Toshiba Corporation Annual Report 2008 • Operational Review Contents
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oshiba Corporation Annual Report 2008 • Operational Review T Toshiba Corporation Annual Report 2008 • Operational Review Contents The Toshiba Brand Statement . 1 Special Feature: Leading Innovation . 2 Basic Management Policy and Mid-term Business Plan . 10 To Our Shareholders . 12 An Interview with the President . 14 Business at a Glance . 18 Business Review . 20 CSR Management . 34 Research & Development and Intellectual Property. 38 Corporate Governance . 41 Directors and Executive Officers . 44 Basic Commitment of the Toshiba Group . 46 Data Section . 47 Corporate Data . 63 The cover background picture is “Toshiba Forest” in Gotemba City, Shizuoka. This is part of Toshiba’s 1.5 million Tree-Planting Project, which contributes to global environment protection. Financial Highlights • Toshiba Corporation and Subsidiaries FY2007 Topics For the years ended March 31, 2008 and 2007 Thousands of Millions of yen Change (%) U.S. dollars (Note1) Jul ’07 Nov ’07 2008 2007 2008/2007 2008 Westinghouse Group signed contracts for con- Announcement of “Toshiba Group Environ- Net sales—Japan ¥3,705,218 ¥3,599,385 2.9 $ 37,052,180 struction of four nuclear power plants in China mental Vision 2050” —Overseas 3,962,858 3,516,965 12.7 39,628,580 Contracts to construct four “Environmental Vision 2050” Net sales (Total) 7,668,076 7,116,350 7.8 76,680,760 next-generation AP1000TM will support efforts to raise Operating income (Note 2) 238,099 258,364 (7.8) 2,380,990 PWR (pressurized water Toshiba Group’s eco-effi- Income before income taxes and minority interest 255,558 298,460 (14.4) 2,555,580 reactors) in China represent ciency in both products and Net income 127,413 137,429 (7.3) 1,274,130 Westinghouse’s first orders business processes, and pro- Total assets 5,935,637 5,931,962 0.1 59,356,370 for new nuclear power plants mote environmental man- Shareholders’ equity 1,022,265 1,108,321 (7.8) 10,222,650 since joining Toshiba Group. agement toward ensuring that “People lead rich lifestyles Environmental Vision Capital expenditures (property, plant and equipment) 465,044 375,335 23.9 4,650,440 AP1000TM PWR type light water reactor in harmony with the Earth.” 2050 Research and development expenditures 393,293 393,987 (0.2) 3,932,930 Return on equity (ROE) (%) 12.0 13.0 - - Sep ’07 Return on total assets (ROA) (%) 2.1 2.6 - - ’07 Completion of construction of Fab 4 Dec NAND Flash Memory manufacturing facility Cooperation with Sharp Corp. on panels for Yen U.S. dollars at Yokkaichi Operations LCD TVs and system LSIs Per share of common stock: Construction of the An agreement with Sharp Corp. Net income (Note 3) fourth fabrication will promote close cooperation —basic ¥ 39.46 ¥ 42.76 (7.7) $0.39 facility at Yokkaichi in the partners’ respective spe- —diluted 36.59 39.45 (7.2) 0.37 Operations rein- cialties: Toshiba’s system LSIs Cash dividends 12.00 11.00 9.1 0.12 forced our capability and Sharp’s LCD panels. Number of employees (Thousands) 198 191 3.7 - to meet increased Notes: 1) Unless indicated otherwise, all dollar figures refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only, at the rate of ¥100 = The companies together U.S.$1.00 (as of March 31, 2008) demand for NAND announced the cooperation. 2) Operating income has been determined under financial reporting practices generally accepted in Japan and is defined as net sales less cost of sales and selling, Flash memory for general and administrative expenses. Yokkaichi Fab 4 3) Basic net income per share (EPS) is computed based on the weighted-average number of shares of common stock outstanding during each period. Diluted EPS digital products. assumes the dilution that could occur if stock acquisition rights were exercised to issue common stock, unless their inclusion would have an antidilutive effect. Feb ’08 Withdrawal from the HD DVD business confirmed Sep ’07 Dramatic changes in the business environment, and Net sales (Billions of yen) Operating income / Operating income ratio (Billions of yen) Sale of Ginza Toshiba Building confirmed a determination that continuation would have a 7,668.1 238.1 08 08 3.1% Sale of the building supported Toshiba in maximiz- major impact on the company’s overall operations, 07 7,116.4 07 3.6% 258.4 ing corporate value and concentrating resources in guided Toshiba’s decision to withdraw from the HD 06 6,343.5 06 3.8% 240.6 core business, and also allows for maximized utiliza- DVD business. 05 5,836.1 05 2.7% 154.8 tion of the Ginza site. 04 5,579.5 04 3.1% 174.6 Feb ’08 Oct ’07 Confirmation of construction of new memory Agreement with Sony Group on joint venture manufacturing facilities Net income (Billions of yen) Return on equity (ROE) for high-performance semiconductors With all projections showing growth in demand for 08 127.4 08 12.0% In strengthening its system LSI business, Toshiba NAND Flash memory, Toshiba took steps to ensure it 07 137.4 07 13.0% signed a memorandum of understanding with Sony was ready by deciding to build two new manufactur- 06 78.2 06 8.6% Group toward establishing a joint venture company for ing facilities simultaneously, with construction sched- the manufacture of high-performance semiconductors. 05 46.0 05 5.9% uled to start in 2009. 04 28.8 04 4.3% Financial Highlights • Toshiba Corporation and Subsidiaries FY2007 Topics For the years ended March 31, 2008 and 2007 Thousands of Millions of yen Change (%) U.S. dollars (Note1) Jul ’07 Nov ’07 2008 2007 2008/2007 2008 Westinghouse Group signed contracts for con- Announcement of “Toshiba Group Environ- Net sales—Japan ¥3,705,218 ¥3,599,385 2.9 $ 37,052,180 struction of four nuclear power plants in China mental Vision 2050” —Overseas 3,962,858 3,516,965 12.7 39,628,580 Contracts to construct four “Environmental Vision 2050” Net sales (Total) 7,668,076 7,116,350 7.8 76,680,760 next-generation AP1000TM will support efforts to raise Operating income (Note 2) 238,099 258,364 (7.8) 2,380,990 PWR (pressurized water Toshiba Group’s eco-effi- Income before income taxes and minority interest 255,558 298,460 (14.4) 2,555,580 reactors) in China represent ciency in both products and Net income 127,413 137,429 (7.3) 1,274,130 Westinghouse’s first orders business processes, and pro- Total assets 5,935,637 5,931,962 0.1 59,356,370 for new nuclear power plants mote environmental man- Shareholders’ equity 1,022,265 1,108,321 (7.8) 10,222,650 since joining Toshiba Group. agement toward ensuring that “People lead rich lifestyles Environmental Vision Capital expenditures (property, plant and equipment) 465,044 375,335 23.9 4,650,440 AP1000TM PWR type light water reactor in harmony with the Earth.” 2050 Research and development expenditures 393,293 393,987 (0.2) 3,932,930 Return on equity (ROE) (%) 12.0 13.0 - - Sep ’07 Return on total assets (ROA) (%) 2.1 2.6 - - ’07 Completion of construction of Fab 4 Dec NAND Flash Memory manufacturing facility Cooperation with Sharp Corp. on panels for Yen U.S. dollars at Yokkaichi Operations LCD TVs and system LSIs Per share of common stock: Construction of the An agreement with Sharp Corp. Net income (Note 3) fourth fabrication will promote close cooperation —basic ¥ 39.46 ¥ 42.76 (7.7) $0.39 facility at Yokkaichi in the partners’ respective spe- —diluted 36.59 39.45 (7.2) 0.37 Operations rein- cialties: Toshiba’s system LSIs Cash dividends 12.00 11.00 9.1 0.12 forced our capability and Sharp’s LCD panels. Number of employees (Thousands) 198 191 3.7 - to meet increased Notes: 1) Unless indicated otherwise, all dollar figures refer to U.S. currency. Yen amounts have been translated into U.S. dollars, for convenience only, at the rate of ¥100 = The companies together U.S.$1.00 (as of March 31, 2008) demand for NAND announced the cooperation. 2) Operating income has been determined under financial reporting practices generally accepted in Japan and is defined as net sales less cost of sales and selling, Flash memory for general and administrative expenses. Yokkaichi Fab 4 3) Basic net income per share (EPS) is computed based on the weighted-average number of shares of common stock outstanding during each period. Diluted EPS digital products. assumes the dilution that could occur if stock acquisition rights were exercised to issue common stock, unless their inclusion would have an antidilutive effect. Feb ’08 Withdrawal from the HD DVD business confirmed Sep ’07 Dramatic changes in the business environment, and Net sales (Billions of yen) Operating income / Operating income ratio (Billions of yen) Sale of Ginza Toshiba Building confirmed a determination that continuation would have a 7,668.1 238.1 08 08 3.1% Sale of the building supported Toshiba in maximiz- major impact on the company’s overall operations, 07 7,116.4 07 3.6% 258.4 ing corporate value and concentrating resources in guided Toshiba’s decision to withdraw from the HD 06 6,343.5 06 3.8% 240.6 core business, and also allows for maximized utiliza- DVD business. 05 5,836.1 05 2.7% 154.8 tion of the Ginza site. 04 5,579.5 04 3.1% 174.6 Feb ’08 Oct ’07 Confirmation of construction of new memory Agreement with Sony Group on joint venture manufacturing facilities Net income (Billions of yen) Return on equity (ROE) for high-performance semiconductors With all projections showing growth in demand for 08 127.4 08 12.0% In strengthening its system LSI business, Toshiba NAND Flash memory, Toshiba took steps to ensure it 07 137.4 07 13.0% signed a memorandum of understanding with Sony was ready by deciding to build two new manufactur- 06 78.2 06 8.6% Group toward establishing a joint venture company for ing facilities simultaneously, with construction sched- the manufacture of high-performance semiconductors.