NTV Annual Report 2005

Transcription

Nippon Television Network Corporation Annual Report for the Year Ended March 31, 2005
http://www.ntv.co.jp/english/
Printed in Japan
Nippon Television Network Corporation
Annual Report for the Year Ended March 31, 2005
ON NEW
MEDIA
ANYTIME,
ANYWHERE
Corporate Data
CONTENTS
Consolidated Financial Highlights
2
Average Viewer Ratings by Viewing-Time Period
3
To Shareholders and Stakeholders
4
Platform for a New Era
12
1. Three Foundations for Winning
14
2. Creating Content for the Mobile Viewer
16
3. Spreading the Boundaries of Digitization
18
4. Social Responsibility
20
Corporate Governance
22
Financial Section
23
Stock Price
51
NTV Group
52
NTV Global Network
53
NTV Corporation Organization Chart
54
Corporate Data
55
Directors
55
Directors
(As of July 1, 2005)
Head Office:
1-6-1 Higashi Shimbashi, Minato-ku,
Tokyo 105-7444, Japan
Tel: 81-3-6215-1111
Board of Directors and Statutory Auditors
Representative Director, Chairman
Seiichiro Ujiie
Representative Director, Adviser
Kohei Manabe
Date of Establishment:
October 28, 1952
Representative Director
Shintaro Kubo
Board Directors
Start of Operations:
August 28, 1953
Noritada Hosokawa
Katsuhiro Masukata
Yoshihiro Yamane
Yoichi Shimada
Tadao Kurosaki
Takeshi Sakai
Toru Shoriki
Tsuneo Watanabe*
Gaishi Hiraiwa*
Nobuo Yamaguchi*
Hiroshi Maeda*
Yoshifumi Akao*
Number of Employees: (As of March 31, 2005)
1,123 (Non-consolidated)
Common Stock:
Authorized 100,000,000 Shares
Issued 25,364,548 Shares
Paid-in Capital:
¥18,576 Million
Standing Statutory Auditor
Kinya Yokoegawa
Stock Exchange Listing:
Tokyo
Statutory Auditors
Transfer Agent and Registrar:
The Chuo Mitsui Trust and Banking Company, Limited
3-33-1 Shiba, Minato-ku, Tokyo 105-0014, Japan
Ryuzo Sejima**
Tomonari Doi**
Kenya Mizukami**
* Outside appointments are pursuant to Article 188.2-7.2 of the
Commercial Code of Japan.
** Outside appointments pursuant to Article 18.1 of the Law for
Special Exceptions to the Commercial Code Concerning Audits, etc.,
of Corporations.
Operating Officers
President
Shintaro Kubo*
Executive Vice President
Noritada Hosokawa*
Managing Officer
Katsuhiro Masukata*
Operating Officers
Yoshihiro Yamane*
Yoichi Shimada*
Tadao Kurosaki*
Takeshi Sakai*
Senior Operating Officers
Cautionary Statements with Respect to Forward-Looking Statements:
Statements made in this annual report with respect to NTV’s plans
and benefits as well as other statements that are not historical facts
are forward-looking statements, which involve risks and uncertainties.
Potential risks and uncertainties include, without limitation, general
economic conditions in NTV’s markets, exchange rates and NTV’s ability
to continue to win customers’ acceptance of its products, which are
offered in highly competitive markets characterized by continual new
product introductions and rapid developments in technology.
Kunisuke Hirabayashi
Masaki Matsumoto
Fumihiro Hirai
Hime Miura
Hiroshi Akimoto
Operating Officers
Yasuhiro Nose
Haruhisa Murokawa
* Concurrent Director
This annual report was printed using a waterless printing method, recycled paper and soy-based ink.
55
MEDIA
NTV’s Mission — A Commitment to Mirroring the New Era
As the first commercial broadcaster in Japan,
NTV commenced operations in 1953,
bringing to the nation a new form
of media to complement the established fields
of newspapers, publishing and radio.
MIRRORS
In the half century that has followed,
NTV has made an enduring impression
on the evolving information-based culture of Japan.
Today, the media sector is
in a dynamic transitional phase
driven by rapid advancements in digital technology.
This has generated significant change
and prompted the convergence
between broadcasting and communications.
THE NEXT
We view this period of transformation
as an opportunity to pursue further growth.
NTV is taking a pioneering role
in line with its axiom that
“media mirrors the next generation.”
GENERATION
1
Thousands of
U.S. Dollars*1
(except per
share figures)
Millions of Yen
(except per share figures)
2005
2004
2005
¥357,614
¥328,375
$3,329,739
Years Ended March 31
For the year:
Net sales
Cost of sales
245,109
217,844
2,282,207
Operating income
34,325
35,937
319,599
Net income
16,846
19,359
156,853
¥493,558
¥513,430
$4,595,512
366,646
354,046
3,413,836
¥ 671.08
¥ 771.74
165.00
120.00
Operating income margin
9.6
10.9
Return on assets
3.3
3.9
Return on equity
4.7
5.7
32.8
18.6
At year-end:
Total assets Total shareholders’ equity
Per share:
Net income* 2
Cash dividends*
3
$
6.25
1.54
Ratio (%):
Dividend payout ratio
Notes:
1. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan
and have been made at the rate of ¥107.4 to $1, the approximate rate of exchange at March 31, 2005. Such translations should not
be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
2. Net income per share is computed based on the weighted average number of shares outstanding during the respective years.
3. Cash dividends per share are the amounts applicable to the respective years, including dividends to be paid after the end of the year.
4. Facts and figures throughout this report relate to the respective years ended March 31 unless otherwise stated.
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(%)
All Day
12
（6:00-24:00）
9
6
3
94
95
96
97
98
99
00
01
02
03
04
(Calendar Year)
(%)
Prime Time
20
（19:00-23:00）
15
10
5
94
95
96
97
98
99
00
01
02
03
04
(Calendar Year)
(%)
Golden Time
20
（19:00-22:00）
15
10
5
94
95
96
97
98
99
00
01
02
03
04
(Calendar Year)
(%)
Non-Prime Time
（6:00-19:00
23:00-24:00）
10
8
6
4
2
94
95
96
97
98
99
00
01
02
03
04
(Calendar Year)
NTV
TV Company A
TV Company B
TV Company C
TV Company D
3
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President
sentative Director and
Shintaro Kubo, Repre
4
Company
5
“Success depends on anticipating change
rather than merely following it. This is NTV’s DNA.”
Over the course of its history, NTV has always shown outstanding presence as
a pioneer among companies in the Japanese broadcasting industry. For ten
years through 2003, we won the quadruple crown title of annual viewer ratings
because of our ability to produce original and pace-setting programs.
The times, however, have completely changed and today we face numerous
perplexing issues. No longer do we stand at the pinnacle of the industry. Our
net sales while strong remain below their peak of the year ended March 31,
2002. By taking greater advantage of NTV’s DNA, we aim to improve on a solid
performance and reclaim our position as No. 1.
It is imperative that we continue to create programs that captivate viewers
and to do so we need people who think outside the box. Leveraging this
revolutionary thinking, we must also evolve beyond existing businesses and
consider opportunities and collaboration unthinkable in the past.
As president, I have set forth NTV’s objective to achieve “total success.” Our
industry has reached a critical juncture. The broadcasting and communication
domains are converging. Our competitive arena is expanding from the free,
advertising-driven terrestrial broadcasting market to fee-based markets in
satellite broadcasting, the Internet and mobile media. Against this backdrop,
our goal is to become a comprehensive media company that succeeds in each
domain and all major distribution channels. Accordingly, NTV must diversify
its businesses and revenue streams. To achieve “total success,” we must draw
more and more on our DNA, and the ability to both anticipate change and
shape the future.
6
7
8
King of Content by 2008
Our eyes are on 2008, the year of NTV’s 55th anniversary and also the year
of the Beijing Olympics. From now, we will see dynamic transformation in
the media industry, with the 29th Olympiad a watershed as the largest and
most technologically advanced media event in history. People will have
more options for watching the Olympic Games than ever before, from mobile
devices and phones to televisions and computers receiving digital terrestrial,
communications satellite (CS) and broadcasting satellite (BS) services. This is
such a momentous opportunity for growth and innovation that NTV is putting all
of its efforts into succeeding in every one of these new media fields. We intend
to win back our top viewer ratings and reclaim our crown as king of content.
In Tune with the Times
Recent media technologies are changing how and where people watch
television, but why they turn it on has not changed. It is easy to appreciate
the higher picture quality of digital broadcasts and the convenience of mobile
and IP-based devices, but what still matters most to viewers is content. It
follows that the most fundamental factor for achieving our objective is to
continuously create fresh and original content that sets new, higher standards
for programming quality. It is in fact NTV’s content that sets us at the top of
our class and reflects our ability to broadcast inventive programs in tune with
the times. At NTV, I believe we must continue to leverage our DNA toward
producing superior content for the coming multimedia society.
9
Goals for a Successful Future
Toward accomplishing our objective of “total success” as a comprehensive
media company, we have condensed core management and operational concepts
into the following five main goals:
Tapping Our Creative Capacity
Having held the quadruple crown for ten years straight, I can say that NTV’s
hit programs were made possible by the abundant inventiveness that springs
from our corporate culture. It is vital to keep nurturing our creative capacity
in a supportive, expansive environment and to this end we will allocate capital
resources for improving our content development capabilities.
Winning Over Clients
With satellite and fee-based broadcasting, television viewers have an incredible
array of choices for programs, and companies have more outlets for advertising.
Nevertheless, our goal is to be the one company most preferred by viewers and
advertisers. NTV will win them over by constantly offering innovative content,
products and services.
Giving Back to Our Shareholders
The support of our shareholders is essential for “total success.” We will make
every effort to distribute stable dividends while increasing corporate value. Our
basic dividend policy is to link payments to performance by emphasizing the
payout ratio. From the year ended March 31, 2005, we have set a payout ratio
target of 33%.
Gaining the Trust of Society
As the industry experiences change and redefines its business boundaries, NTV
aims to be the company most trusted to lead the expansion of television’s role
in society. This requires nurturing the trust of our viewers in everything we do,
from producing programming, reporting news, providing sales and services and
contributing to our communities. We are cognizant of our responsibility as a
media company to consider and enhance culture and public standards.
10
Strengthening Cost Management
Our operating environment is becoming more dynamic, unpredictable and
fiercely competitive. In this context, it is imperative that we build on our
rock-solid operating foundation that can effectively implement meticulous cost
management. Although it has been a long-standing problem in the broadcasting
industry, NTV was one of the first companies to tackle this problem head-on.
I am confident in our abilities to continue making significant cost reductions
without lowering employee motivation. Furthermore, our current earnings
capability is considerably higher than that of our rivals, which we believe holds
us in good stead.
In the true spirit of a pioneer, NTV will capitalize on the openings that change
provides and emerge a clear victor in 2008. We will draw upon our DNA, that
is, our ability to materialize opportunities into successes, to expand into new
fields as a winning company.
Having assumed the responsibilities of president, I look forward to tackling
the challenges ahead with our strong, forward-looking management and
our talented and diverse group of employees. We value the support of our
shareholders and stakeholders as vital to our goal of achieving “total success.”
Shintaro Kubo
Representative Director and President
11
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13
© TAKASHI YANASE / FRÖEBELKAN
•
TMS
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NTV
NTV’s future depends on the production of
cartoon characters Anpanman and Lupin the
high-quality content in the multimedia age.
3rd is doing particularly well. Entering its 18th
Despite an increasing variety of broadcasting
year of television showings in October 2005,
technologies and communications devices, we
Anpanman has grown into a substantial ¥86
will stay focused on the creation of true value
billion merchandise market. Our investment in the
— content that is cherished by viewers — as the
production of works at Studio Ghibli coupled with
essence of television. Broadcasting is simply
DVD sales of other popular programs and spin-off
a means of distribution and content is the end
merchandise serve to double this strength in the
product consumed by viewers. NTV aims to expand
growing copyright business.
the content business in line with new technologies
A second foundation for winning is our
by leveraging advantages found in its inherent
aggressive approach to the movie business. We are
strengths that form three foundations for winning.
making concerted efforts to produce our own movies
Our first foundation is the copyright business.
Merchandise based on the popular television
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under the NTV Original Movie (NOMO) project. Tokyo
is committed to across-the-board efforts to nurture
Tower became a hit movie after opening in January
this business as a pillar of non-broadcasting source
2005 and plans for more high-profile films are in
of earnings. NTV has achieved considerable success
the works.
in clearing copyright issues related to an archive of
The third foundation is our bold posture in
more than 180,000 programs, a resource of strong
taking on new business opportunities. In October
earnings potential for VoD services. Additionally,
2005, we are planning the full-fledged launch of a
we will work to create fresh, original content that
Video-on-Demand (VoD) service. For this purpose,
keeps users coming back for more.
we established the VoD Business Department
in September 2005, which reports to the newly
created NTV2 VoD Business Division. The Company
NTV Can Create
Media Market Scale in 2003
(Billions of Yen)
Visual
4,918
Movies
Satellite TV programs
Terrestrial TV programs
Audio
932
Game software
Video software
Print
Primary Distribution Market
651
295
196
58
18
5,010
Multi-Use Market
Source: Research Concerning the Current State of Production and Distribution
of Media Contents (Institute for Information and Communications
Policy, MIC)
15
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NTV is B
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16
Scheduled to start in spring 2006, “one-segment”
more important role in each individual’s daily
services (a unique digital broadcasting service
life. According to various surveys in Japan, more
in Japan) will enable the transmission of content
than 80% of the respondents indicated interest
to cellular phones and other mobile devices by
in watching television on their cellular phones.
using one of 13 segments on the digital terrestrial
By utilizing these communication devices as a
broadcasting spectrum. Acutely aware of the
broadcasting medium, we are confident datacasting
opportunities presented by this new service, NTV is
will enable users to easily access more detailed
taking an aggressive approach to creating content
information about television programs and order
for this innovative broadcasting medium.
related products.
The launch of “one-segment” services will
Although we do not expect this change to
allow people to watch television on ultra-compact
happen overnight, we believe young people, the
devices that fit in a shirt pocket, at times and
chief users of cellular phones, will quickly adopt
places unreachable until now. With greater access
the new technology.
and opportunity, we anticipate viewing time to
significantly increase and datacasting to play a
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Since digital terrestrial broadcasting in Japan
started from December 2003, area coverage has
steadily widened and compatible hardware has
advanced. Further expansion is expected in fiscal
2005 with full-fledged digital broadcasting.
Spurred by the launch of “one-segment” digital
broadcasting and enriched datacasting, coverage
is estimated to extend to 27 million households, or
57%, by the end of 2005.
NTV is making every effort to complete the
transition to high-definition (HD) production and
transmission equipment, taking full advantage
of the cutting-edge facilities at the NTV Tower
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in Shiodome. NTV can already boast the highest
ratio of HD programs among the key commercial
broadcasters in Tokyo, reaching 66% of households
in Japan as of April 2005, but we aim to extend our
reach to more than 80% of households in 2007.
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NTV is conducting new experiments with
digitization and datacasting. Specifically, we are
developing services in cooperation with local
governments that will enable people to electronically
submit various applications such as residency
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certificates through their televisions. Among other
initiatives, we are participating in reception
t io n s
D iv e r s e A p p li c a
tests of “one-segment”
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broadcasting in subways and underground walkways.
These efforts are significantly contributing to
increased awareness of NTV’s technical expertise.
With regard to networking, Kitanihon
Broadcasting Co., Ltd., an NTV affiliate, kicked
off the first digital broadcasting service to areas
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outside Tokyo, Osaka and Nagoya in October
2004. We anticipate affiliated networks will
take steps toward digitization in the next few
years. Digitization requires a significant up-front
investment for these stations, so their most
pressing issue is how to build cost-efficient digital
networks. NTV is implementing specific measures
to substantially reduce these costs and cooperating
in the joint ordering of equipment and use of
common specifications for FPU (field pickup unit)
masters.
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19
social
NTV is highly conscious of its responsibility
31, 2005, the Ministry of Internal Affairs and
as a media company and takes into account
Communications singled out NTV for having the
various environmental and social issues in the
highest ratio (25%) of subtitle broadcasting time
implementation of management measures.
to total broadcasting time among private-sector
Recognizing this responsibility, NTV emphasizes
broadcasters. Highlighting our activities to preserve
strict adherence to corporate ethics, encourages
the world's cultural heritage, NTV has lent its full
personal development and promotes social
cooperation in the renovation of a special viewing
contribution.
room for the world-renowned painting of the Mona
In fostering personnel, NTV also promotes
Lisa by Leonardo da Vinci at the Louvre Museum in
initiatives to encourage the development of talented
Paris. In our charity program, 24-Hour Television:
employees and improve corporate value. These
Love Saves the Earth, donations from viewers,
measures include a personnel evaluation system,
corporate clients and NTV's network affiliates have
career planning services, a job request program and
raised a total of more than ¥23 billion as of 2004,
a performance-based compensation system.
the 27th year of this annual event, for assistance
NTV takes great pride in its contributions to
to public welfare and environmental activities.
society. The Company has an established policy to
In 2003, we established the NTV Environmental
deliver information and services to the broadest
Management Office to guide corporate efforts to
possible audience. In order to lower barriers to
protect the environment. Our new head office is a
information access, for example, NTV uses subtitles
during broadcasts. In the year ended March
L in k s
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C o m m it t e d t o R
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ponsib
Social Res
ility
contribution
shining example. Designed with energy conservation
24-Hour Television — Use of Charity Donations in 2004
and environmental harmony in mind, NTV Tower is
(Yen)
contributing to reductions in energy consumption
Domestic natural
disaster assistance
by 8% and CO2 emissions by 7%.
In addition, NTV was one of the first media
companies to participate in Team Minus 6%, a
government initiative promoted by the Ministry of
the Environment to prevent global warming and
meet CO2 reduction targets in accordance with
the Kyoto Protocol, which took effect in February
2005.
10,000,000
Donations to
support global
environmental
protection
Overseas aid
57,594,165
Buses with lifts
4,621,000
13,773,361
Wheelchair-accessible
compact vehicles
with ramps
Donations to
support the
training of dogs
that assist the
disabled
7,489,800
Gifts
4,619,450
In July 2005, NTV created the Environmental
ISO Promotion Committee, with the president
appointed as chief environmental officer, launching
companywide efforts toward the acquisition of ISO
14001 certification in 2005.
12,110,800
Cash disbursement
773,105,130
Special vehicles for
public service activities
687,118,154
Spending Total
785,215,930
Donations raised in 2004 (27th annual charity event) totaled ¥719,045,124.
Donations raised over 27 years of charity events have totaled ¥23,208,275,214.
Source: 24-Hour Television Charity Committee (October 1, 2003 to September
30, 2004)
Sector
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C
e
h
t
y and
b e t w e e n S o c ie t
NTV was selected by the
FTSE4Good Index Series in
September 2004. In line with
the Dow Jones Sustainability
World Index, the FTSE4Good
Index Series is a key indicator
for measuring the performance
of companies that meet
globally recognized corporate
responsibility standards, and it
facilitates investment in those
companies. The FTSE4Good
Index Series also includes a
number of major Japanese
companies including Sony
Corporation, Teijin Limited and
Toyota Motor Corporation.
21
Management Structure
Primary Initiatives in Fiscal 2004
NTV’s Board of Directors has a total of 15
The Compliance Committee, established in
members, five of whom are outside appointments.
December 2003, is responsible for overall corporate
The Board of Statutory Auditors, which has four
governance. As part of its activities, the Committee
members, includes three outside auditors.
formulated the NTV Compliance Charter, which can
NTV has also created an internal control
be viewed on the Company’s website. Underpinned
system that incorporates various function-specific
by this Charter, the Committee also checks
committees. The Business Operations Audit
on a daily basis cost management issues and
Committee has been established as a part of the
improves systems related to program production
Board of Directors to supervise all aspects of
and deliberates on measures to enhance ethical
business execution. The Remuneration Committee
awareness of employees. Reinforcing business
was formed under the Board of Directors to
oversight systems through internal auditing
field inquiries about compensation for directors
regulations, the Committee is also responsible for
and other employees. Key to NTV’s corporate
staff adjustments as well as periodic training and
governance activities is the Compliance Committee.
compliance education.
This committee was formed to ensure effective
The Compliance & Standards Division was
corporate governance and highly transparent
established in June 2004 to handle various
activities. Through strict compliance with laws and
legal issues as well as review programs and
regulations, NTV is taking significant strides to
commercials. The Division also provides guidance
garner the trust and support of the public.
on the objectivity of news and documentary
The framework of the internal control system is
programs while fostering an internal culture that
specifically implemented as described below. First,
emphasizes ethical behavior. In fiscal 2004, the
all of our directors and employees have pledged to
Division took the initiative to update Company
uphold the NTV Compliance Charter. Second, the
rules on document management and worked
Business Operations Audit Committee is dedicated
toward complete compliance with the Personal
to preventing and uncovering illicit behavior
Information Protection Law. With the enactment
through internal audits. Third, the Compliance
of the Whistleblower Protection Act, NTV also
& Standards Division conducts checks on every
strengthened related systems, such as expanding
facet of daily business activities from a legal
contacts through the NTV Whistle internal
perspective. Fourth, the Operations Improvement
notification system.
Committee, an organization under the direction of
the Compliance Committee, concentrates efforts on
the improvement of compliance-related systems.
Fifth, NTV Whistle was put in place as an internal
notification system so employees are able to report
inappropriate conduct.
22
Financial
Section
CONTENTS
Six-Year Summary
24
Management’s Discussion and Analysis
25
Consolidated Balance Sheets
34
Consolidated Statements of Income
36
Consolidated Statements of Shareholders’ Equity
37
Consolidated Statements of Cash Flows
38
Notes to Consolidated Financial Statements
39
Independent Auditors’ Report
50
23
Six-Year Summary
Thousands of
U.S. Dollars* 1
(except for per
share figures)
Millions of Yen (except for per share figures)
2005
Years Ended March 31
2004
2003
2002
2001
2000
2005
For the year:
Net sales
¥ 357,614 ¥ 328,375 ¥ 336,299 ¥ 358,683 ¥ 352,409 ¥ 328,014 $3,329,739
Cost of sales
245,109
217,844
215,180
218,889
207,744
203,863
2,282,207
Operating income
34,325
35,937
47,407
63,574
67,303
54,351
319,599
Net income
16,846
19,359
20,296
34,648
36,008
34,003
156,853
At year-end:
Total assets
¥ 493,558 ¥ 513,430 ¥ 476,634 ¥ 443,798 ¥ 410,042 ¥ 364,896 $4,595,512
Total shareholders’
equity
366,646
354,046
327,116
323,319
291,501
253,912
3,413,836
Per share:
Net income*2
671.08 ¥
771.74 ¥
801.99 ¥ 1,366.34 ¥ 1,419.96 ¥ 1,341.04 $
6.25
165.00
120.00
120.00
120.00
120.00
80.00
1.54
14,688.07
14,183.02
13,102.25
12,750.14
11,495.33
20,025.50
136.76
Operating income
margin
9.6
10.9
14.1
17.7
19.1
16.6
Return on assets
3.3
3.9
4.4
8.1
9.3
10.0
Cash dividends*
¥
3
Shareholders’ equity
Ratio (%):
Return on equity
Dividend payout ratio
4.7
5.7
6.2
11.3
13.2
14.7
32.8
18.6
15.4
9.4
8.9
6.3
Notes:
1. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and
have been made at the rate of ¥107.4 to $1, the approximate rate of exchange at March 31, 2005. Such translations should not be
construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
2. Net income per share is computed based on the weighted average number of shares outstanding during the respective years,
retroactively adjusted for stock splits.
3. Cash dividends per share are the amounts applicable to the respective years, including dividends to be paid after the end of year,
retroactively adjusted for stock splits.
4. Facts and figures throughout this report relate to the respective years ended March 31 unless otherwise stated.
24
Management’s Discussion and Analysis
1. Overview
Taking a broad look at economic conditions in
Japan, there were signs of a recovery in the first
half of the year ended March 31, 2005, led by
a moderate increase in consumer spending amid
improvements in corporate earnings. At the start
of the second half, this positive trend slowed,
reflecting the deceleration in exports and higher
crude oil prices.
In the advertising market, the Athens Olympics
and a stifling summer buoyed demand. As a result,
advertising spending totaled ¥5,857.1 billion
in 2004, up 3.0% for the first increase in four
calendar years according to research by Dentsu Inc.
Of this total, spending on television advertising
increased in 15 of 21 categories, including
financing and insurance, beverages and real estate
and housing facilities. Of these 15 categories,
six showed significant double-digit growth. As
a consequence, total spending on television
advertising rose 4.9% to ¥2,043.6 billion,
rebounding to the ¥2 trillion level after a three-year
lapse. Satellite media-related advertising grew 4.1%
to ¥43.6 billion owing mainly to an increase in BS
digital broadcasting.
Under these operating conditions, the NTV Group
recorded significant growth of 8.9% in consolidated
net sales to ¥357,614 million in the year ended
March 31, 2005, marking the first increase in
three years. This gain in sales was supported by a
firm rise in revenues in the television broadcasting
segment, owing to the robust advertising market
and a considerable upward swing in revenues in the
cultural activities segment.
Operating income and net income decreased on
account of an increase in costs with the operation
of NTV’s new head office. However, the NTV Group
recorded higher net sales and net income than
original targets for the year ended March 31,
2005. Net sales were 7.5% higher than our original
estimate and net income was 49.1% higher. This
was the result of our efforts to thoroughly manage
costs for program production combined with
external factors, such as the favorable turn in the
advertising market.
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Increased Spending
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Contribution
Ratio
Finance/Insurance
113.9
25.8
Beverages/Cigarettes
108.3
16.1
Cosmetics/Toiletries
106.0
15.7
Transportation/Leisure
106.0
11.7
Real Estate/Housing Facilities
105.2
5.6
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Comparison
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Comparison
Ratio
Contribution
Ratio
Foodstuffs
94.7
39.0
Hobbies/Sporting Goods
94.4
19.4
Information/Communications
97.0
18.9
Government/Organizations
Pharmaceuticals/
Medical Supplies
89.5
12.7
97.6
10.0
Note: The contribution ratio represents the percentage of contribution to the
total amount of the increase or decrease.
Source: 2004 Advertising Expenditures in Japan (Dentsu Inc.)
25
(1) Net Sales
In the year ended March 31, 2005, the NTV Group
posted consolidated net sales of ¥357,614 million,
an increase of 8.9%, or ¥29,239 million. The
significant jump in sales in the cultural activities
segment played a part in overall growth, especially
record-setting box-office receipts for the movie
Hauru no Ugoku Shiro (Howl’s Moving Castle)
and strong sales of DVD titles. In the television
broadcasting segment, sales rose in tandem
with major single-episode programs, such as the
Athens Olympics, as well as a recovery in the spot
advertising market. Solid performance in these
two segments provided sturdy support for sales
expansion in the NTV Group.
(2) Gross Profit
Gross profit edged up 1.8%, or ¥1,974 million, to
¥112,505 million. Cost of sales totaled ¥245,109
million, an increase of 12.5%, or ¥27,265 million,
reflecting a peak in depreciation and amortization to
¥21,060 million in accordance with the full-scale
operation of the Shiodome head office. The increase
in net sales, however, covered for the higher cost of
sales. Program production costs, one of the largest
expenditures, decreased 0.5% on an unconsolidated
basis to ¥109,570 million, contributing to higher
gross profit.
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(3) Operating Income
Operating income fell 4.5%, or ¥1,612 million, to
¥34,325 million. This decrease reflects an upswing
in selling, general and administrative (SG&A)
expenses of 4.8%, or ¥3,586 million, to ¥78,180
million, owing mainly to an increase in running
costs at the Shiodome head office.
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(4) Income Before Income Taxes and Minority
Interests
Despite an improvement in other expenses, the
aforementioned increase in SG&A expenses resulted
in a drop in income before income taxes and
minority interests of 8.0%, or ¥2,766 million, to
¥31,787 million.
(5) Net Income
As a result of the above, net income amounted to
¥16,846 million, a decrease of 13.0%, or ¥2,513
million. Owing to a fall in the share prices of listed
companies, NTV had planned to record a ¥3,550
million loss on devaluation of investment securities
as an extraordinary loss. Share prices rebounded
by March 31, 2005, however, and accounting
readjustments revised this loss to ¥145 million.
2. Performance by Segment
(1) Television Broadcasting
In the television broadcasting segment, revenues
are derived from sales of broadcasting time to
advertisers (broadcasting sales) and programs to
network affiliates, through the production and
broadcasting of television programs. Broadcasting
sales are classified into two categories: broadcasting
time during specific programs (time sales) and
advertising spots between programs (spot sales).
The production and broadcasting of television
programs in this segment are handled by NTV Eizo
Center Corporation and five other consolidated
subsidiaries, as well as two unconsolidated
subsidiaries and nine associated companies.
During the year ended March 31, 2005, total
television broadcasting sales increased ¥4,794
million, or 1.7%, to ¥289,810 million (all segment
sales include inter-segment transactions). The main
components of broadcasting sales are as follows.
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Time sales rose in the first half of the year
ended March 31, 2005, owing mainly to large-scale
single-episode programs, such as the Athens
Olympics and international soccer friendly matches.
Despite strong special program sales around the
New Year, time sales declined in the second half
due to the absence of the Major League Baseball
season opener and the Tokyo International
Marathon, which aired in the same period of the
previous fiscal year. There was also a decline in
time sales for regular programs throughout the
fiscal year. As a result, time sales edged down to
¥148,699 million in the year ended March 31,
2005.
In spot sales, there was a recovery in the first
half of the year ended March 31, 2005, reflecting
the positive effect of demand for consumer
electronics, most notably from July through
September due to the Athens Olympics, and higher
advertising placements for beverages during the
intense summer. While the domestic economy
showed some signs of slowing in the second half of
the year ended March 31, 2005, NTV continued to
aggressively promote efficient sales activities in the
first half, resulting in a sales increase. Accordingly,
spot sales for fiscal 2004 increased 2.6% to
¥120,137 million, offsetting the decline in time
sales.
Operating income in the television broadcasting
segment fell ¥5,801 million, or 18.6%, to ¥25,345
million, owing to a considerable increase in
depreciation and amortization despite efforts to
reduce costs by aiming to enhance the efficiency of
program production spending for regular programs
in particular.
(2) Cultural Activities
In the cultural activities segment, NTV promotes
concerts and art exhibits, film investments and
production, sports events and book publishing.
Nippon Television Music Corporation plans
and produces recorded music, including CDs,
and represents music copyrights and manages
merchandising rights. VAP Inc. plans, produces,
records and sells CDs, videotapes and DVDs.
This segment also includes two unconsolidated
subsidiaries and one associated company.
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Total cultural activities segment sales increased
¥23,244 million, or 59.8%, to ¥62,103 million.
In movies, Hauru no Ugoku Shiro (Howl’s Moving
Castle), which hit theaters in November 2004
and Tokyo Tower, an NTV Original Movie (NOMO)
project released in January 2005, attracted broad
popularity. In DVDs, the South Korean dramas
Winter Sonata and Beautiful Days and the DVD
version of the popular comedy television show
Downtown no Gaki no Tsukaiyaarahende!! were
runaway hits. CDs by popular music artists Mr.
Children, Bump of Chicken and YUZU also provided
a boost to sales. Sales were also strong for character
goods including those for the Anpanman and Lupin
the 3rd cartoons.
From January 2005, the ALPHONSE MUCHA:
Treasures from the Mucha Foundation exhibition
was held at the Tokyo Metropolitan Art Museum.
During a two-month period, more than 238,000
visitors enjoyed the event, contributing strongly to
revenues. In its 19th year, Disney on Ice was shown
in Tokyo and Yokohama, providing a steady stream
of box-office revenue.
As a result, operating income in the cultural
activities segment climbed ¥4,303 million, or
110.0%, to ¥8,215 million.
(3) Other
In the other segment, NTV Services Inc. engages in
building management, insurance sales and sales of
novelty goods at various events. Nippon Television
Work 24 Corporation is involved in general facility
management services, including property. Nippon
Television Football Club Co., Ltd. manages a
professional soccer team. Forecast Communications
Inc. offers Internet-related services. Five other
associated companies are also a part of this
segment.
Total sales in this segment in the year ended
March 31, 2005, were ¥13,717 million, up ¥1,806
million, or 15.2%. Operating income increased
¥264 million, or 29.0%, to ¥1,175 million.
These gains reflect the addition of tenant leasing,
merchandise sales and building management
operations at the Shiodome head office, as well as
the initial leasing of the former head office building
in Kojimachi.
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3. Liquidity and Financial Resources
Net property and equipment fell ¥12,780
million, or 5.5%, to ¥218,590 million due to a
considerable amount of depreciation. Investments
and other assets increased ¥6,528 million, or
7.0% to ¥99,871 million, reflecting the purchase
of investment securities and an increase in other
assets.
As of March 31, 2005, total liabilities were
¥121,747 million, a decrease of ¥34,372 million,
or 22.0%, from the end of the previous fiscal year.
Total current liabilities were ¥84,700 million,
down ¥33,320 million from the end of the previous
fiscal year, primarily reflecting the repayment of
short-term bank loans.
Total non-current liabilities declined ¥1,052
million to ¥37,047 million, owing to the partial
reversal of liabilities for retirement benefits in
accordance with the partial transition from the
approved retirement annuity system (the Company's
defined benefits pension plan) and lump-sum
retirement benefits to a 401(k)-type plan.
Minority interests amounted to ¥5,165 million,
an increase of ¥1,900 million from the end of the
previous fiscal year on account of an increase in
minority interests at consolidated subsidiaries that
had performed favorably in the year ended March
31, 2005.
Total shareholders’ equity was ¥366,646 million,
an increase of ¥12,600 million. Despite a decrease
in unrealized gain on available-for-sale securities
due to a fall in share prices on stocks held, retained
earnings rose along with the recording of net
income.
(1) Liquidity Management and Capital
Procurement Policy
The NTV Group uses retained earnings and
procures funds through borrowings to meet ongoing
requirements for operating capital and capital
expenditures. Bank loans were taken out to build
the new Shiodome head office and invest in digital
broadcasting equipment. As of March 31, 2005,
short-term bank loans were ¥11.5 billion. NTV
plans to repay this amount in full during the year
ending March 31, 2006.
The NTV Group plans to invest in corporate
initiatives for sustainable growth and believes
NTV has the ability to continue funding these
investments with retained earnings.
(2) Financial Position
As of March 31, 2005, total assets were ¥493,558
million, a decrease of ¥19,872 million, or 3.9%
from a year earlier.
Total current assets declined ¥13,620 million to
¥175,097 million, owing to a decrease in cash and
cash equivalents in accordance with the repayment
of short-term bank loans.
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4. Strategic Events and Outlook
(3) Cash Flows
As of March 31, 2005, cash and cash equivalents
were ¥66,878 million, down ¥11,052 million
from a year earlier. This was mainly the result of
the repayment of short-term bank loans, which
outweighed an increase in net cash provided by
operating activities.
Net cash provided by operating activities totaled
¥49,286 million, up from ¥30,520 million in the
previous fiscal year. Decreases in cash included a
decline in income before income taxes and minority
interests, as well as a drop in trade notes and
accounts payables, which was due to shortened
payment cycles to comply with the Act Against
Delay in Payment of Subcontract Proceeds. These
factors were overcome, however, by sources of cash
including an increase in depreciation, a non-cash
item and a decrease in income taxes paid.
Net cash used in investing activities was ¥23,046
million. The main uses of cash were payments
for the refurbishment of the former head office at
Kojimachi, purchases of investment securities and
payments for long-term loans.
Net cash used in financing activities was
¥37,275 million, compared with net cash provided
by financing activities of ¥7,131 million in the
previous fiscal year, reflecting the repayment of
short-term bank loans.
This section contains forward-looking statements
about the NTV Group’s future performance. Please
refer to the “Cautionary Statements with Respect
to Forward-Looking Statements” at the end of this
annual report.
(1) Management Issues Faced in the Year Ended
March 31, 2005, and Future Management Policy
The year ended March 31, 2005, saw signs of a
recovery in the Japanese economy and an increase
in consumer spending. There was also significant
improvement in the advertising market, which
deeply affects the earnings of the NTV Group.
NTV was confronted with several issues in the
year ended March 31, 2005. Even though NTV
had attained the quadruple crown title of annual
viewer ratings for ten consecutive years, we allowed
this title to slip away to a competing broadcaster
in the year ended March 31, 2005. One reason
for this was low viewer ratings for professional
baseball games during the regular season. NTV is
collaborating with a wide variety of parties that both
directly and indirectly shape the face and future
of professional baseball in Japan for ways to boost
its popularity, such as through reforms including
interleague matches. As conditions do not warrant
optimism for viewer ratings for our other regular
programs, we are taking decisive action in the
form of a large reorganization of program lineups
and the appointment of young producers. NTV is
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31
also concentrating more efforts on single-episode
programs. From 2005, NTV plans to broadcast the
FIFA Club World Championship Toyota Cup Japan,
a tournament of the best soccer clubs from six
continents, in December of each year. To regain
top viewer ratings, we must continue to produce
high-quality programs by effectively leveraging the
cutting-edge facilities in NTV Tower, our Shiodome
head office replete with the latest digital equipment
to prepare and edit program content.
One of our most urgent management issues is
responding to the multimedia and multichannel era
amid a fusion of broadcasting and communications
technologies. In this context, the NTV Group plans
to launch from autumn 2005 a full-scale VoD
service for distributing fee-based content over
the Internet and “one-segment” broadcasting.
NTV is building a virtual shopping zone for video
content for various distribution channels, such
as PCs and cellular phones. As a comprehensive
distribution business, NTV’s VoD service will be a
first in the broadcasting industry. In this business,
we will offer a wide range of appealing content,
and plan to incorporate advertising revenues in
addition to content viewing fees. After launching
the service, we aim to quickly build membership
to one million users and grow the business into
a non-broadcasting source of earnings by adding
content and aggressively selling advertising.
Business performance during the year ending March
31, 2006 is expected to see little impact.
32
The NTV Group has the following measures in
place to address issues particular to the television
broadcasting segment and the cultural activities
segment.
Television Broadcasting
In the television broadcasting segment, the two
most urgent issues we face are developing and
providing the best content in the industry, as well
as improving viewer ratings. NTV is focusing on
single-episode programs, aiming to foster young
upwardly mobile creators and improve the quality
of the programming schedule.
Promptly responding to client needs is
another crucial issue. In recent years, the needs
of advertisers and the lifestyles of viewers have
changed remarkably and we must strategically
reposition network time, local time and spot
advertising slots. As for marketing strategy, NTV is
revising its program schedules in April and October
based on an analysis of program content, client
needs and viewer lifestyles, while flexibly allocating
a balance of network and local commercials, as well
as time and spot commercials. We will also continue
to accurately pinpoint diverse advertiser needs and
create content that surpasses the expectations of
our advertisers.
Cultural Activities
In the cultural activities segment, the NTV Group is
making every effort to improve earnings capabilities
by leveraging its competitive advantages. We have
hosted many successful art exhibitions thanks to
strong ties with art museums, mainly in France,
through a project to restore the murals of the
Sistine Chapel in the Vatican. We will continue to
sponsor popular art exhibitions with an appropriate
commitment of management resources. In the
year ending March 31, 2006, NTV plans to hold
three standout events: the Masterpieces from the
Louvre Museum: 19th Century French Paintings
from Neoclassicism to Romanticism at the
Yokohama Museum of Art; Hauru no Ugoku Shiro
Dai Sakasuten (Howl’s Moving Castle in Festival) at
the Museum of Contemporary Art, Tokyo; and the
We Will Rock You spectacular at Shinjuku Koma
Stadium. Projecting strong attendance, NTV expects
to enjoy significant profits in the cultural activities
segment.
In the copyrights business field, NTV is
concentrating on promoting merchandise for
Anpanman and Lupin the 3rd, popular cartoons in
Japan and investing in the production of works at
Studio Ghibli. We aim to diversify revenue sources
by maximizing the value of our content copyrights
as a precious resource of the NTV Group.
2) Earnings Estimates for the Year Ending
March 31, 2006
In the year ending March 31, 2006, NTV estimates
net sales of ¥343 billion, ordinary income of ¥27
billion and net income of ¥11 billion. NTV expects
sales to decline in the television broadcasting
segment, owing to the absence of special demand
from the Athens Olympics and oppressive summer
in 2004. In the cultural activities segment, NTV
estimates a decrease in sales due to the lack of
blockbuster movies and DVDs that boosted sales in
the year ended March 31, 2005. Accordingly, NTV
estimates net sales to decline ¥15,114 million,
or 4.2%. In terms of expenses, NTV expects
production costs to increase due to large-scale
single-episode programs including the World Grand
Champions Cup 2005 (volleyball), FIFA Club World
Championship Toyota Cup Japan 2005 (soccer) and
Torino Winter Olympics. The Company estimates
depreciation to decrease, having crossed its peak.
However, NTV projects a shortfall that will not
cover the projected decline in net sales. Further
exacerbating this downturn, NTV anticipates it will
incur losses on devaluation of investment securities
of approximately ¥5.0 billion. In light of the
aforementioned projections, net income is forecast
to fall ¥5,947 million, or 35.3%.
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Capital expenditures
Depreciation and amortization
2006
2007
2008
2009
2010
7.3
7.1
5.2
6.8
4.0
16.5
15.3
13.3
11.7
9.8
33
Consolidated Balance Sheets
Nippon Television Network Corporation and Consolidated Subsidiaries
March 31, 2005 and 2004
Thousands of
U.S. Dollars
(Note 1)
Millions of Yen
ASSETS
Current assets:
Cash and cash equivalents
Time deposits
Marketable securities (Note 3)
Receivables:
Trade notes
Trade accounts
Other
Allowance for doubtful accounts
Program rights
Deferred tax assets (Note 8)
Prepaid expenses and other
Total current assets
Property and equipment—At cost (Notes 4 and 9):
Land
Buildings and structures
Machinery, vehicles and equipment
Construction in progress
Total
Accumulated depreciation
Net property and equipment
Investments and other assets:
Investment securities (Note 3)
Investment in unconsolidated subsidiaries and
associated companies
Deferred tax assets (Note 8)
Other assets
Total investments and other assets
TOTAL
See notes to consolidated financial statements.
34
2005
2004
¥ 66,878
100
2,076
¥ 77,930
100
329
5,250
78,484
1,708
(59)
9,530
5,231
6,597
(698)
6,339
76,232
5,582
(96)
11,525
5,981
5,445
(650)
2005
$
622,700
931
19,330
48,883
730,764
15,901
(549)
88,734
48,706
61,425
(6,499)
175,097
188,717
1,630,326
114,936
90,831
93,836
485
115,120
90,468
99,778
268
1,070,168
845,726
873,706
4,515
300,088
(81,498)
305,634
(74,264)
2,794,115
(758,826)
218,590
231,370
2,035,289
77,545
75,212
722,020
7,225
552
14,680
(131)
7,132
312
10,856
(169)
67,272
5,140
136,685
(1,220)
99,871
93,343
929,897
¥493,558
¥513,430
$4,595,512
Thousands of
U.S. Dollars
(Note 1)
Millions of Yen
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term bank loans (Note 5)
Payables:
Trade notes
Trade accounts
Other
Income taxes payable
Accrued expenses and other
Total current liabilities
Non-current liabilities:
Liabilities for retirement benefits (Note 6)
Guarantee deposits received (Note 4)
Deferred tax liabilities (Note 8)
Other
Total non-current liabilities
Minority interests
2005
2004
2005
¥ 11,500
¥ 45,903
3,081
49,424
7,292
6,640
6,763
2,838
53,720
2,852
2,256
10,451
28,687
460,186
67,896
61,825
62,971
84,700
118,020
788,641
10,438
20,127
4,964
1,518
13,507
20,046
4,546
97,188
187,402
46,220
14,134
37,047
38,099
344,944
5,165
3,265
48,091
$
107,076
Commitments and contingent liabilities (Notes 9 and 10)
Shareholders’ equity (Notes 7 and 11):
Common stock, no par value—authorized,
50,000,000 shares; issued, 25,364,548 shares
in 2005 and 2004
Additional paid-in capital
Retained earnings
Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Total
Treasury stock—at cost, 409,210 shares in 2005 and
408,930 shares in 2004
Total shareholders’ equity
TOTAL
18,576
17,928
330,171
9,666
(159)
18,576
17,928
316,418
10,835
(179)
172,961
166,927
3,074,218
90,000
(1,480)
376,182
363,578
3,502,626
(9,536)
(9,532)
(88,790)
366,646
354,046
3,413,836
¥493,558
¥513,430
$4,595,512
35
Consolidated Statements of Income
Years Ended March 31, 2005 and 2004
Thousands of
U.S. Dollars
(Note 1)
Millions of Yen
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Note 9)
Operating income
Other income (expenses):
Interest and dividend income
Interest expense
Gain on sales of property and equipment
Loss on devaluation of investment securities
Loss on revision of retirement benefit plan
Moving expense related to new head office building
50th anniversary expense of broadcasting service
Other—net
2005
2004
2005
¥357,614
¥328,375
$3,329,739
245,109
217,844
2,282,207
112,505
110,531
1,047,532
78,180
74,594
727,933
34,325
35,937
319,599
784
(70)
5
(145)
(2,269)
7,300
(652)
47
(1,350)
(21,127)
709
(134)
935
(558)
(843)
(673)
(771)
(892)
(7,849)
(2,538)
(1,384)
(23,631)
Income before income taxes and minority interests
31,787
34,553
295,968
Income taxes (Note 8):
Current
Deferred
11,416
1,727
9,247
4,941
106,294
16,080
13,143
14,188
122,374
Income before minority interests
18,644
20,365
173,594
Minority interests in net income
(1,798)
(1,006)
(16,741)
Other expenses—net
Total income taxes
Net income
¥ 16,846
¥ 19,359
Yen
Per share of common stock (Note 2.m):
Net income
Cash dividends applicable to the year
36
$
156,853
U.S. Dollars
2005
2004
2005
¥671.08
165.00
¥771.74
120.00
$6.25
1.54
Consolidated Statements of Shareholders’ Equity
Thousands
Millions of Yen
Shares of
Common
Stock
Common
Stock
Additional
Paid-in
Capital
Balance, April 1, 2003
Net income
Cash dividends, ¥95 per share
Bonuses to directors
Interim cash dividends,
¥25 per share
Adjustment of retained earnings
from the exclusion of equity
method of an associated
company
Net increase in unrealized gain
on available-for-sale securities
Foreign currency translation
adjustments
Increase in treasury stock—net
25,365
¥18,576
¥17,928
Balance, March 31, 2004
Net income
Cash dividends, ¥95 per share
¥25 per share
Net decrease in unrealized gain
adjustments
25,365
25,365
Retained
Earnings
¥299,477
19,359
(2,372)
(140)
Unrealized
Gain on
Availablefor-sale
Securities
¥
Foreign
Currency
Translation
Adjustments
775
¥(110)
Treasury
Stock
¥(9,530)
(623)
717
10,060
(69)
(2)
18,576
17,928
316,418
16,846
(2,369)
(100)
10,835
(179)
(9,532)
(624)
(1,169)
20
(4)
¥18,576
¥17,928
¥330,171
¥ 9,666
¥(159)
¥(9,536)
Thousands of U.S. Dollars (Note 1)
Common
Stock
Net income
Cash dividends, $0.88 per share
$0.23 per share
Net decrease in unrealized gain
adjustments
$172,961
$172,961
Additional
Paid-in
Capital
Retained
Earnings
Unrealized
Gain on
Availablefor-sale
Securities
$166,927 $2,946,164 $100,885
156,853
(22,059)
(931)
Foreign
Currency
Translation
Adjustments
$(1,667)
Treasury
Stock
$(88,752)
(5,809)
(10,885)
187
(38)
$166,927 $3,074,218
$ 90,000
$(1,480)
$(88,790)
37
Consolidated Statements of Cash Flows
Thousands of
U.S. Dollars
(Note 1)
Millions of Yen
Operating activities:
Income before income taxes and minority interests
Adjustments for:
Income taxes—paid
Depreciation and amortization
Reversal of liabilities for retirement benefits
Gain on sales of property and equipment
Loss on devaluation of investment securities
Equity in losses of unconsolidated subsidiaries and
associated companies
Changes in operating assets and liabilities:
(Increase) decrease in trade notes and accounts receivables
Decrease (increase) in program rights
(Decrease) increase in trade notes and accounts payables
Other—net
2004
2005
¥ 31,787
¥ 34,553
$ 295,968
(7,032)
21,060
(3,069)
(5)
145
89
(1,163)
1,995
(4,053)
9,532
(19,183)
12,676
(1,686)
(935)
558
430
(65,475)
196,089
(28,575)
(47)
1,350
829
1,334
(3,915)
4,426
2,262
(10,829)
18,575
(37,737)
88,752
Total adjustments
17,499
(4,033)
162,932
Net cash provided by operating activities
49,286
30,520
458,900
(100)
100
290
(11,612)
147
(902)
249
(6,452)
(4,766)
963
9,243
(51,326)
12,118
(3,280)
82
(8,419)
(977)
(931)
931
2,700
(108,119)
1,369
(8,399)
2,318
(60,074)
(44,376)
(23,046)
(41,596)
(214,581)
(34,403)
(2,846)
(4)
(22)
10,138
(2,995)
(2)
(10)
(320,326)
(26,499)
(38)
(204)
(37,275)
7,131
(347,067)
Investing activities:
Increase in long-term deposits
Decrease in long-term deposits
Proceeds from sales of marketable securities
Purchases of property and equipment
Proceeds from sales of property and equipment
Purchases of intangible assets
Proceeds from sales of investment securities
Purchases of investment securities
Other—net
Net cash used in investing activities
Financing activities:
Change in short-term bank loans—net
Dividends paid
Purchases of treasury stock
Other—net
Net cash (used in) provided by financing activities
Foreign currency translation adjustments
on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
38
2005
(17)
(69)
(157)
(11,052)
77,930
(4,014)
81,944
(102,905)
725,605
¥ 66,878
¥ 77,930
$ 622,700
Notes to Consolidated Financial Statements
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with the provisions set
forth in the Japanese Securities and Exchange Law and its related accounting regulations, and in conformity
with accounting principles generally accepted in Japan, which are different in certain respects as to application
and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been
made to the consolidated financial statements issued domestically in order to present them in a form which
is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the 2004
financial statements to conform to the classifications used in 2005.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which
Nippon Television Network Corporation (the “Company”) is incorporated and operates. The translation of
Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan
and has been made at the rate of ¥107.4 to $1, the approximate rate of exchange at March 31, 2005. Such
translations should not be construed as representations that the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate.
2. Summary of Significant Accounting Policies
a. Consolidation — The consolidated financial statements as of March 31, 2005 and 2004 include the
accounts of the Company and its 12 significant subsidiaries (together, the “Group”).
Under the control or influence concept, those companies in which the Company, directly or indirectly, is able
to exercise control over operations are fully consolidated, and those companies over which the Company has the
ability to exercise significant influence are accounted for by the equity method.
Investments in 4 (4 in 2004) unconsolidated subsidiaries and 15 (16 in 2004) associated companies are
accounted for by the equity method.
Investments in the remaining unconsolidated subsidiaries and associated companies are stated at cost.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group is eliminated.
b. Cash Equivalents — Cash equivalents are short-term investments that are readily convertible into cash and
that are exposed to insignificant risk of changes in value.
Cash equivalents include time deposits and mutual funds investing in bonds that represent short-term
investments, all of which mature or become due within three months of the date of acquisition.
c. Program Rights — Costs incurred in connection with the production of programming and the purchase of
rights to programs are capitalized and amortized as the respective programs are broadcasted. Program rights are
carried at cost, determined by the specific identification method.
d. Marketable and Investment Securities — Marketable and investment securities are classified as trading
securities, held-to-maturity debt securities or available-for-sale securities depending on management’s intent.
The Group classifies securities as held-to-maturity debt securities and available-for-sale securities.
Held-to-maturity debt securities are stated at amortized cost.
Marketable available-for-sale securities are stated at fair value with unrealized gains and losses, net of
applicable taxes, reported in a separate component of shareholders’ equity. The cost of securities sold is
determined based on the moving-average method.
39
Non-marketable available-for-sale securities are stated at cost determined by the moving-average method.
For other than temporary declines in fair value, non-marketable available-for-sale securities are reduced to net
realizable value by a charge to income.
e. Property and Equipment — Property and equipment are stated at cost. Depreciation is computed by the
declining-balance method over the estimated useful lives of the assets, while the straight-line method is applied
to buildings acquired after April 1, 2000. The range of useful lives is from 3 to 50 years for buildings and
structures and from 2 to 20 years for machinery, vehicles and equipment.
f. Retirement and Pension Plan — The Company has an unfunded lump-sum retirement benefits plan, a
defined contribution pension plan and a prepaid retirement plan. Subsidiaries have an unfunded lump-sum
retirement benefits plan and a non-contributory funded pension plan.
Effective April 1, 2000, the Group adopted a new accounting standard for employees’ retirement benefits
and accounted for the liability for retirement benefits based on projected benefit obligations and plan assets at
the balance sheet date.
The Company’s transitional assets, determined at the beginning of the year, are being amortized over 10
years.
The annual provision for retirement benefits for directors and corporate auditors is calculated to state the
liability at the amount that would be required if all directors and corporate auditors retired at each balance
sheet date.
According to the enactment of the Defined Contribution Pension Plan Law in October 2001, the Company
shifted a portion of the existing defined benefit pension plan (qualified pension plan and severance lump-sum
payment plan) to a defined contribution pension plan and a prepaid retirement plan in line with the
implementation of the defined contribution pension law. The Company applied accounting treatments specified
in the guidance issued by the Accounting Standards Board of Japan (“ASB”). The effect of this transfer was
to increase income before income taxes by ¥2,269 million ($21,127 thousand) and was recorded as profit on
transfer of pension plans in the consolidated statement of income for the year ended March 31, 2005.
The transition amount of this shift, ¥3,096 million ($28,827 thousand), is scheduled to be paid to the
private pension account, for 4 years after plan shifts.
On March 31, 2005, the untransition amount accounted for payable (other) of ¥738 million ($6,872
thousand) and non-current liabilities (other) of ¥1,477 million ($13,752 thousand).
g. Leases — All leases are accounted for as operating leases. Under Japanese accounting standards for leases,
finance leases that deem to transfer ownership of the leased property to the lessee are to be capitalized,
while other finance leases are permitted to be accounted for as operating lease transactions if certain “as if
capitalized” information is disclosed in the notes to the consolidated financial statements.
h. Income Taxes — The provision for income taxes is computed based on the pretax income included in the
consolidated statements of income. The asset and liability approach is used to recognize deferred tax assets and
liabilities for the expected future tax consequences of temporary differences between the carrying amounts and
the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted tax laws to the
temporary differences.
i. Appropriations of Retained Earnings — Appropriations of retained earnings at each year end are reflected
in the financial statements for the following year upon shareholders’ approval.
j. Foreign Currency Translations — Receivables and payables denominated in foreign currencies are translated
into Japanese yen at the exchange rates at the balance sheet date.
Foreign exchange gains and losses are recognized during the fiscal year in which they occur.
40
k. Foreign Currency Financial Statements — The balance sheet and revenue and expense accounts of the
consolidated overseas subsidiaries are translated into yen at the current exchange rates as of the balance sheet
date except for shareholders’ equity, which is translated at the historical exchange rate.
Differences arising from such translation were shown as “Foreign currency translation adjustments” in a
separate component of shareholders’ equity.
l. Cash Dividends — Cash dividends charged to retained earnings are those actually paid during the year
which represents year-end dividends for the preceding year and interim dividends for the current year.
m. Per Share Information — Basic net income per share is computed by dividing net income available to
common shareholders by the weighted-average number of common shares outstanding for the period.
Diluted net income per share is not disclosed because it is anti-dilutive.
Cash dividends per share presented in the accompanying consolidated statements of income are dividends
applicable to the respective years including dividends to be paid after the end of the year.
n. New Accounting Pronouncements — In August 2002, the Business Accounting Council issued a Statement
of Opinion, “Accounting for Impairment of Fixed Assets,” and in October 2003 the ASB issued ASB Guidance
No. 6, “Guidance for Accounting Standard for Impairment of Fixed Assets.” These new pronouncements are
effective for fiscal years beginning on or after April 1, 2005 with early adoption permitted for fiscal years
ending on or after March 31, 2004.
The new accounting standard requires an entity to review its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset or asset group may not
be recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset group
exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss would be measured as the amount by which the
carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows
from the continued use and eventual disposition of the asset or the net selling price at disposition.
The Group expects to adopt these pronouncements as of April 1, 2005 and is currently in the process of
assessing the effect of adoption of these pronouncements.
3. Marketable and Investment Securities
Marketable and investment securities as of March 31, 2005 and 2004 consisted of the following:
Thousands of
U.S. Dollars
Millions of Yen
2005
Marketable securities:
Government and corporate bonds
Trust fund investments and others
2004
2005
¥ 1,076
1,000
¥
329
$ 10,019
9,311
Total
Investment securities:
Equity securities
¥ 2,076
¥
329
$ 19,330
¥60,269
8,853
8,423
¥59,673
8,265
7,274
$561,164
82,430
78,426
Total
¥77,545
¥75,212
$722,020
41
The carrying amounts and aggregate fair value of marketable securities and investment securities at March
31, 2005 and 2004 were as follows:
Millions of Yen
March 31, 2005
Securities classified as:
Available-for-sale:
Equity securities
Held-to-maturity
Cost
¥33,781
4,977
2,256
5,029
Unrealized
Gains
Unrealized
Losses
¥18,035
103
1,049
57
¥3,139
180
4
Fair
Value
¥48,677
4,900
3,301
5,086
Millions of Yen
March 31, 2004
Available-for-sale:
Equity securities
Held-to-maturity
Cost
¥27,452
3,588
2,288
5,037
Unrealized
Gains
Unrealized
Losses
¥19,449
90
997
21
¥2,260
121
4
Fair
Value
¥44,641
3,557
3,281
5,058
Thousands of U.S. Dollars
March 31, 2005
Available-for-sale:
Equity securities
Held-to-maturity
Cost
$314,534
46,341
21,006
46,825
Unrealized
Gains
$167,924
959
9,767
530
Unrealized
Losses
$29,227
1,676
37
Fair
Value
$453,231
45,624
30,736
47,355
Available-for-sale securities whose fair value is not readily determinable as of March 31, 2005 and 2004 were
as follows:
Carrying Amount
Thousands of
U.S. Dollars
Millions of Yen
Available-for-sale—Non-marketable securities
2005
2004
2005
¥17,714
¥19,025
$164,934
Proceeds from sales of available-for-sale securities for the years ended March 31, 2005 and 2004 were ¥249
million ($2,318 thousand) and ¥82 million, respectively. Gross realized gains and losses on these sales,
computed on the moving average cost basis, were ¥65 million ($605 thousand) and nil, respectively, for the
year ended March 31, 2005 and ¥6 million and ¥4 million, respectively, for the year ended March 31, 2004.
42
The carrying values of debt securities by contractual maturities for securities classified as available-for-sale
at March 31, 2005 are as follows:
Available for Sale
Millions of Yen
Thousands of
U.S. Dollars
Due in one year or less
Due after one year through five years
Due in ten years and after
¥ 2,156
9,948
4,049
$ 20,074
92,626
37,700
Total
¥16,153
$150,400
4. Collateralized Property
At March 31, 2005, land of ¥101,031 million ($940,698 thousand) was pledged as collateral for guarantee
deposits received of ¥19,000 million ($176,909 thousand).
5. Short-term Bank Loans
Short-term bank loans outstanding were generally represented by bank overdraft arrangements. The annual
interest rates ranged from 0.24% to 0.30% and from 0.23% to 1.56% at March 31, 2005 and 2004,
respectively.
6. Retirement and Pension Benefits Plan
The Company and certain subsidiaries have severance payment plans for employees, directors and corporate
auditors.
Retirement benefits for employees are determined on the basis of length of service, basic rate of pay at the
time of termination and certain other factors. If the termination is involuntary, the employee is usually entitled
to greater payment than those in the case of voluntary termination.
The liability for employees’ retirement benefits at March 31, 2005 and 2004 consisted of the following:
Thousands of
U.S. Dollars
Millions of Yen
2005
Projected benefit obligation
Fair value of plan assets
Unrecognized pension assets
Unrecognized net transitional assets
Prepayment of pension cost
¥9,386
(908)
Net liability
¥9,356
876
2
2004
2005
¥24,804
(14,164)
195
1,665
41
$87,393
(8,454)
¥12,541
$87,114
8,156
19
43
The components of net periodic benefit costs for the years ended March 31, 2005 and 2004 are follows:
Thousands of
U.S. Dollars
Millions of Yen
2005
Service cost
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of prior service cost
Amortization of net transitional assets
Defined contribution pension plan premium cost
Net periodic benefit costs
Loss on revision of retirement benefit plan
Total
¥
971
352
(33)
(141)
(166)
(235)
198
2004
¥1,191
500
(60)
(911)
104
(278)
946
2,269
¥3,215
¥
2005
$ 9,041
3,277
(307)
(1,313)
(1,546)
(2,188)
1,844
546
8,808
21,127
546
$29,935
Assumptions used for the years ended March 31, 2005 and 2004 are set forth as follows:
Discount rate
Expected rate of return on plan assets
Recognition period of actuarial gain/loss
Amortization period of prior service cost
Amortization period of net transitional asset
2005
2004
2.3%
0.5%
1 year
1 year
10 years
2.3%
0.5%
1 year
1 year
10 years
Retirement benefits for directors and corporate auditors are paid subject to approval of the shareholders in
accordance with the Japanese Commercial Code (the “Code”). Retirement benefits as of March 31, 2005 and
2004 included those for directors and corporate auditors in the amount of ¥1,082 million ($10,074 thousand)
and ¥966 million, respectively.
7. Shareholders’ Equity
Japanese companies are subject to the Code.
The Code requires that all shares of common stock are recorded with no par value and at least 50% of
the issue price of new shares is required to be recorded as common stock and the remaining net proceeds as
additional paid-in capital, which is included in capital surplus. The Code permits Japanese companies, upon
approval of the Board of Directors, to issue shares to existing shareholders without consideration as a stock
split. Such issuance of shares generally does not give rise to changes within the shareholders’ accounts.
The Code also provides that an amount at least equal to 10% of the aggregate amount of cash dividends and
certain other appropriations of retained earnings associated with cash outlays applicable to each period shall
be appropriated as a legal reserve (a component of retained earnings) until such reserve and additional paid-in
capital equals 25% of common stock. The amount of total additional paid-in capital and legal reserve that
exceeds 25% of the common stock may be available for dividends by resolution of the shareholders. In addition,
the Code permits the transfer of a portion of additional paid-in capital and legal reserve to the common stock by
resolution of the Board of Directors.
The Code allows Japanese companies to repurchase treasury stock and dispose of such treasury stock by
resolution of the Board of Directors. The repurchased amount of treasury stock cannot exceed the amount
available for future dividend plus the amount of common stock, additional paid-in capital or legal reserve to be
reduced in the case where such reduction was resolved at the shareholders meeting.
44
In addition to the provision that requires an appropriation for a legal reserve in connection with the cash
payment, the Code imposes certain limitations on the amount of retained earnings available for dividends.
The amount of retained earnings available for dividends under the Code was ¥287,411 million ($2,676,086
thousand) as of March 31, 2005, based on the amount recorded in the parent company’s general books of
account.
Dividends are approved by the shareholders at a meeting held subsequent to the fiscal year to which the
dividends are applicable. Semiannual interim dividends may also be paid upon resolution of the Board of
Directors, subject to certain limitations imposed by the Code.
8. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in
the aggregate, resulted in normal effective statutory tax rates of approximately 40.7% and 42.1% for the years
ended March 31, 2005 and 2004, respectively.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax
assets and liabilities as of March 31, 2005 and 2004 are as follows:
Thousands of
U.S. Dollars
Millions of Yen
2005
Current:
Deferred tax assets:
Devaluation of program rights
Accrued enterprise taxes
Accrued bonuses
Other
Less valuation allowance
¥
Non-current:
Deferred tax assets:
Retirement benefits
Devaluation of property and equipment
Devaluation of investment securities
Other
Less valuation allowance
Total
Offset with deferred tax liabilities
¥
4,065
358
966
$
702
(95)
5,233
Total
Deferred tax liabilities:
Other
Net deferred tax assets
3,244
519
905
70
497
(2)
2005
2004
30,205
4,832
8,426
652
4,629
(19)
48,725
5,996
(15)
(2)
(19)
¥
5,231
¥
5,981
$
48,706
¥
5,018
123
2,665
861
(402)
¥
5,251
491
3,035
1,037
(464)
$
46,723
1,145
24,814
8,017
(3,743)
8,265
(8,265)
9,350
(9,350)
76,956
(76,956)
¥ (5,982)
(6,686)
(9)
¥ (5,974)
(7,377)
(233)
$ (55,698)
(62,253)
(85)
(12,677)
8,265
(13,584)
9,350
(118,036)
76,956
¥ (4,412)
¥ (4,234)
$ (41,080)
Net deferred tax assets
Deferred tax liabilities:
Tax benefit from deferred gain on sales of property and equipment
Other
Total
Offset with deferred tax assets
Net deferred tax liabilities
45
For the years ended March 31, 2005 and 2004, the difference between the statutory tax rate and effective
tax rate is less than 5% of the statutory tax rate; therefore, tax rate reconciliation is not disclosed.
9. Leases
a. Finance Lease Transactions
As lessee
The Group leases certain machinery, vehicles and equipment, office space and other assets.
Total rental expenses including lease payments under finance leases for the years ended March 31, 2005
and 2004 were ¥373 million ($3,473 thousand) and ¥298 million, respectively.
Pro forma information of leased property such as acquisition cost, accumulated depreciation, obligation
under finance leases, depreciation expense, interest expense of finance leases that do not transfer ownership of
the leased property to the lessee on an “as if capitalized” basis for the years ended March 31, 2005 and 2004
was as follows:
Thousands of
U.S. Dollars
Millions of Yen
2005
2004
2005
Acquisition cost
¥1,875
697
¥1,624
520
$17,458
6,490
Net book value
¥1,178
¥1,104
$10,968
¥
¥
$ 3,454
7,877
Machinery, Vehicles and Equipment
Obligations under Finance Leases
Due within one year
Due after one year
Total
Less—Sublease
Total
371
846
1,217
(39)
¥1,178
400
820
1,220
(116)
¥1,104
11,331
(363)
$10,968
Obligations under finance leases including obligations on sublease were ¥39 million ($363 thousand) and
¥116 million at March 31, 2005 and 2004, respectively.
Depreciation expense, which is not reflected in the accompanying consolidated statements of income, is
computed by the straight-line method and was ¥373 million ($3,473 thousand) and ¥298 million for the years
ended March 31, 2005 and 2004, respectively.
The amounts of obligations, acquisition cost and depreciation under finance leases include the imputed
interest expense portion.
As lessor
Total lease receipts were ¥241 million ($2,244 thousand) and ¥173 million for the years ended March 31,
2005 and 2004, respectively.
46
Pro forma information on leased property such as acquisition cost, accumulated depreciation, receivables
under finance lease, depreciation expense, interest income of finance leases that do not transfer ownership of
the leased property to the lessee on an “as if capitalized” basis for the years ended March 31, 2005 and 2004
was as follows:
Thousands of
U.S. Dollars
Millions of Yen
2005
2004
2005
Acquisition cost
¥1,860
961
¥1,814
549
$17,318
8,947
Net book value
¥
899
¥1,265
$ 8,371
Due within one year
Due after one year
¥
286
1,097
¥
314
1,342
$ 2,663
10,214
Total
¥1,383
¥1,656
$12,877
Machinery and Equipment
Receivables under Finance Leases
Depreciation expense was ¥412 million ($3,836 thousand) and ¥257 million for the years ended March 31,
2005 and 2004, respectively. The amounts of receivables under finance leases include the imputed the interest
income portion.
b. Operating Lease Transactions
The minimum rental commitments under noncancelable operating leases at March 31, 2005 and 2004 were as
follows:
Thousands of
U.S. Dollars
Millions of Yen
2005
As Lessee
2005
2004
Due within one year
Due after one year
¥
45
272
¥
53
20
$
419
2,533
Total
¥
317
¥
73
$ 2,952
Due within one year
Due after one year
¥
130
6,121
¥
130
6,250
$ 1,210
56,993
Total
¥6,251
¥6,380
$58,203
As Lessor
10. Contingent Liabilities
The Group’s contingent liabilities as of March 31, 2005 as guarantors of indebtedness were as follows:
Millions of Yen
Thousands of
U.S. Dollars
Employees
Broadcasting Satellite System Corporation
¥
737
1,792
$ 6,862
16,685
Total
¥2,529
$23,547
47
11. Subsequent Event
The following appropriations of retained earnings at March 31, 2005 were approved at the Company’s
shareholders meeting held on June 29, 2005:
Millions of Yen
Year-end cash dividends, ¥140 ($1.30) per share
¥3,494
100
Thousands of
U.S. Dollars
$32,530
931
12. Segment Information
Information about industry segments, geographic segments and sales to foreign customers for the years ended
March 31, 2005 and 2004 was as follows:
(1) Industry Segments
2005
a. Sales and operating income
Millions of Yen
Television
Broadcasting
Sales to outside customers
Intersegment sales/transfers
Total sales
Operating expenses
Operating income
Cultural
Activities
Other
Elimination/
Corporate
Consolidated
¥288,607
1,203
¥61,429
674
¥ 7,578
6,139
¥(8,016)
¥357,614
289,810
264,465
62,103
53,888
13,717
12,542
(8,016)
(7,606)
357,614
323,289
¥ 25,345
¥ 8,215
¥ 1,175
(410)
¥ 34,325
¥
Television
Broadcasting
Cultural
Activities
$2,687,216
11,201
$571,965
6,276
2,698,417
2,462,430
578,241
501,751
235,987
$ 76,490
Total sales
Operating expenses
Operating income
$
Other
Elimination/
Corporate
Consolidated
$ 70,558
$3,329,739
57,160 $(74,637)
127,718
116,778
(74,637)
(70,819)
3,329,739
3,010,140
$ 10,940 $ (3,818) $ 319,599
b. Assets, depreciation and capital expenditures
Millions of Yen
Television
Broadcasting
Assets
Depreciation
¥313,061
18,734
7,076
Cultural
Activities
¥33,396
246
867
Other
¥53,990
1,863
1,156
Elimination/
Corporate
Consolidated
¥93,111
217
115
¥493,558
21,060
9,214
Assets
Depreciation
48
Television
Broadcasting
Cultural
Activities
Other
$2,914,907
174,432
65,885
$310,950
2,291
8,073
$502,700
17,346
10,763
Elimination/
Corporate
Consolidated
$866,955 $4,595,512
2,020
196,089
1,070
85,791
2004
a. Sales and operating income
Millions of Yen
Television
Broadcasting
Total sales
Operating expenses
Operating income
Cultural
Activities
Other
Elimination/
Corporate
Consolidated
¥284,520
496
¥37,863
996
¥ 5,992
5,919
¥(7,411)
285,016
253,870
38,859
34,947
11,911
11,000
(7,411)
(7,379)
328,375
292,438
¥ 31,146
¥ 3,912
(32)
¥ 35,937
¥
911
¥328,375
¥
b. Assets, depreciation and capital expenditures
Millions of Yen
Television
Broadcasting
Assets
Depreciation
¥341,557
11,026
43,698
Cultural
Activities
¥22,566
131
310
Other
¥41,312
1,426
5,292
Elimination/
Corporate
Consolidated
¥107,995
93
461
¥513,430
12,676
49,761
(2) Geographic Segments
Sales and total assets of the Company and its domestic subsidiaries for the years ended March 31, 2005 and
2004 represented more than 90% of the consolidated sales and total assets of the respective years. Accordingly,
geographic segments were not disclosed.
(3) Sales to Foreign Customers
Sales to foreign customers for the years ended March 31, 2005 and 2004 represented less than 10% of the
consolidated sales of the respective years. Accordingly, sales to foreign customers were not disclosed.
49
50
Stock Price
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51
NTV Group
Television
Broadcasting
Culture-Related
Business
Other Business
Program Planning and Production
NTV Eizo Center Corporation*
NTV Video Corporation*
NTV Enterprises Co., LTD.*
Nippon Television Art Corp.*
NTV America Company*
NTV International Corporation*
Nippon Television Network Europe B.V.
NTV Personnel Center
Nishi Nippon Eizo Co.
Nagasaki Vision Co.
Kagoshima Vision Co.
Kanazawa Eizo Center Co.
Nagano Visual Center Corp.
Cosmo Space Co., Ltd.
Pro Media Niigata Co.
Copyright Management
Nippon Television Music Corporation*
Rights Inn Corporation
Property Management and
Events Organization
NTV Services Inc.*
Nippon Television Work 24 Corporation*
Satellite Broadcasting
BS Nippon Corporation
CS Nippon Corporation
Audio and Visual Content Planning,
Production and Sales
VAP Inc.*
Variws Tokyo Inc.
Art Exhibition Planning
Mamma Aiuto Inc.
Professional Football Team
Management
Nippon Television Football Club Co., Ltd.*
(TOKYO VERDY 1969)
Art Exhibition Goods Sales
Art Yomiuri Co., Ltd.
Internet and Broadband
Forecast Communications Inc.*
B-BAT Inc.
Other
Shiodome Urban Energy
AsiaOne Corporation
RF Radio Nippon Co., Ltd.
*Consolidated
52
NTV Global Network
NTV Affiliates (Japan)
STV
RAB
ABS
YBC
TeNY
CTV
NKT
KRY
YTV
HTV
RNB
TOS
KKT
FCT
KNB
YBS NTV
SDT
RNC
FBS
NIB
MMT
TSB
KTK
FBC
TVI
RKC
JRT
UMK
KYT
NTV/NNN Overseas News Bureaus
Moscow
London
Paris
NTV Europe
Beijing
Cairo
Shanghai
Seoul
Los Angeles
New York
NTV International
Washington, D.C.
Bangkok
53
Executive Administration
Public Relations
Legal Affairs
Broadcast Standards
Rights & Contracts Management
Viewer Relations
Personal Information Management
Office
Comprehensive Planning
Compliance & Standards
Board of Statutory Auditors
Administration
NTV Group Strategy Planning
Health Clinic
Network Strategy Planning
Network Operations
Nippon TV Network System
Program Sales
Administration
Human Resources
Labor Relations
Corporate Administration
Corporate Shares Management
Investor Relations
Facility Planning & Development
NTV Environmental Management
Office
NTV Group Strategy Planning
Network
Board of Directors
Business Operations Audit
Committee
Board of Executive Officers
Human Resources Administration
Corporate Administration
External Discussion Council
IT Planning & Development
Finance
Accounting
Finance
Asset Management
Events
Venue Planning & Development
Event Promotion & Administration
“24-Hour TV”
Administration Office
Events
Network Sales
Spot Commercial Sales
Local Sales
Sales Promotion & Administration
Sales Development
On-Air Commercial Operations
Administration
Nagoya Sales Office
Publicity
NTV Event Management Office
Media Business Strategy Planning
Media Business
International Strategy Planning
Administration
Content Business Planning &
Development
Sales
Kansai Office
Publicity
Media Strategy Planning &
Development
Content Business
Programming & Production
Entertainment
Infotainment
Sports
Programming
*1 Domestic Bureaus
Yokohama
Chiba
Saitama
Naha
*2 Overseas Bureaus
London (NNN)
Paris (NNN)
Moscow (NNN)
Cairo (NNN)
Beijing (NNN)
Shanghai (NNN)
Seoul (NNN)
Bangkok (NNN)
New York (NNN)
Washington, D.C. (NNN)
Los Angeles (NNN)
54
News
News Code Committee
Commentators Committee
Engineering & Technology
Production Engineering
Broadcast Engineering
NTV2 VoD Business
Licensing Business
Media Commerce Business
Film Projects Development
Publishing
Content Archive
Administration
Drama Production Team &
CP Groups
Programming
Marketing & Research
Announcers
Program Administration
Political News, Economic &
Financial News, National News,
Foreign News, Camera Crew,
News Programs & Documentaries
Administration
Nippon News Network
Administration Office
Domestic Bureaus *1
Overseas Bureaus *2
Production Engineering Management
Technical Operations
Digital Content
Master Control Operations
Transmission Management
Technology Planning
Technology Research &
Development
Technology Management
VoD Business
Corporate Data
CONTENTS
2
3
To Shareholders and Stakeholders
4
12
1. Three Foundations for Winning
14
2. Creating Content for the Mobile Viewer
16
3. Spreading the Boundaries of Digitization
18
4. Social Responsibility
20
22
Financial Section
23
Stock Price
51
NTV Group
52
NTV Global Network
53
54
Corporate Data
55
Directors
55
Directors
Head Office:
1-6-1 Higashi Shimbashi, Minato-ku,
Tokyo 105-7444, Japan
Tel: 81-3-6215-1111
Board of Directors and Statutory Auditors
Representative Director, Chairman
Seiichiro Ujiie
Representative Director, Adviser
Kohei Manabe
Date of Establishment:
October 28, 1952
Representative Director
Shintaro Kubo
Board Directors
Start of Operations:
August 28, 1953
Noritada Hosokawa
Katsuhiro Masukata
Yoshihiro Yamane
Yoichi Shimada
Tadao Kurosaki
Takeshi Sakai
Toru Shoriki
Tsuneo Watanabe*
Gaishi Hiraiwa*
Nobuo Yamaguchi*
Hiroshi Maeda*
Yoshifumi Akao*
Number of Employees: (As of March 31, 2005)
1,123 (Non-consolidated)
Common Stock:
Authorized 100,000,000 Shares
Issued 25,364,548 Shares
Paid-in Capital:
¥18,576 Million
Standing Statutory Auditor
Kinya Yokoegawa
Stock Exchange Listing:
Tokyo
Statutory Auditors
Transfer Agent and Registrar:
The Chuo Mitsui Trust and Banking Company, Limited
3-33-1 Shiba, Minato-ku, Tokyo 105-0014, Japan
Ryuzo Sejima**
Tomonari Doi**
Kenya Mizukami**
* Outside appointments are pursuant to Article 188.2-7.2 of the
Commercial Code of Japan.
** Outside appointments pursuant to Article 18.1 of the Law for
Special Exceptions to the Commercial Code Concerning Audits, etc.,
of Corporations.
Operating Officers
President
Shintaro Kubo*
Executive Vice President
Noritada Hosokawa*
Managing Officer
Katsuhiro Masukata*
Operating Officers
Yoshihiro Yamane*
Yoichi Shimada*
Tadao Kurosaki*
Takeshi Sakai*
Senior Operating Officers
Cautionary Statements with Respect to Forward-Looking Statements:
Statements made in this annual report with respect to NTV’s plans
and benefits as well as other statements that are not historical facts
are forward-looking statements, which involve risks and uncertainties.
Potential risks and uncertainties include, without limitation, general
economic conditions in NTV’s markets, exchange rates and NTV’s ability
to continue to win customers’ acceptance of its products, which are
offered in highly competitive markets characterized by continual new
product introductions and rapid developments in technology.
Kunisuke Hirabayashi
Masaki Matsumoto
Fumihiro Hirai
Hime Miura
Hiroshi Akimoto
Operating Officers
Yasuhiro Nose
Haruhisa Murokawa
* Concurrent Director
This annual report was printed using a waterless printing method, recycled paper and soy-based ink.
55
Nippon Television Network Corporation Annual Report for the Year Ended March 31, 2005
http://www.ntv.co.jp/english/
Printed in Japan
Annual Report for the Year Ended March 31, 2005
ON NEW
MEDIA
ANYTIME,
ANYWHERE

NTV Annual Report 2005

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