Pioneer 2016 Annual Report Download

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Annual Report 2016
For the Year Ended March 31, 2016

Table of contents

  • Page 1
    Annual Report 2016 For the Year Ended March 31, 2016

  • Page 2
    ... 2016 0 2014 2015 2016 Car Electronics sales declined 1.2% year on year, to ¥351.3 billion. Sales of car audio products decreased. Consumermarket sales declined, mainly from lower sales in emerging markets. OEM sales rose owing to increases mainly in Japan and North America. Car navigation system...

  • Page 3
    ... systems and map software, we are utilizing our unique optical, sound, and imaging technologies to develop new businesses in fields such as medical and health care-related devices and organic light-emitting diode (OLED) lighting. 98.3 billion yen 21.9% Sales by Geographic Market The Pioneer Group...

  • Page 4
    ... DJ equipment business, etc. 3. Net income per share is calculated based on the number of shares outstanding, excluding treasury stock. 4. Free cash flows represent the sum of cash flows from operating activities and cash flows from investing activities. 02 Pioneer Corporation Annual Report 2016

  • Page 5
    ...proposing new added value through advanced driving assist systems, and offering new forms of in-vehicle entertainment. In addition, we will expand our commercial-use businesses that utilize the cloud, and we will place a greater focus on products in the affordable price range in emerging markets. In...

  • Page 6
    ... for the Car Electronics Business With a new structure that concentrates management resources in the Car Electronics business, we will pursue growth strategies emphasizing the consumer market and OEM businesses, as well as the map business and autonomous driving field, to be a leading company in...

  • Page 7
    .... During the investment recoupment stage, with a full ï¬,ow of large-scale OEM orders and effects of the measures for improving profitability, earnings at the OEM business will improve and both the consumer market and OEM businesses will generate profit. Pioneer Corporation Annual Report 2016 05

  • Page 8
    ... NAVI car navigation systems to prevent rear-end accidents using screen-displayed images and sound, and also features an event data recorder function and the ability to alert the driver by email when unusual activity is detected while the car is parked, supporting the overall car-driving experience...

  • Page 9
    ... affordably priced models Expand business areas (ASEAN, Central and South America Middle East Africa) New Fields OEM Business Basic Directions Strengthen competitiveness via improving profitability in existing businesses Propose new value-added solutions for future growth to OEM customers Aiming...

  • Page 10
    ... of car AV products and car navigation systems Function Car AV products Car navigation systems Individual development Navigation function Car navigation systems Modular design Consolidate a minimum number of required parts, assemble them to form diverse products Conventional development AV and...

  • Page 11
    ...autonomous driving Existing businesses Contents Map data sales Map database covering all of Japan, multilingual maps of Japan Navigation Map database and software for car navigation systems in Japan and overseas Solutions MapFan map service Map solutions business for business use New initiatives...

  • Page 12
    ...solutions Updating system solutions Data analysis solutions (Million vehicles) 45 Commercial use Fully autonomous driving Autonomous driving except in emergencies 30 15 Partially autonomous driving 2015 2020 2025 2030 (Calendar year) 0 (Pioneer research) 10 Pioneer Corporation Annual Report...

  • Page 13
    ... 2016 0 2014 2015 2016 Car Electronics sales declined 1.2% year on year, to ¥351.3 billion. Sales of car audio products decreased. Consumermarket sales declined, mainly from lower sales in emerging markets. OEM sales rose owing to increases mainly in Japan and North America. Car navigation system...

  • Page 14
    ... Changes in heart rate, autonomic nervous system, etc. Vehicle information Detection of driver's biological information Stimuli through sounds, vibrations, etc. Vital sensors Adjustment for individual differences Estimate driver's physical condition 12 Pioneer Corporation Annual Report 2016

  • Page 15
    ... water Transparency like radio waves THz THz Penetrates Cloth, paper, wood, plastic, and ceramics Wall painting Evaluating the condition of the Takamatsuzuka Tomb wall paintings (Photo: Nara National Research Institute for Cultural Properties in Japan) Pioneer Corporation Annual Report 2016 13

  • Page 16
    ... and periodically reviewing and revising this basic policy, Pioneer will creatively develop corporate governance. Board of Directors, Board of Corporate Auditors and Executive Officers Pioneer has adopted a Board of Corporate Auditors system of corporate governance. Under this system, the Company...

  • Page 17
    ... regulations. The Audit Division 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...

  • Page 18
    ... learn the principles of sound and the structure of speakers. With the help and cooperation of our employees and their families, we intend to continue carrying out these activities going forward. The "Listen through the Body" program held various type of concerts using Pioneer's proprietary system...

  • Page 19
    ... of the Tokyo Stock Exchange. 2. Messrs. Keiichi Nishikido and Hiroyuki Wakamatsu are outside corporate auditors pursuant to the Companies Act of Japan, and are independent corporate auditors satisfying the requirements of the Tokyo Stock Exchange. Pioneer Corporation Annual Report 2016 17

  • Page 20
    ... Review Consolidated Balance Sheet Consolidated Statement of Income Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Independent Auditor's Report 18 Pioneer Corporation Annual...

  • Page 21
    ...share are calculated by using the number of issued shares after deducting treasury stock. 5. Cash and cash equivalents at end of year exclude time deposits which become due over three months of the date of acquisition. 6. The amount of borrowings includes convertible bonds and excludes capital lease...

  • Page 22
    ...car audio sales. Car Electronics sales declined 1.2% year on year, to ¥351,293 million. Sales of car audio products decreased. Consumermarket sales declined, mainly from lower sales in emerging markets. OEM sales rose owing to increases mainly in Japan and North America. Car navigation system sales...

  • Page 23
    ... of deferred tax assets in fiscal 2015. • Net income attributable to owners of Pioneer Corporation As a result of the above, net income attributable to owners of Pioneer Corporation decreased to ¥731 million, from ¥14,632 million in fiscal 2015. Financing activities provided net cash in the...

  • Page 24
    ...7 and 15) Investments in associated companies (Note 15) Software Software in progress Goodwill Deferred tax assets (Note 10) Net defined benefit asset (Note 8) Other assets Allowance for doubtful accounts Total investments and other assets Total See notes to consolidated financial statements. 4,164...

  • Page 25
    ... Treasury stock-at cost, 5,029,993 shares in 2016 and 5,028,727 shares in 2015 Accumulated other comprehensive income (loss): Unrealized loss on available-for-sale securities Deferred loss on derivatives under hedge accounting Foreign currency translation adjustments Defined retirement benefit plans...

  • Page 26
    ... Current Deferred Total income taxes Net income Net income (loss) attributable to noncontrolling interests Net income attributable to owners of Pioneer Corporation ¥ $ Per Share of Common Stock (Note 18) : Basic net income Diluted net income Cash dividends, applicable to the year See notes to...

  • Page 27
    ... Benefit Plans Loss Interests Common Stock Capital Surplus Retained Earnings Treasury Stock Total Equity Balance, April 1, 2015 $811,788 $495,717 $294,487 $(97,796) $ (929) - $(419,195) $(183,779) $(603,903) $47,194 $947,487 Net income attributable to owners of Pioneer Corporation...

  • Page 28
    ... of Cash Flows Pioneer Corporation and Its Subsidiaries Year Ended March 31, 2016 Millions of Yen Thousands of U.S. Dollars (Note 1) 2016 Operating Activities: 2015 ¥ 25,230 (4,504) 23,543 (327) 1,331 (1,596) (44,889) 2016 $ 43,363 (40,248) 240,018 5,372 1,159 (6,212) Income before income taxes...

  • Page 29
    ...equity method. Investments in seven (seven in 2015) associated companies are accounted for by the equity method. The excess of the cost of an acquisition over the fair value of the net assets of an acquired subsidiary at the date of acquisition is being amortized over a period not exceeding 20 years...

  • Page 30
    ... recorded in equity through other comprehensive income; (c) expensing capitalized development costs of R&D; and (d) cancellation of the fair value model accounting for property, plant, and equipment and investment properties and incorporation of the cost model accounting. d. Business Combination In...

  • Page 31
    ... of the year of the first-time application. The revised accounting standards and guidance for (b) presentation of the consolidated balance sheet and (c) presentation of the consolidated statement of income shall be applied to all periods presented in financial statements containing the first...

  • Page 32
    ... and plan assets at the consolidated balance sheet date. The projected benefit obligations are attributed to periods on a benefit formula basis. Prior service cost is amortized using the straight-line method over 10-14 years within the average of the estimated remaining service years. Actuarial...

  • Page 33
    ... method for lease assets involving finance lease transactions of which the ownership is not transferred to lessees is the straight-line method with their residual values being zero over their leased periods used as the number of years for useful life. Pioneer Corporation Annual Report 2016...

  • Page 34
    ...net of tax, and full exercise of outstanding warrants. Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective fiscal years including dividends to be paid after the end of the year. 32 Pioneer Corporation Annual Report 2016

  • Page 35
    ... on the income or loss for the fiscal year ending on or after March 31, 2017. v. Consolidated Corporate Tax System The Group files a tax return under the consolidated corporate tax system, which allows companies to base tax payments on the combined profits or losses of the parent company and its...

  • Page 36
    ... market price in an active market. The information for these investments is disclosed in Note 15. Available-for-sale securities that the Group sold during the years ended March 31, 2016 and 2015 were as follows: Millions of Yen Thousands of U.S. Dollars 2016 Proceeds from sales: Equity securities...

  • Page 37
    ... and 2015, the Group held certain idle properties in Yamanashi and other areas in Japan. Gain on sales of idle properties for the years ended March 31, 2016 and 2015, was ¥123 million ($1,088 thousand) and ¥1,473 million, respectively. The carrying amounts, changes in such balances and fair value...

  • Page 38
    ... fiscal year ended March 31, 2015, principally represents the sales of idle property of ¥2,182 million. 3. Fair value is principally based on the values provided by third-party real estate appraisers. 7. Short-term Borrowings and Long-term Debt Short-term borrowings as of March 31, 2016 and 2015...

  • Page 39
    ... stock of the Company from December 25, 2015 to December 11, 2020 at ¥456 ($4.04) per share. The conversion prices of the convertible bonds are subject to adjustments in certain circumstances. As of March 31, 2016 and 2015, the following assets were pledged as collateral for short-term borrowings...

  • Page 40
    ...points are accumulated based on years of service and job class. In some cases, additional retirement benefits are paid when an employee retires. The Company and certain consolidated subsidiaries have joined multi-employer pension fund plans. Each company's portion of plan assets corresponding to its...

  • Page 41
    ... were as follows: Millions of Yen Thousands of U.S. Dollars 2016 Prior service cost Actuarial losses (gains) Transitional obligation for retirement benefits Total ¥ 883 6,535 - ¥7,418 2015 ¥ 1,018 (3,004) (182) ¥(2,168) 2016 $ 7,814 57,832 - $65,646 Pioneer Corporation Annual Report 2016 39

  • Page 42
    ...and 2015, consisted of the following: 2016 Debt investments securities Equity investments securities Cash and cash equivalents Others Total (b) Method of determining the expected rate of return on plan assets The expected rate of return on plan assets is determined considering the long-term rates of...

  • Page 43
    ... Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or deducted directly from stock acquisition rights. Pioneer Corporation Annual Report 2016 41

  • Page 44
    ... of inhabitant tax Revision of net tax basis of investments relating to consolidated corporate tax system 2015 36.0% 2.5 (0.6) (4.1) 3.4 2.1 0.3 2.6 2.0 44.2% 33.0% 7.7 (1.1) (37.4) 78.1 13.7 1.5 (15.0) 4.4 84.9% Others-net Actual effective tax rate 42 Pioneer Corporation Annual Report 2016

  • Page 45
    ... for an early retirement incentive plan. 14. Gain on Business Transfer Gain on business transfer for the years ended March 31, 2016 and 2015, was due to the transfer of the Group's business relating to development, manufacturing and sale of DJ equipment. Pioneer Corporation Annual Report 2016 43

  • Page 46
    ... securities, mainly equity instruments in the companies with which the Company has business and capital alliances, are exposed to the risk of market price ï¬,uctuations. Payment terms of payables, such as trade payables, are less than one year. Payables in foreign currencies arising from imports...

  • Page 47
    ... Gain Carrying Amount Fair Value 2016 Unrealized Gain 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 48
    ... fair value because the market interest rates reflected in the short-term period use mainly variable interests and the credit status of the Company has not changed significantly. Derivatives Fair value information for derivatives is included in Note 16. 46 Pioneer Corporation Annual Report 2016

  • Page 49
    ...whose fair value cannot be reliably determined as of March 31, 2016 and 2015, were as follows: Millions of Yen Thousands of U.S. Dollars 2016 Investment in equity instruments that do not have a quoted market price in an active market: Unlisted securities Unlisted associated securities Total ¥2,434...

  • Page 50
    ... 29 11 (6) 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. 48 Pioneer Corporation Annual Report 2016

  • Page 51
    ... profit or loss Amount before income tax effect Income tax effect Total Defined retirement benefit plans Adjustments arising during the year Reclassification adjustments to profit or loss Amount before income tax effect Income tax effect Total Share of other comprehensive (loss) income in associates...

  • Page 52
    ... of Yen Year ended March 31, 2016 Net Income Thousands of Shares Weighted-Average Number of Shares Yen EPS U.S. Dollars EPS Basic EPS: Net income attributable to owners of Pioneer Corporation Effect of dilutive securities Dilutive effect of convertible bonds Diluted EPS: Net income for computation...

  • Page 53
    ... car navigation systems, car stereos, car AV systems, car speakers and others. "Others" produces and sells Blu-ray Disc drives, DVD drives, equipment for cable-TV systems, factory automation systems, map software, electronic devices and parts, speaker units and organic light-emitting diode displays...

  • Page 54
    ...property, plant and equipment and intangible assets are capital investments principally related to relocation of head office. 4. Adjustments are made to reconcile segment income to operating income presented in the accompanying consolidated statement of income. 52 Pioneer Corporation Annual Report...

  • Page 55
    ...property, plant and equipment and intangible assets are capital investments principally related to relocation of head office. 4. Adjustments are made to reconcile segment income to operating income presented in the accompanying consolidated statement of income. Pioneer Corporation Annual Report 2016...

  • Page 56
    (4) Information about geographical areas (I) Sales Millions of Yen Thousands of U.S. Dollars 2016 Japan North America Europe ¥29,999 China ¥56,094 Others Total Japan North America Europe China Others 2016 Total ¥181,870 ¥101,315 ¥80,352 ¥449,630 $1,609,469 $896,593 $265,478 $496,407 $711,...

  • Page 57
    ...Electronics Corporate Others Total Consolidated Unamortized balance of goodwill - - - ¥522 ¥522 Thousands of U.S. Dollars 2016 Reportable Segment Car Electronics Corporate Others Total Consolidated Unamortized balance of goodwill - - - $4,248 $4,248 Pioneer Corporation Annual Report...

  • Page 58
    Independent Auditor's Report 56 Pioneer Corporation Annual Report 2016

  • Page 59
    ... Services Bank, Ltd. (Trust Account) Oasis Investments II Master Fund Ltd. Japan Trustee Services Bank, Ltd. (Trust Account 9) The Bank of Tokyo-Mitsubishi UFJ, Ltd. State Street Bank and Trust Company 505001 The Bank of New York 133522 SIX SIS Ltd. Number of shares held (thousand) Shareholdings...

  • Page 60
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