SOCIAL INFRASTRUCTURE SYSTEMS COMPANY President TSUYOSHI KIMURA SOCIAL INFRASTRUCTURE SYSTEMS COMPANY Our mission is simple but essential: to build the infrastructure that society depends on. To do that, we provide comprehensive support, from systems development through to servicing and operations, for a wide range of es- sential infrastructure: community infrastructure such as water supply and sewerage systems; build- ing management; public facilities; environmen- tal protection; transportation infrastructure for roads, railroads and airports; and industrial in- frastructure that supports plant and equipment for manufacturing industries. Today’s infrastructure demands higher levels of safety, usability and convenience, as well as consideration of the global environment and im- proved system efficiency. We achieve these tar- gets with advanced technology, reliable systems and components, and top-quality services. Working together with our customers, we create value that provides a bridge to a more prosperous tomorrow. Consolidated sales in the Social Infrastructure Systems segment reached ¥955.3 billion (US$7,183 million), a 2% decrease against the previous fiscal year. However, operating income in- creased 46% from the previous fiscal year, to ¥13.6 billion (US$102 million), on the strength of new products in the medical systems and elevator and escalator businesses and far-reaching initiatives to cut costs. The Social Infrastructure Systems is a new segment established in April 2001. It brings together the Social Infrastructure Systems Company, the Medical Systems Company and Toshiba Elevator Corporation. Cuts in domestic public spending combined with weak public sector demand and reduced capital expenditure in the private sector, particularly by manufacturing companies, reduced revenues in our social and industrial systems businesses. Trans- portation businesses also saw large revenue de- creases due to the curtailed facility investments by the Japan Railway Group and other railroad companies. Looking to the long term, the Social Infrastruc- ture Systems Company is bolstering profitability in key areas of infrastructure provision. Demand is growing for efficient infrastructure that fully meets demands for safety, comfort and convenience while showing every consideration for environmental impacts. Toshiba has developed comprehensive businesses that deliver the latest technologies, reliable system components, diverse services and operations in the following areas: * Public systems: Our goal here is to promote new service businesses supporting public systems such as water supply and sewerage systems, in areas including Operation & Maintenance (O&M) and Pri- vate Finance Initiatives (PFIs). * Buildings and public facilities: Building and Energy Management System (BEMS), our new energy con- servation services for buildings, started to offer an IT-based total solution in improving the efficiency of air-conditioners, light and other facilities. * Railroad infrastructure: Japan’s first integrated Micro-Electronics (ME) system, deploys a single The medical systems business overcame se- vere conditions in its domestic and overseas mar- kets to generate profits. In Japan, reforms to the medical service system made health-care provid- ers more concerned for cost effectiveness. That, combined with inroads made by overseas manu- facturers, intensified price competition. The medi- cal information systems business grew, reflecting the national government’s initiatives to promote the use of IT and networking at medical institu- tions. The elevator and escalator business saw lower sales, largely because of declines in sales prices. Overseas, business was hit by deteriorat- ing market conditions that accompanied the eco- nomic slowdown in the United States and Asia, as well as by sharp drop in facility investment in the United States. Social Infrastructure Systems Toshiba supplies the carbody and all electrical and electronic systems for Japan Freight Rail- way Company’s “EH500” type electric locomotive. 20