Pioneer 2012 Annual Report Download

Download and view the complete annual report

Please find the complete 2012 Pioneer annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 58

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58

A Leap Forward as the New Pioneer
Annual Report 2012
For the Year Ended March 31, 2012

Table of contents

  • Page 1
    A L e ap F o r w ar d as the N e w P io ne e r A n n u al R ep or t 2012 For th e Year E n d ed Mar ch 31, 2012

  • Page 2
    ... introduction of the emerging market strategy, which is making progress in securing steady growth 08 S p e c ia l F e a tu re 2: C re a tio n a n d E x p a n s io n o f Ne w Bu s in e s se s An explanation of how Pioneer utilizes its technological strengths to cultivate new businesses 12 Re v ie...

  • Page 3
    ... Pioneer's Home Electronics business handles products including home AV systems, DJ equipment, optical discs, cable TV equipment, and AV accessories. In addition to being a leading developer and seller of DJ equipment in the global market, we aim to expand the business by creating a new music...

  • Page 4
    ... production Working aggressively to develop new businesses and expand businesses in emerging markets n New business development In the Car Electronics business, there has been much attention on Pioneer's "augmented reality (AR) head-up display (HUD) unit," which combines AR 02 Pioneer Corporation...

  • Page 5
    ... for increased sales and market share in Brazil by utilizing our established brand recognition and local production sites. We will also work to expand our business in countries and regions with significant market growth, including India, Russia, ASEAN, Central and South America, the Middle East, and...

  • Page 6
    ...markets (Invest 25% of capital expenditures and R&D expenses in new businesses) n Aim for early resumption of dividend payments n Aim for ROE of 20% and over, and continue business growth n Aim for an equity ratio of 40% and achieve a stable financial position 04 Pioneer Corporation Annual Report...

  • Page 7
    .... We are utilizing these sales channels to increase sales of Pioneer brand home AV products. Our products are displayed at more than 500 Suning Appliance stores (as of June 2012), and we expect sales of our products to continue to grow. We also have a brand alliance in flat-panel TVs, displayed at...

  • Page 8
    ... and raise our brand recognition in the Chinese market. Suning Appliance store (Home AV products corner) Further expanding the Car Electronics business The Car Electronics business is working through its joint venture with major Chinese automaker Shanghai Automotive Industry Corporation (Group) to...

  • Page 9
    ... a business expansion strategy that integrates manufacturing and marketing. This involves developing products matched to local market needs, utilizing local sales networks to boost sales of car CD players and car AV products, and increasing sales of home AV products through local production. We...

  • Page 10
    ... main car navigation system can be projected beyond the windshield. By overlaying necessary information on the view in front of the driver, * First HUD with laser for car (As of May 8, 2012, based on Pioneer research) Carrozzeria Cyber Navi AR HUD unit 08 Pioneer Corporation Annual Report 2012

  • Page 11
    ..." (Japan, left) and "AppRadio" (Overseas, right) Emerging Markets n Offering "just fit" car navigation systems (local models), mainly in China "Just fit" car navigation systems (China) n Rapid development of the smartphonelinkage business Head-up display Pioneer Corporation Annual Report 2012...

  • Page 12
    ... STEEZ brand in global markets, we will accelerate the compatibility of MIXTRAX with home audio and car audio products in addition to the STEEZ line, thereby increasing the appeal of the Pioneer brand in new ways. STEEZ Dance event (Tokyo) MIXTRAX MIXTRAX is a PC-based song management application...

  • Page 13
    ... display automatically downloaded information on popular locations and areas for riding that are suited to the season. With increased interest in health and the environment, this system is gaining popularity as a way of adding new enjoyment to cycling. We also plan to release this system in Europe...

  • Page 14
    ... Main Products n n n n Audio Systems n Audio Components n DJ Equipment Equipment for Cable-TV Systems n Blu-ray Disc Players Blu-ray Disc Drives n DVD Players n DVD Drives AV Accessories Overseas Japan 200 157.6 135.6 100 94.0 83.2 0 41.6 2010 2011 74.3 64.9 58.1 2012 123.1 Home Electronics sales...

  • Page 15
    Main Products and Services n n n n n Factory Automation Systems n Speaker Units Electronic Devices and Parts Organic Light-Emitting Diode Displays n Telephones Business-use AV Systems n Map Software Licensing of Patents Related to Laser Optical Disc Technologies Overseas Japan 60 40 20 36.2 0 2010 ...

  • Page 16
    Research and Development Pioneer is making advances in research and development with a view toward entering new business areas for future growth. Moving closer to full-scale business development of organic light-emitting diode (OLED) lighting, we are putting further emphasis on the development of ...

  • Page 17
    ... connection to managing physical fitness and health-and medical institutions are carrying out research in this area. Pioneer is considering working with medical equipment manufacturers to implement portable blood-flowmetry sensor devices at an early date, while at the same time we are expanding the...

  • Page 18
    ... for advancing business activities, investment projects, Group realignment, and Group-wide management strategies, as well as medium- and long-term policies, and approves these issues, or, in cases where the Board of Directors has decision-making authority, the Group Executive Committee reports on...

  • Page 19
    ... also works with the internal audit staff at Group companies and the Board of Corporate Auditors to enhance the internal audit function with regard to internal control systems, risk management, and areas related to corporate ethics, quality control, and environmental protection. Business Ethics...

  • Page 20
    ... a CHANGE Day" award ceremony AR scouter mode Recommended distance between vehicles indicated by blue bar For more information regarding Pioneer's corporate citizenship and environmental activities, please visit our website at http://pioneer.jp/corp/csr-e/. 18 Pioneer Corporation Annual Report...

  • Page 21
    ..., 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. Pioneer Corporation Annual Report 2012 19

  • Page 22
    Financial S e cti o n Co n t e n t s 21 22 24 26 26 Fi v e- Ye a r S umma r y o f Ope ra t io ns Fi n a n c i a l Re v ie w C... o f C a s h F lo w s No te s to C o n s o lid a te d F in a n c ia l Sta te me n ts In d e p e n d e n t A u d ito r's R e p o rt 20 Pioneer Corporation Annual Report 2012

  • Page 23
    ... operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of year Return on assets (ROA) (%) Return on equity (ROE) (%) Average foreign exchange rate (yen/U.S. dollars) Average foreign exchange rate (yen/euro) Number of employees...

  • Page 24
    ... , supported partly by the roll-out of new products, and increases in OEM sales on solid sales to automobile manufacturers and for dealer options in Japan. In car audio products, on the other hand, consumer-market sales rose in Europe but recorded an overall decline, mainly from lower sales in North...

  • Page 25
    ... in trade payables. Investing activities used net cash in the amount of ¥21,781 million, compared with ¥3,886 million net cash provided in fiscal 2011. This was mainly because of a ¥15,843 million decrease in proceeds from the sale of noncurrent assets, and the absence of decreases in financial...

  • Page 26
    ...Investments and Other Assets: Investment securities (Notes 3, 7 and 14) Investments in associated companies (Note 14) Deferred tax assets (Note 10) Software Goodwill Other assets Allowance for doubtful accounts Total investments and other assets Total See notes to consolidated financial statements...

  • Page 27
    Millions of Yen LIABILITIES AND EQUITY Current Liabilities: Thousands of U.S. Dollars (Note 1) 2012 2011 2012 Short-term borrowings (Notes 7 and 14) Current portion of long-term debt (Notes 7 and 14) Trade payables (Note 14) Income taxes payable (Note 14) Accrued expenses Warranty reserve Other...

  • Page 28
    ...) gain on sale of investment securities-net (Note 3) Gain on sales of subsidiary's stock Insurance income for disaster (Note 13) Loss on disaster (Note 13) Loss on transfer of retirement benefit plan Loss on adjustment for changes of accounting standard for asset retirement obligations Others-net...

  • Page 29
    ...2012 Number of Shares of Treasury Stock 2011 5,021,028 2,272 (22) 5,023,278 Balance, beginning of year Purchase of treasury stock Disposal of treasury stock Balance, end of year See notes to consolidated financial statements. 5,023,278 884 (115) 5,024,047 Pioneer Corporation Annual Report 2012...

  • Page 30
    ... of property, plant and equipment Loss (gain) on sale of investment securities-net Changes in assets and liabilities: (Increase) decrease in receivables Increase in inventories Increase in trade payables Decrease in accrued expenses Other-net Net cash provided by operating activities Investing...

  • Page 31
    ... 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...

  • Page 32
    .... In addition, financial statements prepared by foreign associated companies in accordance with either International Financial Reporting Standards or the generally accepted accounting principles in the United States of America tentatively may be used in applying the equity method if the following...

  • 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
    ...All short-term and long-term monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange rates at the balance sheet date. The foreign exchange gains and losses from translation are recognized in the 32 Pioneer Corporation Annual Report 2012

  • Page 35
    .... The Company expects to apply the revised accounting standard from the end of the annual period beginning on April 1, 2013 and is in the process of measuring the effects of applying the revised accounting standard for the year ending March 31, 2014. Pioneer Corporation Annual Report 2012 33

  • Page 36
    ... market price in an active market. The information for these investments is disclosed in Note 14. Available-for-sale securities that the Group sold during the years ended March 31, 2012 and 2011, were as follows: Millions of Yen Thousands of U.S. Dollars 2012 Proceeds from sales: Equity securities...

  • Page 37
    ... income (expenses) as loss on impairment of property, plant and equipment. The value in use of organic light-emitting diode business asset group was determined to be zero. As for the group of assets to be disposed of, the projected selling price was used as the basis of values. For the year ended...

  • Page 38
    ... on those rental properties for the year ended March 31, 2012, were ¥80 million ($976 thousand), and ¥502 million ($6,122 thousand), respectively. In 2011, the Group holds certain idle properties in Shizuoka, other areas in Japan and overseas (mainly in Mexico). Net of rental income and operating...

  • Page 39
    ... assets were pledged as collateral for short-term borrowings and longterm debt of the Group: Thousands of Millions of Yen U.S. Dollars 2012 Finished products Building and structures Land Investment securities Total Long-term debt amounting to ¥80,459 million ($981,207 thousand) (in which current...

  • Page 40
    ... plans or lump-sum payment plans. Accrued pension and severance costs for the years ended March 31, 2012 and 2011, were as follows: Japan Millions of Yen Thousands of U.S. Dollars 2012 Projected benefit obligation Fair value of plan assets Unfunded retirement obligation Unrecognized prior service...

  • Page 41
    ..., and (4) the term of service of directors is prescribed as one year rather than two years by its articles of incorporation, the board of directors may declare dividends (except for dividends in kind) at any time during the fiscal year if the company Pioneer Corporation Annual Report 2012 39

  • Page 42
    ... of equity or deducted directly from stock acquisition rights. 10. Income Taxes The Company and its Japanese subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a statutory tax rate of approximately 41% for the years ended March 31, 2012 and...

  • Page 43
    ...The effect of the tax rate change is immaterial. 11. Research and Development Costs Research and development costs charged to income were ¥34,590 million ($421,829 thousand) and ¥33,040 million for the years ended March 31, 2012 and 2011, respectively. Pioneer Corporation Annual Report 2012 41

  • Page 44
    ... currency exchange rates, the position, net of payables in foreign currencies, is hedged 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...

  • Page 45
    .../Loss Carrying Amount Fair Value 2012 Unrealized Gain/Loss Cash and cash equivalents Receivables: Trade receivables Allowance for doubtful receivables (*1) Investment securities: Available-for-sale securities Total Short-term borrowings Current portion of long-term debt Trade payables Income taxes...

  • Page 46
    ... 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, short-term borrowings and income tax payable The carrying values of trade payables, short-term borrowings...

  • Page 47
    ... reliably determined for the years ended March 31, 2012 and 2011, were as follows: Thousands of Millions of Yen U.S. Dollars 2012 Investment in equity instruments that do not have a quoted market price in an active market Unlisted securities Unlisted associated securities Total ¥ 306 1,628 ¥1,934...

  • Page 48
    ... Fair Value Contract Amount Fair Value Foreign currency forward contracts: Buying U.S. dollars Selling Euro Total Trade payables Trade receivables ¥ 9,407 7,032 ¥16,439 - - - ¥(132) 27 ¥(105) $114,720 85,756 $200,476 - - $(1,609) 329 $(1,280) 46 Pioneer Corporation Annual Report 2012

  • Page 49
    ...$(54,451) The corresponding information for the year ended March 31, 2011, was not required under the accounting standard for presentation of comprehensive income as an exemption for the first year of adopting that standard and is not disclosed herein. Pioneer Corporation Annual Report 2012 47

  • Page 50
    ...-TV systems, Blu-ray Disc players, Blu-ray Disc drives, DVD players, DVD drives, AV accessories 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, map software...

  • Page 51
    ...increase in property, plant and equipment and intangible assets are capital investments principally in software. 4. Adjustments are made to reconcile segment income (loss) to operating income presented in the accompanying consolidated statement of income. Pioneer Corporation Annual Report 2012 49

  • Page 52
    ...increase in property, plant and equipment and intangible assets are capital investments principally in software. 4. Adjustments are made to reconcile segment income (loss) to operating income presented in the accompanying consolidated statement of income. 50 Pioneer Corporation Annual Report 2012

  • Page 53
    ... year ended March 31, 2012, has been omitted since there are no external customers who constituted more than 10% of net sales on the consolidated statement of income. Millions of Yen 2011 Name of customer Sharp Trading Corporation Related segment Home Electronics Sales ¥61,729 Pioneer Corporation...

  • Page 54
    ... Consolidated Unamortized balance of goodwill - - - - ¥690 ¥690 Thousands of U.S. Dollars 2012 Reportable segment Car Electronics Home Electronics Corporate Others Total Consolidated Unamortized balance of goodwill - - - - $7,902 $7,902 52 Pioneer Corporation Annual Report 2012

  • Page 55
    ... balance sheet of Pioneer Corporation and subsidiaries as of March 31, 2012, and the related consolidated statements of income, comprehensive loss, changes in equity, and cash ï¬,ows for the year then ended, and a summary of significant accounting policies and other explanatory information...

  • Page 56
    ...Corporation Chase Manhattan Bank GTS Clients Account Escrow Credit Suisse Securities (Europe) Limited PB Sec. Int. TR Client The Bank of Tokyo-Mitsubishi UFJ, Ltd. Pioneer Employee Share Ownership Plan Japan Trustee Services Bank, Ltd. (Trust Account 9) Number of shares held (thousand) Shareholdings...

  • Page 57
    ... access funding; (vii) our continued ability to devote sufficient resources to research and development, and capital expenditure; (viii) our ability to ensure the quality of our products; (ix) conditions in which we are able to continuously procure key parts essential to our manufacturing operations...

  • Page 58
    P I O N E E R C O R P O R AT I O N h t t p : / / p i o n e e r. j p / e / Printed in Japan with vegetable oil ink on environmentally friendly paper.