Toshiba 2010 Annual Report Download

Download and view the complete annual report

Please find the complete 2010 Toshiba annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 122

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122

Table of contents

  • Page 1

  • Page 2
    ... Toshiba Group Management Vision A set of values and targets shared throughout Toshiba Group Toshiba Group Standards of Conduct Standards of conduct to which everyone in Toshiba Group is required to adhere * UN Global Compact: A voluntary corporate citizenship initiative concerning human...

  • Page 3
    ... - Focus resources on growth business areas Mid-term Business Plan Business Review CSR Management Research & Development and Intellectual Property Corporate Governance Directors and Executive Officers Corporate History Data Section 2 4 6 13 18 20 34 36 38 40 42 43 1 TOSHIBA Annual Report 2010

  • Page 4
    ...will decide on our dividend policy for FY2010 based on a careful evaluation of the Group's financial position and strategic investment plans. We are aiming to transform Toshiba Group into a top-level diversified electric/electronics manufacturer with strong competitive power. Going forward, we will...

  • Page 5
    TOSHIBA Annual Report 2010 3

  • Page 6
    ....4) 198.0 Financial position and indicators Total assets Total equity attributable to shareholders of Toshiba Corporation (Note 4) Interest-bearing debt Shareholders' equity ratio (%) Debt/equity ratio (Times) Investment R&D expenditures Capital expenditures (Property, plant and equipment) Return...

  • Page 7
    ...shareholders of Toshiba Corporation (Billions of yen) Debt/equity ratio (Times) 1,108.3 1,002.2 1,022.3 R&D expenditures R&D/sales raito (%) (Billions of yen) Free... cash provided by (used in) operating activities Net cash used in investing activities Free cash flow TOSHIBA Annual Report 2010 5

  • Page 8
    ...Interview with the President Norio Sasaki Director, President and CEO "I believe that the transforming of our business structure is necessary so as to transform Toshiba Group into a top-level diversified electric/electronics manufacturer with a strong global competitive power that will allow us to...

  • Page 9
    ... and shifting to overseas operations with lower operating costs. We restructured our LCD (liquid-crystal display) business by reorganizing our production facilities and focusing on the strategic allocation of resources for selected high- FY2009 Management Achievements: Returning to the path of...

  • Page 10
    ... profitability and steadily execute them. For example, we reached an agreement with Fujitsu Ltd. to merge our mobile phone businesses in July, 2010. The same month Toshiba Mobile Display sold 100% of the shares it owned of its subsidiary company manufacturing small- and mid-size LCDs in Singapore to...

  • Page 11
    ... prepare and consider each business case and then proceed to carry out business operations while placing emphasis on the rate of return-on-investment as an important criterion for management. Q. How do you intend to reshape the business structure of Toshiba Group? A. As a result of the...

  • Page 12
    ...by enhancing the leading position of Toshiba and Westinghouse in the nuclear services business. In this connection, we announced that we would make a major investment in USEC, a leading U.S. company engaged in uranium enrichment for commercial nuclear power plants. We are also planning to expand the...

  • Page 13
    ... battery SCiB™ business and new energy-efficient LED lighting system business. Recent examples of our efforts to accelerate new businesses include the contract to supply energy-efficient electric motors for hybrid electric vehicles to Ford Motor Corporation and the agreement to jointly develop...

  • Page 14
    ... member of Toshiba Group, we will enhance corporate value by transforming Toshiba Group into a top-level diversified electric/electronics manufacturer with strong global competitive power. I deeply believe that further enhancing corporate value and meeting the expectations of all shareholders is my...

  • Page 15
    ... to mitigate global warming. Memory Business We are expanding our line-up of memory products fabricated with cutting-edge process technology. Nuclear Energy Business Construction of an AP1000 reactor is under way in China. (Picture: Westinghouse Electric Company) TOSHIBA Annual Report 2010 13

  • Page 16
    ... Group developed the world's first device to incorporate these features, the NAND ï¬,ash memory. In the years since, NAND ï¬,ash has won wide use as a storage medium, generating new demand and promoting value creation. At Toshiba, we aim to establish a strong earnings base in our Memory Business...

  • Page 17
    ... based on 32nm process technology Market launch of 64GB embedded NAND flash memory, offering the world's largest** data density Development of a 32nm process chip for application in SSD for notebook PCs Artist's impression of the completed Yokkaichi Operations Fab 5 TOSHIBA Annual Report 2010...

  • Page 18
    ... policy. We anticipate long term global expansion driven by demand for fuel and improving the reliability and economic viability of existing plants. Nuclear power plants by company BWR PWR Share of plants in operation Nuclear reactor: main contracts (ratio to installed capacity) Toshiba Group...

  • Page 19
    Toshiba Group's Advantages and Business Strategy Synergies between Toshiba and WEC* will drive new plant construction, and develop global fuel and service businesses. Toshiba Group is the only manufacturer of nuclear power plant with technology for both mainstream light-water reactors-boiling water ...

  • Page 20
    ... economic conditions and market changes Business Structure Transformation Transform Toshiba Group into a top-level diversified electric/ electronics manufacturer with strong global competitive power Proactive environmental management Establish a position as one of the foremost eco-companies in...

  • Page 21
    ... technology globally in nuclear energy business and in steam turbines and generators for U.S. market Continue to enhance global manufacturing bases (A new factory for super 6.8% critical steam turbines and generators in India (planned to operate in Jan. 2011) 640 Become No.1 worldwide in energy...

  • Page 22
    ... Distribution & Industrial Systems Company Social Infrastructure Systems Company Toshiba Elevator and Building Systems Corporation Toshiba Solutions Corporation Toshiba Medical Systems Corporation Home Appliances Segment (As of April 1, 2010) Toshiba Consumer Electronics Holdings Corporation 20

  • Page 23
    ... demand. The acquisition of Fujitsu's hard disk drive business also contributed to higher sales in the Storage Products business. The PC business saw lower sales, mainly due to the trend to low priced machines and changes in exchange rates. Retail Information Systems and Office Equipment and Mobile...

  • Page 24
    ...both saw improved sales, whilst the PC, Retail Information Systems and Office Equipment and Mobile Phones businesses all experienced negative impacts from the sluggish economy and declines in unit prices, causing the segment to record slightly lower revenue. The V isual Produc ts and Storage Produc...

  • Page 25
    ... high performance processor, the Cell Broadband Engineâ„¢, delivers high definition images using super-resolution technology, supports state-ofthe-art image processing using high speed software technology, and offers numerous recording, search and playback functions. TOSHIBA Annual Report 2010 23

  • Page 26
    ... that include notebook PCs, servers, business telephone systems and industrial cameras. The company is dedicated to serving consumers and business by expanding the provision of products and services grounded in digital and network technologies. In FY2009 the notebook PC market recovered in terms of...

  • Page 27
    ... Devices Segment Sales Operating income (loss) 1,309.1 (-15.8 billion yen, -1% vs FY2008) billion yen -24.2 billion yen (+299.0 billion yen vs FY2008) While the Semiconductor business generated higher sales, the LCD business saw a major decline, resulting in almost flat segment sales. The...

  • Page 28
    ... to secure a return to operating profit. We also maintained our number three position in world semiconductor market share* in CY2009. The Semiconductor Company is promoting fundamental restructuring where necessary. The system LSI business restructured the front-end process at Kitakyushu Operations...

  • Page 29
    ...-life LED backlight saves energy and achieves the high reliability of 100,000 hours of operation. Its wide applications include industrial use display equipment, measuring equipment, medical instruments, personal digital equipment and high-definition TFT LCD modules. TOSHIBA Annual Report 2010 27

  • Page 30
    ...orders, except in Nuclear Energy Systems, which saw increased sales in nuclear power plants overseas. Increased revenue from the Nuclear Energy Systems business led... FY08 FY09 Operating income (loss) Operating income ratio 131.3 (Billions of yen) (%) Capital expenditures (order basis) (Billions...

  • Page 31
    ... operating profit. In the Nuclear Power Systems business, we began to construct two plants in China that will house the world's most advanced pressurized water reactors.*1 New engineering facilities at the Isogo Engineering Center in Yokohama, and in the United States*2 will support globalization...

  • Page 32
    ... forward facility solutions-the business of improving energy saving and functionality in buildings and facilities-by drawing on the collective strengths of Toshiba Group and collaborating with the Smart Facility Business Division, established in April 2010 under corporate control. Global demand for...

  • Page 33
    ... friendly products in our domestic business, while overseas we will accelerate global expansion by utilizing business partners and development and manufacturing bases, particularly in China and other Asian countries. revenue declined, but cutting fixed costs and other measures maintained operating...

  • Page 34
    ... the home appliances, general lighting and airconditioning businesses. The air-conditioning business worsened on markedly lower sales, but successes in cost cutting improved the per formance of the home appliances business and general lighting business, and the segment saw a narrower operating loss...

  • Page 35
    ... the May 2010 transfer of the residential air-conditioning business from Toshiba Carrier Corporation, to Toshiba Home Appliances Corporation whose main products are refrigerators and washing machines. White Goods Business Our many environmentally conscious products excel in energy saving performance...

  • Page 36
    ..., we developed " Toshiba Group Environmental Vision 2050." Further, in order to establish a position as one of the world's foremost eco-companies, we are working to mitigate global warming through environmental solutions in three main areas products, business processes and technology, and through...

  • Page 37
    ...research company Public Resource Center, Japan Japan Corporate Governance Research Institute, Inc. Ministry of the Environment and others, Japan Environmental & Sustainability Report Awards Environmental Management Level Survey Toyo Keizai Inc., Japan Nikkei Inc., Japan TOSHIBA Annual Report 2010...

  • Page 38
    ...of September 2009, based on Toshiba research Activities in FY2009 Our R&D advances the achievement of management policies through technology development for the four business segments, and through innovation in nine new product areas, including rechargeable batteries, new lighting systems and smart...

  • Page 39
    ... for Invention we received the following awards. Intellectual Property Strategy Toshiba Group's intellectual property (IP) strategy interweaves with business growth and supports research & development, binding the three into one. It promotes sustained growth with steadily higher profit through...

  • Page 40
    ... Corporate Governance Toshiba Group promotes corporate governance based on the fundamental policy and objectives of enhancing management efficiency, increasing transparency, and maximizing corporate value from the shareholders' perspective. Toshiba's Governance System Toshiba adopted the Company...

  • Page 41
    ... protecting and enhancing the Company's corporate value and the common interests of its shareholders, Toshiba has implemented countermeasures against largescale acquisitions of shares in the Company. For more information visit: www.toshiba.co.jp/about/ir/en/news/20090508_1.pdf TOSHIBA Annual Report...

  • Page 42
    ... Director Fumio Muraoka Director Masao 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...

  • Page 43
    ...Director Kazuo Tanigawa Director Shigeo Koguchi Director Chairman of Audit Committee Hiroshi Horioka Director Audit Committee Member Kiichiro Furusawa Outside Director Chairman of Compensation Committee Audit Committee Member Executive Officers Corporate... 23, 2010) TOSHIBA Annual Report 2010 41

  • Page 44
    ...Display Co., Ltd. Adopted the Company with Committees system. Jan. 2001 July Aug. Apr. 2002 Oct. Mar. 2003 Jun. Oct. Transferred home appliances business to Toshiba Consumer Marketing Corp. (now Toshiba Consumer Electronics Holdings Corp.) and Toshiba Home Appliances Manufacturing (now Toshiba Home...

  • Page 45
    ... Debt Organization Chart Corporate Governance Consolidated Subsidiaries and Affiliated Companies Accounted for by the Equity Method Stock/Shareholder Information 44 46 48 48 49 50 51 51 52 54 57 58 Major indices of the Data Section have been compiled chronologically based on the fiscal years...

  • Page 46
    ... Toshiba Corporation Interest-bearing debt Long-term debt Short-term debt Shareholders' equity ratio (%)*2 Debt/equity ratio (Times)*3 R&D, Capital Expenditures and Depreciation R&D expenditures Capital expenditures (Property, plant and equipment) Depreciation (Property, plant and equipment) Return...

  • Page 47
    ... (Operating income (loss) + Interest and dividends) / Interest expense *12 Free cash flow = Net cash provided by operating activities + Net cash used in investing activities *13 Market capitalization = Common stock price [Year-end / Yen / Close] Ã- Total issued shares TOSHIBA Annual Report 2010 45

  • Page 48
    ... affiliates Marketable securities and other investments 18,883 228,402 240,456 487,741 19,329 240,249 250,536 510,114 7,423 321,166 264,149 592,738 3,987 340,756 190,110 534,853 3,337 366,250 253,267 622,854 Property, Plant and Equipment: Land Buildings Machinery and equipment Construction in...

  • Page 49
    ...,396 130,007 1,626,171 960,938 725,620 148,548 1,835,106 Equity attributable to shareholders of Toshiba Corporation Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost 274,926 285,743 570,080 (126,509) (2,075) 1,002,165 274,926...

  • Page 50
    Consolidated Statements of Operations (Millions of yen) Year ended March 31 Sales and Other Income: Net sales Subsidy received on return of substitutional portion of Employees' Pension Fund Plan Interest and dividends Equity in earnings of affiliates Other income 2006 2007 2008 2009 2010 ...

  • Page 51
    ...of 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...

  • Page 52
    ...Year ended March 31 Digital Products Net sales Share of net sales (%) Operating income (loss) Operating income ratio (%) Number of employees (Thousands) R&D expenditures Depreciation Capital...105.8 2,427.5 (0.9) - (13.7) - 5.7 0.4 4.5 56.3 3.8 2010 Change (%) ¥2,363.6 34.4 13.3 0.6 54 80.8 36.3 21.9...

  • Page 53
    ...,210 127,390 133,379 91,565 - - ¥1,005,847 ¥ - 190,085 207,255 182,072 226,826 - 34,498 270,847 ¥1,111,583 For more information on corporate bonds and ratings, please visit our IR website at http://www.toshiba.co.jp/about/ir/en/stock/bond.htm TOSHIBA Annual Report 2010 51

  • Page 54
    ...Diversity Development Div. •Toshiba General Hospital Finance & Accounting Group •Finance & Accounting Div. •Global Financial System Div. Mobile Communications Company •Hino Operations Visual Products Company •Visual Products Marketing Div. •TV & Network Div. •Core Technology Center...

  • Page 55
    ... Management Div. •Corporate Manufacturing Engineering Center •Yokohama Complex •Himeji Operations Technology & Intellectual Property Group •Technology Planning Div. •Intellectual Property Div. •Corporate Research & Development Center •Corporate Software Engineering Center Marketing...

  • Page 56
    ... Fujifilm Holdings Corporation finance and management. Outside Director, NHK Promotions Inc. Outside Director, Daiichi Sankyo Company, Mr. Hirabayashi currently properly supervises Limited the Company's management based on his President, The Japan-India Association rich experience and knowledge as...

  • Page 57
    ... 436-2, etc. of the Security Listing Regulations of the Tokyo Stock Exchange. 2) Relationship between the Company and entities at which outside directors hold important concurrent posts The Company has an ongoing business relationship with Chuo Mitsui Trust Group, which consists of Chuo Mitsui...

  • Page 58
    ... work of the supervisory function. Since the responsibility of Executive Officers is to increase corporate value in their capacity as executives responsible for companies or divisions within the Group, compensation for Executive Officers is divided into fixed compensation and performance-based...

  • Page 59
    ... • Toshiba Industrial Products Sales Corporation • Toshiba Information Equipments Co., Ltd. • Toshiba Lighting & Technology Corporation • Toshiba Logistics Corporation • Toshiba Medical Systems Corporation • Toshiba Mobile Display Technology Co., Ltd. • Toshiba Plant Systems & Services...

  • Page 60
    ... Information Common Stock Price Trends Year ended March 31 Common stock price (¥, fiscal year) High Low Nikkei average (¥) Number of shares issued (Millions of shares) Market capitalization (¥ Billion) Earnings per share attributable to shareholders of Toshiba Corporation (yen) -Basic (EPS...

  • Page 61
    Corporate Data As of March 31, 2010 Headquarters: Founded: Number of Employees: Fiscal Year: Authorized Number of Shares: Number of Shares Issued: Number of Shareholders: Stock Exchange Listings: ISIN: Ticker Code on the Tokyo Stock Exchange: Shareholder Registration Agent: For further information...

  • Page 62

  • Page 63
    TOSHIBA CORPORATION 2010 FINANCIAL REVIEW Annual Report 2010 • Financial Review

  • Page 64
    ...from the sales or disposal of fixed assets, may be presented as non-operating income (loss). 3) Basic earnings (loss) per share attributable to shareholders of Toshiba Corporation (EPS) is computed based on the weighted-average number of shares of common stock outstanding during each period. Diluted...

  • Page 65
    ... of strategic policies that aim to generate profit regardless of market conditions and fluctuations, Toshiba resolutely promoted groupwide cost reduction measures and strategic allocations of resources, accelerated the further globalization of its business and promoted business structure reformation...

  • Page 66
    ... of Toshiba Corporation of -19.7 billion yen. This reflects the capital increase resulting from a June 2009 public offering, as well as an improvement in accumulated other comprehensive income (loss) of 53.7 billion yen due to unrealized gains on the recovery in stock market prices. Total debt...

  • Page 67
    ... demand. The acquisition of Fujitsu's hard disk drive business also contributed to higher sales in the Storage Products business. The PC business saw lower sales, mainly due to the trend to low priced machines and changes in exchange rates. Retail Information Systems and Office Equipment and Mobile...

  • Page 68
    ... and healthcare services, such as demands for energy and environmental technologies in emerging countries and demands for medical care and education, and in the field of ICT(Information and communications technology) with the basis of worldwide trends to digitalization, networking and transfers of...

  • Page 69
    ... for manufacturing. Major projects completed by the Group in this fiscal year included building for development and design of nuclear power generation equipment (at the Isogo Nuclear Engineering Center). In the Home Appliances segment, 10.2 billion yen was invested for to development of new models...

  • Page 70
    Management's Discussion and Analysis billions of yen As of March 31, 2010 Business Segment Digital Products Electronic Devices Social Infrastructures Home Appliances Others Total Planned Capital Investments for FY 2010 33.0 166.0 77.0 15.0 29.0 320.0 Major Contents and Purposes Manufacturing ...

  • Page 71
    ... Mobile Display Co., Ltd. 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 Consumer Electronics...

  • Page 72
    ... of energy and electronics, the Group's main business areas, require highly advanced technology for their operation. At the same time, the Group faces fierce global competition. Therefore, appropriate risk management is indispensable. Major risk factors related to the Group identified by the Company...

  • Page 73
    .... 2. Risks related to financial condition, results of operations and cash flow (1) Business environment of the Digital Products business The market for the Digital Products business is intensely competitive, with many companies manufacturing and selling products similar to those offered by the Group...

  • Page 74
    ... in market demand, adjustment of supplies and investment management. The Group promotes procurement of components from overseas in US dollars in order to mitigate the impact of exchange rate fluctuations. In addition, Toshiba Mobile Display Co., Ltd., which engages in the LCD business, remains...

  • Page 75
    ... in "accumulated other comprehensive income (loss)" reported as a component of equity attributable to shareholders of Toshiba Corporation. As a result, the Group's equity attributable to shareholders of Toshiba Corporation may be affected by exchange rate fluctuations. (iii) Accrued pension and...

  • Page 76
    ... with key suppliers. (2) 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. In particular, securing the...

  • Page 77
    ... by sharing intellectual property through the promotion of common platforms and using overseas resources more efficiently in system development. 7. Risks related to laws and regulations (1) Information security The Group maintains and manages personal information obtained through business operations...

  • Page 78
    ... pending. 9. Risks related to directors, employees, major shareholders and affiliates (1) Alliance in NAND flash memories The Group has a strategic alliance with a U.S. company, SanDisk Corporation ("SanDisk"), for the production of NAND flash memories, which includes production joint ventures...

  • Page 79
    ... social conditions The Group undertakes global business operations. Any changes in political, economic, and social conditions and policies, legal or regulatory changes and exchange rate fluctuations, in Japan or overseas, may impact market demand and the Group's business operations. The Group makes...

  • Page 80
    ...Investments in and advances to affiliates (Note 9) Marketable securities and other investments (Note 6) Total long-term receivables and investments Property, plant and equipment (Notes 11, 17 and 22): Land Buildings Machinery and equipment Construction in progress Less-Accumulated depreciation Total...

  • Page 81
    ...,489,795 Equity attributable to shareholders of Toshiba Corporation (Notes 12 and 19): Common stock: Authorized-10,000,000,000 shares Issued: 2010-4,237,602,026 shares ¥ 439,901 2009-3,237,602,026 shares - Additional paid-in capital 447,733 Retained earnings 375,376 Accumulated other comprehensive...

  • Page 82
    ... loss Diluted net loss per share attributable to shareholders of Toshiba Corporation (Note 20) Loss from continuing operations Loss from discontinued operations Net loss Cash dividends per share (Note 19) The accompanying notes are an integral part of these statements. ¥ ¥ ¥ (4.82) (0.11) (4.93...

  • Page 83
    ... Statements of Equity Toshiba Corporation and Subsidiaries For the years ended March 31, 2010 and 2009 Millions of yen Common stock shares Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock Equity Equity attributable to attributable to shareholders...

  • Page 84
    ... property, plant and equipment Acquisition of intangible assets Purchase of securities (Increase) decrease in investments in affiliates Proceeds from sale of Toshiba Building Co., Ltd. stock Other Net cash used in investing activities Cash flows from financing activities Proceeds from long-term debt...

  • Page 85
    ... Financial Statements Toshiba Corporation and Subsidiaries March 31, 2010 1 . DESCRIPTION OF BUSINESS Toshiba Corporation and its subsidiaries (hereinafter collectively, the "Company") are engaged in research and development, manufacturing and sales of high-technology electronic and energy products...

  • Page 86
    ... Financial Statements Toshiba Corporation and Subsidiaries March 31, 2010 ALLOWANCE FOR UNCOLLECTIBLE RECEIVABLES An allowance for uncollectible trade receivables is recorded based on a combination of the write-off history, aging analysis, and an evaluation of any specific known troubled accounts...

  • Page 87
    ... 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 attributable to shareholders of Toshiba Corporation ("EPS") is computed based on the weighted-average number...

  • Page 88
    ... revenue arrangement that include software elements. ASU No.2009-14 is effective for fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the timing and the impact of adoption of ASU No.2009-14 on the Company's financial position and results of operations. SUBSEQUENT...

  • Page 89
    ...=U.S.$1, the approximate current rate of exchange at March 31, 2010, has been used throughout for the purpose of presentation of the U.S. dollar amounts in the accompanying consolidated financial statements. 4 . DISCONTINUED OPERATION Since its establishment, Mobile Broadcasting Corporation ("MBCO...

  • Page 90
    ...: Millions of yen March 31, 2010 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: MMF Marketable securities: Equity securities Debt securities Derivative assets: Forward exchange contracts Interest rate swap agreements Currency swap agreements Subordinated retained interests Total assets...

  • Page 91
    ... 3 securities 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 agreements...

  • Page 92
    ... Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2010 Subordinated retained interests Subordinated retained interests are valued based on unobservable inputs and classified within Level 3. They are valued based on the internal valuation models and the Company's own...

  • Page 93
    ... based on the specific valuation techniques and hypotheses of the Company with unobservable inputs. The impaired long-lived assets were classified within level 3 as they were valued based on discounted cash flows expected to be generated by the related assets and on the transfer price of stocks...

  • Page 94
    Notes to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2010 6. MARKETABLE SECURITIES AND OTHER INVESTMENTS The aggregate cost, gross unrealized holding gains and losses, and aggregate fair value for marketable equity securities and debt securities classified as ...

  • Page 95
    ...the prevailing market rate. Related servicing assets or liabilities are immaterial to the Company's financial position. The table below summarizes certain cash flows received from and paid to special purpose entities ("SPEs") on the above securitization transactions. Millions of yen Year ended March...

  • Page 96
    Notes to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2010 8 . INVENTORIES Inventories consist of the following: Millions of yen March 31 Thousands of U.S. dollars Finished products Work in process: Long-term contracts Other Raw materials 2010 ¥303,860 96,376 ...

  • Page 97
    ... ASSETS The Company tested goodwill for impairment in accordance with ASC No.350 "Intangibles-Goodwill and Other" (formerly SFAS No.142), applying a fair value based test and has concluded that there was no impairment for the years ended March 31, 2010 and 2009. The components of acquired intangible...

  • Page 98
    .... The rest were mainly allocated within Digital Products. Goodwill acquired during the year ended March 31, 2010 is mainly related to the acquisition of Chevalier (HK) Limited and its subsidiaries (Social Infrastructure). 11 . SHORT-TERM BORROWINGS AND LONG-TERM DEBT Short-term borrowings at March...

  • Page 99
    ... the secured and unsecured loan agreements may require prior approval by the banks and trustees before any distributions (including cash dividends) may be made from current or retained earnings. Assets pledged as collateral for short-term borrowings at March 31, 2010 were property, plant, equipment...

  • Page 100
    ... to common stock and the remainder to additional paid-in capital. The additional 175,295,212 shares relating to the potential conversion of the 2011 Bonds are excluded from the calculation of net loss per share attributable to shareholders of Toshiba Corporation for the year ended March 31, 2010 due...

  • Page 101
    ...of year Service cost Interest cost Plan participants' contributions Plan amendments Actuarial loss (gain) Benefits paid Acquisitions and divestitures Foreign currency exchange impact Benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return...

  • Page 102
    ... stocks that are listed on the securities exchanges. Prior to investing, the Company has investigated the business condition of the investee companies, and appropriately diversified investments by type of industry and other relevant factors. The debt securities are selected primarily from government...

  • Page 103
    ...and cash equivalents Equity securities: Japanese companies Foreign companies Pooled funds Debt securities: Government bonds Municipal bonds Corporate bonds Pooled funds Other assets: Hedge funds Real estate Life insurance company general accounts Other assets Total March 31, 2010 ¥ 16,633 111,412...

  • Page 104
    ... and government bonds, which are valued based on quoted market prices in active markets with sufficient volume and frequency of transactions. Level 2 plan assets represent pooled funds that invest in equity securities and debt securities, corporate bonds and life insurance company general accounts...

  • Page 105
    ...,817 million ($170,075 thousand) related to the stock transfer agreement of AFPD PTE., LTD. ("AFPD"), a manufacturing subsidiary in Singapore. The Company reduced book value of property, plant and equipment of AFPD in accordance with the transfer price of AFPD stock. This impairment loss is included...

  • Page 106
    ... $ 2010 (65,796) (212,419) (425,269) (186,893) (603,462) (737,591) (132,957) (2,364,387) $ 4,654,140 Gross deferred tax liabilities: Inventories Property, plant and equipment Unrealized gains on securities Gain on securities contributed to employee retirement benefit trusts Undistributed earnings...

  • Page 107
    ...amount 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, 2010 included the Company's equity in undistributed...

  • Page 108
    ...of-tax amount For the year ended March 31, 2010: Net unrealized gains and losses on securities: Unrealized holding gains arising during year Less: reclassification adjustment for losses included in net loss attributable to shareholders of Toshiba Corporation Foreign currency translation adjustments...

  • Page 109
    ...any large-scale acquisitions of the Company's shares (the "Plan"), based on the shareholders' approval of the Plan for the purpose of protection and enhancement of the corporate value of the Company and the common interests of shareholders. Specifically, if an acquirer commences or plans to commence...

  • Page 110
    ... to shareholders of Toshiba Corporation for the years ended March 31, 2010 and 2009. 21 . FINANCIAL INSTRUMENTS (1) DERIVATIVE FINANCIAL INSTRUMENTS The Company operates internationally, giving rise to exposure to market risks from fluctuations in foreign currency exchange and interest rates. In...

  • Page 111
    ... 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. The gain or loss on the derivative financial instruments designated as fair...

  • Page 112
    Notes to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2010 (2) FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values of the Company's financial instruments and the location in the consolidated balance sheets at March 31, 2010 and 2009 are summarized as follows: ...

  • Page 113
    ...-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 114
    ... Forward exchange contracts Interest rate swap agreements Other expense Other income ¥ (1,106) 2 22 . LEASES 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 March 31, 2010...

  • Page 115
    ... transferred. 24 . GUARANTEES GUARANTEES OF UNCONSOLIDATED AFFILIATES AND THIRD PARTY DEBT The Company guarantees debt as well as certain financial obligations of unconsolidated affiliates and third parties to support the sale of the Company's products and services. Expiration dates vary from 2010...

  • Page 116
    ... by July 2016. The Company accrued ¥9,030 million ($97,097 thousand) and ¥10,426 million at March 31, 2010 and 2009, respectively, for environmental remediation and restoration costs for products or equipment with PCB which some Toshiba operations in Japan have retained. The Westinghouse Group...

  • Page 117
    ...Nuclear Power Systems business by establishing a market presence in Japan and building a fuel production platform in Asia. The total purchase price for the acquisition was ¥11,526 million ($123,935 thousand) in cash. Of the total price, ¥13,680 million ($147,097 thousand) was allocated to property...

  • Page 118
    ... : Energy-related equipment, Medical equipment, IT solutions, Elevators, etc. (4) Home Appliances : Refrigerators, Washing drying machines, Light fixtures, Air-conditioners, etc. (5) Others : Logistics Service, etc. BUSINESS SEGMENTS Financial information by segments as of and for the years ended...

  • Page 119
    ... 268,409 ¥ GEOGRAPHIC INFORMATION Net Sales Net sales by region based on the location of the customer for the years ended March 31, 2010 and 2009 are as follows: Millions of yen Year ended March 31 Thousands of U.S. dollars Japan Overseas Asia North America Europe Others Total 2010 ¥ 2,878,494...

  • Page 120
    ... to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2010 Property, plant and equipment Property, plant and equipment by region at March 31, 2010 and 2009 are as follows: Millions of yen March 31 Thousands of U.S. dollars Japan Overseas Asia North America Europe...

  • Page 121
    Report of Independent Auditors The Board of Directors and Shareholders of Toshiba Corporation We have audited the accompanying consolidated balance sheets of Toshiba Corporation and subsidiaries (the "Company") as of March 31, 2010 and 2009, and the related consolidated statements of income, equity,...

  • Page 122
    This report was printed on recycled paper with soy-based ink. Printed in Japan