Toshiba 2000 Annual Report Download

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A new Toshiba takes shape >>
ANNUAL REPORT >> Year ended March 31, 2000

Table of contents

  • Page 1
    A new Toshiba takes>>shape >> ANNUAL REPORT Year ended March 31 , 2000

  • Page 2
    ... Services B2C Internet Services REVIEW OF OPERATIONS Information & Communications and Industrial Systems Digital Media Pow er Sy s tems Electronic Devices & Components Home Appliances Others RESEARCH AND DEVELOPMENT TOSHIBA AND THE ENVIRONMENT BOARD OF DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE...

  • Page 3
    ...Toshiba Corporation and its subsidiaries Years ended March 31, 2000 and 1999 Millions of yen 2000 1999 Thousands of U.S. dollars 2000 Net sales - Japan ...- Overseas ...Net sales ...Operating income ...Income (loss) before income taxes and minority interest ...Net loss ...Research and development...

  • Page 4
    ... home appliances business also made a substantial return to profitability. And in its first full year, our new in-house company system secured impressive gains in cash flows. Settlement Reached in U.S. Class-Action Litigation In October 1999, Toshiba reached a settlement in a class-action lawsuit...

  • Page 5
    ... Chairman of the Board left: TADASHI OKAMURA President and Chief Executive Officer With the full support of one of the best U.S. law firms, Toshiba vigorously defended itself in the lawsuit by arguing that - while there was the potential for the FDC condition to cause data loss under certain...

  • Page 6
    ... in the market. The key to that is Management Innovation 2001 (MI2001). Launched in October 1998, this company-wide initiative is applying Six-Sigma methodology to building a corporate culture that encourages continuous innovation and seeks total customer satisfaction. We began extending MI2001...

  • Page 7
    ...of our drive into Internet-based services we established our ninth in-house company, the iValue Creation Company, in April 2000. A wide range of on-line operations will include business-to-consumer (B2C) services that use Toshiba's present portals and the FreshEye search engine, to conduct " Web-top...

  • Page 8
    ... companies working in IT-related businesses. The value chain is now promoting six projects in media cards, mobile devices, network home appliances, digital broadcasting services, Internet services and Intelligent Traffic Systems and automotive electronics. A Sound Base for Consistently High Returns...

  • Page 9
    ... and valued company. Through our products and services and our enhanced customer support, we will assure a level of performance in this and coming years that places Toshiba in the front ranks of the world's most admired companies. June 2000 Taizo Nishimuro Director Chairman of the Board Tadashi...

  • Page 10
    ... st Media cards Mobile devices Network home appliances The Six Pillars of the Value Chain Toshiba's inter-company value chain targets six markets: media cards; mobile devices; network home appliances; digital broadcasting services; Internet services; and Intelligent Transportation Systems (ITS...

  • Page 11
    ...Power Systems & Services Company Home Appliances Company Content distribution Flash memories Wireless devices Satellite Content distribution Content distribution PC Cellular phone Network AV Digital TV Telecom LSIs LCDs/Batteries System LSIs LCDs/Batteries Digital white goods Mobile data...

  • Page 12
    ... th in system LSI sales. In discrete components, Toshiba is preeminent in the global market, and bolstering its product line and profitability w ith new products for mobile applications. Flash memories are being cultivated as the nucleus for the business, and Toshiba seeks the lion's share of the...

  • Page 13
    ...personal products like digital cameras and mobile audio players. Toshiba adds to the potential w ith its NAND-flash-memory based SmartMediaâ„¢ and the SD media cards. Record data on one device, view it on another; enjoy total flexibility. The market is ready to soar, and Toshiba is ready to drive it...

  • Page 14
    ... overseas production. But the key innovations w ill come in the PCs themselves. Look for enhanced netw orking capabilities, including Bluetooth-compatible models, and for great audio-visual features. And look for Toshiba to retain its lead in the global portable market. < Inter-company Value Chain...

  • Page 15
    ... through OEM supply to Audiovox-Toshiba is looking to W-CDMA and other next-generation standards as a w ay to increased market share. The Wideband CDMA Business Development Division started business in January 2000 to speed development of products for Japan's spring 2001launch of W-CDMA service. It...

  • Page 16
    ... of business: procurement, manufacturing, logistics, sales and other activities. Total energy solutions is another face of the services the company offers: consultation on energy conservation; an energy-conserving physical plant management service and an operating and maintenance management system...

  • Page 17
    ...services, BS digital data broadcasts of interactive e-commerce, through a new affiliate, MediaServe Corporation. With demand for hardw are set to grow , Toshiba is ready and w aiting w ith a broad range of digital broadcasting equipment, including program production systems and video data management...

  • Page 18
    ... its data center positions Toshiba for growth as an application service provider. B2B Internet Services >> The e-Net Business Division stands in the vanguard of Toshiba's B2B strategy. Diverse expertise gained in providing system solutions for industry, and in supplying a full line of electric and...

  • Page 19
    ... develop mobile Internet services and content. Spearheading the drive is iValue Creation Company, the new est of the in-house companies. In its first steps, it is using Toshiba's popular portal, the " Eki-mae Tanken Club," and its " FreshEye" search engine to speed the grow th of Internet services...

  • Page 20
    ...based services and 1,000 communications, key areas for future growth. Initiatives included the December 1999 establishment of T&I Solution Co. Ltd., a Toshiba and IBM 500 Mar. 1998 1999 2000 Japan, Ltd. joint venture that supports banks with data processing and communications systems. Share...

  • Page 21
    ...and management equipment for submarine cable communications by delivering systems for the new backbone cable linking China and the U.S. The company also developed a high-speed Broadband Wireless Access System that is expected to generate strong global demand. Early customers include Sony Corporation...

  • Page 22
    ... sharing â- The December 1999 decision to spin off Toshiba Corporation's industrial systems business into two subsidiaries, one dedicated to manufacturing the other sales, in order to enhance cost competitiveness and responsiveness to market shifts. The new companies began operations in April 2000...

  • Page 23
    ... company expanded opera- Net Sales (Â¥ billion) tions with the April 2000 start-up of Toshiba Computer Systems (Shanghai) Co. Ltd., a new 1,500 1,200 900 600 300 subsidiary in Shanghai, China that will manufacture and sell portable PCs. Higher sales were also recorded in networkrelated equipment...

  • Page 24
    ...market share. Video products enjoyed solid domestic business as consumers readied for the start of BS digital broadcasts in 2000. Flat-screen color TVs increased market share, with interest focused on models offering the higher picture quality of progressive scan technology, D3/D4 digital connection...

  • Page 25
    ... Toshiba makes the connection between the PC and CATV networks with the first cable modem certified by Cable Labs, bringing high-speed, interactive networking into the home. BS digital tuners and BS digital high-definition TVs developed for the December 2000 start of BS digital broadcasts in Japan...

  • Page 26
    ... Marubeni Corporation, Toshiba was selected by the Abu Dhabi Electricity & Water Authority to supply a complete network of substations. Work began in September 1999 1998 1999 2000 Mar. and will be completed by April 2001. This was the third consecutive order in Abu Dhabi. Share of Net Sales M ar...

  • Page 27
    ... Corporation, to supply a generator for a thermal power plant in Egypt-the first generator ever supplied to EDF by a Japanese company. The year also witnessed many new joint ventures and alliances. â- Global Nuclear Fuel, established with General Electric Company and Hitachi, Ltd. in January 2000...

  • Page 28
    ... a joint venture with SanDisk Corporation, Flash Vision LLC. With Toshiba's expertise in such areas as 900 600 300 fine-line geometry and Shallow Trench Isolation Mar. 1998 1999 2000 Technology, and SanDisk 's capabilities in multi- Share of Net Sales M ar. 1998 1999 2000 % 20.6 19.8 22...

  • Page 29
    ... help make cellular phones and other portable devices even smaller. As it builds a solid base for long-term expansion, Toshiba has restructured semiconductor operations around three core businesses: memories, system LSIs and discrete devices. In line with this strategy, the company took a number...

  • Page 30
    ... production base for North America. Shipments of 256M DRAMs will begin late in 2000. Reorganization also saw the company set in motion a global project to apply IT to cutting inventories, speeding deliveries and enhancing customer satisfaction. LCDs enjoyed stable prices as orders outstripped supply...

  • Page 31
    ... refrigerators, Home Appliances A segment that provides essential products for daily life. Consolidated sales declined 7 percent in the year to ¥ 659.9 billion, on declines in lighting products and other areas, and fell from 1 2 percent to 1 0 percent of total sales. Toshiba's innovative products...

  • Page 32
    ...and parts sourcing and environmental measures. With 13 working groups studying the best ways to advance in specific fields, the partners launched their first jointly developed product in February 2000: a home-use espresso maker. In Egypt, Toshiba has a technology sharing agreement for refrigerators...

  • Page 33
    ...-term business plan, and in support of the product areas being nurtured by the inter-company value chain, w e are concentrating our energies on the critical fields of mobile communications and netw orks. The follow ing paragraphs introduce some of our recent advances in technologies that w ill shape...

  • Page 34
    ... updated to accommodate new capabilities, such as e-mail and high-speed data transmissions, and allows format changes that give access to mobile communications systems around the world. Upgrades are delivered as a software rewrite over the telephone, at just the press of a button. Commercial systems...

  • Page 35
    ..., through a wireless link, on a TV at a later time. The company has developed the world 's first system for transmitting MPEG-4 video and sound over Bluetooth. The advanced lithium-ion rechargeable battery will support slimmer, lighter mobile applications offering greater functionality, including...

  • Page 36
    ...; prevention of global w arming; strict management of chemicals; development of environmentally-conscious products; and recycling of end-of-life products. Recycling Home Appliances Japan continues to promote environmental legislation. With new regulations on recycling home appliances due to come...

  • Page 37
    .... The Mid-Term Environmental Plan The comprehensive goals covered in the latest voluntary plan, Toshiba's third and most ambitious yet, setting new targets for waste reduction (with zero as the goal), creation of more environmentally friendly products, the full-scale application of " green...

  • Page 38
    ...the Board TADASHI OKAMURA* Director President and Chief Executive Officer KIYOAKI ...EXECUTIVE OFFICERS President and Chief Exec u t i ve Of f i c er Senior Executive Vice Presidents Executive... AZUMA EISABURO HAMANO Senior Vice Presidents CORPORATE AUDITORS ATSUMI UCHIYAMA KENJIRO HAYASHI HARUO ...

  • Page 39
    MANAGEMENT'S DISCUSSION & ANALYSIS FIVE-YEAR SUMMARY Toshiba Corporation and its subsidiaries Years ended March 31 2000 Millions of yen, except per share amounts 1999 1998 1997 1996 Net sales ...Cost of sales ...Selling, general and administrative expenses . Operating income ...Income (loss) ...

  • Page 40
    ... million). Though the newly consolidated Toshiba TEC Group boosted results, systems for use in industry, government and medical applications struggled. Digital media continued to benefit from steady results in PCs, while DVD-ROMs and mobile communications products both performed well. Unfortunately...

  • Page 41
    ..., Power & Industrial Systems, Consumer Products and Service & Other have been changed into six segments- Information & Communications and Industrial Systems, Digital Media, Power Systems, Electronic Devices & Components, Home Appliances and Others. Consolidated financial data for previous years have...

  • Page 42
    ... Systems ...Digital Media ...Power Systems ...Electronic Devices & Components ...Home Appliances ...Others...Corporate ...Consolidated ...Capital expenditures: Information & Communications and Industrial Systems ...Digital Media ...Power Systems ...Electronic Devices & Components ...Home Appliances...

  • Page 43
    ... dollars 1998 2000 Years ended March 31 2000 1999 Net sales: Japan Unaffiliated customers ...Intersegment ...Total ...North America Unaffiliated customers ...Intersegment ...Total ...Asia Unaffiliated customers ...Intersegment ...Total ...Europe Unaffiliated customers ...Intersegment ...Total...

  • Page 44
    ... Toshiba Electronics Corporation and low-temperature polysilicon LCD production facilities at Fukaya Operations. In other segments, capital expenditures were ¥51.4 billion (US$485 million) in information & communications and industrial systems, ¥42.9 billion (US$405 million) in digital media...

  • Page 45
    ... Toshiba Europe GmbH ...100 Malaysia Toshiba Electronics Malaysia Sdn.Bhd...100 Singapore TEC Singapore Electronics Pte.Ltd...100 Toshiba TEC Corporation ... U.S.A. Toshiba America Consumer Products,Inc...Toshiba America Electronic Components,Inc...100 100 100 100 100 100 Japan Showa Electric...

  • Page 46
    ... BALANCE SHEETS Toshiba Corporation and its subsidiaries As of March 31, 2000 and 1999 Millions of yen Thousands of U.S. dollars (Note 3) 1999 2000 ASSETS Current assets: Cash and cash equivalents ...Marketable securities (Note 4) ...Notes and accounts receivable, trade - Notes ...Accounts...

  • Page 47
    ... payable, trade ...Accounts payable, other and accrued expenses ...Accrued income and other taxes ...Advance payments received ...Other current liabilities ...Total current liabilities ...Long-term liabilities: Long-term debt (Note 8) ...Accrued pension and severance costs (Note 9) ... 2000 ¥ 587...

  • Page 48
    ... OF INCOME Toshiba Corporation and its subsidiaries For the years ended March 31, 2000 and 1999 Millions of yen 2000 1999 Thousands of U.S. dollars (Note 3) 2000 Sales and other income: Net sales...Interest and dividends ...Other income ... ¥ 5,749,372 21,793 85,200 5,856,365 ¥ 5,300,902 20...

  • Page 49
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Toshiba Corporation and its subsidiaries For the years ended March 31, 2000 and 1999 Millions of yen Additional paid-in capital Accumulated other comprehensive income (loss) Common stock Retained earnings Total Balance at March 31, 1998 ......

  • Page 50
    CONSOLIDATED STATEMENTS OF CASH FLOWS Toshiba Corporation and its subsidiaries For the years ended March 31, 2000 and 1999 Millions of yen 2000 1999 Thousands of U.S. dollars (Note 3) 2000 Cash flows from operating activities: Net loss ...Adjustments to reconcile net loss to net cash provided by ...

  • Page 51
    ... engaged in the research and development, manufacturing and sales of high-technology electronic and energy products, which span (1) information & communications and industrial systems, (2) digital media, (3) power systems, (4) electronic devices & components, (5) home appliances, and (6) others. For...

  • Page 52
    ... in process for contract items are stated at the lower of cost or estimated realizable value, cost being determined by accumulated production costs. Effective April 1, 1999, the company changed its method of accounting for the costs of finished products and work in process for stock sales items from...

  • Page 53
    ...and equity securities classified as held-to-maturity, trading, or available-for-sale securities. Under SFAS No. 115, the debt and equity securities owned by the company should be classified as available-for-sale securities and should be reported at fair value with unrealized gains and losses, net of...

  • Page 54
    ...debt securities mainly consist of corporate debt securities. Contractual maturities of debt securities classified as available-for-sale were as follows at March 31, 2000: Millions of yen Carrying amount Fair value Thousands of U.S. dollars Carrying amount Fair value Due within one year ...Due after...

  • Page 55
    ... leases mainly of information systems, medical equipment, agricultural and industrial equipment and others. Other finance receivables represent transactions in a variety of forms, including commercial loans, and installment sales of consumer products manufactured by the company. At March 31, 2000...

  • Page 56
    ... market prices at those dates. Summarized financial information of the affiliated companies accounted for by the equity method is shown below: Millions of yen Thousands of U.S. dollars 1999 2000 March 31 2000 Current assets ...Other assets including property, plant and equipment ...Total assets...

  • Page 57
    ... ($250,358 thousand) was in support of the company's commercial papers. These lines of credit have commitment fee requirements. Long-term debt at March 31, 2000 and 1999 comprise the following: Millions of yen Thousands of U.S. dollars 1999 2000 March 31 2000 Loans, principally from banks and...

  • Page 58
    ... in part, at defined prices. At March 31, 2000, 24,506 thousand shares of common stock would be issued upon conversion of all convertible debentures of the company. The aggregate annual maturities of long-term debt are as follows: Year ending March 31 Millions of yen Thousands of U.S. dollars 2001...

  • Page 59
    ... status and accrued pension and severance costs for 2000 and 1999 were as follows: Millions of yen Thousands of U.S. dollars 1999 2000 March 31 2000 Change in benefit obligations: Benefit obligation at beginning of year ...Service cost ...Interest cost ...Plan participants' contributions ...Plan...

  • Page 60
    ..., the company reached a settlement in a class-action lawsuit in the U.S. brought by two owners of its notebook personal computers (PCs) concerning the floppy-disk drive controller incorporated in PCs. They alleged that the floppy-disk controller (FDC) may, under certain circumstances, cause data to...

  • Page 61
    ... to stated capital. The amount of retained earnings available for dividends is based on the parent company's retained earnings determined in accordance with generally accepted accounting principles and the Commercial Code in Japan. Retained earnings at March 31, 2000 include year-end dividends of...

  • Page 62
    ... dollars 1999 2000 March 31 2000 Foreign currency translation adjustments: Balance at beginning of year ...Current-period change ...Balance at end of year ...Minimum pension liability adjustment: Balance at beginning of year ...Current-period change ...Balance at end of year ...Total accumulated...

  • Page 63
    ... for those two years. Weighted-average number of shares outstanding for both basic and diluted EPS for the years ended March 31, 2000 and 1999 were 3,218,976 thousand and 3,218,983 thousand, respectively. 1 7. FINANCIAL INSTRUMENTS: The company operates internationally, giving rise to exposure to...

  • Page 64
    ...office space, warehouses, and employees' residential facilities. Such leases are customarily renewed. At March 31, 2000, contingent liabilities, principally for loans guaranteed, approximated ¥ 483,017 million ($4,556,764 thousand). Management of the company believes that there are no legal actions...

  • Page 65
    ...balance sheets of Toshiba Corporation and its subsidiaries as of March 31, 2000 and 1999, and the related consolidated statements of income, shareholders' equity and cash flows for the years then ended, stated in yen. These financial statements are the responsibility of the Company's management. Our...

  • Page 66
    ... OFFICES Latin America Buenos Aires Europe Moscow Middle East Baghdad Abu Dhabi Asia Beijing Shanghai Manila Bangkok Jakarta New Delhi Africa Johannesburg OVERSEAS SUBSIDIARIES AND AFFILIATES North America Toshiba of Canada, Ltd. Markham, Ontario, Canada Toshiba America, Inc. New York, New York...

  • Page 67
    ...Malaysia Toshiba Capital (Asia) Ltd. Singapore Toshiba Asia Pacific Pte., Ltd. Singapore Toshiba Medical Systems Asia Pte., Ltd. Singapore Toshiba Data Dynamics Pte., Ltd. Singapore Toshiba Video Products Pte., Ltd. Singapore Toshiba Singapore Pte., Ltd. Singapore Toshiba Electronics Asia (Singapore...

  • Page 68
    ...Corporation Toshiba Elevator Products Corporation Toshiba Engineering Corporation Toshiba Finance Corporation Toshiba GE Turbine Components Co., Ltd. Toshiba Hokuto Electronics Corporation Toshiba Home Technology Corporation Toshiba Information Equipments Co., Ltd. Toshiba Information Systems (Japan...

  • Page 69
    ...contact: Corporate Communications Office TOSHIBA CORPORATION 1-1, Shibaura 1-chome, Minato-ku Tokyo 105-8001, Japan Phone: (03) 3457-2096 Facsimile: (03) 5444-9202 or via the Internet at: http://www.toshiba.co.jp /about / ir / index.htm Product names may be trademarks of their respective companies...

  • Page 70
    Printed in Japan