Tokyo Electron

Annual Report 2012

Page

27

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Section

Corporate Datan Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Tokyo Electron Limited(hereinafter “the Company”) and its subsidiaries (hereinafter collectively referred
to as “Tokyo Electron”) have been prepared in accordance with the provisions set
forth in the Financial Instruments and Exchange Law of Japan and its related
accounting regulations, and in conformity with accounting principles generally
accepted in Japan, which are different in certain respects as to application anddisclosure requirements of International Financial Reporting Standards.
The Company uses financial statements prepared by foreign subsidiaries inaccordance with International Financial Reporting Standards or U.S. generally
accepted accounting principles for the preparation of the consolidated financial
statements, together with adjustment for certain items which are required to be
adjusted in the consolidation process.
The accompanying consolidated financial statements have been restructured
and translated into English from the statutory Japanese language consolidated
financial statements. Some supplementary information included in the statutory
Japanese language consolidated financial statements is not presented in theaccompanying consolidated financial statements.
U.S. dollar amounts included herein are solely for the convenience of readers
and are presented at the rate of ¥82.19 to $1.00, the approximate rate as ofMarch 31, 2012. The translation should not be construed as a representation that
the Japanese yen amounts shown could be converted into U.S. dollars at that or
any other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidation
The consolidated financial statements include the accounts of the Company and its
30 and 32 subsidiaries for the years ended March 31, 2012 and 2011, respectively.
Investments in affiliates in which the Company’s ownership is 20% to 50% areaccounted for by the equity method.
All significant inter-company accounts, transactions and unrealized profits orlosses have been eliminated in consolidation.
The fiscal year-end of all entities is March 31, except for three consolidated foreign subsidiaries, which use a December 31 year-end, and adjustment is made forany significant transactions between the different fiscal year-ends.
(b) Foreign currency translation
All assets and liabilities denominated in foreign currencies are translated into
Japanese yen at the year-end rates, except for those hedged by forward exchange
contracts, which are translated at the contracted rates. Resulting exchange gains
and losses are included in earnings for the year.
Revenue and expense items are translated at the rates that approximate thoseprevailing at the time of the transactions.
The balance sheet accounts of foreign subsidiaries are translated into Japanese
yen at the rates of exchange in effect at the balance sheet date, except forshareholders’ equity accounts, which are translated at the historical rates. Revenue
and expense accounts of foreign subsidiaries are translated at average rates of
exchange in effect during the year. Resulting translation adjustments are presented
in net assets as a component of accumulated other comprehensive income andminority interests in the consolidated balance sheets.
(c) Cash equivalents
For purposes of the consolidated statements of cash flows, Tokyo Electron considers all highly-liquid instruments purchased with original maturities of threemonths or less to be cash equivalents.
(d) Short-term investments
Short-term investments consist of short term deposits and low-risk financial
instruments with original maturities of more than three months.
(e) Investment securities
Tokyo Electron examines the intent of holding each security and classifies thosesecurities as trading securities, held-to-maturity debt securities or other securities.
Tokyo Electron has no trading securities. Held-to-maturity debt securities are statedmainly at amortized cost. Other securities with market prices are valued at fairmarket value prevailing at the balance sheet date. The differences between thebook and market prices of other securities, net of applicable income taxes, arepresented in net assets as a component of accumulated other comprehensive
income. Other securities without market value are valued at cost using theweighted-average method.
The cost of sold securities is calculated using the weighted-average method.
(f) Inventories
Inventories other than raw materials are stated at the lower of cost, determinedby the specific identification method, or net realizable value, which is defined as
selling price less estimated additional manufacturing costs and estimated direct
selling expenses. Raw materials are stated at the lower of cost, determined principally by the moving-average method, or net realizable value.
(g) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation of buildings,
machinery and equipment of the Company and its domestic subsidiaries is computed using the declining balance method, except for buildings acquired subsequent to March 31, 1998 which are depreciated using the straight-line method,
based on the estimated useful lives of assets. Foreign subsidiaries mainly apply thestraight-line method over the estimated useful lives of assets.
Estimated useful lives of property, plant and equipment are as follows:
Buildings
2 to 60 years
Machinery and equipment 2 to 17 years(h) Intangible assets
Intangible assets, which primarily comprise of capitalized costs for computer
software and goodwill, are amortized by the straight-line method over their estimated useful lives. Capitalized costs for computer software for internal use areamortized over a period of 2 to 5 years. Goodwill is evaluated on an individual
basis and amortized over a period not exceeding 20 years.
(i) Impairment of fixed assets
Tokyo Electron evaluates the carrying value of fixed assets held for use in
the business.
If the carrying value of a fixed asset is impaired, a loss is recognized based on
the amount by which the carrying value exceeds its recoverable amount, being
the higher of the net selling price or the value in use of the assets. Net selling
price is determined using the fair value less disposal costs and value in use isbased on the total amount of discounted cash flows estimated to be generated
from the continuing use of the individual assets or the asset group and the disposal of the assets.
(j) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount determinedbased on the historical experience of bad debts with respect to ordinary
receivables, and an estimate of uncollectible amounts determined by reference
to specific doubtful receivables from customers which are experiencing
financial difficulties.
(k) Accrued pension and severance costs
The Company and its domestic subsidiaries provide an accrual for defined benefit employees’ pension and severance costs based on the projected benefit obligation and the fair value of pension assets. Prior service costs are charged toearnings on a straight-line basis, beginning from the fiscal year in which they are
incurred, over a fixed number of years (four years) within the average remaining
years of service of employees when the changes occur. Actuarial differences arecharged to earnings on a straight-line basis, beginning from the following fiscal
year after they are recognized, over a fixed number of years (four years) within the
average remaining years of service of employees when the differences occur.
The provision for accrued pension and severance costs for directors and statutory auditors of the Company and its domestic subsidiaries is calculated in accordance with internal regulations.
The Company and certain domestic subsidiaries decided to discontinue the payment of severance pay for directors and statutory auditors after April 1, 2005, andat the general shareholders’ meeting in June 2005, it was resolved that the severance pay for directors and statutory auditors until March 31, 2005 would be paid
at the termination of their service and the decision regarding the payment amountfor each director and statutory auditor was delegated to the board of directors andstatutory auditors. As discussed in note 9, the accruals for severance costs for
directors and statutory auditors are included in accrued pension and severance
costs in the consolidated balance sheets.

Tokyo Electron

Annual Report 2012

Page

28

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Section

Corporate Datan Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(l) Accrued warranty expenses
Tokyo Electron’s products are generally subject to warranty, and Tokyo Electron
accrues such estimated costs when product revenue is recognized. To prepare for
future repairs during warranty periods, estimated after-sale repair expenses overwarranty periods are accrued based on the historical ratio of actual repair expenses
to corresponding sales.
(m) Leases
Until the year ended March 31, 2008, non-cancelable leases of the Company
and its domestic subsidiaries had been primarily accounted for as operating leases(whether such leases were classified as operating or finance leases), except forleases that transfer ownership to the lessee at the end of the lease, which had
been accounted for as finance leases.
Effective from the year ended March 31, 2009, the Company and its domestic
subsidiaries adopted “Accounting Standard for Lease Transactions” and “Guidance on Accounting Standard for Lease Transactions.” As a result, the Company
and its domestic subsidiaries capitalized leased assets under finance leases commencing after March 31, 2008 and such leased assets are depreciated using thestraight-line method over the period of the lease contract with zero residual value.
(n) Derivatives and hedge accounting
The Company and a domestic subsidiary make use of derivatives in order tomanage certain risks arising from adverse fluctuations in foreign currency
exchange rates. The amount of derivatives is limited to the extent of foreign currency assets, liabilities and actual orders, and the Company and the domestic subsidiary do not trade in derivatives for speculative purposes.
Derivatives are carried at fair value in the consolidated balance sheet withchanges in unrealized gain or loss charged or credited to earnings, except for
those which meet the criteria for hedge accounting. Unrealized gains or losses on
hedging derivatives, net of taxes, are reported in net assets as a component ofaccumulated other comprehensive income. Receivables and payables hedged byqualified forward foreign exchange contracts are translated at the corresponding
foreign exchange contract rates.
(o) Income taxes
Tokyo Electron records deferred tax assets and liabilities on temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes, which are measured
using the enacted tax rates and laws which are expected to be in effect when the
differences are expected to reverse.
(p) Revenue recognition
Revenue from Semiconductor and FPD (Flat Panel Display)/PV (Photovoltaic cell)
production equipment is principally recognized at the time of the customer confirmation of set-up and testing of products. Revenue from such equipment notrequiring substantial installation is recognized at the time of shipment. Revenue
from other products, such as electronic components, is recognized at the time of
shipment. Service revenue from maintenance is recognized ratably over the termof the maintenance contract.

(q) Per share information
Net income per share and net assets per share are computed based on theweighted-average number of shares of common stock outstanding during
each year.
Dividends per share has been presented on an accruals basis and include, ineach fiscal year ended March 31, dividends approved or to be approved after
March 31 but applicable to the year then ended.

(c) Accounting standards for asset retirement obligations
Effective from April 1, 2010, the Company and its domestic subsidiaries adopted“Accounting Standards for Asset Retirement Obligations” (Statement No. 18
issued by the Accounting Standards Board of Japan) and “Guidance on Accounting Standards for Assets Retirement Obligations” (Guidance No. 21 issued by the
Accounting Standards Board of Japan). The adoption of this standard had no significant impact on the consolidated financial statements.

(r) Research and development expenses
Research and development expenses are charged to earnings as incurred andamounted to ¥81,506 million ($991,678 thousand) and ¥70,568 million for theyears ended March 31, 2012 and 2011, respectively.

(d) Accounting standard for disclosures about segments of an enterpriseand related information
Effective from the year ended March 31, 2011, the Company adopted“Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (Statement No. 17 issued by the Accounting Standards
Board of Japan) and “Guidance on Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information” (Guidance No. 20 issued by
the Accounting Standards Board of Japan). The accounting standard requires theCompany to adopt a management approach as the segment reporting method.
As a result of the adoption of this standard the Company changed the basis ofsegmentation and segment measures.

(s) Reclassifications
Certain reclassifications have been made to the prior year’s consolidated financial statements to conform with the presentation used for the year ended March
31, 2012.

3. Change in Accounting Policies and Adoption of New AccountingStandards(a) Accounting standards for earnings per share
Effective from April 1, 2011, the Company adopted “Accounting Standard for
Earnings Per Share” (Statement No. 2 issued as of June 30, 2010 by the Accounting Standards Board of Japan) and “Guidance on Accounting Standards for Earnings Per Share” (Guidance No. 4 issued as of June 30, 2010 by the AccountingStandards Board of Japan). Based on these new standards, the Company haschanged its method of calculating diluted net income per share. Under the new
method, for share option rights which vest after a specified period of service, thefair value amount of the share options for service expected to be provided in
the future is included in the proceeds assumed to be received when options
are exercised.
(b) Accounting standard for accounting changes and error corrections
Effective from April 1, 2011, the Company and its domestic subsidiaries adopted“Accounting Standard for Accounting Changes and Error Corrections” (Statement
No. 24 issued by the Accounting Standards Board of Japan) and “Guidance on
Accounting Standard for Accounting Changes and Error Corrections” (Guidance
No. 24, issued by the Accounting Standards Board of Japan) for accountingchanges and corrections of prior period errors which are made from the fiscal year
beginning on April 1, 2011. The adoption of this standard had no significant
impact on the consolidated financial statements.

(e) Accounting standard for presentation of comprehensive income
Effective from the year ended March 31, 2011, the Company adopted“Accounting Standard for Presentation of Comprehensive Income” (Statement No.
25 issued by the Accounting Standards Board of Japan). As a result of the adoption of this standard the Company prepared a consolidated statements of comprehensive income from the year ended March 31, 2011.
(f) Accounting standard for consolidated financial statements
Effective from the year ended March 31, 2011, the Company adopted “Partial amendments to the accounting standards of financial statements” (Cabinet
office ordinance No. 5) in accordance with “Accounting Standard for Consolidated Financial Statements” (Statement No. 22 issued by Accounting Standards
Board of Japan). As a result of the adoption of this standard, the Company
added a subtotal of “Income before minority interests” in the consolidated
statements of Income.

Tokyo Electron

Annual Report 2012

29

Page

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Corporate Data

Financial Sectionn Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Securities
Other securities as of March 31, 2012 and 2011 are as follows:
Millions of yen
Cost
Carrying value

2012

Noncurrent
Securities with market prices  Equity securities�������������������������������������������������������
Securities without market prices  Unlisted stock����������������������������������������������������������
  Other�����������������������������������������������������������������������
Total�������������������������������������������������������������������������������

¥ 9,212¥14,699485
910¥10,607473
910¥16,082

2011

Millions of yen
Cost
Carrying value

Current
Noncurrent
Securities with market prices  Equity securities�������������������������������������������������������
Securities without market prices  Unlisted stock����������������������������������������������������������
  Other�����������������������������������������������������������������������
Total�������������������������������������������������������������������������������

2012

Thousands of U.S. dollars
Cost
Carrying value

Noncurrent
Securities with market prices  Equity securities�������������������������������������������������������
Securities without market prices  Unlisted stock����������������������������������������������������������
  Other�����������������������������������������������������������������������
Total�������������������������������������������������������������������������������

¥232,058¥232,058¥  9,763¥ 14,445

365
911¥ 11,039

370
911¥ 15,726$112,082
5,901
11,072$129,055$178,842
5,755
11,072$195,669

Held-to-maturity securities classified as current assets are ¥211,790 million($2,576,835 thousand) and nil as of March 31, 2012 and 2011, respectively.
Reconciliation of held-to-maturity securities as of March 31, 2012 and Other
securities as of March 31, 2011 to the amounts of short-term investments in the
consolidated balance sheets are as follows:
Millions of yen
2012
2011

Held-to-maturity (current)�������������������
Other securities (current)���������������������
Deposits and low-risk financial
instruments with original maturitiesof three months or less���������������������
Deposits with original maturities ofmore than three months�������������������
Short-term investments�����������������������

¥211,790—¥—
232,058

Thousands of
U.S. dollars
2012$2,576,835—(132,790)(142,058)(1,615,647)

9,849¥88,849

30,000¥120,000

119,832$1,081,020

Loss on devaluation of investment securities were ¥817 million ($9,940 thousand)and ¥74 million for the years ended March 31, 2012 and 2011, respectively.
Net gain on sale of investment securities was ¥38 million ($462 thousand) and¥91 million for the years ended March 31, 2012 and 2011, respectively.

5. Inventories
Inventories as of March 31, 2012 and 2011 are as follows:

Finished products��������������������������������
Work in process, raw materials
and supplies��������������������������������������
Total���������������������������������������������������

Millions of yen
2012
2011

Thousands of
U.S. dollars
2012¥101,790¥111,918$1,238,472

47,680¥149,470

57,007¥168,925

580,119$1,818,591

The amounts of change in inventory provision included in cost of sales in the consolidated statements of income for the years ended March 31, 2012 and 2011 werean increase of ¥1,115 million ($13,566 thousand) and ¥1,202 million, respectively.

6. Impairment of Property, Plant and Equipment and Intangible
AssetsFor assessing fixed asset impairment, the Company generally groups fixed assets
used for normal operations at a business unit level for which profits are reasonably
controllable. Also, the Company assesses the recoverability of individual assets not
used in normal operations or that are idle.

7. Pledged Assets
Tokyo Electron did not hold any assets pledged as collateral as of March 31,
2012 and 2011.

interest rate. The noncontributory plans provide for lump-sum payment benefits toemployees who retire or terminate their employment for reasons other than dismissal for cause. Certain foreign subsidiaries have noncontributory retirement andseverance benefit plans that provide for pension or lump-sum payment benefits toemployees who retire or terminate their employment for reasons other than dismissal for cause.
The funded status of the defined benefit plans, a substantial portion of which
consists of domestic benefit plans, as of March 31, 2012 and 2011 is as follows:

Benefit obligation�������������������������������
Fair value of plan assets����������������������
Funded status�������������������������������������
Unrecognized actuarial difference�������
Unrecognized prior service cost�����������
Net amount recognized����������������������
Amounts recognized in the
consolidated balance sheets
consist of:Prepaid pension and   severance costs (Note 1)����������������
Accrued pension and   severance costs (Note 2)����������������
Net amount recognized����������������������

9. Accrued Pension and Severance Costs
The Company and its domestic subsidiaries have defined benefit plans (cashbalance plan and noncontributory retirement and severance benefit plans) covering substantially all their employees who meet eligibility requirements. The benefits
under the plans are based on length of service and certain other factors.
The cash balance plan provides for pension or lump-sum payment benefits toemployees who retire or terminate their employment for reasons other than dismissal for cause. Under the cash balance plan, each participant has an accountwhich is credited yearly based on the current rate of pay and market-related

Thousands of
U.S. dollars
2012¥(94,369)
45,139(49,230)(1,809)–(51,039)¥(89,350)
41,282(48,068)(90)
25(48,133)$(1,148,181)
549,203(598,978)(22,010)–(620,988)

3,607

4,097

43,886(54,646)¥(51,039)(52,230)¥(48,133)(664,874)$(620,988)

Notes: 1.	The prepaid pension and severance costs as of March 31, 2012 and 2011 is included in otherassets in the consolidated balance sheets.
2.	The provision for accrued pension and severance costs for directors and statutory auditors(¥620 million ($7,544 thousand) as of March 31, 2012 and ¥596 million as of March 31,2011) is not included.

Net periodic pension cost of the plans is as follows:

8. Short-term Borrowings
Short-term borrowings represent 365-day notes issued by Tokyo Electron tobanks and bore interest at an average annual rate of 0.40% and 0.39% as ofMarch 31, 2012 and 2011, respectively.
As of March 31, 2012, Tokyo Electron has unused lines of credit amounting to¥150,248 million ($1,828,057 thousand).

Millions of yen
2012
2011

Millions of yen
2012
2011

Service cost�����������������������������������������
Interest cost����������������������������������������
Expected return on plan assets������������
Amortization of actuarial difference����
Amortization of prior service cost��������
Net pension cost���������������������������������

¥5,597
1,768
(814)
401
25
¥6,977¥5,474
1,666
(767)
286
100
¥6,759Thousands of
U.S. dollars
2012$68,099
21,511(9,904)
4,879
304$84,889

Significant assumptions of domestic pension plans used to determine the above
amounts are as follows:2012 and 2011

Allocation method of benefit obligation����������������������
Discount rate��������������������������������������������������������������
Expected rate of return on plan assets�������������������������
Amortization period of actuarial difference�����������������
Amortization period of prior service cost���������������������

Straight-line method
2.00%
2.00%
4 years
4 years

Tokyo Electron

Annual Report 2012

Page

30

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Section

Corporate Datan Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Income Taxes
Significant components of the deferred tax assets and liabilities of Tokyo
Electron as of March 31, 2012 and 2011 are as follows:

Deferred tax assets
Accrued pension andseverance costs���������������������������������
Tax credit for research anddevelopment�������������������������������������
Elimination of unrealized profit
in inventories������������������������������������
Devaluation of inventories�������������������
Accrued warranty expenses�����������������
Accrued employees’ bonuses��������������Net operating loss carryforwards���������
Allowance for doubtful accounts��������
Other��������������������������������������������������
Total gross deferred tax assets�������������
Less valuation allowance���������������������
Total deferred tax assets����������������������
Deferred tax liabilities
Undistributed earnings offoreign subsidiaries���������������������������
Net unrealized gains on
investment securities�������������������������
Prepaid pension andseverance costs���������������������������������
Reserves under Special Taxation
Measures Law�����������������������������������
Other��������������������������������������������������
Total deferred tax liabilities������������������
Net deferred tax assets������������������������

Millions of yen
2012
2011

Thousands of
U.S. dollars
2012¥19,538¥21,172$237,717

12,564

5,910

152,865

9,161
4,749
2,971
2,954
1,609
1,035
6,994
61,575(15,134)
46,441

10,309
4,716
2,795
4,471
1,475
690
11,76863,306(9,031)
54,275

111,461
57,78136,14835,941
19,577
12,59385,095749,178(184,134)
565,044(3,760)(3,087)(45,748)(1,981)(1,916)(24,103)(1,200)(1,635)(14,600)(1,084)(748)(8,773)¥37,668(8)(1,524)(8,170)¥46,105(13,189)
9,100(106,740)$458,304

Net deferred tax assets are included in the consolidated balance sheets as ofMarch 31, 2012 and 2011 as follows:
Millions of yen
2012
2011

Current assets�������������������������������������
Investments and other assets��������������
Other current liabilities������������������������
Other liabilities������������������������������������

¥23,546
17,585(1)(3,462)¥27,610
20,728(1)(2,232)Thousands of
U.S. dollars
2012$286,482
213,955(12)(42,122)

The Company and its wholly-owned domestic subsidiaries apply a consolidated
tax filing system for corporate tax purposes.
The ultimate realization of deferred tax assets is dependent upon the generationof future taxable income during the period in which temporary differences become
deductible. For assessment of the realizability of deferred tax assets, management
considers the scheduled reversal of deferred tax liabilities, future estimated taxable
income, tax planning strategies and level of net operating loss carryforwards, ifany, in accordance with accounting principles generally accepted in Japan.
Based on the level of historical taxable income and future estimated taxable
income over the periods which the deferred tax assets are deductible, management believes Tokyo Electron will realize the benefits of these deferred tax assets,
net of valuation allowance, as of March 31, 2012 and 2011.
The Company is subject to corporate tax, inhabitants’ tax and a deductible
enterprise tax, which in the aggregate resulted in a statutory income tax rate of
approximately 40.69% for the years ended March 31, 2012 and 2011. On December 2, 2011, amendments to the Japanese tax regulations were enacted into law.
As a result of these amendments, the statutory income tax rate for the Company
will be reduced to 38.01% for years beginning on or after April 1, 2012 and35.64% for years beginning on or after April 1, 2015. Based on the amendments,
the statutory income tax rates utilized for the measurement of deferred tax assets
and liabilities expected to be settled or realized from April 1, 2012 to March 31,
2015 and on or after April 1, 2015 are 38.01% and 35.64%, respectively, as ofMarch 31, 2012. Due to these changes in statutory income tax rates, net deferred
tax assets decreased by ¥3,310 million ($40,273 thousand) as of March 31, 2012and deferred income tax expense recognized for the year ended March 31, 2012
increased by ¥3,587 million ($43,643 thousand).
Significant components of the difference between the statutory and effective
tax rates for the years ended March 31, 2012 and 2011 are as follows:
Statutory tax rate in Japan����������������������������������������������
Adjustments:
Effect of enacted changes in Japanese tax rates
on net deferred tax assets���������������������������������������������
Tax credit for research and development�������������������������
Difference in statutory tax rates of subsidiaries����������������
Others, net���������������������������������������������������������������������
Effective tax rate�������������������������������������������������������������

2012

2011

40.69 %

40.69 %

5.92
(5.20)(4.04)
1.28
38.65 %–
(7.22)(2.26)(4.33)
26.88 %

11. Net Assets
Net assets comprises four subsections, which are shareholders’ equity, accumulated other comprehensive income, share subscription rights and minority interests.
Under Japanese laws and regulations, the entire amount paid for new shares isrequired to be designated as common stock. However, a company may, by aresolution of the board of directors, designate an amount not exceeding onehalf of the price of the new shares as additional paid-in capital which is included
in capital surplus.
In cases where dividend distribution of surplus is made, the lesser of an amountequal to 10% of the dividend or the excess, if any, of 25% of common stock over
the total of additional paid-in capital and legal reserve must be set aside as additional paid-in capital or legal reserve. Legal reserve is included in retained earnings
in the accompanying consolidated balance sheets.
Both appropriations of legal reserve and additional paid-in capital used to eliminate or reduce a deficit generally require a resolution of the shareholders’ meeting.
Additional paid-in capital and legal reserve may not be distributed as dividends. All additional paid-in capital and legal reserve may be transferred to othercapital surplus and retained earnings, respectively, which are potentially available
for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of the Company inaccordance with Japanese laws and regulations.
At the general shareholders’ meeting on June 23, 2006, in accordance withJapanese laws and regulations, the Company altered its articles to allow for the
distribution of earnings to shareholders on dates, other than the mid-term andyear-end, by a resolution of the board of directors.
At the board of directors’ meeting held on May 15, 2012, the distribution of
cash dividends amounting to ¥4,837 million ($58,851 thousand) was resolved.
Such appropriations have not been accrued in the consolidated financial statements as of March 31, 2012 since they are recognized in the period in which they
are resolved at the board of directors’ meeting.

Tokyo Electron

Annual Report 2012

Page

31

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Corporate Data

Financial Sectionn Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. Other Comprehensive Income (loss)
Other comprehensive income for the year ended March 31, 2012 is as follows:
Millions of yen
2012

Net unrealized gains on investment securities
Unrealized gains arising during the year����������������������
Reclassification adjustments����������������������������������������
Sub-total, before tax���������������������������������������������������
Tax expense�����������������������������������������������������������������
Sub-total, net of tax����������������������������������������������������
Net deferred losses on hedging instruments
Deferred losses arising during the year������������������������
Reclassification adjustments����������������������������������������
Sub-total, before tax���������������������������������������������������
Tax benefit������������������������������������������������������������������
Sub-total, net of tax����������������������������������������������������

¥302
531
833
(64)
769

(9)
(101)
(110)
41
(69)

Thousands of
U.S. dollars
2012$3,674
6,461
10,135
(779)
9,356

(109)
(1,229)(1,338)499(839)

Foreign currency translation adjustments
Adjustments during the year���������������������������������������
Reclassification adjustments����������������������������������������
Sub-total, before tax���������������������������������������������������Tax (expense) or benefit�����������������������������������������������
Sub-total, net of tax����������������������������������������������������

(925)
–
(925)
–
(925)

(11,254)–(11,254)–(11,254)

Total other comprehensive income (loss)�������������������������

¥(225)$(2,737)

Tax effects and amounts reclassified to net income in the period that were recognized in other comprehensive income in the current or previous periods (reclassification adjustments) are required to be disclosed effective from the year ended
March 31, 2012.

13. Share Subscription Rights
Stock option plan
The Company’s shareholders have approved annual stock option plans for directors and selected employees since the year ended March 31, 1999. The options
under the plans vest immediately with restriction on exercise up to two or three
years after the date of grant, and have an exercise period of eight to twenty years
from the date of grant.
Options to purchase 234,200 shares of the Company were authorized andgranted at an exercise price of ¥1 for the year ended March 31, 2012. The options
under the plans have an exercise period of twenty years from the date of grant,with restriction on exercise up to three years after the date of grant. No options topurchase shares of the Company were authorized and granted for the year ended
March 31, 2011.

Shareholders of Tokyo Electron Device Limited, a domestic listed subsidiary, haveapproved annual stock option plans for directors and selected employees since theyear ended March 31, 2005.
A summary of stock options outstanding and exercisable as of March 31, 2012
and 2011 is as follows:
2012

Tokyo Electron Limited

Number ofshares

Weighted-average exercise
price
Yen
U.S. dollars

Outstanding at the
beginning of year�������� 1,296,800 ¥  5,086 $   61.88
234,200
1
0.01
Granted������������������������
Exercised�����������������������
111,100
1
0.01
586,600
6,786
82.56
Expired (forfeited)���������
Outstanding at theend of year�����������������
833,300
3,139
38.19
Exercisable at theend of year�����������������
599,100
4,365
53.11
Tokyo Electron Device
Limited2012

Number ofsharesOutstanding at the
beginning of year��������
Granted������������������������
Exercised�����������������������
Expired (forfeited)���������
Outstanding at theend of year�����������������
Exercisable at theend of year�����������������

Weighted-average exercise
price
Yen
U.S. dollars

2011
Weightedaverage
Number of exercise pricesharesYen

1,779,100–
67,100415,200¥  5,720–
1
8,625

1,296,800

5,086

1,120,500

5,886

2011
Weightedaverage
Number of exercise pricesharesYen

650 ¥308,698 $3,755.91
–
–
–
–
–
–
–
–
–

650
–
–
–

¥308,698
–
–
–

650

308,698

3,755.91

650

308,698650

308,698

3,755.91

650

308,698

14. Leases
As mentioned in note 2 (m), effective from the year ended March 31, 2009, theCompany and its domestic subsidiaries adopted “Accounting Standard for Lease
Transactions” and “Guidance on Accounting Standard for Lease Transactions.” Aspermitted under the standards, finance leases which commenced on or before
March 31, 2008 continue to be accounted for as operating leases. Pro forma information of leased property acquired on or before March 31, 2008 including acquisition cost, accumulated depreciation, obligation under finance leases, anddepreciation expense of finance leases that do not transfer ownership of leased
property to the lessee on an “as if capitalized” basis for the years ended March
31, 2012 and 2011, are as follows:
Leased assets not recorded in the consolidated balance sheets:
Millions of yen
2012
2011

Acquisition cost����������������������������������
Accumulated depreciation������������������
Net leased property�����������������������������

¥286
216
¥ 70

¥947
690
¥257

Thousands of
U.S. dollars
2012$3,4802,628$  852Future minimum lease payments:
Millions of yen
2012
2011

Due within one year����������������������������
Due over one year�������������������������������
Total���������������������������������������������������

¥48
22
¥70

¥139
118
¥257

Thousands of
U.S. dollars
2012

$584
268
$852

Lease payments relating to finance leases accounted for as operating leases
amounted to ¥97 million ($1,180 thousand) and ¥158 million, which approximated the corresponding depreciation on the respective leased property computedby the straight-line method over the lease terms, for the years ended March 31,
2012 and 2011, respectively.
Future minimum lease payments on non-cancelable operating leases:
Millions of yen
2012
2011

Due within one year����������������������������
Due over one year�������������������������������
Total���������������������������������������������������

¥2,013
2,905¥4,918¥1,984
4,361¥6,345

Thousands of
U.S. dollars
2012$24,492
35,345$59,837

Tokyo Electron

Annual Report 2012

Page

32

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Corporate Data

Financial Sectionn Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. Fair Value of Financial Instruments
Policy for Financial Instruments
Tokyo Electron limits its fund management to short-term bank deposits andlow-risk financial instruments, and obtains funds by utilizing bank-loans or liquidating trade-receivables.
Trade receivables, which consist of notes and accounts receivable, are exposedto credit risk in the event of non-performance by the counterparties. Execution
and management of credit risk, maturity and receivable balance are conductedpursuant to the internal management rules for credit control. Credit risk of major
customers is assessed on a regular basis.
Short-term investments consist of time deposits and low risk financial instruments and the Company and its listed subsidiary trade with highly-rated financial
institutions to mitigate credit risks.
Investment securities consist of mainly equity interests in listed companies
exposed to equity market risks. Conditions, including market prices, for theseinvestment securities are monitored on a regular basis.
Short-term borrowings and trade payables, which consist of notes and accounts
payable, mainly mature within one year. Trade payables are exposed to liquidity
risks which are managed through activities such as implementing cash management plans.
See note 16 for detailed discussion on derivative financial instruments.
Fair Value of Financial Instruments
Carrying amount and estimated fair value of financial instruments as of March
31, 2012 and 2011, are set out below. Fair value of financial instruments which ispractically difficult to estimate are excluded (see note 4).
2012:

AssetsCash and cash equivalents�������������������������������������������
Short-term investments�����������������������������������������������
Trade notes and accounts receivable, net of   allowance for doubtful accounts   (¥1,376 million)���������������������������������������������������������
Investment securities���������������������������������������������������
Liabilities
Short-term borrowings������������������������������������������������
Trade notes and accounts payable�������������������������������
Derivatives (see note 16)
Hedge accounting not applied�������������������������������������
Hedge accounting applied�������������������������������������������

Millions of yen
Carrying
Estimatedamountfair value 1¥158,776
88,849¥158,776
88,638148,930
14,699148,930
14,6994,403
58,243

4,403
58,243

(400)
(153)

(400)
(153)

2011:

AssetsCash and cash equivalents�������������������������������������������
Short-term investments�����������������������������������������������
Trade notes and accounts receivable, net of   allowance for doubtful accounts   (¥1,154 million)���������������������������������������������������������
Investment securities���������������������������������������������������
Liabilities
Short-term borrowings������������������������������������������������
Trade notes and accounts payable�������������������������������
Derivatives (see note 16)
Hedge accounting not applied�������������������������������������
Hedge accounting applied�������������������������������������������

2012:

AssetsCash and cash equivalents�������������������������������������������
Short-term investments�����������������������������������������������
Trade notes and accounts receivable, net of   allowance for doubtful accounts   ($16,742 thousand)���������������������������������������������������
Investment securities���������������������������������������������������
Liabilities
Short-term borrowings������������������������������������������������
Trade notes and accounts payable�������������������������������
Derivatives (see note 16)
Hedge accounting not applied�������������������������������������
Hedge accounting applied�������������������������������������������

Millions of yen
Carrying
Estimatedamountfair value 1¥165,051
120,000¥165,051
120,000

135,231
14,445

135,231
14,445

7,996
63,766

7,996
63,766

327
(44)

327
(44)

Thousands of U.S. dollars
Carrying
Estimatedamountfair value 1$1,931,817
1,081,020$1,931,817
1,078,452

1,812,021
178,842

1,812,021
178,842

53,572
708,639

53,572
708,639

Note: 1. Fair value calculation of financial instruments		Cash and cash equivalents, trade notes and accounts receivable, short-term investments,
short-term borrowings and trade notes and accounts payable		 The carrying amounts approximate fair value because of the short maturity of these
instruments.
		 Investment securities
		  The fair values of marketable securities are based on quoted market prices.
		  See note 4 for further information by classification of investment securities.
		Derivatives
		  See note 16 for detailed discussion on derivative financial instruments.
2. Maturities of financial assets and securities are as follows:
2012:
Cash and cash equivalents�����������������������������������������������������������
Short-term investments����������������������������������������������������������������
Trade notes and accounts receivable��������������������������������������������
2011:
Cash and cash equivalents�����������������������������������������������������������
Short-term investments����������������������������������������������������������������
Trade notes and accounts receivable��������������������������������������������
2012:
Cash and cash equivalents�����������������������������������������������������������
Short-term investments����������������������������������������������������������������
Trade notes and accounts receivable��������������������������������������������

Millions of yen
After 1 through5 years

Within 1 year

¥158,776
88,849150,306¥–––Millions of yen
After 1 throughWithin 1 year
5 years¥165,051
120,000
136,385¥–––

Thousands of U.S. dollars
After 1 throughWithin 1 year
5 years$1,931,817
1,081,020
1,828,763$–––

3. Repayment schedule of short-term borrowings and capital lease obligations is as follows:(4,866)(1,862)(4,866)(1,862)

Receivables and payables derived from derivative transactions are stated on a net basis. The figuresin parentheses represent net payables.

2012:
Short-term borrowings������������������������������������������
Capital lease obligations����������������������������������������
2011:
Short-term borrowings������������������������������������������
Capital lease obligations����������������������������������������
2012:
Short-term borrowings������������������������������������������
Capital lease obligations����������������������������������������

Within 1 year

Millions of yen
After 1 through2 years

After 2 through5 years¥4,403
335

¥–
267

¥–
42

Within 1 year

Millions of yen
After 1 through2 years

After 2 through5 years¥7,996
127

¥–
103

¥–
64

Thousands of U.S. dollars
After 1 throughAfter 2 throughWithin 1 year
2 years
5 years$53,572
4,076

$–
3,249

$–
511

Tokyo Electron

Annual Report 2012

Page

33

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Section

Corporate Datan Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. Derivative Financial Instruments

18. Segment Information

2. Derivative financial instruments designated as hedging instruments

Tokyo Electron is subject to risk from adverse fluctuations in foreign currency
exchange rates in its operating and financing activities. The Company and its listed
domestic subsidiary enter into forward foreign exchange contracts in order tohedge such risks, but do not enter into such transactions for speculative purposes.
The Company and its domestic subsidiary implement a ratio analysis of the total
cumulative cash flow fluctuations to assess effectiveness of hedging. Execution
and management of all derivative transactions are conducted pursuant to theinternal management rule for derivatives and the assessment of effectiveness ofhedging activities is reported on a semi-annual basis to the Corporate Director in
charge of Finance.
The estimated fair values of the derivative financial instruments as of March 31,
2012 and 2011 are as follows:
1. Derivative financial instruments not designated as hedging instruments
Millions of yen
2012:

Contract
AmountSell U.S. dollars���������������������������������������
Sell Korean won��������������������������������������
Buy U.S. dollars���������������������������������������
Total�������������������������������������������������������

¥ 9,874701
5,804¥16,379

Fair value

Unrealized
gains (losses)¥(464)
23
41¥(400)¥(464)
23
41¥(400)

2012: Hedge accounting

Millions of yen
Contract
AmountFair value

Thousands of U.S. dollars
Contract
AmountFair value

Sell U.S. dollars�����������������
Sell Korean won����������������
Sell Chinese yuan��������������
Buy U.S. dollars�����������������
Buy EURO�������������������������
Total���������������������������������

¥ 6,879
85
192
4,325
195
¥11,676$ 83,696
1,034
2,336
52,622
2,373$142,061

2011: Hedge accounting

Millions of yen
Contract
AmountFair value

Sell U.S. dollars�����������������
Sell Korean won����������������
Buy U.S. dollars�����������������
Total���������������������������������

¥ 6,41137
4,099¥10,547

2011:

Sell U.S. dollars���������������������������������������
Sell Korean won��������������������������������������
Buy U.S. dollars���������������������������������������
Total�������������������������������������������������������

¥ 7,405
1,235
4,763¥13,4032012:

Contract
amountSell U.S. dollars���������������������������������������
Sell Korean won��������������������������������������
Buy U.S. dollars���������������������������������������
Total�������������������������������������������������������

$120,136
8,529
70,617$199,282

Fair value¥(72)350
49¥327¥(72)
350
49¥327

Thousands of U.S. dollars
Fair value$(5,645)280
499$(4,866)

Note: The fair values are based on the quoted forward foreign exchange rates.

¥(54)
11
(1)
¥(44)

Contract amountMillions of yen
2012
2011

Unrealized
gains (losses)

Unrealized
gains (losses)$(5,645)280
499$(4,866)$(2,203)
(85)
12
207
207
$(1,862)

The contract amounts of forward foreign exchange contracts, entered into tohedge receivables and payables denominated in foreign currencies that have beentranslated by the corresponding contracted rates, are as follows:

Millions of yen
Contract
amount¥(181)(7)
1
17
17¥(153)

Sell U.S. dollars�����������������������������������
Sell Chinese yuan��������������������������������
Buy U.S. dollars�����������������������������������
Total���������������������������������������������������

¥   589,854
65¥9,977

¥ 90
–
62
¥152

Thousands of
U.S. dollars
2012$    705
119,893
791$121,389

Note:	The fair value of these derivative financial instruments, which is based on the quoted foreignexchange rates, is included in the carrying value of hedged assets and liabilities.

17. Other Income (Expenses)
Reversal of allowance for doubtful accounts of ¥1,892 million for the year
ended March 31, 2011 is related to the subsequent collection of specificaccounts receivable.
Expenses for plant relocation of ¥1,839 million were recognized as a result of
the transfer of etch system business for the year ended March 31, 2011.
Loss from natural disasters of ¥936 million ($11,388 thousand) and ¥1,114
million for the years ended March 31, 2012 and 2011, respectively, represents
losses relating to the Great East Japan Earthquake which occurred on March 11,
2011, which mainly consists of repair costs for damaged facilities and fixed costs
during the inactive period and repair costs for damaged facilities.
Loss on business restructuring of ¥849 million ($10,330 thousand) for the year
ended March 31, 2012 consists of devaluation of inventories, loss on impairmentof property, plant and equipment and loss on disposal of inventories and property,
plant and equipment.

General information about reportable segments
A reportable segment is a component or an aggregated component of Tokyo
Electron. For each of the components, discrete financial information is available
and its operating result is regularly reviewed by management to make decisions
about resources to be allocated to the segment and assess its performance.
The operation of Tokyo Electron consists of segments by products and services
based on business units (BUs), and Tokyo Electron identifies as a reportable segment, “Semiconductor Production Equipment (SPE),” “Flat Panel Display and Photovoltaic Cell (FPD/PV) Production Equipment,” and “Electronic Components andComputer Networks.”
Products of the SPE segment consist of coaters/developers, plasma etch systems,
thermal processing systems, single wafer deposition systems, cleaning systems usedin wafer processing, wafer probers used in the wafer testing process and other semiconductor production equipment. The SPE segment principally develops, manufactures, services and distributes such products.
Products of the FPD/PV Production Equipment segment consist of coaters/developers, plasma etch/ash system used in the manufacture of flat panel displays, and plasma CVD systems used in the manufacture of thin film silicon PV
cells. The FPD/PV segment principally develops, manufactures, services and distributes such products.
The Electronic Components and Computer Networks segment principally
designs, develops, procures, and distributes semiconductor products centering
on integrated circuits (IC), other electronic components, computer networks
and software.
Basis of measurement of reportable segment net sales, segment profit,
segment assets and other items
The accounting policies applied in each reportable segment are generally consistent with those applied for the preparation of the consolidated financial statements. Intersegment sales or transfers are determined based on current market
prices. Assets in common use have not been allocated to each reportable segment,
while costs associated with those assets have been allocated to reportable segments on a systematic basis.

Tokyo Electron

Annual Report 2012

Page

34

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Sectionn Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Information about reportable segment net sales, segment profit, segment assets and other items
Reportable segment information as of and for the year ended March 31, 2012 and 2011 are as follows:
Millions of yen
Reportable Segment
Semiconductor
production
equipment

FPD/PV
production
equipment

Electronic
components &computer
networks

Net sales
Sales to external customers�����������������������������������������������������������������������������
Intersegment sales or transfers������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������
Segment profit������������������������������������������������������������������������������������������������
Segment assets�����������������������������������������������������������������������������������������������

¥477,873–
477,873
89,020262,789¥69,889–
69,8892,271
21,295

Depreciation and amortization������������������������������������������������������������������������
Capital expenditures, including intangible and other assets�������������������������������

11,282
13,518

687
672

2012:

Eliminations andCorporate

Consolidated¥633,091
15,997649,088
95,430332,402¥–(15,997)(15,997)(34,828)451,209¥633,091–
633,091
60,602
783,611

12,70914,633

11,48928,572

24,19843,205

Eliminations andCorporate

Consolidated

Other

Total

¥84,868
1,432
86,3002,312
46,391¥   461
14,56515,026
1,827
1,927

570
407

170
36
Millions of yen

Reportable Segment
Semiconductor
production
equipment

FPD/PV
production
equipment

Electronic
components &computer
networks

Net sales
Sales to external customers�����������������������������������������������������������������������������
Intersegment sales or transfers������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������
Segment profit������������������������������������������������������������������������������������������������
Segment assets�����������������������������������������������������������������������������������������������

¥511,332
0511,332
120,846
239,707¥66,721–66,721
6,641
42,812

Depreciation and amortization������������������������������������������������������������������������
Capital expenditures, including intangible and other assets�������������������������������

7,369
13,182

543
553

2011:

Other

Total

¥90,216
1,100
91,316
2,907
50,255¥   453
14,90815,361
1,916
2,094¥668,772
16,008684,730
132,310
334,868¥–(16,008)(16,008)(32,731)474,337¥668,722–
668,722
99,579809,205

456
774

354
28

8,722
14,537

8,985
26,723

17,70741,260

Corporate Data

Tokyo Electron

Annual Report 2012

Page

35

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Sectionn Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Thousands of U.S. dollars
Reportable Segment

2012:

Semiconductor
production
equipment

FPD/PV
production
equipment

Electronic
components &computer
networks

Other

Total

Eliminations andCorporate

Consolidated

Net sales
Sales to external customers�����������������������������������������������������������������������������
Intersegment sales or transfers������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������
Segment profit������������������������������������������������������������������������������������������������
Segment assets�����������������������������������������������������������������������������������������������

$5,814,247–
5,814,247
1,083,100
3,197,335$850,335–
850,335
27,631
259,095$1,032,583
17,423
1,050,006
28,130564,436$5,609177,211
182,820
22,22923,446$7,702,774
194,634
7,897,408
1,161,090
4,044,312$–(194,634)(194,634)(423,750)
5,489,828$7,702,774–
7,702,774
737,340
9,534,140

Depreciation and amortization������������������������������������������������������������������������
Capital expenditures, including intangible and other assets�������������������������������

137,267
164,473

8,359
8,176

6,935
4,952

2,068
438

154,629
178,039

139,786
347,633

294,415525,672

Notes: 1. “Other” includes all other operating segments which are not included in the reportable segments, including group-wide logistic services, leasing and insurance.
2. (1)	“Eliminations and Corporate” segment profit totaling ¥34,828 million ($423,750 thousand) and ¥32,731 million for the years ended March 31, 2012 and 2011, respectively, includes corporate expenses
not allocated to any reportable segments. The corporate expenses mainly consist of research and development costs of ¥26,071 million ($317,204) and ¥22,719 million for the years ended March 31,
2012 and 2011, respectively, pertaining to fundamental research and element research, not allocated to any of the reportable segments.
		 (2)	“Eliminations and Corporate” segment assets totaling ¥451,209 million ($5,489,828 thousand) and ¥474,337 million as of March 31, 2012 and 2011, respectively, consist mainly of cash and cash
equivalents, short-term investments and buildings not allocated to any of the reportable segments.
3.	“Eliminations and Corporate” capital expenditures totaling ¥28,572 million ($347,633 thousand) and ¥26,723 million for the years ended March 31, 2012 and 2011, respectively, consist mainly of capital
expenditures for buildings not allocated to any of the reportable segments.
4. Reported segment profit is reconciled to Income before income taxes and minority interests in the consolidated statements of income.

Other Information(1) Domestic and overseas net sales by destination for the years ended March 31, 2012 and 2011 are as follows:
Net sales

Millions of yen
2012
2011

Thousands of
U.S. dollars
2012Japan�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
United States of America�������������������������������������������������������������������������������������������������������������������������������������������������������������������
Korea�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Taiwan�����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Other�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Total��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

¥171,364
114,951
114,218
86,882
145,676¥633,091$2,084,974
1,398,601
1,389,682
1,057,087
1,772,430$7,702,774¥182,165
103,013106,374
169,276
107,894¥668,722

Note:	Sales are classified in countries or regions based on location of customers.

(2) Net property, plant and equipment by location as of March 31, 2012 and 2011 are as follows:
2012:

Japan

Property, plant and equipment¥107,874

2011:

Japan

Property, plant and equipment¥97,775

Millions of yen
Other¥19,011
Millions of yen
Other¥14,777

Thousands of U.S. dollars
Other

Total

Japan

¥126,885$1,312,495

Total¥112,552$231,306

Total$1,543,801

Corporate Data

Tokyo Electron

Annual Report 2012

Page

36

Contents

Highlights

Top Message

Segment Information

FeatureCorporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Sectionn Financial Review
n Consolidated Eleven-year Summaryn Consolidated Balance Sheetsn Consolidated Statements of Income
n Consolidated Statements Of Comprehensive Income
n Notes To Consolidated Financial Statements
n Consolidated Statements Of Changes In Net Assets
n Consolidated Statements of Cash Flowsn Independent Auditors’ Report

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(3) Major customer information
Net sales to external customers that represent 10 percent or more of the company’s total net sales are as follows:
Name of customer

Samsung Electronics Co., Ltd.
Intel Corporation

Related reportable segment

Semiconductor production equipment and FPD/PV production equipment
Semiconductor production equipment

Name of customer

Samsung Electronics Co., Ltd.

Related reportable segment

Semiconductor production equipment and FPD/PV production equipment

Millions of yen
2012

Thousands of
U.S. dollars
2012¥116,919
90,399$1,422,545
1,099,878

Millions of yen
2011¥101,074

Note:	The amounts include sales to the customer and its subsidiaries.

19. Subsequent Event
Grant of stock options under stock option plans
On May 15, 2012, the Company’s board of directors decided to submit a resolution to the shareholders’ meeting for approval of the issuance of stock subscription
rights to directors and selected employees of Tokyo Electron. The issuance of stock
subscription rights is intended to enable the grant of stock options. Under thesestock option plans, option to purchase up to 53,800 shares of the Company at an
exercise price of ¥1 ($0.01), will be granted to directors of the Company as ofMarch 31, 2012 (excluding outside directors and directors who resigned on June22, 2012), and options to purchase up to 77,000 shares of the Company at an

exercise price of ¥1 ($0.01), will be granted to certain executive officers of theCompany as of March 31, 2012, certain directors of the Company who resigned
on June 22, 2012, certain directors and executive officers of domestic subsidiaries
and certain chairmen, presidents, and vice chairmen of overseas subsidiaries as ofMarch 31, 2012, who were determined by a resolution at a board of directors
meeting subsequent to the approval of grant at the general meeting of shareholders. This grant of stock options was approved at the annual general meeting of theshareholders of the Company on June 22, 2012.

Corporate Data