Please address inquiries for further information to:
Mitsubishi Electric Corporation, Corporate Finance Div.
Tokyo Building, 2-7-3, Marunouchi, Chiyoda-ku, Tokyo 100-8310, Japan
Phone: 81-3-3218-2391
X-X01-4-C9401-A HQ1407〈IP〉
A Global, Leading Green Company That
Enriches Society with Technology.
Contents
02 To Our Shareholders
08 Review of Operations
13
Research and Development /
03 Financial Highlights
08 Energy and Electric Systems
Intellectual Property
04 Corporate Strategy
09 Industrial Automation
16 Corporate Social Responsibility
06 At a Glance
Systems
19 Corporate Governance
Fiscal 2014 Overview
10 Information and
20 Directors and Executive Officers
Communication Systems
21 Organization
11 Electronic Devices
12 Home Appliances
22 Major Subsidiaries and Affiliates
23 Financial Section
73
Corporate Data /
Shareholder Information
As the Mitsubishi Electric Group comes closer to celebrating in fiscal 2021 the
100th anniversary of our founding, we will contribute to the enrichment of
society as a global, leading green company.
By "enriching society," we mean creating a “people-friendly” society where
everyone can live their lives in safety, peace of mind, health, and comfort—and at
the same time an “earth-friendly” society that reduces impact to the environment
by advancing the efficient use and reuse of resources and energy.
We of the Mitsubishi Electric Group have come to provide cutting-edge technologies
and diverse businesses globally, and on a broad scale of applications ranging from
homes, offices, and factories to social infrastructure and outer space.
“To pave the way to a better and brighter tomorrow”—this will be our
mindset for future efforts as we increase collaboration within the Group
and continually challenge ourselves to innovate.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 01
To Our Shareholders
Looking back on the economic situation during the fiscal year
in growth strategies that include: promoting environment-related
ended March 31, 2014 (hereinafter fiscal 2014), the Japanese
business strategies; expanding business activities in China, India,
domestic economy recovered due to factors such as an improve-
and other emerging economies; bolstering the social infrastruc-
ment in business confidence following the further weakening of
ture systems business; and developing the solutions business by
the yen. Outside Japan as well, economies in general continued
combining a wide array of technologies with expertise gained in
to gradually expand.
the security business and other fields.
Under these circumstances, the Mitsubishi Electric Group placed
Furthermore, regarding our aspiration to realize a higher level of
greater emphasis than ever before on promoting growth strategies
growth, we aim to enhance corporate value by promoting robust
rooted in its competitive advantages as well as on efforts to boost
growth strategies based on renewed and meticulous efforts to
its competitiveness and strengthen its management structure.
bolster operations in the area of Soundness—one of the three key
As a result, the Mitsubishi Electric Group recorded consolidated
viewpoints of Balanced Corporate Management—with particular
net sales of ¥4,054.3 billion in the fiscal year ended March 31,
consideration also being given to corporate ethics and compliance.
2014, an increase of 14% compared with the previous fiscal year.
The promotion of such growth strategies is underpinned by a
Operating income increased 55% year on year to ¥235.1 billion,
management foundation realigned to be even stronger.
for a Group operating income ratio of 5.8%. Meanwhile, net
As we stride forward resolutely to achieve our goals, we ask for
income increased 121% to ¥153.4 billion. Accordingly, we
your continued support.
reached our management targets of establishing a return on
equity (ROE) above 10% and keeping interest-bearing debt to
total assets below 15%. Moving forward, we have revised our
growth targets and will carry out a variety of measures in order
to achieve consolidated net sales of ¥5 trillion or more and an
operating income ratio of 8% or more by fiscal 2021.
The Mitsubishi Electric Group is taking steps to strengthen its
initiatives in growing market fields. To that end, we are engaging
02 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
July 2014
President & CEO
Masaki Sakuyama
Financial Highlights
Performance for the Year Ended March 31, 2014
Years ended March 31
Net sales
Operating income
Net income attributable to Mitsubishi Electric Corp.
Total assets
Interest-bearing debt
Mitsubishi Electric Corp. shareholders’ equity
Capital expenditures
R&D expenditures
Per-Share Amounts
Net income attributable to Mitsubishi Electric Corp.
Basic
Diluted
Cash dividends declared
Statistical Information
Operating income ratio
Return on equity (ROE)
Interest-bearing debt to total assets
2014
¥4,054,359
235,172
153,473
3,612,966
373,478
1,524,322
151,840
178,945
Yen
(millions)
2013
2012
¥3,567,184
152,095
69,517
3,410,410
540,572
1,300,070
150,425
172,222
¥3,639,468
225,444
112,063
3,391,651
542,291
1,132,465
159,346
169,686
U.S. dollars
(thousands)
2014
$39,362,709
2,283,223
1,490,029
35,077,340
3,626,000
14,799,243
1,474,175
1,737,330
Yen
U.S.dollars
¥71.49
¥32.38
¥52.20
—
17
5.8%
10.9
10.3
—
11
4.3%
5.7
15.9
—
12
%
6.2%
10.3
16.0
$0.694
—
0.165
—
—
—
See accompanying Notes to Consolidated Financial Statements on page 39.
1 The Company prepares consolidated financial statements with procedures, accounting terms, forms, and preparation that are in conformity with accounting principles
generally accepted in the United States of America based on the rules and regulations applicable in Japan.
2 Operating income is presented as net sales less cost of sales, selling, general, administrative and R&D expenses, and loss on impairment of long-lived assets.
3 Diluted net income per share attributable to Mitsubishi Electric Corp. is not included in the above figure as no dilutive securities existed.
4 U.S. dollar amounts are translated from yen at the rate of ¥103=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2014.
Net Sales Breakdown by Business Segment
Others
14.6%
Net sales ¥676,034 million
Energy and Electric Systems 25.4%
Net sales
¥1,180,093 million
Home Appliances 20.3%
Net sales ¥944,351 million
Electronic Devices 4.2%
Net sales ¥194,658 million
Industrial Automation Systems 23.7%
¥1,098,796 million
Net sales
Information and
Communication Systems 11.8%
¥548,282 million
Net sales
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 03
Corporate Strategy
Management Policy
Management Policy
Maintain Balanced Corporate Management
for Sustainable Growth
Growth
• Accelerate the growth of
strong businesses
• Further global expansion
• Create new strong businesses
• Reinforce the solutions business
Greater
Corporate
Value
Profitability
Efficiency
• Enhance capital efficiency
• Create a stronger business
foundation
Soundness
• Constantly review and
refresh business portfolio
• Maintain sound financial
standing
• Promote thorough Ethics
and Compliance and
CSR initiatives
Toward a Higher Level of Growth
The Mitsubishi Electric Group has established three management
ensure the health of its businesses by constantly reviewing and
refreshing its business portfolio, the Group will work toward the
targets to be continuously and stably achieved: an operating
realization of true, sound growth.
income ratio of 5% or more, an ROE of 10% or more, and a ratio
of interest-bearing debt to total assets of 15% or less. In fiscal
2014, the Group achieved an operating income ratio, ROE, and
Management Targets
In fiscal 2014, the Mitsubishi Electric Group recuperated consoli-
ratio of interest-bearing debt to total assets of 5.8%, 10.9%, and
dated net sales above ¥4.0 trillion as well as an operating income
10.3% respectively, meaning that it was able to simultaneously
ratio of 5% or more. Taking these positive results into consider-
achieve these three management targets for the first time in
ation, it has revised its growth targets for fiscal 2021 to consoli-
three years. Building on these results, the Group has positioned
dated net sales of ¥5.0 trillion or more and an operating income
fiscal 2015 as a year in which it will work toward an even higher
ratio of 8% or more. Looking ahead, the Group will also continue
level of growth. In addition to a continued focus on balanced
with efforts to achieve the following management targets contin-
management initiatives, the Group will endeavor to expand sales
uously and stably: to secure an ROE of 10% or more, and to
while concurrently increasing profitability. Making efforts to
secure an interest-bearing debt to total assets ratio of 15% or less.
Growth Targets to be Achieved by Fiscal 2021
Management Targets to be Continuously and Stably Achieved
Net sales
Operating income ratio
ROE
¥5.0 trillion or more
8 % or more
10 % or more
Ratio of interest-bearing
debt to total assets
15 % or less
04 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
The Mitsubishi Electric Group, based on its Corporate Mission and Seven Guiding Principles, has positioned corporate social responsibility (CSR) initiatives as the pillar of its corporate management. It seeks to become a corporation that is trusted by society, customers, shareholders, and employ-ees and that earns their satisfaction through its business activities. Concerning corporate social respon-sibility, in particular corporate ethics and compliance, the entire Mitsubishi Electric Group will continue to strengthen its internal control systems and thoroughly implement education and training. Since fiscal 2002, the Mitsubishi Electric Group has continued to pursue sustainable growth by undertak-ing balanced management initiatives that stem from the three perspectives of growth, profitability and efficiency, and soundness. Looking ahead, the Group will carry out these initiatives while accelerating the global expansion of its environment-and-energy-relat-ed and social-infrastructure-related systems businesses, as a global, leading green company that is committed to the creation of a prosperous society. Along with its efforts to secure business growth, the Group will work diligently to increase corporate value. Bolstering Growth Strategies
The Mitsubishi Electric Group’s strength lies in its solid technology
Further Global Business Expansion
The Mitsubishi Electric Group works actively to achieve stable
platform, which encompasses a wide range of technologies, such
growth and greater profitability in the Japanese market. At the
as control technologies as well as power electronics. In addition,
same time, it is currently making preparations to strengthen the
the Group possesses a solid business platform encompassing
competitiveness of its operations and expand its business scale in
material procurement, production, quality assurance, and sales
Europe and the United States as well as China, which are the
and services, in all of which a culture of improvement is firmly
nucleus of its global business development endeavors.
entrenched. The Mitsubishi Electric Group’s growth strategies are
Furthermore, in order to realize an even higher level of growth,
built on its efforts to create technological and operating synergies
the Group is making efforts to promote the cultivation of new mar-
by coordinating and combining operations between these plat-
kets by establishing business structures in emerging nations such
forms consistently.
as Turkey, India, Vietnam, Thailand, Indonesia, Mexico, and Brazil.
Aiming for a higher level of growth, the Group has positioned
the eight businesses as drivers of global growth: power systems,
transportation systems, building systems, factory automation (FA)
systems, automotive equipment, space systems, power devices,
and air conditioning (AC) systems.
Strengthening the Group‘s Management
Foundation
The Mitsubishi Electric Group reported an interest-bearing debt
to total assets ratio of 10.3% on a balance of outstanding debt
and corporate bonds of ¥373.4 billion as of the end of fiscal
Making Strong Businesses Stronger
The Mitsubishi Electric Group is responding flexibly to changes in
2014. It was successful in securing a positive free cash flow for
the first time in three years. As a result, the Group‘s equity ratio
customer needs, market trends, and business conditions in order
improved to 42.2%, substantially enhancing its financial position.
to strengthen the competitive edge of individual businesses. At the
Moving forward, the Mitsubishi Electric Group will continue to
same time, it is bolstering its technology platform through a variety
build a solid management structure while generating stable cash
of measures, including research and development tie-ups with
flows. It will actively channel these cash flows into growth fields,
external institutions. Moreover, the Group is strengthening its busi-
including research and development, capital investment, and
ness platform—which encompasses material procurement, produc-
M&A. Moreover, the Group will pursue the balanced distribution
tion, quality assurance, and sales and services—even further as a
of profits to shareholders through the payment of dividends and
part of its efforts to increase profitability. Through these means, it
work diligently to increase its corporate value.
is advancing growth strategies across the Group as a whole.
Continuous Creation of New Strong Businesses
To realize sustainable growth, the Mitsubishi Electric Group is also
Continuous Innovation
The Mitsubishi Electric Group will steadfastly carry out its man-
agement policies guided by a commitment to balanced manage-
committed to actively creating new robust businesses that will
ment, while putting into practice its overarching corporate
support future expansion. To this end, it is strengthening its tech-
statement, Changes for the Better. Each and every employee will
nology and business platforms while promoting wide-ranging
share the common goal of developing new frontiers through
measures such as the coordination and consolidation of existing
continuous innovation, and the Mitsubishi Electric Group—by
businesses and technologies.
continuing to undergo transformation itself—will mature into a
corporation that is always producing something better.
Reinforcing Solutions Business Centered on Strong
Businesses
Going beyond promoting the development of products and sys-
tems on an individual business basis, the Mitsubishi Electric
Group works diligently to ensure collaboration among business
divisions. By combining individual products and systems, it is
advancing operations in energy and security solutions businesses
across a wide range of residential, building, factory, and transpor-
tation fields.
The Group‘s efforts to develop each of these businesses enable
it to create and deliver new added value at the community level.
By moving forward with its smart community solutions, the Group
is contributing to the creation of an even more prosperous society.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 05
At a Glance
Energy and Electric Systems
Industrial Automation Systems
Information and Communication Systems
Net sales
Yen (billions)
1,200
1,000
800
600
400
200
0
1,039
1,027
1,027
1,058
1,180
10
11
12
13
14
(Years ended March 31)
Net sales
Yen (billions)
1,200
1,000
800
600
400
200
0
927
978
927
1,098
733
10
11
12
13
14
(Years ended March 31)
Net sales
Yen (billions)
1,200
1,000
800
600
400
200
0
526
487
516
522
548
10
11
12
13
14
(Years ended March 31)
Operating income
Operating income
Operating income
Yen (billions)
120
100
80
60
40
20
0
-20
74
83
84
85
76
10
11
12
13
14
(Years ended March 31)
Yen (billions)
120
100
80
60
40
20
0
-20
100
101
98
60
26
10
11
12
13
14
(Years ended March 31)
Yen (billions)
120
100
80
60
40
20
0
-20
18
13
21
1
5
10
11
12
13
14
(Years ended March 31)
MAIN PRODUCTS AND BUSINESS LINES
MAIN PRODUCTS AND BUSINESS LINES
MAIN PRODUCTS AND BUSINESS LINES
Turbine generators, hydraulic turbine generators,
nuclear power plant equipment, motors,
transformers, power electronics equipment,
circuit breakers, gas insulated switches,
switch control devices, surveillance-system
control and security systems, large display devices,
electrical equipment for locomotives and rolling
stock, elevators, escalators, building security
systems, building management systems,
particle therapy systems, and others
Programmable logic controllers, inverters,
servomotors, human-machine interface, motors,
hoists, magnetic switches, no-fuse circuit
breakers, short-circuit breakers, transformers for
electricity distribution, time and power meters,
uninterruptible power supply, industrial fans,
computerized numerical controllers, electrical
discharge machines, laser processing machines,
industrial robots, clutches, automotive electrical
equipment, car electronics and car mechatronics,
car multimedia, and others
Wireless and wired communications systems,
surveillance cameras, satellite communications
equipment, satellites, radar equipment,
antennas, missile systems, fire control systems,
broadcasting equipment, data transmission
devices, network security systems, information
systems equipment, systems integration,
and others
M Fiscal 2014 Overview
April
• Established new FA center to strengthen services for
factory automation products in Mexico
• Opened a new office building as the headquarters of
Mitsubishi Electric US, Inc.’s Cooling & Heating Division
• Commenced operations at a new transformer factory in
Memphis, Tennessee
• Commenced operations at a digital instrumentation and
control (I&C) system for nuclear power plants in China
Mitsubishi Electric Power Products, Inc. Memphis Factory
New Cooling & Heating
Facility in Georgia, USA
June
August
• Established new FA
center at Jakarta to
provide enhanced
services in Indonesia
• Established new FA centers at Hanoi and Ho Chi Minh
• Installed two 3,385-inch Diamond Vision displays, both
1,352m2, at Reliant Stadium in Houston, Texas
Diamond Vision displays
at Reliant Stadium
2013
May
• Launched three types of silicon carbide (SiC) power
modules for home appliances, industrial equipment,
and railcar traction systems
• Enhanced business relating to smart meters, the
advanced electricity meters with communication
functions, in collaboration with partner Echelon
Corporation (NASDAQ: ELON)
July
September
• Established a mock-house facility to
test heating, ventilating, and air
conditioning (HVAC) products in
Scotland, U.K.
• Announced the acquisition of F.A.
TECH CO.,LTD. (F.A. TECH), a factory
automation product distributor and
long-time partner in Thailand
• Entered Brazilian elevator and escalator market
• Established Mitsubishi Electric Power & Electrical Infrastructure
Systems (Beijing) Co., Ltd. (MEPIC) in Beijing, China
• Announced that the Company had been awarded a contract to
install 38 elevators and escalators to
MAHANAKHON, a commercial complex
under construction in Bangkok, Thailand
MELCO ELEVADORES DO BRASIL S.A.
06 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Electronic Devices
Home Appliances
Others
Net sales
Yen (billions)
1,200
1,000
800
600
400
200
0
138
175
200
164
194
10
11
12
13
14
(Years ended March 31)
Net sales
Yen (billions)
1,200
1,000
800
600
400
200
0
924
824
849
821
944
10
11
12
13
14
(Years ended March 31)
Net sales
Yen (billions)
1,200
1,000
800
600
400
200
0
552
609
611
590
676
10
11
12
13
14
(Years ended March 31)
Operating income (loss)
Operating income
Operating income
Yen (billions)
120
100
80
60
40
20
0
-20
-7
10
5
3
-5
10
11
12
13
14
(Years ended March 31)
Yen (billions)
120
100
80
60
40
20
0
-20
42
4
52
22
19
10
11
12
13
14
(Years ended March 31)
Yen (billions)
120
100
80
60
40
20
0
-20
14
3
20
18
19
10
11
12
13
14
(Years ended March 31)
MAIN PRODUCTS AND BUSINESS LINES
MAIN PRODUCTS AND BUSINESS LINES
MAIN PRODUCTS AND BUSINESS LINES
Power modules, high-frequency devices,
optical devices, LCD devices, and others
LCD televisions, room air conditioners, package
air conditioners, air-to-water heat pump boilers,
refrigerators, electric fans, ventilators, photovoltaic
systems, hot water supply systems, LED lamps,
fluorescent lamps, indoor lighting, compressors,
chillers, dehumidifiers, air purifiers, showcases,
cleaners, jar rice cookers, microwave ovens,
IH cooking heaters, and others
Procurement, logistics, real estate, advertising,
finance, and other services
October
November
January
February
• Established a new FA center in the
• Announced that the Company
”
Umraniye district of Istanbul
• Awarded contract to deliver proton
therapy systems for cancer treatment
to Tsuyama Chuo Hospital in
Okayama and Hakuhokai Group
Osaka Proton Therapy Clinic
• Commenced production of indoor
units for commercial air conditioners
at Mitsubishi Electric US
had been awarded a contract to
install 85 elevators and escalators,
including two eleva-
tors capable of climb-
ing 600 meters per
minute, to the Wuhan
Center, Hubei
Province, China
Wuhan Center (CG rendition)
• Expanded assembly lines for
automotive equipment at
Mitsubishi Electric Automotive
America, Inc. in the United
States and commenced
production of high-efficiency
alternators
Mitsubishi
Electric Automotive America, Inc.
• Successfully launched
the TURKSAT-4A satel-
lite under a turnkey
contract awarded by
Turksat Satellite
Communication, Cable
TV and Operation Inc. Co. (Turksat A.S.)
• Agreed to acquire Turkish air conditioning
Successfully Launched
TURKSAT-4A Satellite
distributor Klima Plus through local subsidiary
Mitsubishi Electric Turkey A. .
S,
2014
December
March
• Commenced sales of Mitsubishi home energy management systems (HEMs); entered the
• Commenced operations at a design and technology facility located in the Power
smart house business in earnest
Device Works in Japan
• Awarded contract to supply the Japan Aerospace Exploration Agency (JAXA) with the
Greenhouse gases Observing SATellite-2 (GOSAT-2) satellite system
• Announced an agreement that will see 80% of Klimat-Fer’s shares
incorporated into Mitsubishi Electric’s railcar business in Europe
• Launched a railcar traction inverter system for 1,500V DC catena-
ries that incorporates the world's first all-silicon carbide (SiC)
power modules made with SiC transistors and SiC diodes
• Installed elevators and escalators to the Abeno Harukas Building in Japan
• Produced one millionth medium-voltage circuit breaker at
Power Distribution Systems Center (PDSC) in Marugame
(Kagawa, Japan)
GOSAT-2 (CG rendition)
• Surpassed one billion yen in cumulative
donations over the 22-year life of the
Mitsubishi Electric SOCIO-ROOTS Fund
Design and Technology Facility
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 07
Review of Operations
Energy and
Electric Systems
Net Sales Breakdown by Business Segment
25.4%
Net Sales
¥1,180.0billion
up 12% year on year
Operating Income
¥76.3billion
down ¥8.8 billion year on year
The social infrastructure systems business
saw increases in both orders and sales com-
pared to the previous fiscal year due primar-
ily to increases in the public utility systems
business in Japan and the power generation
and rolling-stock businesses outside Japan,
in addition to the weaker yen.
The building systems business experi-
enced increases in both orders and sales
compared to the previous fiscal year, owing
to growth in elevators and escalators for
new installations and renewals in Japan as
well as for new installations overseas mainly
in China, in addition to the weaker yen.
As a result, total sales for this segment
increased by 12% from the previous fiscal
year to 1,180.0 billion yen. Operating
income decreased by 8.8 billion yen from
the previous fiscal year to 76.3 billion yen
due primarily to a shift in project portfolio
and other factors.
08 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Next-generation SiC Inverter for Railcars
Mitsubishi Electric has developed a traction inverter for railcars
that incorporates silicon carbide (SiC), a new type of semicon-
ductor. This new inverter, with its energy-efficient, compact,
lightweight, low-maintenance and low-noise design,
is expected to play a major role in next-generation railcar
propulsion systems.
Digital Signage System at Narita International Airport
Mitsubishi Electric has successfully installed Japan’s largest
digital signage system1 at Narita International Airport. This
system comprises 100 display units made up of a total of 336
display panels, including a unit consisting of 27 46-inch LCD
multi-display screens. As a part of efforts to ensure the presen-
tation of information in an appropriate and timely manner, a
wide range of content, including airport news and entertain-
ment, is delivered according to the location of each display.
1. Based on Mitsubishi Electric research as of June 2012.
Particle Therapy System
Utilizing the characteristic features of protons, carbon, and
other heavy ions, particle therapy is a cutting edge technology
that allows for the pinpoint targeting of cancerous tumors
while minimizing side effects on surrounding normal tissues.
It is increasingly selected as an advanced solution in the treat-
ment of cancer.
Power Plants
Mitsubishi Electric power plant installations are used both
by power utility companies and by companies in various
industries as in-house power generators. Owing to its
accumulated expertise and leading technological capabilities,
Mitsubishi Electric is able to provide optimal power plants
in various power generation fields.
AXIEZ Machine-room-less Elevators
Along with enhanced energy-saving functions, including lighting
that is entirely LED, AXIEZ machine-room-less elevators offer
outstanding function and design. Furthermore, Mitsubishi
Electric has added a new large-capacity model to the AXIEZ
lineup, thereby extending the range of target buildings to
include large-scale office buildings, commercial facilities, and
hospitals.
Facima BA-System, an Open Integrated
Management System for Building Facilities
The Facima BA-system provides a variety of functions which help
save energy and make building management more efficient. In
order to target buildings of a wider range of sizes and purposes,
Mitsubishi Electric has launched a new wall-mounted model
with an LCD touch panel as part of its Facima lineup.
Industrial
Automation Systems
Net Sales Breakdown by Business Segment
23.7%
Net Sales
¥1,098.7billion
up 18% year on year
Operating Income
¥98.0billion
up ¥37.4 billion year on year
The factory automation systems business
saw increases in both orders and sales from
the previous fiscal year mainly due to an
increase in capital expenditures relating to
smartphone and semiconductor as well as
facility replacements by manufacturers in
Japan, in addition to the weaker yen.
The automotive equipment business saw
increases in both orders and sales from the
previous fiscal year due primarily to strength
in the North American and Japanese car
sales markets and increased sales in China
by Japanese automotive manufacturers, as
well as the weaker yen.
As a result, total sales for this segment
increased by 18% from the previous fiscal
year to 1,098.7 billion yen. Operating
income increased by 37.4 billion yen from
the previous fiscal year to 98.0 billion yen
due primarily to an increase in sales.
Programmable Logic Controllers
Mitsubishi Electric’s MELSEC series of programmable logic
controllers supports a wide array of production and social
infrastructure applications; solutions range from control and
safety devices to information and instrumentation management.
As a leading global brand, the MELSEC series contributes to
the construction of cutting-edge control systems owing to its
capabilities, performance, product variety and high reliability.
AC Servos
The MELSERVO-J4 series features the world’s highest level of
performance and functionality. Its advanced design allows
“one touch” auto-tuning and vibration suppression that
enhances the speed, precision and overall performance of
production equipment and manufacturing devices. The
MELSERVO-J4 series has applications in numerous fields,
including semiconductors, FPD (Flat Panel Display) production,
packaging systems and industrial machinery.
Low-voltage Circuit Breakers
Low-voltage Circuit Breakers are used for wiring protection
and short-circuit protection in low-voltage circuits. Since 1933,
Mitsubishi Electric has been continuously designing and
developing such breakers, the latest of which is the new WS-V
“World” series. The lineup is ideal for both power distribution
and OEM markets.
Electrical Discharge Machines (EDMs)
Beginning with the newly launched MV series, a strategic
product globally, Mitsubishi Electric provides a lineup of EDMs
that add value and improve the manufacturing productivity of
molds and precision components. Such equipment is indis-
pensable to the production of automobiles, home electronics
and IT-related devices.
Electric Power Steering (Motors and Controllers)
Mitsubishi Electric was the first company in the world to mass
produce motors and controllers for electric power steering to
assist driver steering in line with driving conditions. Over the
years, Mitsubishi Electric has helped to improve steering feel,
response and stability while delivering compact units and
high-output performance, and contributing to reduced
automobile CO2 emissions.
Memory Car Navigation System
Mitsubishi Electric’s DIATONE SOUND.NAVI is a car navigation
system that incorporates acoustic technology cultivated during
the development of DIATONE to offer improved sound quality.
The NR-MZ80 Series boasts the high-definition technology of
the Company’s REAL LCD TV along with a variety of simple,
user-friendly navigation functions.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 09
Information and
Communication Systems
Net Sales Breakdown by Business Segment
11.8%
Net Sales
¥548.2billion
up 5% year on year
Operating Income
¥5.5billion
up ¥3.9 billion year on year
The telecommunications equipment busi-
ness saw increases in both orders and sales
from the previous fiscal year owing primarily
to an increase in the communications infra-
structures business.
The information systems and services
business saw an increase in sales compared
to the previous fiscal year mainly due to
growth in the system integration business.
The electronic systems business saw a
decrease in orders from the previous fiscal
year due primarily to decreases in large-scale
projects in the electronics and space systems
businesses, while sales increased from the
previous fiscal year due to progress in orders
already received for projects in the space
systems business.
As a result, total sales for this segment
increased by 5% from the previous fiscal
year to 548.2 billion yen. Operating income
increased by 3.9 billion yen from the previ-
ous fiscal year to 5.5 billion yen due to an
increase in sales and other factors.
10 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Information System Integrated Control Center
Specialist engineers are available 24/7 to remotely operate
and monitor client information systems and to analyze and
determine any problem that might occur using automated
tools, enabling a rapid response to any system malfunction.
(Mitsubishi Electric Information Network Corporation)
Mission-critical Server
Employing virtualization technology in its complete fault-tolerant
system as an overarching concept, this server not only ensures
the succession of customers’ application assets, but also
integrates internal mission-critical tasks and systems for
situations where failure is not an option.
(Mitsubishi Electric Information Technology Corporation)
DS2000 Standard Satellite Platform
The DS2000 is a standard satellite platform modeled after
JAXA’s ETS-VIII platform, which was designed to meet the
need for high-quality, low-cost satellites with shortened
delivery times. The DS2000 has maintained a competitive
edge internationally, and is employed in such satellites as
Himawari-7, 8, 9, Superbird-C2, ST-2 and Türksat-4A/4B.
Vehicle-mounted Stations for Satellite
Communications
Vehicle-mounted satellite communication equipment enables
transmission of video and audio for broadcast news (satellite
news gathering) and information for disaster management.
Mitsubishi Electric products have achieved Japan’s highest
market share in this field, and are employed by Japanese
broadcasters, the public sector and infrastructure companies
such as gas and electricity utilities.
Broadband Optical Access Systems
Mitsubishi Electric is progressively installing Gigabit Ethernet
Passive Optical Network (GE-PON) systems, which play a
central role in broadband services. The need for GE-PON
systems is steadily expanding due to high-capacity broadband
content, including the increased use of visual services.
Digital CCTV (Closed-circuit Television) System
This digital CCTV system meets the expanding range of needs
for video surveillance systems, which is achieved through new
digital technology incorporated into its high-resolution
megapixel camera and its high level of scalability, which can
accommodate even large-scale systems.
Electronic Devices
Net Sales Breakdown by Business Segment
4.2%
Net Sales
¥194.6billion
up 19% year on year
Operating Income
¥10.0billion
up ¥15.6 billion year on year,
turning into profit
The semiconductor business saw increases
in both orders and sales from the previous
fiscal year due to a growth in demand
mainly for power modules used in consumer,
industrial, automotive and railcar applica-
tions, as well as the weaker yen.
The LCD module business saw increases
both in orders and sales due to growth in
demand for automotive-use products.
As a result, total sales for this segment
increased by 19% from the previous fiscal
year to 194.6 billion yen. Operating income
improved by 15.6 billion yen from the previ-
ous fiscal year, turning into a profit 10.0 bil-
lion yen, mainly due to an increase in sales.
Super mini DIPIPMTM Ver. 6
with Built-in Seventh-generation IGBT
Equipped with a seventh-generation IGBT that serves to reduce
the static and turn-off loss during periods of low current, the
Ver. 6 Series transfer-molded super-mini dual in-line package
intelligent power module (DIPIPMTM) delivers industry-leading
low power consumption. This module contributes significantly
to reducing the power consumption of white goods as well as
the inverter drive systems of industrial motors.
J1-series Power Modules for Automotive Inverters
Mitsubishi Electric has developed a new power module series
”J1-Series” for use mainly in the inverters of electric and hybrid
vehicles. The J1-Series power modules feature a compact,
high-reliability package structure with an integrated direct
cooling fin.
Ku-band1 GaN2 HEMT3 MMIC4 with Integrated Linearizer
Mitsubishi Electric has launched the MGFG5H1503, a Ku-band MMIC amplifier
that features the world’s first5 GaN HEMT MMIC with an integrated linearizer
to compensate for distortion. In combination with our GaN HEMT, the
MGFG5H1503 contributes to the downsizing, high performance, and faster
development of power transmitters while enabling Ku-band satellite earth
station power transmitters to be configured for a wide range of output power.
1. Microwave band ranging from 12-18 GHz
2. Gallium Nitride
3. High Electron Mobility Transistor
4. Monolithic Microwave Integrated Circuit
5. Based on Mitsubishi Electric research as of January 20, 2014. GaN HEMT for use in
satellite earth stations.
Four-wavelength Integrated 100Gbps EML1-TOSA2
Mitsubishi Electric has developed a laser diode-transmitter
optical subassembly that enables 100Gbps optical transmission
over a single fiber using four-channel wavelength-division
multiplexing. Not only is this unit compact, but it also enables
optical transceiver modules to operate at lower power.
1. Electro-absorption Modulated Laser diode
2. Transmitter Optical Sub Assembly
Touch panel
Control board
Liquid-crystal module
Graphics board
Industrial-use Color TFT LCD Module
with Built-in Intelligent GUI
A liquid-crystal module with a touch panel that realizes a high
level of operability and a graphics board that easily incorporates
high-quality graphic displays are provided as a single set. As a
result, there is no need for intensive software development,
production equipment development costs are drastically
reduced, and high-quality graphics can be easily displayed.
Display screen (meter display)
Color TFT-LCD Modules
with Touch Panels for Industrial Applications
Mitsubishi Electric’s lineup of color thin-film transistor liquid
crystal display (TFT-LCD) modules with touch panels provide
superior visibility and durability and can be operated intuitively
even by users wearing gloves. In addition to upgrading and
expanding the lineup of products, which boast a variety of
screen sizes, the company is making every effort to provide
total support, including touch panels, in order to make the user
interface with industrial equipment more sophisticated.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 11
Home Appliances
Net Sales Breakdown by Business Segment
Room Air Conditioners
In addition to KIRIGAMINE room air conditioners, Mitsubishi
Electric offers an extensive lineup of products with applications
extending from stores, offices and buildings to factories and
industrial facilities while featuring environmentally compatible,
energy-saving technologies. These qualities allow Mitsubishi
Electric to meet air conditioning needs globally.
Photovoltaic system
Smart All-electric Homes
20.3%
Energy Generation
In-house Power Generation
Induction cooking
heater
Energy Savings
Heat Pump Technology
To ensure the comfort and convenience of all-electric-powered
homes, Mitsubishi Electric is proposing “smart all-electric
home” lifestyle ideas that improve energy creation via
photovoltaic generation and effective energy usage through
high-efficiency technologies such as heat pumps.
Net Sales
Built-in dishwasher
Heat pump hot water
supply system
Comfortable Lifestyle
Safe/Convenient
Hot water floor heating system
Mitsubishi Ecomist bath drying, heating,
and ventilation system with mist function
¥944.3billion
up 15% year on year
Operating Income
¥52.8billion
up ¥33.5 billion year on year
The home appliances business saw a 15%
increase in sales from the previous fiscal
year to 944.3 billion yen due primarily to
expansion in sales for air conditioners in
Asian, European and North American mar-
kets, as well as increases in air conditioners
and photovoltaic systems in Japan, which
experienced a last-minute surge prior to the
consumption tax raise, in addition to the
weaker yen.
Operating income rose by 33.5 billion yen
from the previous fiscal year to 52.8 billion
yen due primarily to an increase in sales.
12 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Home Appliances
The home appliances business strives to deliver technologies
and products that bring convenience, comfort and enjoyment
to everyday life. Focusing on keywords such as “delicious,”
“delightful” and “soothing,” every effort is made to further
enhance people’s quality of life through intelligent, connected,
and economical—or, in short, ”smart”—technologies.
LED Lighting
Currently under rapid development, LEDs possess outstanding
features that expand lighting possibilities, including longevity,
low power consumption, absence of mercury and the enabling
of more compact fixtures. LEDs also significantly contribute to
power conservation efforts.
Digital Signage
Mitsubishi Electric offers a full lineup of visual display products,
including multiple large-screen systems. The lineup is easy to
use—digital content can be accessed simply by inserting an
SD card into a display unit—while offering solutions for
logistics, retail stores, and other industry sectors as well as a
host of applications.
Visual Equipment for Public and
Business Applications
Our high-quality image processing technologies deliver
exceptionally sharp color reproduction. Mitsubishi Electric
offers a range of products developed to suit a variety of
application needs. These systems are being used in Japan
and abroad for large-screen applications that display images,
data and information.
Research and Development / Intellectual Property
Research and Development
R&D Initiatives
The Mitsubishi Electric Group, in conformity with its growth strat-
its efforts to commercialize electric circuit substrates made with
glass, thereby helping to create electronic devices with even
egies, accelerated R&D efforts in the environment/energy and
greater processing abilities and functionalities in the fields of
social infrastructure fields, in which increased business opportuni-
smartphones and other mobile terminals.
ties are expected on a global scale. In addition, the Group
1. A high-energy laser beam created through electrical discharge in carbon dioxide gas
focused on developing new technologies and new products that
2. 1 micron is equal to 1/1000 millimeter
will fortify its position in the future, making its competitiveness in
key operating fields even stronger. Representative achievements
for the consolidated fiscal year under review are as follows.
R&D Achievements in Fiscal 2014
Developing Micro Glass-Processing Technology That
Employs a Pulsed CO2 Laser1
Mitsubishi Electric Corporation has developed a new glass substrate
3. As of February 13, 2014 (survey conducted by Mitsubishi Electric Corporation)
Establishing House-Type HVACs Evaluation Facilities
in Scotland
The Group subsidiary Mitsubishi Electric Air Conditioning Systems
Europe Ltd. has established house-type HVACs evaluation facilities
in Scotland, U.K., to test its heating, ventilating and air condition-
ing (HVAC) systems, with the aim of developing HVAC products
processing technology for drilling holes with diameters as tiny as
best tailored to cold climate zones in Europe. This move will
25 microns2, a size that makes them the smallest3 in the world.
facilitate the Group’s penetration of the European market in step
Employing a pulsed CO2 laser, this technology enables drilling at a
pace of 200 holes per second, a speed that makes the technology
with growing demand for heat pump-related HVAC systems,
which boast energy-saving properties as well as environment
practicable for use in mass-production machining processes.
friendliness.
Glass is brittle and difficult to process. On the other hand, its
With the installation of a total of more than 1,400 sensors to
physical hardness and minimal deformation at high temperatures
monitor indoor conditions, the facility enables the precise testing
are characteristics that have resulted in glass being considered
of the effect of air conditioning systems on indoor environments.
superior to resin—the current mainstay material for electric circuit
Employing this facility, the Mitsubishi Electric Group will step up
substrates—when creating extremely small circuits. Drawing on
product development targeting the European market, creating
this achievement, Mitsubishi Electric Corporation will accelerate
HVAC solutions capable of contributing to “zero-emission housing.”
1 m m
Control room-based comparative analysis of the
comfort levels and specific attributes of each facility
Substrate with image composed
of small holes (centimeter scale)
Enlarged image of the
small holes in the substrate
Glass circuit substrate
Plastic circuit substrate
(printed circuit board)
IC chip
Small holes
Boiler-type water heating system
installed in one test house
Heat-pump systems installed
in the other test house
Detailed Analysis of Air-Conditioning and Refrigeration System
Operations as well as Air-Conditioning and Ventilation Environments
Cross section of an advanced electronic package
Helping to Deliver Electronic Devices, Including Smartphones
That Offer Increased Speed and Performance
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 13
Unveiling an Innovative EV Motor Drive System
Prototype
Mitsubishi Electric Corporation has developed a 60kW electric
vehicle (EV) motor drive system prototype with a reduced cubic
volume of 14.1 liters, thereby realizing the smallest EV motor
drive in this category.1 In addition to incorporating a built-in
silicon-carbide (SiC) inverter—one example of the Company’s
R&D accomplishments aimed at reducing EV motor size—the
system employs a unique structure to improve cooling, optimizing
the allocation of power modules so that paths of motor coolant
and inverter coolant run parallel on the outer periphery of the
casing. With these features, the new EV motor drive system is
designed to contribute to the downsizing, weight cutbacks and
energy efficiency of EV motors. Accordingly, this system is
expected to realize a longer driving range compared with current
drive systems when using the same size batteries.
1. As of February 13, 2014 (survey conducted by Mitsubishi Electric Corporation)
Intellectual Property
SiC power
semiconductor module
Cooling duct
Motor
Full SiC inverter
EV motor drive system
Smallest of Its Kind in the Industry
Basic Policy
The Mitsubishi Electric Group recognizes that intellectual property
Global IP Strategy
The Mitsubishi Electric Group identifies critical IP-related themes
(IP) rights represent a vital management resource essential to its
in connection with mainstay businesses and important R&D proj-
future. Therefore, every effort is made to integrate the Group’s
ects. At the same time, the Group channels its energies toward
business, R&D and IP activities. Moving forward, the Mitsubishi
the globalization of its robust patent portfolio by promoting
Electric Group will further strengthen its IP capabilities while
patent filing activities. With regard to its overseas operations, the
promoting its growth strategy.
Structure of the Intellectual Property Division
The Mitsubishi Electric Group’s IP-related operations are the direct
Group is accelerating the globalization of its IP activities through
actions such as working to increase the number of patent appli-
cations it files prior to undertaking business development in
emerging countries, including India and Brazil.
responsibility of the president and are overseen by the Head Office
Moreover, the Mitsubishi Electric Group is actively engaging in
IP Division under an appointed IP executive officer. Day-to-day
activities aimed at acquiring design rights in Japan and overseas
issues are handled by IP departments at relevant facilities, R&D
to further enhance its robust patent portfolio. These efforts are
centers and affiliated companies. The Head Office IP Division
intended to specifically protect proprietary assets in both technol-
formulates strategies for the entire Group, promotes critical
ogy and design areas.
IP-related projects and coordinates interaction with the patent
office. At the manufacturing facility, R&D center and affiliated
company levels, IP departments pursue specific objectives in line
with the Group’s overall IP strategies.
Annual Trends in Overseas Patent Applications by
the Mitsubishi Electric Group
Integrating Business, R&D and IP Activities
(No. of Applications)
9,000
Integration
IP Network
IP/Standardization
Strategy
IP Division at
Headquarters
President
Business Strategy
IP Departments at
Business Groups,
Facilities, Affiliates
Development
Strategy
R&D Centers
IP Departments
14 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
6,000
3,000
0
2011
2012
2013
2014
(FY)
USA Europe China Other
Further Strengthening Global IP Capabilities
IP representative
Europe
Asia
USA / Brazil
Head Office
IP Division
V Protecting products through IP rights
V Acquiring international standard-related patents
V Counterfeit product countermeasures
The Mitsubishi Electric Group has assigned IP representatives to
each of its bases in the United States, Europe and China. Every
effort is being made to strengthen IP capabilities at Group facili-
Activities Aimed at Preventing Infringement
on the Group’s IP Rights
The Mitsubishi Electric Group works diligently to prevent any
ties, R&D centers and affiliated companies in each country.
infringement on its IP rights by other companies. In addition to
Standardization Strategy
As companies continue to globalize their business activities, the
in-house activities, the Group places particular weight on collabo-
rating with industry organizations while approaching government
agencies both in Japan and overseas as a part of a wide range of
international standardization of technologies that contribute to
measures to prevent the counterfeiting of its products.
global market growth is significantly impacting business strategies.
For this reason, the importance of promoting IP strategies in
consideration of international standards is increasing. In response
Respecting the IP Rights of Others
The Mitsubishi Electric Group recognizes that any infringement on
to this situation, the Mitsubishi Electric Group is placing emphasis
the IP rights of another company has the potential to significantly
on activities to standardize its development technologies and
impair the Group’s continued viability as a going concern. The
acquire related IP rights. The Group is paying particular attention
resulting potential impairments include being obliged to pay
to the acquisition of international standard patents, while patent
significant licensing fees or being forced to discontinue the man-
pools, including those for MPEG and Blu-ray DiscTM*, are proving
ufacture of a certain product. In order to prevent any infringement
to be a wellspring for IP revenues. These revenues are contribut-
on the IP rights of other companies, the Group provides education
ing to improvement and growth in business earnings.
and training to raise employee awareness and promote greater
Furthermore, the Mitsubishi Electric Group is working to reinforce
respect for the IP rights of others. At the same time, the Group
its activities to acquire rights for international standard-related
has put in place a set of rules to facilitate appropriate actions
technologies. The Group is looking to utilize these patents to
such as surveying other companies’ patent rights at every stage
help increase the market share of its products.
from development to production. The Mitsubishi Electric Group
*Blu-ray DiscTM is a trademark of the Blu-ray Disc Association
works diligently to ensure strict adherence to these rules.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 15
Corporate Social Responsibility
The Mitsubishi Electric Group promotes its corporate social
responsibility (CSR) activities based on the conviction that all
business activities must take CSR into consideration. The Group’s
Corporate Mission and Seven Guiding Principles form its basic
CSR policies. It is vigilant in its enforcement of corporate ethics
and compliance and constantly works to improve educational
programs and strengthen its internal control system. At the
same time, it pursues initiatives related to quality management,
global environmental conservation, philanthropy and improved
communication with all stakeholders.
Corporate Mission
The Mitsubishi Electric Group will continually improve its technol-
ogies and services by applying creativity to all aspects of its busi-
ness. By doing so, we enhance the quality of life in our society.
To this end, all members of the Group will pursue the following
Seven Guiding Principles.
Seven Guiding Principles
Trust, Quality, Technology, Citizenship, Ethics, Environment, Growth
The Mitsubishi Electric Group’s Corporate
Social Responsibility
The operating environment continues to undergo dramatic
changes, reflecting advances in globalization, revisions to legisla-
tion and other factors. What must continue regardless of how
the times may change is a respect for corporate ethics and com-
pliance and a commitment to never compromise on environmen-
tal issues and product quality. This commitment of the Mitsubishi
Electric Group was first articulated in the Keys to Management
(in Japanese, Keiei no Yotei), which was drawn up at the time of
Mitsubishi Electric’s founding in 1921. The spirit of this document,
which states the Group‘s contributions in areas such as the pros-
perity of society, product quality and customer satisfaction, lives
on today in its Corporate Mission and Seven Guiding Principles.
With these tenets as its core principles, the Group promotes vari-
ous initiatives in order to fulfill its corporate social responsibilities.
In particular, the Group‘s commitment to corporate ethics and
compliance has underpinned corporate management while form-
ing the core of the Group‘s efforts to strengthen its internal control
system and implement employee training programs. Looking ahead,
the Group will continue to strictly adhere to a policy of compliance.
It will also redouble its efforts to bolster activities and to establish
relationships built of robust mutual trust with all stakeholders.
As a member of society, the Mitsubishi Electric Group is responsi-
ble for upholding corporate ethics and compliance as well as contrib-
uting to society. The Group recognizes its responsibility to contribute
to society through the technologies it has built up over the years.
A sincere concern for the environment permeates every facet
of the Mitsubishi Electric Group’s operations. Thus, it can be said
that each facet of the Group‘s business activities is geared toward
contributing to the environment. The technologies and products
that comprise its portfolio support environmental protection,
energy conservation and social infrastructure while being gentle
to humankind and the earth, thereby enriching society. Looking
ahead, the Group will help create a more prosperous and sustain-
able society by harnessing the strengths of its wide-ranging tech-
nological capabilities.
Philanthropic Activities
Philosophy and Policies on Philanthropic Activities
The Mitsubishi Electric Group shares a common Philosophy and
Policies based on its Corporate Mission and Seven Guiding
Principles, and carries out a variety of activities accordingly.
16 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Philosophy
As a corporate citizen committed to meeting societal needs and
expectations, the Mitsubishi Electric Group will make full use of
the resources it has at hand to contribute to creating an affluent
society in partnership with its employees.
Policies
• We shall carry out community-based activities in response to
societal needs in the fields of social welfare and global environ-
mental conservation.
• We shall contribute to developing the next generation through
activities that support the promotion of science and technology,
culture and arts, and sports.
Promoting Activities Deeply Rooted in Local Communities
and Activities that Develop the Next Generation
Emphasizing the three categories of social welfare, global envi-
ronmental conservation, and the promotion of science and tech-
nology, the Group‘s philanthropic activities in Japan are
underpinned primarily by the Mitsubishi Electric SOCIO-ROOTS
Fund, a gift program in which the Company matches any dona-
tion made by an employee to social welfare facilities; the
“Satoyama” Woodland Preservation Project, which involves
employee volunteers participating in environmental restoration
activities in the areas surrounding the Group‘s offices and pro-
duction facilities; and science workshops that foster the develop-
ment of the engineers of tomorrow by encouraging children to
experience for themselves the appeal of science.
Focusing on philanthropic activities overseas, the Group imple-
ments a broad range of initiatives, including undertaking nature
conservation activities with the help of employee volunteers,
funding social welfare organizations, and offering support for
young musicians and sports teams.
Activities through Mitsubishi Electric’s Overseas
Satoyama Woodland Preservation Project
participants (Japan)
A Science Class that helps communicate
the appeal of science to children (Japan)
Supporting the El Primer Palau
music festival (Spain)
Foundations
The Mitsubishi Electric America Foundation and Mitsubishi Electric
Thai Foundation, both founded in 1991, also carry out various
activities in the spirit of the Mitsubishi Electric Group‘s Philosophy
and Policies. The Mitsubishi Electric America Foundation, with the
cooperation of its branches in the United States, helps young
people with disabilities to become employed and participate
more fully in society. The Mitsubishi Electric Thai Foundation, in
addition to providing scholarships to university students and sup-
porting a school lunch program for grade school students, has in
recent years been promoting employee-involved volunteer activi-
ties that support education and environmental protection.
An employee volunteer working with a
student on Disability Mentoring Day
(United States)
Recipients of university scholarships and
Foundation representatives (Thailand)
Environmental Activities
The 7th Environmental Plan
The Mitsubishi Electric Group has set the goal of becoming a
global, leading green company. Guided by its growth strategies
and Environmental Vision 2021, the Group is working diligently
to realize a sustainable society in which the people of the world
can enjoy safe and comfortable lifestyles in harmonious coexis-
tence with all living creatures. In 2007, the Group announced the
details of Environmental Vision 2021, its long-term vision for
environmental management. Under this vision, the Group
launched its 7th Environmental Plan, which covers the period
from fiscal 2013 to fiscal 2015. In carrying out this plan, the
Group is pursuing the efficient use of energy across all of its busi-
nesses, promoting the development and widespread use of inno-
vative products and services that boast outstanding resource
efficiency, and advancing efforts to reduce the environmental
impact of all of its business activities from procurement through
production to logistics.
The Mitsubishi Electric Group is evaluating priorities from the
perspectives of both society and the Group. At the same time, it
is examining the progress and results of its environmental activi-
ties as well as pending issues. Drawing on each of these evalua-
tions and examinations, it is putting in place environmental plans
on a three-year basis.
• Reducing CO2 Emissions from Production
Under its 7th Environmental Plan, which covers the period from
fiscal 2013 to fiscal 2015, the Mitsubishi Electric Group is taking
steps to reduce its CO2 emissions during production as a part of
efforts to help create a low-carbon society. The Group has set
and manages CO2 emission reduction targets in terms of sales
unit ratio.* Doing so ensures that its efforts to reduce emissions
can be properly evaluated regardless of increases or decreases in
the volume of production. The Group has identified the fiscal
2015 target of reducing the sales unit ratio of CO2 emissions to
83% of the level recorded in fiscal 2011. In order to achieve this
target, a variety of initiatives are being implemented. In an effort
to reduce CO2 emissions from the production line, steps are being
taken to visualize and remove the energy waste inherent in the
production process. At the same time, the Group is focusing on
increasing the efficiency and management of utilities, including
air conditioners and lighting. Furthermore, in response to the
appeal for a reduction of energy usage in Japan due to the after-
math of the Great East Japan Earthquake, attention is being paid
to managing and controlling the use of electric power during
peak periods through the introduction of monitoring systems
with the aim of realizing a reduction through the use of demand
management. Complementing these initiatives, the Mitsubishi
Electric Group has also actively promoted the introduction of
photovoltaic power generation systems.
The improvement rate of CO2 emissions in terms of sales unit
ratio was 90% in fiscal 2014 against the fiscal year target of 86%.
This was, however, a six percentage point improvement over the
96% result in fiscal 2013. While conditions make it difficult to
achieve per unit targets due mainly to changes in the social envi-
ronment that have occurred since the 7th Environmental Plan was
formulated and the shortfall between projected and actual net
sales, the Group will look to make improvements that exceed the
previous fiscal year and continue to engage in reduction activities
with the aim of achieving initial targets.
*The amount of CO2 emitted per unit of sales.
Reduce CO2 emissions
from product usage by 30%
(Base year: fiscal 2001)
Reduce total emissions
from production by 30%
(Base year: fiscal 1991)
Aim to reduce CO2 emissions
from power generation
Environmental Vision 2021
Global Leading
Green Company
Promote product “3Rs”;
reduce, reuse and recycle
Reduce resource inputs
Aim for zero emissions
from manufacturing
Contribute to the
Environment and Society
(through our products, services
and business activities)
Reduce
environmental impact
(by further honing highly efficient
manufacturing techniques to
minimize our environmental impact)
Creating a
Low-Carbon
Society
Creating a
Recycling-Based
Society
Respecting Biodiversity
Ensuring harmony with nature and
fostering environmental awareness
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 17
Group-wide Plan to Reduce CO2 Emissions from Production
Total amount of emissions
(10,000 tons)
Base year
24
118
25
69
120
100
80
60
40
20
0
Actual amount of reduction under the
6th Environmental Plan: 106,000 tons
Planned amount of reduction under the
7th Environmental Plan: 121,000 tons
100%
92%
96%
97
86
3.4
22
17
47
3.5
27
19
51
93
3.7
27
16
50
92
3.5
27
17
48
93
90%
83%
3.5
27
17
50
97
29
17
51
6th Environmental Plan
7th Environmental Plan
CO2 emissions
(sales unit ratio %)
100
98
62%
80
60
40
20
0
1991
2010
2011
2012
2013
2014
2015
2021
(FY)
(cid:31) Mitsubishi Electric (base year: FY1991) (cid:31) Affiliates in Japan (base year: FY2001) (cid:31) Overseas affiliates (base year: FY2006)
Group total (cid:31) Amount of reduction CO2 emissions compared to FY2011 (sales unit ratio %)
Photovoltaic power generation capacity
(MW)
20
(Actual operating basis, cumulative)
14.7
15
10
5
0
0.7
15.5
Before fiscal 2011
2014
2015
(Fiscal year)
• Reducing CO2 Emissions from Product Usage
In looking at greenhouse gas emissions outside the scope of the
Mitsubishi Electric Group’s business activities, a principal source is
the CO2 derived from electric power consumption during the
period that products are used. According to in-house calculations,
the amount of CO2 emitted during product use can be several
dozen to several hundred times the amount emitted during
production. Therefore, the development and widespread use of
highly energy-efficient products has a direct impact on efforts to
reduce CO2 emissions. Under the 7th Environmental Plan, the
Mitsubishi Electric Group has identified the average rate of reduc-
tion in CO2 emissions from product usage as an important index.
The Mitsubishi Electric Group is aiming to achieve an average
reduction rate of 27%, with fiscal 2001 as the baseline, through
the manufacture of specified products with designs that prioritize
lowered emissions during use. Based on extensive analysis, the
Group has positioned reduced CO2 emissions as an important
environmental aspect of product design. The number of specified
products in fiscal 2014 was 110 (97 end products and 13 inter-
mediate products). The average rate of CO2 emissions reduction
among these products was 33%, which is in excess of the target
for the final fiscal year of the plan. In particular, notable reductions
were recorded in consumer- and railcar-use power devices as well
as indoor lighting. In fiscal 2015, the Group will work to maintain
and increase rates of reduction.
Plan for Reducing CO2 from Product Usage through
Improved Energy Efficiency
0
)
%
(
n
o
i
t
c
u
d
e
r
f
o
e
t
a
r
e
g
a
r
e
v
A
100
17%
7th Environmental Plan
26%
29%
33%
27%
30%
110 targeted products
2001
Base fiscal year
2008
2012 2013 2014 2015
2021
(Fiscal year)
More information about the Mitsubishi Electric Group’s environmental and CSR initiatives is available on the following websites:
http://www.MitsubishiElectric.com/company/csr/
http://www.MitsubishiElectric.co.jp/corporate/environment/
18 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Corporate Governance
Basic Corporate Governance Policy
To realize sustained growth and increase corporate value,
Executive officers are responsible for ensuring compliance and
management efficiency in their assigned areas of operations.
Mitsubishi Electric works to maintain the flexibility of its operations
Internal auditors monitor executive officers’ performance of
while promoting management transparency. These endeavors are
duties. Internal auditors report on the results of such monitoring
supported by an efficient corporate governance structure that
to the executive officer in charge of auditing, and the executive
clearly defines and reinforces the supervisory functions of manage-
officer in charge of auditing and accounting auditors report on
ment while ensuring that the Company is responsive to the expec-
the results of such monitoring to the Audit Committee.
tations of customers, shareholders, and all of its stakeholders.
Mitsubishi Electric maintains a multi-dimensional risk manage-
Corporate Management and Governance
Structure
Corporate Management Structure
In June 2003, Mitsubishi Electric became a company with a
ment system in which all executive officers participate. Under this
system, executive officers are responsible for risk management in
their assigned areas of operation. In addition, executive officers
exchange information and participate in important management
initiatives and decisions through regularly scheduled executive
committee system. Key to this structure is the separation of
officers’ meetings.
supervisory and executive functions; the Board of Directors plays
a supervisory decision-making role and executive officers handle
the day-to-day running of the Company.
The Corporate Auditing Division and Audit Committee
Acting independently, Mitsubishi Electric’s Corporate Auditing
The present Board is comprised of twelve directors (five of
Division conducts internal audits of the Company from a fair and
whom are outside directors), who objectively supervise and advise
impartial standpoint. In addition, the division’s activities are
the Company’s management. The Board of Directors has three
supported by auditors with profound knowledge of their particu-
internal bodies: the Audit, Nomination and Compensation com-
lar fields, assigned from certain business units.
mittees. Each body has five members, three of whom are outside
The Audit Committee is made up of five directors, three of
directors. The Audit Committee is supported by dedicated
whom are outside directors. In accordance with the policies and
independent staff.
Internal Control System
Further ensuring effective corporate governance, the roles of
assignments agreed to by the committee, the performances of
directors and executive officers as well as affiliated companies
are audited.
The Corporate Auditing Division, through the executive officer
Chairman and President & CEO are clearly defined and exclusive.
in charge of auditing, submits reports to the Audit Committee,
The Chairman heads the board of directors and the President &
which holds periodic meetings to exchange information and dis-
CEO heads the Company’s executive officers. Neither the Chair-
cuss auditing policies. In addition, the Audit Committee discusses
man nor the President & CEO is a member of the Nomination or
policies and methods of auditing with accounting auditors, who
Compensation Committees. This allows for the clear division of
furnish it with reports on the status and results of the audits of
executive and supervisory functions, thereby enabling Mitsubishi
the Company that they themselves conduct.
Electric to ensure effective corporate governance.
Report
General Shareholders’ Meeting
Report
Appointment
Appointment/Dismissal/Supervision
Reporting to
Decision Making and Execution
Executive Officers
President & CEO
Executive Vice Presidents
Senior Vice Presidents
Executive Officers
Business/Administration Divisions
Supervision
Board of Directors
Chairman
Nomination Committee
Outside Directors (majority)
s
r
o
t
c
e
r
i
D
Audit Committee
Outside Directors (majority)
Compensation Committee
Outside Directors (majority)
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 19
Directors and Executive Officers
Directors (As of June 27, 2014)
Kenichiro Yamanishi ............................ Chairman
Masaki Sakuyama ................................. Representative Executive Officer, President & CEO
Hiroki Yoshimatsu ................................ Chairman of the Audit Committee
Noritomo Hashimoto ........................... Member of the Nomination Committee, Senior Vice President
Nobuyuki Okuma ................................. Chairman of the Nomination Committee, Chairman of the Compensation Committee,
Akihiro Matsuyama .............................. Member of the Compensation Committee, Executive Officer
Takashi Sasakawa ................................. Member of the Audit Committee
Executive Officer
Mikio Sasaki .......................................... Member of the Compensation Committee, Senior Corporate Advisor, Mitsubishi Corporation
Shigemitsu Miki .................................... Member of the Nomination Committee, Member of the Audit Committee,
Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Fujiatsu Makino .................................... Member of the Audit Committee, Member of the Compensation Committee,
Certified Public Accountant, Registered Tax Accountant
Mitoji Yabunaka ................................... Member of the Nomination Committee, Member of the Compensation Committee,
Advisor, Nomura Research Institute, Ltd.
Hiroshi Obayashi .................................. Member of the Nomination Committee, Member of the Audit Committee, Attorney-at-Law
Representative Executive Officers (As of April 1, 2014)
Masaki Sakuyama
Hideyuki Okubo
Yutaka Ohashi
Executive Officers (As of April 1, 2014)
President & CEO:
Masaki Sakuyama
Senior Vice Presidents:
Hideyuki Okubo ................................... In charge of Export Control and Factory Automation Systems
Yutaka Ohashi ...................................... In charge of Automotive Equipment
Noritomo Hashimoto ........................... In charge of Corporate Strategic Planning and Operations of Associated Companies
Yoshiaki Nakatani................................. In charge of Electronic Systems
Yasuyuki Nakanishi .............................. In charge of Communication Systems
Masayuki Ichige .................................... In charge of Auditing, Government & External Relations and Public Relations
Executive Officers:
Masaharu Moriyasu .............................. In charge of Total Productivity Management & Environmental Programs
Isao Iguchi ............................................. In charge of Advertising and Domestic Marketing
Toru Yoshinaga ..................................... In charge of Information Systems & Network Service
Nobuyuki Okuma ................................. In charge of General Affairs and Human Resources
Akihiro Matsuyama .............................. In charge of Accounting and Finance
Takashi Sakamoto ................................ In charge of Purchasing
Takahiro Kikuchi ................................... In charge of Public Utility Systems
Kenji Kondo .......................................... In charge of IT and Research & Development
Nobuyuki Abe ....................................... In charge of Building Systems
Katsuya Takamiya ................................. In charge of Global Strategic Planning & Marketing
Takaaki Kukita ...................................... In charge of Global Strategic Planning & Marketing
Takeshi Sugiyama ................................. In charge of Living Environment & Digital Media Equipment
Nobushi Morooka ................................ In charge of Legal Affairs & Compliance, Export Control and Intellectual Property
Yasuyuki Ito .......................................... In charge of Energy & Industrial Systems
Hideaki Nagatomo ............................... In charge of Living Environment & Digital Media Equipment
Toru Sanada .......................................... In charge of Semiconductor & Device
20 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Organization
(As of June 27, 2014)
Board of Directors
Chairman
Nomination
Committee
Audit
Committee
Compensation
Committee
Audit Committee Office
Executive Officers’
Meeting
President & CEO
Senior Vice
Presidents
Executive
Officers
(cid:31) Corporate Auditing Div.
(cid:31) Corporate Marketing Group
(cid:31) Corporate Strategic
Planning Div.
(cid:31) Corporate IT Strategy Div.
(cid:31) Global Strategic Planning &
Marketing Group
(cid:31) Associated
Companies Div.
(cid:31) Government &
External Relations Div.
(cid:31) Corporate
Administration Div.
(cid:31) Corporate Human
Resources Div.
(cid:31) Corporate
Accounting Div.
(cid:31) Corporate Finance Div.
(cid:31) Corporate
Purchasing Div.
(cid:31) Public Relations Div.
(cid:31) Corporate
Advertising Div.
(cid:31) Corporate Legal &
Compliance Div.
(cid:31) Corporate Export
Control Div.
(cid:31) Corporate Licensing Div.
(cid:31) Corporate Total Productivity
Management & Environmental
Programs Group
(cid:31) Corporate Research and
Development Group
(cid:31) Information Systems &
Network Service Group
(cid:31) Public Utility Systems Group
(cid:31) Energy & Industrial
Systems Group
(cid:31) Building Systems Group
(cid:31) Electronic Systems Group
(cid:31) Corporate Intellectual
Property Div.
(cid:31) Communication Systems Group
(cid:31) Living Environment & Digital
Media Equipment Group
(cid:31) Factory Automation
Systems Group
(cid:31) Automotive Equipment Group
(cid:31) Semiconductor & Device Group
Business Planning Office
Market Planning & Administration Dept.
Compliance Dept.
Marketing Research & Business Development Dept.
Branch Offices (Hokkaido, Tohoku, Kanetsu, Kanagawa,
Hokuriku, Chubu, Kansai, Chugoku, Shikoku, Kyushu)
Global Planning & Administration Div.
Compliance Dept.
Regional Marketing Div.
Regional Strategic Development Div.
Regional Corporate Offices
Americas (U.S.A.)
Europe (U.K.)
Asia (Singapore)
China
Taiwan
Corporate Productivity Engineering Dept.
Compliance Dept.
Corporate Quality Assurance Planning Dept.
Corporate Environmental Sustainability Group
Corporate Logistics Dept.
Information Technology Center
Design Systems Engineering Center
Manufacturing Engineering Center
Planning & Administration Dept.
Compliance Dept.
Advanced Technology R&D Center
Information Technology R&D Center
Industrial Design Center
Planning & Administration Dept.
Compliance Dept.
Information Systems & Network Service Div.
Planning & Administration Dept.
Compliance Dept.
Engineering Planning Dept.
ITS Business Development Group
Public-Use Systems Marketing Div.
Transportation Systems Div.
Overseas Marketing Div.
Plant Engineering & Construction Div.
Branch Offices
Kobe Works, Itami Works, Nagasaki Works
Planning & Administration Dept.
Compliance Dept.
Engineering Planning Dept.
Nuclear Power Plant Technical Supervisory Office
Transmission & Distribution Systems Marketing Div.
Power & Energy Systems Marketing Div.
Nuclear Energy, Advanced Magnetic & Medical Systems Marketing Div.
Capital Region Marketing Div.
Power Plant Engineering & Construction Center
Branch Offices
Energy Systems Center, Transmission & Distribution Systems Center,
Power Distribution Systems Center
Planning & Administration Dept.
Compliance Dept.
Engineering Planning Dept.
Total Security Systems Dept.
Domestic Marketing Div.
Overseas Marketing Div.
Building Systems Field Operation Div.
Branch Offices
Inazawa Works
Electronic Systems Compliance Dept.
Planning & Administration Dept.
Defense Systems Div.
Space Systems Div.
IT Space Solutions Div.
Branch Offices
Communication Systems Center, Kamakura Works
Planning & Administration Dept.
Compliance Dept.
Communication Systems Engineering Center
Telecommunication Systems Sales & Marketing Div.
Telecommunications Carrier Sales & Marketing Div.
Branch Offices
Communication Networks Center
Planning & Administration Dept.
Compliance Dept.
Engineering Dept.
Branding Strategy Dept.
External Relations Dept.
Customer Satisfaction Promotion Dept.
Marketing & Operations Strategic Planning Dept.
Eco-Facility Systems Marketing Dept.
Air-Conditioning & Refrigeration Systems Div.
Lighting, Ventilation, Housing Systems & PV Systems Div.
Home Appliances & Digital Media Equipment Div.
Living Environment Systems Laboratory
Branch Offices
Nakatsugawa Works, Air-Conditioning & Refrigeration Systems Works,
Shizuoka Works, Kyoto Works, Gunma Works
Planning & Administration Dept.
Compliance Dept.
Industrial Products Marketing Div.
Industrial Automation Marketing Div.
Overseas Marketing Div.
Global Account Management Div.
Branch Offices
Nagoya Works, Fukuyama Works
Planning & Administration Dept.
Automotive Equipment Compliance Dept.
Automotive Equipment Marketing Div.
Automotive Equipment Overseas Marketing Div.
Automotive Electronics Development Center
Branch Offices
Himeji Works, Sanda Works
Planning & Administration Div.
Compliance Dept.
Semiconductor & Device Marketing Div. A
Semiconductor & Device Marketing Div. B
LCD Div.
Branch Offices
Power Device Works, High Frequency & Optical Device Works
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 21
Major Subsidiaries and Affiliates
(As of March 31, 2014)
Manufacturing
Sales/Installation/Services
Comprehensive Sales Companies
Energy and
Electric Systems
Toyo Electric Corporation
Tada Electric Co., Ltd.
Mitsubishi Electric Building Techno-Service Co., Ltd.
Mitsubishi Electric Plant Engineering Corporation
Mitsubishi Electric Power Products, Inc.
Ryoden Elevator Construction, Ltd.
Mitsubishi Electric Shanghai Electric Elevator Co., Ltd.
Mitsubishi Electric Control Software Corporation
Mitsubishi Elevator Asia Co., Ltd.
Ryoko Co., Ltd.
Taiwan Mitsubishi Elevator Co., Ltd.
RYO-SA BUILWARE Co., Ltd.
Toshiba Mitsubishi-Electric Industrial
Systems Corporation
Mitsubishi Elevator Hong Kong Co., Ltd.
Mitsubishi Elevator Korea Co., Ltd.
Mitsubishi Hitachi Home Elevator Corporation
Hitachi Mitsubishi Hydro Corporation
Shanghai Mitsubishi Elevator Co., Ltd.
ETA-Melco Elevator Co. L.L.C.
Industrial
Automation
Systems
DB Seiko Co., Ltd.
Ryowa Corporation
Mitsubishi Electric Automotive America, Inc.
Ryoden Koki Engineering Co., Ltd.
Mitsubishi Electric Thai Auto-Parts Co., Ltd.
Meldas System Engineering Corporation
Mitsubishi Electric Dalian Industrial Products Co., Ltd.
Mitsubishi Electric Mechatronics Software Corporation
Mitsubishi Electric Automotive (China) Co., Ltd.
Mitsubishi Electric Automation (Hong Kong) Ltd.
Mitsubishi Electric Automation, Inc.
Mitsubishi Electric Automation Korea Co., Ltd.
Mitsubishi Electric Automotive Czech s.r.o.
Shizuki Electric Co., Inc.
Nippon Injector Corporation
Shihlin Electric & Engineering Corporation
Setsuyo Astec Corporation
Mitsubishi Electric TOKKI Systems Corporation
Diamond Telecommunication Co., Ltd.
Information and
Communication
Systems
Mitsubishi Precision Co., Ltd.
SPC Electronics Corporation
Seiryo Electric Co., Ltd.
Miyoshi Electronics Corporation
Oi Electric Co., Ltd.
Electronic
Devices
Melco Display Technology Inc.
Melco Power Device Corporation
Mitsubishi Electric Metecs Co., Ltd.
Vincotech Holdings S.à r.l.
Powerex, Inc.
Mitsubishi Electric Information Systems Corporation
Mitsubishi Electric Information Network Corporation
Mitsubishi Electric Information Technology Corporation
Mitsubishi Space Software Co., Ltd.
Mitsubishi Electric Business Systems Co., Ltd.
Mitsubishi Electric Micro-Computer Application
Software Co., Ltd.
Itec Hankyu Hanshin Co., Ltd.
Melco Semiconductor Engineering Corporation
Chiyoda Mitsubishi Electric Co., Ltd. and
other regional comprehensive sales
companies (10 companies)
Mitsubishi Electric Europe B.V.
Mitsubishi Electric US, Inc.
Mitsubishi Electric Taiwan Co., Ltd.
Mitsubishi Electric & Electronics
(Shanghai) Co., Ltd.
Mitsubishi Electric Asia Pte. Ltd.
Mitsubishi Electric Australia Pty. Ltd.
Mitsubishi Electric (H.K.) Ltd.
Ryoden Trading Co., Ltd.
Kanaden Corporation
Mansei Corporation
Home Appliances
Others
Mitsubishi Electric Lighting Corporation
Mitsubishi Electric Home Appliance Co., Ltd.
Mitsubishi Electric Consumer Products
(Thailand) Co., Ltd.
Shanghai Mitsubishi Electric & Shangling
Air-Conditioner and Electric Appliance Co., Ltd.
Mitsubishi Electric (Guangzhou) Compressor Co., Ltd.
Siam Compressor Industry Co., Ltd.
Mitsubishi Electric Air Conditioning Systems Europe Ltd.
Kang Yong Electric Public Co., Ltd.
Mitsubishi Electric Living Environment
Systems Corporation
Mitsubishi Electric Life Network Co., Ltd.
Mitsubishi Electric Air Conditioning &
Refrigeration Equipment Sales Co., Ltd.
Mitsubishi Electric Air Conditioning &
Refrigeration Systems Co., Ltd.
Melco Facilities Corporation
Mitsubishi Electric Kang Yong Watana Co., Ltd.
Mitsubishi Electric Air-Conditioning &
Visual Information Systems (Shanghai) Ltd.
Mitsubishi Electric Trading Corporation
Mitsubishi Electric Engineering Co., Ltd.
Mitsubishi Electric Logistics Corporation
Mitsubishi Electric System & Service Co., Ltd.
The Kodensha Co., Ltd.
Mitsubishi Electric Life Service Corporation
iPLANET Inc.
Melco Trading (Thailand) Co.,Ltd.
Mitsubishi Electric Credit Corporation
KITA KOUDENSHA Corporation
Notes:
1. Comprehensive sales companies include several companies that are responsible for selling products from a number of businesses, and therefore these are placed into their own
separate category rather than grouped by business segment.
2. Companies shaded in gray are consolidated subsidiaries, while others are equity-method affiliate companies.
22 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Financial Section
Contents
24 Five-Year Summary
25 Financial Review
34 Consolidated Balance Sheets
36 Consolidated Statements of Income
36 Consolidated Statements of Comprehensive Income
37 Consolidated Statements of Equity
38 Consolidated Statements of Cash Flows
39 Notes to Consolidated Financial Statements
72
Independent Auditors’ Report
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 23
Five-Year Summary
Mitsubishi Electric Corporation and Subsidiaries
Years ended March 31
2014
2013
2012
2011
2010
Yen (millions)
U.S. dollars
(thousands)
2014
Summary of Operations
Net sales
Cost of sales
Selling, general, administrative
and R&D expenses
Loss on impairment of
long-lived assets
Operating costs
Operating income
Income before income taxes
Net income attributable
¥4,054,359
2,914,589
¥3,567,184
2,604,360
¥3,639,468
2,628,964
¥3,645,331
2,622,959
¥3,353,298
2,505,095
$39,362,709
28,296,981
900,807
806,412
781,278
784,606
736,959
8,745,699
3,791
4,317
3,782
4,005
16,942
36,806
3,819,187
3,415,089
3,414,024
3,411,570
3,258,996
37,079,486
235,172
248,990
152,095
65,141
225,444
224,080
233,761
210,237
94,302
64,259
2,283,223
2,417,379
to Mitsubishi Electric Corp.
¥ 153,473
¥ 69,517
¥ 112,063
¥ 124,525
¥ 28,278
$ 1,490,029
Financial Ratios
Return on sales (%)
Return on equity (%)
Return on assets (%)
Equity ratio (%)
Per-Share Amounts
Net income attributable
to Mitsubishi Electric Corp.
(yen/U.S. dollars)
Basic
Diluted
Cash dividends declared
(yen/U.S. dollars)
Statistical Information
Current assets
Current liabilities
Working capital
Mitsubishi Electric Corp.
shareholders’ equity
Cash dividends paid
Total assets
Capital expenditures
R&D expenditures
Depreciation
Employees
3.79
10.87
4.37
42.19
1.95
5.72
2.04
38.12
3.08
10.27
3.33
33.39
3.42
12.36
3.80
31.52
0.84
3.12
0.86
30.00
—
—
—
—
¥71.49
—
¥32.38
—
¥52.20
—
¥58.00
—
¥13.18
13.18
$0.694
—
¥ 17
¥ 11
¥ 12
¥ 12
¥ 4
$0.165
¥2,290,007
1,494,243
¥2,129,395 ¥2,180,362 ¥2,052,887 ¥1,905,852
1,214,176
1,386,067
1,387,744
1,421,174
$22,233,077
14,507,214
795,764
743,328
792,618
631,713
691,676
7,725,863
1,524,322
25,762
3,612,966
151,840
178,945
¥ 132,956
1,300,070
23,616
3,410,410
150,425
172,222
1,132,465
27,910
3,391,651
159,346
169,686
¥ 127,942 ¥ 127,244
1,050,340
19,315
3,332,679
107,638
151,779
¥ 105,280
964,584
—
3,215,094
109,069
133,781
¥ 119,762
14,799,243
250,117
35,077,340
1,474,175
1,737,330
$ 1,290,835
(at the end of the year)
124,305
120,958
117,314
114,443
109,565
—
Notes: 1. The Company prepares consolidated financial statements with procedures, accounting terms, forms, and preparation that are in conformity with accounting
principles generally accepted in the United States of America based on the rules and regulations applicable in Japan.
2. Operating income is presented as net sales less cost of sales, selling, general, administrative and R&D expenses, and loss on impairment of long-lived assets. Total
operating income for each segment conforms to above mentioned operating income. Business restructuring expenses are shown as non-operating expenses.
3. R&D expenditures include elements spent on quality improvements, which constitute manufacturing costs.
4. U.S. dollar amounts are translated from yen at the rate of ¥103=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2014.
5. The Company has 167 consolidated subsidiaries and 37 equity-method companies as of March 31, 2014.
6. For the years ended March 31, 2014, 2013, 2012 and 2011, data for diluted net income per share attributable to Mitsubishi Electric Corp. is not included in
the above table as no dilutive securities existed.
24 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Financial Review
OVERVIEW
The business environment in the fiscal year ended March 31, 2014 (hereinafter, fiscal 2014) generally showed gradual expansion
in economies outside Japan in addition to recovery in Japan, where corporate sentiments improved due to the weaker yen and
other factors.
Under these circumstances, the Mitsubishi Electric Group placed greater emphasis than ever before on promoting growth
strategies rooted in its own advantages as well as on Group efforts undertaken to date to boost its competitiveness and on
strengthening its business structure.
As a result, in fiscal 2014, the Mitsubishi Electric Group recorded net sales of ¥4,054.3 billion and operating income of
¥235.1 billion. Income before income taxes came to ¥248.9 billion. Net income attributable to Mitsubishi Electric Corporation was
¥153.4 billion for the fiscal year.
Net Sales
The Mitsubishi Electric Group recorded increases in sales in all its business segments,
namely, Energy and Electric Systems, Industrial Automation Systems, Information and
Communication Systems, Electronic Devices, Home Appliances and Others. In the
fiscal year, consolidated net sales climbed by ¥487.1 billion year on year to ¥4,054.3
billion.
Cost of Sales, Expenses and Operating Income
The cost of sales increased by ¥310.2 billion compared with the previous fiscal year
to ¥2,914.5 billion, representing 71.9% of total net sales, an improvement of 1.1
percentage points. Selling, general and administrative (SG&A) expenses together with
research and development (R&D) expenses totaled ¥900.8 billion, up ¥94.3 billion
year on year. As a result, the ratio of SG&A and R&D expenses to net sales improved
by 0.4 of a percentage point year on year to 22.2%. Loss on impairment of long-
lived assets decreased by ¥0.5 billion year on year to ¥3.7 billion.
Accounting for the aforementioned factors, operating income amounted to
¥235.1 billion, an increase of ¥83.0 billion compared with the previous fiscal year.
This increase was primarily attributable to higher income in the Industrial Automation
Systems, Information and Communications Systems, Electronic Devices, Home
Appliances, and Other business segments.
Non-Operating Income and Expenses
Financial income, the sum of interest and dividend income less interest expenses,
amounted to ¥3.2 billion, an improvement of ¥2.0 billion year on year.
Equity in earnings of affiliated companies totaled ¥23.1 billion, an improvement
of ¥37.7 billion compared with the previous fiscal year.
Other income declined by ¥0.8 billion to ¥24.5 billion year on year due primar-
ily to the decrease in gains on the sale of assets. Other expenses fell by ¥61.7 billion
year on year to ¥37.1 billion because of such factors as the absence of non-operating
expenses, including the refund payment for overcharged expenses in the electronic
systems business recorded in the previous fiscal year.
Net sales / Operating income
4.05
233
225
235
3.643.63
3.56
3.35
152
94
10 11 12 13
14
10 11 12 13
14
Net sales
(Yen in trillions)
Operating income
(Yen in billions)
Net income attributable to Mitsubishi Electric Corp. /
Basic net income per share attributable to
Mitsubishi Electric Corp.
153
71.49
124
112
58.00
52.20
69
28
32.38
13.18
10 11 12 13
14
10 11 12 13
14
Net income attributable
to Mitsubishi Electric Corp.
(Yen in billions)
Basic net income per share
attributable to Mitsubishi
Electric Corp. (Yen)
Income before Income Taxes
Income before income taxes increased by ¥183.8 billion compared with the previous fiscal year to ¥248.9 billion, for a ratio to net sales
of 6.1%. As previously mentioned, this is largely attributable to the aforementioned upswing in operating income of ¥83.0 billion and
a ¥100.7 billion improvement in non-operating income and expenses.
Net Income Attributable to Mitsubishi Electric Corp.
Net income attributable to Mitsubishi Electric Corp. grew by ¥83.9 billion year on year to ¥153.4 billion (a ratio to net sales of 3.8%)
largely on the back of the increase in income before income taxes.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 25
Business Risks
The Mitsubishi Electric Group engages in the development, manufacture and sale of products in the Energy and Electric Systems,
Industrial Automation Systems, Information and Communication Systems, Electronic Devices, Home Appliances and Other busi-
ness fields in Japan as well as North America, Europe, Asia and other overseas regions. As a result, the Group’s financial standing
and business performance may be affected by a variety of factors.
Factors that may affect the financial standing and business performance of the Mitsubishi Electric Group include but are not
limited to the following. As such, additional factors may arise at any given time.
(1) Important trends
The Mitsubishi Electric Group’s operations may be affected by trends in the global economy, social conditions, laws, tax
codes and regulations.
(2) Foreign currency exchange rates
Fluctuations in foreign currency markets may affect Mitsubishi Electric’s sales of exported products and purchases of import-
ed materials that are denominated in U.S. dollars or euros, as well as its Asian production bases’ sales of exported products
and purchases of imported materials that are denominated in foreign currencies.
(3) Stock markets
A fall in stock market prices may cause Mitsubishi Electric to record devaluation losses on marketable securities or cause an
increase in retirement benefit obligations in accordance with a decline in the fair value of pension assets.
(4) Supply/demand balance for products and procurement conditions for materials and components
A decline in prices and shipments due to changes in the supply/demand balance as well as an increase in costs due to
a worsening of material and component procurement conditions may adversely affect the Mitsubishi Electric Group’s
performance.
(5) Fund raising
An increase in interest rates, the yen interest rate in particular, would increase Mitsubishi Electric’s interest expenses.
(6) Significant intellectual property matters
Important patent filings, licensing, copyrights and patent-related disputes may adversely affect related businesses.
(7) Environmental legislation or relevant issues
Mitsubishi Electric may incur losses or expenses owing to changes in environmental legislation or the occurrence of envi-
ronmental issues. Such changes in legislation or the occurrence of environmental issues may also affect the Group’s overall
operations, including manufacturing activities.
(8) Flaws or defects in products or services
Mitsubishi Electric may incur losses or expenses relating to flaws or defects in products or services. A decrease in the general
assessment of the quality of Group products and services may also impact overall operations.
(9) Lawsuits and other legal proceedings
Lawsuits and/or other legal proceedings against the Mitsubishi Electric Group may affect its overall operations.
(10) Disruptive changes
Disruptive changes in the technology, development and manufacturing of products using new technology and timing of
market introduction may adversely affect the Mitsubishi Electric Group’s performance.
(11) Business restructuring
The Mitsubishi Electric Group may record losses due to restructuring measures.
(12) Incidents related to information security
The performance of the Mitsubishi Electric Group may be affected by computer virus infections, unauthorized access and
other unpredictable incidents that lead to the loss or leakage of personal information held by the Group or confidential
information regarding the Group’s business such as its technology, sales and other operations.
(13) Natural disasters
The Mitsubishi Electric Group’s operations, particularly manufacturing activities, may be affected by the occurrence of earth-
quakes, typhoons, tsunami, fires and other large-scale disasters.
(14) Other significant factors
The Mitsubishi Electric Group‘s operations may be affected by the outbreak of social or political upheaval due to terrorism,
war, pandemic by new strains of influenza and other diseases, or other factors.
26 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
RESULTS BY BUSINESS SEGMENT
Net Sales by Business Segment
Yen (millions)
U.S. dollars
(thousands)
Years ended March 31
2014
2013
2012
2011
2010
2014
Energy and Electric Systems
Industrial Automation Systems
Information and
Communication Systems
Electronic Devices
Home Appliances
Others
Subtotal
Eliminations
Consolidated total
¥1,180,093
1,098,796
¥1,058,177
927,857
¥1,027,115
978,380
¥1,027,749
927,002
¥1,039,669
733,132
$11,457,214
10,667,922
548,282
194,658
944,351
676,034
4,642,214
(587,855)
¥4,054,359
522,422
164,065
821,298
590,366
4,084,185
(517,001)
¥3,567,184
516,354
200,799
849,274
611,619
4,183,541
(544,073)
¥3,639,468
487,915
175,910
924,478
609,416
4,152,470
(507,139)
¥3,645,331
526,161
138,985
824,679
552,981
3,815,607
(462,309)
¥3,353,298
5,323,126
1,889,884
9,168,456
6,563,437
45,070,039
(5,707,330)
$39,362,709
Operating Income (Loss) by Business Segment
Yen (millions)
U.S. dollars
(thousands)
Years ended March 31
2014
2013
2012
2011
2010
2014
Energy and Electric Systems
Industrial Automation Systems
Information and
Communication Systems
Electronic Devices
Home Appliances
Others
Subtotal
Eliminations
Consolidated total
¥ 76,324
98,079
¥ 85,140
60,592
¥ 84,920
101,192
¥ 83,055
100,089
¥ 74,727
26,138
$ 741,010
952,223
5,529
10,050
52,878
19,801
262,661
(27,489)
¥235,172
1,591
(5,580)
19,300
18,790
179,833
(27,738)
¥152,095
21,312
3,585
22,358
20,348
253,715
(28,271)
¥225,444
13,743
5,901
42,008
14,475
259,271
(25,510)
¥233,761
18,672
(7,141)
4,809
3,204
120,409
(26,107)
¥ 94,302
53,679
97,573
513,379
192,243
2,550,107
(266,884)
$2,283,223
Energy and Electric Systems
The social infrastructure systems business saw increases in both orders and sales
compared to the previous fiscal year due primarily to increases in the public utility
systems business in Japan and the power generation and rolling-stock businesses
outside Japan, in addition to the weaker yen.
The building systems business experienced increases in both orders and sales
compared to the previous fiscal year, owing to growth in elevators and escalators
for new installations and renewals in Japan as well as for new installations overseas
mainly in China, in addition to the weaker yen.
As a result, total sales for this segment increased by 12% from the previous fis-
Net sales and Operating income of
Energy and Electric Systems
1,180
1,0391,0271,027 1,058
74
83 84 85
76
cal year to 1,180.0 billion yen. Operating income decreased by 8.8 billion yen from
10 11 12 13
14
10 11 12 13
14
the previous fiscal year to 76.3 billion yen due primarily to a shift in project portfo-
lio and other factors.
Industrial Automation Systems
The factory automation systems business saw increases in both orders and sales
from the previous fiscal year mainly due to an increase in capital expenditures
relating to smartphone and semiconductor as well as facility replacements by
manufacturers in Japan, in addition to the weaker yen.
The automotive equipment business saw increases in both orders and sales
from the previous fiscal year due primarily to strength in the North American and
Net sales
(Yen in billions)
Operating income
(Yen in billions)
Net sales and Operating income of
Industrial Automation Systems
1,098
978
927
927
733
100 101
98
60
Japanese car sales markets and increased sales in China by Japanese automotive
26
manufacturers, as well as the weaker yen.
As a result, total sales for this segment increased by 18% from the previous
fiscal year to 1,098.7 billion yen. Operating income increased by 37.4 billion yen
from the previous fiscal year to 98.0 billion yen due primarily to an increase in
sales.
10 11 12 13
14
10 11 12 13
14
Net sales
(Yen in billions)
Operating income
(Yen in billions)
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 27
Information and Communication Systems
The telecommunications equipment business saw increases in both orders and
sales from the previous fiscal year owing primarily to an increase in the commu-
nications infrastructures business.
The information systems and services business saw an increase in sales com-
pared to the previous fiscal year mainly due to growth in the system integration
business.
The electronic systems business saw a decrease in orders from the previous
fiscal year due primarily to decreases in large-scale projects in the electronics and
space systems businesses, while sales increased from the previous fiscal year due
to progress in orders already received for projects in the space systems business.
As a result, total sales for this segment increased by 5% from the previous
fiscal year to 548.2 billion yen. Operating income increased by 3.9 billion yen
from the previous fiscal year to 5.5 billion yen due to an increase in sales and
other factors.
Electronic Devices
The semiconductor business saw increases in both orders and sales from the pre-
vious fiscal year due to a growth in demand mainly for power modules used in
consumer, industrial, automotive and railcar applications, as well as the weaker
yen.
The LCD module business saw increases both in orders and sales due to
growth in demand for automotive-use products.
As a result, total sales for this segment increased by 19% from the previous
fiscal year to 194.6 billion yen. Operating income improved by 15.6 billion yen
from the previous fiscal year, turning into a profit 10.0 billion yen, mainly due to
an increase in sales
Home Appliances
The home appliances business saw a 15% increase in sales from the previous fis-
cal year to 944.3 billion yen due primarily to expansion in sales for air condition-
ers in Asian, European and North American markets, as well as increases in air
conditioners and photovoltaic systems in Japan, which experienced a last-minute
surge prior to the consumption tax raise, in addition to the weaker yen.
Operating income rose by 33.5 billion yen from the previous fiscal year to
52.8 billion yen due primarily to an increase in sales.
Others
Sales increased by 15% from the previous fiscal year to 676.0 billion yen. This
Net sales and Operating income of
Information and Communication Systems
526
487
516 522
548
21
18
13
5
1
10 11 12 13
14
10 11 12 13
14
Net sales
(Yen in billions)
Operating income
(Yen in billions)
Net sales and Operating income (loss) of
Electronic Devices
200
194
175
164
138
10
5
3
-7 -7
-5
10 11 12 13
14
10 11 12 13
14
Net sales
(Yen in billions)
Operating income (loss)
(Yen in billions)
Net sales and Operating income of Home Appliances
924
944
824
849
821
52
42
22
19
4
10 11 12 13
14
10 11 12 13
14
Net sales
Operating income
(Yen in billions)
was mainly due to contributions from affiliated companies involved in materials
(Yen in billions)
procurement.
Operating income increased by 1.0 billion yen from the previous fiscal year
to 19.8 billion yen due primarily to an increase in sales.
Net sales and Operating income of Others
676
609
611
552
590
20
19
18
14
3
10 11 12 13
14
10 11 12 13
14
Net sales
(Yen in billions)
Operating income
(Yen in billions)
28 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
RESULTS BY GEOGRAPHIC SEGMENT
Net Sales by Geographic Segment
Yen (millions)
U.S. dollars
(thousands)
Years ended March 31
Japan
North America
Asia (excluding Japan)
Europe
Others
Eliminations
Consolidated total
2014
2013
2012
2011
2010
2014
¥3,362,854
325,224
887,022
352,950
47,824
¥3,064,014
248,105
624,724
289,933
40,255
¥3,186,719
222,543
582,888
309,997
40,184
¥3,176,605
229,958
583,827
293,952
38,200
¥2,886,502
205,713
445,722
282,822
33,140
(921,515)
¥4,054,359
(699,847)
¥3,567,184
(702,863)
¥3,639,468
(677,211)
¥3,645,331
(500,601)
¥3,353,298
$32,649,068
3,157,515
8,611,864
3,426,699
464,311
(8,946,748)
$39,362,709
Operating Income (Loss) by Geographic Segment
Yen (millions)
U.S. dollars
(thousands)
Years ended March 31
Japan
North America
Asia (excluding Japan)
Europe
Others
Eliminations
Consolidated total
2014
2013
2012
2011
2010
2014
¥177,315
1,679
59,023
4,768
1,735
(9,348)
¥235,172
¥116,923
(1,744)
36,172
4,527
2,209
(5,992)
¥152,095
¥179,452
3,339
34,220
6,319
3,905
(1,791)
¥225,444
¥177,354
1,363
43,734
7,830
4,329
(849)
¥233,761
¥49,673
5,531
27,337
3,091
1,949
6,721
¥94,302
$1,721,505
16,301
573,039
46,291
16,844
(90,757)
$2,283,223
Japan
Sales totaled ¥3,362.8 billion, up 10% compared with the previous fiscal year. This largely reflected the upswing in sales in the
factory automation systems, automotive equipment and air conditioners businesses. Operating income increased by ¥60.3 billion
to ¥177.3 billion.
North America
Sales increased by 31% year on year to ¥325.2 billion primarily due to higher sales in the power systems, automotive equipment
and air conditioners businesses. Mitsubishi Electric reported operating income in its operations in North America totaling ¥1.6 bil-
lion. This was an improvement of ¥3.4 billion compared with the previous fiscal year, turning into profit.
Asia (excluding Japan)
Sales totaled ¥887.0 billion, up 42% compared with the previous fiscal year mainly because of higher sales in the building sys-
tems, factory automation systems and air conditioners businesses. Operating income increased by ¥22.8 billion to ¥59.0 billion.
Europe
Sales increased by 22% year on year to ¥352.9 billion mainly because of higher sales in the factory automation systems, automo-
tive equipment and air conditioners businesses. Operating income increased by ¥0.2 billion to ¥4.7 billion.
Others
Sales in other regions, including figures for Mitsubishi Electric’s Australian subsidiary, amounted to ¥47.8 billion, while operating
income was ¥1.7 billion.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 29
RESEARCH AND DEVELOPMENT
R&D Expenditures
Yen (billions)
U.S. dollars
(millions)
Years ended March 31
2014
2013
2012
2011
2010
2014
Energy and Electric Systems
¥ 28.8
¥ 29.8
¥ 30.5
¥ 27.0
¥ 23.4
$ 280.4
Industrial Automation Systems
Information and Communication Systems
Electronic Devices
Home Appliances
Others
Consolidated total
63.4
15.6
9.3
34.1
27.5
58.9
16.4
8.2
30.8
27.7
54.9
16.1
9.3
30.4
28.2
44.9
14.9
8.5
30.7
25.5
34.7
12.5
7.3
29.6
26.1
616.0
151.6
90.6
331.5
267.0
¥178.9
¥172.2
¥169.6
¥151.7
¥133.7
$1,737.3
The Mitsubishi Electric Group actively promotes R&D initiatives that cover fundamental and advanced applications as well as
product commercialization and manufacturing technologies. Carrying out these initiatives are various Group facilities, including
corporate laboratories in Japan and laboratories in the United States and Europe as well as the R&D departments of factories and
consolidated subsidiaries. Moreover, we pursue advanced and wide-ranging R&D activities in partnership with universities and
research institutions both in Japan and overseas.
In fiscal 2014, total R&D expenditures, including quality improvement expenses constituting manufacturing costs, amount-
ed to ¥178.9 billion. Mitsubishi Electric reports R&D activities by business segment according to purpose, type, result and
expenditure.
In the Energy and Electric Systems segment, our research is directed at boosting the competitiveness of such core products
as rotating machines for generators, electric motors and other machinery, switches and transformers; other power transmission/
distribution/reception equipment and systems; transportation systems; elevators and escalators; and particle therapy systems.
Other R&D areas include IT-application systems for supervision and control, power information systems, building management
systems and visual information systems. Notable among Mitsubishi Electric’s recent R&D achievements are traction inverters with
all-SiC power modules for the rolling stocks; Diamond Vision high-resolution technology; movable steps for platform screen
gates; proton-type particle therapy systems; smart meter systems; the addition of large-capacity models to the lineup of standard
elevators AXIEZ; a destination oriented allocation system compatible with double-deck elevators; and enhancements to manage-
ment support functions in building energy management systems. R&D expenditures in this segment totaled ¥28.8 billion.
In the Industrial Automation Systems segment, R&D activities are aimed at enhancing the competitiveness of our lineup,
which includes motors and related products; CNC systems; electrical discharge machines & laser processing machines; FA con-
trol equipment and systems; automotive electric and electronic components, including electric power steering (EPS) and related
products; and car multimedia systems. Mitsubishi Electric’s important R&D successes encompass the Top runner transformers
R-series; the GT27 model of the GOT2000 series of programmable display equipment; the FREQROL-A800 series of general-
purpose inverters; the GTW4 series of laser drilling machines; the HV2-R series of carbon dioxide 2D laser processing machines;
the EMIRAI 2 EV concept car; the DIATONE SOUND.NAVI car audio and navigation system; an electric supercharger for automo-
biles; high power starter for heavy-duty diesel engine; and eco driving assistance
technologies for in-vehicle information system. R&D expenditures in this segment
R&D expenditures
R&D expenditures ratio
totaled ¥63.4 billion.
In the Information and Communication Systems segment, Mitsubishi Electric
pursues research related to the development of information and communication
technology (ICT) systems, which include network systems for telecommunication
operators and network solutions equipment, as well as space systems, includ-
ing satellites, ground systems and large telescopes. Notable R&D successes for
Mitsubishi Electric include the Prime Focus Unit of the Hyper Suprime-Cam (HSC)
newly installed in the Subaru Telescope; 100Gbps digital coherent transponders
for submarine cable systems; 100Gbps WDM transmission systems for metro
networks; IPTV set-top box AM900; high-speed digital watermarking gen-
eration technology for video content delivery; AnalyticMart®*1 on Demand, the
cloud-based data analysis service; NECAROKU 4.0, the recording and delivering
30 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
172 178
169
151
133
4.7
4.8
4.4
4.2
4.0
10 11 12 13
14
10 11 12 13
14
R&D expenditures
(Yen in billions)
R&D expenditures /
Net sales (%)
server for surveillance camera; DIACERT®*2, the electronic certificate issuing service with new encryption algorithms; and ALIVE
SOLUTION®*3 Version 5.0, integrated system for the accounting, personnel and general affairs department. R&D expenditures in
this segment totaled ¥15.6 billion.
In the Electronic Devices segment, our R&D focuses on semiconductor and other electronic devices that are themselves
vital components used in all our business segments. Major R&D achievements include SiC power semiconductor modules; the
super-mini DIPIPM Version 6 series; the J1-Series of power semiconductor modules for automobiles; a 4-wavelength integrated
100Gbps EML-TOSA; a Ku-band 80W GaN HEMT amplifier for satellite earth stations; and TFT-LCD modules with intelligent GUI.
R&D expenditures in this segment totaled ¥9.3 billion.
In the Home Appliances segment, Mitsubishi Electric is engaged in the development of products in such wide-ranging
fields as air conditioning equipment, kitchen appliances, vacuum cleaners, lighting, visual information systems, electronic hous-
ing products and photovoltaic systems. Major R&D achievements include the KIRIGAMINE room air conditioners with Move Eye
Kiwami and Takumi Flap functions; SMART CUBE (Energy conservation & Large capacity); the TC-FXC series Be-K dust bag vac-
uum cleaners (Lightweight & Compact); the LSR6 series red laser backlight LCD TV; the MILCO.S®*4 automated dimming system
for LED lighting; and Mitsubishi HEMS(Home Energy Management System), enable to connect up to seven products. R&D expen-
ditures in this segment totaled ¥34.1 billion.
In Others, fundamental technology R&D that benefits the entire Group is carried out at the Corporate Research and
Development Group and the Corporate Total Productivity Management & Environmental Programs Group research centers, which
strive to enhance global business competitiveness and create new businesses. In our main areas of R&D we have developed micro
glass-processing technology incorporating pulsed CO2 laser; technologies for Smart Grid & Smart Community and its demonstra-
tion system; EV Motor Drive System; HEVC encoder for 8K Super Hi-Vision*5; Ultra-simple Human Machine Interface for in-car
device operation, high-speed algorithms for optimization; brushless DC motor for ventilation fans; and high voltage and high
frequency inverter of laser drilling machine for printed circuit board. R&D expenditures in this area amounted to ¥27.5 billion.
*1. AnalyticMart is a registered trademark of Mitsubishi Electric Information Technology Corporation
*2. DIACERT is a registered trademark of Japan Net Corporation
*3. ALIVE SOLUTION is a registered trademark of Mitsubishi Electric Business Systems Co., Ltd.
*4. MILCO.S is a registered trademark of Mitsubishi Electric Lighting Corporation
*5. Joint development with Japan Broadcasting Corporation
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 31
FINANCIAL POSITION
Total assets amounted to ¥3,612.9 billion as of March 31, 2014, an increase of
Interest-bearing debt
Debt ratio
¥202.5 billion compared with the end of previous fiscal year. The change in the
balance of total assets is mainly attributable to increases of ¥119.1 billion in cash
and cash equivalents; ¥71.7 billion in investments in securities and other on the
back of such factors as the upswing in share prices; ¥46.3 billion in tangible fixed
537
542
540
484
assets; ¥11.6 billion in inventories; and ¥11.2 billion in trade receivables and
373
16.7 16.0 15.9
14.5
10.3
long-term trade receivables.
Under liabilities, the outstanding balance of debt and corporate bonds fell
by ¥167.0 billion compared with the end of the previous fiscal year to ¥373.4
billion. As a result, the ratio of interest-bearing debt to total assets was 10.3%,
a decrease of 5.6 percentage points year on year. While trade payables and
accrued expenses increased by ¥106.1 billion and ¥44.5 billion, respectively,
retirement and severance benefits fell by ¥42.3 billion largely because of an
increase in pension plan assets caused by higher share prices. As a result of these
and other factors, total liabilities dropped by ¥30.8 billion to ¥2,012.6 billion.
Mitsubishi Electric Corp. shareholders’ equity rose by ¥224.2 billion com-
pared with the end of previous fiscal year to ¥1,524.3 billion and the ratio of
Mitsubishi Electric Corp. shareholders’ equity to total assets was 42.2%, up 4.1
10 11 12 13
14
10 11 12 13
14
Interest-bearing debt
(Yen in billions)
Interest-bearing debt /
Total assets (%)
Total assets /
Mitsubishi Electric Corp.
shareholders’ equity
Shareholders’
equity ratio
percentage points year on year. Despite the decrease attributable to the payment
of cash dividends totaling ¥25.7 billion, this increase was largely the result of the
3,332
3,215
3,3913,410
3,612
42.2
38.1
net income attributable to Mitsubishi Electric Corp. amounting to ¥153.4 billion
for the fiscal year and the increase in accumulated other comprehensive income
of ¥95.4 billion reflecting such factors as the upswing in share prices and weak
yen.
33.4
31.5
30.0
1,524
1,300
1,132
1,050
964
10 11 12 13
14
10 11 12 13
14
Total assets
(Yen in billions)
Mitsubishi Electric Corp.
shareholders’ equity
(Yen in billions)
Shareholders’ equity ratio
(%)
32 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
CAPITAL EXPENDITURES
In line with its policy of improving performance by implementing the Balanced
Capital expenditures
Depreciation
Corporate Management Policy while pursuing further growth, the Mitsubishi
Electric Group aims to realize its growth strategies as it increases profitability. To
that end, the Group directed its capital investment mainly toward the areas of
energy and electric systems, factory automation equipment, automotive products,
power devices and air conditioning equipment. At the same time the Group con-
tinued to reinforce its solid business platform through the careful selection and
concentration of investments.
On an individual business segment basis, investments were made in Energy
and Electric Systems (including power systems, electric equipment for rolling stock
and elevators/escalators) aimed at increasing production capacity, streamlining and
enhancing quality. In Industrial Automation, capital expenditures were used primar-
ily for boosting production capacity for factory automation systems and automo-
tive equipment operations. In Information and Communication Systems, funds
159
150
151
127
127
132
119
105
109
107
10 11 12 13
14
10 11 12 13
14
Capital expenditures
(Yen in billions)
Depreciation
(Yen in billions)
were appropriated for bolstering research and development capabilities, while in Electronic Devices, Mitsubishi Electric directed
investment mainly toward augmenting production in the power device business. In Home Appliances, expenditures focused largely
on increasing the air conditioners production capacity, streamlining operations and enhancing quality. In Common and Others,
investments mainly went toward boosting research and development capabilities.
Capital expenditures are derived from cash on hand and funds from operations. For this fiscal year, production capacity was not
materially affected by the sale, disposal, damage or loss due to natural disaster of property, plant and equipment.
CASH FLOWS
In the year ended March 31, 2014, net cash provided by operating activities
Cash flows
amounted to ¥440.4 billion, while net cash used in investing activities was
¥130.2 billion. As a result, free cash flow was an inflow of ¥310.2 billion, a posi-
tive turnaround of ¥381.2 billion from the outflow recorded in the previous fis-
330
327
cal year. Taking this into account along with net cash used in financing activities
of ¥209.0 billion, the end of fiscal year cash and cash equivalents amounted to
75
82
440
310
195182
¥418.0 billion, an increase of ¥119.1 billion year on year.
Net cash provided by operating activities increased by ¥357.7 billion com-
pared with the previous fiscal year to ¥440.4 billion. This increase was largely
due to higher net income and deferred income taxes as well as an increase in
trade payables.
-134
-145
-156
-153
-130
-80 -70
10 11 12 13
14
10 11 12 13
14
Net cash used in investing activities decreased by ¥23.4 billion year on year
to ¥130.2 billion. During the period, proceeds from sale of short-term invest-
ments and investment securities increased while loans receivable decreased.
Net cash used in financing activities was ¥209.0 billion, up ¥167.8 billion
Net cash provided by
operating activities
(Yen in billions)
Net cash used in investing
activities (Yen in billions)
Free cash flows
(Yen in billions)
year on year. This largely represented the repayment of long-term debt.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 33
Consolidated Balance Sheets
Mitsubishi Electric Corporation and Subsidiaries
March 31, 2014 and 2013
Assets
Current assets:
2014
Yen (millions)
2013
U.S. dollars
(thousands)
(note 2)
2014
Cash and cash equivalents
¥ 418,049
¥ 298,881
$ 4,058,728
Short-term investments (notes 3, 17 and 18)
Trade receivables (notes 4, 6 and 15)
Inventories (note 5)
Prepaid expenses and other current
assets (notes 9, 14 and 18)
Total current assets
51
983,468
602,341
812
974,505
590,735
495
9,548,233
5,847,971
286,098
279,327
2,290,007
2,129,395
2,777,650
22,233,077
Long-term receivables and investments:
Long-term trade receivables (note 17)
Investments in securities and other (notes 3, 6, 14, 17 and 18)
Investments in and advances to affiliated
companies (note 6)
Total long-term receivables and investments
4,813
314,047
183,463
502,323
2,521
242,271
181,285
426,077
46,728
3,049,000
1,781,194
4,876,922
Property, plant and equipment (notes 7, 18, 19 and 20):
Land
Buildings
Machinery and equipment
Construction in progress
Less accumulated depreciation
Net property, plant and equipment
104,272
703,223
105,449
659,411
1,712,632
1,637,682
54,632
2,574,759
1,925,374
649,385
50,813
2,453,355
1,850,355
603,000
1,012,350
6,827,407
16,627,495
530,408
24,997,660
18,692,951
6,304,709
Other assets (notes 9, 10 and 18)
171,251
251,938
1,662,632
Total assets
¥3,612,966
¥3,410,410
$35,077,340
See accompanying notes to consolidated financial statements.
34 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Liabilities and Equity
Current liabilities:
Bank loans (note 7)
Current portion of long-term debt (notes 7, 17 and 20)
Trade payables (notes 6 and 8)
Accrued expenses (note 16)
Accrued income taxes (note 9)
Other current liabilities (notes 10, 14 and 18)
2014
Yen (millions)
2013
U.S. dollars
(thousands)
(note 2)
2014
¥ 60,275
¥ 131,837
$ 585,194
101,777
758,913
337,571
17,151
218,556
103,081
652,718
292,990
11,919
193,522
988,126
7,368,087
3,277,388
166,515
2,121,904
Total current liabilities
1,494,243
1,386,067
14,507,214
Long-term debt (notes 7, 17 and 20)
Retirement and severance benefits (note 10)
Other liabilities (notes 9, 14, 16 and 18)
211,426
212,638
94,308
305,654
254,977
96,721
2,052,680
2,064,447
915,611
Total liabilities
2,012,615
2,043,419
19,539,952
Mitsubishi Electric Corp. shareholders’ equity
Common stock (note 11):
Authorized 8,000,000,000 shares;
issued 2,147,201,551 shares in 2014 and in 2013
Capital surplus (note 11)
Legal reserve
Retained earnings
Accumulated other comprehensive
175,820
207,089
62,739
1,076,999
175,820
205,945
61,406
950,621
1,706,990
2,010,573
609,117
10,456,301
income (loss) (notes 3, 9, 10, 12 and 14)
1,957
(93,487)
19,000
Treasury stock, at cost
348,999 shares in 2014 and
306,490 shares in 2013
(282)
(235)
(2,738)
Total Mitsubishi Electric Corp. shareholders’ equity
1,524,322
1,300,070
14,799,243
Noncontrolling interests
Total equity
76,029
66,921
1,600,351
1,366,991
738,145
15,537,388
Commitments and contingent liabilities (note 16)
Total liabilities and equity
¥3,612,966
¥3,410,410
$35,077,340
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 35
Consolidated Statements of Income
Mitsubishi Electric Corporation and Subsidiaries
Years ended March 31, 2014, 2013 and 2012
Revenues:
Net sales (note 6)
Interest and dividends (note 6)
Equity in earnings of affiliated companies (note 6)
Other (notes 3, 12, 14 and 19)
Total revenues
Costs and expenses:
Cost of sales (notes 10 and 20)
Selling, general and administrative (notes 10, 19 and 20)
Research and development
Loss on impairment of long-lived assets (notes 18 and 19)
Interest
Equity in losses of affiliated companies (note 6)
Other (notes 3, 6, 12, 14, 15, 16 and 19)
Total costs and expenses
2014
2013
Yen (millions)
2012
¥4,054,359
7,799
23,153
24,554
4,109,865
¥3,567,184
7,742
—
25,361
3,600,287
¥3,639,468
8,332
—
22,196
3,669,996
2,914,589
737,042
163,765
3,791
4,539
—
37,149
3,860,875
2,604,360
648,890
157,522
4,317
6,507
14,619
98,931
3,535,146
2,628,964
625,283
155,995
3,782
6,818
3,366
21,708
3,445,916
U.S. dollars
(thousands)
(note 2)
2014
$39,362,709
75,718
224,786
238,389
39,901,602
28,296,981
7,155,748
1,589,951
36,806
44,068
—
360,669
37,484,223
Income before income taxes
248,990
65,141
224,080
2,417,379
Income taxes (note 9):
Current
Deferred
34,241
51,957
86,198
23,490
(32,999)
(9,509)
42,187
63,628
105,815
332,437
504,437
836,874
Net income
162,792
74,650
118,265
1,580,505
Net income attributable to noncontrolling interests
9,319
5,133
6,202
90,476
Net income attributable to Mitsubishi Electric Corp.
¥ 153,473
¥ 69,517
¥ 112,063
$ 1,490,029
Net income per share attributable to Mitsubishi Electric Corp. (note 13):
Basic
Diluted
See accompanying notes to consolidated financial statements.
¥71.49
—
¥32.38
—
Yen
¥52.20
—
U.S. dollars
(note 2)
$0.694
—
Consolidated Statements of Comprehensive Income
Mitsubishi Electric Corporation and Subsidiaries
Years ended March 31, 2014, 2013 and 2012
Net income
Other comprehensive income (loss),
net of tax (note 12):
Foreign currency translation adjustments
Pension liability adjustments (note 10)
Unrealized gains (losses) on securities (note 3)
Unrealized gains (losses) on derivative instruments (note 14)
Total
2014
¥162,792
2013
¥ 74,650
Yen (millions)
2012
¥118,265
U.S. dollars
(thousands)
(note 2)
2014
$1,580,505
51,769
(6,756)
55,556
(80)
100,489
66,592
47,633
14,845
43
129,113
(8,843)
2,234
6,298
54
(257)
502,612
(65,593)
539,379
(777)
975,621
Comprehensive income
263,281
203,763
118,008
2,556,126
Comprehensive income attributable to
noncontrolling interests
Comprehensive income attributable to
Mitsubishi Electric Corp.
See accompanying notes to consolidated financial statements.
14,364
12,130
5,629
139,456
¥248,917
¥191,633
¥112,379
$2,416,670
36 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Consolidated Statements of Equity
Mitsubishi Electric Corporation and Subsidiaries
Years ended March 31, 2014, 2013 and 2012
Balance at March 31, 2011
Comprehensive income (loss):
Net income attributable to Mitsubishi Electric Corp.
Net income attributable to noncontrolling interests
Other comprehensive income (loss), net of tax (note 12):
Foreign currency translation adjustments
Pension liability adjustments (note 10)
Unrealized gains (losses) on securities (note 3)
Unrealized gains (losses) on derivative instruments
(note 14)
Transfer to legal reserve
Equity transactions with noncontrolling interests
and other
Dividends paid to Mitsubishi Electric Corp.
shareholders’ equity
Purchase of treasury stock
Reissuance of treasury stock
Balance at March 31, 2012
Comprehensive income (loss):
Net income attributable to Mitsubishi Electric Corp.
Net income attributable to noncontrolling interests
Other comprehensive income (loss), net of tax (note 12):
Foreign currency translation adjustments
Pension liability adjustments (note 10)
Unrealized gains (losses) on securities (note 3)
Unrealized gains (losses) on derivative instruments
(note 14)
Transfer to legal reserve
Equity transactions with noncontrolling interests
and other
Dividends paid to Mitsubishi Electric Corp.
shareholders’ equity
Purchase of treasury stock
Reissuance of treasury stock
Balance at March 31, 2013
Comprehensive income (loss):
Net income attributable to Mitsubishi Electric Corp.
Net income attributable to noncontrolling interests
Other comprehensive income (loss), net of tax (note 12):
Foreign currency translation adjustments
Pension liability adjustments (note 10)
Unrealized gains (losses) on securities (note 3)
Unrealized gains (losses) on derivative instruments
(note 14)
Transfer to legal reserve
Equity transactions with noncontrolling interests
and other
Dividends paid to Mitsubishi Electric Corp.
shareholders’ equity
Purchase of treasury stock
Reissuance of treasury stock
Balance at March 31, 2014
Balance at March 31, 2013
Comprehensive income (loss):
Net income attributable to Mitsubishi Electric Corp.
Net income attributable to noncontrolling interests
Other comprehensive income (loss), net of tax (note 12):
Foreign currency translation adjustments
Pension liability adjustments (note 10)
Unrealized gains (losses) on securities (note 3)
Unrealized gains (losses) on derivative instruments
(note 14)
Transfer to legal reserve
Equity transactions with noncontrolling interests
and other
Dividends paid to Mitsubishi Electric Corp.
shareholders’ equity
Purchase of treasury stock
Reissuance of treasury stock
Balance at March 31, 2014
Common
stock
Legal
reserve
¥175,820 ¥208,669 ¥59,223
Capital
surplus
Retained
earnings
¥822,750
112,063
Accumulated
other
comprehensive
income (loss)
¥(215,919)
Total Mitsubishi
Electric Corp.
shareholders’
equity
¥ (203) ¥1,050,340
Treasury
stock
Non-
controlling
interests
Total
equity
¥56,685 ¥1,109,025
Yen (millions)
(8,254)
2,234
6,285
51
1, 817
(1,817)
112,063
(8,254)
2,234
6,285
51
112,379
—
6,202
(589)
13
3
5,629
112,063
6,202
(8,843)
2,234
6,298
54
118,008
—
(2,326)
(2,326)
(5,759)
(8,085)
(27,910)
¥175,820 ¥206,343 ¥61,040
¥905,086
¥(215,603)
69,517
59,631
47,633
14,803
49
366
(366)
(27,910)
(20)
2
¥ (221) ¥1,132,465
(20)
2
(27,910)
(20)
2
¥58,555 ¥1,191,020
69,517
59,631
47,633
14,803
49
191,633
—
5,133
6,961
42
(6)
12,130
69,517
5,133
66,592
47,633
14,845
43
203,763
—
(398)
(398)
(3,764)
(4,162)
(23,616)
¥175,820 ¥205,945 ¥61,406 ¥ 950,621
¥ (93,487)
153,473
46,675
(6,756)
55,591
(66)
1, 333
(1,333)
(23,616)
(16)
2
¥ (235) ¥1,300,070
(16)
2
(23,616)
(16)
2
¥66,921 ¥1,366,991
153,473
46,675
(6,756)
55,591
(66)
248,917
—
9,319
5,094
(35)
(14)
14,364
153,473
9,319
51,769
(6,756)
55,556
(80)
263,281
—
1.144
1,144
(5,256)
(4,112)
(25,762)
¥175,820
¥207,089 ¥62,739 ¥1,076,999
¥ 1,957
(25,762)
(48)
1
¥ (282) ¥1,524,322
(48)
1
(25,762)
(48)
1
¥76,029 ¥1,600,351
U.S. dollars (thousands) (note 2)
Accumulated
other
comprehensive
income (loss)
$(907,641)
453,157
(65,593)
539,718
(641)
Common
stock
Retained
earnings
$1,706,990 $1,999,466 $596,175 $ 9,229,331
Capital
surplus
Legal
reserve
1,490,029
12,942
(12,942)
11,107
(250,117)
$1,706,990 $2,010,573 $609,117 $10,456,301
$ 19,000
Total Mitsubishi
Electric Corp.
shareholders’
equity
Non-
controlling
interests
Treasury
stock
Total
equity
$(2,282) $12,622,039 $649,718 $13,271,757
1,490,029
453,157
(65,593)
539,718
(641)
2,416,670
—
90,476
49,455
(339)
(136)
139,456
1,490,029
90,476
502,612
(65,593)
539,379
(777)
2,556,126
—
11,107
(51,029)
(39,922)
(250,117)
(466)
10
$(2,738) $14,799,243 $738,145 $15,537,388
(250,117)
(466)
10
(466)
10
See accompanying notes to consolidated financial statements.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 37
Consolidated Statements of Cash Flows
Mitsubishi Electric Corporation and Subsidiaries
Years ended March 31, 2014, 2013 and 2012
2014
2013
Yen (millions)
2012
U.S. dollars
(thousands)
(note 2)
2014
¥ 162,792
¥ 74,650
¥ 118,265
$ 1,580,505
132,956
127,942
127,244
1,290,835
3,627
4,014
3,367
35,214
67
51,957
1,108
607
(23,153)
14,812
18,141
(12,580)
83,179
(10,756)
21,494
(3,764)
440,487
(296)
(32,999)
(2,480)
4,828
14,619
(49)
16,706
(21,241)
(62,549)
(63,638)
16,787
6,458
82,752
834
63,628
(1,682)
6,961
3,366
(166,091)
(55,737)
(17,553)
9,113
(61,108)
(7,311)
51,884
75,180
650
504,437
10,757
5,893
(224,786)
143,806
176,126
(122,136)
807,563
(104,427)
208,680
(36,544)
4,276,573
(151,840)
(150,425)
(159,346)
(1,474,174)
4,930
4,792
5,085
47,864
(21,312)
(13,036)
(11,766)
(206,913)
44,134
1,882
(8,015)
(130,221)
193
(105,445)
(73,266)
(25,762)
(48)
1
(4,694)
29,088
(14,398)
(9,722)
(153,701)
57,003
(90,786)
19,237
(23,616)
(16)
2
(2,977)
15,961
90
(6,198)
(156,174)
138,283
(139,775)
46,630
(27,910)
(20)
2
(10,182)
428,485
18,272
(77,816)
(1,264,282)
1,874
(1,023,738)
(711,320)
(250,117)
(466)
10
(45,573)
(209,021)
(41,153)
7,028
(2,029,330)
17,923
119,168
298,881
¥ 418,049
18,802
(93,300)
392,181
¥ 298,881
(5,920)
(79,886)
472,067
¥ 392,181
174,010
1,156,971
2,901,757
$ 4,058,728
Cash flows from operating activities:
Net income
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation
Impairment losses of property, plant and
equipment
Loss (gain) from sales and disposal of
property, plant and equipment, net
Deferred income taxes
Loss (gain) from sales of securities and
other, net
Devaluation losses of securities and other, net
Equity in losses (earnings) of affiliated companies
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in trade payables
Increase (decrease) in accrued expenses and
retirement and severance benefits
Increase (decrease) in other liabilities
Other, net
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditure
Proceeds from sale of property,
plant and equipment
Purchase of short-term investments
and investment securities
Proceeds from sale of short-term
investments and investment securities
Decrease (increase) in loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from long-term debt
Repayment of long-term debt
Increase (decrease) in short-term debt, net
Dividends paid
Purchase of treasury stock
Reissuance of treasury stock
Other, net
Net cash provided by (used in)
financing activities
Effect of exchange rate changes on
cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See accompanying notes to consolidated financial statements.
38 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Notes to Consolidated Financial Statements
Mitsubishi Electric Corporation and Subsidiaries
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Description of Business
Mitsubishi Electric Corporation (the “Company”) is a multina-
tional organization which develops, manufactures, sells and
distributes a broad range of electrical and electronic equip-
The Company evaluates Variable Interest Entities (VIEs)
whether it has a controlling financial interest in an entity
through means other than voting rights and whether it should
consolidate the entity as the primary beneficiary when the
ments in the fields as diverse as home appliances and space
Company has a controlling financial interest.
electronics.
The Company and its subsidiaries’ principal lines of
business are: (1) Energy and Electric Systems, (2) Industrial
Automation Systems, (3) Information and Communication
Systems, (4) Electronic Devices, (5) Home Appliances and (6)
Others.
Each line’s sales as a percentage of total consolidated
sales, before elimination of internal sales, for the year ended
March 31, 2014 are as follows: Energy and Electric Systems
– 25%, Industrial Automation Systems – 24%, Information
and Communication Systems – 12%, Electronic Devices – 4%,
Home Appliances – 20% and Others – 15%.
Majority of the operations of the Company and its sub-
sidiaries is mainly conducted in Japan. Net sales for the year
ended March 31, 2014 comprises of the following geo-
graphical locations: Japan – 61%, North America – 8%, Asia
(excluding Japan) – 20%, Europe – 9% and Others – 2%.
Our manufacturing operations are conducted principally
at the Parent company with 22 manufacturing sites located in
Japan as well as overseas manufacturing sites located in the
United States, United Kingdom, Thailand, Malaysia, China and
other countries.
(b) Basis of Presentation
The Company and its subsidiaries maintain their books of
account in conformity with financial accounting standards in
the countries of their domicile.
The Company prepares the consolidated financial state-
ments with reflecting the adjustments which are considered
necessary to conform with accounting principles generally
accepted in the United States of America.
(c) Consolidation
The Company prepares the consolidated financial statements
including the accounts of the parent company and those
of its majority-owned subsidiaries, whether directly or indi-
rectly controlled. All significant intercompany transactions,
accounts, and unrealized gains or losses have been eliminated.
Investments in corporate joint ventures and affiliated
companies with the ownership interest of 20% to 50%, in
which the Company does not have control, but has the abil-
ity to exercise significant influence, are accounted for by the
equity method of accounting. Investments of less than 20%
or on which the Company does not have significant influence
are accounted for by the cost method.
(d) Use of Estimates
The Company makes estimates and assumptions to prepare
the consolidated financial statements in conformity with
generally accepted accounting principles, and those estimates
and assumptions affect the reported amounts of assets and
liabilities as well as the disclosed amounts of contingent assets
and liabilities at the date of the consolidated financial state-
ments and the reported amounts of revenues and expenses
during the reporting period. Significant items subject to such
estimates and assumptions include valuation allowances for
receivables, inventories and deferred tax assets; the carrying
amount of property, plant and equipment; and assets and
obligations related to employee benefits. Actual results could
differ from those estimates.
(e) Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with
original maturities of three months or less to be cash equiva-
lents for the consolidated cash flow statements.
(f) Short-Term Investments and Investment Securities
The Company classifies investments in debt and equity secu-
rities into trading, available-for-sale, or held-to-maturity
securities.
Trading securities are bought and held principally for
the purpose of selling them in the near term. Held-to-
maturity securities are those securities which the Company
has the ability and intent to hold until maturity. All securities
not included in trading or held-to-maturity are classified as
available-for-sale.
Trading and available-for-sale securities are recorded at
fair value. Held-to-maturity securities are recorded at amor-
tized cost, adjusted for the amortization or accretion of pre-
miums or discounts. Unrealized holding gains and losses on
trading securities are included in earnings. Unrealized holding
gains and losses, net of the related tax effect, on available-for-
sale securities are excluded from earnings and are reported as
a separate component of other comprehensive income (loss)
until realized. Realized gains or losses from the sale of securi-
ties are determined on the average cost of the particular secu-
rity held at the time of sale.
A decline in the fair value of any available-for-sale security
below costs that is other-than-temporary results in a reduction
in carrying amount to the fair value, which becomes the new
cost basis for the security.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 39
To determine whether an impairment of equity security
is other-than-temporary, the Company considers whether it
(k) Income Taxes
The Company recognizes deferred tax assets and liabilities
has the ability and intent to hold the security until a market
for the future tax consequences attributable to differences
price recovery and considers whether evidence indicating
between the financial statement carrying amounts of existing
the market price of the security is recoverable to the carrying
assets and liabilities and their respective tax basis, operating
amount outweighs the counter evidence. Evidence considered
loss and tax credit carryforwards. Deferred tax assets and
in this assessment includes the reasons for the impairment,
liabilities are measured using enacted tax rates expected to
the severity and duration of the impairment, changes in value
apply to taxable income in the years in which the temporary
subsequent to year-end, and forecasted performance of the
differences are expected to be recovered or settled. The effect
investee.
on deferred tax assets and liabilities of a change in tax rates
To determine whether an impairment of debt security is
is recognized in income in the period that includes the enact-
other-than-temporary, the Company considers whether it has
ment date.
the intent to sell the equity investment and more likely than
Valuation allowances are established to reduce deferred
not that the Company is required to sell until a market price
tax assets to their net realizable value if it is more likely than
of the investment is recoverable to the amortized cost.
not that some portion or all of the deferred tax asset will not
Other investments are stated at cost. The Company rec-
be realized.
ognizes a loss when there is other-than-temporary decline in
The Company recognizes the financial statement effects
value of other investments, using the same policy as described
of unrecognized tax benefits only if those positions are more
above for available-for-sale security impairments.
likely than not of being sustained.
(g) Allowance for Doubtful Receivables
The Company records an allowance for doubtful receivables
(l) Product Warranties
The Company generally offers warranties on its products
based on credit loss history and evaluation of specific doubtful
against certain manufacturing and other defects for the spe-
receivables.
(h) Inventories
In work-in-process, the Company records the ordered prod-
ucts at the acquisition cost and the regular purchased prod-
ucts at the average production costs. Those products are
cific periods of time and/or usage of the product depending
on the nature of the product, the geographic location of its
sale and other factors. The Company recognizes accrued war-
ranty costs based primarily on historical experience of actual
warranty claims as well as current information on repair costs.
recorded at the lower of cost or market. Net costs in excess
of billings on long-term contracts are included in inventories.
(m) Retirement and Severance Benefits
The Company recognizes the funded status (i.e., the differ-
Raw material and finished product inventories are gener-
ence between the fair value of plan assets and the projected
ally recorded using the average-cost method, and evaluated
benefit obligations) of its pension plans in the consolidated
at the lower of cost or market. In accordance with the general
balance sheet at the end of the year, and records the cor-
practice in the heavy electrical industry, inventories related to
responding amount to accumulated other comprehensive
Energy and Electric Systems include items with long manufac-
income (loss), net of tax. The adjustment items for accumulat-
turing periods which are not realizable within one year.
ed other comprehensive income (loss) are unrecognized prior
(i) Property, Plant and Equipment
The Company records property, plant and equipment at cost.
Depreciation of property, plant and equipment is generally cal-
service cost and unrecognized net gain or loss. The amounts
of these adjustments are recognized as net periodic pension
cost in future years.
culated by the declining-balance method, except for certain
assets which are depreciated by the straight-line method, over
(n) Revenue Recognition
The Company recognizes revenue when persuasive evidence
the estimated useful life of the assets according to general
of an arrangement including title transfer exists, delivery has
class, type of construction, and use of these assets.
occurred, the sales price is fixed or determinable, and collect-
The estimated useful life of buildings is 3 to 50 years,
ibility is probable. These criteria are met for mass-merchandis-
while machinery and equipment is 2 to 20 years.
ing products such as consumer products and semiconductors
(j) Leases
The Company records capital leases at the inception of the
lease at the lower of the discounted present value of future
minimum lease payments or the fair value of the leased
assets. The amortization of the leased assets is calculated in
accordance with the Company’s normal depreciation policy.
at the time when the product is received by the customer,
and for products with acceptance provisions such as heavy
machinery and industrial products at the time when the prod-
uct is received by the customer and the specific criteria of the
product are demonstrated by the Company with only certain
inconsequential or perfunctory work left to be performed
40 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
by the customer. Revenue from maintenance agreements is
recognized over the contract term when the maintenance is
(s) Derivatives
The Company recognizes all derivatives as either assets or lia-
provided and the cost is incurred. Also, the Company applies
bilities in the consolidated financial statements and measures
the percentage of completion method for long-term con-
them at fair value. For derivatives designated as fair value
struction contracts. The Company measures the percentage
hedges, changes in fair value of the hedged item and the
of completion by comparing expenses recognized through
derivative are recognized in current earnings. For derivatives
the current year to the aggregate amount of estimated cost.
designated as cash flow hedges, fair value changes of the
Any anticipated losses on fixed price contracts are charged
effective portion of the hedging instruments are recognized as
to operations when such losses can be estimated. Provisions
a component of other comprehensive income (loss) until the
are made for contingencies in the period when they become
hedged item is recognized in earnings. The ineffective portion
known pursuant to specific contract terms and conditions and
of all hedges is recognized in earnings immediately.
are estimable.
The Company discloses the use and purpose of derivative
For the contract which may consists of any combination
instruments, accounting for derivative instruments and related
of products, equipment, installation and maintenance, rev-
hedged items. The Company also discloses the effects on the
enue is allocated to each accounting unit based on its relative
entity’s financial position, results of operations, and cash flows
fair value, when each deliverable is accounted for separate
by the derivative instruments and hedging activities
accounting unit.
(o) Research and Development and Advertising
The Company accounts for the costs of research and devel-
(t) Securitizations
The Company accounts for the securitization of the accounts
receivables as a sale, if it is determined based on the
opment and advertising as expense when those costs are
Company’s evaluation that it has surrendered control over the
incurred.
transferred receivables.
(p) Shipping and Handling Costs
The Company records shipping and handling costs mainly as
selling, general and administrative expenses.
(q) Net Income per Share
The Company calculates basic net income per share attribut-
able to Mitsubishi Electric Corp. divided net income attribut-
able to Mitsubishi Electric Corp. by the weighted-average
number of common shares outstanding during each year.
Diluted net income per share attributable to Mitsubishi Electric
Corp. reflects the potential dilution and is calculated on the
basis that dilutive securities were converted at the beginning
of the year or at time of issuance (if later), and that dilutive
stock option were exercised (less the number of treasury stock
assumed to be purchased from the proceeds using the aver-
age market price of the Company’s common stock).
(r) Foreign Currency Translation
The Company translates receivables and payables in foreign
currency at the prevailing rates of exchange at the balance
sheet date. Gains and losses resulting from translation of
receivables and payables are recognized in current earnings.
Assets and liabilities of the Company’s overseas consolidating
subsidiaries are translated into Japanese yen at the prevail-
ing rates of exchange at the balance sheet date. Income and
expense items are translated at the average exchange rate
prevailing during the year. Gains and losses resulting from
translation of financial statements are recognized as foreign
currency translation adjustments in other comprehensive
income (loss).
Accordingly, the receivables sold under these facilities
are excluded from Trade receivables in the accompanying
consolidated balance sheets. Gain or loss on sale of receiv-
ables is calculated based on the allocated carrying amount of
the receivables sold. When a portion of accounts receivables
is transferred, the participating interest that continues to be
held is recorded at the allocated carrying amount of the assets
based on their relative fair values at the date of the transfer.
The Company estimates fair value based on the present value
of future expected cash flows less credit losses.
(u) Impairment of Long-Lived Assets
The Company reviews for impairment of long-lived assets
such as property, plant, and equipment and purchased intan-
gibles subject to amortization, to be held and used whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of
the carrying amount of an asset to estimated undiscounted
future cash flows expected to be generated by the asset. If
the carrying amount of an asset exceeds its estimated future
cash flows, an impairment loss is recognized by the amount
by which the carrying amount of the asset exceeds the fair
value of the asset. Long-lived assets to be disposed of other
than sale continue to be classified as held and used until they
are disposed.
Long-lived assets classified as held-for-sale are separately
presented in the balance sheet and reported at the lower of
the carrying amount or fair value less costs to sell, and are
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 41
no longer depreciated. The assets and liabilities of a disposed
group classified as held-for-sale are presented separately in
(z) Reclassifications
The Company has made certain reclassifications of the previ-
the appropriate asset and liability sections of the consolidated
ous fiscal years’ consolidated financial statements to conform
balance sheets.
to the presentation used for the year ended March 31, 2014.
(v) Goodwill and Other Intangible Assets
The Company accounts for business combinations using the
(aa) Future Application of New Accounting Standards
In March 2013, the Financial Accounting Standards Board
acquisition method. The Company recognizes at fair value the
(FASB) issued Accounting Standards Updates (ASU) 2013-
assets acquired, the liabilities assumed, any noncontrolling
05 "Parent's Accounting for the Cumulative Translation
interests in the acquiree, and acquired goodwill at the acquisi-
Adjustment upon Derecognition of Certain Subsidiaries or
tion date. The Company discloses the nature of business com-
Groups of Assets within a Foreign Entity or of an Investment
bination to enable the readers to evaluate the effects of such
in a Foreign Entity (a consensus of the FASB Emerging Issues
transaction on the consolidated financial statements.
Task Force)" (An Amendment of Accounting Standards
The Company does not amortize goodwill but tests it for
Codification (ASC) Topic 830 "Foreign Currency Matters").
impairment at least annually. Also other intangible assets with
ASU 2013-05 addresses the accounting for the cumulative
indefinite useful life are not amortized, but instead tested for
translation adjustment when a parent either sells a part or
impairment until its useful life is determined. On the other
all of its investment in a foreign entity or no longer holds a
hand, other intangible assets determined to have useful life
controlling financial interest in a subsidiary or group of assets
are amortized over their respective estimated useful life and
that is a nonprofit activity or a business within a foreign entity.
tested for impairment.
(w) Cost Associated with Exit or Disposal Activities
The Company recognizes the costs associated with exit or dis-
posal activities as liability only when it meets the definition of
a liability in the Statements of Financial Accounting Concepts
No. 6, “Elements of Financial Statements”. The Company
uses fair value for initial measurement of liabilities related to
exit or disposal activities.
(x) Guarantees
The Company recognizes the guarantees and indemnifica-
tion arrangements as liability measured at fair value as they
are issued or modified by the Company, and discloses the
guarantees that the Company has undertaken, including a
rollforward of the Company’s product warranty liabilities. The
Company continually monitors the conditions of the guaran-
tees and indemnifications to identify occurrence of probable
losses, and when such losses are identified and if estimable,
they are recognized in current earnings.
(y) Asset Retirement Obligations
The Company recognizes legal obligations associated with the
ASU 2013-05 requires entities to apply the guidance in ASC
830-30 to release any related cumulative translation adjust-
ment into net income. The Company is required to adopt ASU
2013-05 on April 1, 2014. The adoption of ASU 2013-05 will
not have a material effect on the Company's consolidated
financial position and results of operations.
In April 2013, the FASB issued ASU 2013-07 "Liquidation
Basis of Accounting" (An Amendment of ASC Topic 205
"Presentation of Financial Statements"). ASU 2013-07 clarifies
when an entity should apply the liquidation basis of account-
ing and provides guidance on principles for the recognition
and measurement of assets and liabilities and requirements
for financial statements prepared using the liquidation basis
of accounting. ASU 2013-07 requires entities to prepare its
financial statements using the liquidation basis of accounting
when liquidation is imminent and to present relevant informa-
tion about an entity's expected resources in liquidation by
measuring and presenting assets at the amount of the expect-
ed cash proceeds from liquidation that include any items that
it had not previously recognized under U.S. GAAP but that it
expects to either sell in liquidation or use in settling liabilities.
retirement of long-lived assets that result from an acquisition,
The Company is required to adopt ASU 2013-07 on April 1,
construction and development, and (or) from a normal opera-
2014. The adoption of ASU 2013-07 will not have a material
tion of a long-lived asset, except for certain lease obligations.
effect on the Company's consolidated financial position and
The Company recognizes a liability for an asset retirement
results of operations.
obligation at fair value in the period which it is incurred if a
In May 2014, the FASB issued ASU 2014-09 “Revenue
reasonable estimate of fair value can be made. The associated
from Contracts with Customers” (A Creation of ASC Topic
asset retirement costs are capitalized as part of the carrying
606 “Revenue from Contracts with Customers”). ASU 2014-
amount of the long-lived asset and subsequently allocated to
expense over the asset’s useful life. Subsequent to the initial
09 requires an entity to recognize revenue to depict the trans-
fer of promised goods or services to customers in an amount
measurement of the asset retirement obligation, the obliga-
that reflects the consideration to which the entity expects
tion is adjusted at the end of each period to reflect the pas-
to be entitled in exchange for those goods or services. The
sage of time and changes in the estimated future cash flows
Company is required to adopt ASU 2014-09 on April 1, 2017
underlying the obligation.
retrospectively to each prior reporting period presented or
42 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
retrospectively with the cumulative effect of initially adopt-
apply and is currently evaluating the effects on the Company's
ing this update recognized at the date of initial adoption.
consolidated financial position and results of operations upon
The Company has not yet determined which method it will
adoption of ASU 2014-09.
(2) U.S. DOLLAR AMOUNTS
The Company has presented the consolidated financial state-
exchange rate prevailing on the Tokyo Foreign Exchange
ments in Japanese yen, and solely for the convenience of the
Market at the end of March 2014. This translation should not
reader, has provided translated amounts in United States dol-
be construed as a representation that the amounts shown
lars at the rate of ¥103=U.S.$1, which was the approximate
could be converted into United States dollars at such rate.
(3) SECURITIES
Marketable securities included in short-term investments and
unrealized holding losses and fair value for such securities by
investments in securities and other consist of available-for-
equity securities and debt securities at March 31, 2014 and
sale securities. The cost, gross unrealized holding gains, gross
2013 were as follows:
2014:
Available-for-sale:
Equity securities
Debt securities
2013:
Available-for-sale:
Equity securities
Debt securities
2014:
Available-for-sale:
Equity securities
Debt securities
Gross
unrealized
holding
gains
Gross
unrealized
holding
losses
Cost
Yen (millions)
Fair value
¥ 96,587
3,861
¥100,448
¥127,931
—
¥127,931
¥1,345
49
¥1,394
¥223,173
3,812
¥226,985
Gross
unrealized
holding
gains
Gross
unrealized
holding
losses
Cost
Yen (millions)
Fair value
¥ 77,663
37,348
¥115,011
¥ 44,736
1,113
¥ 45,849
¥1,512
2,442
¥3,954
¥120,887
36,019
¥156,906
Gross
unrealized
holding
gains
Gross
unrealized
holding
losses
Cost
Fair value
U.S. dollars (thousands)
$937,738
37,485
$1,242,049
—
$975,223
$1,242,049
$13,058
476
$13,534
$2,166,729
37,009
$2,203,738
Debt securities consist of Japanese government debt
($539,718 thousand) , ¥14,803 million and ¥6,285 million,
securities, corporate debt securities and others.
respectively.
In the years ended March 31, 2014, 2013 and 2012, net
As of March 31, 2014 and 2013, the cost of non-market-
unrealized gains on available-for-sale securities, net of taxes
able equity securities were ¥14,550 million ($141,262 thou-
and noncontrolling interests, increased by ¥55,591 million
sand) and ¥15,033 million, respectively.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 43
Maturities of marketable securities classified as available-for-sale at March 31, 2014 were as follows:
Due within one year
Due after one year through five years
Due after five years
Marketable equity securities
Cost
¥ 51
210
3,600
96,587
¥100,448
Yen (millions)
Fair value
¥ 51
210
3,551
223,173
¥226,985
U.S. dollars
(thousands)
Fair value
$ 495
2,039
34,475
2,166,729
$2,203,738
Cost
$ 495
2,039
34,951
937,738
$975,223
Gross unrealized losses on available-for-sale securities and the fair value of the related securities, aggregated by length of time
that individual securities have been in a continuous unrealized loss positions, at March 31, 2014 were as follows:
Available-for-sale:
Equity securities
Debt securities
Available-for-sale:
Equity securities
Debt securities
Less than 12 months
Fair
value
Unrealized
losses
12 months or more
Fair
value
Unrealized
losses
Yen (millions)
Total
Fair
value
Unrealized
losses
¥5,557
492
¥6,049
¥ 997
8
¥1,005
¥ 603
2,459
¥3,062
¥348
41
¥389
¥6,160
2,951
¥9,111
¥1,345
49
¥1,394
Less than 12 months
Fair
value
Unrealized
losses
12 months or more
Fair
value
Unrealized
losses
U.S. dollars (thousands)
Total
Fair
value
Unrealized
losses
$53,951
4,777
$58,728
$9,679
78
$9,757
$ 5,855
23,873
$29,728
$3,379
398
$3,777
$59,806
28,650
$13,058
476
$88,456
$13,534
The Company did not recognize an impairment loss from the
sonable period of time sufficient for a recovery of fair value,
decline in the fair value of the marketable securities includ-
the Company does not consider those securities to be other-
ing the unrealized losses. Based on that evaluation and the
than-temporarily impaired.
Company’s ability and intent to hold those securities for a rea-
Proceeds from the sale of available-for-sale securities and gross realized gains and losses on those sales in the years ended March
31, 2014, 2013 and 2012 were as follows:
Proceeds
Gross realized gains
Gross realized losses
2014
¥26,964
161
1,327
2013
¥22,287
2,527
47
Yen (millions)
2012
¥1,460
486
5
U.S. dollars
(thousands)
2014
$261,786
1,563
12,883
For the year ended March 31, 2014, the Company did not recognize any material losses on impairment of marketable securities
due to other-than-temporary declines in fair value.
For the years ended March 31, 2013 and 2012, the Company recognized loss on impairment of marketable securities of
¥3,860 million and ¥6,912 million, respectively due to other-than-temporary declines in fair value.
(4) TRADE RECEIVABLES
Trade receivables are summarized as follows:
Notes receivable
Accounts receivable
Allowance for doubtful receivables
44 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
2014
¥ 68,335
925,181
(10,048)
¥983,468
Yen (millions)
2013
¥ 56,284
926,511
(8,290)
¥974,505
U.S. dollars
(thousands)
2014
$ 663,446
8,982,340
(97,553)
$9,548,233
(5) INVENTORIES
Inventories are comprised of the following:
Work in process
Less accumulated billings on long-term contracts
Raw materials
Finished products
(6) INVESTMENTS IN AFFILIATED COMPANIES
2014
¥262,466
14,955
247,511
100,150
254,680
Yen (millions)
2013
¥271,574
13,166
258,408
90,477
241,850
¥602,341
¥590,735
U.S. dollars
(thousands)
2014
$2,548,214
145,195
2,403,019
972,331
2,472,621
$5,847,971
For the fiscal year ended March 31, 2013, the Company recorded an amount of ¥13,785 million, the portion of the costs of
investments in affiliated companies accounted for by the equity method of accounting at date of acquisition that exceeds the
amounts of net assets attributable to the Company, included in investments in affiliated companies as goodwill related to equity
investments on its consolidated balance sheets. At the year ended March 31, 2013, the Company did not recognize any goodwill
impairment loss.
On September 30, 2013, Renesas Electric Corporation (Renesas) issued additional shares to third parties. As a result, the
Company’s ownership interest in Renesas decreased from 25.05% to 6.27% such that the Company no longer has the abil-
ity to exercise significant influence over Renesas. Therefore, the Company excluded Renesas from an affiliate of the Company
accounted for by the equity method of accounting, and reclassified the amounts of investment in Renesas from “Investment in
and advances to affiliated companies” to “Investment in securities and other” and recognized a loss resulting from the share
issuance. The Company recorded the loss resulting from the share issuance of ¥4,355 million ($42,282 thousand) in “Costs and
expenses - Other” for the year ended March 31, 2014.
A summary of the combined financial information relating to affiliated companies accounted for by the equity method of
accounting (Toshiba Mitsubishi-Electric Industrial Systems Corporation, Shanghai Mitsubishi Elevator Co., Ltd, etc.) as of March
31, 2014 and 2013, and for the years ended March 31, 2014, 2013 and 2012 is as follows:
The Financial Position as of March 31, 2013 and Results of Operations for the years ended March 31, 2014, 2013 and 2012
include the financial information of Renesas.
Financial Position
Current assets
Property, plant and equipment
Other assets
Total assets
Current liabilities
Long-term debt
Total liabilities
Shareholders’ equity
2014
¥1,240,376
109,668
105,591
¥1,455,635
¥ 830,046
133,766
963,812
491,823
Yen (millions)
2013
U.S. dollars
(thousands)
2014
¥1,395,527
343,725
192,039
¥1,931,291
¥ 948,324
517,159
1,465,483
465,808
$12,042,486
1,064,738
1,025,155
$14,132,379
$ 8,058,699
1,298,699
9,357,398
4,774,981
Total liabilities and shareholders’ equity
¥1,455,635
¥1,931,291
$14,132,379
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 45
2014
2013
Yen (millions)
2012
U.S. dollars
(thousands)
2014
Results of Operations
Sales
Net income (loss) attributable to affiliated companies
¥1,648,617
54,383
¥1,869,079
(84,953)
¥1,956,596
(36,010)
$16,005,990
527,990
The balances and transactions with affiliated companies accounted for by the equity method of accounting as of March 31, 2014
and 2013, and for the years ended March 31, 2014, 2013 and 2012 are as follows:
The balances as of March 31, 2013 and transactions for the years ended March 31, 2014, 2013 and 2012 include those with
Renesas.
Trade receivables
Trade payables
Sales
Purchases
Dividends
2014
¥ 71,578
149,964
2014
¥313,119
173,897
12,418
2013
¥298,033
166,633
10,174
Yen (millions)
2013
¥ 74,470
129,123
Yen (millions)
2012
¥314,740
184,766
6,945
U.S. dollars
(thousands)
2014
$ 694,932
1,455,961
U.S. dollars
(thousands)
2014
$3,039,990
1,688,320
120,563
Investments in affiliated companies accounted for by the equity method of accounting include the shares of 9 publicly quoted
affiliates (10 publicly quoted affiliates existed in 2013), which are summarized as follows:
Investments at equity
Quoted market value
(7) BANk LOANS AND LONG-TERM DEBT
Bank loans consisted of the following:
Borrowings from banks and others
Commercial paper
2014
¥35,378
45,595
Yen (millions)
2013
¥52,720
65,751
2014
¥60,275
—
¥60,275
Yen (millions)
2013
¥101,617
30,220
¥131,837
U.S. dollars
(thousands)
2014
$343,476
442,670
U.S. dollars
(thousands)
2014
$585,194
—
$585,194
The weighted average interest rates on borrowings from
At March 31, 2014, the Company and its subsidiaries had
banks and others outstanding as of March 31, 2014 and 2013
unused committed lines of credit that can provide short-term
were 0.51% and 0.71%, respectively.
funds from subscribing financial institutions amounting to
¥115,500 million ($1,121,359 thousand).
46 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Long-term debt consisted of the following:
Borrowings from banks and other companies,
due 2014 to 2022 with bearing interest rate
ranging from 0.29% to 3.20% at March 31, 2014:
due 2013 to 2022 with bearing interest rate
ranging from 0.35% to 3.00% at March 31, 2013:
Secured
Unsecured
1.17% Japanese yen bonds due 2014
0.58% Japanese yen bonds due 2013
Capital lease obligations
Less amount due within one year
2014
Yen (millions)
2013
U.S. dollars
(thousands)
2014
¥ 403
256,877
30,000
—
25,923
313,203
101,777
¥211,426
¥ 821
319,527
30,000
30,000
28,387
408,735
103,081
¥305,654
$ 3,913
2,493,951
291,262
—
251,680
3,040,806
988,126
$2,052,680
U.S. dollars
(thousands)
$ 988,126
879,350
478,233
220,175
234,699
240,223
$3,040,806
The aggregate annual maturities of long-term debt outstanding at March 31, 2014 were as follows:
Year ending March 31:
2015
2016
2017
2018
2019
Thereafter
Total
Yen (millions)
¥101,777
90,573
49,258
22,678
24,174
24,743
¥313,203
Substantially all of the loans with banks and others have basic
Certain of the secured loan agreements contain provi-
written agreements. With respect to all present or future
sions that permit the lenders to require additional collateral,
loans, these agreements state that the Company would need
and substantially all of the unsecured loan agreements permit
to provide collateral or guarantors immediately upon the
the lenders to require collateral or guarantors. Property, plant
banks’ requests and that any collateral furnished pursuant to
and equipment carried at ¥891 million ($8,650 thousand)
such agreements will be used against repayment of debts in
are pledged as security for long-term loans from banks and
case of default.
others.
(8) TRADE PAYABLES
Trade payables are summarized as follows:
Notes payable
Accounts payable
2014
¥ 15,029
743,884
¥758,913
Yen (millions)
2013
¥ 16,868
635,850
¥652,718
U.S. dollars
(thousands)
2014
$ 145,912
7,222,175
$7,368,087
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 47
(9) INCOME TAXES
Total income taxes were allocated as follows:
Income before income taxes
Shareholders’ equity—accumulated other
comprehensive income (loss):
Foreign currency translation adjustments
Pension liability adjustments
Unrealized gains (losses) on securities
Unrealized gains (losses) on derivative instruments
2014
¥ 86,198
2013
¥(9,509)
Yen (millions)
2012
¥105,815
U.S. dollars
(thousands)
2014
$ 836,874
4,280
(2,151)
30,818
(24)
5,037
26,637
7,230
38
(135)
(144)
2,777
37
41,552
(20,882)
299,204
(233)
¥119,121
¥29,433
¥108,350
$1,156,515
The significant components of deferred tax expense attributable to income taxes are as follows:
Change in valuation allowance related
to deferred tax assets
Other
2014
2013
¥ (4,129)
56,086
¥51,957
¥(40,029)
7,030
¥(32,999)
Yen (millions)
2012
¥ (6,915)
70,543
¥63,628
U.S. dollars
(thousands)
2014
$ (40,087)
544,524
$504,437
The Company is subjected to a number of income taxes. The
ed to be recovered or settled after April 1, 2014. Before the
statutory tax rate is approximately 38% for the years ended
adjustment, the statutory tax rates applied were approximate-
March 31, 2014 and 2013, approximately 41% for the year
ly 38% for temporary differences expected to be recovered
ended March 31, 2012.
or settled through March 31, 2015 and approximately 35.5%
The “Act to Partially Revise the Income Tax Act” (Act No.
for temporary differences expected to be recovered or settled
10 of 2014) was enacted and promulgated in March 2014,
for the subsequent fiscal years after April 1, 2015. After the
resulting in a reduction of the corporation tax rate effective
adjustment, the statutory tax rate applied is approximately
for fiscal years beginning after April 1, 2014, and the “Local
35.5% for temporary differences expected to be recovered or
Corporate Tax Act” (Act No. 11 of 2014) was enacted and
settled for the subsequent fiscal years after April 1, 2014.
promulgated in March 2014, resulting in a newly imposed
For the year ended March 31, 2014, ¥7,856 million
Local Corporate Tax effective for fiscal years beginning after
($76,272 thousand) of income tax expense is included in
April 1, 2015. As a result, the Company adjusted the statu-
“Income taxes – Deferred” in the Consolidated Statements of
tory tax rates to be applied in the calculation of deferred tax
Income, as a result of the adjustment of deferred tax assets
assets and liabilities arising from temporary differences expect-
and liabilities.
The effective tax rate for the years ended March 31, 2014, 2013 and 2012 is reconciled with the Japanese statutory tax rate in
the following table:
Japanese statutory tax rate
Change in valuation allowance
Adjustment for unrealized profit on intercompany transactions
Expenses permanently not deductible for tax purposes
International tax rate difference
Tax credits
Tax effect attributable to investments at equity
Effect of income tax rate change
Other
Effective tax rate
48 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
2014
38.0%
(1.9)
2.4
4.2
(8.4)
(0.1)
(2.1)
3.2
(0.7)
34.6%
2013
38.0%
(60.1)
21.4
2.8
(17.9)
(0.3)
(10.4)
7.6
4.3
(14.6)%
2012
41.0%
3.6
(0.4)
1.0
(5.1)
(3.3)
(2.6)
14.3
(1.3)
47.2%
For the year ended March 31, 2013, because it was expected
more likely than not that the temporary differences related to
that certain investments in affiliated companies would no
its investment in affiliated companies would be realized. The
longer be accounted for by the equity method of accounting
effects were included in Change in valuation allowance.
during the following year, the Company concluded that it was
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities
at March 31, 2014 and 2013 are as follows:
Deferred tax assets:
Retirement and severance benefits
Accrued expenses
Property, plant and equipment
Inventories
Pension liability adjustments
Tax loss carryforwards
Other
Total gross deferred tax assets
Valuation allowance
Deferred tax assets, less valuation allowance
Deferred tax liabilities:
Securities contributed to employee
retirement benefit trust
Property, plant and equipment
Net unrealized gains on securities
Other
Total gross deferred tax liabilities
Net deferred tax assets
2014
¥ 60,624
88,148
32,566
21,779
81,317
35,506
78,569
398,509
(64,547)
333,962
30,404
10,252
25,385
39,298
105,339
¥228,623
Yen (millions)
2013
U.S. dollars
(thousands)
2014
¥ 77,846
77,609
34,815
23,998
79,533
18,484
155,207
467,492
(68,676)
398,816
30,404
10,939
14,637
33,162
89,142
¥309,674
$ 588,583
855,806
316,175
211,447
789,485
344,718
762,805
3,869,019
(626,669)
3,242,350
295,184
99,534
246,456
381,535
1,022,709
$2,219,641
The valuation allowance for deferred tax assets as of April
temporary differences become deductible. Management
1, 2012 was ¥108,705 million. The net change in the total
considers the scheduled reversal of deferred tax liabilities, pro-
valuation allowance for the year ended March 31, 2013 was
jected future taxable income, and tax planning strategies in
a decrease of ¥40,029 million. The net change in the total
making this assessment.
valuation allowance for the year ended March 31, 2014 was
At March 31, 2014, the Company and certain subsidiar-
a decrease of ¥4,129 million ($40,087 thousand). In assessing
ies had net operating loss carryforwards of ¥64,911 million
the realizability of deferred tax assets, management considers
($630,204 thousand) and ¥181,917 million ($1,766,184
whether it is more likely than not that some portion or all of
thousand) for corporate and local income tax purposes,
the deferred tax assets will be realized. The ultimate realiza-
respectively, which were available to offset future taxable
tion of deferred tax assets is dependent upon the generation
income, if any. A significant portion of the net operating loss
of future taxable income during the periods in which those
carryforwards will expire in the years ending March 31, 2023.
Net deferred tax assets and liabilities at March 31, 2014 and 2013 are reflected in the accompanying consolidated balance sheets
under the following captions:
Prepaid expenses and other current assets
Other assets
Other liabilities
2014
¥120,413
113,773
(5,563)
¥228,623
Yen (millions)
2013
¥112,019
201,794
(4,139)
¥309,674
U.S. dollars
(thousands)
2014
$1,169,058
1,104,592
(54,009)
$2,219,641
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 49
Deferred tax liabilities have not been recognized for undis-
of income. Both interest and penalties accrued as of March
tributed earnings of domestic subsidiaries and some affili-
31, 2014 and 2013, and interest and penalties for the years
ated companies as such income, if distributed in the form of
ended March 31, 2014, 2013 and 2012 are not material.
dividends, is either not taxable under present circumstances
The Company and its subsidiaries file income tax returns
or is not material. Deferred tax liabilities for the undistributed
in Japan and various foreign tax jurisdictions. The tax years
income of foreign subsidiaries and affiliated companies have
that remain subject to examination by major tax jurisdictions
been recognized.
Although the Company believes that there are no sig-
nificant unrecognized tax benefits as of March 31, 2014 and
2013, future determination by tax authorities could affect the
effective tax rate in the future periods.
The Company records interest and penalties related to
additional income tax, etc. in the consolidated statements
are as follows:
Location
Japan
United States
Thailand
Europe
(10) RETIREMENT AND SEVERANCE BENEFITS
Open tax years
2007-2014
2011-2014
2009-2014
2008-2014
The Company has non-contributory and contributory defined
2005, and established a defined contribution plan on April
benefit plans covering substantially all of its employees who
1, 2005. In addition, the Company amended its contributory
meet eligibility requirements.
defined benefit plan and introduced a cash balance pension
Under the non-contributory plans, employees with less
plan. Under the cash balance pension plan, each participant
than twenty years of service are entitled to lump-sum sever-
has a notional account which is credited yearly based on the
ance indemnities at date of severance, and employees with
current rate of contribution and market-related interest rate.
twenty or more years of service are entitled to annuity pay-
The domestic consolidated subsidiaries sponsor various
ments subsequent to retirement, determined by the current
pension plans, which are partially or entirely employees’ pen-
basic rate of pay, length of service and termination condi-
sion fund plan, and/or corporate pension fund plan, based on
tions. In addition, certain employees who meet the eligibility
each subsidiary’s respective pension policies.
requirements are entitled to additional lump-sum payments
In addition, the foreign consolidated subsidiaries that
at the date of retirement based on the retirement age. Under
have adopted pension policy mainly sponsors defined contri-
the contributory plans, employees are entitled to annuity
bution pension plan.
payments at a certain age. The assets of certain of the non-
The Company measures the fair value of plan assets and
contributory plans and the contributory plans are combined in
the projected benefit obligation at the end of the year, and
accordance with the regulations and administered by a board
recognizes the funded status (i.e., the difference between the
of trustees comprised equally of employer and employee
fair value of plan assets and the projected benefit obligations)
representatives. An employee retirement benefit trust is estab-
of pension in consolidated balance sheets with the amount of
lished for certain of the non-contributory plans.
corresponding adjustment to Accumulated other comprehen-
The Company amended its benefit plan under labor and
management agreement during the year ended March 31,
sive income (loss), net of tax.
50 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Obligations and funded status
Reconciliations of beginning and ending balances of the benefit obligations and the fair value of the plan assets are as follows:
Change in benefit obligations:
Benefit obligations at beginning of year
Service cost
Interest cost
Plan participants’ contributions
Amendments
Actuarial loss
Benefits paid
Acquisitions and divestitures, etc.
Benefit obligations at end of year
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Plan participants’ contributions
Benefits paid
Acquisitions and divestitures, etc.
Fair value of plan assets at end of year
2014
¥1,038,169
29,486
19,123
1,063
339
50,408
(74,167)
2,719
1,067,140
784,686
56,929
48,280
1,063
(35,477)
2,452
857,933
Yen (millions)
2013
U.S. dollars
(thousands)
2014
¥1,052,970
29,433
21,562
1,077
957
8,823
(77,667)
1,014
1,038,169
683,258
90,710
47,051
1,077
(38,251)
841
784,686
$10,079,311
286,272
185,660
10,320
3,291
489,398
(720,068)
26,398
10,360,582
7,618,311
552,709
468,738
10,320
(344,437)
23,806
8,329,447
Funded status at end of year
¥ (209,207)
¥ (253,483)
$ (2,031,135)
Amounts recognized in the consolidated balance sheets at March 31, 2014 and 2013 consist of:
Other assets
Other current liabilities
Retirement and severance benefits
2014
¥ 7,651
(4,220)
(212,638)
¥(209,207)
Yen (millions)
2013
¥ 7,353
(5,859)
(254,977)
¥(253,483)
Amounts recognized in accumulated other comprehensive income (loss) at March 31, 2014 and 2013 consist of:
Actuarial gain or loss
Prior service cost
2014
¥286,221
(54,959)
¥231,262
Yen (millions)
2013
¥300,091
(77,514)
¥222,577
U.S. dollars
(thousands)
2014
$ 74,282
(40,970)
(2,064,447)
$(2,031,135)
U.S. dollars
(thousands)
2014
$2,778,845
(533,583)
$2,245,262
The accumulated benefit obligations for all defined benefit plans were as follows:
Accumulated benefit obligations
2014
¥1,050,423
Yen (millions)
2013
¥1,031,769
U.S. dollars
(thousands)
2014
$10,198,282
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 51
Components of net periodic retirement and severance costs and other amounts recognized in other comprehensive
income (loss)
Net periodic retirement and severance costs for the years ended March 31, 2014, 2013 and 2012 consisted of the following
components:
Service cost
Interest cost on projected benefit obligation
Expected return on plan assets
Amortization of prior service cost
Amortization of actuarial loss
Plan participants’ contributions
2014
¥ 30,549
19,123
(13,911)
(22,216)
21,544
35,089
(1,063)
2013
¥ 30,510
21,562
(13,556)
(21,748)
27,253
44,021
(1,077)
Yen (millions)
2012
¥ 30,330
21,838
(12,834)
(17,044)
27,904
50,194
(1,108)
Net periodic retirement and severance costs
¥ 34,026
¥ 42,944
¥ 49,086
U.S. dollars
(thousands)
2014
$ 296,592
185,660
(135,058)
(215,689)
209,165
340,670
(10,320)
$ 330,350
Other changes in plan assets and projected benefit obligations recognized in other comprehensive income (loss) for the years
ended March 31, 2014 and 2013 were summarized as follows:
Actuarial gain or loss
Amortization of actuarial loss (gain)
Prior service cost
Amortization of prior service cost
2014
¥ 7,674
(21,544)
339
22,216
¥ 8,685
Yen (millions)
2013
¥(68,295)
(27,253)
957
21,748
¥(72,843)
U.S. dollars
(thousands)
2014
$ 74,505
(209,165)
3,291
215,689
$ 84,320
The estimated actuarial gain or loss and prior service cost for the defined benefit pension plans that will be amortized from accu-
mulated other comprehensive income (loss) into net periodic benefit cost over the next year are summarized as follows:
Actuarial gain or loss
Prior service cost
Yen (millions)
¥ 15,119
(11,571)
U.S. dollars
(thousands)
$ 146,786
(112,340)
Actuarial assumptions
Actuarial assumptions used to determine benefit obligations at March 31, 2014 and 2013 were as follows:
Discount rate
Assumed rate of increase in future compensation levels
2014
1.5%
1.7%
2013
2.0%
1.7%
Actuarial assumptions used to determine net periodic retirement and severance costs for the years ended March 31, 2014, 2013
and 2012 were as follows:
Discount rate
Assumed rate of increase in future compensation levels
Expected long-term rate of return on plan assets
2014
2.0%
1.7%
2.5%
2013
2.0%
1.7%
2.5%
2012
2.0%
1.7%
2.5%
The expected long-term rate of return is based on actual historical returns and the expectations for future returns of each plan
asset category in which the Company invests.
52 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Plan Assets
The fair values of the Company’s pension plan assets at March 31, 2014 and 2013 were as follows:
Equity securities
Marketable equity securities
Pooled funds
Debt securities
Government, municipal and corporate debt securities
Pooled funds
Other assets
Life insurance company general accounts
Other
2014
Yen (millions)
Level 1
Level 2
Level 3
Total
¥178,946
—
¥ —
179,921
¥ —
—
¥178,946
179,921
5,111
—
21,727
322,495
—
—
26,838
322,495
—
—
91,567
42,604
—
15,562
91,567
58,166
¥184,057
¥658,314
¥15,562
¥857,933
Notes: 1. Marketable equity securities include mainly domestic stocks.
2. Pooled funds of equity securities include approximately 20% domestic stocks and 80% foreign stocks.
3. Pooled funds of debt securities include approximately 70% domestic bonds and 30% foreign bonds.
4. Government, municipal and corporate debt securities of level 1 include government debt securities.
Equity securities
Marketable equity securities
Pooled funds
Debt securities
Government, municipal and corporate debt securities
Pooled funds
Other assets
Life insurance company general accounts
Other
2013
Yen (millions)
Level 1
Level 2
Level 3
Total
¥172,899
—
¥ —
171,648
¥ —
—
¥172,899
171,648
4,224
—
21,447
276,469
—
—
25,671
276,469
—
—
88,260
34,601
—
15,138
88,260
49,739
¥177,123
¥592,425
¥15,138
¥784,686
Notes: 1. Marketable equity securities include mainly domestic stocks.
2. Pooled funds of equity securities include approximately 20% domestic stocks and 80% foreign stocks.
3. Pooled funds of debt securities include approximately 70% domestic bonds and 30% foreign bonds.
4. Government, municipal and corporate debt securities of level 1 include government debt securities.
Equity securities
Marketable equity securities
Pooled funds
Debt securities
Government, municipal and corporate debt securities
Pooled funds
Other assets
Life insurance company general accounts
Other
U.S. dollars (thousands)
2014
Level 1
Level 2
Level 3
Total
$1,737,340
—
$ —
1,746,806
$ — $1,737,340
1,746,806
—
49,621
—
210,942
3,131,019
—
—
260,563
3,131,019
—
—
889,000
413,631
—
151,088
889,000
564,719
$1,786,961
$6,391,398
$151,088
$8,329,447
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 53
The Company’s investment policies are designed to ensure
the contents of investment, and appropriately diversified
adequate plan assets are available to provide future pay-
investments.
ments of pension benefits to eligible participants. Taking into
See note 18 which shows categorized input for fair value
account the expected long-term rate of return on plan assets,
measurements by the valuation technique into a three-level
the Company formulates an investment portfolio comprised
hierarchy.
of the optimal combination of equity and debt securities.
Each level into which assets are categorized is based on
Plan assets are invested in individual equity and debt securi-
inputs used to measure the fair value of the assets.
ties using the guidelines of the investment portfolio in order
Level 1 assets are comprised principally of equity securi-
to produce a total return that will match the expected return
ties and government bonds, which are valued using unad-
on a mid-term to long-term basis. The Company evaluates the
justed quoted market prices in active markets with sufficient
gap between expected return and actual return of invested
volume and frequency of transactions. Level 2 assets are
plan assets on an annual basis. In addition, taking into the
comprised principally of pooled funds that invest in equity
consideration the management environment and the revision
and debt securities, corporate bonds and investments in life
of regulations, the Company revises the investment portfolio
insurance company general accounts. Pooled funds are valued
when and to the extent considered necessary to achieve the
at their net asset values that are calculated by the sponsor of
expected long-term rate of return on plan assets based on the
the fund. Corporate bonds are valued using quoted prices for
pension asset and liability management method.
identical assets in markets that are not active. Investments in
The Company’s investment portfolio consists of
life insurance company general accounts are valued at the
three major components: approximately 30% is invested
in equity securities, approximately 65% is invested in debt
amounts that are the conventional interest adding to the
principle amounts calculated by life insurance company. Level
securities and investments in life insurance company general
3 assets comprise hedge funds, which are valued based on
accounts, and approximately 5% is invested in hedge funds.
unobservable inputs.
As for selection of plan assets, the Company has examined
An analysis of the changes in Level 3 assets which comprise hedge funds measured at fair value for the years ended March 31,
2014 and 2013 is as follows:
Balance at beginning of year
Actual return:
Relating to assets sold
Relating to assets still held
Purchases, sales and settlements
Transfers in and/or out of Level 3
Balance at end of year
2014
¥15,138
Yen (millions)
2013
¥15,151
(8)
432
—
—
—
(13)
—
—
U.S. dollars
(thousands)
2014
$146,971
(77)
4,194
—
—
¥15,562
¥15,138
$151,088
Cash Flows
The Company expects to contribute ¥48,744 million ($473,243 thousand) to its pension plan in the year ending March 31, 2015.
Estimated future benefit payments are as follows:
Year ending March 31:
2015
2016
2017
2018
2019
2020–2024
Yen (millions)
¥ 67,643
67,474
61,193
55,897
56,177
260,033
U.S. dollars
(thousands)
$ 656,728
655,087
594,107
542,689
545,408
2,524,592
The amount of cost recognized for the Company and certain subsidiaries’ defined contribution plans for the years ended March
31, 2014, 2013 and 2012 were ¥8,423 million ($81,777 thousand), ¥7,447 million and ¥6,938 million, respectively.
54 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
(11) SHAREHOLDERS’ EqUITY
Changes in common stock for the years ended March 31, 2014 and 2013 were as follows:
Number of common shares issued:
Balance at beginning of year
Balance at end of year
2014
2013
Shares
2,147,201,551
2,147,201,551
2,147,201,551
2,147,201,551
Conversions into common stock of convertible debenture
The amount available for dividends under the Japanese
issued subsequent to October 1, 1982 and exercise of war-
Corporate Law is based on the amount recorded in the
rants were accounted for in accordance with the provisions of
Company’s books of account in accordance with accounting
the Japanese Commercial Code by crediting one-half of the
standards of Japan. The adjustments included in the accom-
conversion price and exercise price to each of the common
panying consolidated financial statements to have them
stock account and the capital surplus account.
conform with accounting principles generally accepted in
The Japanese Corporate Law enforced on May 1, 2006
the United States of America, but not recorded in the books
requires that an amount equal to 10% of dividends and other
of account, have no effect on the determination of retained
distributions paid in cash by the Company and its domes-
earnings available for dividends under the Japanese Corporate
tic subsidiaries be appropriated as a legal reserve until the
aggregated amount of additional paid-in capital and the legal
Law. Retained earnings available for dividends shown in the
Company’s books of account amounted to ¥301,412 million
reserve equal to 25% of the common stocks. The additional
($2,926,330 thousand) at March 31, 2014.
paid-in capital and the legal reserve may be used to reduce
Cash dividends and appropriations to the legal reserve
a deficit or transferred to common stock with a resolution of
charged to retained earnings during the years ended March
the shareholders’ meeting.
31, 2014, 2013 and 2012 represent dividends paid out during
the years and the related appropriations to the legal reserve.
(12) OTHER COMPREHENSIVE INCOME (LOSS)
Starting year ended March 31, 2014, the Company adopts
of accumulated other comprehensive income and into net
FASB ASU 2013-02 "Reporting of Amounts Reclassified Out
income. The adoption of ASU 2013-02 does not have a
of Accumulated Other Comprehensive Income" (An amend-
material effect on the Company's consolidated financial posi-
ment of ASC Topic 220 "Comprehensive Income"). ASU
tion and results of operations.
2013-02 requires entities to disclose items reclassified out
Change in accumulated other comprehensive income (loss) is as follows:
Foreign currency
translation
adjustments
Pension liability
adjustments
2014
Unrealized gains
(losses) on
securities
Balance at beginning of year
¥ (8,023)
¥(112,523)
¥27,045
Other comprehensive income before
reclassifications
Amounts reclassified from
accumulated other comprehensive
income
Net change during the year
Balance at end of year
46,675
(6,323)
54,831
—
(433)
760
46,675
¥38,652
(6,756)
¥(119,279)
55,591
¥82,636
Yen (millions)
Total
¥(93,487)
95,085
359
95,444
¥ 1,957
Unrealized gains
(losses) on
derivative
instruments
¥ 14
(98)
32
(66)
¥(52)
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 55
Balance at beginning of year
Net change during the year
Balance at end of year
Balance at beginning of year
Net change during the year
Balance at end of year
Foreign currency
translation
adjustments
¥(67,654)
59,631
¥ (8,023)
Pension liability
adjustments
¥(160,156)
47,633
¥(112,523)
Foreign currency
translation
adjustments
¥(59,400)
(8,254)
¥(67,654)
Pension liability
adjustments
¥(162,390)
2,234
¥(160,156)
Foreign currency
translation
adjustments
Pension liability
adjustments
2013
Unrealized gains
(losses) on
securities
¥12,242
14,803
¥27,045
2012
Unrealized gains
(losses) on
securities
¥ 5,957
6,285
¥12,242
2014
Unrealized gains
(losses) on
securities
Balance at beginning of year
$ (77,894)
$(1,092,456)
$262,573
Unrealized gains
(losses) on
derivative
instruments
¥(35)
49
¥ 14
Unrealized gains
(losses) on
derivative
instruments
¥(86)
51
¥(35)
Yen (millions)
Total
¥(215,603)
122,116
¥ (93,487)
Yen (millions)
Total
¥(215,919)
316
¥(215,603)
U.S. dollars (thousands)
Unrealized gains
(losses) on
derivative
instruments
$ 136
Total
$(907,641)
Other comprehensive income before
reclassifications
Amounts reclassified from
accumulated other comprehensive
income
Net change during the year
Balance at end of year
453,157
(61,389)
532,339
(952)
923,155
—
(4,204)
7,379
311
3,486
453,157
$375,263
(65,593)
$(1,158,049)
539,718
$802,291
(641)
$(505)
926,641
$ 19,000
56 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Reclassifications out of accumulated other comprehensive income (loss) are as follows:
Details about Accumulated other
comprehensive income components
Pension liability adjustments
Amortization of prior service cost
Amortization of actuarial loss
Unrealized gains (losses) on securities
Realized losses on sales
Other
Unrealized gains (losses) on derivative instru-
ments
Other
2014
Amounts reclassified from accumulated other
comprehensive income
Yen
(millions)
U.S. dollars
(thousands)
Affected line items in consolidated
statements of income
¥(22,216)
21,544
(672)
239
(433)
1,166
13
1,179
(419)
760
42
42
(10)
32
$(215,689)
209,165
(6,524)
2,320
(4,204)
11,320
127
11,447
(4,068)
7,379
See Note
See Note
Total before tax
Income tax
Net of tax
Other costs and expenses
Other costs and expenses
Total before tax
Income tax
Net of tax
408
408
(97)
311
Other costs and expenses
Total before tax
Income tax
Net of tax
Total amounts reclassified
¥ 359
$ 3,486
Net of tax
Note: These accumulated other comprehensive income components are included in the computation of net periodic retirement
and severance costs. See Note 10 “Retirement and Severance Benefits”.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 57
Tax effects allocated to each component of other comprehensive income (loss) and reclassification adjustments are as follows:
Before-tax amount
Tax (expense)
or benefit
Yen (millions)
Net-of-tax amount
2014:
Foreign currency translation adjustments:
Amount arising during the year on investments in
foreign entities held at end of year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in foreign currency translation
adjustments during the year
Pension liability adjustments:
Amount arising during the year on pension liability adjustments
Less reclassification adjustments for gains (losses)
realized in net income
Net change in pension liability adjustment
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on securities
Unrealized gains (losses) on derivative instruments:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on derivative instruments
¥ 50,955
¥ (4,280)
¥46,675
—
—
—
50,955
(4,280)
46,675
(8,235)
(672)
(8,907)
85,230
1,179
86,409
(132)
42
(90)
1,912
239
2,151
(30,399)
(419)
(30,818)
34
(10)
24
(6,323)
(433)
(6,756)
54,831
760
55,591
(98)
32
(66)
Other comprehensive income (loss)
¥128,367
¥(32,923)
¥95,444
2013:
Foreign currency translation adjustments:
Amount arising during the year on investments in
foreign entities held at end of year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in foreign currency translation
adjustments during the year
Pension liability adjustments:
Amount arising during the year on pension liability adjustments
Less reclassification adjustments for gains (losses)
realized in net income
Net change in pension liability adjustment
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on securities
Unrealized gains (losses) on derivative instruments:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on derivative instruments
Other comprehensive income (loss)
58 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Before-tax amount
Tax (expense)
or benefit
Yen (millions)
Net-of-tax amount
¥ 64,668
¥ (5,037)
¥ 59,631
—
64,668
68,765
5,505
74,270
20,071
1,962
22,033
134
—
(5,037)
(24,545)
(2,092)
(26,637)
(6,489)
(741)
(7,230)
(53)
—
59,631
44,220
3,413
47,633
13,582
1,221
14,803
81
(47)
87
¥161,058
15
(38)
¥(38,942)
(32)
49
¥122,116
2012:
Foreign currency translation adjustments:
Amount arising during the year on investments in
foreign entities held at end of year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in foreign currency translation
adjustments during the year
Pension liability adjustments:
Amount arising during the year on pension liability adjustments
Less reclassification adjustments for gains (losses)
realized in net income
Net change in pension liability adjustment
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on securities
Unrealized gains (losses) on derivative instruments:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on derivative instruments
Other comprehensive income (loss)
Before-tax amount
Tax (expense)
or benefit
Yen (millions)
Net-of-tax amount
¥(8,379)
¥ 135
¥(8,244)
(10)
(8,389)
(8,770)
10,860
2,090
3,536
5,526
9,062
72
16
88
¥ 2,851
—
135
4,597
(4,453)
144
(654)
(2,123)
(2,777)
(30)
(10)
(8,254)
(4,173)
6,407
2,234
2,882
3,403
6,285
42
(7)
(37)
¥(2,535)
9
51
¥ 316
Before-tax amount
U.S. dollars (thousands)
Tax (expense)
or benefit
Net-of-tax amount
2014:
Foreign currency translation adjustments:
Amount arising during the year on investments in
foreign entities held at end of year
$ 494,709
$ (41,552)
$453,157
Less reclassification adjustments for gains (losses)
realized in net income
Net change in foreign currency translation
adjustments during the year
Pension liability adjustments:
Amount arising during the year on pension liability adjustments
Less reclassification adjustments for gains (losses)
realized in net income
Net change in pension liability adjustment
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on securities
Unrealized gains (losses) on derivative instruments:
Unrealized holding gains (losses) arising during the year
Less reclassification adjustments for gains (losses)
realized in net income
Net change in unrealized gains (losses) on derivative instruments
—
—
—
494,709
(41,552)
453,157
(79,951)
(6,524)
(86,475)
18,562
2,320
20,882
(61,389)
(4,204)
(65,593)
827,475
(295,136)
532,339
11,447
838,922
(4,068)
(299,204)
7,379
539,718
(1,282)
408
(874)
330
(97)
233
(952)
311
(641)
Other comprehensive income (loss)
$1,246,282
$(319,641)
$926,641
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 59
(13) NET INCOME PER SHARE ATTRIBUTABLE TO MITSUBISHI ELECTRIC CORP.
A reconciliation of the numerators and denominators of the basic and diluted net income per share attributable to Mitsubishi
Electric Corp. calculations is as follows:
Net income attributable to
Mitsubishi Electric Corp.
Effect of dilutive securities
Diluted net income attributable to
Mitsubishi Electric Corp.
Average common shares outstanding
Effect of dilutive securities:
Diluted common shares outstanding
Net income per share attributable to
Mitsubishi Electric Corp.:
Basic
Diluted
2014
2013
Yen (millions)
2012
U.S. dollars
(thousands)
2014
¥153,473
—
¥69,517
—
¥112,063
—
$1,490,029
—
¥153,473
¥69,517
¥112,063
$1,490,029
2014
2,146,871,671
—
2,146,871,671
2013
2,146,906,220
—
2,146,906,220
Shares
2012
2,146,926,221
—
2,146,926,221
2014
2013
2012
2014
Yen
U.S. dollars
¥71.49
—
¥32.38
—
¥52.20
—
$0.694
—
Diluted net income per share attributable to Mitsubishi Electric Corp. is not presented as no dilutive securities existed as of and
for the years ended March 31, 2014, 2013 and 2012.
(14) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Foreign Exchange Risk Management and Interest Rate
Risk Management
The Company and its subsidiaries operate internationally, giv-
ing rise to significant exposure to market risks from changes
in foreign currencies and interest rates. Derivative financial
instruments are comprised principally of foreign exchange
contracts, foreign currency swaps and interest rate swaps uti-
lized by the Company and certain of its subsidiaries to reduce
these risks. The Company and its subsidiaries do not hold or
issue financial instruments for trading purposes.
.
Contract Amounts, Notional Principal Amounts and
Credit Risk
The Company and its subsidiaries are exposed to risk of credit-
related losses in the event of nonperformance by counterparties
to foreign exchange contracts, foreign currency swaps and inter-
est rate swaps. The Company believes such risk is minimal due to
the high credit ratings of these counterparties. Other derivative
instruments are debt securities that contain embedded deriva-
tives with intention to hold for a certain period. The Company
believes that no material risks exist on its debt securities because
the principal of those debt securities are guaranteed.
Information with Respect to Fair Value Hedges
Certain subsidiaries have entered into foreign currency swaps to
hedge currency exposure and designate them as fair value hedges.
Information with Respect to Cash Flow Hedges
The Company and certain of its subsidiaries have entered into
forward foreign exchange contracts mainly with forecasted
transactions to hedge against market risks from changes
in foreign currencies and interest rate swap agreements to
modify the interest rate characteristics of a portion of its long-
term debt from a variable to a fixed rate. The Company and
certain of its subsidiaries designate them as cash flow hedges.
The maximum period for cash flow hedges is 26 months. The
Company expects that the amounts of net gain of ¥15 mil-
lion ($146 thousand) in accumulated other comprehensive
income (loss) will be reclassified into earnings over the next
12 months with transactions such as collection of foreign cur-
rency receivables and payment of foreign currency payables
and interests on long-term debt..
Derivatives not designated as hedging Instruments
The Company and certain of its subsidiaries enter into foreign
exchange contracts and certain of foreign currency swaps and
interest rate swaps that are not designated as hedging instru-
ments to hedge against certain foreign currency and interest
rate exposures. The Company and certain of its subsidiaries
recognize the changes in unrealized gains and losses on such
instruments in earnings.
60 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Contract amounts of foreign exchange contracts and foreign currency swaps and notional principal amounts of interest rate
swaps and other derivative instruments at March 31, 2014 and 2013 are as follows:
Foreign exchange contracts:
Forwards to sell foreign currencies
Forwards to buy foreign currencies
Foreign currency swaps
Interest rate swaps
Other derivative instruments
2014
¥208,775
91,194
37,010
2,000
3,000
Yen (millions)
2013
¥106,974
66,586
17,196
7,000
28,300
U.S. dollars
(thousands)
2014
$2,026,942
885,379
359,320
19,417
29,126
The estimated fair values of foreign exchange contracts, foreign currency swaps, interest rate swaps and other derivative instru-
ments at March 31, 2014 and 2013 are as follows:
Derivatives designated as hedging instruments
Consolidated balance sheet line item
2014
Yen (millions)
2013
Asset derivatives
Estimated fair value
U.S. dollars
(thousands)
2014
Foreign exchange contracts
Prepaid expenses and
other current assets
¥27
¥118
$262
Derivatives designated as hedging instruments
Consolidated balance sheet line item
Foreign exchange contracts
Interest rate swaps
Total
Other current liabilities
Other liabilities
Derivatives not designated as hedging instruments
Consolidated balance sheet line item
Foreign exchange contracts
Foreign currency swaps
Interest rate swaps
Total
Prepaid expenses and
other current assets
Prepaid expenses and
other current assets
Investments in securities
and other
Derivatives not designated as hedging instruments
Consolidated balance sheet line item
Foreign exchange contracts
Foreign currency swaps
Other derivative instruments
Total
Other current liabilities
Other current liabilities
Other liabilities
2014
¥115
—
¥115
Yen (millions)
2013
¥23
61
¥84
2014
Yen (millions)
2013
Liability derivatives
Estimated fair value
U.S. dollars
(thousands)
2014
$1,117
—
$1,117
Asset derivatives
Estimated fair value
U.S. dollars
(thousands)
2014
¥1,006
¥6,686
$ 9,767
70
60
¥1,136
211
84
¥6,981
2014
¥1,993
2
4
¥1,999
Yen (millions)
2013
¥4,076
197
1,819
¥6,092
680
583
$11,030
Liability derivatives
Estimated fair value
U.S. dollars
(thousands)
2014
$19,350
19
39
$19,408
The effect of foreign exchange contracts and interest rate swaps designated as cash flow hedges on the consolidated statements
of income for the years ended March 31, 2014 and 2013 are as follows:
Derivatives in cash flow hedging relationships
Foreign exchange contracts
Interest rate swaps
Total
2014
¥(151)
61
¥ (90)
Amount of gain or (loss) recognized in OCI on derivative
(effective portion)
U.S. dollars
(thousands)
Yen (millions)
2013
¥ 85
49
¥134
2014
$(1,466)
592
$ (874)
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 61
Derivatives in cash flow hedging relationships
Line item of gain or (loss) recognized
from accumulated OCI into income
(effective portion)
Amount of gain or (loss) recognized from accumulated OCI into income
(effective portion)
U.S. dollars
(thousands)
Yen (millions)
2013
2014
2014
Foreign exchange contracts
Other revenues
(cost and expenses)
¥(42)
¥47
$(408)
The effect of foreign exchange contracts, foreign currency swaps, interest rate swaps and other derivative instruments not desig-
nated as hedging instruments on the consolidated statements of income for the years ended March 31, 2014 and 2013 are set
forth below:
Derivatives not designated as hedging instruments
Line item of gain or (loss) recognized
in income on derivative
Foreign exchange contracts
Foreign currency swaps
Interest rate swaps
Other revenues
(cost and expenses)
Other revenues
(cost and expenses)
Other revenues
(cost and expenses)
Other derivative instruments
Other revenues
Total
(15) SECURITIzATIONS
Amount of gain or (loss) recognized in income on derivative
U.S. dollars
(thousands)
Yen (millions)
2013
2014
2014
¥(19,807)
¥(8,302)
$(192,301)
704
(24)
56
¥(19,071)
(88)
(24)
2,090
¥(6,324)
6,835
(233)
544
$(185,155)
The Company sells its accounts receivable under several secu-
receivables.
ritization programs.
The Company recognized losses of ¥485 million ($4,709
Whe n the Company retains subordinated interests in the
thousand), ¥492 million and ¥450 million on the securitiza-
certain accounts receivables after the sale of these receivables,
tions of receivables for the years ended March 31, 2014, 2013
a portion of these, where the Company retains subordinated
and 2012, respectively.
interests, is not taken off the balance sheet and is recorded at
Subsequent to securitization, the Company retains col-
their fair value. Such carrying value is adjusted to reflect the
lection and administrative responsibilities for the receiv-
portion that is not expected to be collectible. As of March
ables. The Company has not recorded a servicing asset or
31, 2014, the Company did not retain subordinated interests
liability since the cost of collection effort is approximate to the
in the certain accounts receivables after the sale of these
amount of commission income.
Certain cash flows received from special purpose entities (SPEs) and banks on the above transactions for the years ended March
31, 2014, 2013 and 2012 are as follows:
Proceeds from new securitizations
2014
¥424,556
2013
¥404,156
Yen (millions)
2012
¥383,396
U.S. dollars
(thousands)
2014
$4,121,903
Quantitative information about trade receivables including securitized receivables as of March 31, 2014 and 2013 are as follows:
Trade receivables
Less: Securitized receivables
Total receivables
2014
¥1,106,139
122,671
¥ 983,468
Yen (millions)
2013
¥1,085,905
111,400
¥ 974,505
U.S. dollars
(thousands)
2014
$10,739,214
1,190,981
$ 9,548,233
As of March 31, 2014 and 2013, delinquencies and credit losses of trade receivables including securitized receivables are immaterial.
62 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
(16) COMMITMENTS AND CONTINGENT LIABILITIES
At March 31, 2014, commitments outstanding for the pur-
Commission, which would result in a downward modifica-
chase of property, plant and equipment were ¥23,998 million
tion of the fine. In December 2013, the Company received a
($232,990 thousand).
judgment from the European Court of Justice upholding the
It is common practice in Japan for companies, in the ordi-
European Commission’s underlying facts. The legal action the
nary course of business, to receive promissory notes in settle-
Company filed in September 2012 with the European General
ment of accounts receivable and to subsequently discount
Court is currently pending.
such notes at banks. At March 31, 2014, certain subsidiar-
Since July 2011, the Company and certain of its subsidiaries
ies were contingently liable to trade notes discounted in the
have been subject to investigations and inquiries conducted by
amount of ¥442 million ($4,291 thousand). Certain subsidiar-
the United States Department of Justice in relation to United State
ies account for the discounted notes as sale of receivables.
Antitrust Laws regarding the sale of certain automotive parts in
As of March 31, 2014, the Company has no significant
the United States of America. Consequently, in September 2013,
concentrations of credit risk.
the Company entered into a plea agreement with the United
While the Company and certain of its subsidiaries are
States Department of Justice in which the Company agreed to
defendants and co-defendants in various lawsuits and
pay US$190,000 thousand (¥18,573 million based on the rate of
legal actions, based upon the advice of legal counsel, the
exchange in effect at the date of the transaction) in fines for the
Company’s management is of the opinion that damages, if
infringement of United States Antitrust Laws.
any, would not have a material effect on the Company’s con-
For the year ended March 31, 2014, the Company recorded
solidated financial position and results of operations, except
¥7,738 million ($75,126 thousand), which is equivalent to the
for the following cases.
difference between the fines and its reserves as of the end of
In January 2007, the Company received a decision ren-
the previous fiscal year, in “Costs and expenses — Other”. The
dered by the European Commission imposing fines for an
actual payment of the fines was completed as of the end of this
infringement of EU Competition Law in connection with its
fiscal year.
sales of certain gas-insulated switchgears in Europe. However,
Civil lawsuits relating to United States Antitrust Laws have
there was a significant inconsistency on recognition of the
also been raised in the United States of America. In addition,
material underlying facts between the European Commission
since July 2011, the Company has been cooperating with
and the Company. Therefore, the Company appealed to the
Competition Law investigations and inquiries conducted by
European General Court and challenged the decision. In July
the European Commission regarding the sales of certain auto-
2011, the Company received a judgment from the European
motive parts in Europe.
General Court upholding the European Commission’s decision
As of March 31, 2014, the Company recorded an esti-
on the underlying facts while annulling the fine imposed on the
mated amount of ¥22,866 million ($222,000 thousand) as a
Company on the basis that the European Commission applied
reserve for these various competition-law-related expenses in
inconsistent methods of calculation to different companies.
“Other liabilities” relating to the gas-insulated switchgears
In September 2011, since there was still a significant
case in Europe and certain automotive parts cases in the
inconsistency on recognition of the material underlying facts
United States of America and Europe.
between the European Commission and the Company, the
Company appealed to the European Court of Justice.
In addition, the Company and certain of its subsidiaries
have moved towards reconciliation with some DRAM purchas-
In June 2012, the Company received the European
ers in relation to the possibility of violation of the Competition
Commission’s decision presenting an amount of fine as pay-
Law concerning DRAM sales. Considering the progress of the
able by the Company after revision of the pertinent computa-
reconciliation, the Company believes that the DRAM case will
tions. In September 2012, the Company took another legal
not have a material effect on Company’s consolidated finan-
action with the European General Court seeking a revision of
cial position and results of operations.
the current computation method presented by the European
The following table provides the undiscounted maximum amount of potential future payments for each major group of guaran-
tees at March 31, 2014:
Guarantees of bank loan:
Employees
Affiliated and other companies
Other
Total
Yen (millions)
¥ 4,150
2,214
6,561
¥12,925
U.S. dollars
(thousands)
$ 40,291
21,495
63,699
$125,485
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 63
The guarantees for the employees are principally made for
nies are made to enhance their credit, and the term of guar-
their housing loans, and the term of guarantees is 1 year to
antees is 1 year to 3 years.
15 years. The guarantees for the affiliated and other compa-
Change in accrued product warranty for the years ended March 31, 2014 and 2013 is summarized as follows:
Balance at beginning of year
Addition
Utilization
Foreign currency translation adjustments
Balance at end of year
(17) FAIR VALUE OF FINANCIAL INSTRUMENTS
2014
¥46,920
50,781
40,091
658
¥58,268
Yen (millions)
2013
¥41,107
39,935
35,049
927
¥46,920
U.S. dollars
(thousands)
2014
$455,534
493,019
389,233
6,389
$565,709
The Company uses the following methods and assumptions
to estimate the fair value of each class of financial instrument
for which it is practical to estimate its value:
(a) Cash and cash equivalents, Trade receivables, Bank
loans, Trade payables and Other current liabilities
The carrying amount approximates fair value because of the
short term nature of these instruments.
(b) Short-term investments and Investments in securities
and other
The fair values of most short-term investments and invest-
ments in securities and other are estimated based on quoted
market prices for these instruments. For other investments
(c) Long-term trade receivables
The fair value of the Company’s long-term trade receivables is
calculated under income approach using market interest rates,
therefore, it is classified in level 2.
(d) Long-term debt
The fair value of the Company’s corporate bonds is calculated
under market approach using quoted published price, therefore,
it is classified in level 2. The fair value of the Company’s long-
term debt is calculated under income approach using market
interest rates, therefore, it is classified in level 2. The Company
excludes the financial instruments relating to lease activities
because its carrying amount approximates fair value.
for which there are no quoted market prices, a reasonable
estimate of fair value could not be made without incurring
(e) Derivative financial instruments
The fair values of derivative financial instruments, consisting
excessive costs.
principally of foreign exchange contracts, foreign currency
swaps and interest rate swaps are estimated by obtaining
quotes from brokers. (See note 14 about estimated fair value.)
The estimated fair values of the Company’s financial instruments at March 31, 2014 and 2013 are summarized as follows:
2014
Carrying
amount
Yen (millions)
2013
Estimated
fair value
Carrying
amount
Estimated
fair value
U.S. dollars
(thousands)
Estimated
fair value
2014
Carrying
amount
Nonderivatives:
Assets:
Marketable securities and other
Long-term trade receivables
¥226,985
4,813
¥226,985
4,865
¥161,905
2,521
¥161,905
2,555
$2,203,738
46,728
$2,203,738
47,233
Liabilities:
Long-term debt, including
current portion
287,280
287,852
380,348
381,579
2,789,126
2,794,680
Limitations
Fair value estimates are made at a specific point in time based
and involve uncertainties and matters of significant judgment
on relevant market information and information about the
and therefore cannot be determined with precision. Changes
financial instrument. These estimates are subjective in nature
in assumptions could significantly affect the estimates.
64 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
(18) FAIR VALUE MEASUREMENTS
The Company defines fair value as “the price that would be
Level 1 : Quoted prices in active markets for identical assets
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement
date”. On that basis, the Company has categorized the inputs for
fair value measurement by the valuation technique into a three-
or liabilities.
Level 2 : Inputs other than quoted prices included within
Level 1 that are directly or indirectly observable for
the asset or liability.
level hierarchy, and placed the order of priority.
Level 3 : Unobservable inputs for the asset or liability.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as
of March 31, 2014 and 2013. The Company measures the fair value of those assets and liabilities in accordance with the require-
ments of FASB ASC for those assets and liabilities.
Assets:
Equity securities
Marketable equity securities
Debt securities
Government, municipal and corporate debt securities, and others
Investment trusts
Derivatives
Liabilities:
Derivatives
Assets:
Equity securities
Marketable equity securities
Debt securities
Government, municipal and corporate debt securities, and others
Investment trusts
Derivatives
Liabilities:
Derivatives
Level 1
Level 2
Level 3
Total
2014
Yen (millions)
¥223,173
¥ —
¥—
¥223,173
—
—
—
—
2,952
860
1,163
2,114
—
—
—
—
2,952
860
1,163
2,114
Yen (millions)
Level 1
Level 2
Level 3
Total
2013
¥120,887
¥ —
¥—
¥120,887
—
—
—
—
38,824
2,194
7,099
6,176
—
—
—
—
38,824
2,194
7,099
6,176
U.S. dollars (thousands)
Level 1
Level 2
Level 3
Total
2014
Assets:
Equity securities
Marketable equity securities
Debt securities
Government, municipal and corporate debt securities, and others
Investment trusts
Derivatives
Liabilities:
Derivatives
$2,166,729
$ —
$— $2,166,729
—
—
—
—
28,660
8,349
11,292
20,525
—
—
—
—
28,660
8,349
11,292
20,525
Level 1 equity securities are marketable equity securities,
and frequency of transactions. Level 2 debt securities are
which are valued using unadjusted quoted market prices in
active markets with sufficient volume and frequency of trans-
valued based on market approach, using quoted prices for
identical assets in markets that are not active. Level 2 deriva-
actions. Debt securities are comprised of government, munici-
tives are comprised principally of foreign exchange contracts,
pal and corporate debt securities and others, and investment
which are valued based on market approach, using quotes
trusts. Level 1 debt securities are valued using unadjusted
obtained from counterparties or third parties.
quoted market prices in active markets with sufficient volume
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 65
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
At March 31, 2014, in accordance with the requirements of
portion of long-lived assets was written down to their fair
FASB ASC Topic 360 “Property, Plant and Equipment”, a por-
value of ¥4,226 million, resulting in an impairment charge
tion of long-lived assets was written down to their fair value
of ¥4,317 million, which was included in loss on impairment
of ¥4,162 million ($40,408 thousand), resulting in an impair-
of long-lived assets for the year ended March 31, 2013. The
ment charge of ¥3,791 million ($36,806 thousand), which
impaired long-lived assets are classified as Level 3 assets,
was included in loss on impairment of long-lived assets for the
because they are measured based on the unobservable inputs
year ended March 31, 2014. The impaired long-lived assets
such as estimated future cash flows under income approach
are classified as Level 3 assets, because they are measured
or net sale price under market approach.
based on the unobservable inputs such as estimated future
The valuation process of long-lived assets is docu-
cash flows under income approach or net sale price under
mented in “Notes to Consolidated Financial Statements (1)
market approach.
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
At March 31, 2013, in accordance with the requirements
ACCOUNTING POLICIES (u)Impairment of Long-Lived Assets”.
of FASB ASC Topic 360 “Property, Plant and Equipment”, a
(19) SUPPLEMENTARY INCOME AND EXPENSE INFORMATION
Advertising expenses
Shipping and handling costs
Exchange gains (losses)
Refund payment for overcharged expenses
Loss on impairment of long-lived assets
2014
¥(23,847)
(79,634)
9,709
—
(3,791)
2013
¥(18,029)
(71,613)
8,034
(75,717)
(4,317)
Yen (millions)
2012
¥(18,372)
(73,283)
(2,000)
—
(3,782)
U.S. dollars
(thousands)
2014
$(231,524)
(773,146)
94,262
—
(36,806)
Advertising expenses are included in “Costs and expenses —
assets”.
Selling, general and administrative”.
For the year ended March 31, 2014, the Company and
Shipping and handling costs represents the costs included
certain of its subsidiaries recognized impairment losses of
in “Costs and expenses - Selling, general and administrative”.
¥3,627 million ($35,214 thousand) on tangible assets such as
Exchange gains (losses) are included in “Revenues —
land, buildings and tools, and ¥164 million ($1,592 thousand)
Other” and “Costs and expenses — Other”.
on intangible assets. The impairment losses included ¥1,217
Refund payment for overcharged expenses is included in
million ($11,816 thousand) for Home Appliances business
“Costs and expenses — Other”.
related assets due to a decline in profitability and ¥2,260
For the electronic systems business, it was revealed in
million ($21,942 thousand) for welfare related assets which
January 2012 that the Company had been billing improperly
are scheduled to be sold. The impairment losses were mainly
overcharged project costs by transferring man-hours among
measured based on the fair value less costs to sell.
different contracts which the Company entered into with
the Japanese Ministry of Defense(MOD), Cabinet Satellite
For the year ended March 31, 2013, the Company
and certain of its subsidiaries recognized impairment loss-
Intelligence Center, Japan Aerospace Exploration Agency,
es of ¥4,014 million on tangible assets such as buildings
and National Institute of Information and Communications
and machinery, and ¥303 million on intangible assets. The
Technology. Also, similar incidents were identified concerning
impairment losses included ¥2,404 million for Electronic
contracts between four of the Company's affiliates and MOD.
Devices business related assets and ¥1,212 million for Home
As a result of investigation conducted by the entities, for the
Appliances business related assets due to a decline in profit-
year ended March 31, 2013, the Company recorded a total of
ability. The impairment losses were mainly measured based
¥75,717 million as a refund payment for overcharged expens-
on the fair value of the discounted present value of expected
es in “Costs and expenses — Other” that covered the refund
future cash flow.
of overcharged expenses, related penalties and interest arising
from the series of incidents referred to herein.
For the year ended March 31, 2012, the Company
and certain of its subsidiaries recognized impairment loss-
Loss on impairment of long-lived assets is included in
es of ¥3,367 million on tangible assets such as buildings
“Costs and expenses — Loss on impairment of long-lived
and machinery, and ¥415 million on intangible assets. The
66 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
impairment losses included ¥2,429 million for Electronic
ability. The impairment losses were mainly measured based on
Devices business related assets and ¥1,110 million for Home
the fair value less costs to sell.
Appliances business related assets due to a decline in profit-
(20) LEASES
The Company and certain of its subsidiaries enter into capital
lease and operating lease agreements with Mitsubishi Electric
Credit Corporation, an equity method investee. The leased
assets, which are committed under capital lease agreements,
are capitalized.
The Company and certain of its subsidiaries lease machin-
ery and equipments. At March 31, 2014, the aggregated cost
and accumulated depreciation of leased assets under capital
leases amounted to ¥42,520 million ($412,816 thousand) and
¥22,350 million ($216,990 thousand), respectively.
Future minimum lease payments under capital and non-cancelable operating leases as of March 31, 2014 are as follows:
Year ending March 31:
2015
2016
2017
2018
2019
Thereafter
Total minimum lease payments
Less: Estimated executory costs
Net minimum lease payments
Less: Amount representing interest
Present value of net minimum capital lease payments
Less: Current portion of obligations under capital leases
Obligations under capital leases, excluding current portion
Yen (millions)
U.S. dollars
(thousands)
Capital leases Operating leases
Capital leases Operating leases
¥ 5,174
3,944
2,397
1,523
1,041
1,723
¥15,802
¥10,704
8,333
5,536
2,911
733
37
28,254
1,421
26,833
910
25,923
9,820
¥16,103
$ 50,233
38,291
23,272
14,786
10,107
16,728
$153,417
$103,922
80,903
53,748
28,262
7,117
359
274,311
13,796
260,515
8,835
251,680
95,340
$156,340
Rental expenses related to operating leases for the years
ended March 31, 2014, 2013 and 2012 amounted to
¥45,246 million ($439,282 thousand), ¥42,587 million and
¥42,076 million, respectively. These operating leases are for
office space, warehouses, employee facilities and computer
equipment, and are customarily renewed.
(21) SUPPLEMENTARY CASH FLOW INFORMATION
Cash paid during the year for:
Interest
Income taxes
2014
2013
Yen (millions)
2012
¥ 4,795
37,434
¥ 6,425
41,022
¥ 6,413
65,901
U.S. dollars
(thousands)
2014
$ 46,553
363,437
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 67
(22) SEGMENT INFORMATION
Operating segment presented below is identified based on the
The Company conducts business through 6 reportable
segments for which separate financial information is available,
business segments, Energy and Electric Systems, Industrial
and is periodically used for decision of business resources allo-
cation and evaluation of business operation by the Company’s
Automation Systems, Information and Communication
Systems, Electronic Devices, Home Appliances, and Others,
management.
based on types and characteristics of products, production
method, and similarity in market.
Principal businesses of each segment are as follows:
Energy and
Electric Systems
Industrial
Automation
Systems
Turbine generators, hydraulic turbine generators, nuclear power plant equipment, motors, transformers, power
electronics equipment, circuit breakers, gas insulated switches, switch control devices, surveillance-system control
and security systems, large display devices, electrical equipment for locomotives and rolling stock, elevators,
escalators, building security systems, building management systems, particle beam treatment systems, and others
Programmable logic controllers, inverters, servomotors, human-machine interface, motors, hoists, magnetic
switches, no-fuse circuit breakers, short-circuit breakers, transformers for electricity distribution, time and power
meters, uninterruptible power supply, industrial fans, computerized numerical controllers, electrical-discharge
machines, laser processing machines, industrial robots, clutches, automotive electrical equipment, car electronics
and car mechatronics, car multimedia, and others
Information and
Communication
Systems
Wireless and wired communications systems, surveillance cameras, satellite communications equipment, satellites,
radar equipment, antennas, missile systems, fire control systems, broadcasting equipment, data transmission
devices, network security systems, information systems equipment, systems integration, and others
Electronic Devices
Power modules, high-frequency devices, optical devices, LCD devices, and others
Home Appliances
LCD televisions, room air conditioners, package air conditioners, air-to-water heat pump boilers, refrigerators, electric
fans, ventilators, photovoltaic power generation systems, hot water supply systems, LED lamps, fluorescent lamps,
indoor lighting, compressors, chillers, dehumidifiers, air purifiers, showcases, cleaners, rice cookers, microwave ovens,
IH cooking heaters, and others
Others
Procurement, logistics, real estate, advertising, finance and other services
Intersegment transactions are conducted generally at the price that the Company’s management recognizes as approximate
arm's length price. Operating income (loss) in Segment Information is measured in a manner consistent with consolidated oper-
ating income.
Segment Information
Segment information for the years ended March 31, 2014, 2013 and 2012 are as follows:
As of and for the year ended March 31, 2014
Yen (millions)
Energy and
Electric Systems
Industrial
Automation
Systems
Information and
Communication
Systems
Electronic
Devices
Home
Appliances
Others
Subtotal
Eliminations
and other
Total
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income
II Assets, depreciation
and amortization,
loss on impairment of
long-lived assets, and
capital expenditures
Assets
Depreciation and
amortization
Loss on impairment of
long-lived assets
Capital expenditures
¥1,171,292
8,801
1,180,093
1,103,769
¥ 76,324
¥1,089,109
9,687
1,098,796
1,000,717
¥ 98,079
¥513,712
34,570
548,282
542,753
¥ 5,529
¥174,082
20,576
194,658
184,608
¥ 10,050
¥927,868
16,483
944,351
891,473
¥ 52,878
¥178,296
497,738
676,034
656,233
¥ 19,801
¥4,054,359
587,855
4,642,214
4,379,553
¥ 262,661
¥ — ¥4,054,359
—
4,054,359
3,819,187
¥ 235,172
(587,855)
(587,855)
(560,366)
¥ (27,489)
¥1,161,790
¥932,857
¥399,215
¥172,925
¥706,833
¥242,496
¥3,616,116
¥(3,150)
¥3,612,966
27,852
52,381
21,289
11,638
28,748
6,000
147,908
—
32,639
—
63,660
—
22,172
115
10,405
1,217
30,334
2,459
8,490
3,791
167,700
—
—
—
147,908
3,791
167,700
68 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
As of and for the year ended March 31, 2013
Yen (millions)
Energy and
Electric Systems
Industrial
Automation
Systems
Information and
Communication
Systems
Electronic
Devices
Home
Appliances
Others
Subtotal
Eliminations
and other
Total
As of and for the year ended March 31, 2012
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income (loss)
II Assets, depreciation
and amortization,
loss on impairment of
long-lived assets, and
capital expenditures
Assets
Depreciation and
amortization
Loss on impairment of
long-lived assets
Capital expenditures
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income
II Assets, depreciation
and amortization,
loss on impairment of
long-lived assets, and
capital expenditures
Assets
Depreciation and
amortization
Loss on impairment of
long-lived assets
Capital expenditures
¥1,049,982
8,195
1,058,177
973,037
¥ 85,140
¥918,123
9,734
927,857
867,265
¥ 60,592
¥491,792
30,630
522,422
520,831
¥ 1,591
¥142,961
21,104
164,065
169,645
¥ (5,580)
¥799,817
21,481
821,298
801,998
¥ 19,300
¥164,509
425,857
590,366
571,576
¥ 18,790
¥3,567,184
517,001
4,084,185
3,904,352
¥ 179,833
¥ — ¥3,567,184
—
3,567,184
3,415,089
¥ 152,095
(517,001)
(517,001)
(489,263)
¥ (27,738)
¥1,134,443
¥863,477
¥486,183
¥132,793
¥668,313
¥213,989
¥3,499,198
¥ (88,788)
¥3,410,410
26,274
46,477
24,769
11,573
25,821
6,393
141,307
143
39,449
—
55,824
—
19,706
2,404
13,732
1,212
27,869
558
6,913
4,317
163,493
—
—
—
141,307
4,317
163,493
Yen (millions)
Energy and
Electric Systems
Industrial
Automation
Systems
Information and
Communication
Systems
Electronic
Devices
Home
Appliances
Others
Subtotal
Eliminations
and other
Total
¥1,018,949
8,166
1,027,115
942,195
¥ 84,920
¥967,779
10,601
978,380
877,188
¥101,192
¥489,824
26,530
516,354
495,042
¥ 21,312
¥170,412
30,387
200,799
197,214
¥ 3,585
¥821,270
28,004
849,274
826,916
¥ 22,358
¥171,234
440,385
611,619
591,271
¥ 20,348
¥3,639,468
544,073
4,183,541
3,929,826
¥ 253,715
¥ — ¥3,639,468
—
3,639,468
3,414,024
¥ 225,444
(544,073)
(544,073)
(515,802)
¥ (28,271)
¥1,064,369
¥855,710
¥477,646
¥147,926
¥636,835
¥191,056
¥3,373,542
¥ 18,109
¥3,391,651
24,365
43,380
29,036
11,207
26,678
5,480
140,146
—
30,269
—
56,487
—
22,116
2,429
21,424
1,110
35,160
243
5,620
3,782
171,076
—
—
—
140,146
3,782
171,076
U.S. dollars (thousands)
As of and for the year ended March 31, 2014
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income
II Assets, depreciation
and amortization,
loss on impairment of
long-lived assets, and
capital expenditures
Assets
Depreciation and
amortization
Loss on impairment of
long-lived assets
Capital expenditures
Energy and
Electric Systems
Industrial
Automation
Systems
Information and
Communication
Systems
Electronic
Devices
Home
Appliances
Others
Subtotal
Eliminations
and other
Total
$11,371,767 $10,573,874
94,048
10,667,922
9,715,699
$ 741,010 $ 952,223
85,447
11,457,214
10,716,204
$4,987,495 $1,690,117
199,767
1,889,884
1,792,311
$ 97,573
335,631
5,323,126
5,269,447
$ 53,679
$9,008,427 $1,731,029 $39,362,709 $ — $39,362,709
—
5,707,330
39,362,709
45,070,039
37,079,486
42,519,932
$ 513,379 $ 192,243 $ 2,550,107 $ (266,884) $ 2,283,223
(5,707,330)
(5,707,330)
(5,440,446)
4,832,408
6,563,437
6,371,194
160,029
9,168,456
8,655,077
$11,279,515
$9,056,864
$3,875,874 $1,678,883
$6,862,456 $2,354,330 $35,107,922
$(30,582) $35,077,340
270,408
508,554
206,689
112,990
279,107
58,252
1,436,000
—
316,884
—
618,058
—
215,262
1,117
101,019
11,815
294,505
23,874
82,427
36,806
1,628,155
—
—
—
1,436,000
36,806
1,628,155
Notes: 1 The amount of unallocatable R&D expenditure included in "Eliminations and other" on "Operating costs" for the years ended March 31, 2014, 2013 and
2012 are ¥27,489 million ($266,884 thousand), ¥27,738 million and ¥28,271 million, respectively.
2 The amount of company-wide shared assets included in "Eliminations and other" on "Assets" for the years ended March 31, 2014, 2013 and 2012 are
¥197,227 million ($1,914,825 thousand), ¥126,212 million and ¥211,012 million, respectively, and those amounts are mainly the Company’s deposit in
bank.
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 69
Geographical Information
Sales to external customers by the location of customers, and long-lived assets by the location of the Company and its subsidiar-
ies as of and for the years ended March 31, 2014, 2013 and 2012 are as follows:
As of and for the year ended March 31, 2014
Yen (millions)
Overseas
Sales to external customers
% of total net sales
Long-lived assets
Japan
¥2,480,369
North
America
¥330,861
Asia
(excluding
Japan)
¥811,081
Europe
¥340,611
Others
¥91,437
Overseas total
¥1,573,990
Consolidated
total
¥4,054,359
61.2%
8.2%
20.0%
8.4%
534,521
39,831
109,774
17,426
2.2%
3,742
38.8%
170,773
100.0%
705,294
As of and for the year ended March 31, 2013
Yen (millions)
Overseas
Sales to external customers
% of total net sales
Long-lived assets
Japan
¥2,335,713
North
America
¥262,706
Asia
(excluding
Japan)
¥604,335
65.5%
7.4%
516,568
27,663
16.9%
90,798
Europe
¥280,126
7.8%
14,160
Others
¥84,304
Overseas total
¥1,231,471
Consolidated
total
¥3,567,184
2.4%
2,692
34.5%
135,313
100.0%
651,881
As of and for the year ended March 31, 2012
Yen (millions)
Overseas
Sales to external customers
% of total net sales
Long-lived assets
Japan
¥2,419,275
North
America
¥239,566
Asia
(excluding
Japan)
¥590,890
66.5%
6.6%
505,529
12,550
16.2%
66,488
Europe
¥304,233
8.4%
13,127
Others
¥85,504
Overseas total
¥1,220,193
Consolidated
total
¥3,639,468
2.3%
2,235
33.5%
94,400
100.0%
599,929
As of and for the year ended March 31, 2014
U.S. dollars (thousands)
Overseas
Sales to external customers
% of total net sales
Long-lived assets
Japan
$24,081,252
North
America
$3,212,243
Asia
(excluding
Japan)
$7,874,573
Europe
$3,306,903
Others
$887,738
Overseas total
$15,281,457
Consolidated
total
$39,362,709
61.2%
8.2%
20.0%
8.4%
2.2%
38.8%
100.0%
5,189,524
386,709
1,065,767
169,184
36,330
1,657,990
6,847,514
Notes: The major countries and regions included in each segments are as follows:
(1) North America : United States, and Canada
(2) Asia (excluding Japan) : China, South Korea, Thailand, Malaysia, Singapore, and Indonesia
(3) Europe : United Kingdom, France, Germany, the Netherlands, Spain, and Italy
In addition to the disclosure requirement of FASB ASC Topic 280 “Segment Reporting”, the Company discloses the following
information as supplement.
Geographical Information Based on the Location of the Company and Its Subsidiaries
As of and for the year ended March 31, 2014
Yen (millions)
Japan
North
America
Asia
(excluding
Japan)
Europe
Others
Subtotal
Eliminations
Total
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income
II Assets
¥2,719,567
643,287
3,362,854
3,185,539
¥ 177,315
¥2,637,710
¥306,537
18,687
325,224
323,545
¥ 1,679
¥254,978
¥638,518
248,504
887,022
827,999
¥ 59,023
¥673,309
¥342,072
10,878
352,950
348,182
¥ 4,768
¥233,252
¥47,665
159
47,824
46,089
¥ 1,735
¥39,884
¥4,054,359
921,515
4,975,874
4,731,354
¥ 244,520
¥3,839,133
¥ —
(921,515)
(921,515)
(912,167)
¥ (9,348)
¥(226,167)
¥4,054,359
—
4,054,359
3,819,187
¥ 235,172
¥3,612,966
70 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
As of and for the year ended March 31, 2013
Yen (millions)
Japan
North
America
Asia
(excluding
Japan)
Europe
Others
Subtotal
Eliminations
Total
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income (loss)
II Assets
¥2,561,242
502,772
3,064,014
2,947,091
¥ 116,923
¥2,594,608
¥233,548
14,557
248,105
249,849
¥ (1,744)
¥210,356
¥450,791
173,933
624,724
588,552
¥ 36,172
¥559,138
¥281,400
8,533
289,933
285,406
¥ 4,527
¥184,872
¥40,203
52
40,255
38,046
¥ 2,209
¥34,043
¥3,567,184
699,847
4,267,031
4,108,944
¥ 158,087
¥3,583,017
¥ —
(699,847)
(699,847)
(693,855)
¥ (5,992)
¥(172,607)
¥3,567,184
—
3,567,184
3,415,089
¥ 152,095
¥3,410,410
As of and for the year ended March 31, 2012
Yen (millions)
Japan
North
America
Asia
(excluding
Japan)
Europe
Others
Subtotal
Eliminations
Total
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income
II Assets
¥2,675,473
511,246
3,186,719
3,007,267
¥ 179,452
¥2,594,841
¥206,359
16,184
222,543
219,204
¥ 3,339
¥177,694
¥416,574
166,314
582,888
548,668
¥ 34,220
¥448,911
¥300,891
9,106
309,997
303,678
¥ 6,319
¥169,676
¥40,171
13
40,184
36,279
¥ 3,905
¥28,783
¥3,639,468
702,863
4,342,331
4,115,096
¥ 227,235
¥3,419,905
¥ —
(702,863)
(702,863)
(701,072)
¥ (1,791)
¥ (28,254)
¥3,639,468
—
3,639,468
3,414,024
¥ 225,444
¥3,391,651
As of and for the year ended March 31, 2014
U.S. dollars (thousands)
Japan
North
America
Asia
(excluding
Japan)
Europe
Others
Subtotal
Eliminations
Total
I Net sales and
operating income
Sales:
(1) External customers
(2) Intersegment
Net sales
Operating costs
Operating income
II Assets
6,245,505
32,649,068
30,927,563
$26,403,563 $2,976,088 $6,199,204 $3,321,087 $462,767 $39,362,709 $ — $39,362,709
—
39,362,709
37,079,486
$ 1,721,505 $ 16,301 $ 573,039 $ 46,291 $ 16,844 $ 2,373,980 $ (90,757) $ 2,283,223
$25,608,835 $2,475,515 $6,536,981 $2,264,582 $387,223 $37,273,136 $(2,195,796) $35,077,340
(8,946,748)
(8,946,748)
(8,855,991)
8,946,748
48,309,457
45,935,477
2,412,660
8,611,864
8,038,825
105,612
3,426,699
3,380,408
181,427
3,157,515
3,141,214
1,544
464,311
447,467
Notes: 1 The Company has identified 5 location segments based on geographical proximity, similarity in market, and interconnectedness within business activities.
2 The major countries and regions included in each segments are as follows:
(1) North America : United States, and Canada
(2) Asia (excluding Japan) : China, South Korea, Thailand, Malaysia, Singapore, and Indonesia
(3) Europe : United Kingdom, France, Germany, the Netherlands, Spain, and Italy
3 The amount of company-wide shared assets included in "Eliminations and other" on "Assets" for the years ended March 31, 2014, 2013 and 2012 is
¥197,227 million ($1,914,825 thousand), ¥126,212 million and ¥211,012 million, respectively, and those amounts are mainly the Company’s deposit in
bank.
(23) SUBSEqUENT EVENT
The Company issued its 44th unsecured bonds and 45th unsecured bonds under approval of Officers’ Meeting held on May 12, 2014.
44th Unsecured Bonds
(a) Total amount of issue ¥20,000 million
(b) Issue date
June 5, 2014
45th Unsecured Bonds
(a) Total amount of issue ¥20,000 million
(b) Issue date
June 5, 2014
(c) Issue price
¥100 per face value of ¥100
(c) Issue price
¥100 per face value of ¥100
(d) Stated interest rate
(e) Collateral
0.270%
None
(d) Stated interest rate
(e) Collateral
0.428%
None
(f) Repayment date
(g) Use of proceeds
June 5, 2019
Repayment of bonds and capital
expenditures
(f) Repayment date
(g) Use of proceeds
June 4, 2021
Repayment of bonds and capital
expenditures
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 71
Independent Auditors’ Report
72 MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014
Corporate Data / Shareholder Information
(As of March 31, 2014)
Corporate Data
Mitsubishi Electric Corporation
Tokyo Building, 2-7-3, Marunouchi,
Chiyoda-ku, Tokyo 100-8310, Japan
Tel: +81(3)3218-2111
Established: January 15, 1921
Paid-in Capital: ¥175,820 million
Shares issued: 2,147,201,551 shares
Employees: 124,305
Major Shareholders
Annual Meeting
The annual meeting of shareholders of the Corporation is regularly
held in June each year. Additionally, special shareholders meetings
may be held as necessary.
Stock Exchange Listings
Japan: Tokyo
Europe: London
The Master Trust Bank of Japan, Ltd. (Trust Account)
State Street Bank and Trust Company
Japan Trustee Services Bank, Ltd. (Trust Account)
Meiji Yasuda Life Insurance Company
Nippon Life Insurance Company
Mitsubishi Electric Group Employees Shareholding Union
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Japan Trustee Services Bank, Ltd. (Trust Account 4)
The Bank of New York Mellon SA/NV 10
The Master Trust Bank of Japan, Ltd.
(Mitsubishi Heavy Industries, Limited Account, Retirement Benefit Trust Account)
Number of Shares
(thousands)
Percentage of
Ownership
164,681
105,952
99,436
81,862
67,039
46,799
36,822
32,708
31,114
30,087
7.7%
4.9%
4.6%
3.8%
3.1%
2.2%
1.7%
1.5%
1.4%
1.4%
Distribution of Shareholders
Other Corporations
6.2%
Traders of Financial Instruments
1.3%
Foreign Corporations
36.1%
Financial Institutions 42.1%
Individuals and Others 14.3%
Stock Price (Yen)
1,500
1,200
900
600
300
0
’11/4
Mitsubishi Electric’s Stock Price
Nikkei Stock Average
’12/4
’13/4
The Nikkei Stock Average is based on information copyrighted by Nihon Keizai Shimbun, Inc.
20,000
15,000
10,000
5,000
’14/4
Nikkei Stock Average
(Yen)
MITSUBISHI ELECTRIC CORPORATION ANNUAL REPORT 2014 73
Please address inquiries for further information to:
Mitsubishi Electric Corporation, Corporate Finance Div.
Tokyo Building, 2-7-3, Marunouchi, Chiyoda-ku, Tokyo 100-8310, Japan
Phone: 81-3-3218-2391
X-X01-4-C9401-A HQ1407〈IP〉