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there for you
TOSHIBA ANNUAL REPORT 2001
Year ended March 31, 2001

Table of contents

  • Page 1
    TOSHIBA ANNUAL REPORT 2001 Year ended March 31, 2001 there for you

  • Page 2
    ...FINANCIAL HIGHLIGHTS TO OUR SHAREHOLDERS FEATURE Value chain Innovative technologies Initiative TOSHIBA AND THE ENVIRONMENT BOARD OF DIRECTORS, EXECUTIVE OFFICERS AND STATUTORY AUDITORS REVIEW OF OPERATIONS AND FINANCIAL SECTION MANAGEMENT'S DISCUSSION AND ANALYSIS CONSOLIDATED FINANCIAL STATEMENTS...

  • Page 3
    ... HIGHLIGHTS Toshiba Corporation and its subsidiaries Years ended March 31, 2001 and 2000 Millions of yen Thousands of U.S. dollars 2001 2000 2001 Net sales-Japan -Overseas Net sales Operating income Income (loss) before income taxes and minority interest Net income (loss) Research and...

  • Page 4
    ... and Chief Executive Officer (right) Summa r y o f F i s c a l 2 0 0 0 Opera t i n g R e s u l t s Fiscal 2000, ended March 31, 2001, saw Toshiba make substantial advances towards the growth targets of its mid-term business plan. We achieved a 4% increase in consolidated net sales to ¥5,951...

  • Page 5
    ... Internet-based business operations on a worldwide scale. Specific actions are already underway. Model CRM (customer relationship management) and SCM (supply chain management) systems for our PC and semiconductor businesses are already being deployed, and will be extended to cover company...

  • Page 6
    ... maximizing returns on capital invested, and boosted cash flows. To sharpen our focus on improving corporate value further, a new core management yardstick-Toshiba Value Created (TVC)-will become effective from the current fiscal year. We will apply TVC in setting mid-term business plan targets...

  • Page 7
    ..., including home appliances and power systems, through which we generate stable earnings streams. Our efforts here will include cultivating new businesses and restructuring operations based on strategic alliances. Toshiba's mid-term business plan to fiscal 2003, ending March 31, 2004, sets the...

  • Page 8
    ... of the work of the individual in-house companies, the value chain drives value-added, cross-company contacts and projects in components, hardware, infrastructure, system solutions and content. It guides Toshiba to enhanced growth in the three key areas of mobile applications, broadband networks and...

  • Page 9
    es with our technology 7

  • Page 10
    ... new value-added services, including a hotel reservation system. (http://ekitan.com) (Left) Modem & PC Card: The world's first BluetoothTM compatible PC card and the BluetoothTM Wireless Modem Station combine to provide wireless Internet access within a maximum range of 100 meters. (Center) Portable...

  • Page 11
    value chain we integrate The photographs show conceptual products. 9

  • Page 12
    innovative technologies we invent 10

  • Page 13
    ... Components Semiconductors, LCDs, batteries, memory cards and other essential enabling technologies are at the center of Toshiba's components business; and at the heart of the mobile and network era that is now dawning. We are striving to generate higher earnings by setting de facto standards in key...

  • Page 14
    ... Television Network Corporation and Warner Bros. And we work together with Amuse Pictures, Inc. to distribute foreign films to Japanese cinemas and to develop the movie redistribution/video business. In home-use hardware, we directed core in-house technologies and capabilities, including Toshiba...

  • Page 15
    initiative we unite 13

  • Page 16
    ..., power systems and home appliances declined by between 40-46%. Reducin g t h e E n v i r o n m e n t a l Burden f r o m P r o d u c t i o n to Recy c l i n g Toshiba is committed to becoming a recycling-oriented company that reduces environmental loads in all product processes from manufacturing...

  • Page 17
    ... washing machines, tumble dryers, microwave ovens and other home appliances were manufactured with lead-free solder in fiscal 2000. One major result in ECPs was the Super Power Eco Series, an air conditioning system for retail premises that received Japan's Energy Conservation Prize. Commercialized...

  • Page 18
    ... Kozo Wada Director Kosaku Inaba Director Sakutaro Tanino Director Yasuhiko Torii Director *Representative Director EXECUTIVE Corporate Kiyoaki Shimagami OFFICERS Company Hiroo Okuhara Senior Vice President STATUTORY Akinobu Kasami Kenjiro Hayashi Susumu Terao Shunsaku Hashimoto Eiichi...

  • Page 19
    ... AND FINANCIAL SECTION AT A GLANCE REVIEW OF OPERATIONS RESEARCH AND DEVELOPMENT MANAGEMENT'S DISCUSSION AND ANALYSIS CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF INCOME 18 20 31 33 40 42 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 43 CONSOLIDATED STATEMENTS OF ...

  • Page 20
    ... new possibilities and lifestyles in the home and the office. The company embeds wireless solutions including BluetoothTM, along with MPEG-4 and other important advances, into the hardware supporting today's networks, including PCs, digital TVs and other visual products, DVD drives, SD Memory Cards...

  • Page 21
    ... capabilities cover generating equipment, systems and services in nuclear, thermal and hydroelectric power generation, power transmission and distribution and system monitoring. As Japan's leading energy systems supplier, the company is enhancing its competitiveness through alliances with Japanese...

  • Page 22
    ... on total solutions in digital broadcasting services, integrating upstream through downstream processes, from broadcasting equipment to television commerce and content. Finally, the company's platform business builds the basic platforms essential for SI solutions, and offers fixed wireless access...

  • Page 23
    ... Toshiba and six other Japanese companies, established two new companies to promote work on the Taiwan high-speed rail project. In August 2000, The Taiwan Shinkansen Corporation was set up to supply electrical and machine systems. And in March 2001, Taiwan Shinkansen Maintenance Service Corporation...

  • Page 24
    ..., Toshiba and General Electric Company established a joint venture, Toshiba GE Automation Systems Corporation, to market industrial control systems and provide systems integration services. Toshiba will proactively extend its facility solutions and energy solutions operations as new business models...

  • Page 25
    ....com) has seen its technology adopted by other leading sites in Japan, and now boasts over 350,000 paying members who use cellular phones to access its services. In fiscal 2000, Toshiba also launched Application Service Provider (ASP) services for other companies' websites. Early success includes...

  • Page 26
    ... phones has created new lifestyle scenarios using mobile audio-visual network functions. Toshiba will support this trend and open up new markets with products that include digital cameras, portable digital audio players and portable DVD players. The Dynabook V Series multi-function drive plays DVDs...

  • Page 27
    ...) SHARE OF SALES (%) Years ended Mar. 31 1999 2000 2001 8.5 8.8 583 8.4 Toshiba is the main contractor for the 1140MW substation at TEPCO's Shinagawa No. 1 Thermal Power Station. This 1300ËšC gas turbine combined-cycle power plant is scheduled to commence operation in July 2001. Toshiba is now...

  • Page 28
    .... Toshiba also set up two manufacturing ventures to respectively produce gas insulated switchgears and vacuum circuit breakers-key components in power transmission networks for ensuring a stable power supply and increasing reliability. In March 2000, Toshiba and International Fuel Cells Corporation...

  • Page 29
    ...system LSIs for digital consumer equipment, networks and communications equipment. A new annex, opened in April 2001, has expanded operating scale and technological capabilities. Toshiba is shifting its DRAM business to high-value-added products. A competitive advantage in highspeed DRAMs, supports...

  • Page 30
    ... at what will be the world's largest manufacturing plant of its kind, is set to commence in July 2002. The companies will invest around Â¥123 billion in the venture, and projections call for a monthly production volume of 55,000 730Ò,920mm boards in fiscal 2003. Toshiba plans to bring to market OLED...

  • Page 31
    ...world's largest producer of home appliances. The alliance will continue to focus on technological exchanges, joint product development, product sourcing, mutual components supply and environmental initiatives. In refrigerators, Toshiba undertakes a number of activities, including technology transfer...

  • Page 32
    ... powerful vacuum cleaner. Negative ions generated by the Plasma Ion Daiseikai air conditioner give rooms a natural feeling. This segment's primary revenue streams are leasing and other financial services, real estate operations, including leasing and sales, and logistics operations. Consolidated...

  • Page 33
    The corporate R&D Center currently focuses its efforts on the mobile sector, networks, key components, software, the enviResearch and Development ronment and other growth areas. The Center performs basic research and market-centric R&D, and develops the technologies that will provide the collective...

  • Page 34
    ... volumes of XML data, including sales data, memos and mail. The capabilities of the XML query language developed by Toshiba surpass those of Structured Query Language (SQL) used in Relational Databases. Use of the engine supports easy development of powerful XML-based knowledge management systems...

  • Page 35
    ... consecutive year of top-line growth. This was primarily attributable to the strong performance of semiconductors and LCDs on the back of increased demand for digital devices, as well as brisk sales of mobile communications devices and home appliances. In terms of average exchange rates, the euro...

  • Page 36
    ...Nevertheless, strong demand for PCs, semiconductors and LCDs, coupled with growth in refrigerators, washing machines, air conditioners, other home appliances and wide-screen TVs, resulted in a 7% increase in net sales to ¥3,753.1 billion (US$30,267 million). North America-The North American market...

  • Page 37
    ... & Communications and Industrial Systems Unaffiliated customers Intersegment Total Digital Media Unaffiliated customers Intersegment Total Power Systems Unaffiliated customers Intersegment Total Electronic Devices & Components Unaffiliated customers Intersegment Total Home Appliances Unaffiliated...

  • Page 38
    ... dollars 2001 2000 1999 2001 Operating income (loss): Information & Communications and Industrial Systems Digital Media Power Systems Electronic Devices & Components Home Appliances Others Eliminations Consolidated Identifiable assets: Information & Communications and Industrial Systems Digital...

  • Page 39
    ...Total Europe Unaffiliated customers Intersegment Total Other Unaffiliated customers Intersegment Total Eliminations Consolidated Operating income (loss): Japan North America Asia Europe Other Eliminations Consolidated Identifiable assets: Japan North America Asia Europe Other Corporate...500... 5,300,902...

  • Page 40
    ... tools, BS digital TVs, DVDs and other visual and information equipment. R&D expenditures in power systems were ¥23.1 billion (US$186 million), including for energy plants, power supply equipment, control and maintenance technologies and new types of fuel cells. In electronic devices & components...

  • Page 41
    ...March 31, 2001. Principal Subsidiaries and Affiliated Companies As of March 31, 2001 Percentage held by Group Consolidated Subsidiaries: Affiliated Companies: Japan Toshiba Battery Co., Ltd. Toshiba TEC Corporation 100 50 Japan Toshiba Ceramics Co., Ltd. 45 U.S.A. Toshiba America, Inc. 100 39

  • Page 42
    ... As of March 31, 2001 and 2000 BALANCE SHEETS Toshiba Corporation and its subsidiaries Millions of yen Thousands of U.S. dollars (Note 3) ASSETS Current assets: Cash and cash equivalents Notes and accounts receivable, trade- Notes (Note 5) Accounts (Note 5) Allowance for doubtful notes and...

  • Page 43
    ...dollars (Note 3) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings (Note 8) Current portion of long-term debt (Note 8) Notes payable, trade Accounts payable, trade...Total current liabilities Long-term liabilities: Long-term debt (Note 8) Accrued pension...in capital ...

  • Page 44
    CONSOLIDATED STATEMENTS OF INCOME Toshiba Corporation and its subsidiaries For the years ended March 31, 2001 and 2000 Millions of yen Thousands of U.S. dollars (Note 3) 2001 2000 2001 Sales and other income: Net sales Interest and dividends Other income (Notes 4 and 9) ¥5,951,357 18,230...

  • Page 45
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Toshiba Corporation and its subsidiaries For the years ended March 31, 2001 and 2000 Millions of yen Additional paid-in capital Accumulated other comprehensive income (loss) Common stock Retained earnings Total Balance at March 31, 1999 ...

  • Page 46
    CONSOLIDATED STATEMENTS OF CASH FLOWS Toshiba Corporation and its subsidiaries For the years ended March 31, 2001 and 2000 Millions of yen Thousands of U.S. dollars (Note 3) 2001 2000 2001 Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income (loss) ...

  • Page 47
    ...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 the years ended March 31...

  • Page 48
    ... principles to revenue recognition issues in financial statements. The company adopted SAB101 in the fiscal year ended March 31,2001 and the adoption did not have a material impact on the company's results of operations or financial condition. Revenue under long-term contracts is generally recorded...

  • Page 49
    ... greater of the projected benefit obligation or the fair value of plan assets are also amortized over the average remaining service period of employees expected to receive benefits. Net Income Per Share- Basic net income per share (EPS) is computed based on the weighted-average number of shares of...

  • Page 50
    ... At March 31, 2001, debt securities mainly consist of corporate debt securities. Contractual maturities of debt securities classified as available-for-sale were as follows at March 31, 2001: Millions of yen Cost Fair value Cost Thousands of U.S. dollars Fair value Due within one year Due after one...

  • Page 51
    ...of sales-type and direct financing 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...

  • Page 52
    ... of U.S. dollars 2001 ¥345,183 148,462 201,060 124,928 ¥819,633 2000 ¥314,778 194,092 208,605 119,713 ¥837,188 2001 $2,783,734 1,197,274 1,621,452 1,007,484 $6,609,944 Finished products Work in process: Long-term contracts Other Raw materials 7. Investments in Affiliated Companies Of the...

  • Page 53
    ...31, 2001, the company and subsidiaries had unused committed lines of credit from shortterm financing arrangements aggregating ¥158,475 million ($1,278,024 thousand), of which ¥30,975 million ($249,798 thousand) was in support of the company's commercial paper. These lines of credit have commitment...

  • Page 54
    ...466,798 4,344,331 438,422 500,000 3,535,661 58,925 630 17,736 62,975 630 17,742 475,202 5,081 143,032 19,000 300 29,000 - 153,226 2,419...pledged as collateral for short-term borrowings and long-term debt at March 31, 2001 are property, plant and equipment with a book value of ¥57,941 million...

  • Page 55
    ... the revisions of the Japanese Welfare Pension Insurance Law. These amendments resulted in the reduction of the projected benefit obligations of the funds. Net periodic pension and severance cost for 2001 and 2000 included the following components: Millions of yen Years ended March 31 Thousands of...

  • Page 56
    ... of year Actual return on plan assets Employer contribution Plan participants' contributions Benefits paid Foreign currency exchange impact Fair value of plan assets at end of year Funded status Unrecognized actuarial loss Unrecognized net obligation at transition Unrecognized prior service cost Net...

  • Page 57
    ... the years ended March 31, 2001 and 2000, respectively. 12. FDC Litigation Settlement In October 1999, 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...

  • Page 58
    ... 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, 2001 include year-end dividends of...

  • Page 59
    ...end of year Minimum pension liability adjustment: Balance at beginning of year Current-period change Balance at end of year Total...666,097) $(1,825,766) Tax effects allocated to each component of other comprehensive income (loss) for the years ended March 31, 2001 and 2000 are shown below: Millions ...

  • Page 60
    ... and losses explicitly deferred, arising from contracts related to future trade transactions, are insignificant. As these foreign exchange forward contracts are utilized solely for hedging purposes, the resulting gains or losses are offset against foreign exchange gains or losses on the underlying...

  • Page 61
    ... interest rate swaps are recognized in interest expense over the terms of the agreements. Currency swaps are accounted for in a manner similar to the accounting for forward exchange contracts. The company's forward exchange contract amounts, the aggregate notional principal amounts of interest rate...

  • Page 62
    ..., plant and equipment approximated ¥46,486 million ($374,887 thousand). Rental expense for the years ended March 31, 2001 and 2000 aggregated ¥81,503 million ($657,282 thousand) and ¥79,299 million, respectively. Substantially all such rental expenses are related to cancellable leases for office...

  • Page 63
    ..., the financial position of Toshiba Corporation and its subsidiaries at March 31, 2000 and 1999, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America, except for the effects...

  • Page 64
    ... Toshiba International Corporation Houston, Texas, U.S.A. Toshiba of Europe Ltd. London, U.K. Toshiba America Electronic Components, Inc. Irvine, California, U.S.A. Toshiba International Finance (UK) Plc. London, U.K. Toshiba Display Devices Inc. Horseheads, New York, U.S.A. Toshiba Research...

  • Page 65
    ... Corporation Taipei, Taiwan Toshiba Electronics Europe GmbH Düsseldorf, Germany Toshiba Medical France S.A. Puteaux, France Taiwan Toshiba International Procurement Corp. Taipei, Taiwan Toshiba Electronics Trading (Malaysia) Sdn. Bhd. Selangor, Malaysia Toshiba Capital (Asia) Ltd. Singapore...

  • Page 66
    ... Sdn. Bhd. Toshiba (Australia) Pty., Ltd. Toshiba (China) Co., Ltd. Toshiba America Business Solutions, Inc. Toshiba America Capital Corporation Toshiba America Consumer Products, Inc. Toshiba America Electronic Components, Inc. Toshiba America Information Systems, Inc. Toshiba America Medical...

  • Page 67
    ...: Toshiba Corporation Corporate Communications Office 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_j.htm Product names may be trademarks of their respective companies. Printed...

  • Page 68
    Printed in Japan