Pioneer 2013 Annual Report Download

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Paving the Way for the Future
Annual Report 2013
For the Year Ended March 31, 2013

Table of contents

  • Page 1
    Paving the Way for the Future Annual Report 2013 For the Year Ended March 31, 2013

  • Page 2
    ...: Medium-term Plan An explanation of the medium-term plan covering the two-year period to March 31, 2015 Review of Operations A review of the Car Electronics, Home Electronics, and Others businesses during fiscal 2013 Research and Development Corporate Governance 14 Management Financial Section...

  • Page 3
    ...and sells cutting-edge car navigation and car audio systems. We also supply products to major automakers around the world, maintaining a high market share in the car consumer market. Pioneer offers products for audio and visual enjoyment, including the world's leading DJ equipment, home AV products...

  • Page 4
    ..., which is suitable for mass production, and developed commercially viable longlife, high-efficiency OLED lighting panels Boothed at IFA 2012 in Germany, the world's largest electronics trade show, and featured reference exhibit of AR HUD car navigation systems April May June July August...

  • Page 5
    ... using Pioneer's HEED-HARP technology Executed contract with JMS Co., Ltd., for development of medical-use laser blood ï¬,ow meter Established representative office in Indonesia to strengthen sales and manufacturing structure in Southeast Asia Pioneer Corporation 03 Annual Report 2013

  • Page 6
    ... executing a medium-term plan for the period to fiscal 2015 to return to a path of growth. n Restructuring to reduce costs In the Car Electronics business, we will improve development and production efficiency with the fullscale introduction of modular design*, while at the same time reducing costs...

  • Page 7
    ... billion in fiscal 2015, ending March 2015. Pioneer's Return to Growth n Growth strategy to bolster profitability We are implementing a growth strategy at each business to bolster our profitability going forward. In Car Electronics, we will thoroughly review the cost structure and move forward with...

  • Page 8
    ... & software technologies with information services provided through strategic alliances as we pursue innovative business development. In Home Electronics, we will streamline the home AV and optical disc business structure to achieve stable profitability that does not rely solely on sales growth...

  • Page 9
    ... streamline optical disc business Personnel adjustments, including at Group companies in Japan Home Electronics Group-wide n Short-term Measures Fixed cost reductions Reduce management's compensation and employees' salaries and bonuses in fiscal 2014 Pioneer Corporation 07 Annual Report 2013

  • Page 10
    ..., including the new carrozzeria Cyber Navi equipped with the "Smart Loop eye" cloud-based information sharing service, introduced in Japan in June 2013. We will also strengthen our development for the business-use market and expand our current business for taxis and leasing businesses into the...

  • Page 11
    ... 2013 2012 (Results) (Results) Fiscal 2014 (Plan) Fiscal 2015 (Plan) Region-specific Strategies for Emerging Countries and Areas China Brazil, Central & South America India ASEAN Russia Africa Work with the local joint venture to strengthen new business acquisitions Expand both consumer-market...

  • Page 12
    ..., to provide new value Strengthen vehicle-linkage to secure products' competitiveness and top-tier global position in automotive equipment Link to cloud-based information services to revitalize hardware & software and information services markets Pioneer Corporation 10 Annual Report 2013

  • Page 13
    ... in Europe and North America, and is popular in clubs around the world. With the spread of downloaded content and the increase in applications, we expect the amateur DJ market to grow in the future, and are developing new products while simultaneously cultivating new sales channels for this...

  • Page 14
    ... Income (Loss) (Billion yen) Main Products n Audio Systems n Audio Components n DJ Equipment n Equipment for Cable-T V Systems n Blu-ray Disc Players n Blu-ray Disc Drives n DVD Players n DVD Drives n AV Accessories -10 2011 2012 2013 0 -2.8 2.5 3.6 10 Pioneer Corporation 12 Annual Report 2013

  • Page 15
    ... Japan Operating Income (Loss) (Billion yen) 2 Main Products and Services n Factory Automation Systems n Speaker Units n Electronic Devices and Parts n Organic Light-Emitting Diode Displays n Telephones n Business-use AV Systems n Electronic Manufacturing Services n Map Software n Licensing...

  • Page 16
    ...research and development in basic technologies to strengthen and expand our existing businesses, Pioneer is actively engaged in research and development for future growth in our new businesses of medical and healthcare devices, and organic light-emitting diode (OLED) lighting. With regard to the new...

  • Page 17
    ... with ROHM Co., Ltd.) Open case Closed case Image of case contents in closed case, produced by terahertz waves Demonstration of terahertz wave imaging technology using an opaque plastic case Research and development website: http://pioneer.jp/crdl/ Pioneer Corporation 15 Annual Report 2013

  • Page 18
    ...cers chosen by the Board of Directors 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, Pioneer Corporation 16 Annual Report 2013

  • Page 19
    ... Committee Business execution Compensation Committee (Chair: outside director) Internal audit Report and make recommendations Submit Approve Special Committee (Chair: outside director) Business Divisions and Group Companies "Rules of the Pioneer Group" • "Pioneer Group Charter for Corporate...

  • Page 20
    ... that contributes to reduced CO 2 emissions throughout its entire life cycle "Low CO 2 Kawasaki Brand '12"-certified SC-L X85 AV amplifier Environmental preservation website: http://pioneer.jp/environment-e/ Pioneer-developed vibrating acoustic system Pioneer Corporation 18 Annual Report 2013

  • Page 21
    ...As of June 26, 2013) Board of Directors Representative Directors Executive Officers President and CEO Susumu Kotani Hideki Okayasu Mikio Ono Directors Susumu Kotani Senior Managing Executive Officers Hideki Okayasu Mikio Ono Managing Executive Officers Satoshi Matsumoto Kunio Kawashiri Takashi...

  • 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 r a t io ns F i n a n c i a l Re v ie w Co n s ol i d a t e d Ba la nc ... 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 Pioneer Corporation 20 Annual Report 2013

  • 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
    ...-market car navigation systems declined, increased OEM sales of car navigation systems and consumer-market sales of car audio products, coupled with the positive effect of the Japanese yen's depreciation, resulted in an overall increase in net sales. Pioneer Corporation 22 Annual Report 2013

  • Page 25
    ...was primarily the result of restructuring costs and a loss on impairment of investment securities recorded in fiscal 2013, as well as the recording of a loss on transition to defined contribution pension plan in fiscal 2012. • Income (loss) before income taxes and minority interests As a result of...

  • Page 26
    ...solid at ed Bal ance Sheet Pioneer Corporation and Its Subsidiaries March 31, 2013 Thousands of U.S. Dollars (Note 1) Millions of Yen ASSETS Current Assets: 2013 2012 2013 Cash and cash equivalents (Note 15) Time deposits (Note 15) Receivables (Note 15): Trade receivables Allowance for doubtful...

  • Page 27
    ... and 2012 Capital surplus Retained earnings (accumulated deficit) Treasury stock-at cost, 5,024,569 shares in 2013 and 5,024,047 shares in 2012 Accumulated other comprehensive income (loss): Unrealized gain (loss) on available-for-sale securities Deferred loss on derivatives under hedge accounting...

  • Page 28
    ... at ed Statement of O pe ra t i o ns Pioneer Corporation and Its Subsidiaries Year ended March 31, 2013 Thousands of U.S. Dollars (Note 1) Millions of Yen Net Sales Cost of Sales (Note 11) Gross profit Selling, General and Administrative Expenses (Note 11) Operating income Other Income (Expenses...

  • Page 29
    ...2013 Number of Shares of Treasury Stock 2012 5,023,278 884 (115) 5,024,047 Balance, beginning of year Purchase of treasury stock Disposal of treasury stock Balance, end of year See notes to consolidated financial statements. Pioneer Corporation 27 5,024,047 548 (26) 5,024,569 Annual Report 2013

  • Page 30
    ... at ed Statement of Ca s h F l ow s Pioneer Corporation and Its Subsidiaries Year ended March 31, 2013 Thousands of U.S. Dollars (Note 1) Millions of Yen 2013 Operating Activities: 2012 2013 Income (loss) before income taxes and minority interests Adjustments for: Income taxes-paid Depreciation...

  • Page 31
    ... production activities of the Group are carried out in Asia including Japan, Brazil, and the United States. The Group's products are generally sold under its own brand names, principally "Pioneer." The Group sells its products to customers in consumer and commercial markets through its sales offices...

  • Page 32
    ... or loss of pensions that has been directly recorded in equity; (c) expensing capitalized development costs of R&D; (d) cancellation of the fair value model accounting for property, plant, and equipment and investment properties and incorporation of the cost model accounting; and (e) exclusion of...

  • Page 33
    ...on the estimated useful lives of the assets, while the straight-line method is applied to property, plant and equipment of foreign subsidiaries and leased property. A change in accounting policies Due to the corporation tax amendment, effective from the year ended March 31, 2013, the Company and its...

  • Page 34
    ... and the capitalized amount of the related asset retirement cost. o. 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 1-3 years, while software used by the Group is...

  • Page 35
    ... System (Part 2)" from the current year. x. Changes in the Method of Presentations Consolidated Balance sheet Prior to April 1, 2012, "Lease assets" was included in "Others" among "Property, Plant and Equipment" of the consolidated balance sheet. Since during this fiscal year ended March 31, 2013...

  • Page 36
    ... investment securities (available-for-sale equity securities) for the year ended March 31, 2013. Available-for-sale securities that the Group sold during the years ended March 31, 2013 and 2012, were as follows: Millions of Yen Thousands of U.S. Dollars 2013 Proceeds from sales: Equity securities...

  • Page 37
    ...Dollars Impairment Loss Millions of Yen Application Type Location Impairment Loss Organic light-emitting diode manufacturing facilities Assets to be disposed of Total Tools, etc. Land, buildings, etc. Yonezawa, Yamagata Ito, Shizuoka ¥16 45 $170 479 ¥61 $649 In 2013, the group of business...

  • Page 38
    ...Notes: 1. Carrying amount reported in the consolidated balance sheet is net of accumulated depreciation and accumulated impairment losses, if any. 2. Decrease during the fiscal years ended March 31, 2013 and 2012, principally represents the sales of investment property. 3. Fair value is principally...

  • Page 39
    ... 25, 2012 and March 26, 2013. These agreements include certain financial covenants which require the Company to maintain certain levels of equity on a consolidated and nonconsolidated basis and certain level of operating income on consolidated basis. Pioneer Corporation 37 Annual Report 2013

  • Page 40
    ... sponsor defined contribution pension plans or lump-sum payment plans. Accrued pension and severance costs for the years ended March 31, 2013 and 2012, were as follows: Japan Millions of Yen Thousands of U.S. Dollars 2013 Projected benefit obligation Fair value of plan assets Unfunded retirement...

  • Page 41
    ... for the years ended March 31, 2013 and 2012, were as follows: Millions of Yen Thousands of U.S. Dollars 2013 Service cost Interest cost Expected return on plan assets Recognized actuarial loss Amortization of prior service gain Curtailment gain Net periodic retirement benefit costs ¥ 125 588 (593...

  • Page 42
    ... March 31, 2013 and 2012, were as follows: Millions of Yen Thousands of U.S. Dollars 2013 Deferred tax assets: Write-down of inventories Accrued expenses Excess depreciation Loss on impairment of property, plant and equipment Loss on impairment of investment securities Tax loss carryforwards Others...

  • Page 43
    ...operating leases as of March 31, 2013 and 2012, were as follows: Millions of Yen Thousands of U.S. Dollars 2013 Operating leases: Due within one year Due over one year Total ¥1,381 2,999 ¥4,380 2012 ¥1,413 3,592 ¥5,005 2013 $14,692 31,904 $46,596 Pioneer Corporation 41 Annual Report 2013

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

  • Page 45
    ...Fair Value 2013 Unrealized Gain/Loss Cash and cash equivalents Time deposits 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 payable...

  • Page 46
    ...included in Note 16. 2013 Investment in equity instruments that do not have a quoted market price in an active market: Unlisted securities Unlisted associated securities Total ¥ 270 1,791 ¥2,061 2012 2013 ¥ 306 1,628 ¥1,934 $ 2,872 19,053 $21,925 Pioneer Corporation 44 Annual Report 2013

  • Page 47
    ...authorization and credit limit amount. Derivative transactions to which hedge accounting is not applied as of March 31, 2013 and 2012 Millions of Yen Thousands of U.S. Dollars 2013 Contract Amount Due After 1 Year Contract Amount Due After 1 Year 2013 Contract Amount Fair Value Unrealized Loss...

  • Page 48
    ... ¥(105) The fair value of foreign currency forward contracts is measured at the quoted price obtained from the forward exchange market. The fair value of currency swap contracts is measured at the quoted price obtained from the financial institutions. Pioneer Corporation 46 Annual Report 2013

  • Page 49
    ... the years ended March 31, 2013 and 2012, were the following: Millions of Yen Thousands of U.S. Dollars 2013 Unrealized gain (loss) on available-for-sale securities Losses arising during the year Reclassification adjustments to profit or loss Amount before income tax effect Income tax effect Total...

  • Page 50
    ... by products and services, which are three segments of "Car Electronics," "Home Electronics," and "Others." "Car Electronics" produces and sells car navigation systems, car stereos, car AV systems, car speakers and others. "Home Electronics" produces and sells audio Pioneer Corporation 48 Annual...

  • Page 51
    systems, audio components, DJ equipment, and equipment for cable-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 ...

  • 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 operations. Pioneer Corporation 50 Annual Report...

  • Page 53
    ...Information about major customers Information about major customers for the years ended March 31, 2013 and 2012, has been omitted since there are no external customers who constituted more than 10% of net sales on the consolidated statement of operations. Pioneer Corporation 51 Annual Report 2013

  • Page 54
    ... Consolidated Unamortized balance of goodwill - - - - ¥648 ¥648 Thousands of U.S. Dollars 2013 Reportable Segment Car Electronics Home Electronics Corporate Others Total Consolidated Unamortized balance of goodwill - - - - $6,447 $6,447 Pioneer Corporation 52 Annual Report 2013

  • Page 55
    ...2013 (7) Allottee: Mitsubishi Electric Corporation (8) Purposes: The company expects to use the fund for the joint development, etc. with Mitsubishi Electric Corporation of the hardware and software platforms for next generation of car navigation systems. Pioneer Corporation 53 Annual Report 2013

  • Page 56
    ...the Board of Directors of Pioneer Corporation: We have audited the accompanying consolidated balance sheet of Pioneer Corporation and its subsidiaries as of March 31, 2013, and the related consolidated statements of operations, comprehensive loss, changes in equity, and cash ï¬,ows for the year then...

  • Page 57
    ... Japan, Ltd. (Trust Account) Japan Trustee Services Bank, Ltd. (Trust Account) JP Morgan Chase Bank 385078 Mitsubishi Electric Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd. Bank of New York GCM Client Account JPRD ISG (FE-AC) Pioneer Employee Share Ownership Plan Number of shares Shareholdings...

  • Page 58
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