Toshiba 1999 Annual Report Download - page 41

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TOSHIBA ANNUAL REPORT 1999
to ¥94.7 billion (US$783 million). This was mainly attributable to significantly improved profitability in PCs. Electronic devices
& materials had an operating loss of ¥68.7 billion (US$568 million), a sharp deterioration in profitability from the operating
income of ¥40.5 billion recorded a year earlier. Lower sales prices for semiconductors, particularly for memories, hurt this
segment. Power & industrial systems operating income was down 43 percent compared with the previous year, to ¥10.7 billion
(US$88 million) in line with decreased sales. Consumer products recorded an operating loss of ¥31.2 billion (US$258 million),
which was an improvement from the ¥45.3 billion operating loss of the previous year. This resulted from good overseas sales of
TVs and improved profitability of washing machines and air conditioners in Japan. Services & other reported a 5 percent decrease
in operating income to ¥23.4 billion (US$194 million).
Toshiba estimates that the net effect of foreign exchange movements during the fiscal year was a ¥41.0 billion increase in
operating income. This is due to the following factors. Foreign exchange movements raised net sales by ¥60.0 billion and raised
procurement expenses by ¥19.0 billion. Net foreign exchange losses in non-operating expenses were ¥22.6 billion lower than in
the previous year. Reduced foreign exchange losses of Toshiba Corporation and a reduction in revaluation losses of dollar-
denominated borrowings in line with increasing stability in many Asian currencies produced this result.
Net financial expenses decreased from ¥32.5 billion in the previous year, to ¥31.4 billion (US$259 million). Other income
includes gains on the sale of securities, mainly shares of Time Warner Inc., and gains on sales of fixed assets, mainly land. Other
expenses includes the cost of restructuring the air conditioner business, strengthening the home appliances business operated by
sales subsidiaries in Japan and improvement of the semiconductor business structure.
Income before income taxes and minority interest decreased 40 percent compared with the previous year, to ¥11.2 billion
(US$93 million). Income taxes increased to ¥25.5 billion (US$211 million). Income taxes includes a ¥16.8 billion (US$139 million)
charge due to the revaluation of deferred assets resulting from the reduction in Japan’s corporate income tax rate.
The result was a net loss of ¥13.9 billion (US$115 million) compared with net income of ¥7.3 billion in the previous year. This
was Toshiba’s first net loss in 23 years. However, net income for the fiscal year was ¥2.9 billion (US$24 million), if the effect of
the tax rate reduction is excluded.
SEGMENT INFORMATION
The following segment information is based on Japanese accounting standards. As Japanese accounting standards do not
require retroactive application of newly adopted standards, certain columns in the following tables are left blank for periods
which precede the adoption of new disclosure requirements.
Industry Segments
Thousands of
Millions of yen U.S. dollars
Years ended March 31 1999 1998 1997 1999
Net sales:
Information & Communication Systems
Unaffiliated customers . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,166,430 ¥2,101,808 ¥2,069,269 $17,904,380
Intersegment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,851 82,270 78,226 668,190
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,247,281 2,184,078 2,147,495 18,572,570
Electronic Devices & Materials
Unaffiliated customers . . . . . . . . . . . . . . . . . . . . . . . . . 1,052,740 1,157,267 1,104,147 8,700,331
Intersegment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198,070 184,527 179,824 1,636,942
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250,810 1,341,794 1,283,971 10,337,273
Power & Industrial Systems
Unaffiliated customers . . . . . . . . . . . . . . . . . . . . . . . . . 947,301 1,061,107 1,108,761 7,828,934
Intersegment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,679 58,542 52,559 352,719
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 989,980 1,119,649 1,161,320 8,181,653
Consumer Products
Unaffiliated customers . . . . . . . . . . . . . . . . . . . . . . . . . 1,013,507 1,015,494 1,136,995 8,376,090
Intersegment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,932 24,889 18,646 222,579
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,040,439 1,040,383 1,155,641 8,598,669