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YAMAHA CORPORATION ANNUAL REPORT 2001
YAMAHA CORPORATION
Annual Report
2001
Year ended March 31, 2001

Table of contents

  • Page 1
    YAMAHA CORPORAT ION Annual Report 2001 Year ended March 31, 2001

  • Page 2
    ...14 15 16 Financial Highlights Interview with the President Special Feature/ T oward Increased Growth Review of Operations Musical Instruments AV• IT Lifestyle-Related Products Electronic Equipment and Metal Products Recreation Others "Creating Kando T ogether" - Creating a New YAMAHA Brand 18 19...

  • Page 3
    ... Highlights YAMAHA CORPORAT ION and Consolidated Subsidiaries Years ended March 31 Millions of U.S. Dollars (Note 2) 1999 2001 Millions of Yen 2001 2000 For the year: Net sales...Â¥ 519,104 Operating income (loss) ...23,001 Net income (loss) ...13,320 At year-end: T otal shareholders' equity...

  • Page 4
    ... Group management"; and "value-added business, sparkling YAMAHA brand." Aiming for growth, we have divided the Group's Q A How do you view the YAMAHA Group's consolidated growth? operations into three main business segments: Core Businesses, LifestyleRelated and Leisure, and Electronic Parts...

  • Page 5
    ... we launched two new mobile phonerelated businesses: a ringer melody distribution service and a business that makes magnesium cases for mobile phones and other information terminals. At the end of the previous term, we began fullscale production of invar materials for use in shadow masks for cathode...

  • Page 6
    ... market. Added to this, the Company is focusing its energies on developing superior products that address market needs. YAMAHA is taking proactive steps to develop new products through the fusion of AV•IT. A key element of YAMAHA's strategy to become number one in the market for home theaters...

  • Page 7
    ... the Group's diverse operations, links them together, and results, ultimately, in increased corporate value. T he slogan "Creating Kando Together" signals YAMAHA 's intent to pursue a brand enhancement strategy that inspires mutual understanding and trust among YAMAHA 's shareholders, customers, and...

  • Page 8
    Review of Operations 6

  • Page 9
    ... operations were virtually M ajor Products & Services • Pianos (upright pianos, grand pianos, etc.) • Digital musical instruments (Clavinovas ® , Electones® , portable keyboards, synthesizers) • Wind instruments (trumpets, flutes, saxophones, etc.) • String instruments (guitars, violins...

  • Page 10
    ... fiscal year. In professional audio products, sales in North America and Europe grew year on year, owing to the introduction of attractive new products. In addition, sales of nonYAMAHA products were slow. In Japan, the number of students attending YAMAHA music schools decreased as a result of...

  • Page 11
    ... aimed at opening new markets in Asia, Central America, and South America and is sharpening its focus on China. In professional audio equipment, YAMAHA is targeting growth by developing a new submarket for music production equipment. PM1D Based on a modular design, the fully digital PM1D is the...

  • Page 12
    ...products in the new category of home theater enjoyment. In Japan, Europe, and North America, sales of home theaters and related products grew in the term under review. In information and telecommunication devices, unit sales of leadingedge 16X-write-speed CD-R/ RW drives increased, but fell in value...

  • Page 13
    ...10 These home theaters come equipped with a DTS/Dolby Digital Decoder that delivers real theater sound. CRW2200 This is a world-class CD-R/RW drive with a 20X write speed. 11 RP-U200 This multimedia amp connects to personal computers via USB cables. DPX-1 This is the total audio visual solution...

  • Page 14
    ...• Yamaha Living Products Corporation 3 59.1 46.9 44.8 46.9 0.9 0.4 -2.5 0 0 '97 '98 '99 '00 '01 '97 '98 '99 '00 '01 Lifestyle-Related Products 12 A decrease in the number of new housing starts and intensified price competition resulted in a stagnant market for lifestyle-related products...

  • Page 15
    ...semiconductor market, YAMAHA is continuing to increase production of sound source chips for mobile phones and invar materials used in shadow masks for CRTs. Also in the term under review, YAMAHA started a new thermoelectric materials business. Lead Frames Lead frames for semiconductors Shadow Masks...

  • Page 16
    ... Products & Services • Sightseeing facilities and accommodation facilities (Tsumagoi, Nemunosato, Haimurubushi, Sunza Villa, Kiroro, Toba- Kokusai, Kitanomaru) • Ski resort (Kiroro Recreation Resort) • Golf courses (Katsuragi Golf Club, Kiroro Golf Club, Nemunosato Golf Club) Sales (Billions...

  • Page 17
    ... Others 15 Golf products did not sell well, but sales of interior automobile components increased steadily. In addition, sales increased dramatically in FA and metallic molds, precision machines and external parts, and YAMAHA 's new business that makes magnesium casings for mobile phones and other...

  • Page 18
    ... to pop music the world over. Meanwhile, first-rate Japanese and foreign broadcasting stations, Carnegie Hall in New York City, The Origin of YAMAHA Corporate History 16 YAMAHA's origins can be traced back to a single broken musical organ. T he man asked to repair the organ was Torakusu Yamaha...

  • Page 19
    ... its customers, shareholders, and employees to create Kando and a more prosperous society. YAMAHA's store in Ginza YAMAHA makes four promises aimed at improving its brand and making it sparkle. 17 1. Promise to customers: 2. Promise to shareholders: YAMAHA will fully satisfy its customers by...

  • Page 20
    ... the development of green technologies and products. In October 2000, the Company began issuing an environmental report to ensure adequate disclosure of its environment-related activities. T his report makes YAMAHA 's environmental program transparent to investors and shareholders, inviting them to...

  • Page 21
    ... YAMAHA CORPORAT ION and Consolidated Subsidiaries Years ended March 31 Millions of Yen SELECTED FINANCIAL DATA 2001 2000 1999 1998 1997 1996 For the year: Net sales...Â¥ 519,104 Cost of sales ...346,200 Gross profit...172,904 Selling, general and administrative expenses...149,902 Operating...

  • Page 22
    ... 600 500 400 300 200 100 0 INCOME ANALYSIS '97 '98 '99 '00 '01 Storage heads Other business Musical instruments and AV•IT Net Sales In fiscal 2001, ended March 31, 2001, the Company recorded a decline in net sales of 1.7%, to ¥ 519.1 billion (US$4.19 billion). If currency exchange increases of...

  • Page 23
    ... financing activities amounted to ¥13.0 billion due to an increase in loans. 21 60 14.9 13.9 13.5 EXCHANGE RATES 40 20 Beginning in the fiscal year under review, YAMAHA switched from using the exchange rate prevailing at March 31, 2001, to the average rate for the period when calculating sales...

  • Page 24
    ... Balance Sheets YAMAHA CORPORAT ION and Consolidated Subsidiaries March 31, 2001 and 2000 T housands of U.S. Dollars (Note 2) Millions of Yen ASSETS 2001 2000 2001 Current assets: Cash and bank deposits (Notes 6 and 15) ...Marketable securities (Notes 6 and 14) ...Notes and accounts receivable...

  • Page 25
    ...of Yen T housands of U.S. Dollars (Note 2) LIABILITIES AND SHAREHOLDERS' EQUITY 2001 2000 2001 Current liabilities: Short-term loans...Current portion of long-term debt (Note 6) ...Notes and accounts payable ...Accrued expenses ...Income taxes payable ...Employees' savings deposits ...Advances...

  • Page 26
    ...Statements of Operations YAMAHA CORPORAT ION and Consolidated Subsidiaries Years ended March 31, 2001 and 2000 T housands of U.S. Dollars (Note 2) Millions of Yen 2001 2000 2001 Net sales...Cost of sales...Gross profit ...Selling, general and administrative expenses...Operating income ... ¥519...

  • Page 27
    ...Statements of Shareholders' Equity YAMAHA CORPORAT ION and Consolidated Subsidiaries Years ended March 31, 2001 and 2000 T housands of U.S. Dollars (Note 2) Millions of Yen 2001 2000 2001 Common stock: Balance at beginning of year (2001-206,523,263 shares; 2000-206,523,263 shares) ...Balance at...

  • Page 28
    ...paid ...Cash dividends paid to minority shareholders...Proceeds from stock issued to minority shareholders...Other, net...Net cash provided by (used in) financing activities ...Effect of exchange rate changes on cash and cash equivalents...Net (decrease) increase in cash and cash equivalents ...Cash...

  • Page 29
    ... face value. Other securities with and without quoted market prices included in "Marketable securities" and "Investment securities" have been stated at cost based on the average method. Effective the year ended March 31, 2001, an affiliate adopted a new accounting standard for financial instruments...

  • Page 30
    ...under its internal rules. Effective the year ended March 31, 2001, the Company separately discloses accrued retirement benefits for directors and statutory auditors. (j) Warranty reserve T he warranty reserve is provided to cover costs for possible repairs which may be claimed by customers after the...

  • Page 31
    ... accounted for by the allocation method, which is utilized to hedge against risk arising from fluctuations in foreign exchange rates. T he Company and consolidated subsidiaries do not make an assessment of the effectiveness for hedging activities because the relationship between the anticipated cash...

  • Page 32
    ... 31, 2001 and 2000, respectively. Long-term debt at March 31, 2001 consisted of the following: Millions of Yen T housands of U.S. Dollars 30 Loans from banks, due through 2018 at average rates of 3.8% and 2.0% for current and noncurrent portion, respectively...1.9% unsecured convertible bonds, due...

  • Page 33
    ... of Yen 2001 T housands of U.S. Dollars 2001 2000 Early retirement benefits...¥ - ¥ Cumulative effect of accounting change with respect to prior service cost of the pension plan ...- Loss on disposal of discontinued operations...- Amortization of net retirement benefits obligation at transition...

  • Page 34
    ...-line method) Amortization of net retirement obligation at transition ...Fully recognized as other expense when incurred 11. CONTINGENT LIABILITIES T he Company had the following contingent liabilities at March 31, 2001: Millions of Yen T housands of U.S. Dollars Export bills discounted with banks...

  • Page 35
    ... depreciation and net book value of leased assets as of March 31, 2001 and 2000, which would have been reflected in the balance sheets if finance leases currently accounted for as operating leases had been capitalized. Millions of Yen T ools and equipment T housands of U.S. Dollars T ools and...

  • Page 36
    ...Millions of Yen 2001 T housands of U.S. Dollars 2001 2000 Cash and bank deposits...¥32,885 T ime deposits with a maturity of more than three months...(160) Cash and cash equivalents...¥32,725 ¥33,796 (163) ¥33,632 $265,416 (1,292) $264,124 16. DERIVATIVES AND HEDGING ACTIVITIES No specific...

  • Page 37
    ...housands of U.S. Dollars Lifestyle related products Eliminations or unallocated amounts Year ended March 31, 2001 Musical instruments AV•IT Recreation Others T otal Consolidated I. Sales and operating income Sales to external customers ...$2,299,443 Intersegment sales or transfers .. - 35...

  • Page 38
    ..., pro-audios, music schools, language schools, content provision, tuning Audio products, IT equipment System kitchens, bathtubs, washstands, furniture, parts for housing components, sound equipment for residential use LSIs, special metals Management of leisure facilities Golf and archery equipment...

  • Page 39
    ...in each geographical segment: (1) North America-U.S.A., Canada (2) Europe-Germany, England (3) Asia, Oceania and other areas-Singapore, Australia (3) Effective the year ended March 31, 2001, as described in Summary of Significant Accounting Policies, the Company and its consolidated subsidiaries has...

  • Page 40
    Report of Independent Auditors T he Board of Directors YAMAHA CORPORAT ION We have examined the accompanying consolidated balance sheets of YAMAHA CORPORAT ION and consolidated subsidiaries as of March 31, 2001 and 2000, and the related consolidated statements of operations, shareholders' equity ...

  • Page 41
    .... íYamaha Credit Corporation íYamaha Insurance Service Co., Ltd. 39 ̈Yamaha Motor Co., Ltd. ̈KORG Inc. United States of America Canada Mexico United Kingdom Sweden T hailand Germany Malaysia United Arab Emirates Singapore Indonesia Australia China Taiwan France Italy Spain Panama Argentina...

  • Page 42
    ...their mailing addresses in Japan. Auditor Century Ota Showa & Co. Main Shareholders Percentage of T otal Shares (%) Number of Shareholders 13,523 Number of Employees 22,277 Number of Consolidated Subsidiaries 73 Number of Companies Accounted for by the Equity Method 3 Stock Exchange Listings T okyo...

  • Page 43
    ... Representative Director Shuji Ito ቢ Senior Managing Director Katsuhiko Kishida ባ Managing Directors Kunihiro Maejima ቤ Masatada Wachi ብ Noriyuki Egawa ቦ Directors Yoshihiro Umeda ቧ Shinya Hanamoto ቨ Hirokazu Kato ቩ T suneo Kuroe ቪ Corporate Auditors Naomoto Ota Michio Horikoshi...

  • Page 44
    Public Relations Division 2-17-11, T akanawa, Minato-ku, T okyo 108-8568, Japan T el: +81 3 5488-6601 Fax: +81 3 5488-5060 URL: http:/ / www.yamaha.co.jp/ english/ Printed in Japan on recycled paper - CM012