Pioneer 2011 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... we want to share our passion for sound, vision, and information by bringing the world ever-new products and services. Our philosophy, "Move the Heart and Touch the Soul" embodies this desire. We are committed to creating new markets with fresh ideas and cutting-edge technologies that will inspire...

  • Page 3
    ...of Fiscal 2011 and Measures for Fiscal 2012 To Our Stakeholders Interview with the President Review of Operations Research and Development 01 02 04 06 12 14 Corporate Governance Management Corporate Social Responsibility Financial Section Independent Auditors' Report General Information on Shares 16...

  • Page 4
    ... optical disc business through joint venture with Sharp Corporation X Alliance with NTT Docomo, Inc.  Launched a new car navigation business for smartphones from April 2011 X Significant Improvement in Financial Position  Redeemed 60.0 billion yen of convertible bonds at maturity using cash...

  • Page 5
    ... income. Measures for Fiscal 2012 XExpanding Businesses in Emerging Markets ...P. 07 - 08  XAggressively Introducing Products in New Categories ...P. 09 XIncreasing Overseas Consumer-Market Car Audio Sales ...P. 10 XDeveloping New Businesses ...P. 11 * Amounts affected by the Great East Japan...

  • Page 6
    ... in terms of our financial position, using cash on hand for the redemption at maturity of ¥60.0 billion of convertible bonds in March 2011. Financial Highlights Pioneer Corporation and Subsidiaries Years ended March 31 In millions of yen and thousands of U.S. dollars, except per share information...

  • Page 7
    ... lighting, our HVT speakers, which use revolutionary, first-ofits-kind technology to achieve a rich bass sound in a slim design, are being developed for a variety of uses from car audio to home AV products, including ï¬,at-panel televisions. Pioneer's Future Direction Increasing its corporate value...

  • Page 8
    Interview with the President Having set a course for growth, the New Pioneer will actively pursue enhanced profitability going forward, based on our growth strategy. 06 Pioneer Corporation Annual Report 2011

  • Page 9
    ..., we plan to enter the market with cost-competitive Blu-ray Disc players, and then, by subsequently increasing the number of models offered, establish a presence for our home AV products in Brazil. Sales expansion of car audio products both for consumer-market and OEM businesses Local manufacturing...

  • Page 10
    ..., we plan to increase our home AV sales capacity in China by increasing the number of stores selling Pioneer products by 50%, from approximately 300 stores as of the end of March 2011. We also intend to increase the number of marketing centers to six from the current three as we expand to inland...

  • Page 11
    ... vehicle position information and Pioneer's proprietary probe (vehicle driving) information. In addition, in May 2011, Pioneer released Cyber Navi models equipped with an augmented reality (AR) scouter mode that uses a specialized camera mounted on the car's windshield to display an actual image of...

  • Page 12
    ...Middle East, we will work to steadily increase sales volume and market share by introducing products that address the needs of these markets. We will introduce roughly ten new models of car navigation products in STEEZ audio system China, for example. Car audio system for North America and Europe...

  • Page 13
    ...Estimates for OLED Lighting (Billion yen) 2,000 (Pioneer projections) TS-STH700, car speakers that use the world's first HVT technology 1,500 1,000 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (Calendar year) Speakers set in the built-in home audio system ACCO that can be installed...

  • Page 14
    ...Despite a decline in sales of plasma displays, from which business Pioneer withdrew in fiscal 2010, in Europe and North America, there was Net Sales (Billion yen) 300 Japan Overseas Operating Income (Loss) (Billion yen) 20 a large increase in sales of Blu-ray Disc drive-related products from the...

  • Page 15
    .... Main Products and Services QFactory Automation Systems QSpeaker Units Q Electronic Devices and Parts Q Organic Light-Emitting Diode Displays Q Telephones Q Business-use AV Systems Q Map Software Q Licensing of Patents Related to Laser Optical Disc Technologies Net Sales (Billion yen) 75 Japan...

  • Page 16
    ...) lighting. In addition, we are working to build on the elemental technologies we have cultivated through our product development to date in such areas as audio and imaging, optical, device, and fine processing technologies. At the same time, we are focusing on the identification of new research...

  • Page 17
    ...Comparison of Endoscope Sensitivity (without light source) The newly developed endoscope produces a brighter, clearer image of a model fetus than a conventional endoscope. Endoscope photos provided by the National Center for Child Health and Development Pioneer Corporation Annual Report 2011 15

  • Page 18
    ... and holds regular meetings once per week, in principle. The Group Executive Committee, under the supervision of the Board of Directors, thoroughly discusses issues such as priorities for advancing business activities, investment projects, Group realignment, and Group-wide management strategies, as...

  • Page 19
    ... its information management system. Furthermore, to ensure proper responses we have developed a system necessary for ensuring proper operations by establishing a response policy in the event of a crisis, designating the authority and responsibilities of each Group company, and setting a policy for...

  • Page 20
    ..., and independent directors satisfying the requirements of the Tokyo Stock Exchange. 2. Messrs. Keiichi Nishikido and Toraki Inoue are outside corporate auditors, and independent corporate auditors satisfying the requirements of the Tokyo Stock Exchange. 18 Pioneer Corporation Annual Report 2011

  • Page 21
    ...in Southeast Asia. Employees and their families volunteering to remove Mikania micrantha For further details on Pioneer's corporate citizenship, environmental and other activities, please visit Pioneer's website at http://pioneer.jp/citizen/index-e.html. Pioneer Corporation Annual Report 2011 19

  • Page 22
    ... Statements of Operations Consolidated Statement of Comprehensive Loss Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Independent Auditors' Report 21 22 24 26 26 27 28 29 51 20 Pioneer Corporation Annual Report 2011

  • Page 23
    ... Disposal of Long-Lived Assets"), issued by the U.S. Financial Accounting Standards Board. Consequently, reclassified figures for net sales and loss from continuing operations before income taxes are shown. 7. Figures for basic net income (loss) per share and total equity per share are calculated...

  • Page 24
    .... Despite a decline in sales of plasma displays, from which business Pioneer withdrew in fiscal 2010, in Europe and North America, there was a large increase in sales of Blu-ray Disc drive-related products from the commencement of operations at an optical disc joint venture in the second half of...

  • Page 25
    ... income (loss) Cost of sales decreased to ¥356,449 million from ¥366,165 million a year earlier. Cost of sales accounted for 77.9% of net sales, improving by 5.5 percentage points from 83.4% in fiscal 2010. This improvement was mainly due to restructuring and cost reductions. Selling, general...

  • Page 26
    Consolidated Balance Sheets Pioneer Corporation and Subsidiaries March 31, 2011 and 2010 Millions of Yen 2010 Thousands of U.S. Dollars (Note 1) 2011 ASSETS Current Assets: Cash and cash equivalents (Note 15) Time deposits (Note 15) Receivables (Note 15): Trade receivables Allowance for doubtful ...

  • Page 27
    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 current liabilities ¥ 2011 Millions of ...

  • Page 28
    Consolidated Statements of Operations Pioneer Corporation and Subsidiaries Years ended March 31, 2011 and 2010 Millions of Yen 2010 Thousands of U.S. Dollars (Note 1) 2011 2011 Net Sales Cost of Sales Gross profit Selling, General and Administrative Expenses (Notes 12 and 13) Operating income (...

  • Page 29
    ... Disposal of treasury stock Balance, end of year See notes to consolidated financial statements. 326,093,836 - 326,093,836 2011 210,063,836 116,030,000 326,093,836 Number of Shares 2010 5,021,028 2,272 (22) 5,023,278 Pioneer Corporation 5,051,933 3,322 (34,227) 5,021,028 Annual Report 2011 27

  • Page 30
    ... securities Other-net Net cash provided by (used in) investing activities Financing Activities: Net decrease in short-term borrowings Increase in long-term debt Repayment of long-term debt Redemption of bonds Proceeds from sale and lease-back transactions Proceeds from issuance of new shares...

  • Page 31
    ...and business-use electronic products such as car electronics and audio/video. The principal production activities of the Group are carried out in Asia including Japan, and the United States. The Group's products are generally sold under its own brand names, principally "Pioneer." The Group sells its...

  • Page 32
    ... Equivalents Cash equivalents are short-term investments that are readily convertible into cash and exposed to insignificant risk of changes in value. Cash equivalents include time deposits which become due within three months of the date of acquisition. 30 Pioneer Corporation Annual Report 2011

  • Page 33
    ... to the defined benefit pension plan, the Group accounts for the liability for employees' retirement benefits based on projected benefit obligations and plan assets at the balance sheet date. Part of the changes in projected benefit obligations and plan assets are not recognized when incurred...

  • Page 34
    ... new accounting standard for the year ended March 31, 2011 on the consolidated financial statements was immaterial. n. 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...

  • Page 35
    ... securities Total $101,060 $21,085 $101,060 $21,085 $157 $121,988 $157 $121,988 Unlisted securities are not included above because they do not have a quoted market price in an active market. The information for these investments is disclosed in Note 15. Pioneer Corporation Annual Report 2011...

  • Page 36
    ...processing machinery groups related organic light-emitting diode and idle assets due to decline of market value and the prospect of future profit. In principle, business assets are grouped based on management classification. However, idle assets whose disposal is planned or whose future use is not...

  • Page 37
    ... the value in use of the organic light-emitting diode business asset group was 4.48%. As for the group of assets to be disposed and the idle asset group, the market price information was obtained on the basis of values provided by real estate appraisers and other specialists. 6. Investment Property...

  • Page 38
    ...areas. Net of rental income and operating expenses for those rental properties was ¥59 million for the fiscal year ended March 31, 2010. The Group also holds some idle properties in Tokyo, other areas in Japan and overseas. The carrying amounts, changes in such balances and market prices of such...

  • Page 39
    ...for short-term borrowings and long-term debt of the Group: 2011 Millions of Yen 2010 Thousands of U.S. Dollars 2011 Finished products Building and structures Land Investment securities Total Long-term debt amounting to ¥80,881 million ($974,470 thousand) (in which current portion of long-term debt...

  • Page 40
    Accrued pension and severance costs for the years ended March 31, 2011 and 2010 were analyzed as follows: Domestic 2011 Millions of Yen 2010 Thousands of U.S. Dollars 2011 Projected benefit obligation Fair value of plan assets Unfunded retirement obligation Unrecognized prior service gain ...

  • Page 41
    ...any time during the fiscal year in addition to the year-end dividend upon resolution of the shareholders meeting. For companies that meet certain criteria such as; (1) having a board of directors, (2) having independent auditors, (3) having a board of corporate auditors, and (4) the term of service...

  • Page 42
    ... the Company's stock options at March 31, 2011, and the changes during the year then ended is as follows: Number of Shares 2006 Stock Option Vested March 31, 2010 (Outstanding) Vested Exercised Expired March 31, 2011 (Outstanding) 315,100 - - 315,100 - 40 Pioneer Corporation Annual Report 2011

  • Page 43
    ... of Yen 2010 Thousands of U.S. Dollars 2011 Current assets: Deferred tax assets Investments and other assets: Deferred tax assets Long-term liabilities: Other long-term liabilities ¥ 5,530 6,057 (1,933) ¥ 5,808 9,389 (2,066) $ 66,627 72,976 (23,289) Pioneer Corporation Annual Report 2011 41

  • Page 44
    ... by 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 ï¬,uctuations. Payment terms of payables, such as trade payables, are less than one year...

  • Page 45
    ... swaps are used to manage exposure to future market risks from changes in foreign currency exchange rate of bank loans payables in foreign currencies based on the internal guidelines. Investment securities, mainly equity instruments in the companies with which the Company has business alliances, are...

  • Page 46
    ... values of investment securities are measured at the quoted market price of the stock exchange for the equity instruments. The information of the fair value for the investment securities by classification is included in Note 3. Trade payables and short-term borrowings The carrying values of trade...

  • Page 47
    ... - - - Due in One Year or Less March 31, 2011 Thousands of U.S. Dollars Due After Five Year Through Due After Ten Years Ten Years Cash and cash equivalents Trade receivables Total 573,084 766,856 $ 1,339,940 $ - - - - - - - - - Please see Note 7 for annual maturities of long-term debt. 16...

  • Page 48
    ... shareholders ¥ 10,350 (600) ¥ 9,750 321,072 14,181 335,253 ¥ 32.24 $ 0.39 ¥ 29.08 $ 0.35 ¥ (58,276) 213,703 ¥ (272.70) Diluted net loss per share for the year ended March 31, 2010 is not disclosed because of the Group's net loss position. 46 Pioneer Corporation Annual Report 2011

  • Page 49
    ... for cable-TV systems, Blu-ray disc players, Blu-ray disc drives, DVD players, DVD drives, AV accessory and others. "Others" produces and sells factory automation systems, Speaker units, Electronic devices and parts, organic light-emitting diode displays, telephones, business-use AV systems, mapping...

  • Page 50
    ... in property, plant and equipment and intangible assets are capital investments principally for office integration due to restructuring. 4. Segment loss is adjusted with operating loss on the accompanying consolidated statements of operations. From the year ended March 31, 2011, AV accessories were...

  • Page 51
    ...404 Japan $578,856 North America $11,108 Europe $11,843 Thousands of U.S. Dollars 2011 China Others $95,711 $114,579 Total $812,097 (5) Information about major customers Millions of Yen 2011 Thousands of U.S. Dollars 2011 Name of customer Sharp Trading Corporation Related segment Home electronics...

  • Page 52
    ... cable TV systems, Blu-ray Disc players, Blu-ray Disc recorders, Blu-ray Disc drives, DVD players, DVD drives, Plasma displays Others: factory automation systems, speaker units, electronics devices and parts, organic light-emitting diode displays, telephones, AV accessories, business-use AV systems...

  • Page 53
    ... Auditors' Report To the Board of Directors of Pioneer Corporation: We have audited the accompanying consolidated balance sheets of Pioneer Corporation and subsidiaries (the "Company") as of March 31, 2011 and 2010, and the related consolidated statements of operations for the years then ended...

  • Page 54
    ... Bank of Japan, Ltd. (Trust Account) Japan Trustee Services Bank, Ltd. (Trust Account) Honda Motor Co., Ltd. Mitsubishi Electric Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd. Pioneer Employee Share Ownership Plan JP Morgan Securities Japan Co., Ltd. State Street Bank and Trust Company 30,000...

  • Page 55
    ...; (ii) exchange rates, particularly between the Japanese yen and the euro, the U.S. dollar, and other currencies in which we make significant sales or in which our assets and liabilities are denominated; (iii) our ability to continuously design and develop and win acceptance for our products in...

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