Pioneer 2010 Annual Report Download

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All in the Name of Growth
Annual Report 2010
For the Year Ended March 31, 2010

Table of contents

  • Page 1
    All in the Name of Growth Annual Report 2010 For the Year Ended March 31, 2010

  • Page 2
    ...roadmap for achieving its vision, Pioneer has formulated a mediumterm plan running through fiscal 2013, the year ending March 31, 2013. 2010 2011 2012 2013 2014 2015 Vision Medium-Term Plan Growth Strategy Where we are today Where we want to be Group Philosophy Move the Heart and Touch the...

  • Page 3
    ... and optical discs. Annual Report 2010 11 Growth Strategies for Others Segment We seek to develop new businesses leveraging Pioneer's strengths and generate earnings from them as early as possible. 12 14 16 18 R&D and Intellectual Properties Review of Operations Corporate Governance Management...

  • Page 4
    ... of investment securities and in income taxes, although restructuring costs of ¥21.9 billion were recorded. Financial Highlights Pioneer Corporation and Subsidiaries Years ended March 31 In millions of yen and thousands of U.S. dollars, except per share information Yen 2009 2010 U.S. Dollars 2010...

  • Page 5
    ... of volume-driven growth centered on Blu-ray Discrelated products through a joint venture with Sharp Corporation. In the Car Electronics business, Pioneer will launch price-competitive products aiming at the largest volume zone in the market through a fundamental review of the cost structure for its...

  • Page 6
    ...; company, employees and corporate culture; products and value propositions; relationships with society and business partners; and our presence on the street, in the car and at home. Feature: Growth Strategy 04 PIONEER CORPORATION Annual Report 2010 From Restructuring to a Medium- and Long-term...

  • Page 7
    ... strategic alliances 3 Expand businesses in newly emerging markets Establish new business models in car electronics: 4 providing new value based on "hardware/software + information services" 5 Develop new businesses Medium-term Plan Net sales 800 05 (Billions of yen) PIONEER CORPORATION Income...

  • Page 8
    ... centered on its Car Electronics business and Home Electronics business in South and Central America, Asia, Africa and the Middle East. In the Car Electronics consumer-market businesses, Pioneer will work to expand sales by rolling out products that provide pricing and functionality that fit...

  • Page 9
    ...systems with communications functions. Through this business model, we envision expanding business in market segments that have not used car navigation systems, such as compact cars. The smartphone market has a very large growth potential and offers numerous possibilities for developing applications...

  • Page 10
    ...2012 2013 -10 â- Net sales (left scale) â- Operating income (loss) (right scale) Car Electronics Growth Strategy 08 PIONEER CORPORATION Annual Report 2010 Launching Competitive Products in the Largest Volume Zone in the Market In the consumer-market business, Pioneer will work to expand sales...

  • Page 11
    ... to vehicle data that has been sent from car navigation systems with communications functions to servers for 09 PIONEER CORPORATION Annual Report 2010 Leveraging Pioneer's Technological Advantages in the Smartphone Era Information Services Provided by Pioneer Quick charging station Waiting time...

  • Page 12
    ... an optical disc joint venture with Sharp Corporation. The joint venture has undertaken the development, design, production and sales of mainly Blu-ray Disc drives, recorders and players in the fast-growing Blu-ray Disc market, and has reduced development costs by effectively utilizing business...

  • Page 13
    ... Creative Lighting Design Inc.) the technology was put on the market as a Pioneer car audio speaker model, and has proven popular in the marketplace. Leveraging these features, Pioneer plans to use these speakers to develop a broad range of products, including built-in home audio systems and home...

  • Page 14
    ... SIM-Drive Corporation* as a venture to promote electric vehicles. Pioneer is a sponsor of a SIM-Drive initiated program called the "Advanced Electric Vehicle Prototype Development Business No.1." Through this program, Pioneer plans to promote R&D on optimal car electronics systems and services for...

  • Page 15
    ... Support Business Pioneer owns a large number of patents in such fields as navigation systems, optical discs, and audio systems, and continuously endeavors to develop and file new patents. Pioneer is also focusing on intellectual property activities overseas. The Company's global application rate...

  • Page 16
    ...14 PIONEER CORPORATION Annual Report 2010 benefits from restructuring, despite decreased sales. Home Electronics Home Electronics sales decreased 36.3% year on year to ¥133.3 billion (US$1,433.6 million), mainly due to lower sales of plasma displays and DVD drives, despite higher sales of Blu-ray...

  • Page 17
    ...80 Main Products and Services Factory Automation Systems Electronics Devices and Parts Telephones â- â- â- Speaker Units â- Organic Light-Emitting Diode Displays Business-use AV Systems AV Accessories Licensing of Patents Related to Laser Optical Disc Technologies Net Sales Operating...

  • Page 18
    ...35 meetings and deliberated approximately 150 issues, functioning effectively as part of the management decision-making process in support of the Board of Directors. 16 PIONEER CORPORATION Annual Report 2010 as a supervisory body. The representative directors are responsible for business execution...

  • Page 19
    ... for Authority of Group Companies," which governs decision making on important matters for each Group company. 17 PIONEER CORPORATION Annual Report 2010 Corporate Governance Structure (As of June 25, 2010) General Meeting of Shareholders ฀ ฀ Board of Corporate Auditors Board of Directors...

  • Page 20
    ... of Research & Development Division, and in charge of Intellectual Property Division, Floating Vision Business Department, and Network Media Platform Business Department Tatsuo Takeuchi Managing Director General Manager of International Business Division 18 PIONEER CORPORATION Annual Report 2010...

  • Page 21
    ... is offered as a token of gratitude to organizations and other groups that have made lasting contributions to society. Pioneer Technology (Malaysia) received the award for the second time in recognition Annual Report 2010 Tree-planting activities in mangrove forests 19 PIONEER CORPORATION of...

  • Page 22
    Financial Section 20 PIONEER CORPORATION Annual Report 2010 Contents 21 22 24 26 27 28 29 51 Five-Year Summary of Operations Financial Review Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to...

  • Page 23
    ... the number of treasury shares from the number of issued shares. 5. In fiscal 2006, Pioneer sold a subsidiary engaged in the development of cable TV software and, in fiscal 2007, sold subsidiaries involved in the electronics devices and parts business. For these, Pioneer applied Financial Accounting...

  • Page 24
    ... products as an optical disc joint venture commenced operations. In terms of geographic sales, sales in Japan increased 29.3% to ¥40,096 million, while overseas sales declined 47.7% to ¥93,233 million. 22 PIONEER CORPORATION Annual Report 2010 not be so compared. Financial Position Total assets...

  • Page 25
    ...sales of factory automation systems and speaker units for cellular phones. This was despite increased royalty revenue from patents related to optical disc technologies, as well as higher sales of electronics devices and parts, and business-use AV systems. In terms of geographic sales, sales in Japan...

  • Page 26
    ... 24 PIONEER CORPORATION Annual Report 2010 Construction in progress Others Total Accumulated depreciation Net property, plant and equipment Investments and Other Assets: Investment securities (Notes 3, 7 and 15) Investments in affiliated companies (Note 15) Deferred tax assets (Note 11) Software...

  • Page 27
    ... Thousands of U.S. Dollars (Note 1) 2010 LIABILITIES AND EQUITY Current Liabilities: Short-term borrowings (Notes 7 and 15) Current portion of long-term debt (Notes 7 and 15) Trade payables (Note 15) Income taxes payable (Note 15) Accrued expenses Warranty reserve Other current liabilities Total...

  • Page 28
    ... Statements of Operations Pioneer Corporation and Subsidiaries Years ended March 31, 2010 and 2009 Thousands of U.S. Dollars (Note 1) 2010 Millions of Yen 2010 2009 Net Sales Cost of Sales Gross profit Selling, General and Administrative Expenses (Notes 12 and 13) Operating loss Other Income...

  • Page 29
    ... Statements of Changes in Equity Pioneer Corporation and Subsidiaries Years ended March 31, 2010 and 2009 Thousands of U.S. Dollars (Note 1) 2010 Millions of Yen 2010 2009 Common Stock Balance, beginning of year Issuance of new shares (Note 9) Balance, end of year Capital Surplus Balance...

  • Page 30
    ...28 PIONEER CORPORATION Annual Report 2010 Investing Activities: Increase in time deposits Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Proceeds from sale of investment securities Proceeds from cancellation of insurance policy Other-net Net cash used...

  • Page 31
    ...new shares in March 2010 through an international offering and thirdparty allotments. 29 PIONEER CORPORATION Annual Report 2010 b. Nature of Operations The Company and its subsidiaries (together, the "Group") are engaged in the development, manufacture and sale of electronic products. The Group is...

  • Page 32
    ... directly recorded in the equity; 3) expensing capitalized development costs of research and development costs; 4) cancellation of the fair value model accounting for property, plant and equipment and investment properties and incorporation of the cost model accounting; 5) recording the prior year...

  • Page 33
    ...yen at the average exchange rate. Annual Report 2010 l. Research and Development Costs and Intangible Assets Research and development costs are charged to income as incurred. Software for sale is amortized by the straight-line method over 2-3 years, while software used by the Group is amortized by...

  • Page 34
    ... procedures used. This standard is applicable to business combinations undertaken on or after April 1, 2010 with early adoption permitted for fiscal years beginning on or after April 1, 2009. (2) The current accounting standard requires that the research and development costs be charged to income as...

  • Page 35
    ... that has been directly recorded in the equity; 3) expensing capitalized development costs of R&D; 4) cancellation of the fair value model accounting for property, plant, and equipment and investment properties and incorporation of the cost model accounting; 5) recording the prior years' effects of...

  • Page 36
    ...-for-sale securities Total Available-for-sale securities and bonds that the Group sold during the year ended March 31, 2010 were as follows: Millions of Yen ¥1,314 ¥1,314 Thousands of U.S. Dollars 2010 34 PIONEER CORPORATION Annual Report 2010 2010 Proceeds from sales: Equity securities Bonds...

  • Page 37
    ...495 25,989 3,914 PIONEER CORPORATION 35 26,269 18,376 3,247 $85,290 Annual Report 2010 In 2010, the group of business assets relating to organic EL was reduced to the value in use since the book value of the group was above the expected future cash flow. As for the group of assets to be disposed...

  • Page 38
    ...($634 thousand) for the fiscal year ended March 31, 2010. The Group also holds some idle properties in Tokyo, other areas in Japan and overseas. 36 PIONEER CORPORATION Annual Report 2010 The carrying amounts, changes in such balances and market prices of such properties are as follows: Millions of...

  • Page 39
    ... on March 4, 2011. Annual maturities of long-term debt and long-term capital lease obligations as of March 31, 2010 for the next five years and thereafter were as follows: Thousands of U.S. Dollars 37 PIONEER CORPORATION Annual Report 2010 2011 2012 2013 2014 2015 2016 and thereafter Total ¥ 63...

  • Page 40
    ... points are accumulated based on years of service, job class and conditions under which termination occurs. The Group's policy is to fund amounts required to maintain sufficient plan assets to provide for accrued benefits, subject to the limitation on deductibility imposed by the Japanese income tax...

  • Page 41
    ... U.S. Dollars 2010 Projected benefit obligation Fair value of plan assets Accrued pension and severance costs ¥(13,375) 9,612 ¥ (3,763) ¥(13,728) 7,786 ¥ (5,942) $(143,817) 103,355 $ (40,462) 39 PIONEER CORPORATION The components of net periodic retirement benefit costs for the years ended...

  • Page 42
    ... component of equity or deducted directly from stock acquisition rights. 40 PIONEER CORPORATION Annual Report 2010 For the year ended March 31, 2010, the Company issued new shares as follows: Yen Number of New Shares Issued (Shares of Common Stock) Paid Amount (Issue Price) per Share Millions of...

  • Page 43
    ... options as a part of their remuneration. A summary of information for the Company's stock option plan as of March 31, 2010 is as follows: Yen Year ended March 31 Persons Granted Exercisable Period Weighted-Average Exercise Price Number of Shares The ASBJ Statement No. 8, "Accounting Standard for...

  • Page 44
    ... deferred tax assets for the years ended March 31, 2010 and 2009 were included in the following accounts: Millions of Yen 2010 2009 Thousands of U.S. Dollars 2010 Current assets: Deferred tax assets Investments and other assets: Deferred tax assets Long-term liabilities: Other long-term liabilities...

  • Page 45
    ... Group has a policy to invest cash surplus, if any, only in short-term deposit or other financial instruments which have similar nature. The Group raises funds by bank loans and/or from capital markets through bonds. Derivatives are used, not for speculative purposes, to manage exposure to financial...

  • Page 46
    ... using forward foreign currency contracts. Investment securities, mainly equity instruments in the companies with which the Company has business and capital alliance, are exposed to the risk of market price fluctuations. Payment terms of payables, such as trade payables, are less than one year. Part...

  • Page 47
    ... Value Unrealized Gain/Loss Cash and cash equivalents Time deposits Receivables: Trade receivables Allowance for doubtful receivables (Note 1) Investment securities: Available-for-sale securities Total Trade payables Short-term borrowings Current portion of long-term debt Income taxes payable Long...

  • Page 48
    ...- - - - - - - 46 PIONEER CORPORATION Annual Report 2010 Thousands of U.S. Dollars Due in One Year or Less Due After One Year Through Five Years Due After Five Years Through Ten Years Due After Ten Years March 31, 2010 Cash and cash equivalents Time deposits Trade receivables Total $ 904,752 65...

  • Page 49
    ... Fair Value 47 PIONEER CORPORATION Currency swap contracts: Receiving U.S. dollars, paying Japanese yen Total Debt ¥8,740 ¥8,740 - - ¥529 ¥529 Thousands of U.S. Dollars Contract Amount Due After One Year March 31, 2010 Hedged Item Contract Amount Fair Value Annual Report 2010 Currency...

  • Page 50
    ... Information about business segments, geographic segments and sales to overseas customers of the Group for the years ended March 31, 2010 and 2009 was as follows: a. Business Segments (1) Sales and operating income (loss) Millions of Yen 2010 Car Electronics Home Electronics Others Corporate...

  • Page 51
    ... 49,795 49 PIONEER CORPORATION (1) Sales and operating income (loss) Thousands of U.S. Dollars 2010 Car Electronics Home Electronics Others Corporate/ Eliminations Consolidated Annual Report 2010 Sales to customers Intersegment sales Total sales Operating expenses Operating income (loss) $2,680...

  • Page 52
    ...: Car Electronics: car navigation systems, car stereos, car AV systems and car speakers Home Electronics: audio systems, audio components, DJ equipment and equipment for cable TV systems, Blu-ray Disc players, Blu-ray Disc recorders, Blu-ray Disc drives, DVD players, DVD drives, Plasma displays...

  • Page 53
    ... consolidated financial position of Pioneer Corporation and subsidiaries as of March 31, 2010 and 2009, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in Japan. Annual Report 2010 Our audits...

  • Page 54
    ... 31.29 22.20 52 PIONEER CORPORATION Annual Report 2010 Note: Japanese individuals and others include 5,021 thousand shares (1.53%) as treasury stock held by the Company. Principal Shareholders (Ten Largest Shareholders) Name of Shareholder Number of shares held (thousand) Shareholdings (%) Sharp...

  • Page 55
    53 PIONEER CORPORATION Annual Report 2010 Cautionary Statement with Respect to Forward-Looking Statements Statements made in Annual Report 2010 with respect to our current plans, estimates, strategies and beliefs, and other statements that are not historical facts are forward-looking statements ...

  • Page 56
    http://pioneer.jp/e/ Printed in Japan with soy ink on environmentally friendly paper.