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Toshiba Corporation
Annual Report 2009 • Operational Review

Table of contents

  • Page 1
    Toshiba Corporation Annual Report 2009 • Operational Review

  • Page 2
    Financial Highlights • Toshiba Corporation and Subsidiaries For the years ended March 31, 2009, 2008 and 2007 (Millions of yen) Net sales-Japan -Overseas Net sales (Total) Operating income (loss) (Note 1) Income (loss) from continuing operations, before income taxes and minority interest Net ...

  • Page 3
    ... Our Shareholders An Interview with the President Action Programs to Improve Profitability Special Feature: Toshiba Group Leading the Way to the Future Business Review 1 2 4 8 10 16 CSR Management Research & Development and Intellectual Property Corporate Governance Directors and Executive Officers...

  • Page 4

  • Page 5
    ... us to quickly seize business opportunities when the market begins to recover. Toshiba will continue to strive to enhance corporate value by promoting four basic management policies: returning to the path of sustained growth with steadily higher profit; setting up ambitious goals for innovation and...

  • Page 6
    ... result in the enhancement of corporate value and lead us to take a giant leap ahead into the next economic era, making Toshiba Group into an even more formidable global competitor. At the same time, with regard to business strategy for the mid- to long-term, I will promote the restructuring of our...

  • Page 7
    ..., we are reevaluating production systems for the TV and Mobile Phone business, and in the Home Appliances segment, we are consolidating production and development bases. Second is the carrying out of Group-wide measures to strengthen our business structure. To increase profitability, we are making...

  • Page 8
    ... impacted by the sharp worldwide drop in demand and also steep and continuing price declines. Based on a careful assessment of the market situation, restructuring of the Semiconductor business will be implemented in line with the characteristics of each business - discrete, system LSI and NAND...

  • Page 9
    ... and business processes 10 times by 2050, with 2000 as the benchmark year. For Toshiba, developing sustainable products and technologies is the next frontier of innovation. We aim to become one of the foremost eco-companies in the world. As a significant step toward global CSR-oriented management in...

  • Page 10
    ... goals of developing a robust profitmaking structure that would allow the Group to generate profit even if the level of sales in FY2009 is not increasing, and establishing a strong foundation for making the most of opportunities offered when the market moves towards recovery. Reduction of capital...

  • Page 11
    ... resources on high-value-added products Home Appliances business Reorganize manufacturing facilities and consolidate R&D functions in Japan Digital Products business Accelerate business expansion in emerging countries and enhance cost-competitiveness by reshaping manufacturing 2. Execute Toshiba...

  • Page 12
    ...to market needs, technology development, and manufacturing systems, we create new value for our customers by bringing the multiplier effect of innovation to the key processes of research & development, production & procurement, and sales & marketing. Sales and Marketing Process Innovation Research...

  • Page 13
    ...of Innovation Realize customer value by generating innovation in research and development, production and procurement, and sales and marketing, and by achieving the multiplier effect Passion Passionately work to take on and overcome antinomy Concept Creation Use creative powers of imagination to...

  • Page 14
    ... TVs, we have continued research and development toward bringing to market the "CELL REGZA." The top of the "REGZA" line, this integrates a high-performance Cell platform, able to transfer huge amounts of data at high speed. *Super resolution technology, "Resolution+" - technology to improve input...

  • Page 15
    ... offer a comfortable, reliable mobile computing environment delivering high-speed start-up, high-speed data access, and long battery life. There's also a much reduced risk of accidental data losses from shock or vibration. Toshiba is now enhancing its PC line-up by introducing SSD developed in-house...

  • Page 16
    ... automobiles and solar power generation systems. In anticipation of a future increase in demand, Toshiba plans to build a new mass production base to complement Saku Operations in Nagano Prefecture, Japan, the current manufacturing base. Comment from product development staff Excellent Safety...

  • Page 17
    ... that use environmentally conscious LEDs. Since developing Japan's very first incandescent lamps in 1890, Toshiba has constantly refined the meaning of "AKARI" or lighting. It is now doing so again by discontinuing production of standard incandescent lamps in 2010, to promote reduction of CO2 with...

  • Page 18
    ... and CEO Mobile Communications Company Digital Media Network Company Personal Computer & Network Company Toshiba TEC Corporation Electronic Devices Segment Digital Products Segment Corporate Divisions Semiconductor Company Display Devices & Components Control Center Toshiba Mobile Display Co...

  • Page 19
    ... in TVs and HDDs, the result of demand declines due to rapid decline into global recession and steeper than expected declines in market prices. The Mobile Phone business also saw notably lower sales due to fewer shipments. The PC business and the Retail Information Systems and Office Equipment...

  • Page 20
    ...offering unique technologies that differentiate them from competing products and enhance Toshiba's strength in the digital AV industry. In FY2008, unit sales of LCD TVs rose, but we faced significant declines in sales prices. In the storage business, demand for HDD for PCs and portable music players...

  • Page 21
    ... notebook PC market, and promote further globalization, we will carefully monitor market needs and trends and use our leading-edge core technologies to deliver unsurpassed products. * Toshiba QUAD Core HD processor: Real-time, high-level image processing in digital equipment requires a powerful...

  • Page 22
    ... flash memory, system LSIs for digital consumer products, and power devices for electric power supply. In FY2008, demand for semiconductors for digital consumer electronics and automotive applications was undermined by the global recession. The company recorded significantly lower sales, and fell...

  • Page 23
    ... TFT technology and supplies small- to medium-sized, high value-added displays for applications that includes mobile phones, car navigation systems and mobile PCs. In FY2008, the company recorded a major operating loss on significantly weakened demand and lower prices in the LCD panel market, and...

  • Page 24
    ... overseas expansion and a reinforced presence in the power plant services business in Japan. In FY2008, the company saw higher sales, led by the nuclear energy business, mainly in services for operating plants, and maintained profit at the level of the previous year. The nuclear energy business...

  • Page 25
    .... Toshiba Elevator and Building Systems Corporation We develop, produce and maintain highly efficient, safe, state-of-the-art elevators and escalators, offer upgrades to replace installed equipment, and deliver integrated building management services. FY2008 saw steady progress in the maintenance...

  • Page 26
    ... the IT market. This approach will support us in growing sales and strengthening our operating base. Inside a double-deck elevator Toshiba Medical Systems Corporation Advanced diagnostic imaging modalities, including CT systems, MRI, ultrasound and X-ray, and medical information systems contribute...

  • Page 27
    ...two manufacturing bases into one and three development centers into two by the end of December 2009. These moves will reinforce our global competitiveness. Lighting Business In FY2008 we expanded our 'E-COREâ„¢' series of LED lights that use less power and offer a much longer life. High value-added...

  • Page 28
    ... including fuel cells, and renewable energy, such as hydro, geothermal and photovoltaic power generation. By 2025 we aim to cut CO2 emissions by 82 million tons. Eco-products: Our target is high-end, 26 energy-saving electronic devices such as LED lighting (with long life), air-conditioners, LCD TVs...

  • Page 29
    ... originating from energy 200 0 1990 1995 2000 2005 2010 2015 2020 2025 FY * The report covers Toshiba Group companies in Japan and overseas, and business processes at production and non-production facilities. Values are actual up to FY2008 and projections for subsequent fiscal years. CO2...

  • Page 30
    ... Property Policies for enhancing global competitiveness focus on process innovation and value innovation, and we aim to provide environmentally conscious technologies and products that capture and convey 'surprise and sensation.' Corporate labs and the development centers of in-house companies...

  • Page 31
    ... Intellectual property rights (patents, etc.) Application in licensing Collaboration with businesses Application in marketing and order receipt Business expansion Cross licensing Alliances Standardization Fair-Payment Licensing A strategy of selective patent application supports globalization...

  • Page 32
    ... 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. Toshiba's Governance System For the purpose of improving management mobility...

  • Page 33
    ...Exchange Law of Japan. Responding to this initiative, the in-house companies and their affiliates around the world established parallel systems. Toshiba will continue to operate appropriate internal control over financial reporting. Compensation for Directors and Executive Officers The compensation...

  • Page 34
    ...Namiki Director Ichiro Tai Director Executive Officers Representative Executive Officer President and Chief Executive Officer Executive Officers Corporate Executive Vice Presidents Norio Sasaki Representative Executive Officers Corporate Senior Executive Vice Presidents Masashi Muromachi Fumio...

  • Page 35
    ... Sasaki Outside Director Takeo Kosugi Outside Director Executive Officers Corporate Senior Vice Presidents Executive Officers Corporate Vice Presidents Shozo Saito Toshiharu Watanabe Ryuichi ...Takaaki Tanaka Toshio Masaki Yasuhiro Shimura Munehiko Tsuchiya Masaaki Oosumi (As of June 24, 2009) 33

  • Page 36
    Basic Commitment of the Toshiba Group BASIC COMMITMENT OF THE TOSHIBA GROUP COMMITMENT TO PEOPLE COMMITMENT TO THE FUTURE 34

  • Page 37
    ... Long-term Debt Organization Chart Consolidated Subsidiaries/ Affiliated Companies Accounted for by the Equity Method Stock/Shareholders Information Corporate History 36 38 40 40 41 42 43 43 44 46 47 48 Major indices of the Data Section have been compiled chronologically based on the fiscal years...

  • Page 38
    ... Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at end of year Liquidity Indicators Debt/cash flow ratio (%)*9 Interest coverage ratio (Times)*10 Corporate Value Free cash flow*11 Market capitalization*12...

  • Page 39
    ...100 *10. Interest 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...

  • Page 40
    ... 2008 2009 ASSETS Current Assets: Cash and cash equivalents Notes and accounts receivable, trade Notes Accounts Allowance for doubtful notes and accounts Inventories Deferred tax assets Prepaid expenses and other current assets 277,278 2,474,319 Long-term Receivables and Investments: Long-term...

  • Page 41
    ... 2008 2009 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...

  • Page 42
    Consolidated Statements of Operations (Millions of yen) Year ended March 31 2005 2006 2007 2008 2009 ¥6,654,518 - Sales and Other Income: Net sales ¥5,836,139 4,836 Subsidy received on return of substitutional portion of Employees' Pension Fund Plan, (net of settlement loss of ¥7,992 ...

  • Page 43
    ...: Proceeds from long-term debt Repayment of long-term debt Increase (decrease) in short-term borrowings, net Dividends paid Repurchase of subsidiary common stock Purchase of treasury stock, net Other Net cash provided by (used in) financing activities Effect of Exchange Rate Changes on Cash and...

  • Page 44
    ... 2008 Change (%) 2009 Change (%) Digital Products ¥2,224.2 Net sales 35.1 Share of net sales (%) 7.3 Operating income (loss) 0.3 Operating income ratio (%) 43 Number of employees (Thousands) 101.7 R&D expenditures 32.6 Depreciation 36.5 Capital expenditures 966.1 Total assets Electronic Devices...

  • Page 45
    ... thereafter Total ¥ 246,675 227,674 177,452 116,731 126,051 59,903 - - ¥ 954,486 2009 - 273,189 187,114 193,210 127,390 - 133,379 91,565 ¥1,005,847 ¥ For more information on corporate bonds and ratings, please visit our IR web site at http://www.toshiba.co.jp/about/ir/en/stock/bond.htm 43

  • Page 46
    .... > Core Technology Center > Ome Operations - Digital Media Network > Fukaya Operations > Personal Computer Div. - Japan & Asia Operations > Personal Computer Div. - America, EMEA & Oceania Operations > Server & Network Div. > PC Development Center > Global Production & Logistics Management Center...

  • Page 47
    ... Group Environment Group > Corporate Procurement Div. > Logistics Planning Office > Corporate Productivity Planning Div. > Corporate Environment Management Div. > Corporate Manufacturing Engineering Center > Yokohama Complex > Himeji Operations > Technology Planning Div. > Intellectual Property...

  • Page 48
    ... Toshiba America Capital Corporation • Toshiba America Consumer Products, L.L.C. • Toshiba America Electronic Components, Inc. • Toshiba America Information Systems, Inc. • Toshiba America Medical Systems, Inc. • Toshiba America MRI, Inc. • Toshiba America Nuclear Energy Corp • Toshiba...

  • Page 49
    ... Life Insurance Company Nippon Life Insurance Company Japan Trustee Service Bank, Limited (trust accounts) Toshiba Employees Stocks Ownership Plan NIPPONKOA Insurance Company, Limited Japan Trustee Service Bank, Limited (trust accounts 4) Sumitomo Mitsui Banking Corporation Mizuho Corporate Bank...

  • Page 50
    ... 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 next-generation processor, with Sony Computer Entertainment Inc. and IBM Corporation...

  • Page 51
    ... Tokyo Stock Exchange: . . 6502 Shareholder Registration Agent: ...The Chuo Mitsui Trust and Banking Company, Limited For further information, please contact: ...Investor Relations Group Corporate Communications Office Toshiba Corporation 1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan Phone...

  • Page 52

  • Page 53
    TOSHIBA CORPORATION 2009 FINANCIAL REVIEW Annual Report 2009 • Financial Review

  • Page 54
    ... net sales, allowing comparison wit h t hat of ot her companies in J apan. Some it ems which are classified as operat ing income (loss) under U.S.GAAP may be present ed as nonoperat ing income (loss). 3) Basic net income (loss) per share (EPS) is comput ed based on t he weight ed-average number of...

  • Page 55
    ... ("KPIs") that the Management of the Group uses in managing its business. T he Company executes proactive managements, including strategic allocation of resources grounded in the Group strategy of achieving sustained growth with profit. For such perspective, growth of sales is indispensable and...

  • Page 56
    ... flash memories and manufacturing facilities for LCDs were partly revised. T he above capital expenditure amount is on an ordering amount basis and includes ¥26.7 billion, representing the Group's portion in the investments made by Flash Alliance, Ltd. etc., which are companies accounted for by the...

  • Page 57
    ... of demand declines due to the rapid decline into global recession and steeper than expected declines in market prices. T he Mobile Phone business also saw notably lower sales due to fewer shipments, the result of the changed handset sales system in Japan. T he PC business and the Retail Information...

  • Page 58
    ... statements. Prior-period data for the fiscal years ended from March 31, 2008 and 2007 has been reclassified to conform with the current classification. INDUSTRY SEGM ENTS M illions of yen Year ended M arch 31 Thousands of U.S. dollars 2009 2008 2007 2009 Sales: Digit al Product s Unaffiliat ed...

  • Page 59
    ...,784 119,750 96,760 9,676 18,721 (2,327) ¥ 258,364 2009 $ (144,918) (3,298,123) 1,155,582 (276,980) 5,388 6,133 $ (2,552,918) Operating income (loss): Digit al Product s Elect ronic Devices Social Infrast ruct ure Home Appliances Ot hers Eliminat ions Consolidat ed Identifiable assets: Digit al...

  • Page 60
    ... ENTS M illions of yen Year ended M arch 31 Thousands of U.S. dollars 2009 2008 2007 2009 Sales: J apan Unaffiliat ed cust omers Int ersegment Tot al Asia Unaffiliat ed cust omers Int ersegment Tot al Nort h America Unaffiliat ed cust omers Int ersegment Tot al Europe Unaffiliat ed cust omers...

  • Page 61
    ...Flash Alliance, Ltd., etc., which are companies accounted for by the equity method) were mainly directed at manufacturing and development of semiconductor products and manufacturing of LCDs. Major projects completed by the Group in this fiscal year included manufacturing building equipment and power...

  • Page 62
    ... Ltd., whose trade name was changed to T oshiba Mobile Display Co., Ltd. on May 25, 2009), parts of its manufacturing facilities were retired and/ or sold. PLANS FOR CONSTRUCTING NEW FACILITIES AND RETIRING EXISTING FACILITIES At the end of this fiscal year ending March 31, 2009, investment in new...

  • Page 63
    ... effect of exchange rate movements decreased cash by ¥32.0 billion. After accounting for the aforementioned and other factors, cash and cash equivalents at the fiscal year-end increased by ¥95.2 billion to ¥343.8 billion. TREASURY STOCK Shares held as of t he closing dat e of last period: Shares...

  • Page 64
    ... 31, 2009 Name of Company Vot ing Right s Rat io (Percent age) Locat ion Toshiba TEC Corporat ion Toshiba America Business Solut ions, Inc. Toshiba M at sushit a Display Technology Co., Lt d. AFPD Pt e., Lt d. Toshiba Plant Syst ems & Services Corporat ion Toshiba Elevat or and Building Syst ems...

  • Page 65
    ... W hile, the Group makes effort to carefully monitor demand and invest in stages, however, unforeseen market changes and corresponding changes in demand may result in the mismatch between the production of particular products based on the sales volume expected at a time when production commenced and...

  • Page 66
    ... products similar to those offered by the Group. In addition, the results of this business tend to be strongly affected by consumer spending, demand for LCD displays using industrial light sources, one of the major products of this business, and trends in building and housing construction starts...

  • Page 67
    ... activities by sharing intellectual property through the promotion of common platforms and using overseas resources more efficiently in system development. (9) Investments in new business T he Group invests in companies involved in new businesses, enters into alliances with other companies for new...

  • Page 68
    ...in a large-scale recall, lawsuits or other claims relating to product quality. (15) Information security T he Group maintains and manages various personal information obtained through business operations as well as various trade secrets regarding the Group's technology, marketing and other business...

  • Page 69
    ...of the Group and Toshiba brand products. (17) Securing human resources A large part of the success of the Group's businesses depends on securing excellent human resources in every business area and process, including product development, production, marketing and business management. Competition to...

  • Page 70
    ... periodic pension and severance costs pursuant to the applicable accounting standards. Funded status of the Group's pension plan may deteriorate due to declines in the fair value of plan assets caused by lower returns, increases of severance benefit obligations caused by changes in the discount rate...

  • Page 71
    ... on similar terms. If the Group is unable to obtain loans for the necessary amount in a timely manner, the Group's financing may be materially adversely affected. (26) Takeover defense measure T he Company introduced a plan for countermeasures to any large-scale acquisitions of the Company's shares...

  • Page 72
    ...2009 and 2008 M illions of yen Thousands of U.S. dollars (Not e 3) Assets Current assets: Cash and cash equivalent s Not es and account s receivable, t rade: Not es (Not e 7) Account s (Not e 7) Allowance for doubt ful not es and account s Invent...684 Property, plant and equipment Land Buildings M...

  • Page 73
    M illions of yen Thousands of U.S. dollars (Not e 3) Liabilities and shareholders' equity Current liabilities: Short -t erm borrowings (Not e 11) Current port ion of long-t erm debt Not es payable, t rade Account s payable, t rade Account s payable, ot her and accrued expenses (Not e 26) Accrued ...

  • Page 74
    ...Toshiba Corporat ion and Subsidiaries For t he years ended M arch 31, 2009 and 2008 M illions of yen Thousands of U.S. dollars (Not e 3) 2009 Sales and other income: Net sales...operations, before income taxes and minority interest Income taxes (Not e 18): Current... are an int egral part of t hese st ...

  • Page 75
    ...Shareholders' Equit y Toshiba Corporat ion and Subsidiaries For t he years ended M arch 31, 2009 and 2008 M illions of yen Addit ional paid-in capit...Pension...Pension...arch 31, 2009 ¥ 280...dollars (Not e 3) Common st ock Addit ional paid-in capit... Pension liabilit...2009 $2,860,010 $2,970,786 $4,031,...

  • Page 76
    ... disclosure of cash flow information Cash paid during t he year for- Int erest Income t axes Non-cash financing act ivit ies- Conversion of convert ible bonds Sale of Toshiba building Co., Lt d. st ock- Asset s sold Liabilit ies relinquished The accompanying not es are an int egral part of t hese st...

  • Page 77
    ..., the "Company") are engaged in research and development, manufacturing and sales of high-technology electronic and energy products, which range (1)Digital Products, (2)Electronic Devices, (3)Social Infrastructure, (4)H ome Appliances, and (5)Others. For the year ended March 31, 2009, sales of...

  • Page 78
    ... realizable value, cost being determined by accumulated production costs. In accordance with general industry practice, items with long manufacturing periods are included among inventories even when not realizable within one year. PROPERTY, PLANT AND EQUIPM ENT Property, plant and equipment...

  • Page 79
    ... or the fair value of plan assets are also amortized over the average remaining service period of employees expected to receive benefits. NET EARNINGS (LOSS) PER SHARE Basic net earnings (loss) per share ("EPS") is computed based on the weighted-average number of shares of common stock outstanding...

  • Page 80
    ... of investment policies and strategies, (b) the major categories of plan assets, (c) the inputs and valuation techniques used to measure the fair value of plan assets, (d) the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period and...

  • Page 81
    ... remove certain leasing transactions from its scope. SFAS157 defines that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. T he fair value hierarchy prioritizes the inputs to...

  • Page 82
    ... represent corporate debt securities and valued based on unobservable inputs as the markets for the assets are not active at the measurement date. Derivative instruments Derivative instruments principally represent forward currency exchange contracts and interest rate swap agreement, which...

  • Page 83
    ...31, 2009, debt securities mainly consisted of corporate debt securities. Contractual maturities of debt securities classified as available-for-sale at March 31, 2009 are as follows: M illions of yen M arch 31, 2009: Cost Fair value Thousands of U.S . dollars Cost Fair value Due wit hin one year Due...

  • Page 84
    ... balance sheets. Under the asset-backed securitization program entered into in Europe, the Company holds subordinated retained interests for certain trade notes receivable and trade accounts receivable. As of March 31, 2009 and 2008, the fair value of retained interests were ¥10,762 million...

  • Page 85
    ... companies), respectively. T he Company's investments in these companies had market values of ¥29,843 million ($304,520 thousand) and ¥60,357 million at March 31, 2009 and 2008, respectively, based on quoted market prices at those dates. Summarized financial information of the affiliates accounted...

  • Page 86
    ... receivables Long-t erm loans receivable Not es and account s payable, t rade Ot her payables Capit al lease obligat ions 10 . GO O D W ILL AN D O TH ER IN TAN GIBLE ASSETS T he Company tested goodwill for impairment under SFAS N o.142, Goodwill and Other Intangible A ssets, applying a fair value...

  • Page 87
    ... dollars 2010 2011 2012 2013 2014 ¥44,906 39,346 33,437 25,892 17,642 $458,224 401,490 341,194 264,204 180,020 Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. T he changes in the carrying amount of goodwill for the years ended March 31, 2009...

  • Page 88
    ...percent on the unused portion of the lines of credit. Long-term debt at March 31, 2009 and 2008 consist of the following: M illions of yen M arch 31 Thousands of U.S. dollars 2009 2008 2009 Loans, principally from banks and insurance companies, due 2009 t o 2029 wit h weight ed-average int erest...

  • Page 89
    ... as collateral for current portion of long-term debt at March 31, 2009 were property, plant, equipment, long-term receivables and investments with a book value of ¥335 million ($3,418 thousand). T he aggregate annual maturities of long-term debt, excluding those of capital lease obligations are as...

  • Page 90
    ... funding of the defined benefit corporate pension plan. Certain subsidiaries in Japan have tax-qualified non-contributory pension plans which cover all or a part of the indemnities payable to qualified employees at the time of termination. T he funding policy for the plans is to contribute amounts...

  • Page 91
    ... he components of the net periodic pension and severance cost for the years ended March 31, 2009 and 2008 are as follows: M illions of yen Year ended M arch 31 Thousands of U.S. dollars Service cost Int erest cost on project ed benefit obligat ion Expect ed ret urn on plan asset s Amort izat ion of...

  • Page 92
    ... future payments of pension and severance benefits to participants, with reasonable risks. T he 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. T he Company periodically reviews the...

  • Page 93
    ... 31, 2008. T he gains on sales of fixed assets were related mainly to the Ginza T oshiba Building and the land sale. W ITHDRAW AL FROM HD DVD BUSINESS In response to the major changes observed in the business environment during the year ended March 31, 2008, the Company decided to withdraw from the...

  • Page 94
    ... at ement s Toshiba Corporat ion and Subsidiaries M arch 31, 2009 18 . IN CO M E TAXES T he Company is subject to a number of different income taxes which, in the aggregate, result in an effective statutory tax rate in Japan of approximately 40.7 percent for the years ended March 31, 2009 and 2008...

  • Page 95
    ..., the majority of which will expire during the period from 2010 through 2016. T he Company utilized tax loss carryforwards of ¥956 million ($9,755 thousand) and ¥1,521 million ($15,520 thousand) to reduce current corporate and local taxes, respectively, during the year ended March 31, 2009...

  • Page 96
    ... Financial St at ement s Toshiba Corporat ion and Subsidiaries M arch 31, 2009 19 . SH AREH O LD ERS' EQ U ITY COM M ON STOCK T he total number of authorized shares of the Company is 10,000,000,000. T he change in the total number of shares issued for the years ended March 31,2009 and 2008 are as...

  • Page 97
    ...and 2008 are shown below: M illions of yen Pre-t ax amount Tax benefit (expense) Net -of-t ax amount For t he year ended M arch 31, 2009: Net unrealized gains and losses on securit ies: Unrealized holding losses arising during year Less: reclassificat ion adjust ment for losses included in net loss...

  • Page 98
    ... ed Financial St at ement s Toshiba Corporat ion and Subsidiaries M arch 31, 2009 TAKEOVER DEFENSE M EASURE T he effective period of the plan for countermeasures to large-scale acquisitions of the shares in T oshiba Corporation (the "Company") (the "Former Plan") expires at the conclusion of the...

  • Page 99
    ... future trade transactions and the interest rate characteristics of the underlying debt as discussed below. Fair Value Hedge Strategy T he forward exchange contracts and currency swap agreements utilized by the Company effectively reduce fluctuation in fair value of accounts receivable and payable...

  • Page 100
    ...Thousands of U.S . dollars 2009 M arch 31 Locat ion Carrying amount Est imat ed fair value Carrying amount 2009 Est imat ed fair value Nonderivat ives: Liabilit ies: Long-t erm debt , including current port ion Derivat ives designat ed as hedging inst rument s: Asset s: Forward exchange cont ract...

  • Page 101
    ...-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 of marketable securities and other investments. For long-term debt...

  • Page 102
    ... million, respectively. Minimum lease payments for the Company's capital and non-cancelable operating leases as of March 31, 2009 are as follows: M illions of yen Year ending M arch 31 Capit al leases Operat ing leases Thousands of U.S. dollars Capit al leases Operat ing leases 2010 2011 2012 2013...

  • Page 103
    ...,837 million ($1,335,071 thousand) as of March 31, 2009. GUARANTEES OF EM PLOYEES' HOUSING LOANS The Company guarantees housing loans of its employees. The term of the guarantees is equal to the term of the related loans which range from 5 to 25 years. A payment would be triggered by failure of the...

  • Page 104
    ... the decommissioning of nuclear power facilities. T hese obligations address the decommissioning, clean up and release for acceptable alternate use of such facilities. T he Company identified certain assets that have an indeterminate life, and thus the fair value of the retirement obligation is not...

  • Page 105
    ... yen Public offering June 3, 2009 2. Secondary Offering of Shares (Secondary Offering for Over-Allotment) (1) (2) (3) (4) (5) Class and N umber of Shares Sold Seller Selling Price T otal Amount of Selling Price Method of Secondary Offering (6) Delivery Date 103,000,000 shares of common stock of...

  • Page 106
    ... with preferred stock of T oshiba ranking most senior in respect to the right to receive dividends from surplus. Class 3 : equity credit of 50% (Rating and Investment Information, Inc.) Basket C : equity credit of 50% (Moody's Investors Service, Inc.) Private placement in Japan solely for qualified...

  • Page 107
    ... We have audited the accompanying consolidated balance sheets of Toshiba Corporation and subsidiaries (the "Company") as of March 31, 2009 and 2008, and the related consolidated statements of income, shareholders' equity, and cash flows for the years then ended, all expressed in Japanese yen. These...

  • Page 108
    This report was printed on recycled paper with soy-based ink. Printed in Japan