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Our energy will Drive eco Innovation
Annual Report 2009
For the year ended March 31, 2009

Table of contents

  • Page 1
    Annual Report 2009 For the year ended March 31, 2009 Our energy will Drive eco Innovation

  • Page 2
    ... and development of society and the well-being of people worldwide through its business activities. In 2008, the 90th anniversary of its founding, the Company made a new start by changing its name from Matsushita Electric Industrial Co., Ltd. to Panasonic Corporation. Moving forward, Panasonic is...

  • Page 3
    ...Region R&D and Intellectual Property Corporate Governance Directors, Corporate Auditors and Executive Officers Corporate History Corporate Social Responsibility Corporate Citizenship Activities 'eco ideas' Strategy Risk Factors Financial Section Business Domain Companies and Group Companies Investor...

  • Page 4
    Financial Highlights Panasonic Corporation and Subsidiaries Years ended March 31 Millions of yen, except per share information 2009 2008 2007 2006 2005 For the year Net sales ...Â¥7,765,507 Operating profit ...72,873 (382,634) Income (loss) before income taxes ...Net income (loss) ...(378,961...

  • Page 5
    ... 100 200 2.0 0 2005 2006 2007 2008 2009 -12.0 0 2005 2006 2007 2008 2009 Capital Investment Depreciation 0 2005 2006 2007 2008 2009 R&D Expenditures [left scale] R&D Expenditures/Sales Ratio [right scale] 0 Stockholders' Equity [left scale] ROE [right scale] Panasonic Corporation 2009 3

  • Page 6
    ... surveillance cameras to venues of the Beijing 2008 Olympic Games. The Company globally showcased the Panasonic brand, such as by providing official broadcast equipment in the form of the P2 HD camcorder series, a solid-state memory card-based news recording system for professional broadcasting use...

  • Page 7
    ... sites in Japan and overseas, withdrawing from unprofitable businesses, recognizing impairment losses on fixed assets, reassigning and downsizing workforce and taking other forthright actions. In October 2008, we changed our name to Panasonic Corporation and unified our corporate brands worldwide...

  • Page 8
    ... considerably in this difficult business environment. Nevertheless, we are staying true to the aspirations and direction of the GP3 plan. In terms of our consolidated results for fiscal 2009, while we managed to generate an operating profit for the full year, our sales and earnings decreased sharply...

  • Page 9
    ... 2009 we initiated emergency management countermeasures, which have included reducing the remuneration for all directors and managers, and vigorous efforts to strip out controllable expenses in each division. Taking the current situation and our responsibility seriously, all employees are working...

  • Page 10
    ...innovation in all our manufacturing processes as we seek to create products that offer the functions and prices desired by more people, especially middle-income earners in emerging markets. In other words, our quest is to make products that will win in the volume zone. 8 Panasonic Corporation 2009

  • Page 11
    ...in sales over fiscal 2009 to 15.5 million units. In terms of strengthening the competitiveness of our products, in addition to enhancing basic performance such as energy saving and moving picture quality by using Neo PDP technology and IPS alpha panels,*2 we plan to double the number of basic models...

  • Page 12
    ... in emerging countries as well as developed countries and strengthen the development of products targeted at overseas markets. We recently started full-scale business development targeting the European home appliances market. Japan accounts for about 53% of Panasonic's total sales. However, Japan...

  • Page 13
    ...environmental impact in all our business activities is a major theme of the GP3 plan. In addition, to step up environmental management, CO2 emissions in production is positioned as one of our key management indicators along with sales and operating profit. In fiscal 2009, our CO2 emissions were 3.47...

  • Page 14
    ... synergies by expanding product line-ups, utilizing each other's sales channel and in other ways. Our GP3 plan positions four strategic businesses as growth drivers-Digital AV networks business, Car electronics business, Appliance solutions business and Black Box devices business. However, it has...

  • Page 15
    ... in the year-end dividend applicable to fiscal 2009. What do you think on returning profits to shareholders? c Answer 8 The return of profits to shareholders has been one of Panasonic's key policies since its foundation and our emphasis on shareholders will not change going forward. Since our...

  • Page 16
    ... and business-use AV equipment, communications network-related equipment, traffic-related systems, car AVC equipment, healthcare equipment, etc. Digital AVC Networks Solutions for the Environment and Comfortable Living c Percentage of Fiscal 2009 Sales Refrigerators, room air conditioners, washing...

  • Page 17
    ... to sluggish sales of digital cameras, audio equipment, car AVC equipment, mobile phones and other products. However, the segment recorded higher year-on-year sales of flat-panel TVs and BD and DVD recorders. Trillions of yen 5 4 3 2 1 0 Billions of yen 250 200 150 100 50 Profit/sales ratio % 10...

  • Page 18
    ...developing attractive products with the Company's proprietary technology, Digital AVC Networks links together various equipment to offer consumers more secure and comfortable lifestyles. Moreover, this business field works actively on developing products that will help create a ubiquitous networking...

  • Page 19
    ... previous fiscal year, flat-panel TV sales increased 1.3 times, recording 10.05 million units. In plasma TVs, the Company strengthened sales of high-value-added sets, substantially enhancing its full HD models as well as launching a 46-inch model. The affordable price of HD models also drove high...

  • Page 20
    ... 1-inch thin full-flat plasma TV. Going forward, the Company plans to respond to market needs while also expanding its market share with appealing products grounded on its unique technologies. Establishing a Fully Capable Production System to Support the Flat-panel TV Business Panasonic worked to...

  • Page 21
    ... products that meet customer requirements. The ultra-mobile CF-U1 notebook PC was designed with durability. The tablet-type CF-H1 notebook PC was designed for the healthcare industry. In the digital AVC business, Panasonic will accelerate the development of a 3D full HD plasma home theater system...

  • Page 22
    ... and comfort to all users. Moreover, Panasonic proposes new value to customers by linking its wide range of products, including DIGA BD/DVD recorders and Strada car navigation systems. The Dokodemo TV door intercom system allows residents to monitor visitors via a LAN-connected TV inside the house...

  • Page 23
    ...in wide-ranging fields, from car navigation systems to key devices such as engine control units. Under severe market conditions, such as a downturn in global automobile sales, Panasonic is concentrating its overall development capabilities on creating demand in new fields. One is business related to...

  • Page 24
    ...Safety Support System: A driving safety support system promoted by the National Police Agency. Panasonic's megapixel network camera easily distinguishes shapes, day or night, with its bright and smooth images. c System Solutions In the system solutions business, Panasonic is developing three major...

  • Page 25
    ...business segments. In offering customers high-value-added products to enhance their lifestyles, Panasonic is proposing ideas for more comfortable living, while also contributing to environmental protection through its proactive creation of products that enhance energy savings. Panasonic Corporation...

  • Page 26
    ... cooking unit for the mass market as a 200V model in 1990. In the energy-generation business, which aims to lead the way in 'eco ideas,' Panasonic became the first company to ship a home-use fuel cell, "Ene Farm," in July 2008. Overseas, the Company placed emphasis on China and other Asian countries...

  • Page 27
    ...-digit growth in overseas sales. c Lighting In the lighting business, Panasonic is endeavoring to develop products that help to effectively conserve energy, utilize resources and reduce the use of substances that may impact the environment. In addition, the Company has maintained a topclass share...

  • Page 28
    ...purification of air, water, and soil. Utilizing Superior Environmental Technology in Various Products In fiscal 2009, demand in the ventilation systems business declined due mainly to sluggish housing starts and other factors. However, Panasonic's DC motor-driven ceiling mount ventilation fan, which...

  • Page 29
    ...-conscious LED lighting products, proposing such energy-saving solutions as lighting control systems for buildings and offices, and developing its total home security business. Broadband (Home LAN) ECOManagement System Secure life home system Security entrance system Lifinity Nanocare...

  • Page 30
    ... the air clean, and provide top-class earthquake resistance. PanaHome also increased sales by All-electric products open up space and offer an "eco" life. providing a system that eliminates the burden of property management. This system enables owners to rent out all units at a fixed rental price...

  • Page 31
    ...Solution The business field of Devices and Industry Solution supplies highperformance and high-value-added devices and solutions. It is composed of two segments: Components and Devices, and Other. In this field, Panasonic develops and strengthens the competitiveness of cutting-edge devices that help...

  • Page 32
    ... the Use of Cutting-edge System LSIs in Finished Products Amid the shift to full HD digital TVs, Panasonic has supplied optimal image-processing engines for a variety of flat-panel TV models. In particular, the incorporation of a highly-integrated PDP driver LSI for plasma TVs contributed...

  • Page 33
    ... optimal key devices and total solutions worldwide to meet finished product concepts. Reinforcing Structures, Actively Pursuing Growth In fiscal 2009, Panasonic maintained its leading global market share for angular rate sensors, which are used for increasing the precision of car navigation systems...

  • Page 34
    ... mobile phones, and digital cameras, as well as heightened awareness of environmental issues. Under these circumstances, Panasonic decided to build a new lithium-ion battery plant in Osaka, Japan, to expand future production capacity. Construction of the new plant began in February 2009. The Company...

  • Page 35
    ..., the Company will expand its wide-ranging environmentally friendly FA solutions business worldwide. These FA solutions encompass plant and process analysis, facility enhancements, and minimization of total costs from delivery to disposal. New modular mounter, "NPM" Panasonic Corporation 2009 33

  • Page 36
    ... in Asia, including India, Vietnam and Indonesia. *1 On a local currency basis *2 Panasonic retail store In fiscal 2009, Panasonic increased its market shares in flat-panel TVs, digital cameras, air conditioners, refrigerators, washing machines and certain other products, although sales declined...

  • Page 37
    ... in sales of air conditioners to equipment businesses. In India, one of the Company's most important markets, Panasonic is working to expand its sales network of proprietary brand shops targeted at the rapidly growing number of upper-income customers emerging in tandem with the country's fast...

  • Page 38
    ... in North America, Panasonic has developed Blu-ray technologies in collaboration with movie studios. In Europe and China, meanwhile, the Company has strengthened its development of products such as refrigerators and air conditioners that are more tailored to regional characteristics in terms of food...

  • Page 39
    .... These energy-saving technologies in Panasonic's air conditioners have earned high marks, and earned the Chairman Prize of Energy Conservation Center, Japan, at the Energy Conservation Grand Prize in fiscal 2009. Localized LED backlight control High-speed driver technologies Adding "nano...

  • Page 40
    ...LCD as of February 9, 2009. (Conceptual image) Hiroshi Ueda Chief Engineer System Camera Design Team Product Development Group DSC Business Unit AVC Networks Company The G1 won the "Photokina STAR" award at Photokina 2008, the world's largest photographic and imaging trade fair held in Germany. It...

  • Page 41
    ...Strategy Promoting Intellectual Property Strategies that Directly Strengthen Product Competitiveness The Panasonic Group engages in a wide range of business activities centering on the electronics field, including diverse technologies and product lines. As such, it is crucial for the Panasonic Group...

  • Page 42
    ... execution of business at various domestic and overseas Panasonic Group companies. This system facilitates the development of optimum corporate strategies that integrate the Group's comprehensive strengths. In addition, Panasonic realigned the role and structure of the Board of Directors to ensure...

  • Page 43
    ...of transparency and acceptability, Panasonic terminated its retirement benefits for Directors and Corporate Auditors in June 2006. * CCM is an indicator created by Panasonic to evaluate return on capital. Internal Control Systems Compliance The Company has published the Panasonic Code of Conduct in...

  • Page 44
    ... for signs of change and act accordingly." In specific terms, in accordance with shared global evaluation standards, risk information is collected widely and analyzed centrally. At the same time, Panasonic maintains a management cycle that links risk management activities with business plans for...

  • Page 45
    ... each company's financial reporting. With the aim of further enhancing the Group's internal control system, in fiscal 2009 Panasonic had approximately 300 personnel assigned to conduct internal audits, including 24 people in the Corporate Internal Auditing Group. Information Disclosure Structure and...

  • Page 46
    ... of life throughout the world. Aiming to grow further to become a global excellent company, Panasonic will work to deliver sustained growth in corporate value to satisfy its shareholders, investors, customers, business partners, employees and all other stakeholders. Panasonic has a basic policy that...

  • Page 47
    ...2009 at the Company's Web site: http://panasonic.co.jp/corp/news/official.data/data.dir/ en090515-9/en090515-9-1.pdf Evaluation of Measures by the Board of Directors and Rationale for Evaluation Panasonic's current mid-term management plan was formulated as a specific measure to increase the Company...

  • Page 48
    ... companies Corporate Governance Practices Followed by Panasonic A NYSE-listed U.S. company must have a majority of directors meeting the independence requirements under Section 303A of the NYSE Listed Company Manual. The Company Law does not require independent directors on the board of directors...

  • Page 49
    ... has the power to request that Panasonic's Directors submit a proposal for dismissal of an accounting auditor to a general meeting of shareholders. The Board of Corporate Auditors also has the power to directly dismiss an accounting auditor under certain conditions. Panasonic's Directors must obtain...

  • Page 50
    ...) Directors c Chairman of the Board c Executive Vice Presidents Kunio Nakamura Susumu Koike In charge of Technology and Semiconductor Company Koshi Kitadai c Vice Chairman of the Board In charge of Industrial Sales, Automotive Electronics Business, System Solutions Company and Panasonic Mobile...

  • Page 51
    ... Miyabe In charge of Digital Network & Software Technology Yoshiaki Nakagawa General Manager, Corporate Planning Group Mamoru Yoshida Senior Vice President, AVC Networks Company / Director, Network Business Group Joseph Taylor COO, Panasonic Corporation of North America Hideaki Kawai General...

  • Page 52
    ... started. Panasonic aimed to develop and commercialize "a radio that doesn't break." Agitator-type washing machine launched. This relieved housewives of a hard laundry chore. 1929 Management Objective and Company Creed established. Our basic business philosophy is based on these statements. 1923...

  • Page 53
    ... 1958 Home air conditioner launched. This helped create more comfortable living spaces. 1991 Mobile phone "Mova P" launched. This was the world's smallest and lightest model at the time (142 cm3, 220 g). VIERA series plasma TV launched. This was a driving force for Panasonic's digital AV business...

  • Page 54
    ... and industry undergo significant changes in various aspects, it is increasingly important that a company continuously helps to develop customers' lifestyles and enhance the quality of life around the world. Guided by its basic philosophy, Panasonic works to provide solutions to society and propose...

  • Page 55
    ... in January 2009. Panasonic is providing total financial support of ¥170 million over 7 years. * WWF (World Wide Fund for Nature), the world's leading conservation organization, has a global network active in over 100 countries with almost 5 million supporters. In October 2008, Panasonic signed an...

  • Page 56
    ... such as air, light, water, and heat. The 'eco ideas' House aims to contribute to the reduction of CO2 emissions from households. In specific terms, we will reduce CO2 emissions by 65% compared with fiscal 1990 levels over the next 3 to 5 years through the use of energy-saving home Lifestyle with...

  • Page 57
    ...developing for over a quarter of a century, and inverter technology for compressor control. A label attached to this Panasonic refrigerator Model No.: NR-B30FX1 Example 2: New VIERA Z Series of Plasma TVs (Japan, North America and Europe) Since April 2009, Panasonic has successively launched sales...

  • Page 58
    ... factories, we will establish an operational structure capable of highly efficient production with minimal energy use. Example 1: Visualization of Energy Use Through Energy Conservation Diagnosis and Reducing CO2 Via Activities by All Employees China-based Panasonic Home Appliances Washing Machine...

  • Page 59
    ... environmentally-conscious products. Panasonic ECO RELAY For a period of 13 days from October 4, 2008, Panasonic implemented eco activities all over the world as part of the Panasonic Eco Relay project. The project was based on an idea that all Panasonic employees around the world could unite as one...

  • Page 60
    ... results and financial condition, because its international business transactions and costs and prices of its products and services in overseas countries are affected by foreign exchange rate changes. In addition, foreign exchange rate changes can also affect the yen value of Panasonic's investments...

  • Page 61
    .... Despite these efforts, Panasonic's competitors may succeed in developing de facto standards for future products before Panasonic can. In such cases, the Company's competitive position, business, operating results and financial condition could be adversely affected. Panasonic Corporation 2009 59

  • Page 62
    ..., if these partners change their business strategies, Panasonic may fail to maintain these partnerships. Panasonic and SANYO Electric Co., Ltd. ("SANYO"), upon resolutions of meetings of their respective Boards of Directors held on December 19, 2008, entered into a Capital and Business Alliance...

  • Page 63
    ...If such is the case, Panasonic's business, operating results and financial condition may be adversely affected. Governmental laws and regulations may limit Panasonic's activities or increase its operating costs Panasonic is subject to governmental regulations in Japan and other countries in which it...

  • Page 64
    ... information systems could be damaged as a result of disasters or unpredictable events, which could have an adverse effect on its business operations Panasonic's headquarters and major facilities including manufacturing plants, sales offices and research and development centers are located in Japan...

  • Page 65
    ... of Operations Consolidated Statements of Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Management's Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm Panasonic Corporation 2009 63

  • Page 66
    ... "Itakona" activities, which seek to standardize cost-reduction processes on a finer level, the Company established the New Business Promotion Subcommittee in April 2009 to strengthen cost-reduction activities. In terms of the eco ideas strategy, the Company made steady progress in reducing CO2...

  • Page 67
    ... water heating systems and other products for all-electric homes recorded strong sales, weak sales of air conditioners and compressors resulted in an overall sales decrease. Profit in this segment decreased 43% from 87 billion yen in fiscal 2008, to 49 billion yen for fiscal 2009, or 4.0% of sales...

  • Page 68
    ... market share in angular rate sensors for car navigation systems and digital cameras. In addition, sales of power supplies for plasma TVs were relatively steady. However, sales of capacitors, electromechanical components and other products dropped sharply due to deteriorated market conditions and...

  • Page 69
    ..., in China, sales decreased mainly in PCs and peripherals, air conditioners, compressors, and general components, resulting in overall decreased sales. Millions of yen 2009 2008 2007 Domestic Sales ...Overseas Sales: North and South America ...Europe ...Asia and Others ...Total ...Total...

  • Page 70
    ... of the Board of Directors Meeting, the Company also distributed 7.50 yen per common share. Accordingly, total dividends for fiscal 2009, including the interim cash dividend, amounted to 30.00 yen per common share. Financial Position and Liquidity 2009 Millions of yen 2008 2007 Total assets (at...

  • Page 71
    ...of 204 billion yen in fiscal 2008. This was due mainly to an increase in long-term debt by issuing unsecured straight bonds of 400 billion yen by Panasonic Corporation, despite repurchase of the Company's common stock of 72 billion yen and the payment of cash dividends. All these activities, as well...

  • Page 72
    Consolidated Balance Sheets Panasonic Corporation and Subsidiaries March 31, 2009 and 2008 Millions of yen Assets Current assets: Cash and cash equivalents (Note 8) ...Time deposits (Note 8) ...Short-term investments (Notes 4 and 17) ...Trade receivables (Note 15): Related companies (Note 3) ......

  • Page 73
    ...term borrowings, including current portion of long-term debt (Notes 5, 8 and 17) ...Trade payables: Related companies (Note 3) ...Notes ...Accounts ...Total trade payables ...Accrued income taxes (Note 10) ...Accrued payroll ...Other accrued expenses (Note 18) ...Deposits and advances from customers...

  • Page 74
    Consolidated Statements of Operations Panasonic Corporation and Subsidiaries Years ended March 31, 2009, 2008 and 2007 Millions of yen 2009 2008 2007 Revenues, costs and expenses: Net sales: Related companies (Note 3) ...Other ...Total net sales ...Cost of sales (Notes 3, 15 and 16) ...Selling,...

  • Page 75
    ... gains (losses) of available-for-sale securities ...Unrealized gains (losses) of derivative instruments ...Minimum pension liability adjustments ...Pension liability adjustments ...Total comprehensive income (loss) ...See accompanying Notes to Consolidated Financial Statements. 258,740 ¥ 258,740...

  • Page 76
    ... expenditures ...Proceeds from disposals of property, plant and equipment ...(Increase) decrease in time deposits ...Purchase of shares of newly consolidated subsidiaries ...Proceeds from sale of shares of subsidiaries and dividends received ...Other ...Net cash used in investing activities ...Cash...

  • Page 77
    ... to Consolidated Financial Statements 1. Summary of Significant Accounting Policies (a) Description of Business From October 1, 2008, the name of Matsushita Electric Industrial Co., Ltd. was changed to Panasonic Corporation. Panasonic Corporation (hereinafter, the "Company," including consolidated...

  • Page 78
    ... with Statement of Financial Accounting Standards (SFAS) No. 13, "Accounting for Leases." Leases of the assets under certain conditions are recorded as capital leases in property, plant and equipment in the consolidated balance sheets. (f) Inventories (See Note 2) Finished goods and work in process...

  • Page 79
    ... the change in judgment occurs. The Company records interests and penalties related to unrecognized tax benefits in "Provision for income taxes-Current" in the consolidated statements of operations. (m) Advertising (See Note 15) Advertising costs are expensed as incurred. Panasonic Corporation 2009...

  • Page 80
    ...and diluted net income (loss) per share on the face of the statements of operation for all entities with complex capital structures. Under SFAS No. 128, basic net income (loss) per share is computed based on the weighted-average number of common shares outstanding during each period, and diluted net...

  • Page 81
    ... on or after April 1, 2009. The Company is currently in the process of assessing the impact of the adoption of FSP FAS 132R-1 on the Company's consolidated financial statements. In April 2008, the FASB issued FASB Staff Position FAS 142-3, "Determination of the Useful Life of Intangible Assets" (FSP...

  • Page 82
    ...with Toshiba Corporation to sell all of its shares in TMD. The sale was finalized on April 28, 2009. The Company formerly accounted for the investment in IPS Alpha Technology, Ltd. (IPS) and its subsidiary under the equity method, and began to consolidate IPS and its subsidiary on March 31, 2008, in...

  • Page 83
    ... in the consolidated statements of operations. Investments in associated companies include equity securities which have quoted market values at March 31, 2009 and 2008 compared with related carrying amounts as follows: Millions of yen 2009 2008 Carrying amount ...Market value ... ¥12,825...

  • Page 84
    ... in associated companies and all debt securities as available-for-sale. The cost, fair value, gross unrealized holding gains and gross unrealized holding losses of available-for-sale securities included in short-term investments, and other investments and advances at March 31, 2009 and 2008 are as...

  • Page 85
    ...not considered other-than-temporarily impaired. The Company did not have investment securities that had been in a continuous loss position for twelve months or more at March 31, 2009 and 2008. The carrying amounts of the Company's cost method investments totaled 40,755 million yen and 29,837 million...

  • Page 86
    ... future cash flows to be derived from these assets or related asset group will be sufficient to recover the remaining recorded asset values. Impairment losses are included in other deductions in the consolidated statements of operations, and are not charged to segment profit. The Company recognized...

  • Page 87
    ...fiscal 2008. The Company recorded impairment losses related to manufacturing facilities used in its domestic semiconductors business. As the profitability of domestic business declined, the Company estimated that the carrying amounts would not be recovered by the future cash flows. The fair value of...

  • Page 88
    ...changes in the carrying amount of goodwill by business segment for the years ended March 31, 2009 and 2008 are as follows: Millions of yen Digital AVC Networks Home Appliances PEW and PanaHome Components and Devices Other Total... ... ¥30,791 23,904 16,479 10,956 7,945 86 Panasonic Corporation 2009

  • Page 89
    ..., respectively. The balance of short-term loans also includes borrowings under acceptances and short-term loans of foreign subsidiaries. The weighted-average interest rate on short-term borrowings outstanding at March 31, 2009 and 2008 was 3.5% and 4.6%, respectively. Panasonic Corporation 2009 87

  • Page 90
    ... system, benefits are calculated based on accumulated points allocated to employees each year according to their job classification and years of service. Under the cash balance pension plans, each participant has an account which is credited yearly based on the current rate of pay and market-related...

  • Page 91
    ... of year as adjusted ...Service cost ...Interest cost ...Prior service benefit ...Actuarial (gain) loss ...Benefits paid ...Effect of changes in consolidated subsidiaries ...Foreign currency exchange impact ...Benefit obligations at end of year ...Change in plan assets: Fair value of plan assets at...

  • Page 92
    ...March 31, 2009 and 2008 are as follows: 2009 2008 Discount rate ...Rate of compensation increase ... 2.7% 1.7% 2.7% 1.7% Weighted-average assumptions used to determine net cost for the three years ended March 31, 2009 are as follows: 2009 2008 2007 Discount rate ...Expected return on plan assets...

  • Page 93
    ... 2009 2008 Asset category: Equity securities ...Debt securities ...Life insurance company general accounts ...Other ...Total ...Each plan of the Company has a different investment policy, which is designed to ensure sufficient plan assets are available to provide future payments of pension benefits...

  • Page 94
    ... differ from the combined statutory tax rates for the following reasons: 2009 2008 2007 Combined statutory tax rate ...Tax credit related to research expenses ...Lower tax rates of overseas subsidiaries ...Expenses not deductible for tax purposes ...Change in valuation allowance allocated to income...

  • Page 95
    ...Millions of yen 2009 2008 Deferred tax assets: Inventory valuation ...Expenses accrued for financial statement purposes but not currently included in taxable income ...Property, plant and equipment ...Retirement and severance benefits ...Tax loss carryforwards ...Other ...Total gross deferred tax...

  • Page 96
    ... within each of the Company's major jurisdictions resulting in a range of open tax years. The open tax years for the Company and its significant subsidiaries in Japan, the United States of America, the United Kingdom and China range from fiscal 2004 and thereafter. 94 Panasonic Corporation 2009

  • Page 97
    ...399,673, 127,610 and 137,733 shares of its treasury stock for the years ended March 31, 2009, 2008 and 2007, respectively. The difference between sales price and book value was charged to capital surplus in the consolidated balance sheets. The Company Law of Japan provides that an amount equal to 10...

  • Page 98
    ...) ...Net unrealized gains (losses) ...Pension liability adjustments: Prior service benefit arising during the period ...Less: Amortization of prior service benefit included in net periodic benefit cost ...Net prior service benefit ...Actuarial loss arising during the period ...Less: Amortization of...

  • Page 99
    ... ...Net unrealized gains (losses) ...Pension liability adjustments: Prior service benefit arising during the period ...Less: Amortization of prior service benefit included in net periodic benefit cost ...Net prior service benefit ...Actuarial loss arising during the period ...Less: Amortization of...

  • Page 100
    ...sales offices. An analysis of the accrued restructuring charges for the years ended March 31, 2009, 2008 and 2007 is as follows: Millions of yen 2009 2008 2007 Balance at beginning of year ...New charges ...Cash payments ...Balance at end of year ...98 Panasonic Corporation 2009 ¥ 4,761 53,400...

  • Page 101
    ... to 3,128 million yen. JVC JVC segment incurred restructuring charges in the amount of 750 million yen in its domestic entertainment business. Other Other segment incurred restructuring charges in the amount of 376 million yen mainly in overseas sales companies. Panasonic Corporation 2009 99

  • Page 102
    ... sales companies. 15. Supplementary Information to the Statements of Operations and Cash Flows Research and development costs, advertising costs, shipping and handling costs and depreciation charged to income for the three years ended March 31, 2009 are as follows: Millions of yen 2009 2008...

  • Page 103
    ... swaps and commodity derivatives. The Company does not hold or issue derivative financial instruments for trading purpose. Gains and losses related to derivative instruments are classified in "Other income (deductions)" and "Cost of sales" in the consolidated statements of operations. The amount of...

  • Page 104
    ...,884 of how and why an entity uses derivative instruments, how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. The fair values of derivative instruments at March 31, 2009 are as follows: Millions of yen Asset derivatives...

  • Page 105
    ... prices or the present value of future cash flows using appropriate current discount rates. Derivative financial instruments The fair value of derivative financial instruments, all of which are used for hedging purposes, are estimated by obtaining quotes from brokers. Panasonic Corporation 2009...

  • Page 106
    The estimated fair values of financial instruments, all of which are held or issued for purposes other than trading, at March 31, 2009 and 2008 are as follows: Millions of yen 2009 Carrying amount Fair value Carrying amount 2008 Fair value Non-derivatives: Assets: Short-term investment ...Other ...

  • Page 107
    ...: Millions of yen 2009 Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities ...Derivatives ...Total ...Liabilities: Derivatives ...Total ...The Company's existing marketable equity securities and commodity futures are included in Level 1, which are valued using an unadjusted quoted...

  • Page 108
    ... and brand names. "Digital AVC Networks" includes video and audio equipment, and information and communications equipment. "Home Appliances" includes household equipment. "PEW and PanaHome" includes electrical supplies, electric products, building materials and equipment, and housing business...

  • Page 109
    Information by segment for the three years ended March 31, 2009 is shown in the tables below: By Business Segment: Millions of yen 2009 2008 2007 Sales: Digital AVC Networks: Customers ...Intersegment ...Total ...Home Appliances: Customers ...Intersegment ...Total ...PEW and PanaHome: Customers ...

  • Page 110
    Millions of yen 2009 2008 2007 Segment profit (loss): Digital AVC Networks ...Home Appliances ...PEW and PanaHome ...Components and Devices ...Other ...JVC ...Corporate and eliminations ...Total segment profit ...Interest income ...Dividends received ...Other income ...Interest expense ......

  • Page 111
    ... of yen 2009 2008 2007 Sales: Japan ...North and South America ...Europe ...Asia and Others ...Consolidated total ...United States included in North and South America ...China included in Asia and Others ...Property, plant and equipment: Japan ...North and South America ...Europe ...Asia and...

  • Page 112
    ...Japanese Financial Instruments and Exchange Law, which a Japanese public company is subject to: Millions of yen 2009 2008 2007 Sales: Japan: Customers ...Intersegment ...Total ...North and South America: Customers ...Intersegment ...Total ...Europe: Customers ...Intersegment ...Total ...Asia and...

  • Page 113
    ...Consolidated total ...Profit by business field: Digital AVC Networks Solution: Digital AVC Networks ...Total ...Solutions for the Environment and Comfortable Living: Home Appliances ...PEW and PanaHome ...Total ...Devices and Industry Solution: Components and Devices ...Other ...Total ...Corporate...

  • Page 114
    ... firm, KPMG AZSA & Co., has audited the effectiveness of the Company's internal control over financial reporting as stated in their report which is included herein. June 30, 2009 Fumio Ohtsubo President Makoto Uenoyama Director (In charge of Accounting and Finance) 112 Panasonic Corporation 2009

  • Page 115
    Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Panasonic Corporation: We have audited the accompanying consolidated balance sheets of Panasonic Corporation and subsidiaries as of March 31, 2009 and 2008, and the related consolidated statements of ...

  • Page 116
    ..., in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Panasonic Corporation and subsidiaries as of March 31, 2009 and 2008, and the related consolidated statements of operations, stockholders' equity, and cash flows...

  • Page 117
    Business Domain Companies and Group Companies (As of March 31, 2009) Digital AVC Networks Solution Digital AVC Networks AVC Networks Company Panasonic Communications Co., Ltd. Panasonic Mobile Communications Co., Ltd. Automotive Systems Company System Solutions Company Panasonic Shikoku ...

  • Page 118
    ... Depositary and Transfer Agent for American Depositary Receipts (ADRs) JPMorgan Service Center P.O. Box 64504 St. Paul, MN 55164-0504, U.S.A. Phone: U.S.: +1-800-990-1135 International: +1-651-453-2128 Investor Relations Offices Japan Head Office Panasonic Corporation, Investor Relations Office...

  • Page 119
    ...Financial Information," by Panasonic's independent registered public accounting firm. 2. Diluted net income per share for the 2nd, 3rd and 4th quarters in fiscal 2009 has been omitted because the Company did not have potential common shares that were outstanding for the period. Panasonic Corporation...

  • Page 120
    http://panasonic.net/ This annual report is printed with soy ink on FSC-certified paper made using wood that comes from well-managed forests. Printed in Japan