Olympus 2007 Annual Report Download

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Annual Report 2007
focusing on a better future

Table of contents

  • Page 1
    Annual Report 2007 focusing on a better future

  • Page 2
    ... A N C E 23 of both health 24 and B O A R D O F D I R E C T O R S , C O R P O R AT E A U D I T O R S A N D E X E C U T I V E O F F I C E R S hapiness- to a higher FINANCIAL SECTION 25 INTELLECTUAL PROPERTY REPORT 55 quality of 57 life. I N V E S T O R I N F O R M AT I O N 59 P R I N C I PA...

  • Page 3
    ... tives to p revent glo bal war m in g. We will proce e d with a c tiv itie s to red uc e environme n tal im pact by im proving e fficie nc y in d a ily o versight thro ugh the use o f m o n ito ring data. Photograph: Shin Yamagishi; shot with the Olympus E-410, Zuiko Digital 14-54mm, F8.0, 1/200sec...

  • Page 4
    2 O LY M PU S 2007

  • Page 5
    ... e Wo r ld W ide Fund for Nature (WWF) Ja p a n, the environ m e n tal co n se r vation organiz ation. On its We b site, O ly mp us is so un din g th e alarm about global warm ing by fea turing high- reso lutio n digital photographs that show curre nt c o nd itio ns a round th e wo r ld. Olym pus...

  • Page 6
    ... c tion a nd trea tment o f can ce r an d othe r mi n u te l es ions. As e nd o sc op ic d ia gnostic too ls, Olym pus h as de ve lo p ed i ma g ing ...BRAV E CIRCLE" cam paign in J apan fo r th e er a dic a tio n of c olo rec ta l c a nc er, a c tive ly e n co ur agin g p eo p l e a t high- risk to re...

  • Page 7
    ... to double-digit sales growth in the Imaging Systems Business, the Medical Systems Business and the Life Science Business. Domestic and overseas sales of new digital cameras, new endoscopes and therapeutic products remained strong, and overseas sales of microscopes and diagnostic systems also...

  • Page 8
    Olympus has designed strategies f i t f o r t h e g l o b a l i z i n g e c o n o m y, harmonizing the pursuits of increasing corporate value and raising the quality of life. 6 O LY M PU S 2007

  • Page 9
    ... death in Europe, the United States and Japan, is one of the leading priorities of Olympus' Medical Systems Business. Leveraging its data-collecting abilities and development strengths as the leading provider of endoscopes, Olympus consistently devises new technologies ahead of competitors. We will...

  • Page 10
    ...will continue to build a stable earnings platfor m in the Medical Systems Business by emphasizing secure, safe and highly efficient medical procedures related to our entire product and ser vice lineup of gastroenterological endoscopes, surgical endoscopes and endotherapy products. L if e S cie n ce...

  • Page 11
    ...am reminding all employees within the Olympus Group that we must > ITX Corporation (ITX), a core unit of the Information & Communication Business and a part of Other Businesses, undertook reforms of its profit structure. The reform plan revolves around reviewing investments, concentrating resources...

  • Page 12
    ... interchangeablelens-type digital SLR camera in the world (as of March 5, 2007, based upon Olympus sur vey of interchangeable-lens-type digital SLR cameras) 4. IC RECORDER VoiceTrek V-61 IC recorder with 2GB of memor y, connects directly to personal computers Imaging Systems Business Sales...

  • Page 13
    Imaging Systems Business > The Imaging Systems Business is centered on digital cameras, optical components, voice recorders and film cameras. In fiscal 2007, ended March 31, 2007, sales in this business increased 15.6% year on year to ¥294,303 million (US$2,453 million) and operating income jumped...

  • Page 14
    ... NEW DISPOSABLE ELECTROSURGICAL KNIFE KD-611L An endotherapy product used for Endoscopic Submucosal Dissection (ESD*). *An endoscopic procedure for dissection or exfoliation of the tissue in the submucosa for treatment of lesions. Medical Systems Business Sales (M i l l i o n s o f y e n ) 311,709...

  • Page 15
    ... by highly rated slim upper gastrointestinal videoscopes, which can be inserted either through the nasal tract or the mouth for reduced patient discomfort. In North America and Europe, Olympus recorded strong sales of EVIS EXERA II high-resolution HDTV videoscope systems featuring imaging using...

  • Page 16
    ... system was developed by leveraging automation technologies and know-how acquired through experience with chemistr y analyzers. LUMINO VIEW 200 Equipped with a range of optimal functions from luminescent viewing of cells, tissues and embr yos to obser vation of genes. Life Science Business Sales...

  • Page 17
    ... System and specialized reagents in Europe. Outlook for Fiscal 2008 > In fiscal 2008, Olympus expects growth in overseas markets to generate increases in sales and profits in the Life Science Business. In biological microscopes, Olympus will continue to focus on sales of high-value-added products...

  • Page 18
    ... of unprofitable shops engaged in sales of mobile handsets. In addition, contributions from the automotive aftermarket business in the network & technology field, as well as sale of investment securities, helped the Information & Communication Business to record operating income for fiscal...

  • Page 19
    ... of structural objects. Olympus' compact, lightweight ultrasonic/eddy current flaw detectors were very well accepted in the market, drawing increased demand for visual testing applications, an area that especially requires system mobility. Sales of phased array instruments also rose sharply, meeting...

  • Page 20
    ...image stabilizer unit employing the exclusive Supersonic Wave Drive (SWD) motor for E-510 (EVOLT E-510 in the Americas) digital SLR cameras equipped with the Live View function. Medical Systems Business 1. EVIS LUCERA SPECTRUM endoscopic video imaging system > Olympus launched the new EVIS LUCERA...

  • Page 21
    ... observation methods, these microscopes also offer ease-of-use. R&D Ex pe n diture (M i lli on s of ye n ) 55,531 47,720 45,935 20.5 17.7 R&D Expenditure by Segme n t (%) Basic Research Imaging Systems Business Others 7.4 17.8 36.6 Medical Systems Business Life Science Business 05 06 07 07...

  • Page 22
    ... such changes. In addition, Group earnings may be impacted in the event that the price for medical equipment declines as a result of policies placing caps on medical expenses. 3) In the Life Science Business, a high percentage of earnings are generated by supplying systems for research funded by the...

  • Page 23
    ...that meet customer needs in a timely manner. R I S K S R E L AT E D T O B U S I N E S S M E R G E R S AND ACQUISITIONS 1) Olympus has formed long-term, strategic partnerships related to technologies and product development with other leading companies in the industry. However, the Group's business...

  • Page 24
    ... facilities at operations across business sectors and regions, including Japan's recently opened Mishima Facility, the new Medical Device Manufacturing Center at KeyMed (Medical & Industrial Equipment) Ltd. in the United Kingdom, and new state-of-the-art headquarters at Olympus America Inc., which...

  • Page 25
    ..., Olympus has introduced an executive officer system that separates the Corporate Governance Structure Chart Appointment/ dismissal General Meeting of Shareholders Appointment/dismissal Appointment/dismissal Board of Auditors Audit Board of Directors Advice Auditors Audit Directors Super...

  • Page 26
    ... an d Ex ec u tive O f fic e r s (As of June 28, 2007) Board of Directors REPRESENTATIVE DIRECTOR/PRESIDENT Corporate Audito r s STANDING CORPORATE AUDITORS Tsuyoshi Kikukawa DIRECTOR Tadao Imai Katsuo Komatsu OUTSIDE CORPORATE AUDITORS Atsushi Yusa DIRECTORS/SENIOR EXECUTIVE MANAGING OFFICERS...

  • Page 27
    ... CO N S O L I DAT E D S TAT E M E N T S O F S H A R E H O L D E R S' E Q U I T Y 3 4 CO N S O L I DAT E D S TAT E M E N T S O F C A S H FLOWS 35 N OT ES TO T H E CO N S O L I DAT E D FI N A N C I A L S TAT E M E N T S 36 I N D E P E N D E N T AU D I TO R S' R E P O R T 5 4 O LY M P U S 2 0 0 7 25

  • Page 28
    ... digital recorders is becoming pronounced. In the Medical Systems Business, sales jumped 17.0% to ¥311,709 million (US$2,598 million). The new EVIS LUCERA SPECTRUM videoscope system, which utilizes specific light spectra technologies, contributed to sales domestically, while the EVIS EXERA II high...

  • Page 29
    ... in the Imaging Systems and Medical Systems Businesses. Net cash used in investing activities increased ¥14,726 million to ¥96,481 million (US$804 million), and mainly comprised deposits in time deposits and purchases of propert y, plant and equipment. Net cash provided by financing activities...

  • Page 30
    ... Shareholders' equity Sales by Geographic Area (%) Other areas 2.3 Sales by Business Segment (%) Others 6.0 Asia 10.8 27.7 39.1 Europe 26.2 Japan Information and Communication Business 25.2 Imaging Systems Business 21.6 North America Life Science Business 11.7 29.4 Medical Systems Business...

  • Page 31
    Millions of yen (except p er share amount s) 2005 2004 2003 2002 2001 2000 1999 1998 250,684 562,854 813,538 128.4 (11,827) (1.5) 47,720 46,127 29,758 (44....

  • Page 32
    C on s ol i date d B a l a n c e She et s Olympus Corporation and Consolidated Subsidiaries March 31, 2007 and 2006 Millions of yen 2007 2006 Thousands of U.S. dollars 2007 ASSETS CURRENT ASSETS: Cash and time deposits (Note 16 and 18) ...Securities (Note 3) ...Notes and accounts receivable (...

  • Page 33
    ... on available-for-sale securities, net of taxes ...Foreign currency translation adjustments ...Treasury stock, at cost ...Total shareholders' equity NET ASSETS: (Note 13) 48,332 73,049 153,864 16,422 873 (1,884) 290,656 ¥976,132 Common stock: Authorized-1,000,000,000 shares Issued-271,283...

  • Page 34
    ... companies carried on the equity method ...Gain on sales of investment securities in subsidiaries and affiliates ...Gain on sale of beneficial interest in trust ...Gain on sales of property, plant and equipment ...Impairment loss on fixed assets (Note 17) ...Provision for losses on business...

  • Page 35
    ...-sale hedging currency securities, derivatives, translation Minority net of taxes net of taxes adjustments interests Common stock Capital surplus Retained earnings Treasury stock, at cost Total shareholders' equity Total net assets Shareholders' equity at March 31, 2006 as previously reported...

  • Page 36
    Cons ol i date d S t a t em e n t s o f Share hold e rs' Eq uit y Olympus Corporation and Consolidated Subsidiaries For the years ended March 31, 2006 and 2005 Millions of yen 2006 2005 COMMON STOCK: Balance at beginning of year ...Issuance of common stock ...Balance at end of year ...CAPITAL ...

  • Page 37
    ... of goodwill ...Increase (decrease) in severance and retirement allowance ...Decrease (increase) in prepaid pension cost ...Increase (decrease) in provision for product warranties ...Interest income ...Interest expense ...Loss (gain) on marketable and investment securities, net ...Proceed from sale...

  • Page 38
    ... and practices generally accepted in Japan, from the accounts and records maintained by the Company and its consolidated subsidiaries and were filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Securities and Exchange Law. In preparing the accompanying...

  • Page 39
    ... funded pension plans. Employees of domestic consolidated subsidiaries, directors and corporate auditors of the Company and several domestic consolidated subsidiaries are covered primarily by unfunded retirement allowance plans. According to the approval at the Company's Annual Shareholders' Meeting...

  • Page 40
    ..." issued by Business Accounting Council on June 16, 1998, unrecognized pension assets are allowed to be recognized as assets and profits. In the year ended March 31, 2006, the Company adopted the partial amendment of "Corporate Accounting Standard No. 3 regarding Employee Retirement and Severance...

  • Page 41
    ... income tax effects. Minority interests are included in the net assets section at March 31, 2007. Under the previous presentation rules, companies were required to present minority interests between the non-current liabilities and the shareholders' equity sections. The adoption of the new accounting...

  • Page 42
    ... not stated at fair value as of March 31, 2007 and 2006: Available-for-sale securities Book value Millions of yen 2007 2006 Thousands of U.S. dollars 2007 Non-listed equity securities ...Non-listed foreign bonds ...Others ...Total ... ¥12,802 9,928 5,037 ¥27,767 ¥11,603 5,428 1,964 ¥18...

  • Page 43
    ...2007 Investment securities ...Other assets ...Total ... ¥21,815 1,054 ¥22,869 ¥25,084 961 ¥26,045 $181,791 8,784 $190,575 4 . B U S I N ES S I N C U B AT I O N S E C U R I T I ES A N D B U S I N ES S I N C U B AT I O N S E C U R I T I ES I N A FFI L I AT ES Business incubation securities and...

  • Page 44
    ...: Millions of yen Thousands of U.S. dollars 2006 2007 (Unsecured long-term debt) 3.60% yen bonds, due...bank, due March 2011...Other bonds ...Others from foreign banks ...Others from Japanese banks ...(Secured long-term debt) Others from foreign banks ...Others from Japanese banks ...Less-current...

  • Page 45
    ... obligation ...Unrecognized prior service costs ...Unrecognized actuarial difference ...Fair value of pension assets ...Prepaid pension expenses ...Allowance for employees' severance and retirement benefits ...Severance and retirement allowance for directors and corporate auditors ...Total severance...

  • Page 46
    ... employees 6 directors of subsidiaries of ITX Corporation 29 directors 4 corporate auditors 372 employees 3 directors of subsidiaries 29 employees of subsidiaries 6 external coagents Class and number of shares of common stock for which new subscription rights were offered ...Date of rights granted...

  • Page 47
    ...applicable to events and transactions occurring after April 30, 2006 and for fiscal years ending after that date. Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, a company may, by a resolution of its board of directors...

  • Page 48
    ... June 29, 2007 Resolution Class of shares Amount of dividend paid (Thousands of U.S. dollars) Dividend per share (U.S. dollars) Record Date Effective date General Shareholders' Meeting (June 29, 2006)...Board of Directors (November 7, 2006) ... Common Stock Common Stock $32,675 $24,783 $0.12...

  • Page 49
    ... U.S. dollars Assets used for Life Science Business Assets used for Information and Communication Business Assets used for others business Idle properties Total (For the year ended March 31, 2006) Use Goodwill Goodwill Building Goodwill Machinery and Equipment Land Building Munster, Germany Tokyo...

  • Page 50
    ... when NDT Engineering Corporation and other companies were consolidated for the year ended March 31, 2006 were as follows: Millions of yen Notes and accounts receivable ...Inventories ...Property, plant and equipment ...Investments and other assets ...Notes and accounts payable ...Short-term...

  • Page 51
    20. I N F O R M AT I O N F O R C E R TA I N L E A S E T R A N S AC T I O N S LESSEE: The Company and its consolidated subsidiaries lease certain machinery and equipment under the non-cancelable finance and operating leases. Finance leases that do not transfer ownership to lessees are not capitalized...

  • Page 52
    ... Imaging Systems Business Medical Systems Business Life Science Business Information and Communication Business Elimination and Corporate Consolidated Total Others Total Net sales: Unaffiliated customers ...Intersegment ...Total ...Operating expenses ...Operating income ...Assets ...Depreciation...

  • Page 53
    ... Systems Business," "Life Science Business," "Information and Communication Business," and "Others." 3. In fiscal 2007, these five business segments include the following products: Imaging Systems Business: Digital cameras, Film cameras, Voice Recorders Medical Systems Business: Medical endoscopes...

  • Page 54
    ... the following products: Imaging Systems Business: Digital cameras, Film cameras, Voice Recorders Medical Systems Business: Medical endoscopes, Surgical endoscopes, Endo-therapy devices, Ultrasound endoscopes Life Science Business: Diagnostic systems, Biological microscopes, Analytical services of...

  • Page 55
    ...: Segmentation is determined by geographical adjacency. North America includes the United States and Canada. Europe includes Germany, the United Kingdom, France and other countries. Asia includes Singapore, Hong Kong, China, South Korea, Australia and other countries. Other areas include Central and...

  • Page 56
    Inde pe n de n t A u d it o r s ' R ep o r t TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF OLYMPUS CORPORATION We have audited the accompanying consolidated balance sheets of Olympus Corporation and consolidated subsidiaries as of March 31, 2007 and 2006, the related consolidated statements of ...

  • Page 57
    ... regenerative medicine. By effectively channeling R&D resources to sharpen its competitive edge, Olympus continues to create new levels of value for its businesses of Imaging Systems, Medical Systems, Life Science and Industrial related. In the fiscal year under review, R&D expenditure amounted to...

  • Page 58
    ... chart below Olympus holds patents that offer business potential in each of its businesses of Imaging Systems, Medical Systems, Life Science and Industrial related. The Company's core Imaging Systems and Medical Systems businesses account for 66% of all patents held. The number and ratio of Olympus...

  • Page 59
    ...18, D-20097 Hamburg, Germany Tel: +49-40-23773-0 http://www.olympus-europa.com/ Shirakawa Olympus Co., Ltd. (Fukushima) Manufacture of optical equipment and medical equipment Mishima Olympus Co., Ltd. (Shizuoka) Manufacture of medical equipment KeyMed House, Stock Road, Southend-on-Sea, Essex SS2...

  • Page 60
    ... Winter & Ibe GmbH (Hamburg, Germany) Manufacture, import and sale of medical equipment Olympus Optical Technology Philippines, Inc. (Cebu, Philippines) Manufacture of optical equipment Olympus KeyMed Group Limited (London, U.K.) Holding company that manages investments and investment returns...

  • Page 61
    ...)* Percentage of shares outstanding (%) Nippon Life Insurance Company ...State Street Bank and Trust Company (Standing proxy: Mizuho Corporate Bank, Ltd.'s Kabutocho Custody & Proxy Department within the Settlement & Clearing Services Division) ...The Master Trust Bank of Japan, Ltd. (trust...

  • Page 62
    AN-0807D Printed in Japan This annual report is printed on recycled paper and FSC- approved paper using soy ink.