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YAMAHA CORPORATION
Annual Report
2002
Year ended March 31, 2002

Table of contents

  • Page 1
    YAMAHA CORPORATION Annual Report 2002 Year ended March 31, 2002

  • Page 2

  • Page 3
    .... Yamaha Corporation Annual Report 2002 KANDO is the emotion that arises when people feel something deeply. KANDO felt deep down becomes hopes and dreams. The sharing of hopes and dreams is what links people together. As an integrated group with sound and music at its core, the Yamaha Group creates...

  • Page 4
    ... several areas in which the Company recorded year-on-year sales increases, in particular, its home theater product and mobile phone related businesses, which include a ringing melody distribution service and operations producing sound chips used to generate mobile phone ringing melodies. In addition...

  • Page 5
    ... review was the first year covered by the Kando Creation 21 mediumterm management plan. Under this plan, the YAMAHA Group has established three major corporate mottoes: "Striving for Growth," "Consolidated Group Management," and "ValueAdded Business, Sparkling YAMAHA Brand." The initial targets set...

  • Page 6
    ... competitive advantages in costs and technologies, and strive to generate profits by reacting quickly to market changes. In the Lifestyle-Related and Leisure group, which includes our lifestyle-related products and recreation businesses, we face a stagnant domestic market and no near-term growth...

  • Page 7
    ... are formulating business and product plans with the YAMAHA brand in mind. Having just finished our first year of operations under the Kando Creation 21 medium-term management plan, I think that we have succeeded in raising brand awareness throughout the Group, mainly as a result of our focus on the...

  • Page 8
    .../IT 500 Musical Instruments YAMAHA, which began as a piano manufacturer, has secured an unassailable market position as the number one maker of musical instruments in the world. In recent years, the Company has made efforts to enhance its line of silent musical instruments and other products. The...

  • Page 9
    ... (trumpets, flutes, saxophones, etc.) •String instruments (guitars, violins) •Percussion instruments (drums, vibraphones, etc.) •Audio products (power amplifiers, speaker systems, on-line karaoke, etc.) •Video products •IT equipment (CDR-RW, remote routers) •Educational musical...

  • Page 10
    ... silent guitars and other exciting products, and developing new products for adult beginners. In the U.S. market, which had been expanding steadily due to favorable economic conditions and demographic growth in the number of children, the economic slowdown during the year under review dented sales...

  • Page 11
    Nobuya Sugawa, one of Japan's most well-known young saxophonists, performs on a YAS-875EX.

  • Page 12
    ... distribution services, Hong Kong, and three European countries (the Netherlands, Germany, and Spain), where we launched such services in the spring of fiscal 2002. Yamaha Corporation Annual Report 2002 YAS-875EX ̈ Topof-the-line custom alto saxophone C1ME ̈ Stylish and compact grand piano

  • Page 13
    Yamaha Corporation Annual Report 2002 SLG-100N ̈ Acoustic guitar combining a silent function with genuine classic guitar performance capabilities P120S ̈ Electronic piano with built-in speakers and the real sound and touch of a grand piano 11 Review of Operations MOTIF 8 ̈ Next-generation ...

  • Page 14
    ... of CDR-RW drives and other products. As a result, income in this segment declined from the previous term. Yamaha Corporation Annual Report 2002 Strategies and Forecasts In fiscal 2003, we will continue striving to expand our share of the market for our core home theater-related products. In the...

  • Page 15
    Yamaha Corporation Annual Report 2002 DVX-S100 ̈ Home theater sound system with DVD player 13 Review of Operations CRW-F1 with DiscT@2 ̈ With highquality recording capabilities, the latest CDR-RW drive comes equipped with a DiscT@2 high-speed, high-quality labeling function. HX Series ̈ High-...

  • Page 16
    ... and manufacturing costs. Yamaha Corporation Annual Report 2002 Strategies and Forecasts With the number of new housing starts projected to decline in fiscal 2003, YAMAHA will draw on its technological strengths to develop a differentiated line of strong materials and other products while working...

  • Page 17
    ... business during the term, the fiber-optic glut in the United States forced us to reduce manufacturing output to negligible levels. 15 Review of Operations Yamaha Corporation Annual Report 2002 Strategies and Forecasts In fiscal 2003, we expect to accelerate the production of mobile phone sound...

  • Page 18
    ...and features Japanese problems, we will absorb this company on gardens resplendent with seasonal flowers October 1, 2002. and outdoor hot spring baths in which guests Yamaha Corporation Annual Report 2002 Strategies and Forecasts In fiscal 2003, YAMAHA will work to increase the income generated by...

  • Page 19
    ... number of children in Japan, we halted our manufacturing activities in February and have resolved to stop selling such products at the end of the fiscal 2003 interim term. 17 Review of Operations Yamaha Corporation Annual Report 2002 Strategies and Forecasts In fiscal 2003, as mobile phone...

  • Page 20
    ... its customers. Beginning in 1993 with silent pianos, the Silent Series has grown to include violins, brass instruments, drums, cellos, violas, Japanese string instruments, and guitars. Packaging Materials ̈ In fiscal 2000, following a sustained effort, YAMAHA achieved a 68% reduction in the use of...

  • Page 21
    ...Year Summary YAMAHA CORPORATION and Consolidated Subsidiaries At March 31 Millions of Yen 2002 2001 2000 1999 1998 1997 For the year: Net sales...Cost of sales...Gross profit...Selling...,746 409,256 195,490 165,859 29,631 24,354 14,066 Yamaha Corporation Annual Report 2002 ¥509,663 201,965...

  • Page 22
    ... the U.S. dollar, the actual fall in net sales was 6.8%, or ¥35.1 billion. In Japan, sales in our mobile phone related businesses (sound chips for mobile phones and the ringing melody distribution service) increased compared with the previous term. However, the Company recorded decreased sales in...

  • Page 23
    ... investing activities equaled ¥10.4 billion. As a result, free cash flow-the net increase in cash and cash equivalents-of ¥18.6 billion was recorded. EXCHANGE RATES Calculated using the average conversion rate prevailing during the term, the yen weakened, falling ¥14 against the U.S. dollar and...

  • Page 24
    ...Balance Sheets YAMAHA CORPORATION and Consolidated Subsidiaries At March 31, 2002 and 2001 Millions of Yen Thousands of U.S. Dollars (Note 2) ASSETS 2002 2001 2002 Current assets: Cash and bank deposits (Notes 5 and 14)...Marketable securities (Notes 5 and 13) ...Notes and accounts receivable...

  • Page 25
    ... Yen Thousands of U.S. Dollars (Note 2) LIABILITIES AND SHAREHOLDERS' EQUITY 2002 2001 2002 Current liabilities: Short-term loans...Current portion of long-term debt (Note 5) ...Notes and accounts payable ...Accrued expenses ...Income taxes payable ...Advances received ...Deferred income taxes...

  • Page 26
    Consolidated Statements of Operations YAMAHA CORPORATION and Consolidated Subsidiaries Years ended March 31, 2002 and 2001 Millions of Yen Thousands of U.S. Dollars (Note 2) 2002 2001 2002 Net sales ...Cost of sales ...Gross profit ...Selling, general and administrative expenses ...Operating ...

  • Page 27
    ... of year (2002-5,136 shares; 2001-3,914 shares)...Net change during the year ...Balance at end of year (2002-46,038 shares; 2001-5,136 shares)...See notes to consolidated financial statements. ¥ 28,533 ¥ 28,533 ¥ 28,533 ¥ 28,533 $ 214,131 $ 214,131 Yamaha Corporation Annual Report 2002 ¥ 26...

  • Page 28
    ... loans ...Proceeds from long-term debt ...Repayment of long-term debt...Cash dividends paid ...Cash dividends paid to minority shareholders ...Proceeds from stock issued to minority shareholders ...Other, net...Net cash (used in) provided by financing activities ...Effect of exchange rate changes...

  • Page 29
    ... financial statements (both in yen and U.S. dollars) do not necessarily agree with the sum of the individual amounts. Yamaha Corporation Annual Report 2002 (b) Basis of consolidation and accounting for investments in unconsolidated subsidiaries and affiliates The consolidated financial statements...

  • Page 30
    ... method. Yamaha Corporation Annual Report 2002 (g) Depreciation and amortization Depreciation of property, plant and equipment is calculated mainly by the declining-balance method (except that certain consolidated subsidiaries employ the straight-line method) at rates based on the estimated useful...

  • Page 31
    ... 2002 presentation. These changes had no impact on previously reported results of operations or shareholders' equity. Yamaha Corporation Annual Report 2002 2. U.S. DOLLAR AMOUNTS For the convenience of the reader, the accompanying financial statements with respect to the year ended March 31, 2002...

  • Page 32
    ...long-term debt and certain other current liabilities at March 31, 2002 were as follows: Millions of Yen Thousands of U.S. Dollars Bank deposits ...Marketable securities ...Property, plant and equipment, net of accumulated depreciation ...Investment securities...Yamaha Corporation Annual Report 2002...

  • Page 33
    ...pension plans and lump-sum payment plans, covering substantially all employees who are entitled to lump-sum or annuity payments, the amounts of which are determined by reference to their basic rates of pay, lengths of service and the conditions under which the termination occurs. The following table...

  • Page 34
    ... be issued upon the conversion of convertible bonds. Net assets per share is based on the number of shares of common stock outstanding at each balance sheet date. Yen Years ended March 31 2002 2001 U.S. Dollars 2002 32 Notes to Consolidated Financial Statements Net income (loss): Basic ...Diluted...

  • Page 35
    ...March 31, 2002: Year ended March 31, 2002 Millions of Yen Thousands of U.S. Dollars Acquisition costs ...Accumulated depreciation...Net book value... ¥5,127 3,469 ¥1,657 $38,477 26,034 $12,435 Yamaha Corporation Annual Report 2002 Lease income and depreciation expense relating to finance leases...

  • Page 36
    ... Year ended March 31, 2002 Acquisition costs Carrying value Unrealized gain (loss) Thousands of U.S. Dollars Acquisition costs Carrying value Unrealized gain (loss) 34 Notes to Consolidated Financial Statements Securities whose carrying value exceeds their acquisition costs: 1. Stock ...2. Bonds...

  • Page 37
    ...of U.S. Dollars 2002 Cash and bank deposits...Time deposits with a maturity of more than three months ...Cash and cash equivalents ... ¥41,074 (502) ¥40,571 ¥32,885 (160) ¥32,725 $308,248 (3,767) $304,473 Yamaha Corporation Annual Report 2002 15. DERIVATIVES AND HEDGING ACTIVITIES The Group...

  • Page 38
    ...Golf and archery equipment, automobile interior components and fittings, factory automation, machinery, molds Geographical Segments Millions of Yen North America Asia, Oceania and other areas Eliminations or unallocated amounts Consolidated Year ended March 31, 2002 Japan Europe Total I. Sales...

  • Page 39
    ... earnings, which have not been reflected in the accompanying consolidated financial statements for the year ended March 31, 2002, were approved at a general meeting of the shareholders of the Company held on June 27, 2002: Millions of Yen Thousands of U.S. Dollars Cash dividends ... ¥825 $6,191

  • Page 40
    Report of Independent Auditors Yamaha Corporation Annual Report 2002 38 Report of Independent Auditors

  • Page 41
    ... Auditors President and Representative Director Shuji Ito Senior Managing Director Katsuhiko Kishida Managing Director Kunihiro Maejima 39 Board of Directors and Corporate Auditors Managing Director Masatada Wachi Managing Director Noriyuki Egawa Director Yoshihiro Umeda Director Shinya...

  • Page 42
    ... „Siam Music Yamaha Co., Ltd. íYamaha Music Australia Pty., Ltd. „Yamaha Music Gulf FZE ̈Yamaha Motor Co., Ltd. ̈KORG Inc. South Korea China Taiwan Canada Mexico United Kingdom Germany France Spain Panama Italy United Arab Emirates Malaysia Sweden Thailand Singapore Indonesia Australia Brazil

  • Page 43
    ... Issued: 206,523,263 shares Number of Shareholders 13,581 Number of Employees 23,020 Number of Consolidated Subsidiaries 82 Number of Companies Accounted for by the Equity Method 3 Stock Exchange Listings Tokyo, Osaka, and Nagoya First Section, Code No. 7951 Transfer Agent and Registrar The Chuo...

  • Page 44
    Public Relations Division 2-17-11, Takanawa, Minato-ku, Tokyo 108-8568, Japan Tel: +81 3 5488-6602 Fax:+81 3 5488-5060 URL: http://www.global.yamaha.com/ Printed in Japan on recycled paper -CM022