February 5, 2009

Consolidated Financial Review
for the Third Quarter Ended December 31, 2008
Company name:
URL:
Telephone number:
Stock exchange listing:Tokyo Electron Limited
http://www.tel.com(03) 5561-7000
Tokyo Stock Exchange 1st Section (Code 8035)

Notes: 1. The accompanying financial statements have been prepared in accordance with accounting
principles and practices generally accepted in Japan.
2. Amounts are shown in million yen except per share data.
3. Amounts are rounded down to the nearest million yen.

1. Financial highlights for the nine months ended December 31, 2008
Nine months ended
December 31, 2008 December 31, 2007
402,314676,215
24,281
133,504
28,833
135,557
9,675
88,06454.07
492.2753.96
491.07(1) Operating results (Cumulative)
Net sales
Operating income
Ordinary income
Net income
Net income per share (Yen)
Fully diluted net income per share (Yen)(2) Financial position

Total assets
Net assets
Equity ratio (%)
Net assets per share (Yen)
Equity: 520,616 million yen (as of Decmeber 31, 2008)
534,953 million yen (as of March 31, 2008)

As of
December 31, 2008
679,639531,259
76.6
2,909.18

As ofMarch 31, 2008
792,817545,24467.5
2,989.70

Year ending
March 31, 2009

Year ended
March 31, 2008

2. Dividends

2Q-end dividend per share (Yen)
20.00
Year-end dividend per share (Yen)(forecast) 4.00
Annual dividend per share (Yen)(forecast) 24.00
Note: Revision of dividends forecast for during this period: No

70.00
55.00
125.003. Earnings forecasts for the year ending March 31, 2009
Year ending
March 31, 2009
Net sales
Operating income
Ordinary income
Net income
Net income per share (Yen)
Note: Revision of earnings forecast for during this period: Yes

1

510,000
7,000
13,000800
4.47

4. Others(1) Important changes in subsidiaries: None
(2) Use of simplified accounting method and special accounting policy for quarterly financial reporting: Yes(3) Changes in principles, procedures and display of accounting method concerning quarterly consolidated
statement policies.
1. Changes in accounting policies: Yes
2. Other changes: None
(4) Number of shares outstanding (common stock)
1. Number of shares issued
As of December 31, 2008:

180,610,911 shares

As of March 31, 2008:

180,610,911 shares

2. Number of shares of treasury stock
As of December 31, 2008:

1,654,179 shares

As of March 31, 2008:

1,678,927 shares

3. Average number of shares outstanding
As of December 31, 2008:

178,943,356 shares

As of September 30, 2007: 178,895,570 shares

Explanations on the appropriate use of earnings forecast:
The performance forecasts and estimates stated in this Financial Review are based on certain
assumptions judged to be reasonable at the present time in light of information currently available.
Consequently, actual operating results may differ substantially from the projections in the Financial
Review.

2

Qualitative Information, Financial Statements, etc.
1. Qualitative Information on Consolidated Operating Results
During the first three quarters of the current fiscal year, the global financial crisis that originatedin the United States began to impact the real economy, resulting in a serious recession in various
industries.
Rapid changes occurred in the business environment related to semiconductor production
equipment, which is the Company’s key segment, and the price of memory chips remained low,
prompting semiconductor manufacturers to reduce production and postpone or freeze capital
investment.
Given this situation, net sales in the first three quarters of the current fiscal year (April to
December 2008), were 402,314 million yen (down 40.5% compared to the same period of theprevious year), operating income was 24,281 million yen (down 81.8%), ordinary income was
28,833 million yen (down 78.7%), and net income was 9,675 million yen (down 89.0%).
In addition, during the third quarter (October to December 2008), net sales were 101,088 million
yen (down 49.4% compared to the same period of the previous year), operating losses were2,001 million yen (down 40,501 million yen), ordinary losses were 74 million yen (down 39,835
million yen), and the net losses for the third quarter were 7,686 million yen (down 33,286 million
yen).

The overview of each business segment is as described below.

(1) Industrial Electronic Equipment BusinessNet sales from external customers for this segment during the first three quarters of the current
fiscal year were 327,353 million yen (down 44.9% compared to the same period of the previousyear). Net sales from external customers in this segment in the third quarter were 78,253
million yen (down 54.2%).

(a) Semiconductor Production Equipment
Due to the global recession that impacted the semiconductor market, semiconductor
manufacturers have reduced production and put off or curbed capital investment. Because ofthis, net sales from external customers in this segment during the first three quarters of thecurrent fiscal year were 266,530 million yen (down 50.6% compared to the same period of theprevious year). Also, net sales from external customers in this segment during the third quarter
were 57,827 million yen (down 64.0%).

3

(b) FPD/PV (Flat Panel Display/Photovoltaic Cell) Production Equipment*
Net sales for external customers in this segment during the first three quarters of the current
fiscal year, chiefly equipment for lines to produce large liquid crystal displays (LCDs) at panel
manufacturers, continued to be strong, at 60,550 million yen (up 12.9% compared to the same
period of the previous year). Meanwhile, some panel manufacturers have announced plans for
reducing production or capital investment due to the decline in demand for end products, and it isfeared that the segment will face a harsh business environment in the future.
Also, net sales from external customers in this segment during the third quarter were 20,370
million yen (up 102.7% compared to the same period of the previous year).
* Starting from the current quarter, the name of this segment was changed from “FPD (Flat Panel Display) Production
Equipment” to “FPD/PV (Flat Panel Display/Photovoltaic Cell) Production Equipment.”(c) Others
Net sales from external customers in this segment during the first three quarters of the current
fiscal year were 273 million yen (down 15.8% compared to the same period of the previous year).
Also, net sales from external customers in this segment during the third quarter were 55 million
yen (down 20.9%).

(2) Electronic Components and Computer Networks BusinessIn the semiconductor and electronic devices field, the businesses of custom ICs for mobile
phone base stations and memory ICs for personal computers, which had both enjoyed relatively
strong sales, remained sluggish in the wake of rapid deterioration of the market.

These

categories were also affected by the impact from production adjustments in various sectors,
including consumer electronics and industrial equipment. In the computer system-related field,
there was an even stronger tendency to curb capital investment as business confidence
worsened. Given this situation, net sales from external customers in this segment during thefirst three quarters of the current fiscal year were 74,960 million yen (down 8.9% compared to thesame period of the previous year). Also, net sales from external customers in this segment
during the third quarter were 22,835 million yen (down 21.2%).

4

(For reference）
Consolidated

Net Sales
Industrial Electronic Equipment
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
FPD/PV Production Equipment
OthersElectronic Components & Computer Networks
Operating Income (loss)
Ordinary Income (loss)
Net Income (loss)

FY2009
1Q-2Q
301,225
249,100
208,702
66,26534,92014,842
26,63338,884
7,025
20,12940,179218
52,12526,282
28,907
17,361（Millions of yen）
FY2009FY20093Q
1Q-3Q
101,088402,314
78,253327,353
57,827
266,530
21,00787,273
13,53848,4595,751
20,5945,700
32,334
4,896
43,781
3,301
10,326
3,631
23,761
20,37060,55055
273
22,83574,960(2,001)
24,281(74)
28,833(7,686)9,675

2. Qualitative Information on Consolidated Financial Conditions(1) Financial Conditions
Current assets at the end of the third quarter of the current fiscal year were 530,539 million yen,down 109,694 million yen compared to the end of the previous fiscal year. The decline wasprimarily the result of a combined decrease in cash and deposits and certificates of deposit insecurities of 13,846 million yen, and a decrease in trade notes and accounts receivable of90,370 million yen.
Tangible fixed assets decreased by 3,440 million yen compared to the end of the previous fiscal
year, to 100,665 million yen.
Intangible fixed assets fell by 2,449 million yen compared to the end of the previous fiscal year, to10,804 million yen.
Investments and other assets increased by 2,405 million yen compared to the end of theprevious fiscal year, to 37,629 million yen.
As a result, total assets were down 113,178 million yen compared to the end of the previous
fiscal year, to 679,639 million yen.
Current liabilities declined by 101,396 million yen compared to the end of the previous fiscal year,
to 97,424 million yen. The decline was the result primarily of redemption of the 11th issue of
unsecured corporate bonds worth 30,000 million yen, a decrease of 27,282 million yen in income5Long-term liabilities were up 2,203 million yen compared to the end of the previous fiscal year, to50,955 million yen.
As a result of the above, total liabilities decreased by 99,193 million yen compared to the end of
the previous fiscal year, to 148,379 million yen.
Net assets decreased to 531,259 million yen as a result of an increase from the reporting of net
income of 9,675 million yen, a decrease from the payment of 9,841 million yen in year-end
dividends for the previous fiscal year and 3,578 million yen in interim dividends for the current
fiscal year, and a decrease in valuation and translation adjustments of 10,021 million yen.

Theequity ratio was 76.6%.

(2) Cash Flow
Cash and cash equivalents at the end of the third quarter of the current fiscal year were down
125,302 million yen compared to the end of the previous fiscal year, to 68,189 million yen. In
addition, cash and cash deposits at the end of the third quarter of the current fiscal year
decreased by 13,846 million yen compared to the end of the previous fiscal year, to 189,716
million yen, including 121,526 million yen for time deposits and certificates of deposit with adeposit term over three months. The overall situation regarding cash flow during the first threequarters of the current fiscal year is as follows.
Cash flow from operating activities was a positive 50,942 million yen, up 9,692 million yen fromthe same period of the previous fiscal year. Major positive factors included income before
income taxes of 20,198 million yen, depreciation and amortization of 16,677 million yen, and adecrease in trade notes and accounts receivable of 87,739 million yen. The main use of cash
was payment of income taxes of 41,177 million yen.
Cash flow from investing activities was a negative 132,869 million yen, compared to a negative
47,494 million yen in the same period of the previous fiscal year, primarily due to 13,243 million
yen in expenditures to acquire tangible fixed assets for production and R&D and 111,864 million
yen in expenditures for net increases in time deposits.
Cash flow from financing activities was a negative 42,031 million yen, compared to a negative
26,826 million yen in the same period of the previous fiscal year, mainly due to the redemption of
the 11th issue of unsecured corporate bonds worth 30,000 million yen and 13,420 million yen in
dividend payments.
In addition, the overall situation regarding cash flow in the third quarter of the current fiscal year
is as follows.
Cash flow from operating activities was a negative 33,662 million yen, down 54,358 million yen
from the same period of the previous fiscal year. Major positive factors included depreciation
and amortization of 5,936 million yen, as well as a decrease in trade notes and accounts

6receivable of 11,279 million yen. Major negative factors included a net pre-income-tax loss forthe current quarter of 8,494 million yen, an increase in inventories of 11,026 million yen, adecrease in trade notes and accounts payable of 15,310 million yen, and the payment of 12,888
million yen in income taxes.
Cash flow from investing activities was a negative 28,953 million yen, compared to a negative
38,961 million yen in the same period of the previous fiscal year, primarily due to 2,470 million
yen in expenditures to acquire tangible fixed assets for production and R&D, and 22,411 million
yen in expenditures for net increases in time deposits.
Cash flow from financing activities was a negative 706 million yen, compared to a negative
10,436 million yen in the same period of the previous fiscal year, primarily due to the payment of
3,578 million yen in interim dividends.
* The figures above indicating year-on-year changes and the explanation of those changes for heading 1 “Qualitative
Information on Consolidated Operating Results” and subheading (2) “Cash Flow” (under heading 2 “Qualitative
Information on Consolidated Financial Conditions”) are for the sake of reference.

3. Qualitative Information on Forecasts for Consolidated Financial Results

Due to the expanding impact of the global financial crisis on the real economy, theelectronics-related market has also faced a worsening recession. There is a stronger trend
among manufacturers of semiconductors or LCD panels to postpone or curb capital investment,so that the business environment is becoming harsher than had been expected. Under suchcircumstances, net sales, focusing on the semiconductor production equipment segment, areexpected to be lower than the previous forecast. In addition, although the Company is striving
to improving profitability by taking measures such as reducing fixed costs extensively, profits are
expected to be lower than the previous forecast due to unusual or infrequent loss such as theloss on devaluation of investment securities and provision for possible loan loss reserve in
addition to the influence of net sales decrease.
Taking these circumstances into account, the Company has revised downward the forecast of
consolidated financial results for the entire fiscal year announced on October 31, 2008, as
follows:

7

Consolidated forecast(Billions of yen)

Net Sales
Industrial Electronic Equipment
Semiconductor Production Equipment
FPD/PV Production Equipment
OthersElectronic Components & Computer Networks
Operating Income
Ordinary Income
Net Income

FY2009 (E)510.0-43.7%
414.8-47.8%
328.0-54.8%
86.5
27.2%
0.3
-34.0%
95.2-14.4%
7.0-95.8%
13.0-92.5%
0.8-99.2%

Note: The financial forecasts and estimates stated in this financial review are based on certain
assumptions judged to be reasonable at the present time in light of information currently
available concerning economic conditions in Japan and overseas, fluctuations in foreignexchange rates, and other factors that may have an impact on performance.
They are therefore susceptible to the impact of many uncertainties, including market conditions,competition, the launching of new products (and their success or failure), and global conditions inthe semiconductor production equipment business. Consequently, actual sales and profits may
differ substantially from the projections stated in this financial review.

8Consolidated Balance Sheet(Millions of yen)
As ofDecember 31, 2008ASSETS

As ofMarch 31, 2008

Current assets
Cash and deposit

61,71667,540Trade notes and accounts receivable

133,799

224,170

Securities

128,001

136,022

Merchandise and finished goods

101,222

101,053Work in process

44,71842,123

Raw materials and supplies

17,80917,974

Others48,06351,411

Allowance for doubtful accounts(4,792)(62)

530,539640,233

100,665

104,105

Others10,804

13,253

Total intangible fixed assets

10,804

13,25339,76735,526

Total current assets
Long-term assets
Tangible fixed assets
Intangible fixed assets

Investments and other assets
OthersAllowance for doubtful accounts(2,137)(301)

Total investments and other assets

37,62935,224

149,100

152,584

679,639

792,817

Total long-term assets
Total assets

9

(Millions of yen)
As ofDecember 31, 2008

As ofMarch 31, 2008

Trade notes and accounts payable

33,57855,332

Short-term debt

7,787

6,069

956

28,239Other allowance

9,227

23,516

Others

45,87485,662

Total current liabilities

97,424

198,820

46,152

43,704

651

665

4,151

4,382

LIABILITIESCurrent liabilities

Income taxes payable

Long-term liabilities
Accrued pension and severance costs
Other allowance
OthersTotal long-term liabilities

50,95548,752

148,379

247,572

Common stock

54,961

54,961

Capital surplus

78,19378,392Retained earnings

406,567

410,866

Treasury stock(11,187)(11,369)

Total shareholders' equity

528,534

532,850

Valuation difference on available-for-sale securities

(704)

2,172

Deferred gains or losses on hedges

686

460

Total liabilities
NET ASSETS
Shareholders' equity

Valuation and translation adjustments

Translation adjustments(7,900)(529)

Total valuation and translation adjustments(7,918)

2,102

960

483

Minority interests

9,682

9,807

Total net assets

531,259545,244679,639

792,817

Subscription rights to shares

Total liabilities and net assets

10Consolidated Statement of Income(Millions of yen)
Nine months ended
December 31, 2008
Net sales

402,314

Cost of sales

284,144

Gross profit

118,169

Selling, general & administrative expenses
Research and development expenses

45,923

Others47,964

Total selling, general & administrative expenses

93,88824,281

Operating income
Non-operating income
Interest expenses

1,332

Revenue from development grants

2,099

Others1,659

Total non-operating income

5,091

Non-operating expenses

Interest expenses
Lease expenses of fixed assets

155

Loss on trade notes and accounts receivable

113

Others71

Total non-operating expenses

538

198

28,833

Ordinary income
Unusual or infrequent profit
Gain on sale of fixed assets

117

Total unusual or infrequent profit

117

Unusual or infrequent loss
Provision for possible loan loss reserve

6,775

Others1,976

Total unusual or infrequent loss

8,752

Income before income taxes

20,198Provision for income taxes and enterprise taxes

10,281

Minority interests

241
9,675

Net income

11Consolidated Cash Flow
(Millions of yen)
Nine months ended
December 31, 2008

Cash flow from operating activities
Income before income taxes

20,198Depreciation and amortization

16,677

Increase in accrued pension and severance costs (decrease)

2,536

Increase in allowance for doubtful accounts (decrease)

6,581

Increase in accrued employees' bonuses (decrease)(10,028)

Increase in accrued warranty expenses (decrease)(3,158)Interest and dividend revenue(1,431)

Decrease in trade notes and accounts receivable (increase)87,739Decrease in inventories (increase)(8,836)

Increase in accounts payable (decrease)(20,181)

Decrease in prepaid consumption tax (increase)

6,524

Increase in accrued consumption tax (decrease)(5,057)

Increase in customer advances (decrease)

5,028

Others(5,708)Subtotal

90,883

Receipts from interest and dividends

1,402Interest paid

(166)

Income taxes paid

(41,177)

Net cash generated by operating activities

50,942

Cash flow from investing activities
Decrease in time deposits (increase)(111,864)

Payment for purchase of tangible fixed assets(13,243)

Payment for acquisition of intangible fixed assets(661)

Payment for purchase of investment securities(6,800)

Others(299)

Net cash used in investing activities(132,869)

Cash flow from financing activities
Net increase in short-term borrowings (decrease)

1,717

Redemption of straight bonds(30,000)

Dividends paid

(13,420)

Others(328)

Net cash generated by financing activities(42,031)

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents (decrease)
Cash and cash equivalents at beginning of period
Cash and cash equivalents from newly consolidated subsidiaries
Cash and cash equivalents at end of period

12(1,411)(125,369)
193,49267
68,189

Segment Information
1. Information by business segment(Millions of yen)
Nine months ended December 31, 2008
Industrial
Electronic
Equipment
Net sales
Operating income

328,087
22,850Electronic Components
and Computer
Networks
75,375
1,411

Total
403,462
24,262Eliminations andCorporate

Consolidated(1,148)19402,314
24,281

Note: 1. Method of classifying businesses: Businesses are classified after considering similarities in type of product,function, or method of sale.
2. Major products in each business segment:(1) Industrial Electronic Equipment: Semiconductor Production Equipment, FPD Production Equipment,
Photovoltaic Cell Production Equipment, Others(2) Electronic Components and Computer Networks: Semiconductor products, Computer systems andnetworks, Middleware and software, Other electronic component

2. Information by geographic segment(Millions of yen)Japan
Net sales
Operating income

386,198
19,671

Nine months ended December 31, 2008
Eliminations andOther Regions
Total
Corporate

89,351
3,485

475,549
23,156(73,234)
1,124

Consolidated

402,314
24,281

Note: 1. National and regional categories are determined on the basis of geographic proximity.
2. Main countries and territories in other regions: U.S., Europe, Taiwan

3. Overseas sales(Millions of yen)
TaiwanOverseas sales

69,201

Nine months ended December 31, 2008
Korea
U.S.
Others56,58848,502

65,958

Consolidated net sales
Proportion of overseas
sales in consolidated
net sales ( % )Total
240,250
402,314

17.2

14.1

12.1

Note: 1. National and regional categories are determined on the basis of geographic proximity.
2. Main countries in others: Singapore, China, Israel
3. Overseas sales indicates net sales in countries and territories except Japan.

13

16.3

59.7

(Reference)
Consolidated Statement of Income of the same period of theprevious fiscal year
(Millions of yen)
Nine months ended
December 31, 2007
Net sales

676,215

Cost of sales

438,429

Gross profit

237,786

Selling, general & administrative expenses

104,281

Operating income

133,504

Non-operating income

3,669

Non-operating expenses

1,616
135,557

Ordinary income
Unusual or infrequent profit

3,057

Unusual or infrequent loss

397

Income before income taxes

138,217

Provision for income taxes and enterprise taxes

49,406

Minority interests

747
88,064

Net income

14