Toshiba 2011 Annual Report Download - page 72

6
Management’s Discussion and Analysis
SOCIAL INFRASTRUCTURE
The Social Infrastructure segment saw overall sales decline by 51.3 billion yen to 2,267.7 billion yen. The Power Systems
and Industrial Systems businesses recorded higher sales thanks to a healthy performance by the Industrial Systems
business in overseas markets. However, the Infrastructure Systems business, the IT Solutions business and the Medical
Systems business all felt the influences of downturns in market demand and price erosion and reported weak
performances.
Segment operating income stood at 137.1 billion yen, close to the same level as a year earlier, and the profit level
remained high. The Power Systems and Industrial Systems businesses recorded higher operating income on a healthy
performance in the Power Systems business. Both the Infrastructure Systems business and the Medical Systems business
saw lower operating income on decreased sales.
HOME APPLIANCES
The Home Appliances segment saw sales increase by 20.0 billion yen to 599.8 billion yen. White Goods including Air-
conditioners reported a healthy performance and a positive result that mainly stemmed from the continued effect of the
eco-points program and a hot summer in Japan. Lighting Systems also reported a healthy performance mainly due to
increased sales of LED lighting and a recovery in domestic housing and building starts.
The segment as a whole recorded an operating income of 8.8 billion yen, an improvement of 14.2 billion yen against the
previous year, mainly on a healthy performance in Air-conditioners in a hot summer in Japan, a solid performance in
refrigerators and progress in restructuring, including reorganizing facilities and reshaping business.
OTHERS
Others saw sales increase by 7.3 billion yen to 352.9 billion yen, with the result that its operating loss improved by 0.1
billion yen to 7.6 billion yen.
The Company’s Consolidated Financial Statements are based on U.S. GAAP.
Operating income (loss) is derived by deducting the cost of sales and selling, general and administrative expenses from
net sales, and reported as a measurement of segment profit or loss. This result is regularly reviewed to support decision-
making in allocations of resources and to assess performance. Certain operating expenses such as restructuring charges
and gains (losses) from the sale or disposition of fixed assets are not included in it.
The Mobile Broadcasting business ceased its operation at the end of FY2008. On June 17, 2010, the Company and
Fujitsu Limited (“Fujitsu”) signed a Memorandum of Understanding to merge their mobile phone businesses, followed by
a definitive contract on July 29, 2010. On October 1, 2010, the Company transferred its mobile phone business to a newly
established company called Fujitsu Toshiba Mobile Communications Limited (“FT MOBILE”), and sold 80.1% of the
shares of the new company to Fujitsu. The results of the Mobile Broadcasting business and FT MOBILE are not
incorporated into consolidated net sales, operating income (loss), or income (loss) from continuing operations, before
income taxes and noncontrolling interests in the consolidated results. The businesses are classified as discontinued in the
consolidated accounts in accordance with ASC No.205-20, “Presentation of Financial Statements – Discontinued Operations”.
Consolidated net income (loss) (consolidated net income (loss) attributable to shareholders of the Company), however,
includes the operating results of the Mobile Broadcasting business and the Mobile Phone business. Prior-period data
relating to the discontinued operations has been reclassified to conform with the current classification.
RESEARCH AND DEVELOPMENT
In response to the Great East Japan Earthquake, the Group has been promoting R&D of the products which contribute
to the restoration of the earthquake damage and electricity saving. Also, the Group has re-examined its R&D with a view
of constructing safer and more secured communities. In the medium term, the Group plans to accelerate overseas
operations, aiming to evolve into a world-leading diversified electric/electronics manufacturer. The Group takes
customers’ needs in advance and promotes R&D to create the world’s first products and services with astonishment and
impression.
The Group has Strengthened Competitiveness and implemented investment for further growth:
1) Company-wide staff division for R&D has researched on the technologies which would become a basis of innovative
products focusing on Mega-Trends (expected business chances in the field of vital and healthcare service, such as the
demands for energy and environment in emerging countries, the demands for medical care and education, and in the
field of ICT (Information and Communication Technology) accompanied by world-wide digitalization, networking,
and large-volume information transfer);
2) R&D facilities of the in-house companies and other operating companies have focused on developing basic