UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

PIONEER CORPORATION

(Translation of registrant’s name into English)

4-1, MEGURO 1-CHOME, MEGURO-KU, TOKYO 153-8654, JAPAN
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F þ       Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o      No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

				PIONEER CORPORATION
				(Registrant)
Date: April 28, 2006
		By		/s/ Tamihiko Sudo
				Tamihiko Sudo
				President and Representative Director

This report on Form 6-K contains the following:

1.

The announcement released by the Company to the press in Japan dated April 27, 2006, concerning its business results on consolidated and non-consolidated bases for fiscal 2006, ended March 31, 2006.

		For Immediate Release April 27, 2006

Pioneer Announces Business Results for Fiscal 2006

TOKYO — Pioneer Corporation today announced its business results on consolidated and non-consolidated bases for fiscal 2006, ended March 31, 2006.

Consolidated Financial Highlights

		(In millions of yen except per share information)
		Year ended March 31
										% to
										prior
		2006				2005				year
Operating revenue		¥	754,964			¥	711,042				106.2	%
Operating income (loss)			(16,409	)			691				—
Loss from continuing operations before income taxes			(71,165	)			(2,067	)			—
Loss from continuing operations			(85,758	)			(10,112	)			—
Net loss		¥	(84,986	)		¥	(8,789	)			—	%
Basic earnings (losses) per share:
Loss from continuing operations		¥	(491.66	)		¥	(57.65	)
Income from discontinued operations, net of tax			4.43				7.54
Net loss		¥	(487.23	)		¥	(50.11	)
Diluted earnings (losses) per share:
Loss from continuing operations		¥	(491.66	)		¥	(57.65	)
Income from discontinued operations, net of tax			4.43				7.54
Net loss		¥	(487.23	)		¥	(50.11	)

Note:		In fiscal 2006, the Company sold a subsidiary engaged in the development of cable TV software, and reached a preliminary agreement on the sale of subsidiaries involved in the electronic components business. As a result, the operating results of these subsidiaries, and the gain on their sale are presented as income from discontinued operations in this release. Corresponding figures for the previous fiscal year have been reclassified accordingly.

Consolidated Business Results
In fiscal 2006, the year ended March 31, 2006, consolidated operating revenue rose 6.2% year on year to ¥754,964 million (US$6,452.7 million) due to increased sales of plasma displays and car audio products. However, Pioneer posted an operating loss of ¥16,409 million (US$140.2 million), compared with operating income of ¥691 million in the previous fiscal year due mainly to a decreased gross profit margin resulting from falling prices for our major products. The net loss was ¥84,986 million (US$726.4 million), compared with a net loss of ¥8,789 million in fiscal 2005, mainly due to retirement charges related to the incentive-based early retirement plan, impairment losses on property, plant and equipment mainly for plasma displays, and losses related to the dissolution of equity-method affiliate ELDis, Inc., in connection with the Company’s business restructuring plans. During fiscal 2006, the average value of the Japanese yen was weaker against the U.S. dollar and the euro by 5.1% and 1.9%, respectively, compared with fiscal 2005.

In fiscal 2006, Home Electronics sales increased 9.9% year on year to ¥354,690 million (US$3,031.5 million). Plasma display sales rose by approximately 30%. Sales of own–brand plasma displays fell in Japan but grew overseas. Rising sales overseas were driven by an expanding market for high-resolution models in North America and Europe. Although OEM (original equipment manufacturer) sales increased, this mainly reflects the September 30, 2004 acquisition of a plasma display production subsidiary. Pioneer reported higher sales of DJ equipment, but sales of DVD recorders, DVD players, and stereo systems declined. In terms of geographic sales, sales in Japan were down 9.7% at ¥81,998 million (US$700.8 million), while overseas sales were up 17.6% at ¥272,692 million (US$2,330.7 million).

     The operating loss in this segment was ¥35,184 million (US$300.7 million), compared with an operating loss of ¥24,628 million in the previous fiscal year. This was mainly caused by decreases in gross profit margins for plasma displays and DVD products due to sharp declines in market prices.

Car Electronics sales climbed 8.9% year on year to ¥330,522 million (US$2,825.0 million). Sales of car audio products were higher both in consumer markets and on an OEM basis. Consumer-market sales expanded primarily in Central and South America, as well as North America and Russia, while OEM sales rose primarily in North America and Japan. Sales of car navigation systems increased in consumer markets, with sales growth coming mainly from Japan and North America. OEM sales increased in North America due to the start of new OEM transactions, but dropped in Japan as the effect of demand generated by the roll out of new models in fiscal 2005 diminished. In terms of

Notes:

	1.		In fiscal 2006, the Company sold a subsidiary engaged in the development of cable TV software, and reached a preliminary agreement on the sale of subsidiaries involved in the electronic components business. As a result, the operating results of these subsidiaries and the gain on their sale are presented as income from discontinued operations in this release. Corresponding figures for the previous fiscal year have been reclassified accordingly.
	2.		Operating income (loss) in each business segment represents operating income (loss) before elimination of intersegment transactions.

geographic sales, sales in Japan were down 2.2% at ¥117,560 million (US$1,004.8 million), while overseas sales were up 16.3% at ¥212,962 million (US$1,820.2 million). OEM sales represented 35% of total Car Electronics sales in fiscal 2006, down from 36% in the previous fiscal year.

     Operating income in this segment decreased 5.9% year on year to ¥17,486 million (US$149.5 million) mainly due to an increase of development costs for future models.

In Patent Licensing, royalty revenue decreased 16.6% year on year to ¥8,540 million (US$73.0 million). This decrease was mainly attributable to the impact of the expiration of some patents licensed to the optical disc industry.

     Operating income was down 23.1% at ¥7,217 million (US$61.7 million).

In the Others segment, sales declined 18.0% year on year to ¥61,212 million (US$523.2 million). This mainly reflected falling sales of factory automation systems, despite higher sales of compact speaker units for cellular phones. In terms of geographic sales, sales in Japan fell 11.8% to ¥33,208 million (US$283.8 million), while overseas sales were down 24.3% at ¥28,004 million (US$239.4 million).

     The operating loss in this segment was ¥3,991 million (US$34.1 million) compared with operating income of ¥61 million in the previous fiscal year. This loss was principally caused by the decrease in sales.

Cash Flows
During fiscal 2006, operating activities provided net cash of ¥68,329 million (US$584.0 million). This was mainly due to a decrease in trade receivables and inventories of ¥26,116 million (US$223.2 million), as well as adjustments for non-cash expenses, such as depreciation and amortization of ¥46,703 million (US$399.2 million), impairment losses of ¥41,422 million (US$354.0 million) on property, plant and equipment, and equity in losses of affiliated companies of ¥24,031 million (US$205.4 million). These factors outweighed the net loss of ¥84,986 million (US$726.4 million) for the period. Meanwhile, investing activities used net cash of ¥29,759 million (US$254.4 million). This reflected ¥40,325 million (US$344.7 million) for car electronics and plasma display-related capital expenditures and other investments, partially offset by proceeds of ¥7,068 million (US$60.4 million) from the sale of investment securities. Financing activities used net cash of ¥38,551 million (US$329.5 million), mainly for the redemption of bonds and dividend payments. In addition, the effect of exchange rate changes on cash and cash equivalents was an increase of ¥4,980 million (US$42.6 million), due to translation differences reflecting a weaker yen. Consequently, cash and cash equivalents at March 31, 2006 were ¥121,680 million (US$1,040.0 million), ¥4,999 million (US$42.7 million) higher than at March 31, 2005.

Corporate Policy and Dividend Policy
Pioneer positions customer satisfaction at the core of management. We seek to offer innovative, high-quality, and value-added electronics products that create new value for customers, aiming to share the Pioneer Group’s philosophy, “Move the Heart and Touch the Soul,” with more people around the world.

     Based on this group philosophy, Pioneer has been working under a new

management framework since January 2006 to formulate a new corporate vision that will act as a set of guidelines for management over the medium term.

Pioneer also positions its dividend policy as a top management priority. The Company sets dividend payments appropriately in light of its financial position, consolidated operating results, and other factors, but has a basic policy of maintaining stable dividends. Retained earnings are effectively used primarily to develop businesses and to reinforce competitiveness and our management base.

     Under this dividend policy, Pioneer regrettably plans to reduce the year-end dividend for fiscal 2006 by ¥10 per share from that for the previous fiscal year to ¥2.5 per share. This decision reflects Pioneer’s large losses for fiscal 2006 on both non-consolidated and consolidated bases, amid a continually challenging business environment. This year-end dividend is subject to approval by the Ordinary General Meeting of Shareholders due to be held on June 29, 2006. The total annual dividend for fiscal 2006, including the interim dividend, will be ¥10 per share, a decrease of ¥15 per share from the previous fiscal year.

Addressing Current Challenges
The global economy is experiencing an overall recovery, supported by robust consumer spending, despite some concerns over surging materials prices, including crude oil. However, Pioneer faces an extremely challenging business environment, due to ongoing price-based competition involving its core products.

In this climate, we will work to rebuild our brand and improve our operating results by focusing on the innovative, high-quality, and value-added products that define Pioneer. To achieve this, Pioneer will recapture the essence of its group philosophy—“Move the Heart and Touch the Soul” of more people around the world.

In the plasma display business, our production output is increasing in step with surging overall market demand. With a forecast of further growth in demand, Pioneer expects to see an increase in the capacity utilization rates of some production lines year on year, but will suspend or shut down the operation of certain production lines incompatible with new products. Our efforts are also focused on improving profitability by continuing to reduce costs, while reducing OEM sales of panel modules and focusing instead on own-brand plasma display products. In addition, Pioneer will bring more innovative products to market, including 1080p plasma displays, aiming to improve its brand value and expand its business.

In the DVD product business, the market for these products is growing, but prices are rapidly falling. In response, Pioneer will reduce costs through production in China and collaborations with other companies, and raise the return on product development investments through external sales of key components. Meanwhile, product development and design processes will be reviewed thoroughly to raise the efficiency and speed of development. In DVD drives for personal computers (PCs), Pioneer plans to offer new value-added proposals by shifting the main thrust of product development to Blu-ray Disc drives, a promising next-generation product. We will narrow down our DVD recorder

lineup to products in areas of expertise, as part of efforts to propose value-added products that are embraced by customers. Furthermore, through economies of scale generated by volume production of DVD drives for PCs that share key components, Pioneer aims to improve profitability in the DVD recorder business.

In the car electronics business, Pioneer is targeting fast-growing consumer markets of Central and South America, Russia and elsewhere, in order to retain its position of leadership in car audio products. In addition, amid the uptake and growth of music content distribution and digital broadcasting, the Company will work to drive earnings growth in the car electronics business by offering products that stand apart from those of other companies through the creation of new value and functions.

     In car navigation systems, Pioneer will actively press ahead with business expansion in Europe and North America, where full-fledged consumer markets are emerging, as well as in Japan’s consumer market, where Pioneer’s car navigation systems have always enjoyed a strong reputation. Aiming to reduce burgeoning software development costs accompanying product advancements, Pioneer is reforming product development processes and raising their efficiency through standardization.

     In the OEM car navigation system business, Pioneer is redoubling efforts in the growing market for car navigation systems offered as dealer options in Japan. In parallel, the Company aims to capture new orders by offering new proposals to OEM customers that leverage our own product planning capabilities, which have been proven in consumer markets, and the advantages of conducting map-related content production within the group. Meanwhile, in the OEM car audio products business too, Pioneer aims to make the most of its strengths in consumer markets to drive further business expansion.

Turning to structural reforms, Pioneer has implemented an incentive-based early retirement plan to reduce personnel levels. Meanwhile, the Company has been identifying issues and exploring concrete initiatives in connection with the following five management innovation projects.

	•		Formulate a new corporate vision that acts as medium-term guidelines under Pioneer’s new management framework.
	•		Revise and reinforce all core processes for developing, manufacturing and selling products, aiming to create products that customers enjoy.
	•		Change the corporate culture to foster an open and relaxed atmosphere, as well as effectively implement Plan, Do, Check, Action (PDCA) cycles.
	•		Revitalize the audio business, with the goal of rebuilding Pioneer’s brand image by reviewing Company-wide initiatives.
	•		Optimally allocate head office strategy formulation and administrative functions on a consolidated basis, aiming to raise efficiency by reviewing head office functions and organizations group-wide.

Pioneer is currently formulating a concrete action plan incorporating proposals for each project. Pursuant to the above project to optimally allocate head office strategy formulation and administrative functions, the Company implemented organizational

reforms centering on administrative and back office divisions on April 1 this year. In addition, Pioneer has changed its operating processes in light of project recommendations and has begun business activities based on these new processes as part of the above project to revise and reinforce core processes.

Going forward, Pioneer will raise management efficiency and speed up management processes to improve earnings by reducing the number of directors/executive officers, while reforming additional operating processes under its new organization and management framework.

Business Forecast for Fiscal 2007
Consolidated business forecasts for fiscal 2007, the year ending March 31, 2007, are as follows:

										(In millions of yen)
		Projections for				Results for				Percent
		fiscal 2007				fiscal 2006				changes
Operating revenue		¥	830,000			¥	754,964				+9.9	%
Operating income (loss)			12,000				(16,409	)			—
Income (loss) before income taxes			13,500				(71,165	)			—
Net income (loss)		¥	3,000			¥	(84,986	)			—

For fiscal 2007, Pioneer is forecasting operating revenue of ¥830.0 billion, up 9.9% year on year. Despite continued challenges in Home Electronics such as price-based competition and falling prices, this increase mainly reflects sales growth expected from plasma displays and DVD drives for PCs, as well as Car Electronics products.

     Pioneer is targeting operating income of ¥12.0 billion, an improvement of ¥28.4 billion from the previous fiscal year’s operating loss. This target mainly reflects improved profitability in the Home Electronics business due to significantly higher sales of plasma displays, active cost cutting efforts, and the emerging benefits of structural reform initiatives, as well as a steady recovery in earnings in the Car Electronics business supported by increased sales. We are forecasting income before income taxes and net income of ¥13.5 billion and ¥3.0 billion, respectively.

     We are assuming average yen-U.S. dollar and yen-euro exchange rates of ¥115 and ¥140, respectively, for these projections.

Cautionary Statement with Respect to Forward-Looking Statements
Statements made in this release with respect to our current plans, estimates, strategies and beliefs, and other statements that are not historical facts are forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. We caution that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. You also should not believe that it is our obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We disclaim any such obligation. Risks and uncertainties that might affect us include, but are not limited to, (i) general economic conditions in our markets, particularly levels of consumer spending; (ii) exchange rates, particularly between the yen and the U.S. dollar, euro, and other currencies in which we make significant sales or in which our assets and liabilities are denominated; (iii) our ability to continue

to design and develop and win acceptance of our products and services, which are offered in highly competitive markets characterized by continual new product introductions, rapid developments in technology, severe price competition and subjective and changing consumer preferences; (iv) our ability to successfully implement our business strategies; (v) our ability to compete, as well as develop and implement successful sales and distribution strategies, in light of technological developments in and affecting our businesses; (vi) our continued ability to devote sufficient resources to research and development, and capital expenditure; (vii) our ability to continuously enhance our brand image; (viii) the success of our joint ventures and alliances; (ix) the success of our business restructuring plans; and (x) the outcome of contingencies.

Proposed Changes in Management
Pioneer announced that at the meeting of its board of directors held on April 27, 2006, it resolved to convene the 60th ordinary general meeting of shareholders on June 29, 2006 in Tokyo. Also announced were changes in management as follows:

(1)

Candidate for membership on Pioneer’s board of directors to be newly elected at the shareholders’ meeting:

•

Mr. Shinji Yasuda, currently Senior Executive Officer, and General Manager of Home Entertainment Business Group and General Manager of Omori Plant, will be elected as Managing Director.

(2)

Directors who will retire at the conclusion of the shareholders’ meeting:

	•		Mr. Akira Niijima, currently Senior Managing Director and Representative Director, and in charge of Japanese domestic subsidiaries;
	•		Mr. Tadahiro Yamaguchi, currently Managing Director, and in charge of Engineering & Production Management Division;
	•		Mr. Koichi Shimizu, currently Managing Director of Pioneer and Chairman of Pioneer China Holding Co., Ltd.;
	•		Mr. Yoichi Sato, currently Managing Director, and Deputy General Manager of Research & Development Group, and General Manager of PDP Development Center; and in charge of Plasma Panel Engineering Division of Home Entertainment Business Group;
	•		Mr. Kanya Matsumoto, currently Director and Advisor; and
	•		Mr. Kaneo Ito, currently Director and Advisor.

(3)

Mr. Terumichi Tsuchida, currently Corporate Auditor, who is also Senior Advisor of Meiji Yasuda Life Insurance Company, will retire at the conclusion of the shareholders’ meeting.

(4)

Ms. Kozue Shiga, attorney-at-law, will be newly elected at the shareholders’ meeting as Substitute Auditor in case of a vacancy.

(5)

Executive Officers to be newly elected, effective June 29, 2006:

	•		Mr. Yoichi Sato, currently Managing Director, and Deputy General Manager of Research & Development Group, and General Manager of PDP Development Center; and in charge of Plasma Panel Engineering Division of Home Entertainment Business Group, as Senior Executive Officer;
	•		Mr. Tatsuo Takeuchi, currently Managing Director of Pioneer Electronics Asiacentre Pte. Ltd., who will assume the office of General Manager of Personnel Division of

Pioneer on May 16, 2006, as Executive Officer; and

•

Mr. Masanori Kurosaki, currently General Manager of Planning & Coordination Division, Mobile Entertainment Business Group, as Executive Officer.

(6)

Executive Officers who will retire on June 29, 2006:

	•		Mr. Kazunori Yamamoto, currently Senior Managing Executive Officer and in charge of International Business Division;
	•		Mr. Seiichiro Kurihara, currently Senior Executive Officer and in charge of Intellectual Property Division;
	•		Mr. Shinji Yasuda, currently Senior Executive Officer, and General Manager of Home Entertainment Business Group and General Manager of Omori Plant; and
	•		Mr. Chojuro Yamamitsu, currently Executive Officer and in charge of Quality Control Division (Eco Products).

(7)

Change in Executive Officer, effective June 29, 2006:

•

Mr. Buntarou Nishikawa, currently Executive Officer, will be promoted to Senior Executive Officer.

Pioneer Corporation is a leading global manufacturer of consumer- and business-use electronics products such as audio, video and car electronics. Its shares are traded on the Tokyo Stock Exchange.

#       #       #       #       #       #

The U.S. dollar amounts in this release represent translation of Japanese yen, for convenience only, at the rate of ¥117=US$1.00, the approximate rate prevailing on March 31, 2006.

Attached are consolidated and non-consolidated financial statements for the year ended March 31, 2006.

For further information, please contact:
Investor Relations Department, Corporate Branding and Communications Division
Pioneer Corporation, Tokyo
Phone: +81-3-3495-6773 / Fax: +81-3-3495-4301
E-mail: pioneer_ir@post.pioneer.co.jp
Website: http://www.pioneer.co.jp/ir-e/

Pioneer Corporation and Subsidiaries

I. CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2006

(1) OPERATING REVENUE BY SEGMENT

(In millions of yen)

		Year ended March 31
		2006								2005								% to
		Amount				% to total				Amount				% to total				prior year
Domestic		¥	81,998				10.9	%		¥	90,838				12.8	%			90.3	%
Overseas			272,692				36.1				231,933				32.6				117.6
Home Electronics			354,690				47.0				322,771				45.4				109.9
Domestic			117,560				15.6				120,260				16.9				97.8
Overseas			212,962				28.2				183,150				25.8				116.3
Car Electronics			330,522				43.8				303,410				42.7				108.9
Domestic			—				—				—				—				—
Overseas			8,540				1.1				10,237				1.4				83.4
Patent Licensing			8,540				1.1				10,237				1.4				83.4
Domestic			33,208				4.3				37,653				5.3				88.2
Overseas			28,004				3.8				36,971				5.2				75.7
Others			61,212				8.1				74,624				10.5				82.0
Domestic			232,766				30.8				248,751				35.0				93.6
Overseas			522,198				69.2				462,291				65.0				113.0
Total		¥	754,964				100.0	%		¥	711,042				100.0	%			106.2	%

(2) CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions of yen)

		Year ended March 31
										% to
		2006				2005				prior year
Operating revenue:
Net sales		¥	746,424			¥	700,805				106.5	%
Royalty revenue			8,540				10,237				83.4
Total operating revenue			754,964				711,042				106.2
Operating costs and expenses:
Cost of sales			593,238				539,118				110.0
Selling, general and administrative			178,135				170,439				104.5
Net loss from transfer of the substitutional portion of employee welfare pension plan			—				794				—
Total operating costs and expenses			771,373				710,351				108.6
Operating income (loss)			(16,409	)			691				—
Other income (expenses):
Interest income			2,658				1,929				137.8
Foreign exchange gain (loss)			(2,326	)			480				—
Interest expense			(1,479	)			(1,741	)			85.0
Other—net			(53,609	)			(3,426	)			—
Total other expenses			(54,756	)			(2,758	)			—
Loss from continuing operations before income taxes			(71,165	)			(2,067	)			—
Income taxes			(4,660	)			4,287				—
Minority interest in losses (earnings) of subsidiaries			4,774				(690	)			—
Equity in losses of affiliated companies			(24,027	)			(3,068	)			—
Loss from continuing operations			(85,758	)			(10,112	)			—
Income from discontinued operations, net of tax			772				1,323				58.4
Net loss		¥	(84,986	)		¥	(8,789	)			—	%

Pioneer Corporation and Subsidiaries

(3) CONSOLIDATED BALANCE SHEETS

										(In millions of yen)
		March 31								Increase/
		2006				2005				(Decrease)
ASSETS
Current assets:
Cash and cash equivalents		¥	121,680			¥	116,681			¥	4,999
Trade receivables, less allowance			110,306				132,176				(21,870	)
Inventories			104,226				109,015				(4,789	)
Assets held for sale			25,577				—				25,577
Others			69,626				69,024				602
Total current assets			431,415				426,896				4,519
Investments and long-term receivables			29,772				28,828				944
Property, plant and equipment, less depreciation			160,231				210,145				(49,914	)
Intangible assets			20,576				24,052				(3,476	)
Other assets			38,795				35,246				3,549
Total assets		¥	680,789			¥	725,167			¥	(44,378	)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt		¥	30,370			¥	52,428			¥	(22,058	)
Trade payables			102,082				96,335				5,747
Liabilities held for sale			17,863				—				17,863
Others			124,720				102,407				22,313
Total current liabilities			275,035				251,170				23,865
Long-term debt			92,970				81,219				11,751
Other long-term liabilities			25,425				42,371				(16,946	)
Minority interests			14,109				18,168				(4,059	)
Shareholders’ equity:
Common stock			49,049				49,049				—
Capital surplus			82,910				82,735				175
Retained earnings			173,826				260,556				(86,730	)
Accumulated other comprehensive income (loss)			(20,092	)			(47,669	)			27,577
Treasury stock			(12,443	)			(12,432	)			(11	)
Total shareholders’ equity			273,250				332,239				(58,989	)
Total liabilities and shareholders’ equity		¥	680,789			¥	725,167			¥	(44,378	)
Breakdown of accumulated other comprehensive income (loss):
Minimum pension liability adjustments		¥	(3,680	)		¥	(11,186	)		¥	7,506
Net unrealized holding gain on securities			10,352				8,250				2,102
Cumulative foreign currency translation adjustments			(26,764	)			(44,733	)			17,969
Total accumulated other comprehensive income (loss)		¥	(20,092	)		¥	(47,669	)		¥	27,577

Pioneer Corporation and Subsidiaries

(4) CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions of yen)

														Accumulated
														Other								Total
		Common				Capital				Retained				Comprehensive				Treasury				Shareholders’
		Stock				Surplus				Earnings				Income (Loss)				Stock				Equity
Balance at March 31, 2004		¥	49,049			¥	82,464			¥	273,718			¥	(61,829	)		¥	(10,464	)		¥	332,938
Net loss											(8,789	)											(8,789	)
Other comprehensive income															14,160								14,160
Value ascribed to stock options							270																270
Cash dividends (¥25 per share)											(4,373	)											(4,373	)
Purchase and sales of treasury stock, net							1												(1,968	)			(1,967	)
Balance at March 31, 2005		¥	49,049			¥	82,735			¥	260,556			¥	(47,669	)		¥	(12,432	)		¥	332,239
Net loss											(84,986	)											(84,986	)
Other comprehensive income															27,577								27,577
Value ascribed to stock options							175																175
Cash dividends (¥10 per share)											(1,744	)											(1,744	)
Purchase and sales of treasury stock, net																			(11	)			(11	)
Balance at March 31, 2006		¥	49,049			¥	82,910			¥	173,826			¥	(20,092	)		¥	(12,443	)		¥	273,250

(5) CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of yen)

		Year ended March 31
		2006				2005
I. Operating activities:
Net loss		¥	(84,986	)		¥	(8,789	)
Depreciation and amortization			46,703				46,990
Decrease (increase) in trade receivables			16,586				(12,322	)
Decrease in inventories			9,530				6,317
Increase in trade payables			13,941				4,405
Increase (decrease) in other accrued liabilities			26,857				(10,371	)
Other			39,698				(6,284	)
Net cash provided by operating activities			68,329				19,946
II. Investing activities:
Payment for purchase of fixed assets			(40,325	)			(63,866	)
Payment for purchase of subsidiary			—				(34,015	)
Other			10,566				4,365
Net cash used in investing activities			(29,759	)			(93,516	)
III. Financing activities:
Increase (decrease) in short-term borrowings and long-term debt			(31,204	)			4,549
Dividends paid			(3,499	)			(4,386	)
Purchase and sales of treasury stock, net			(11	)			(1,967	)
Decrease in capital-lease obligations			(3,535	)			(1,770	)
Other			(302	)			(445	)
Net cash used in financing activities			(38,551	)			(4,019	)
Effect of exchange rate changes on cash and cash equivalents			4,980				1,851
Net increase (decrease) in cash and cash equivalents			4,999				(75,738	)
Cash and cash equivalents, beginning of year			116,681				192,419
Cash and cash equivalents, end of year		¥	121,680			¥	116,681
Free cash flow (I + II)		¥	38,570			¥	(73,570	)

Pioneer Corporation and Subsidiaries

(6) SEGMENT INFORMATION

The following segment information is prepared pursuant to the regulations under the Securities and Exchange Law of Japan.

<Business Segments>

(In millions of yen)

		Year ended March 31
		2006								2005								% to prior year
		Operating				Operating				Operating				Operating				Operating				Operating
		Revenue				Income				Revenue				Income				Revenue				Income
Home Electronics		¥	356,813			¥	(35,184	)		¥	325,103			¥	(24,628	)			109.8	%			—	%
Car Electronics			332,101				17,486				304,731				18,591				109.0				94.1
Patent Licensing			10,588				7,217				11,599				9,389				91.3				76.9
Others			98,857				(3,991	)			111,307				61				88.8				—
Total			798,359				(14,472	)			752,740				3,413				106.1				—
Corporate and Eliminations			(43,395	)			(1,937	)			(41,698	)			(2,722	)			—				—
Consolidated		¥	754,964			¥	(16,409	)		¥	711,042			¥	691				106.2	%			—	%

<Geographic Segments>

(In millions of yen)

		Year ended March 31
		2006								2005								% to prior year
		Operating				Operating				Operating				Operating				Operating				Operating
		Revenue				Income				Revenue				Income				Revenue				Income
Japan		¥	604,649			¥	(25,832	)		¥	574,286			¥	(7,106	)			105.3	%			—	%
North America			202,970				3,368				176,977				(2,738	)			114.7				—
Europe			163,702				3,519				149,922				(308	)			109.2				—
Other Regions			333,942				3,697				279,586				6,986				119.4				52.9
Total			1,305,263				(15,248	)			1,180,771				(3,166	)			110.5				—
Corporate and Eliminations			(550,299	)			(1,161	)			(469,729	)			3,857				—				—
Consolidated		¥	754,964			¥	(16,409	)		¥	711,042			¥	691				106.2	%			—	%

Pioneer Corporation and Subsidiaries

Notes:

	1.		The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).
	2.		The consolidated financial statements include the accounts of the parent company and 124 subsidiaries and the investments in 3 affiliated companies accounted for on an equity basis.
	3.		Effective from this fiscal 2006, the Company changed business segment classification for certain businesses. Results related to plasma displays for business use and DJ equipment have been moved from “Others” to “Home Electronics.” Corresponding figures for the previously reported operating revenue by segment and segment information have been reclassified accordingly.
	4.		In fiscal 2006, the Company sold a subsidiary engaged in the development of cable TV software, and reached a preliminary agreement on the sale of subsidiaries involved in the electronic components business. The assets and liabilities of subsidiaries expected to be sold have been classified as held for sale at March 31, 2006 and at the lower of their carrying amount or fair value less costs to sell and no impairment adjustment was necessary. The operating results of the discontinued operations are presented as a separate line item in the consolidated statements of operations. These reclassifications are done in accordance with the Statement of Financial Accounting Standards No.144, “Accounting for the Impairment of Disposal of Long-Lived Assets.” Reclassifications have been made to previously reported consolidated statements of operations and segment information to conform to this presentation.
			The financial result of discontinued operations for the year ended March 31, 2005 and 2006, and income from discontinued operations presented as a line in consolidated statements of operations, is itemized as follows.

(In millions of yen)

		Year ended March 31
		2006				2005
Operating revenue		¥	30,274			¥	22,606
Operating income			739				1,901
Income before income taxes			820				1,878
Gain on sale of discontinued operations			434				—
Income taxes			482				555
Income from discontinued operations		¥	772			¥	1,323

- 13 -

Pioneer Corporation—Parent Company Only

II. NON-CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2006

(1) SALES BY SEGMENT

(In millions of yen)

		Year ended March 31
		2006								2005								% to
		Amount				% to total				Amount				% to total				prior year
Domestic		¥	73,290				14.2	%		¥	80,873				16.7	%			90.6	%
Export			181,577				35.2				164,882				33.9				110.1
Home Electronics			254,868				49.4				245,756				50.6				103.7
Domestic			117,281				22.8				119,572				24.6				98.1
Export			142,420				27.6				118,242				24.4				120.4
Car Electronics			259,702				50.4				237,814				49.0				109.2
Domestic			1,162				0.2				1,835				0.4				63.3
Export			60				0.0				122				0.0				49.0
Others			1,222				0.2				1,958				0.4				62.4
Domestic			191,734				37.2				202,282				41.7				94.8
Export			324,058				62.8				283,247				58.3				114.4
Total		¥	515,792				100.0	%		¥	485,530				100.0	%			106.2	%

Note:

Effective from this fiscal 2006, the Company changed business segment classification for certain businesses. Results related to plasma displays for business use and DJ equipment have been moved from “Others” to “Home Electronics.” Previously reported amounts have been reclassified accordingly.

(2) CONDENSED STATEMENTS OF OPERATIONS

(In millions of yen)

		Year ended March 31
		2006								2005
						% to								% to
		Amount				net sales				Amount				net sales
Net sales		¥	515,792				100.0	%		¥	485,530				100.0	%
Cost of sales			451,320				87.5				411,075				84.7
Selling, general and administrative expenses			96,712				18.8				89,469				18.4
Operating income (loss)			(32,239	)			(6.3	)			(15,014	)			(3.1	)
Non-operating income—net			692				0.2				10,023				2.1
Ordinary income (loss)			(31,546	)			(6.1	)			(4,991	)			(1.0	)
Other income (expenses)—net			(13,183	)			(2.6	)			1,446				0.3
Income (loss) before income taxes			(44,730	)			(8.7	)			(3,545	)			(0.7	)
Income taxes			3,027				0.6				(3,184	)			(0.6	)
Net income (loss)		¥	(47,757	)			(9.3	)		¥	(360	)			(0.1	)

- 14 -

Pioneer Corporation—Parent Company Only

(3) CONDENSED BALANCE SHEETS

						(In millions of yen)
		March 31								Increase/
		2006				2005				(Decrease)
ASSETS
Current assets:
Cash		¥	50,305			¥	40,502			¥	9,803
Notes and accounts receivable—trade			46,034				51,833				(5,798	)
Marketable securities			—				11,685				(11,685	)
Inventories			30,015				28,018				1,996
Other current assets			40,105				41,683				(1,577	)
Total current assets			166,461				173,724				(7,263	)
Fixed assets:
Tangible			55,537				53,301				2,235
Intangible			28,752				29,826				(1,073	)
Investments and others			201,979				201,893				86
Total fixed assets			286,269				285,021				1,248
Total assets		¥	452,730			¥	458,745			¥	(6,015	)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable—trade		¥	56,175			¥	52,738			¥	3,437
Accrued expenses			61,190				40,152				21,037
Other current liabilities			40,512				23,611				16,901
Total current liabilities			157,879				116,502				(41,376	)
Long-term liabilities			73,351				73,237				113
Total liabilities			231,230				189,740				41,489
Shareholders’ equity			221,500				269,005				(47,505	)
Total liabilities and shareholders’ equity		¥	452,730			¥	458,745			¥	(6,015	)

Pioneer Corporation—Parent Company Only

(4) PROPOSAL OF APPROPRIATION OF UNAPPROPRIATED RETAINED EARNINGS

		(In millions of yen except per share information)
		Year ended				Year ended
		March 31, 2006				March 31, 2005
Unappropriated retained earnings (accumulated deficit) at the end of the period		¥	(46,902	)		¥	2,215
Restoration of general reserves			47,800				2,129
Total			898				4,344
To be appropriated as follows:
Dividends			436				2,180
		(¥2.5 per share of common stock)				(¥12.5 per share of common stock)
Unappropriated retained earnings carried forward to the next period		¥	462			¥	2,164

Note:		Combined with the interim dividends of ¥7.5 per share of common stock paid on December 2, 2005, the total cash dividends for fiscal year 2006 will amount to ¥10 per share of common stock.