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Operational Review
Annual Report
Year ended March 31, 2014
2014
C M Y K特色 e_ 東芝 AR2014_ 表 1-4 オモテ 14/09/01 22:16:30

Table of contents

  • Page 1
    2014 Annual Report Year ended M arch 31, 2014 Operational Review

  • Page 2
    ... environment, and anti-corruption proposed by the former UN Secretary-General Kofi Annan in 1999 at the World Economic Forum. Toshiba joined the UN Global Compact in 2004. Toshiba Group Management Vision A set of values and targets shared throughout Toshiba Group Toshiba Group Standards of Conduct...

  • Page 3
    ... Energy & Infrastructure Segment Community Solutions Segment Healthcare Systems & Services Segment Electronic Devices & Components Segment Lifestyle Products & Services Segment 30 32 36 39 41 44 48 54 Toshiba Group CSR Environmental Management Third-Party Evaluations of CSR in FY2013 57 Corporate...

  • Page 4
    ... of our shareholders. At the Board of Directors meetings held in FY2013, we received reports from executive officers regarding business forecasts and actual results, and after holding thorough discussions, we made decisions regarding important matters related to the company's basic policies such as...

  • Page 5
    To Our Shareholders Masashi Muromachi Chairman of the Board of Directors TOSHIBA Annual Report 2014 03

  • Page 6
    ... a Toshiba Group company in India (right) Corporate Strategies President's Perspective 05 14 18 21 25 Medium-term Business Plan Financial and Non-Financial Highlights Special Feature: Toshiba's Healthcare Strategy Research & Development and Intellectual Property 04 TOSHIBA Annual Report 2014

  • Page 7
    ... systems and services that were developed in different organizations within Toshiba Group into one business domain. We have moved ahead aggressively with the restructuring of our Lifestyle Products & Services segment. In our TV/PC businesses, we closed and sold LCD TV manufacturing bases in China...

  • Page 8
    ...pursuing growth that does not overly depend on market growth but is generated by Toshiba's creative powers. Among the key points of our new Medium-term Business Plan, the ones I place most importance on are "promoting a healthy financial base," "organic growth" and "enhancing profitability." We will...

  • Page 9
    ... continue to make resource inputs necessary to sustain our competitive power; however, when executing them we will put the priority on strengthening our financial base. We will carry out capital expenditures and investments during the Medium-term Business Plan now under way within a planned frame of...

  • Page 10
    ...developing such exciting new products as heavy-ion radiotherapy systems that offer improved treatment for cancer patients and DNA testing kits. The unique technology strengths Toshiba possesses in healthcare systems and services can lead us to win in the healthcare market. 08 TOSHIBA Annual Report...

  • Page 11
    ... products that have a strong competitive power. Going forward, in order to keep our technological superiority and continue to lead the market, we will selectively allocate management resources focused on the data storage business. *1: Internet of Things *2: Solid State Drive TOSHIBA Annual Report...

  • Page 12
    ...With the knowledge and information we have gathered so far, we will accelerate commercialization and will work to realize stable energy supply and safe, secure and comfortable communities. Aiming for the world's top 3 share in diagnostic imaging systems, expanding into new healthcare business areas...

  • Page 13
    ... developing the sales and services of medical equipment in more than 135 countries around the world are both strengths that are unique to Toshiba. In order to clearly demonstrate such strengths of our company, we have established a new healthcare company by integrating related resources within...

  • Page 14
    ... Under this Medium-term Business Plan, unless a drastic environment change occurs, we will not change our targeted values once we announce them, and from next year on, we will report every year the achievement status of our forecasts. In order to gain the trust of all of our shareholders, we will go...

  • Page 15
    ... solution of these issues. Aiming to solidify Toshiba's position as one of the world's foremost eco-companies, we will continue to move forward with and expand our environmental management. Going forward, I will work to the best of my abilities to build a corporate group that is trusted as a global...

  • Page 16
    ... Products + Excellent User Experiences 14 TOSHIBA Annual Report 2014 g Medium-term Business Plan Value Creation Focus on customers' points-of-view Combine values to create synergies and expand applications Promote most effective use of resources and assets Enhance quality, efficiency and...

  • Page 17
    ... motor controller, structured array*1 Identify needs in IoT*2 market (e.g. smart cars and wearable devices) *1: Replacement of Gate Arrays *2 IoT: Internet of Things Memory: Pursuit of Miniaturization and Efficiency Started mass production of world's smallest class 15nm NAND Promote development...

  • Page 18
    ...Establishing global horizontal division work structure Localize by providing low-cost components from India to final assembly & testing plants in other countries (Japan, North America, EMEA countries) Community Solutions FY14 ¥1.4T FY16 ¥1.6T Realizing stable energy supply and safe, secure and...

  • Page 19
    ... Global Operations Structure Accelerate and divide up development in Japan, the U.S., Europe, China and India Expand Brazil production, preparing new production site DNA testing system 720.0 New healthcare business (Including M&A) 410.8 Medical New Healthcare areas Promote COI*3 business...

  • Page 20
    ...246.6) 40.0 Financial position and indicators Total assets Equity attributable to shareholders of Toshiba Corporation (Note 3) Interest-bearing debt Shareholders' equity ratio (%) Debt/equity ratio (Times) Investment R&D expenditures Capital expenditures (Property, plant and equipment) Depreciation...

  • Page 21
    ... of Toshiba Corporation (Billions of yen) Debt/equity ratio (Times) 1,034.3 1,229.1 50.8 0.8 797.4 868.1 863.5 1.5 1.2 -0.3 -19.7 FY09 FY10 FY11 FY12 FY13 FY09 FY10 1.4 1.4 1.1 FY13 FY11 FY12 Net income decreased YonY, mainly resulted from the discontinuation of the Optical Disc Drive...

  • Page 22
    ...Implementation of "CSR Procurement Policy" ] Domestic and overseas Toshiba Group companies (No. of companies) Participation in briefings Surveys (including self-auditing) On-site audits [Expenditures on Corporate Citizenship Activities] Domestic and overseas Toshiba Group companies (100 millions of...

  • Page 23
    ... by Toshiba's business groups, Energy & Infrastructure, Community Solutions, Lifestyles Products & Health Health lth th h Promotion Pro rom motio on n Active lives, healthy Active health hy in body and mind b d Air Water Food * Market size figures are Toshiba estimates Healthcare business net...

  • Page 24
    ...target in disease diagnosis and treatment. It will also reduce healthcare costs. At Toshiba, we will make progress by providing more patient-friendly diagnostic imaging systems offering even higher image quality. We also aim to create speedy, simple means of testing that do not stress the body, and...

  • Page 25
    ... Family home watching Voice-activated SNS Nursing care movement assistance technology "Medication time" check button Example of an alert screen In home services for seniors, tablet devices, home-health management and communication with families via video phones and handwritten-input mail help...

  • Page 26
    ... promoting health, and an environment in which people can feel secure, enjoy peace mind and live active lives. With Toshiba-only innovations, we will take on the challenge of pioneering the future of the healthcare industry. Satoshi Tsunakawa President and Chief Executive Officer Healthcare Company...

  • Page 27
    ... forward, we want to take the results of research and development in emerging economies such as China and India as starting points for the creation of products that win acceptance in the global market, including the developed countries. Major R&D bases in Japan and overseas Toshiba Software (India...

  • Page 28
    ... the world's fastest-class write speed of 25Mbyte/second by using our original high-speed writing circuit system. Community Solutions Healthcare Order-made Elevator: ELCRUISETM This order-made elevator offers enhanced energy savings and safety features based on the concept of safety, security...

  • Page 29
    ... Cloud & Solutions REGZA Z8X series: High Resolution 4K Ultra HD TVs Our successfully commercialized REGZA Z8X series (84-, 65- and 58-inch models) are equipped with the "Cinema 4K" highquality image processing system that integrates our newly developed image processing engine and 4K panel with...

  • Page 30
    ... images taken in a power transmission tunnel in London. Plant Factory Business We plan to market long-storage-life, pesticide-free vegetables grown at "Toshiba Clean Room Farm Yokosuka," a closed-type plant factory that combines Toshiba Group's water treatment, air control and lighting equipment...

  • Page 31
    ... Management (Contribution to Business) Achieving differentiation Management Strategy Value Innovation New Concept Innovation Securing license revenue Other PCT* 14% 16% 5% 6% 20% Other 8% FY2013 FY2016 Research & Development Business Operations ©2013 Toshiba Corporation *1: Global...

  • Page 32
    ... developer of nuclear power plants. Community Solutions Segment P.36 Sales ¥1,357.4 billion (YoY +¥178.3 billion, +15%) Operating Income ¥51.9 billion (YoY +¥9.2 billion) 19% Business Review The Retail Information Systems and Office Equipment business reported significantly higher sales...

  • Page 33
    Sales (Billions of yen) Operating income (Billions of yen) Operating income ratio (%) Capital expenditures (Billions of yen) (Payment basis) R&D expenditure....1 33.4 33.3 40.9 38.6 40.6 35.7 45.2 Business Review 3.8 FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 ...TOSHIBA Annual Report 2014 31

  • Page 34
    ...energy cycle-make energy, transmit energy, store energy and smart use of energy-we contribute to the environment with high efficiency and clean energy. Energy & Infrastructure Segment Delivery record of steam turbines for thermal power plants... Zealand 2 Units 167 MW 32 TOSHIBA Annual Report 2014

  • Page 35
    ...Company In nuclear power systems, a baseload power source that contributes to securing stable energy supply, Toshiba Group continues its global business expansion, aiming to supply the latest plants offering enhanced safety. In a recent move, we acquired a 60% stake in NuGeneration Ltd., which plans...

  • Page 36
    ... energy-related equipment, and a global production center that provides support and expert guidance to overseas sites. It will support global business development and deepen cooperation between sites in Japan and overseas, including the Smart Community Center in Kawasaki, the core site of our smart...

  • Page 37
    ... Nishi Sendai Substation and equipped with Toshiba's SCiB TM In industrial systems, we are involved in the manufacture of high-efficiency industrial motors in Vietnam, and we are working to expand sales into new markets, including emerging markets. In automation systems, in May 2013 we were awarded...

  • Page 38
    ... energy usage across the entire project area, including streets, buildings, homes and transportation (EV). Within the overall project, an EV car-sharing pilot project started in October 2013. (Project term: April 2012 - August 2016) ©Alexandre Nicolas-SPL Lyon Confluence 36 TOSHIBA Annual Report...

  • Page 39
    ...; Toshiba Lighting & Technology Corporation, handles the lighting systems; and Toshiba Carrier Corporation handles the commercial air-conditioning systems. In January 2014, Community Solutions Group companies were brought together in the Smart Community Center, a new building in Kawasaki, promoting...

  • Page 40
    ... and reduced maintenance work. It also delivers instant re-lighting, a problem with HID lamps. contribute to more convenient and comfortable lifestyles. Toshiba Carrier Air Conditioning (China) Co., Ltd., commenced production of commercial air-conditioning equipment. 38 TOSHIBA Annual Report 2014

  • Page 41
    ... the usefulness of non-contrast MR angiography technology *TMRU: TOSHIBA MEDICAL RESEARCH INSTITUTE, USA TMRD: Toshiba Medical System R & D (Dalian) TMC: Toshiba Medical System (China) TMVS: Toshiba Medical Visualization Systems Europe TRL: Toshiba Research Europe TOSHIBA Annual Report 2014 39

  • Page 42
    ...we are building a worldwide network of development, production and sales sites. In January 2014, we established Toshiba Medical Systems R&D (Dalian) Co., Ltd. in Dalian, China, which integrates our previous R&D function there. The company's work will support us in strengthening business in China and...

  • Page 43
    ... America Electronic Components, Inc Toshiba Information Equipment (Philippines), Inc. NAND D Flash lash M Me emory y No. Toshiba Electronics Asia (Singapore) Pte. Ltd. global g obal sh hare* % glo gl lobal share* Hard Disk k Drive ives es e s Toshiba Semiconductor (Thailand) Co., Ltd. Power...

  • Page 44
    ... FY2013. Regarding the future, in the mixed-signal business we will focus our resources on three areas, motor controls, communications and image recognition, and steadily promote new businesses. In the NAND Flash memory fabricated with the world's first 15nm process 42 TOSHIBA Annual Report 2014

  • Page 45
    ... servers and data centers, drives that realize the industry's largest storage capacity for a non-helium-gasfilled HDD. Going forward we will continue to strengthen our enterprise HDD products. Sales of wireless communication products for mobile devices In mobile devices like smart phones, there...

  • Page 46
    ... "T-Series" (For the Thai market) In March, 2014, we launched a refrigerator in Thailand that offers the high energy-saving performance of inverter control and increased storage space for beverages. This feature is based on the result of local lifestyle surveys. Since the end of 2013, we...

  • Page 47
    ...large customers. Lifestyle Products & Services Segment In the consumer PC business, we are promoting the "Toshiba Direct" online shopping site and taking measures to improve our sales channels, as well as working to expand our range of strategic products offering high added value. In April 2013, we...

  • Page 48
    ... LCD TV production base for the European market, was sold to Taiwan's Compal Electronics, Inc. We are promoting reductions in fixed costs through the realignment of our production sites, with the aim of realizing profitability. Cloud & Solutions Company, Data Center Image 46 TOSHIBA Annual Report...

  • Page 49
    ... CSR Activity Highlight 1: 48 50 51 52 54 57 Respect for Human Rights Activity Highlight 2: Promoting Supply Chain CSR Activity Highlight 3: CSR supported by 200,000 Employees Activity Highlight 4: Environmental Management Third-Party Evaluations of CSR in FY2013 TOSHIBA Annual Report 2014 47

  • Page 50
    ... 26000*1 CSR Management to support "Growth with Creativity" Contribute to improving global social issues through our business Customers Energy Environment Storage Healthcare Local communities Accord the highest priority to human life, safety, and legal compliance Shareholders & Investors Suppliers...

  • Page 51
    ... and requests on a daily basis, in order to reflect them in our business activities. As a means to reflect stakeholder requirements into our CSR management, we hold regular dialogues with them. In February 2014, executives of Toshiba Information Equipment (Philippines), Inc. held a dialogue with...

  • Page 52
    ... make it our management principles to respect human rights and we put an emphasis on human rights as we promote our business activities. Workshop for human resources managers in Asia Briefing on conflict minerals investigation We signed the United Nations Global Compact in January 2004 to support...

  • Page 53
    ... selfchecks. In cases where issues were found, we provided support and guidance on how to make improvements. Fair trading practices Toshiba Group provides Clean Partner Line, a system that allows suppliers to report compliance violations. In the event of a report, we promptly conduct a survey to...

  • Page 54
    ...2 Development of Corporate Culture (0.9%) Europe: companies 42 people Japan: companies 289 people (3.8%) The Americas: companies Highest priority on human life, safety and compliance Toshiba Group lists "Commitment to People" as one of its management philosophy and conducts business activities...

  • Page 55
    ... to build an integral support system. Colleen Smith, Toshiba America Electronic Components, Inc. Toshiba Group CSR Toshiba With Corporation Continuing support activities for reconstruction after the Great East Japan Earthquake With employee-organized fundraising and labor union activities taking...

  • Page 56
    ... increases in environmental impact in production processes with high-efficiency manufacturing Green Management Continually improving basic activities, such as human resource development, environmental communication and conservation of biodiversity Increase eco-efficiency by 1.5 times against the...

  • Page 57
    ...after) Participation from 363 sites For the first time on June 5, 2013, 363 business and production sites promoted and participated in the energy conservation-themed, simultaneous lights-down activity to reduce lighting at business sites and the homes of employees. TOSHIBA Annual Report 2014 55

  • Page 58
    ... constantly strive to provide new CSR and environmental information in a timely manner through our CSR website and Environment website. CSR website Environment website http://www.toshiba.co.jp/csr/en/ http://www.toshiba.co.jp/env/en/ (PDF version) (PDF version) 56 TOSHIBA Annual Report 2014

  • Page 59
    ... (Universal Smart X RUA-SP Series) Ministry of Economy Trade and Industry Prize "Loops" paper reuse system 1st place (manufacturing) Information disclosure score of 98 points (3rd among Japanese companies), A-grade performance score Toshiba Elevator and Building Systems Corporation Toshiba Lighting...

  • Page 60
    Ordinary General Meeting of Shareholders (at Kokugikan) Corporate Governance Corporate Governance 59 64 66 68 70 Perspectives of Outside Directors Directors and Executive Officers Organization Structure Corporate History 58 TOSHIBA Annual Report 2014

  • Page 61
    Corporate Governance Toshiba Group promotes corporate governance based on the fundamental policies of enhancing management efficiency, increasing transparency and maximizing corporate value from the shareholders' perspective. Toshiba's Governance System Toshiba's corporate governance follows the ...

  • Page 62
    ... of their operations, establish internal control systems based on those of the parent company. The following website provides detailed information on the structure of our internal control systems. http://www.toshiba.co.jp/about/ir/jp/governance/ governance_system.htm 60 TOSHIBA Annual Report 2014

  • Page 63
    ...global company, with the aim of securing highly competent management personnel. The compensation standards of other listed companies and pay and benefits of employees are considered when determining the Company's compensation standards for management. Corporate Governance TOSHIBA Annual Report 2014...

  • Page 64
    ...Norio Sasaki Toshiba Corporation 104 Hisao Tanaka Toshiba Corporation 111 Outside Directors Names and other details Hiroyuki Itami Mr. Itami carries out appropriate supervision of the Company's management based on his rich experience and knowledge as a specialist in business administration and...

  • Page 65
    ... supervision of the Company's management based on her rich experience and knowledge as a top executive. where Ms. Kiyomi Saito serves as president. The Company has made a donation to the support the refurbishment of the Japan China Friendship Center, a public interest incorporated foundation...

  • Page 66
    ...community. Toshiba holds a large number of "world's first" and "world's top" titles and it is incumbent on it to put to full use its technological excellence and creativity to help make that happen. I am sure that Toshiba will continue to expand and upgrade its global business activities with a high...

  • Page 67
    ... Outside Directors companies and equally so in government offices. With this, there is a lack of horizontal cooperation between the vertical ranks, and each vertical section goes about its business in a complacent manner, with the result that knowledge, information and networking is not shared, and...

  • Page 68
    ... Hisao Tanaka Hidejiro Shimomitsu Masahiko Fukakushi Kiyoshi Kobayashi Toshio Masaki Hiroshi Saito Shigenori Shiga Yasuo Naruke Naoto Nishida Keizo Maeda Executive Officers Corporate Senior Vice Presidents Masaaki Oosumi Masayasu Toyohara Hironobu Nishikori 66 TOSHIBA Annual Report 2014

  • Page 69
    ... Compensation Committee Sakutaro Tanino Outside Director Chairman, the Nomination Committee Member, the Audit Committee Directors and Executive Officers Osamu Maekawa Shigenori Tokumitsu Naoki... Fumio Otani Koichi Harazono Isahiro Hasegawa (As of June 25, 2014) TOSHIBA Annual Report 2014 67

  • Page 70
    ...Human Resources & Administration Div. Information Systems Div. New Business Development Div. Corporate Research & Development Center Corporate Software Engineering Center Corporate Manufacturing Engineering Center Energy & Infrastructure Group Community Solutions Group Cloud & Solutions Company...

  • Page 71
    ...& Development Personal & Client Solutions Company Personal Solutions Div. Business Solutions Div. Lifestyle Solutions Development Center Ome Complex Toshiba Lifestyle Products & Services Corp. Organization Structure Materials & Devices Div. Fukaya Complex ODD Div. TOSHIBA Annual Report 2014 69

  • Page 72
    ... Corporation, Sony Corporation and Hitachi, Ltd. Toshiba TEC Corporation acquired the retail store solutions business of US-based IBM (International Business Machines Corporation). Opened the Smart Community Center in Kawasaki City. Mar. 2012 Aug. 2012 Oct. 2013 70 TOSHIBA Annual Report 2014

  • Page 73
    ...Income Consolidated Statements of Cash Flows Industry Segment Performance Long-term Debt Shareholder Information Stock Information Consolidated Subsidiaries and Affiliated Companies Accounted for by the Equity Method 72 74 76 77 78 79 80 81 82 83 Data Section Major indices of the Data Section have...

  • Page 74
    ... to shareholders of 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...

  • Page 75
    ...) = (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 2014 73

  • Page 76
    ...,474 812,160 1,190,634 ¥5,752,737 336,330 1,012,364 1,348,694 ¥6,100,002 264,349 1,143,369 1,407,718 ¥6,241,623 For more information, please visit our IR website at http://www.toshiba.co.jp/about/ir/en/finance/index.htm Data Section 74 TOSHIBA Annual Report 2014

  • Page 77
    ... LIABILITIES AND EQUITY Current Liabilities: Short-term borrowings Current portion of long-term debt Notes and accounts payable, trade Accounts payable, other and accrued expenses Accrued income and other taxes Advance payments received Other current liabilities 2010 2011 2012 2013 2014 ¥ 51...

  • Page 78
    ...354 31,242 48,346 29,375 17,143 2013 2014 ¥1,739,605 ¥1,970,508 96,382 135,562 22,845 12,151 Data Section (2.86) 1.25 8.80 3.83 6.94 4.05 5.39 2.87 For more information, please visit our IR website at http://www.toshiba.co.jp/about/ir/en/finance/index.htm 76 TOSHIBA Annual Report 2014

  • Page 79
    ... Interests Comprehensive Income Attributable to Shareholders of Toshiba Corporation Beginning with the fiscal year ended March 31, 2013, Toshiba Corporation adopted ASU No. 2011-05, and discloses consolidated statements of comprehensive income. Data Section TOSHIBA Annual Report 2014 77

  • Page 80
    ... from stock offering of ¥317,541 million. *2 Includes the acquisition of Landis+Gyr AG in the amount of ¥(129,450) million. *3 Includes the additional purchase of shares of Westinghouse Group from noncontrolling interests in the amount of ¥(124,724) million. 78 TOSHIBA Annual Report 2014

  • Page 81
    ... expenditures Depreciation Capital expenditures Total assets Community Solutions Net sales Share of net sales (%) Operating income Operating income ratio (%) Number of employees (Thousands) R&D expenditures Depreciation Capital expenditures Total assets Healthcare Systems & Services Net sales Share...

  • Page 82
    ... Less-Portion due within one year The aggregate annual maturities of long-term debt, excluding those of capital lease obligations, are as follows: (Millions of yen) Year ending March 31 2014 2015 2016 2017 2018 2019 and thereafter 2019 2020 and thereafter Total 2013 ¥ 232,064 56,477 198,237 159...

  • Page 83
    ... 31, 2014) Percentage of shareholding ratio (Rounded to one decimal place) The Master Trust Bank of Japan, Limited (trust accounts) Japan Trustee Service Bank, Limited (trust accounts) The Dai-ichi Life Insurance Company, Limited Toshiba Stock Purchase Plan Nippon Life Insurance Company JP MORGAN...

  • Page 84
    ... stock price (Yen, fiscal year) High Low Nikkei average (Yen) Number of shares issued (Millions of shares) Market capitalization (Billions of yen) Earnings per share attributable to shareholders of Toshiba Corporation (Yen) -Basic (EPS) -Diluted (EPS) Annual dividends per share (Yen) Payout ratio...

  • Page 85
    ... Marketing Co., Ltd. • Toshiba Elevator and Building Systems Corporation • Toshiba Global Commerce Solutions Holdings Corporation • Toshiba Home Appliances Corporation • Toshiba Industrial Products and Systems Corporation • Toshiba Information Equipments Co., Ltd. • Toshiba Lighting...

  • Page 86
    Corporate Data As of March 31, 2014 1-1, Shibaura 1-chome, Minato-ku, Tokyo, Japan (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: ...

  • Page 87
    ... this we make full and proactive use of the Internet in our IR activities. On our investor relations site we publish a wide range of resources, including news releases, information for shareholders, our statements of accounts, and explanations of our business results, as well as videos and other...

  • Page 88
    Public Relations & Investor Relations Office Corporate Communications Division Tree use cycle mark We believe that it is important to make proactive use of domestic wood products and to grow forests, and we support the Forestry Agency's efforts to promote "tree trainer activities". Domestic timber ...

  • Page 89

  • Page 90
    ... to shareholders of the Company (Note 2) âˆ'Basic âˆ'Diluted Cash dividends Total assets Equity attributable to shareholders of the Company Capital expenditures (Property, plant and equipment) Depreciation (Property, plant and equipment) R&D expenditures Number of employees 2014 Â¥ 6,502...

  • Page 91
    ...Toshiba Group ("the Group") comprised Toshiba Corporation ("the Company") and 598 consolidated subsidiaries and its principal operations were in the Energy & Infrastructure, Community Solutions, Healthcare Systems & Services, Electronic Devices & Components and Lifestyle Products & Services business...

  • Page 92
    ...of a U.S. developer of nuclear power plants. Community Solutions: The net sales of the Community Solutions segment increased by 178.3 billion yen to 1,357.4 billion yen (US$13,178.2 million). The Retail Information Systems and Office Equipment business reported significantly higher sales on positive...

  • Page 93
    ... to pay both an interim dividend and a year-end dividend. The Company paid 4.0 yen per share as the interim dividend and the year-end dividend has been set at 4.0 yen per share. As a result, the annual dividend for the year ended March 31, 2014 was 8.0 yen per share. TOSHIBA Annual Report 2014 05

  • Page 94
    ... of yen Energy & Infrastructure Community Solutions Healthcare Systems & Services Electronic Devices & Components Lifestyle Products & Services Others 64.2 45.2 31.7 147.5 34.8 6.1 CAPITAL EXPENDITURES CAPITAL EXPENDITURE OVERVIEW (1) Overview The Group strongly promotes capital expenditure and...

  • Page 95
    ... 31, 2015 are as follows: As of March 31, 2014 Name of Company and Office Place Business Segment Type of Facility Planned Beginning Capacity Improvement after Completion of Construction Flash฀Forward Ltd. and others Yokkaichi,฀Mie Electronic Devices & Components Manufacturing฀facilities...

  • Page 96
    ... Aggregate฀amount฀of sales value: Shares held as of the closing date of this period: 2,789,946 (common stock) 333,471 (common stock) 151,256 (thousand yen) 750 (common stock) 323 (thousand yen) 12,700 (common stock) 5,781 (thousand yen) 3,111,467 (common stock) 08 TOSHIBA Annual Report 2014

  • Page 97
    ...Denzai฀Marketing฀Co.,฀Ltd. Toshiba Elevator and Building Systems Corporation Toshiba฀Global฀Commerce฀Solutions฀Holdings฀Corporation Toshiba฀Home฀Appliances฀Corporation Toshiba Industrial Products and Systems Corporation Toshiba Information Equipments Co., Ltd. Toshiba Lighting...

  • Page 98
    ... Group actively promotes business alliances with other companies, including the formation of joint ventures, and acquisitions, in order to grow new businesses in research and development, production, marketing and various other areas. If the Group has any disagreement with its partner in a business...

  • Page 99
    ... experiments in the area of the smart community business on a worldwide basis and has provided diversified solutions in collaboration with local governments. Since a significant portion of the net sales in this business is attributable to sales related to expenditures on public works and capital...

  • Page 100
    ... and investment management. The Group promotes procurement of components from overseas in US dollars in order to mitigate the impact of exchange rate fluctuations. (5) Business environment of the Lifestyle Products and Services business The market for the Lifestyle Products and Services business is...

  • Page 101
    ...repayments occurs, it may materially affect the Company's business operations. 3. Risks related to business partners and others (1) Procurement of components and materials It is important for the Group's business activities to procure materials, components and other goods in a timely and appropriate...

  • Page 102
    ... fields. In order to avoid these risks, the Group intends to enhance the efficiency of research and development activities by sharing intellectual property through the promotion of common platforms and using overseas resources more efficiently in system development. 14 TOSHIBA Annual Report 2014

  • Page 103
    ... control of its information management system, training its employees, and other measures. However, in the past, situations have occurred in which leakage of trade secrets was suspected. The Group's competitive power may be weakened and the Group's business, operating results and financial condition...

  • Page 104
    ... in February 2013. 9. Risks related to directors, employees, major shareholders and affiliates (1) Alliance in NAND flash memory The Group has a strategic alliance with a U.S. company, SanDisk Corporation ("SanDisk"), for the production of NAND flash memory, which includes production joint ventures...

  • Page 105
    ... transportation and sales interruptions or other similar disruptions, which could affect production capabilities significantly. In the past, the businesses of the Group were affected to a certain extent by the Great East Japan Earthquake and the floods in Thailand. TOSHIBA Annual Report 2014 17

  • Page 106
    ...advances to affiliates (Notes 5 and 9) Marketable฀securities฀and฀other฀investments฀(Notes฀5฀and฀6) Total฀long-term฀receivables฀and฀investments Property, plant and equipment (Notes 16 and 21): Land Buildings Machinery฀and฀equipment Construction in progress Less-Accumulated...

  • Page 107
    ...฀shares฀Issued: 2014 and 2013 âˆ'4,237,602,026 shares Additional฀paid-in฀capital Retained earnings Accumulated฀other฀comprehensive฀loss Treasury stock, at cost: 2014âˆ'3,111,467 shares 2013âˆ'2,789,946 shares Total equity attributable to shareholders of the Company Equity attributable...

  • Page 108
    Consolidated Statements of Income Toshiba Corporation and Subsidiaries For the years ended March 31, 2014 and 2013 Millions of yen Thousands of U.S. dollars (Note 3) 2014 Sales and other income: Net sales Interest and dividends Equity in earnings of affiliates (Note 9) Other income (Notes 5, 6, ...

  • Page 109
    ...interests Less:Comprehensive income attributable to noncontrolling interests Comprehensive income attributable to shareholders of the Company The accompanying notes are an integral part of these statements. ¥ 2014 69,618 ¥ 2013 95,331 $ 2014 675,903 18,417 130,110 55,797 (1,734) 202,590 272...

  • Page 110
    Consolidated Statements of Equity Toshiba Corporation and Subsidiaries For the years ended March 31, 2014 and 2013 Millions of yen Accumulated other comprehensive income (loss) Equity attributable to shareholders of the Company Equity attributable to noncontrolling interests Common stock ...

  • Page 111
    ...-in capital Retained earnings Treasury stock Total equity Balance at March 31, 2013 $ 4,270,884 $ 3,926,505 $ 6,169,117 $ (4,310,097) $ Change฀in฀ownership฀for฀ noncontrolling interests and others 1,301 Dividend attributable to shareholders of the Company (328,913) Dividends attributable...

  • Page 112
    ...sale of securities Acquisition฀of฀property,฀plant฀and฀equipment Acquisition฀of฀intangible฀assets 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...

  • Page 113
    ... Toshiba Corporation ("the Company") and its subsidiaries (hereinafter collectively, "the Group") are engaged in research and development, manufacturing and sales of high-technology electronic and energy products, which range (1)Energy & Infrastructure, (2)Community Solutions, (3)Healthcare Systems...

  • Page 114
    .... However, the Company and domestic subsidiaries changed the method of calculating depreciation for property, plant and equipment to the straight-line method, starting from April 1, 2013. Based on the FY2013 Mid-Term Business Plan which started from April 1, 2013, the Group plans to continuously...

  • Page 115
    .... Revenue from the development of custom software products is recognized when there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collectibility is probable, and the software product has been delivered and accepted by the customer. TOSHIBA Annual Report 2014...

  • Page 116
    ... to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 SHIPPING AND HANDLING COSTS The Group includes shipping and handling costs which totaled ¥72,905 million ($707,816 thousand) and ¥69,432 million for the years ended March 31, 2014 and 2013, respectively in...

  • Page 117
    ... disc drive ("ODD") business as part of the Company's restructuring of the ODD business in response to the changing market environment. Under the terms of the agreements, Toshiba Samsung Storage Technology Corporation ("TSST"), which is the Company and Samsung Electronics' Japan-based joint holding...

  • Page 118
    ... Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 5. FAIR VALUE MEASUREMENTS ASC No.820 "Fair Value Measurements" defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants...

  • Page 119
    ...prices in active markets with sufficient volume and frequency of transactions. Level 2 securities represent marketable equity securities listed in less active markets, which are valued based on quoted market prices for identical assets in inactive markets. Level 3 securities represent corporate debt...

  • Page 120
    ... gains and losses on securities Purchases Sales Issuances Settlements Balance at end of year $ 36,330 $ 3,534 âˆ' âˆ' 4,330 âˆ' 44,194 At March 31, 2014 and 2013, Level 3 assets measured at fair value on a recurring basis consisted of corporate debt securities. 32 TOSHIBA Annual Report 2014

  • Page 121
    ... to affiliates Component held for sale Total assets $ $ $ $ Certain non-marketable equity securities accounted for under the cost method were written down to their fair value, resulting in other-than-temporary impairment for the years ended March 31, 2014 and 2013. The impaired securities were...

  • Page 122
    Notes to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 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 123
    ... of U.S. dollars Finished products Work฀in฀process: Long-term฀contracts Other Raw฀materials ¥ 2014 323,254 82,694 359,642 168,428 934,018 ¥ 2013 331,107 99,764 394,597 177,640 1,003,108 2014 $ 3,138,388 802,855 3,491,670 1,635,223 $ 9,068,136 ¥ ¥ TOSHIBA Annual Report 2014 35

  • Page 124
    ... companies accounted for by the equity method together with the percentage of the Group's ownership of voting shares at March 31, 2014 were: NREG Toshiba Building Co., Ltd. (35.0%); Topcon Corporation (30.4%); Toshiba Machine Co., Ltd. (22.1%); Toshiba Mitsubishi-Electric Industrial Systems...

  • Page 125
    ...GOODWILL AND OTHER INTANGIBLE ASSETS The Group tested goodwill for impairment in accordance with ASC No.350, applying a fair value based test and has concluded that there was no impairment for the years ended March 31, 2014 and 2013. The components of acquired intangible assets excluding goodwill at...

  • Page 126
    ..., 2014 and 2013, goodwill allocated to Energy & Infrastructure is ¥474,793 million ($4,609,641 thousand) and ¥410,459 million, respectively. The rest was mainly allocated to Community Solutions. 11. SHORT-TERM BORROWINGS AND LONG-TERM DEBT Short-term borrowings at March 31, 2014 and 2013 consist...

  • Page 127
    ... corresponding notes and accounts receivable, trade and long-term receivables which were accounted for as secured borrowings under ASC No.860 at March 31, 2013 were ¥26,978 million. The aggregate annual maturities of long-term debt, as of March 31, 2014, excluding those of capital lease obligations...

  • Page 128
    ... employees and managements in January 2011, and introduced Cash Balance Plan from April 2011. This plan is designed that each plan participant has a notional account, which is accumulated based on salary standards, interest rates in financial markets and others. The funding policy for the plans...

  • Page 129
    ... net periodic pension and severance cost over the next year are summarized as follows: Millions of yen Year ending March 31 Thousands of U.S. dollars Prior service cost Actuarial฀loss ¥ 2015 (4,366) 21,585 $ 2015 (42,388) 209,563 TOSHIBA Annual Report 2014 41

  • Page 130
    ... to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 For the year ended March 31, 2014, the Company contributed certain marketable equity securities to employee retirement benefit trusts, with no cash proceeds thereon. The fair value of these securities at the...

  • Page 131
    ... of yen March 31, 2014 Cash 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...

  • Page 132
    ... to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 Millions of yen March 31, 2013 Cash and cash equivalents Equity securities: Japanese฀companies Foreign companies Pooled funds Debt securities: Government฀bonds Municipal฀bonds Corporate bonds Pooled...

  • Page 133
    ..., 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. Pooled funds, which...

  • Page 134
    ... related to the property, plant and equipment, and finite-lived intangible assets of the Visual Products business for the year ended March 31, 2013. The impairment loss is included in other expense in the accompanying consolidated statements of income, and is related to Lifestyle Products & Services...

  • Page 135
    ... because of a change in judgment about the realizability of the related deferred tax assets in future years for the year ended March 31, 2014 was ¥9,355 million ($90,825 thousand). The amount of adjustments for the year ended March 31, 2013 was not significant. TOSHIBA Annual Report 2014 47

  • Page 136
    ...Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 The Group's tax loss carryforwards for the corporate and local taxes at March 31, 2014 amounted to ¥464,137 million ($4,506,184 thousand) and ¥679,131 million ($6,593,505 thousand), respectively, the majority of...

  • Page 137
    ... accounting principles in Japan and the Corporation Law of Japan. Retained earnings at March 31, 2014 do not reflect current year-end distributions of ¥16,937 million ($164,437 thousand) which started to be paid from June 2, 2014. Retained earnings at March 31, 2014 included the Group's equity...

  • Page 138
    ...to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 Amounts reclassified from accumulated other comprehensive loss for the year ended March 31, 2014 are as follows: Millions of yen Thousands of U.S. dollars Affected line item in Consolidated Statements of Income...

  • Page 139
    ... shareholders of the Company Other comprehensive income For฀the฀year฀ended฀March฀31,฀2013: Net unrealized gains and losses on securities: Unrealized฀holding฀...¥ 20,427 645 106,349 3,155 17,620 21,372 (282) (433) ¥ 207,122 ¥ (38,269) ¥ 168,853 TOSHIBA Annual Report 2014 51

  • Page 140
    ...enhancement of the corporate value of the Company and the common interests of shareholders. Specifically, if an acquirer commences or plans to commence an acquisition or a tender offer that would result in the acquirer holding 20% or more of the shares issued by the Company, the Company will require...

  • Page 141
    ... ¥ (0.58) 18.27 $ $ (0.02) 0.12 Diluted net earnings per share attributable to shareholders of the Company for the years ended March 31, 2014 and 2013 have been omitted because the Company did not have potential common stock that were outstanding for the period. TOSHIBA Annual Report 2014 53

  • Page 142
    .... The Group has policies and procedures for risk management and the approval, reporting and monitoring of derivative financial instruments. The Group's policies prohibit holding or issuing derivative financial instruments for trading purposes. The Group is exposed to credit-related losses in...

  • Page 143
    ...฀current฀portion ¥ (1,208,018) ¥ (1,215,525) ¥ (1,245,214) ¥ (1,252,204) Thousands of U.S. dollars 2014 March 31 Carrying amount Fair value Nonderivatives: Liabilities: Long-term฀debt,฀including฀current฀portion $ (11,728,330) $ (11,801,214) TOSHIBA Annual Report 2014 55

  • Page 144
    Notes to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 The above table excludes the financial instruments for which fair value approximate their carrying amounts and those related to leasing activities. The table also excludes marketable securities and other ...

  • Page 145
    ... the consolidated statements of income for the year ended March 31, 2013 is as follows...designated as hedging instruments: Millions of yen Amount of gain (loss) recognized in income (loss) Location Amount recognized Forward฀exchange฀contracts Other income ¥ 2,401 TOSHIBA Annual Report 2014...

  • Page 146
    ...to Consolidated Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 21. LEASES The Group 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, 2014 and 2013 were...

  • Page 147
    ... AND THIRD PARTY DEBT The Group guarantees debt as well as certain financial obligations of unconsolidated affiliates and third parties to support the sale of the Group's products and services. Expiration dates vary from 2014 to 2023 as of March 31, 2014 or terminate on payment and/or cancellation...

  • Page 148
    ... investigations. Based on the information currently available to both the Group and its legal counsel, Management believes that such legal procedures, if any, would not have a material adverse effect on the financial position or the results of operations of the Group. 60 TOSHIBA Annual Report 2014

  • Page 149
    ... costs for products or equipment with PCB which some Group's operations in Japan have retained. The Westinghouse Group, consolidated subsidiaries of the Company, is subject to federal, state and local laws and regulations relating to the discharge of pollutants into the environment, the disposal...

  • Page 150
    ...cash and consequently acquired a controlling financial interest of NFT. NFT manufactures and sells advanced semiconductor manufacturing equipment and has a close relationship with the Company in development of related technologies. The Company decided to acquire additional shares in consideration of...

  • Page 151
    ... point of sale systems company that provides new value to customers, globally offering high-level products and solutions in the retail solution market which has been rapidly growing in the Americas, Europe, Japan, Asia, and worldwide. The Group allocated the purchase price to the assets acquired...

  • Page 152
    ... the power transformer and switchgear businesses. The New Company will run the acquired businesses and provide them with the Company's latest design, development and production capabilities in order to supply a wide range of T&D products globally as well as in India. The Company is in the process of...

  • Page 153
    ...NAND flash memories. For those joint ventures, the Group and SanDisk share power equally. Unconsolidated VIEs involved in Energy & Infrastructure are established for the purpose of developing nuclear power plants, supplying stable electric power systems, and providing electric services and equipment...

  • Page 154
    ... etc. As a result of above reforms, the data relating to the consolidated segment information is presented in conformity with the new organization from October 1, 2013, and prior year information has been restated. (1) Energy & Infrastructure: (2) Community Solutions: 66 TOSHIBA Annual Report 2014

  • Page 155
    ... year ended March 31, 2013 Energy & Infrastructure Community Solutions Healthcare Systems Electronic Devices Lifestyle Products & Services & Components & Services Others Total Corporate and Eliminations Consolidated Net sales (1)฀Unaffiliated฀customers (2) Intersegment Total Segment operating...

  • Page 156
    ... Financial Statements Toshiba Corporation and Subsidiaries March 31, 2014 A reconciliation table between the total of the segment operating income (loss) and the income from continuing operations, before income taxes and noncontrolling interests for the years ended March 31, 2014 and 2013...

  • Page 157
    ...are no individually material countries which should be separately disclosed. 2) There are no material sales to a single unaffiliated customer. 3) Prior-period data relating to the discontinued operation has been reclassified to conform with the current classification. TOSHIBA Annual Report 2014 69

  • Page 158
    ... Statements Toshiba Corporation and Subsidiaries March 31, 2014 30. SUBSEQUENT EVENT Notice of Fund Procurement through Hybrid Financing for the prematurity redemption of the 1st Series Unsecured, Interest Deferrable and Early Redeemable Subordinated Bonds Solely for Qualified Institutional...

  • Page 159
    ... Report of Independent Auditors The Board of Directors and Shareholders of Toshiba Corporation We have audited the accompanying consolidated financial statements of Toshiba Corporation and subsidiaries, which comprise the consolidated balance sheets as of March 31, 2014 and 2013, and the related...

  • Page 160
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