. Estimate method: Black-Scholes option pricing model Volatility of stock price: 43.022% Estimate remaining outstanding period: ï¬fteen years Estimate dividend: Â¥18.00 per share Interest rate ...
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Page 46
...Research and development costs incurred were Â¥58,373 million ($582,628 thousand) and Â¥47,218 million for the ï¬scal years ended March 31, 2008 and 2007, respectively.
14. Lease Payments
Total lease payments under ï¬nancing lease arrangements that do not transfer ownership of the leased property...
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Page 47
...liabilities at March 31, 2008 were as follows:
Thousands of U.S. Dollars 2008
Millions of Yen 2008
As the guarantor of bank loans and indebtedness, principally of employees, unconsolidated subsidiaries and associated companies Total
¥2,973 ¥2,973
$ 29,673 $ 29,673
Nikon Annual Report 2008
45
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Page 48
..., was established to promote the Nikon Group's inhouse company system ï¬rmly, respond to market changes more quickly and strengthen competitiveness and proï¬tability. The precision equipment business of Tochigi Nikon Corporation was transferred to Tochigi Nikon Precision Co., Ltd. After this spin...
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Page 49
...205,265
Major products of each industry: Precision Equipment : IC steppers, LCD steppers Imaging Products : Digital cameras, Film cameras, Interchangeable lenses. Instruments : Microscopes, Measuring instruments, Inspection equipment Other : Glass materials, Sport optics products, Ophthalmic frames...
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Page 50
...,792 820,623 ¥ 135,169 ¥ 820,622
Consolidated
Â¥
741,411
Japan
North America
Europe
Total
(Eliminations) or Corporate
For the year ended March 31, 2007 Net sales Outside customers Intersegment sales Total Operating expenses Operating income Assets
¥ 337,455 347,651 685,106 600,320 ¥ 84...
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Page 51
...,193 2,442,727 132,932 $ 6,954,759 9,539,790
North America ...U.S.A., Canada Europe ...The Netherlands, Germany, United Kingdom, etc. Asia /Oceania ...South Korea, Taiwan, Singapore, China, Australia, etc. Other Area ...Middle & South America, Africa, etc. Notes: 1. "Asia area" has been changed to...
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Page 52
Independent Auditors' Report
50
Nikon Annual Report 2008
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Page 53
... 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...
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Page 54
... sport optics products Design, manufacture, and sales of microprocessing systems and customized microscopes Development, manufacture, sales and servicing of ophthalmic lenses Development, manufacture, sales and servicing of surveying instruments Development and support of computer software Employee...
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Page 55
..., Nikon (Thailand) Co., Ltd. General Manager of Research & Development Headquarters, Core Technology Center & General Manager of Optical Research Laboratory of Research & Development Headquarters, Core Technology Center General Manager of Business Planning Department, Imaging Company General Manager...
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Page 56
...,000,000 shares Issued: 400,101,468 shares ¥64,676 million Number of Shareholders 18,580 Price Range of Common Stock (¥)
4,500
Major Shareholders The Master Trust Bank of Japan, Ltd., Trust Account Japan Trustee Services Bank, Ltd., Trust Account Meiji Yasuda Life Insurance Company State Street...
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Page 57
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Page 58
...Chiyoda-ku Tokyo 100-8331, Japan www.nikon.com
This report is printed on Forest Stewardship Council (FSC)-certiï¬ed paper using VOC (volatile organic compound)-free ink containing no volatile organic solvents. A waterless printing method has been employed that does not generate alkaline wastewater...