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Annual Report 2004
For the year ended March 31, 2004
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松下表紙 04.6.28 11:23 AM ページ 1

Table of contents

  • Page 1
    Annual Report 2004 For the year ended March 31, 2004 ideas

  • Page 2
    ... Executive Engineer Corporate R&D Group Matsushita Electric Industrial Co., Ltd. endeavor Manager Corporate System LSI Development Division Semiconductor Company Creativity and customer intimacy contribute essential value to our customers' products and growth strategies Joseph Taylor Matsushita...

  • Page 3
    ... Brand Value through V-products 12 Overseas Initiatives within the Leap Ahead 21 Plan 14 Business Domain and Group Company Presidents Net income (loss) ...¥ 0,042,145 ¥ (19,453) (8.70) (8.70) 10.00 - - - 125.0% 94.9% 108.6 107.9% 105.1 100.8% $ (405) Millions of yen, except per share information...

  • Page 4
    ... every effort to increase corporate value for our shareholders, investors, customers and all other stakeholders by contributing to society through our business activities, maintaining accountability and enhancing transparency. Thank you for your continued support. May 2004 Yoichi Morishita Chairman...

  • Page 5
    ... of the Company's shift to a new growth strategy. The process to follow value creation is one that will open a path to further growth. Reï¬,ecting this concept, the new three-year management plan, which began in April 2004, was named Leap Ahead 21. Matsushita aims to achieve global excellence by...

  • Page 6
    ... Matsushita Electric Works, Ltd. (MEW), after which Matsushita initiated a tender offer for •Business domain-based •Organizational restructuring Fiscal additional shares of MEW. As a result, MEW and its group companies organizational structure and by business domain 2004 new management system...

  • Page 7
    ... environment such V-products. For example, the Panasonic AVC Networks Global Excellence Company is contributing to overall growth by creating business pillars 2010 centered on ï¬,at-panel TVs, DVD recorders, and digital still cameras (DSCs), the market for which is rapidly expanding worldwide. Leap...

  • Page 8
    ... as Electronic Program Guide (EPG) and the ability to record onto SD Memory Cards. The Company also continued to expand its SD Memory Cardcompatible product lineup with new digital cameras, DVD recorders and cellular phones. Linking such digital AV equipment via the SD Memory Card is part of the...

  • Page 9
    ...steamer/microwave oven. These, together with digital AV products, were marketed under the new global brand slogan "Panasonic ideas for life." Global Sales Domestic sales up 1% Overseas sales up 4% on local currency basis Business Domain Companies and Regional Headquarter Companies Global and Group...

  • Page 10
    ... secure a top position in global markets. At the same time, we have vigorously promoted the growth strategies outlined in our mid-term Leap Ahead 21 plan. JVC Masahiko Terada Victor Company of Japan, Ltd. HOME APPLIANCES Yoshitaka Hayashi Yoshinori Nishida Home Appliances Group Healthcare Business...

  • Page 11
    ..., stereo hi-fi and related equipment, car audio, DVD players, DVD recorders, CD radio cassette recorders, business- and education-use equipment, information equipment, KARAOKE systems, video projectors, display components, optical pickups, motors, high-density multi-layered printed circuit boards...

  • Page 12
    ... networking products and their supporting components and devices. In fiscal 2004, Matsushita concentrated management resources into the SD Memory Card, DVD and DTV businesses under the "3D" value chain strategy. The SD Memory Card boasts the top share in the global memory card market, and...

  • Page 13
    ... of its fixed-line communications business. In fiscal 2004, the Company introduced new products to the global market, including digital cordless phones, thereby maintaining its top market share. In fiscal 2005, Matsushita plans to release Internet-protocol (IP) telephones and facsimile machines...

  • Page 14
    ... security, integrated circuit (IC) cards and digital broadcasting, thereby globally expanding a total security solutions business that meets customer needs relating to safety and security in the ubiquitous networking age. System Solutions A moment of inspiration became a six-year quest to develop...

  • Page 15
    ... into healthcare equipment and networking operations. In fiscal 2004, the Company recorded increased sales of a new system that quickly and This health monitor connects doctors with patients at home Air conditioner with oxygen enrichment and ventilation functions 24 Matsushita Electric...

  • Page 16
    ...Company will also begin sales of air purifiers in China and other parts of Asia. In the ventilation fan business, Matsushita aims to increase its global market share by reinforcing business overseas and expanding production in China. Environmental Systems System LSI wafer for digital AV equipment...

  • Page 17
    ... business by further expanding operations in China and other regions. In May 2004, Matsushita began construction on a new semiconductor production facility at its Uozu Plant in Japan, installing the cutting-edge 90-nanometer production process for 300mm wafers. By the end of 2005, the Company plans...

  • Page 18
    ... the size of strategic display and optical disk businesses. In line with its brand statement "The Perfect Experience," JVC will provide customers with an enhanced experience in audio and visual quality, as implied by the "Only One products" concept. JVC Compact DVD component system with two-way...

  • Page 19
    ...10-year Technology Vision Technology and Business Strategy Intellectual Properties Strategy Planning Companywide Technology Strategy R&D Management Innovation Action Common Platform Structure Strategy As software and system LSIs become ever more important in the development of digital equipment...

  • Page 20
    ... Group companies, thereby facilitating the development of corporate strategies that integrate the Group's comprehensive strengths. In addition, Matsushita has realigned the role and structure of the Board of Directors to conduct swift and strategic decision making, as well as optimum monitoring...

  • Page 21
    ... In charge of Finance and Accounting Fujio Nakajima Senior Vice President, Panasonic AVC Networks Company, Director, AVC Development Center, General Manager, Digital Broadcasting Business Promotion Office Managing Directors Yoshinobu Sato Director, Corporate Sales Strategy Div. for National...

  • Page 22
    ... year. Video and Audio Equipment Sales of video and audio equipment rose 1%, to ¥1,418.1 billion ($13,636 million), from the fiscal 2003 total of ¥1,397.7 billion. Strong sales were recorded in the Company's socalled "3D" value chain products, which include SD Memory Cards, DVDs and digital TVs...

  • Page 23
    ... products such as PDP TVs, DVD recorders and cellular phones, and home appliances such as air conditioners. Sales by Product Category Millions of yen Thousands of U.S. dollars 2004 2003 (Restated) 2002 (Restated) 2001 (Restated) 2000 (Restated) 2004 AVC Networks Video and audio equipment...

  • Page 24
    ... a new management system for effective management of projects at each step in the R&D process. Regarding R&D at business domain companies, Matsushita significantly reduced lead time for product development by introducing innovative R&D process management, developed from the standpoint of return on...

  • Page 25
    ...an integral part of the Company's financial strategy to improve shareholder value. Total Assets and Stockholders' Equity Billions of yen 10,000 Millions of yen Thousands of U.S. dollars Profit Distribution During fiscal 2004, the Company distributed an interim (semiannual) cash dividend of ¥6.25...

  • Page 26
    ...-for-sale securities ...Unrealized gains (losses) of derivative instruments ...Minimum pension liability adjustments ...Total accumulated other comprehensive income (loss) ...Treasury stock, at cost (Note 13): 134,645,885 shares (88,606,377 shares in 2003)...Total stockholders' equity ...Commitments...

  • Page 27
    ...' Equity Matsushita Electric Industrial Co., Ltd. and Subsidiaries Years ended March 31, 2004, 2003 and 2002 Millions of yen Thousands of U.S. dollars (Note 2) Millions of yen Thousands of U.S. dollars (Note 2) 2004 Revenues: 2003 2002 2004 2004 2003 2002 2004 Net sales (Note...

  • Page 28
    ... categorized as follows: AVC Networks-48%, Home Appliances-16%, Components and Devices-15%, JVC-11%, and Other-10%. A sales breakdown in fiscal 2004 by geographical market was as follows: Japan-46%, North and South America- 18%, Europe-15%, and Asia and Others-21%. The Company is not dependent on...

  • Page 29
    ...Note 13) The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its stock option plans described in Note 13. As the option price at the date of grant exceeded the fair market value of common stock, no...

  • Page 30
    ... and 59,984,408 shares of its treasury stock to the minority shareholders. These transactions were accounted for using the purchase method of accounting. The fair value of the acquired minority interests was determined based on the weighted-average quoted market price of ¥1,728 per share of MEI for...

  • Page 31
    ...Investments in associated companies include equity securities which have quoted market values at March 31, 2004 and 2003 compared with related carrying amounts as follows: Millions of yen Millions of yen Thousands of U.S. dollars 2004 2003 2004 2004 2003 2004 Current assets ...Â¥ 1,047,518...

  • Page 32
    ... follows: 2004 Millions of yen Less than 12 months Fair value Unrealized losses 12 months or more Fair value Unrealized losses Fair value Total Unrealized losses Cost Current: Convertible and straight bonds...¥000,004 Other debt securities ...1,192 ¥001,196 Noncurrent: Equity securities ...¥242...

  • Page 33
    ... loss of ¥24,420 million during fiscal 2002 related to the writedown of machinery and equipment to manufacture display devices and other components. As the prices of these products significantly decreased due to highly competitive market conditions, the Company projected that the future business...

  • Page 34
    ... the lender the right to request additional security or mortgages on property, plant and equipment. At March 31, 2004 and 2003, short-term loans subject to such general agreements amounted to ¥1,245 million ($11,971 thousand) and ¥27,062 million, respectively. The balance of shortterm loans also...

  • Page 35
    ...related unrecognized actuarial loss, at the time when the past benefit obligation was transferred. The measurement date used to determine the pension measures for pension plans is December 31. Net periodic benefit cost for the contributory, funded benefit pension plans, the unfunded lump-sum payment...

  • Page 36
    ... U.S. dollars Asset category: Equity securities ...39% Debt securities ...31% Life insurance company general accounts ...13% Other ...17% Total ...100% Each plan of the Company has a different investment policy, which is designed to ensure sufficient plan assets available to provide future payments...

  • Page 37
    ... the Company's common stock. All stock options have a four-year term and become fully exercisable two years from the date of grant. Information with respect to stock options is as follows: Number of shares Weighted-average exercise price Yen U.S. dollars Thousands of U.S. dollars 2004 2003 2004...

  • Page 38
    ... dilutive securities was not included in the calculation of diluted net loss per share for the years ended March 31, 2003 and 2002 as their effect would be antidilutive due to the net loss incurred for the respective year. 70 Matsushita Electric Industrial 2004 Matsushita Electric Industrial 2004...

  • Page 39
    ... manufacturing facilities or locations. Of ¥61,622 million, a total of ¥6,660 million was accrued at March 31, 2002 and paid during fiscal 2003. Included in other income of revenues for the year ended March 31, 2003 is a gain of ¥10,805 million from the sale of Panasonic Disc Services Corporation...

  • Page 40
    ... 2003 was insignificant. The Company issues contractual product warranties under which it generally guarantees the performance of products delivered and services rendered for a certain period or term. The change in accrued warranty costs for the years ended March 31, 2004 and 2003 are summarized as...

  • Page 41
    ...) 2004 The five new segments are: "AVC Networks," "Home Appliances," "Components and Devices," "JVC," and "Other." Business segments correspond to categories of activity classified primarily by markets, products and brand names. "AVC Networks" includes video and audio equipment, and information...

  • Page 42
    ... U.S. dollars Sales attributed to countries based upon the customer's location and long-lived assets are as follows: Millions of yen Thousands of U.S. dollars 2004 2003 2002 2004 2004 2003 2002 2004 Sales: Japan ...Â¥ 3,477,492 North and South America ...1,326,940 Europe ...1,080,143 Asia...

  • Page 43
    ... equipment, building products and related materials based in Osaka, Japan. As a result of the acquisition, the Company is expected to be a leading provider of a comprehensive range of home electric and household equipment and systems in Japan. It also expects to reduce costs through economies...

  • Page 44
    ...., Ltd. Investor Information Corporate Headquarters Investor Relations Office Semiconductor Company Panasonic AVC Networks Company Panasonic Automotive Systems Company Panasonic System Solutions Company Matsushita Home Appliances Company Healthcare Business Company Lighting Company Motor Company...

  • Page 45
    http://panasonic.co.jp/global/ Matsushita Electric Industrial Co., Ltd. This entire report is printed with soy ink on paper which is 50% recycled. Printed in Japan