Nikon 2009 Annual Report Download

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NIKON ANNUAL REPORT 2009

Table of contents

  • Page 1

  • Page 2
    ... precision equipment that includes semiconductor-related equipment, IC and LCD steppers and scanners, microscopes and measuring instruments. The sudden slowdown in the global economy in the latter half of the fiscal year ended March 2009 led to a difficult business environment for the Nikon Group...

  • Page 3
    ... ...2 To Our Shareholders and Investors...3 Interview with the President ...4 Review of Operations ...8 Precision Equipment Company ...8 Imaging Company ...12 Instruments Company ...16 Other ...20 Highlights (Fiscal Year Ended March 2009) ...21 CSR-Oriented Management ...22 Five-Year Summary...25...

  • Page 4
    2 Nikon Annual Report 2009 Financial Highlights Nikon Corporation and Consolidated Subsidiaries Years ended March 31 Thousands of U.S. Dollars 2009 Millions of Yen 2008 2007 2009 2006 2005 For the year Net sales Operating income Net income Per share of common stock (yen and U.S. dollars) : ...

  • Page 5
    Nikon Annual Report 2009 3 To Our Shareholders and Investors Nikon established a Management Reform Committee to coordinate our response to the rapid changes in the business environment during the fiscal year ended March 2009, and promptly implemented a variety of measures as a corporate group. ...

  • Page 6
    ... industrial instruments field the market stagnated as curbs were placed on capital expenditures Q. A. The three-year Medium Term Management Plan from April 2009 through March 2012 has just begun. What are your goals for this plan, and what specific measures does it contain? Focusing on the world...

  • Page 7
    ...(2) develop products for sustainable growth. These two central themes are the twin pillars for this plan. First of all, to strengthen earnings capabilities to secure profits even in the severe environment, we will reorganize the business locations of the Precision Equipment Company at a global level...

  • Page 8
    ... we announced a plan for a friendly tender offer for Metris NV, a Belgian company that manufactures measurement equipment. Metris has advanced technology and products in the market for non-contact, three-dimensional measurement systems, and its business lines will neatly complement those of Nikon...

  • Page 9
    ... of ¥4.00 per share). I would like to offer my sincere appreciation to shareholders and investors for their continued support of Nikon. especially important during difficult times. The Nikon Group currently faces an extremely difficult business environment. However, it is precisely at such times...

  • Page 10
    8 Nikon Annual Report 2009 Review of Operations Precision Equipment Company The Precision Equipment Company faced difficult conditions during the fiscal year ended March 2009. In the IC steppers and scanners field, the market contracted sharply from initial expectations, with a widespread scaling...

  • Page 11
    ... and scanners field, Nikon worked to expand sales of the existing FX-65S model for lithographic exposure of 6th generation glass plates, as well as the FX-903N model, which is ideally suited for the manufacture of the small to medium-sized high-precision liquid crystal displays used in cell phones...

  • Page 12
    ... become one of the main points of focus for LCD steppers and scanners. The latest FX-101S lithography system, which Nikon began shipping in the year ended March 2009, is compatible with 10th generation glass plates that measure approximately 3 meters on a side. It was designed to allow for efficient...

  • Page 13
    ...First shipment in the year ended March 2009) The FX-101S, incorporating Nikon's proprietary multi-lens projection optical system, is an LCD exposure system for production of 10th generation large glass plates. LCD televisions have spread rapidly in recently years, and screen sizes have become larger...

  • Page 14
    12 Nikon Annual Report 2009 Review of Operations Imaging Company The Imaging Company enhanced its digital SLR camera line-up and achieved an increase in unit sales during the fiscal year ended March 2009, but faced difficult conditions in the latter half of the period due to the significantly ...

  • Page 15
    ... markets expand, but that sales will remain ï¬,at on a value basis. Review of the Year Ended March 2009 In digital SLR cameras, in September 2008 Nikon launched its mid-range model D90, the world's first*1 digital SLR camera with the "D-Movie" movie function. We further enhanced the product lineup...

  • Page 16
    ... increasing prominence as a company that provides both the camera hardware and the imaging services. Note: 1. Available in Japan only. Sales Value Ratio by Product (%) Years ended March 31 Sales Value Ratio by Region (%) Years ended March 31 Others 7 7 22 12 Europe Interchange- 20 able Lens...

  • Page 17
    ...the image was recorded. The LAN port allows images to be uploaded to Nikon's image storage and sharing site my Picturetown. Users can also use the geotag information to link the images to maps, offering new ways to enjoy viewing, organizing, and storing pictures. Digital Compact Camera Nikon COOLPIX...

  • Page 18
    16 Nikon Annual Report 2009 Review of Operations Instruments Company The Instruments Company's performance was severely affected by the state of the economy during the fiscal year ended March 2009. Despite positive performance in the bioscience field, mainly for areas concerned with live cells, ...

  • Page 19
    ... enjoy a large share of the market in Japan and other areas of Asia. Looking ahead, we aim to broaden our business domain -2,724 and earnings base through expansion into measuring instruments for a variety of industries. As one part of this strategy, in June 2009 we announced a plan for a friendly...

  • Page 20
    ... to increase the market share for Metris products in the measuring instruments field. The Instruments Company as the Third Pillar of the Nikon Group In June 2008 Nikon established the Sales Division to strengthen its sales structure, and formulated a strategy to systematically address customer needs...

  • Page 21
    Nikon Annual Report 2009 19 Product Spotlight Instruments Company High-quality imaging of intracellular biological processes, for cutting-edge research Confocal Microscope A1 Series Confocal Microscope A1 Series (Launched in February 2008) The A1 series is a confocal microscope system capable of ...

  • Page 22
    ... The customized products business suffered a decrease in sales of special order items and solid-state lasers, due in part to the deterioration of market conditions, though sales of optical components and space-related products were on a par with the previous fiscal year. The glass-related business...

  • Page 23
    Nikon Annual Report 2009 21 Highlights Fiscal Year Ended March 2009 2008 April May Briefing held to explain the "Nikon Group's Business Partners' CSR Guidelines." Nikon D3, D300 and AF-S NIKKOR 14-24mm f/2.8G ED Honored with TIPA European Photo & Imaging Awards. • Digital SLR Camera Nikon D3 ...

  • Page 24
    ... a medium-term plan for CSR, incorporating such priority measures as the development and furthering of environmental management, and global promotion of compliance structures. Through these measures, we endeavor to be a truly outstanding company. CSR Structure The Nikon Group's CSR program had...

  • Page 25
    ... departments, to conduct internal audits. During the fiscal year ended March 2009, in addition to the schedule in the audit plan, we conducted a company-wide assessment of all internal controls and internal control structures for operational processes through Nikon Corporation and the Nikon Group...

  • Page 26
    24 Nikon Annual Report 2009 performance. It also conducts training to minimize the damage from risks, monitors risks on a regular basis, and establishes the plan-do-check-act (PDCA) protocols. Currently, the committee focuses on such areas as information security, risk management for employees ...

  • Page 27
    ... slump, investment freeze, and plunge in stock prices. Reviewing the business segments of the Nikon Group under these conditions, the semiconductor-related market contracted sharply with the large reduction in capital expenditure from the drop in global demand for semiconductor devices. In the...

  • Page 28
    ... world's first mid-range model, the world's first digital SLR camera with movie recording functions. Compact digital cameras enjoyed a significant increase in both net sales and the number of units sold as a result of favorable sales in the North American region together with the March 2009 release...

  • Page 29
    ... to ¥79,806 million. Basic Policy on Shareholder Returns and Current and Subsequent Term Dividends Nikon's basic dividend policy is to improve reflection of business performance based on paying a steady, continuous dividend emphasizing the standpoint of investors while also expanding investment for...

  • Page 30
    28 Nikon Annual Report 2009 Consolidated Balance Sheets Nikon Corporation and Consolidated Subsidiaries March 31, 2009 and 2008 Thousands of U.S. Dollars (Note 1) 2009 Millions of Yen 2009 2008 ASSETS Current assets Cash and cash equivalents Notes and accounts receivable - trade: Customers ...

  • Page 31
    Nikon Annual Report 2009 29 Millions of Yen 2009 2008 Thousands of U.S. Dollars (Note 1) 2009 LIABILITIES AND EQUITY Current liabilities Short-term borrowings (Note 6) Current portion of long-term debt (Note 6) Notes and accounts payable - trade: Suppliers Unconsolidated subsidiaries and ...

  • Page 32
    30 Nikon Annual Report 2009 Consolidated Statements of Income Nikon Corporation and Consolidated Subsidiaries Years ended March 31, 2009 and 2008 Thousands of U.S. Dollars (Note 1) 2009 Millions of Yen 2009 2008 Net sales Cost of sales Gross profit Selling, general and administrative expenses (...

  • Page 33
    Nikon Annual Report 2009 31 Consolidated Statements of Changes in Equity Nikon Corporation and Consolidated Subsidiaries Years ended March 31, 2009 and 2008 Thousands Outstanding Number of Shares of Common Stock Millions of Yen Unrealized Deferred Gain on Foreign Loss on Available- Derivatives ...

  • Page 34
    32 Nikon Annual Report 2009 Consolidated Statements of Cash Flows Nikon Corporation and Consolidated Subsidiaries Years ended March 31, 2009 and 2008 Thousands of U.S. Dollars (Note 1) 2009 Millions of Yen 2009 2008 Operating activities: Income before income taxes Adjustments for: Income taxes-...

  • Page 35
    ... expensing capitalized development costs of R&D; 4) cancellation of the fair value model of accounting for property, plant, and equipment and investment properties and incorporation of the cost model of accounting; 5) recording the prior years' effects of changes in accounting policies in the income...

  • Page 36
    ...-line method, using rates based on the estimated useful lives of the assets. The range of useful lives is principally from 30 to 40 years for buildings and from 5 to 10 years for machinery. The useful lives for lease assets are the terms of the respective leases. (h) Long-lived Assets The Group...

  • Page 37
    ... hedge foreign exchange risk and interest rate exposures. The Group does not hold or issue derivatives for trading or speculative purposes. Derivative financial instruments and foreign currency transactions are classified and accounted for as follows: (a) all derivatives are recognized principally...

  • Page 38
    36 Nikon Annual Report 2009 (s) Per Share Information Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period, retroactively adjusted for stock splits. Diluted net income per share re...

  • Page 39
    ... loss on the contract should be immediately recognized by providing for loss on construction contracts. This standard is applicable to construction contracts and software development contracts and effective for fiscal years beginning on or after April 1, 2009 with early adoption permitted for...

  • Page 40
    ...,761 286,175 $2,699,936 5. LONG-LIVED ASSETS The Group reviewed its long-lived assets for impairment as of March 31, 2009 and recognized an impairment loss of ¥721 million ($7,337 thousand) as other expense for land, building, machinery and equipment in Japan, Asia and Europe. This is because the...

  • Page 41
    Nikon Annual Report 2009 39 Long-term debt at March 31, 2009 and 2008 consisted of the following: Millions of Yen 2009 2008 Thousands of U.S. Dollars 2009 Loans, principally from banks and insurance companies: 2009: 0.9400% -4.3600% due 2010-2016 2008: 0.7400% -4.3600% due 2008-2013 Obligations ...

  • Page 42
    ... fiscal years ended March 31, 2009 and 2008 were as follows: Millions of Yen 2009 2008 Thousands of U.S. Dollars 2009 Service cost Interest cost Expected return on plan assets Recognized actuarial loss Amortization of prior service cost Net periodic retirement benefit costs ¥3,569 2,940 (2,400...

  • Page 43
    ... the shareholders meeting. For companies that meet certain criteria such as; (1) having the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by...

  • Page 44
    ... assumptions used to measure the fair value of 2008 Stock Options which were granted on November 25, 2008. Estimate method: Black-Scholes option pricing model Volatility of stock price: 43.022% Estimate remaining outstanding period: fifteen years Estimate dividend: ¥25.00 per share Interest rate...

  • Page 45
    ...is as follows: Year ended March 31, 2009 2008 Normal statutory tax rate Tax credit for research and development costs Tax difference of consolidated subsidiaries Dividends from foreign subsidiaries not applicable to foreign tax credits Increase in valuation allowance Tax effect on retained earnings...

  • Page 46
    44 Nikon Annual Report 2009 12. RESEARCH AND DEVELOPMENT COST Research and development costs incurred were ¥61,489 million ($625,971 thousand) and ¥58,373 million for the fiscal years ended March 31, 2009 and 2008, respectively. 13. LEASES The Group leases mainly certain machinery and equipment...

  • Page 47
    ... rate swap contracts to hedge foreign exchange risk and interest rate exposures. The Group does not hold or issue derivatives for trading purposes. Derivatives are subject to market risk and credit risk. Market risk is the exposure created by potential ï¬,uctuations in market conditions, including...

  • Page 48
    ... of Nikon's Precision Equipment Company Nikon Corporation will implement global business locations reorganization and structural reform to enhance profit and competitiveness of their Precision Equipment Company. Nikon has been implementing, from the beginning of the last year, various measures such...

  • Page 49
    ... companies, it will be possible not only to significantly strengthen the product lineup of the Nikon Group, but also strengthen the customer base. In addition, the sales channels of Metris, covering markets around the world, with special strengths in the European and North American markets, will...

  • Page 50
    ... Nikon can purchase 100% of the shares of Metris through the public Tender Offer. Date of the Announcement of the Tender Offer: June 3, 2009 Existence of an Agreement with the Company to Be Acquired Related to the Tender Offer: Yes, a support agreement exists. Bart Van Coppenolle, Chief Executive...

  • Page 51
    Nikon Annual Report 2009 49 19. SEGMENT INFORMATION Information about industry segments, geographic segments and sales to foreign customers of the Group for the fiscal years ended March 31, 2009 and 2008, was as follows: (a) Industry Segments Millions of Yen Precision Equipment Imaging Products ...

  • Page 52
    ...) (605,214) (600,628) ¥ (4,586) ¥ 79,211 (Eliminations) or Corporate 955,792 820,623 ¥135,169 ¥820,622 Thousands of U.S. Dollars Japan North America Europe Asia/Oceania Total Consolidated For the year ended March 31, 2009 Net sales Outside customers $2,645,258 $2,773,665 $2,230,675 $1,306,109...

  • Page 53
    ...24.1% 21.9 25.5 1.4 72.9% $2,660,783 2,127,228 2,362,152 139,237 $7,289,400 $8,955,707 North America ...U.S.A., Canada Europe ...The Netherlands, Germany, United Kingdom, etc. Asia/Oceania ...China, South Korea, Taiwan, Singapore, Australia, etc. Other Area ...Middle & South America, Africa, etc.

  • Page 54
    52 Nikon Annual Report 2009 Independent Auditors' Report

  • Page 55
    ... Department Business 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...

  • Page 56
    ... sales and servicing of ophthalmic lenses Development, manufacture, sales and servicing of surveying instruments Development and support of computer software Employee welfare activities, procurement, logistics, and activities related to intellectual property Processing, assembly and packing of parts...

  • Page 57
    ... & General Manager of Optical Research Laboratory of Research & Development Headquarters, Core Technology Center Toshiyuki Masai Director, Member of the Board Yoshimichi Kawai Executive Officer President of Business Administration Center, in charge of Corporate Communications & IR Department, in...

  • Page 58
    ... Year ended March 31, 2009 For further information or additional copies of this annual report, please contact the Corporate Communications & IR Department. Homepage: Nikon has created a Web site speci fically for investors containing released financial reports, fact books and other information...

  • Page 59

  • Page 60
    ... Bldg., 2-3, Marunouchi 3-chome, Chiyoda-ku Tokyo 100-8331, Japan www.nikon.com This report is printed on Forest Stewardship Council (FSC)-certified paper using VOC (volatile organic compound)-free ink containing no volatile organic solvents. A waterless printing method has been employed that does...