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Toshiba Corporation
Annual Report 2008 • Operational Review

Table of contents

  • Page 1
    Toshiba Corporation Annual Report 2008 • Operational Review

  • Page 2
    ...Toshiba Brand Statement ...1 Special Feature: Leading Innovation ...2 Basic Management Policy and Mid-term Business Plan ...10 To Our Shareholders ...12 An Interview with the President ...14 Business at a Glance ...18 Business Review ...20 CSR Management ...34 Research & Development and Intellectual...

  • Page 3
    ...) Net sales-Japan -Overseas Net sales (Total) Operating income (Note 2) Income before income taxes and minority interest Net income Total assets Shareholders' equity Capital expenditures (property, plant and equipment) Research and development expenditures Return on equity (ROE) (%) Return on total...

  • Page 4
    ... Corp. will promote close cooperation in the partners' respective specialties: Toshiba's system LSIs and Sharp's LCD panels. The companies together announced the cooperation. Sep '07 Sale of Ginza Toshiba Building confirmed Sale of the building supported Toshiba in maximizing corporate value and...

  • Page 5
    ..., more productive life. We bring together the spirit of innovation with our passion and conviction to shape the future and help protect the global environment-our shared heritage. We foster close relationships, rooted in trust and respect, with our customers, business partners and communities around...

  • Page 6
    ... brand tagline, "Toshiba Leading Innovation," to deliver waves of innovation in all aspects of business operations. If a company is to secure sustained profit, its management policies must be grounded in promoting growth. We can never be complacent, satisfied with business activities to date...

  • Page 7
    ..., Toshiba Group is simultaneously bringing innovation to the development, manufacturing and sales processes, using the multiplier effect to win sustained growth. Research & Development Process Innovation Achieving enhanced speed and efficiency in providing timely new products and services, at...

  • Page 8
    ... brand worldwide Launch of the world's first multi-drive notebook PC Launch of the ultra-small "libretto" PC Launch of the world's first 256 color TFT notebook PC Launch of the "dynabook" brand in Japan Commercialization of the "T1100," the world's first laptop PC Toshiba: History of the Notebook...

  • Page 9
    ... battery life, plus the world's first solid state drive (SSD). Toshiba also continues to lead the industry in commodity products with the release of high quality notebook PCs. Going forward, advances in high-performance processors supporting real-time image processing, in power-efficient fuel cells...

  • Page 10
    ..., including lower power consumption. March 2008 saw Toshiba start to apply 43-nanometer* process technology to production of NAND Flash memory. The Company also developed its first Solid State Drive (SSD), a product that is expected to see fast demand growth thanks to superior shock resistance and...

  • Page 11
    ...(2 bits per cell) Launch for use with mobile phones Launch for use in portable music players Development of the SD memory card Launch of the world's first Multi Chip Package (MCP) Launch for use with digital cameras Development of SmartMedia Development of NAND Flash memory Toshiba: History of the...

  • Page 12
    ... (700MW) 1976 First domestically produced nuclear power generation steam turbine (784MW) 1975 World's largest capacity steam turbine to date (1,000MW super critical steam turbine) 1965 Largest capacity to date of any unit manufactured in Japan (375MW) Toshiba: History of the Steam Turbine for Power...

  • Page 13
    ...capacity of 150 gigawatts. Moving ahead, Toshiba will respond to demand for thermal and nuclear power generation facilities in fast-growing overseas economies, and promote refurbishment and replacement of aging equipment in Japan and other countries. INNOVATION THAT REALIZES GROWTH AND CREATES VALUE...

  • Page 14
    Basic Management Policy and Mid-term Business Plan Toshiba Group has the goal of being a responsible "corporate citizen of planet Earth" that creates new value and contributes to the lives and cultures of people around the world. To fulfill this goal, our basic management policy aims to achieve ...

  • Page 15
    ...Continue high growth, expand high profitability Develop as growth businesses Create products that deliver more "Surprise and Sensation" (NAND, Cell, AV products) Enhance provision of eco-products/systems (nuclear power, new lighting, innovative rechargeable batteries) FY2010 Achieve High Growth...

  • Page 16
    ... to consider the fulfillment of Corporate Social Responsibility as one of the main concepts of our basic management policy. In November 2007, we released "Toshiba Group's Environmental Vision 2050," and expressed our commitment toward the goal of helping people lead culturally rich lifestyles in...

  • Page 17
    Tadashi Okamura Atsutoshi Nishida 13

  • Page 18
    ... on the ideal makeup of Toshiba Group's income structure in the future? We succeeded in breaking our past record for consolidated sales. Since I was appointed President and CEO, I have been implementing a basic management policy that calls on all Toshiba employees to work to achieve "sustained...

  • Page 19
    ...especially important strategic investments? There has been no fundamental change in Toshiba's stance or in our commitment to positioning the Digital Products and Electronic Devices segments as FY2007 was a year in which Toshiba Group engaged in a comprehensive review of its current businesses. What...

  • Page 20
    ... do you view the financial structure of Toshiba Group? The ratio of interest-bearing debt to shareholders' equity-the D/E ratio-stood at 123% at the end of FY2007, which was worse than that of the previous fiscal year. Our mid-term business plan addresses this issue. We plan to bring the D/E ratio...

  • Page 21
    ... in FY2007 the full-year dividend totaled ¥12 per share, a record amount. From now on, we will continue to implement management strategies that enhance the value of Toshiba Group and bring benefits to our shareholders and all of our stakeholders. For Toshiba to continue to record sustained growth...

  • Page 22
    ... to development and progress in diverse product areas. The Center also manages progress in key emerging technologies, including direct methanol fuel cells (DMFC) for mobile devices, DNA chips and photocatalysts. TOSHIBA MATSUSHITA DISPLAY TECHNOLOGY CO., LTD. As ubiquitous connectivity starts to...

  • Page 23
    ... equipment and systems for transportation, production, control and measuring, all contribute to industrial development in world markets. SOCIAL INFRASTRUCTURE SYSTEMS COMPANY With the same innovative spirit that developed the leading-edge technology for Japan's first refrigerators, washing machines...

  • Page 24
    ... who purchased products of continued use, free from concern. Finally, we sold our holding in IPS Alpha Technology, Ltd. a manufacturer of large-sized LCDs, to Matsushita Electric Industrial Co., Ltd. Toshiba's position in the market Share of the global portable PCs market for 2007 Volume of...

  • Page 25
    ... of high definition content that are distributed via digital terrestrial broadcasting, internet and optical cables, and to easily record that content onto the integrated 300-gigabyte hard-disk drive. Mobile Phones and PHS We offer a wide line-up, including models that use "REGZA" LCD TV technology...

  • Page 26
    ...MOBILE COMMUNICATIONS COMPANY While the Japanese market recorded a new high in total units shipped in FY2007, this is expected to change in the future, as the market undergoes steady change from maturation and carriers implement changes in the billing system (standard two-year contracts). Overseas...

  • Page 27
    ... our current DVD business, while prices continue to ease, Toshiba numbers among the market leaders in Japan, thanks to sales promotions focused on products that can record terrestrial digital broadcasts, and we will continue to operate the DVD player and recorder business. While Toshiba faces price...

  • Page 28
    ...declining sales prices. We have agreed with Sony Corp. and Sony Computer Entertainment Inc. to establish a joint venture to manufacture high-performance semiconductors, and we acquired manufacturing equipment from Sony Group. On the strength of a projected increase in demand for NAND Flash memory as...

  • Page 29
    ... to support the host processor. The SpursEngineTM is based on the high-performance multi-core technology of the Cell Broadband EngineTM (the high-end processor developed by IBM, Sony Group and Toshiba) and adds Toshiba's advanced image processing technology. Automotive-use circular LCD display...

  • Page 30
    ... mobile phones inhouse, at Iwate Toshiba Electronics Co. We are also promoting cooperative agreements with other companies. We formed an alliance with Sharp Corp. in system LSIs for LCD TVs, and also entered into a contract with Sony Group for a joint venture to produce high-performance processors...

  • Page 31
    ... for mobile phones in overseas markets, together with dramatic falls in prices, resulted in sales falling below the level of the previous fiscal year. Efforts to support profit that included continuous productivity improvements, moves to reduce the purchase prices of parts materials and to control...

  • Page 32
    ... plant and equipment, mainly overseas, and the consolidation of the Westinghouse Group also boosted sales. The Transmission Distribution & Industrial Systems business recorded higher sales on good performances in transmission and distribution systems, and transportation systems. Sales in the Medical...

  • Page 33
    ..., and established Toshiba Xingyi Control System (Xian) Co., Ltd. to manufacture and sell information control systems for plants in China. In order to assure its ability to meet demand for services in Japan and for power generation equipment overseas, we will continue to promote development of power...

  • Page 34
    ... is promoting expansion, including overseas marketing of such new products as mailing equipment. The company will contribute to the creation of a safe, secure, comfortable society, by providing customers with high quality infrastructure and diverse solutions. TOSHIBA ELEVATOR AND BUILDING SYSTEMS...

  • Page 35
    ... responding to upgrade demand, the company will expand overseas business, mainly in China, the Middle East and Asia. TOSHIBA SOLUTIONS CORPORATION In FY2007, a healthy performance in business solutions and embedded software for financial and manufacturing companies in Japan boosted both sales and...

  • Page 36
    ... four years 2004 to 2007, we maintained the No.1 share in the Japanese washing machine market in unit sales. Source: GfK Japan nationwide survey of leading electronic goods retailers TOSHIBA CONSUMER ELECTRONICS HOLDINGS CORPORATION Home Appliances business In FY2007, our product line-up covered...

  • Page 37
    ... the industry's most powerful dust gathering system, which realizes energy savings of up to 30%. In overseas markets, the air-conditioner business saw good sales, mainly in Europe and Asia, supporting sales growth. Lighting business We released E-CORE, a highly efficient LED downlight with built-in...

  • Page 38
    ...Sustainability Index (DJSI) for eight consecutive years. MAJOR EVALUATIONS OF TOSHIBA GROUP CSR IN 2007 Nihon Keizai Shimbun: Center for Public Resources Development (Japan): Integrex (Japan): SAM (Switzerland): Innovest (USA): Environmental Management Ranking Survey on Corporate Sociality Corporate...

  • Page 39
    ... technologies and pursue heightened efficiency and power saving. We also aim to promote the development of high-end electronic devices that bring new levels of low power consumption to LED lighting, air-conditioners and other home appliances. Through innovations in new, non-traditional products...

  • Page 40
    ... maintaining the "Corporate Forest Toshiba (Ontake)" in Ome, the western outskirts of Tokyo. We are also cooperating with municipal governments in Tochigi, Oita, and Kyoto Prefectures, to promote the creation and upkeep of forests. Outside Japan, the main focus of our tree planting is Asia, where we...

  • Page 41

  • Page 42
    ...to take innovation to the global level, promoting research in Toshiba facilities in Europe, the United States, China and Southeast Asia. Corporate Laboratories Corporate Staff Corporate Research & Development Center Corporate Manufacturing Engineering Center Corporate Software Engineering Center 19...

  • Page 43
    Toshiba Group will continue to create cutting edge technology by promoting constant innovation, with "Creativity for Decommoditized Technology" as a technology slogan. Major achievement of Research & Development Commercialization of LCD TV with enhanced connectivity with AV equipment, etc. ...

  • Page 44
    ... ultrasound imaging systems Inventions related to access control to data memory Inventions related to nuclear power plant 1 IBM 2 Samsung Electronics 3 Canon Matsushita 4 Electric Industrial 5 Intel 6 Microsoft 7 Toshiba 8 Sony 9 Micron 10 HewlettPackard 3,148 2,725 1,987 1,941 Washing machines...

  • Page 45
    ...Governance System Toshiba promotes corporate governance based on the fundamental policy and objectives of enhancing management efficiency, increasing transparency, and seeking to maximize corporate value from the shareholders' perspective. Towards those ends, Toshiba made the transition to a Company...

  • Page 46
    ... internal control systems throughout Toshiba Group. Toshiba supports Toshiba Group companies in this by establishing models of basic policies and principal rules covering internal control systems. Beyond this, Toshiba has also asked all overseas group companies to adopt the Toshiba Group Standards...

  • Page 47
    ... Japan, Toshiba has introduced an organization at the corporate level to promote assessment of the effectiveness of internal control over financial reporting throughout the Company. In response to this initiative, each in-house company and its affiliated companies worldwide have established systems...

  • Page 48
    ... Director Fumio Muraoka Director Executive Officers Representative Executive Officer President and Chief Executive Officer Representative Executive Officer Corporate Executive Vice President Atsutoshi Nishida Representative Executive Officers Corporate Senior Executive Vice Presidents Fumio...

  • Page 49
    ... Kiichiro Furusawa Outside Director Hiroshi Hirabayashi Outside Director Takeshi Sasaki Outside Director Executive Officers Corporate Senior Vice Presidents Executive Officers Corporate Vice Presidents Yoshihide Fujii Toshinori Moriyasu Shozo Saito Hidejiro Shimomitsu Hisao Tanaka Toshiharu...

  • Page 50
    Basic Commitment of the Toshiba Group BASIC COMMITMENT OF THE TOSHIBA GROUP COMMITMENT TO PEOPLE COMMITMENT TO THE FUTURE 46

  • Page 51
    ...Subsidiaries / Affiliated Companies Accounted for by the Equity Method ...60 Stock / Shareholders Information ...61 Corporate History...62 Major indices of the Data Section have been compiled chronologically based on the fiscal years. For the details of financial information for the year ended March...

  • Page 52
    ... Interest-bearing debt Long-term debt Short-term debt Shareholders' equity ratio (%)*2 Debt/equity ratio (Times)*3 R&D, Capital Expenditures, Depreciation R&D expenditures Capital expenditures (Property, plant and equipment) Depreciation (Property, plant and equipment) Return Indicators Return on...

  • Page 53
    ... coverage ratio (Times) = (Operating income (loss) + Interest and dividends) / Interest expense *11. Free cash flow = Net cash provided by operating activities - Net cash used in investing activities *12. Market capitalization = Common stock price [Year-end/Yen/Close] X Total issued shares 49

  • Page 54
    ...and other current assets 236,244 2,352,419 Long-term Receivables and Investments: Long-term receivables Long-term finance receivables, net Investments in and advances to affiliates Marketable securities and other investments 197,901 440,987 Property, Plant and Equipment: Land Buildings Machinery and...

  • Page 55
    ...'04/3 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Short-term borrowings Current portion of long-term debt Notes payable, trade Accounts payable, trade Accounts payable, other and accrued expenses Accrued income and other taxes Advance payments received Other current liabilities 320,640...

  • Page 56
    ...,061 113,518 Net income (loss) 4,041 34,787 72,428 26,173 20,632 25,025 80,505 1,251 Earnings per share (Basic) (Â¥) 1.26 6.42 10.82 7.75 22.54 24.88 8.14 0.39 For additional information, please visit our IR web site at http://www.toshiba.co.jp/about/ir/en/finance/index.htm 52

  • Page 57
    ...securities Acquisition of property, plant and equipment Purchase of securities (Increase) decrease in investments in affiliates Other Net cash used in investing activities Cash Flows from Financing Activities: Proceeds from long-term debt Repayment of long-term debt Increase (decrease) in short-term...

  • Page 58
    ... Change (%) '06/3 Change (%) '07/3 Change (%) '08/3 Change (%) Digital Products Net sales Share of net sales (%) Operating income (loss) Operating income ratio (%) Number of employees R&D expenditures Depreciation Capital expenditures Total assets Electronic Devices Net sales Share of net sales...

  • Page 59
    ...,675 228,506 227,674 174,608 177,452 119,558 116,731 184,498 - - 126,051 - 59,903 ¥1,044,152 ¥ 954,486 For more information on corporate bond and ratings, please visit our IR web site at http://www.toshiba.co.jp/about/ir/en/stock/bond.htm 55

  • Page 60
    ... Operations > Electronic Devices Sales & Marketing Div. > Process & Manufacturing Engineering Center > Center For Semiconductor Research & Development & Components Control Center > Hino Operations > Storage Device Div. > TV & Visual Media Equipment Div. > Optical Imaging System Div. > Digital...

  • Page 61
    ... Infrastructure Systems Group > Power Systems Company > Transmission > Nuclear Energy Systems & Services Div. > Isogo Nuclear Engineering Center > WEC Coordination Div. > Thermal & Hydro Power Systems & Services Div. > Power and Industrial Systems Research and Development Center > Keihin Product...

  • Page 62
    ... • Toshiba America Nuclear Energy Corporation • ReGENco L.L.C. • Hydro Power Service, L.L.C. • ST Inverter America, Inc. • Toshiba America Electronic Components, Inc. • Toshiba America Medical Systems, Inc. • Toshiba Nuclear Energy Holdings (US) Inc. • Westinghouse Electric Company...

  • Page 63
    ...(Far East) Co., Ltd. • Toshiba Lighting Hong Kong Ltd. Philippines • Toshiba Information Equipment (Philippines), Inc. • Toshiba Electronics Philippines, Inc. Vietnam • Toshiba Vietnam Consumer Products Co., Ltd. • Toshiba Software Development (Vietnam) Co., Ltd. • Toshiba Vietnam Home...

  • Page 64
    ... Marketing Co., Ltd. • Toshiba Device Corporation • Toshiba Elevator and Building Systems Corporation • Toshiba HA Products Co., Ltd. • Toshiba Home Technology Corporation • Toshiba Industrial Products Sales Corporation • Toshiba Information Equipments Co., Ltd. • Toshiba Lighting...

  • Page 65
    ... / Shareholders Information Common Stock Price Trends '04/3 Common stock price (Â¥, fiscal year) High Low Nikkei average (Â¥) Number of shares issued (Millions of shares) Market capitalization (Â¥ Billion) Earnings per share-Basic (EPS) (Â¥) Earnings per share-Diluted (EPS) (Â¥) Annual Dividends per...

  • Page 66
    ... world's first laptop PCs. 1991 Introduced corporate executive officer system. Introduced in-house company system. 1995 1998 1999 2000 2001 Released SD Card and 1.8-inch HDD. Released "01 Action Plan. " Commercialized the world's first HDD/DVD video recorder. Commenced joint development of Cell, the...

  • Page 67
    ... Tokyo Stock Exchange: . . 6502 Shareholder Registration Agent: ...The Chuo Mitsui Trust and Banking Company, Limited For further information, please contact: ...Toshiba Corporation Corporate Communications Office Investor Relations Group 1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan Phone...

  • Page 68
    The white-colored pages of this report are printed on FSC certified paper.

  • Page 69
    2008 FINANCIAL REVIEW Annual Report 2008 • Financial Review TOSHIBA CORPORATION

  • Page 70
    ... from the HD DVD business, the sale of Ginza Toshiba Building, and the change in accounting estimates effected by a change in accounting principle for depreciation of property, plant and equipment (P.P.E.), are presented as non-operating income (loss). 3) Basic net income per share (EPS) is computed...

  • Page 71
    ... the HD DVD business and the impact of changes in estimate of salvage value of property, plant and equipment (P.P.E.), in spite of the gain from the sale of the Ginza Toshiba Building. Net income decreased by 10.0 billion yen to 127.4 billion yen. NET SALES BY REGION Millions of yen Year ended March...

  • Page 72
    ...record high of ¥12.0, up ¥1.0 from the previous term. The dividend for FY2008 has not yet been decided. RESULTS BY INDUSTRY SEGMENT Billions of yen Net Sales Year ended March 31 - Change (%) Operating Income (loss) - Change Digital Products Electronic Devices Social Infrastructure Home Appliances...

  • Page 73
    HOME APPLIANCES Consolidated sales of Home Appliances increased by 25.4 billion yen to 774.3 billion yen, on higher sales of air conditioners, refrigerators and washing machines, mainly in overseas markets. Consolidated segment operating income declined by 5.8 billion yen to 3.9 billion yen, largely...

  • Page 74
    ... Home Appliances Others Corporate Consolidated Impairment of long-lived assets: Digital Products Electronic Devices Social Infrastructure Home Appliances Others Corporate Consolidated Capital expenditures: Digital Products Electronic Devices Social Infrastructure Home Appliances Others Corporate...

  • Page 75
    ... SEGMENTS Millions of yen Year ended March 31 Thousands of U.S. dollars 2008 2007 2006 2008 Sales: Japan Unaffiliated customers Intersegment Total Asia Unaffiliated customers Intersegment Total North America Unaffiliated customers Intersegment Total Europe Unaffiliated customers Intersegment...

  • Page 76
    ...., etc., which are companies accounted for by the equity method) were directed at increasing capacity and promoting development of semiconductor products and raising output of LCDs. Major projects completed by the Group in this fiscal year included leading-edge LSI manufacturing facilities (at the...

  • Page 77
    ... year-end decreased by ¥60.7 billion to ¥248.6 billion. TREASURY STOCK Shares held as of the closing date of last period: Shares acquired during the period: 5,537,542 (common stock) 1,285,859 (common stock) Aggregate amount of acquisition costs: Shares disposed during the period: Demand for sale...

  • Page 78
    ... Toshiba Plant Systems & Services Corporation Toshiba Elevator and Building Systems Corporation Toshiba Solutions Corporation Toshiba Medical Systems Corporation Toshiba Nuclear Energy Holdings (US) Inc. Toshiba Nuclear Energy Holdings (UK) Ltd. Toshiba America Medical Systems, Inc. Toshiba Consumer...

  • Page 79
    ... introduction of new technology, the Group's current products may become obsolete. This business segment requires significant levels of capital expenditure. While efforts are made to invest in stages by carefully monitoring demand, unanticipated market change may result in production capacity for...

  • Page 80
    ...business operations. Any changes in political, economic and social conditions, legal or regulatory changes and exchange rate fluctuations, in any region, may impact on market demand and the Group's business operations. As the Group expands overseas production, particularly in Asia, any occurrence of...

  • Page 81
    ... Group and Toshiba brand products. (15) Securing human resources The success of the Group's businesses depends in large part on securing excellent human resources in every business area and process, including product development, production, marketing and business management. Competition to secure...

  • Page 82
    ..., or planned returns on assets may be lower than anticipated. (22) Financing environment The Group has substantial amounts of interest-bearing debt for financing that is highly susceptible to the market environment, including interest rate movements and fund supply and demand. Changes in these...

  • Page 83
    ...and other current assets Total current assets Long-term receivables and investments: Long-term receivables (Note 5) Investments in and advances to affiliates (Note 7) Marketable securities and other investments (Note 4) Total long-term receivables and investments Property, plant and equipment (Notes...

  • Page 84
    ... Toshiba Corporation and Subsidiaries As of March 31, 2008 and 2007 Millions of yen Thousands of U.S. dollars (Note 3) Liabilities and shareholders' equity Current liabilities: Short-term borrowings (Note 9) Current portion of long-term debt (Notes 9 and 19) Notes payable, trade Accounts payable...

  • Page 85
    Consolidated Statements of Income Toshiba Corporation and Subsidiaries For the years ended March 31, 2008 and 2007 Millions of yen Thousands of U.S. dollars (Note 3) 2008 Sales and other income: Net sales Interest and dividends Equity in earnings of affiliates (Note 7) Other income (Notes 4, 5 ...

  • Page 86
    Consolidated Statements of Shareholders' Equity Toshiba Corporation and Subsidiaries For the years ended March 31, 2008 and 2007 Common stock Additional paid-in capital Millions of yen Accumulated other Retained comprehensive earnings loss Treasury stock Total Balance at March 31, 2006 ¥ 274,...

  • Page 87
    ...from sale of securities Acquisition of property, plant and equipment Purchase of securities (Increase) decrease in investments in affiliates Acquisition of Westinghouse, net of cash acquired Other Net cash used in investing activities Cash flows from financing activities Proceeds from long-term debt...

  • Page 88
    ..., the "Company") are engaged in research and development, manufacturing and sales of high-technology electronic and energy products, which span (1)Digital Products, (2)Electronic Devices, (3)Social Infrastructure, (4)Home Appliances, and (5)Others. For the year ended March 31, 2008, sales of Digital...

  • Page 89
    ... PENSION AND SEVERANCE COSTS The Company has various retirement benefit plans covering substantially all employees. The unrecognized net obligation existing at initial application of Statement of Financial Accounting Standards ("SFAS") No. 87, Employers' Accounting for Pensions, and prior service...

  • Page 90
    ... 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 common stock outstanding during...

  • Page 91
    ... is required to be adopted by the Company in the fiscal year beginning April 1, 2008. In February 2008, the FASB issued Staff Position No. FAS157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of...

  • Page 92
    ...and ¥1,596 million related to other-thantemporary declines in the marketable and non-marketable equity securities for the years ended March 31, 2008 and 2007, respectively. At March 31, 2008, the cost and fair value of available-for-sale securities in an unrealized loss position over 12 consecutive...

  • Page 93
    ...the sale of receivables, the Company holds subordinated retained interests for certain trade notes receivable and trade accounts receivable. A portion of these receivables, where the Company holds subordinated retained interests, is not taken off the balance sheet and is recorded at their fair value...

  • Page 94
    ... market prices at those dates. Summarized financial information of the affiliates accounted for by the equity method is shown below: Millions of yen March 31 Thousands of U.S. dollars Current assets Other assets including property, plant and equipment Total assets Current liabilities Long-term...

  • Page 95
    ... Notes and accounts receivable, trade Other receivables Long-term loans receivable Notes and accounts payable, trade Other payables Capital lease obligations 2008 ...Software Technical license fees Core and current technology Other Total Other intangible assets not subject to amortization: Brand...

  • Page 96
    ...155,680 Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The changes in the carrying amount of goodwill for the years ended March 31, 2008 and 2007 are as follows: Millions of yen Year ended March 31 Thousands of U.S. dollars Balance at beginning...

  • Page 97
    ...Euro Hong Kong dollar medium-term note of a subsidiary, with interest rate of 5.00% at March 31, 2007 ¥ 29 113,529 132,000 12,273 ¥ - 53,532 - 14,945 $ 290 1,135,290 1,320,000 122,730 - ¥ 257,831 3,149 ¥ 71,626 - $ 2,578,310 Substantially all of the short-term borrowings are with banks...

  • Page 98
    ... to employees each year according to the regulation of retirement benefit, length of service and conditions under which their employment terminates. The obligation for the severance indemnity benefit is provided for through accruals and funding of the defined benefit corporate pension plan. Certain...

  • Page 99
    ... end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employer contributions Plan participants' contributions Benefits paid Acquisitions and divestitures Foreign currency exchange impact Fair value of plan assets at end of year Funded status...

  • Page 100
    ...230) (28,030) 160,890 $ 701,910 Other changes in plan assets and benefit obligation recognized in the other comprehensive loss for the year ended March 31, 2008 are as follows: Millions of yen Year ended March 31 Thousands of U.S. dollars Current year actuarial loss Recognized actuarial loss Prior...

  • Page 101
    ... of pension and severance benefits to participants, with reasonable risks. The Company designs the basic target allocation of the plan assets to mirror the best portfolio based on estimation of mid-term and long-term return on the investments. The Company periodically reviews the actual return on...

  • Page 102
    ... assets were related mainly to the Ginza Toshiba Building and the land sale. Gains on sales of fixed assets were ¥40,137 million, and losses on disposal of fixed assets were ¥15,075 million for the year ended March 31, 2007. WITHDRAWAL FROM HD DVD BUSINESS In response to the major changes observed...

  • Page 103
    ...) $ 3,535,670 Gross deferred tax liabilities: Property, plant and equipment Unrealized gains on securities Gain on securities contributed to employee retirement benefit trusts Undistributed earnings of foreign subsidiaries and affiliates Assets acquired in business combinations Other Deferred tax...

  • Page 104
    ...of retained earnings available for dividends is based on Toshiba Corporation's retained earnings determined in accordance with generally accepted accounting principles in Japan and the Corporation Law of Japan. Retained earnings at March 31, 2008 do not reflect current year-end dividends of ¥19,414...

  • Page 105
    ... losses on securities: Balance at beginning of year Current year change Balance at end of year Foreign currency translation adjustments: Balance at beginning of year Current year change Balance at end of year Pension liability adjustments: Balance at beginning of year Current year change Adjustment...

  • Page 106
    ... Statements Toshiba Corporation and Subsidiaries March 31, 2008 Tax effects allocated to each component of other comprehensive income (loss) for the years ended March 31, 2008 and 2007 are shown below: Pre-tax amount Millions of yen Tax benefit (expense) Net-of-tax amount For the year ended March...

  • Page 107
    ...enhancement of the corporate value of the Company and the common interests of shareholders. Specifically, if an acquirer starts or plans to start an acquisition or a takeover bid that would result in the acquirer holding 20% or more of the Company's total outstanding shares, the Company will require...

  • Page 108
    ...fluctuation in fair value of accounts receivable and payable denominated in foreign currencies. The interest rate swap agreements utilized by the Company effectively convert a portion of its fixed-rate debt to a floatingrate basis. Cash Flow Hedge Strategy The forward exchange contracts and currency...

  • Page 109
    ...-trade, short-term borrowings, notes payable-trade, accounts payable-trade and accounts payable-other and accrued expenses, it is assumed that the carrying amount approximated fair value for the majority of these instruments because of their short maturities. Quoted market prices are used for a part...

  • Page 110
    ...Toshiba Corporation and Subsidiaries March 31, 2008 20 . LEASES LESSEE The Company leases manufacturing equipment, office and warehouse space, and certain other assets under operating leases. Rent expenses under such leases for the years ended...the purchase of property, plant and equipment ...

  • Page 111
    .... However, the Company expects that the majority of such payments would be reimbursed through the Company's insurance policy. GUARANTEES OF TRANSFERRED CORPORATE BONDS The Company entered into a sale and assumption agreement with an SPE during 2001. As a result, the Company was released from being...

  • Page 112
    ... normal expectations. Judgements unfavorable to the Company in these cases may impact on Company's operations. The Company's Management believes that there are meritorious defenses to all of these legal procedures, including lawsuits and investigations. Based on the information currently available...

  • Page 113
    ... the Westinghouse Group whose main business is nuclear power systems, and of Westinghouse Electric UK Limited (collectively "Westinghouse") for $5.4 billion. On acquiring Westinghouse, Toshiba established two special-purpose acquisition companies in the U.S. and U.K. (Toshiba Nuclear Energy Holdings...

  • Page 114
    ... minority shareholders and preventing equity participation by a third party who may put Toshiba at disadvantage. Subsequently, pursuant to the terms of the sale/purchase agreement with British Nuclear Fuels plc as seller, Westinghouse's assets and liabilities at the time of acquisition of the shares...

  • Page 115
    ... years then ended in conformity with U.S. generally accepted accounting principles. As discussed in Note 2 to the consolidated financial statements, effective April 1, 2007, Toshiba Corporation and its domestic subsidiaries changed their method of accounting for depreciation. We have also reviewed...

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    This report was printed on recycled paper with soy-based ink. Printed in Japan