TOKYO ELECTRON

July 28, 2015

Consolidated Financial Review
for the First Quarter Ended June 30, 2015
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 andpractices generally accepted in Japan.
2. Amounts are rounded down to the nearest million yen.

1. Financial highlights for the three months ended June 30, 2015
Three months ended
June 30, 2014
June 30, 2015
Net sales (Millions of yen)
151,325
155,762
Operating income (Millions of yen)
17,06930,279Ordinary income (Millions of yen)
16,91330,207
Net income attributable to owners of parent (Millions of yen)
11,835
19,481
Net income per share (Yen)
66.04
109.53
Fully diluted net income per share (Yen)
65.88
109.22Comprehensive income: Three months ended June 30, 2015: 21,616 million yen
Three months ended June 30, 2014: 12,241 million yen(1) Operating results (Cumulative)(2) Financial position
As ofMarch 31, 2015
Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Equity: 624,887 million yen (as of June 30, 2015)
639,483 million yen (as of March 31, 2015)

876,153
641,162
73.0

As of
June 30, 2015
841,934
627,384
74.2

2. Dividends
Year ended
March 31, 2015
10.00
30.00
35.00
68.00
143.00

1Q-end dividend per share (Yen)
2Q-end dividend per share (Yen)
3Q-end dividend per share (Yen)
Year-end dividend per share (Yen)Annual dividend per share (Yen)
Note: Revision of dividends forecast : Yes

1

Year ending
March 31, 2016
105.00 (Forecast)
83.00 (Forecast)188.00 (Forecast)TOKYO ELECTRON

3. Earnings forecasts for the year ending March 31, 2016

Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income attributable to owners of parent (Millions of yen)
Net income per share (Yen)Six months ending
September 30, 2015
(Cumulative)
338,500
53,50053,50037,000209.04

Year ending
March 31, 2016
645,000
95,00095,00066,000373.78Notes: Revision of earnings forecast : Yes

4. Others(1)

Important changes in subsidiaries: None
(Changes on specific subsidiaries with changes in scope of consolidation)(2)

Changes in accounting principles, accounting estimation and restatement
1. Changes in accounting policies along with changes in accountins standards: Yes
2. Other changes of accounting policies besides number 1 above: None
3. Changes in accounting estimation: None
4. Restatement: None(3)

Number of shares issued and outstanding (common stock)
1. Number of shares issued and outstanding (including treasury stock)
As of June 30, 2015:

180,610,911 shares

As of March 31, 2015: 180,610,911 shares
2. Number of shares of treasury stock
As of June 30, 2015:

4,469,768 shares

As of March 31, 2015: 1,344,892 shares
3. Average number of shares outstanding
As of June 30, 2015:

177,865,767 shares

As of June 30, 2014:

179,203,670 shares

Notification of the status of quarterly financial review procedures:This quarterly financial report is outside the jurisdiction of auditing procedures outlined in the Financial Instruments and Exchange
Act and remain incomplete at the time of announcing this report.
Explanations on the appropriate use of earnings forecast:
The performance forecast and estimate 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 fromthe projections in this Financial Review.
The company plans to hold a financial meeting for analysts and investors on Tuesday, July 28, 2015. The supplementary materials
to these financial reports that will be handed out at this meeting will be posted simultaneously on our company website.

2

1. Qualitative Information on Financial Results for the Current Quarter(1) Description of Operating Results

During the first quarter of the current fiscal year, while certain sectors showed some weakness, recent
performance of the global economy has been sound. In Japan too, backed by the government’s economic
and fiscal policies, business continued to sustain a moderate recovery.
In the electronics industry, the primary area of the Tokyo Electron (TEL) Group’s business activities, while
demand for personal computers is exhibiting some sluggishness, demand in the high performance
smartphone market remains strong, and demand for servers, etc. needed to support the trend toward
increasing digital data communications remains firm.
Under these circumstances, the Group’s consolidated results (cumulative) for the first quarter of the current
fiscal year were net sales of 155,762 million yen (a year-on-year growth of 2.9%), operating income of
30,279 million yen (a year-on-year growth of 77.4%), ordinary income of 30,207 million yen (a year-on-year
growth of 78.6%), and quarterly net income attributable to owners of parent of 19,481 million yen (ayear-on-year growth of 64.6%).

The overview of each business segment is as described below.
As of the first quarter of the current fiscal year, the Photovoltaic Panel (PV) Production Equipment business,from which we announced our intentions to withdraw, diminished in importance. Therefore, it has been
removed from the reportable segments and included in “Others.” The year-on-year comparisons below are
based on figures reclassified into segments after the amendment of year-on-year figures.

(i) Semiconductor Production Equipment
Buoyed by the demand for DRAM and NAND flash memory used in high performance smartphones anddata center servers, capital investment by memory manufacturers remained strong, while manufacturers oflogic-based semiconductors also continued their capital investment in cutting-edge technology. As a result,net sales to external customers in this segment in the first quarter of the current fiscal year were 140,365
million yen (a year-on-year growth of 3.1%).

(ii) Flat Panel Display (FPD) Production Equipment
In the market for FPD production equipment, while capital investment in large-sized flat panel displays
continues in China, there has been an evident lull in investment there in small and medium-sized flat panels.
Against this backdrop, net sales to external customers in this segment in the first quarter of the current fiscal
year were 10,070 million yen (a year-on-year decrease of 27.7%).

3

(iii) Others
Net sales to external customers in this segment in the first quarter of the current fiscal year were 5,326
million yen (a year-on-year growth of 319.6%).

(For reference)
Consolidated Operating Results(Millions of yen)
FY 2015
Full YearNet Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
FPD Production Equipment
OthersOperating Income
Ordinary Income
Net Income Attributable to Owners of Parent
Note:

613,124576,242
87,747
135,341
58,76897,364
139,423
39,713
17,88332,7094,172
88,113
92,94971,888FY 2016
1Q

1Q

2Q

3Q

4Q

151,325
136,126
13,42133,79012,53022,451
38,456
13,911
1,565
13,9291,269
17,06916,913
11,835

142,948
136,500
26,08433,906
12,18914,69538,352
7,069
4,202
5,099
1,348
13,045
14,8608,181

137,021
131,993
19,081
32,041
19,054
18,10328,598
6,322
8,791
3,751
1,276
22,081
25,005
17,451

181,829
171,622
29,16035,603
14,992
42,11434,017
12,409
3,324
9,928
278
35,91636,16934,420155,762
140,365
25,011
30,776
17,05328,14023,13014,084
2,169
10,0705,326
30,27930,207
19,481

Offset elimination has been carried out on the dealing between segments.

Production and Order Performance
1. Production(Millions of yen)
FY 2015
Full Year

Semiconductor Production Equipment
FPD Production Equipment

559,926
33,230

1Q

2Q

3Q

4Q

124,318
7,419

123,037
3,033

145,775
10,953

166,795
11,824

FY 2016
1Q
147,830
10,435

Others

3,488

1,081

1,191

1,110

105

5,124

Total

596,645

132,818

127,262

157,839

178,724

163,390

Note:

1. Amounts are based on sales prices.
2. The above amounts do not include consumption taxes .

(Millions of yen)

2. Orders Received
FY 2015
Full Year
Semiconductor Production Equipment
FPD Production Equipment
OthersTotal
Note:626,795
35,301(1,129)660,967

1Q

2Q

3Q

4Q

137,297
14,280708
152,286

142,474
4,849
133
147,457

167,264
3,474
1,559
172,298

179,759
12,696(3,530)188,924

1. Offset elimination has been carried out on the dealing between segments.
2. The above amounts do not include consumption taxes.

4

FY 2016
1Q
156,663
11,847
1,835
170,346

3. Orders Backlog(Millions of yen)
FY 2015

FY 2016
1Q

1Q

2Q

3Q

4Q

Semiconductor Production Equipment
FPD Production Equipment

211,085
29,371

217,059
29,121

252,330
28,844

260,467
31,611

276,766
33,388OthersTotal

8,433
248,889

7,219
253,3997,501
288,675

3,692
295,771201
310,355

Note:

1. Offset elimination has been carried out on the dealing between segments.
2. The above amounts do not include consumption ta xes.

(2) Description of Financial Conditions(i) Financial Conditions
Current assets at the end of the first quarter of the current fiscal year were 640,236 million yen, down by
30,646 million yen compared to the end of the previous fiscal year. The major factors influencing this result
were a 19,558 million yen decrease in prepaid consumption taxes, a 12,883 million yen decrease in tradenotes and accounts receivable, a 9,938 million yen decrease in cash and deposit, an 8,807 million yen
decrease in short-term investments included in securities, and a 19,222 million yen increase in inventories.
Tangible fixed assets decreased by 1,559 million yen from the end of the previous fiscal year, to 105,336
million yen.
Intangible fixed assets decreased by 386 million yen from the end of the previous fiscal year, to 27,180
million yen.
Investments and other assets decreased by 1,627 million yen from the end of the previous fiscal year, to69,180 million yen.
As a result, total assets decreased by 34,219 million yen from the end of the previous fiscal year, to 841,934
million yen.
Current liabilities were down 17,285 million yen compared to the end of the previous fiscal year, to 155,527
million yen. The major factors causing the decrease were an 8,545 million yen decrease in customer
advances, a 6,941 million yen decrease in accrued employees’ bonuses, a 5,437 million yen decrease intrade notes and accounts payable, and a 2,971 million yen increase in payable income taxes.
Long-term liabilities were down 3,156 million yen compared to the end of the previous fiscal year, to 59,022
million yen.
Net assets were down 13,777 million yen compared to the end of the previous consolidated fiscal year, to627,384 million yen. The main factors were an increase due to reported quarterly net income attributable toowners of parent of 19,481 million yen, a decrease of 24,119 million yen due to the purchase of treasury
stock, and a decrease as a result of the payment of 12,190 million yen in year-end dividends for theprevious fiscal year. As a result, the equity ratio was 74.2%.

5

(ii) Cash Flow
Cash and cash equivalents at the end of the first quarter of the consolidated fiscal year decreased by
48,734 million yen compared to the end of the previous consolidated fiscal year to 268,897 million yen. The
combined balance including 30,038 million yen in time deposits and short-term investments with periods ofmaturity or redemption of at least three months, that are not in included in cash and cash equivalents was
298,936 million yen, down 18,746 million yen from the end of the previous fiscal year. The overall situation
regarding cash flow during the first quarter of the current fiscal year was as described below.
Cash flow from operating activities was positive 17,394 million yen, up 946 million yen compared to the endof the previous fiscal year. The main positive factors were 29,099 million yen in quarterly net income before
income taxes, a 19,564 million yen decrease in prepaid consumption taxes, and a decrease of 13,427
million yen in trade notes and accounts receivable. The main negative factors were an 18,515 million yen
increase in inventories, a 9,387 million yen decrease in customer advances, a 6,992 million yen decrease inaccrued bonuses, and a 6,123 million yen decrease in accounts payable.
Cash flow from investing activities was negative 32,028 million yen compared to positive 21,060 million yen
in the same period of the previous year. The primary negative factors were 29,987 million yen in payments
associated with an increase in time deposits and short-term investments, and payment of 2,152 million yen
for the acquisition of tangible fixed assets.
Cash flow from financing activities was negative 36,362 million yen, compared to negative 4,614 million yen
in the same period of the previous fiscal year. This was primarily the result of the payment of 24,119 million
yen for the purchase of treasury stock, and the payment of 12,190 million yen in dividends.

Consolidated Cash Flow (Summary)(Millions of yen)Three month ended
June 30, 2014

Three month ended
June 30, 2015

Cash flow from operating activities
Income before income taxes (loss)
Depreciation and amortization
Decrease in trade notes and accounts receivable (increase)
Decrease in inventories (increase)
Increase in accounts payable (decrease)

16,44715,022
4,717
8,231
4,992
(4,096)

17,39429,0994,624
13,427(18,515)(6,123)

OthersCash flow from investing activities
Decrease in time deposits and short-term investments (increase)
Others (purchase of fixed assets)
Cash flow from financing activities
Decrease in treasury stock (increase)(12,420)
21,06022,300(1,239)(4,614)(38)(5,117)(32,028)(29,987)(2,041)(36,362)(24,119)(4,576)(12,242)

Others
Effect of exchange rate changes on cash and cash equivalents

1,273

2,262

Net increase in cash and cash equivalents (decrease)34,166(48,734)

Cash and cash equivalents at beginning of period

104,797

317,632

Cash and cash equivalents at end of period

138,963

268,897

Cash and cash equivalents and time deposits and short-term investments with periods tomaturity or redemption of at least three months that are not included in cash and cash
equivalents

280,011

298,9366

(3) Description of Financial Estimates Information such as Consolidated Performance Forecasts

In light of the semiconductor market environment and our current orders, we will make a revision to ourearnings forecast for the second quarter of the current fiscal year as well as our forecast for the full year.

Consolidated Forecast(Billions of yen, Y/Y change)
FY2016(E)Interim

Net Sales

Full Year

338.5

15.0%

645.0

Semiconductor Production Equipment

315.0

15.5%

594.0

3.1%

FPD Production Equipment
Others

18.0
5.5

-5.4%
110.1%

45.0
6.0

37.6%
43.8%

Operating Income

53.5

77.7%

95.0

7.8%

Ordinary Income

53.5

68.4%

95.0

2.2%

Net Income Attributable to Owners of Parent

37.0

84.8%

66.0

-8.2%

Note:

5.2%

Offset elimination has been carried out on the dealing between segments.

Note: The financial forecasts and estimates stated in this announcement are based on certain assumptions judged to bereasonable by the Company in light of information currently ava ilable concerning economic conditions in Japan and overseas,fluctuations in foreign exchange rates, and other factors that may have an impact on perform ance. The company does notpromise that the forecasts or estimates will be accurate.
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 in the semiconductor related industry. Consequently, actua lsales and profits may differ substantially from the projections stated in this announcement.

7

TOKYO ELECTRON

Consolidated Balance Sheet
As ofMarch 31, 2015

(Millions of yen)
As ofJune 30, 2015

ASSETS
Current assets
Cash and deposit

79,382

Trade notes and accounts receivable

110,845

97,961

Securities

238,532

229,492

Merchandise and finished goods

112,301

126,313Work in process

41,48344,413

Raw materials and supplies

21,80324,083

Others

66,913

48,620Allowance for doubtful accounts

69,443

(378)

(93)

670,882

640,236

106,896

105,336

9,067

8,957

Others

18,49918,222

Total intangible fixed assets

27,56627,180

Others72,692

71,072

Allowance for doubtful accounts(1,884)(1,892)

Total investments and other assets

70,807

69,180205,271

201,698

876,153

841,934

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

Investments and other assets

Total long-term assets
Total assets

8

TOKYO ELECTRON(Millions of yen)
As ofMarch 31, 2015

As ofJune 30, 2015

LIABILITIESCurrent liabilities
Trade notes and accounts payable

56,478

Income taxes payable

6,196

51,041
9,168

Accrued warranty expenses

10,441

10,305

Other allowance

13,151

5,368

Others86,54379,643

Total current liabilities

172,812

155,527

Long-term liabilities
Other allowance

374

374

Net defined benefit liability

51,10451,041Others

10,6997,605

Total long-term liabilities

62,17859,022

234,991

214,549

Common stock

54,961

54,961

Capital surplus

78,02378,023Retained earnings

488,816

496,043

Total liabilities
NET ASSETS
Shareholders' equity

Treasury stock
Total shareholders' equity(9,064)(33,008)

612,736

596,019

9,463

10,016

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Translation adjustments

122

94

12,481

14,609Remeasurements of defined benefit plans

4,681

4,147

Total accumulated other comprehensive income

26,74728,868

1,420

2,276

Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

9

257

220

641,162

627,384

876,153

841,934

TOKYO ELECTRON

Consolidated Statement of Income(Millions of yen)Three months ended
June 30, 2014

Three months ended
June 30, 2015

Net sales

151,325

155,762

Cost of sales

95,942

90,057Gross profit

55,38365,704

Research and development expenses

16,754

17,577

Others21,558

17,848

Total selling, general & administrative expenses

38,31335,425

17,06930,279Dividend revenue

305

268

Others557

600

Total non-operating income

863

869

Foreign currency translation loss

852

810

Others

166

130

1,019

941

16,91330,207

Gain on sale of fixed assets

55

258

Gain on sale of investment securities

54

Total unusual or infrequent profit

110

258

1,609

1,110

Selling, general & administrative expenses

Operating income (loss)
Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary income (loss)
Unusual or infrequent profit-

Unusual or infrequent loss
Loss on sales of subsidiaries and affiliates' stocks
Others392

255

Total unusual or infrequent loss

2,001

1,366

Income (loss) before income taxes

15,02229,099

Income taxes

3,169

9,610

Net income (loss)

11,853

19,488Net income (loss) attributable to non-controlling interests
Net income (loss) attributable to owners of parent

10

18

7

11,835

19,481

TOKYO ELECTRON

Consolidated Statement of Comprehensive Income(Millions of yen)Three months ended
June 30, 2014

Three months ended
June 30, 2015

11,853

19,488Valuation difference on available-for-sale securities

269

555

Deferred gains or losses on hedges

(117)

(32)

Translation adjustments

739

2,129

Remeasurements of defined benefit plans

(498)

(521)

(5)

(3)

Net income (loss)
Other comprehensive income

Share of other comprehensive
income of associates accounted for using equity method
Total other comprehensive income
Comprehensive income

387

2,127

12,241

21,616

12,221

21,60219

14(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

11

TOKYO ELECTRON

Notes to Remarkable Changes in Shareholders' Equity
Tokyo Electron Limited executed the purchase of treasury stock based on the resolution of its Board of Directors
dated April 27, 2015. Due to the purchase and other transactions, the amount of treasury stock of the company
increased by 23,944 million yen for the first quarter of the current fiscal year and resulted in 33,008 million yen at
the end of the first quarter of the current fiscal year.

12

TOKYO ELECTRON

Segment Information(i) Overview of reportable segments

The reportable segments by the company provide separate financial information pertaining to the various segmentsof the company, which is reviewed periodically by the management to evaluate corporate performance as well as
make decisions about the allocation of management resources.
The corporate structure consists of product and service segments based on business units (BUs), and thereportable segments are as follows: Semiconductor Production Equipment and Flat Panel Display (FPD)
Production Equipment.
The Semiconductor Production Equipment segment consists of coaters/developers, plasma etch systems, thermal
processing systems, single wafer deposition systems, cleaning systems used in wafer processing, wafer probers
used in the wafer testing process and other semiconductor production equipment, and we are engaged in thedevelopment, manufacturing, sales and provision of maintenance services, etc. for such products.
The FPD Production Equipment segment consists of coaters/developers, plasma etch/ash systems used in the
manufacturing of flat panel displays, and we are engaged in the development, manufacturing, sales and provision ofmaintenance services, etc. for such products.

(ii) Net sales and income (loss) in reportable segments
Three months ended June 30, 2015

(Millions of yen)
Reportable Segments

Semiconductor
Production Equipment

OthersFPD Production
Equipment

Total

Net sales

140,365

10,0708,202

158,638

Segment income (loss)

32,240

1,343

2,184

35,767

Eliminations

Consolidated Total

Net sales(2,876)

155,762

Segment income (loss)(6,668)29,099Notes:
1. The "Others" is all other businesses segment which are not included in the reported business segments, such as
the transportation of products, facility management and insurance of the Tokyo Electron Group and Photovoltaic
Panel (PV) Production Equipment.
2. The eliminations of segment income amounting to 6,668 million yen includes corporate expenses pertaining to thecorporate account which are not allocated to any specific reportable segments. The corporate account expenses
are mainly R&D expenses of 3,083 million yen, pertaining to fundamental research and element research
conducted by the company not related to any of the reportable segments.
3. Segment income is adjusted against income before income taxes in consolidated statement of income.

13

TOKYO ELECTRON

Segment Information(iii)

Items Related to Changes in Reportable Segments
From the first quarter of the current fiscal year, the Photovoltaic Panel (PV) Production
Equipment business diminished in importance. Therefore, it has been removed from thereportable segments and included in “Others.”(iv)

Impairment losses on fixed assets and goodwill, etc. in reportable segments
Significant impairment losses related to fixed assets: None
Significant changes in goodwill amount: None
Significant income related to negative goodwill: None14