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Annual Repo rt 2005

Table of contents

  • Page 1
    A n n u a l Re p o r t 2 0 0 5

  • Page 2
    ... O RPO RA TE A U D ITO RS A N D EXEC U TIV E O FFIC ERS FIN A N C IA L S EC TIO N 25 IN TELLEC TU A L PRO PERTY REPO RT 5 1 PRIN C IPA L BU S IN ES S BA S ES / IN V ES TO R IN FO RM A TIO N C O N S O LID A TED S U BS ID IA RIES 53 55 me d ic a l sy ste m s b u si n e ss > Sinc e 1919, OL YM...

  • Page 3
    ... nt C e nte r, the fa ir sho w c a se d a d va nc e d O lymp us te c hno lo g ie s, inc lud ing p ro d uc ts, so ftw a re , a nd ma nufa c turing me tho d s ma d e p o ssib le w ith " O p to -Dig ita l Te c hno lo g y" in the fie ld s o f ima g ing syste ms, me d ic a l syste ms, life sc...

  • Page 4
    ...ing 4 / 3 -typ e 8 -me g a p ixe l C C Ds, hig h-p e rfo rma nc e ima g e p ro c e ssing e ng ine s, a nd d ust re d uc tio n. The se fe a ture s a re e mp o w e re d b y the O lymp us E-syste m' s inte rc ha ng e a b le le nse s d e sig ne d e sp e c ia lly fo r d ig ita l c a me ra s. Pho to g ra...

  • Page 5
    O LYM PUS 2 0 0 5 3

  • Page 6
    ... hno lo g ie s suc h a s the " W ire le ss p o w e r sup p ly syste m" tha t sup p lie s mo tive p o w e r to c a p sule e nd o sc o p e s fro m o utsid e the b o d y, a s w e ll a s the " C a p sule g uid a nc e syste m" tha t c o ntro ls the p o sitio n o f c a p sule e nd o sc o p e s w ithin the...

  • Page 7
    ...iscuss the d ig ita l ca mera b usiness a nd the issues rela ting to its d ecline in p rofits, a nd how w e p la n to reb uild o ur ea rning s fo und a tio n. M illio ns o f y e n 2005 2004 2003 Tho usa nd s o f U. S. d o lla rs 2005 N e t sa le s ...N e t inc o me (lo ss)...Ea rning s p e r sha re...

  • Page 8
    ... ra s to re p la c e the ir o ld e r mo d e ls tha n use rs b uying d ig ita l c a me ra s fo r the first time . The fa c t tha t O lymp us w a s una b le to c re a te c o mp e lling p ro d uc ts in re sp o nse to this c ha ng e ha d a se ve re imp a c t o n p ro fits in fisc a l 2 0 0 5 . A ltho ug...

  • Page 9
    ... ine d g ro w th in sa le s a nd p ro fits d uring fisc a l 2 0 0 5 a mid p re ssure s to sla sh me d ic a l e xp e nse s a c ro ss the me d ic a l ind ustry. Fro m its o ve rw he lming c o mp e titive a d va nta g e in g a stro e nte ro lo g ic a l e nd o sc o p e s, O lymp us b e lie ve s the re...

  • Page 10
    ...suc h a s in lo o king fo r ne w mo d e ls fo r the M e d ic a l Syste ms Busine ss. By re info rc ing o ur p a rtne rship , O lymp us e xp e c ts to find me a ning ful syne rg ie s b e tw e e n O lymp us' b ra nd re c o g nitio n a nd te c hno lo g ic a l c a p a b ilitie s a nd ITX C o rp o ra tio...

  • Page 11
    ...2 0 a nd the w o rld ' s first c o mme rc ia l g a stro c a me ra in 1 9 5 0... rts to c o ntrib ute to so c ie ty. Pa rtic ipa tio n in the G lo b a l C... rse e c ro ss-se c tio na ...ke ho ld e rs, inc lud ing sha re ho ld e rs, c usto me rs, sup p lie rs, a nd e mp lo ye e s, w e a re d riving fo rw a rd...

  • Page 12
    ... ty, sha ring c o mmo n va lue s, a nd p ro p o sing ne w o ne s thro ug h o ur b usine ss. O lymp us b e lie ve s tha t a w in-w in re la tio nship b e tw e e n O lymp us a nd its sta ke ho ld e rs, inc lud ing sha re ho ld e rs, c usto me rs, use rs, e mp lo ye e s, b usine ss p a rtne rs, so c ie...

  • Page 13
    ... s thre e re la tio nship s b e tw e e n O lymp us a nd so c ie ty. The se thre e " IN " re la tio nship s a re IN vo lve me nt (so c ia l invo lve me nt), IN sig ht (sha ring so c ia l va lue s), a nd IN sp ira tio n (c re a ting ne w va lue ). A p p lying this c o nc e p t to...

  • Page 14
    ... O lymp us Huma n Rig hts a nd L a b o ur Po lic y w a s c re a te d in M a rc h 2 0 0 5 to se nd a stro ng me ssa g e o f re sp e c t fo r huma n rig hts to a ll e mp lo ye e s in the G ro up . M a i n C SR A cti vi ti es Q ua li ty A ssura nce a nd C usto mer Sup p o rt > O lymp us ha s d e fine...

  • Page 15
    ..., a nd na tura l sc ie nc e . M o re o ve r, e a c h a nd e ve ry o ne o f o ur e mp lo ye e s ma ke s a n e ffo rt to p a rtic ip a te in vo lunta ry a c tivitie s o f the ir c ho ic e . sue p ro fits, Ke yM e d ha s p ro vid e d sup p o rt fo r lo c a l sc ho o l e d uc a tio n, tra nsp o rta tio...

  • Page 16
    REVIEW O F O PERA TIO N S > The Ima g ing Syste ms Busine ss ha nd le s d ig ita l c a me ra s, film c a me ra s, a nd vo ic e re c o rd e rs. O n O c to b e r 1 , 2 0 0 4 , the Ima g ing Syste ms Busine ss w a s sp lit o ff into O lymp us Ima g ing C o rp . , a w ho lly o w ne d sub sid ia ry o f ...

  • Page 17
    ...so lutio n a nd func tio na lity tha n the -mini DIG ITA L, w hile re ta ining its w a te r-re sista nt d e sig n. V-2 0 DIG ITA L STEREO REC O RDER The Vo ic e -Tre k V-2 0 IC re c o rd e r c a n b e d ire c tly c o nne c te d to a PC via USB a nd c a n a lso sto re d o c ume nts a nd ima g e file...

  • Page 18
    ... sult o f sig nific a nt g ro w th in Euro p e a nd A sia . O ve ra ll sa le s o f the M e d ic a l Syste ms Busine ss inc re a se d 6 . 3 % to ¥ 2... . 4 mm a nd a d va nc e d a ng ula tio n func tio ns in the tip , it he lp s imp ro ve the sa fe ty a nd e ffic ie nc y o f surg ic a l o p e ra tio ns...

  • Page 19
    ... o p ic vid e o sc o p e s, w hic h ha ve ha d le a d a nd he xa va le nt c hro mium re mo ve d fro m in-ho use p ro d uc tio n p ro c e sse s, a s e nviro nme nta lly frie nd ly O lymp us Ec o -Pro d uc ts tha t c o nta in no ha rmful sub sta nc e s. M i ni ma lly Inva si...

  • Page 20
    ...d va nc e d o p tic a l te c hno lo g y, a s a p a rt o f the so lutio n to p e rso na liz e d me d ic ine tha t is e xp e c te d to b e the ne xt g e ne ra tio n o f he a lth c a re . PO W ER BX PLUS SERIES O F UPRIG HT M IC RO SC O PES Using Ec o -G la ss, the Po w e r BX Plus Se rie s o f up rig...

  • Page 21
    ...c hno lo g ic a l a sp e c ts b e tw e e n p ro d uc ts, w e d e c id e d to tra nsfe r ind ustria l mic ro sc o p e s, w hic h ha d b e e n a p a rt o f the Ind ustria l Syste ms Busine ss, to the L ife Sc ie nc e Busine ss in the fisc a l ye a r e nd ing M a rc h 3 1 , 2 0 0 6 . W e a im to inc re...

  • Page 22
    ...sup p o rte d b y g ro w th in the d ig ita l c o nsume r e le c tro nic s ma rke t le d b y fla t-p a ne l TVs, a s w e ll a s ro b ust c a p ita...n). Ind ustri a l M i c ro sc o p es > Sa le s o f ind ustria l mic ro sc...ng e s to w a rd furthe r minia turiz a tio... SC O PE SYSTEM Fe a turing imp ro ve...

  • Page 23
    ... no w a iting time s fo r multip le -p a g e p rinting , ma king it e a sie r to c re a te visua lly imp re ssive c o lo r d o c ume nts. M X6 1 L FPD IN SPEC TIO N M IC RO SC O PE C O M PA TIBLE W ITH 3 0 0 M M W A FERS Co mpatible with 3 0 0 mm w a fe rs, the M X6 1 L FPD insp e c tio n mic ro sc...

  • Page 24
    ... In o the r b usine ss ve nture s in the me d ic a l fie ld , the C o rp o ra te Re se a rc h a nd De ve lo p me nt C e nte r ha s a d va nc e d re se a rc h a nd d e ve lo p me nt to w a rd the c o mme rc ia liz a tio n o f b o ne tissue e ng ine e ring tha t c o mb ine s b o ne c e lls w ith ultra...

  • Page 25
    ...lue . In using this b e nc hma rk, w e a re a b le to id e ntify the true va lue o f a b usine ss b y ta king into c o nsid e ra tio n c a p ita l c o sts a nd o the r fa c to rs. O VA w ill a lso b e use d a s a re fe re nc e b e nc hma rk fo r the se le c tio n a nd c o nc e ntra tio n o f b usine...

  • Page 26
    BO A RD O F D IREC TO RS, C O RPO RA TE A U D ITO RS A N D EXEC U TIVE O FFIC ERS (A s o f June 2 9 , 2 0 0 5 ) Tsuyo shi Kikuka w a Pre sid e nt P RES ID EN T S EN IO R EX EC U TIV E M A N A G IN G O FFIC ER Tsuyo shi Kikuka w a * D IREC TO RS M a sa a ki Te ra d a ** EX EC U TIV E M A N A G ...

  • Page 27
    f i n a n c i a ls FIN A N C IA L REV IEW 26 TEN -YEA R S UM M A RY 2 8 C O N S O LID A TED BA LA N C E S H EETS 30 32 33 C O N S O LID A TED S TA TEM EN TS O F O PERA TIO N S C O N S O ...

  • Page 28
    ...o ntinue d to fa c e furthe r p ric e d e c line s a nd se ve re c o mp e titio n a s c o mp e tito rs a g g re ssive ly la unc he d ne w mo d e ls. M o re o ve r, hig he r sa le s fro m ro b ust d e ma nd in Euro p e a n a nd A sia n ma rke ts w e re una b le to c o mp e nsa te fo r d e c line s in...

  • Page 29
    ...US$ 2 , 7 5 6 millio n), o w ing to c o nso lid a te d Resea rc h & Develo p ment Exp end i tures > The O lymp us G ro up ha s b e e n se e king ne w te c hno lo g ie s thro ug h re se a rc h a nd d e ve lo p me nt a c tivitie s to c re a te ne w b usine ss a re a s a nd to stre ng the n the c o re...

  • Page 30
    ... re a 3 .0 Sa le s b y Busine ss Se g me nt (% ) O the rs 1 . 7 A sia 1 1 .5 3 0 .8 Ind ustria l Sy ste ms Busine ss Ja p a n 6 .1 Life Sc ie nc e Busine ss 9 .7 3 4 .1 Euro p e 2 9 .9 2 4 .8 Info rma tio n a nd C o mmunic a tio n Busine ss N o rth A me ric a M e d ic a l Sy ste ms Busine...

  • Page 31
    M i lli o ns o f yen (exc ep t p er sha re a mo unts) 2003 2002 2001 2000 1999 1998 1997 1996 1 4 1 ,0 2 1 4 2 3 ,3 2 2 5 6 4 ,3 4 3 1 0 6 .8 2 4 ,3 4 8 4 .3 3 4 ,7 3 5 3 4 ,6 1 9 1 6 ,8 5 8 1 5 0 ,7 6 1 3 7 7 ,6 5 4 5 2 8 ,4 1 5 1 1 3 .2 1 0 ,2 7 9 1 .9 3 0 ,4 7 7 2 4 ,8 3 5 2 3 ,7 0 0 1 4 9 ,3 ...

  • Page 32
    ... 2005 Tho usa nd s o f U. S. d o lla rs 2004 2005 A S S ETS C URREN T A S S ETS : C a sh a nd time d e p o sits ...M a rke ta b le se c uritie s...N o te s a nd a c c o unts re c e iva b le ...A llo w a nc e fo r d o ub tful a c c o unts ...Inve nto rie s ...De fe rre d inc o me ta xe s ...O the...

  • Page 33
    ... Tho usa nd s o f U. S. d o lla rs 2004 2005 LIA BILITIES A N D S H A REH O LD ERS ' EQ UITY C URREN T LIA BILITIES : Sho rt-te rm b o rro w ing s...C urre nt ma turitie s o f lo ng -te rm d e b t...N o te s a nd a c c o unts p a ya b le ...A c c rue d e xp e nse s (N o te 9 ) ...Inc o me ta xe...

  • Page 34
    ... d Sub sid ia rie s Fo r the ye a rs e nd e d M a rc h 3 1 , 2 0 0 5 , 2 0 0 4 a nd 2 0 0 3 M i lli o ns o f yen 2005 Tho usa nd s o f U. S. d o lla rs 2003 2005 2004 N e t sa le s ...C o st o f sa le s...G ro ss p ro fit ...Se lling , g e ne ra l a nd a d ministra tive e xp e nse s ...O p e ra...

  • Page 35
    ...6 5 ,5 2 8 - $ 5 9 5 ,7 0 9 200 ¥ 6 5 ,5 5 0 ¥ 6 5 ,5 2 8 ¥ 6 5 ,5 2 8 $ 5 9 5 ,9 0 9 RETA IN ED EA RN IN G S : Ba la nc e a t b e g inning o f ye a r ...N e t inc o me (lo ss) ...C a sh d ivid e nd s p a id ...Bo nuse s fo r d ire c to rs...N e t lo ss o n d isp o sa l o f tre a sury...

  • Page 36
    ... M illio ns o f y e n 2005 Tho usa nd s o f U. S. d o lla rs 2004 2003 2005 C A S H FLO W S FRO M O PERA TIN G A C TIV ITIES : Inc o me b e fo re p ro visio n fo r inc o me ta xe s ...A d justme nts to re c o nc ile inc o me b e fo re p ro visio n fo r inc o me ta xe s to ne t c a sh p ro vid...

  • Page 37
    ...t fa ir ma rke t va lue , a nd tho se w ith no fa ir ma rke t va lue s a t mo ving -a ve ra g e c o st. Unre a liz e d g a ins a nd lo sse s o n the se se c uritie s a re re p o rte d , ne t o f a p p lic a b le inc o me ta xe s, a s a se p a ra te c o mp o ne nt o f the sha re ho ld e rs ' e q uity...

  • Page 38
    ...n o f Pro Fo rma Sta nd a rd Ta xa tio n Po rtio n o f Ente rp rise Ta x o n C o rp o ra tio n in Sta te me nts o f Inc o me " issue d b y the A c c o unting Sta nd a rd s Bo a rd o f Ja p a n, the e nte rp rise ta xe s le vie d in p ro p o rtio n to a d d e d va lue a nd c a p ita l, a mo unting to...

  • Page 39
    ... sk o f fluctua ti o ns i n red emp ti o n p ri ce ca used b y cha ng es i n the uti li za ti o n va lue o f rea l esta te. M a turitie s o f a va ila b le -fo r-sa le se c uritie s a re a s fo llo w s: M i lli o ns o f yen 2005 O ve r a y e a r b ut w ithin five y e a rs O ve r five y e a rs b ut...

  • Page 40
    ... 1 1 7 ,6 8 6 $ 1 ,3 8 1 ,3 3 6 5 . IN V EN TO RIES Inve nto rie s a s o f M a rc h 3 1 , 2 0 0 5 a nd 2 0 0 4 , c o nsiste d o f the fo llo w ing : M i lli o ns o f yen 2005 Tho usa nd s o f U. S. d o lla rs 2004 2005 Finishe d g o o d s ...W o rk in p ro c e ss a nd ra w ma te ria ls ...To ta...

  • Page 41
    ...ne ve r b e e n re q ue ste d to sub mit suc h a d d itio na l se c urity. 7 . LO N G - TERM D EB T Lo ng -te rm d e b t a s o f M a rc h 3 1 , 2 0 0 5 a nd 2 0 0 4 , c o nsiste d o f the fo llo w ing : M i lli o ns o f yen (Unse c ure d lo ng -te rm d e b t) 2005 Tho usa nd s o f U. S. d o lla rs...

  • Page 42
    ...2005 Tho usa nd s o f U. S. d o lla rs 2004 2005 Pro je c te d b e ne fit o b lig a tio n ...Unre c o g niz e d p rio r se rvic e c o sts ...Unre c o g niz e d a c tua ria l d iffe re nc e ...Fa ir va lue o f p e nsio n a sse ts ...Unre c o g niz e d ne t tra nsitio n o b lig a tio n ...Pre p a id...

  • Page 43
    ....9 3 0 6 .5 % Sig nific a nt c o mp o ne nts o f d e fe rre d inc o me ta x a sse ts a nd lia b ilitie s a s o f M a rc h 3 1 , 2 0 0 5 a nd 2 0 0 4 w e re a s fo llo w s: M i lli o ns o f yen 2005 Tho usa nd s o f U. S. d o lla rs 2004 2005 De fe rre d inc o me ta x a sse ts: Inve nto rie s...De...

  • Page 44
    ... c o nso lid a te d sta te me nts o f c a sh flo w s a s o f M a rc h 3 1 , 2 0 0 5 a nd 2 0 0 4 w e re a s fo llo w s: M i lli o ns o f yen 2005 Tho usa nd s o f U. S. d o lla rs 2004 2005 C a sh a nd time d e p o sits ...Le ss: Time d e p o sits w ith ma turitie s o ve r thre e mo nths...C a sh...

  • Page 45
    ... d fina nc e le a se s fo r the ye a r e nd e d M a rc h 3 1 , 2 0 0 5 a nd 2 0 0 4 w a s a s fo llo w s: M i lli o ns o f yen 2005 Tho usa nd s o f U. S. d o lla rs 2004 2005 (Eq uiva le nt a mo unt) A c q uisitio n c o st ...A c c umula te d d e p re c ia tio n ...Estima te d ne t b o o k va lue...

  • Page 46
    ... ye a rs e nd e d M a rc h 3 1 , 2 0 0 5 a nd 2 0 0 4 , the a mo unts o f ma c hine ry a nd e q uip me nt w e re summa riz e d a s fo llo w s: Tho usa nd s o f U. S. d o lla rs 2004 2005 M i lli o ns o f yen 2005 A c q uisitio n c o st ...A c c umula te d d e p re c ia tio n...N e t b o o k va lue...

  • Page 47
    ...o ns o f yen Bo o k va lue Fa ir va lue Tho usa nd s o f U. S. d o lla rs N o tio na l a mo unt Bo o k va lue Fa ir va lue Fo re ig n e xc ha ng e fo rw a rd c o ntra c ts: To b uy U. S. d o lla rs ...To b uy o the r c urre nc ie s ...To se ll U. S. d o lla rs ...To se ll British Po und s ...To se...

  • Page 48
    ... usa nd s o f U. S. d o lla rs 2005 Ima g ing Sy ste ms Busine ss M e d ic a l Sy ste ms Busine ss Life Sc ie nc e Busine ss Info rma tio n a nd C o mmunic a tio n Busine ss Elimina tio n a nd C o rp o ra te O the rs To ta l C o nso lid a te d To ta l N e t sa le s: Una ffilia te d c usto me rs...

  • Page 49
    ...ES S S EG M EN T Se g me nt info rma tio n fo r the ye a rs e nd e d M a rc h 3 1 , 2 0 0 5 , 2 0 0 4 a nd 2 0 0 3 a re sho w n in the ta b le s b e lo w : M i lli o ns o f yen 2005 Ima g ing Sy ste ms Busine ss M e d ic a l Sy ste ms Busine ss Life Sc ie nc e Busine ss... Busi ness Li fe Sc i enc ...

  • Page 50
    ... center tha t ha d b een reg a rd ed una llo ca ta b le, a nd elementa l resea rch a nd d evelo p ment exp enses tha t ha d b een a llo ca ted to ea ch seg ment, tra d ed a mo unts o f these exp enses a re reco g ni zed a s o p era ti ng exp enses i n ea ch seg ment si nce the a mo unts o f co nsi...

  • Page 51
    ..., H o ng Ko ng , C hi na , A ustra li a a nd o ther co untri es. ( c ) O V ERS EA S S A LES IN FO RM A TIO N Tho usa nd s o f U. S. d o lla rs 2003 2005 M i lli o ns o f yen 2005 2004 Exp o rt sa le s (A ) ...to N o rth A me ric a ...to Euro p e ...to A sia ...to O the r a re a s ...N e t sa le...

  • Page 52
    ... o nso lid a te d re sults o f the ir o p e ra tio ns a nd the ir c a sh flo w s fo r e a c h o f the thre e ye a rs in the p e rio d e nd e d M a rc h 3 1 , 2 0 0 5 , in c o nfo rmity w ith a c c o unting p rinc ip le s g e ne ra lly a c c e p te d in Ja p a n. W itho ut q ua lifying o ur o p inio...

  • Page 53
    ...lo g y a s fund a me nta l te c hno lo g ie s c o mmo n to the e ntire C o mp a ny. By c ha nne ling re se a rc h a nd d e ve lo p me nt re so urc e s to b uild up a c o mp e titive e d g e , the C o mp a ny c o ntinue s to c re a te ne w le ve ls o f va lue fo r its ima g ing , me d ic a l, life sc...

  • Page 54
    ... . ITX C o rp o ra tio n is c urre ntly e ng a g e d in d e ve lo p ing ne w b usine sse s in the ne tw o rk, te c hno lo g y, a nd mo b ile se c to rs. C o ntri b uti o n o f Pa tent Po rtfo li o to C o mp a ny Busi ness > O lymp us a c tive ly p ursue s a p o lic y o f c o nve rting re se a rc...

  • Page 55
    ...Ke yM e d Ho use , Sto c k Ro a d , So uthe nd -o n-Se a , Esse x SS2 5 Q H, U. K. Te l: (1 7 0 2 ) 6 1 6 3 3 3 http : / / w w w. ke yme d . c o . uk/ Further informa tion is a va... . , Ltd . (To kyo ) Lea si ng o f med i ca l eq ui p ment O lymp us M e d ic a l Eng ine e ring C o . , Ltd . (To kyo )...

  • Page 56
    O V ERS EA S O lymp us USA Inc o rp o ra te d (N ew Yo rk, U. S. A . ) H o ld i ng co mp a ny tha t p ro vi d es fi na nci a l sup p o rt a nd co mp rehensi ve b usi ness p la nni ng fo r a ffi li a ted co mp a ni es i n the Uni ted Sta tes O lymp us A sia n Pa c ific Limite d (H o ng Ko ng...

  • Page 57
    ... r o f sha re s he ld (tho usa nd s)* Pe rc e nta g e o f to ta l sha res o utsta nd ing (%) Ja p a ne se fina nc ia l institutio ns ...Ja p a ne se se c uritie s c o mp a nie s ...O the r Ja p a ne se c o rp o ra tio ns ...Ja p a ne se ind ivid ua ls a nd o the rs ...Fo re ig n institutio ns a nd...

  • Page 58
    A N -0 8 0 5 D Pri nted i n Ja p a n o n rec yc led p a p er