Pioneer 2007 Annual Report Download - page 50

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PIONEER CORPORATION49
10. Impairment losses of long-lived assets:
The Company recognized impairment losses of long-lived
assets in accordance with the provisions of SFAS No. 144
during the years ended March 31, 2005, 2006 and 2007.
Impairment losses are included in other deductions of cost and
expenses in the consolidated statements of operations (See
Note 18). See Note 17, “Restructuring plans” for the impair-
ment losses of long-lived assets recognized in connection with
the restructuring plans.
The Company recognized impairment losses of long-lived
assets in the aggregate of ¥4,460 million for the year ended
March 31, 2005.
For the year ended March 31, 2005, the Company reviewed
PPD’s production facilities for impairment because of the unfa-
vorable post-acquisition changes in market conditions for
plasma displays. As a result of the review, an impairment loss
of ¥3,396 million was recognized as the excess of the carrying
value of the asset group over the group’s estimated fair value.
Fair value was determined using the present value of estimated
cash flows.
The Company recognized impairment losses of long-lived
assets in the aggregate of ¥41,422 million for the year ended
March 31, 2006.
During the year ended March 31, 2006, the Company
reviewed the production facilities of plasma displays (PPD’s
production facilities and other) and DVD recorder-related
products for impairment because of significant decreases in
gross profit margins for these products due to a sharp decline
in market prices. As a result of the review, an impairment loss
of ¥31,915 million in plasma display and ¥8,950 million in
DVD recorder-related products were recognized as the excess
of the carrying value of the asset group over the group’s
estimated fair value. Fair value was determined using the
present value of estimated cash flows.
The Company additionally recognized impairment losses of
long-lived assets in the aggregate of ¥22,711 million
($192,466 thousand) for the year ended March 31, 2007.
The projected estimate of gross profit margins for plasma
displays and DVD recorder-related products for future years
were revised downward in comparison to the Company’s
previous projections made in March 2006, mainly reflecting
more intense competition and lower prices in the markets.
The Company reviewed the production facilities of plasma
displays (PPD’s production facilities and other) and DVD-related
products for impairment. As a result of the review, an impair-
ment loss of ¥20,412 million ($172,983 thousand) in plasma
display and ¥2,296 million ($19,458 thousand) in DVD-related
products were recognized as the excess of the carrying value
of the asset group over the group’s estimated fair value. Fair
value was determined using the present value of estimated
cash flows.
11. Short-term borrowings and long-term debt:
Short-term borrowings at March 31, 2006 and 2007 are comprised of the following:
Thousands of
Millions of Yen U.S. Dollars
2006 2007 2007
Bank loans:
Weighted-average interest rate of 1.62% at March 31, 2006
and 1.91% at March 31, 2007:
Collateralized – ¥ 2,391 $ 20,263
Uncollateralized ¥23,205 9,637 81,669
Total ¥23,205 ¥12,028 $101,932