TOKYO ELECTRON

Summary of Consolidated Financial Results for the Third Quarter Ended
December 31, 2018 (Japanese GAAP)
Name of Listed Company:
Security Code:
URL:
Representative:
Contact:

Tokyo Electron Limited
8035
https://www.tel.com
Toshiki Kawai, Representative Director, President & CEO
Ken Sasagawa, Vice President of Accounting Dept.
Telephone: +81-3-5561-7000
Scheduled start date of dividends payment: Preparation of supplementary materials for the quarterly financial results: Yes
Quarterly earnings release conference: Yes (for investors and analysts)

January 31, 2019

Stock Exchange Listing: Tokyo

Note: Amounts are rounded down to the nearest million yen.
1. Consolidated Financial Results for the Nine Months Ended December 31, 2018 (April 1, 2018 to December 31, 2018)(1) Consolidated Operating Results (Cumulative)
Note: Percentages indicate changes from the same period of the previous fiscal year.
Nine months ended
December 31, 2017

December 31, 2018%%

Net sales (Millions of yen)

774,75043.7

959,204

23.8

Operating income (Millions of yen)

181,41192.7

234,154

29.1

Ordinary income (Millions of yen)

180,42688.5

241,90734.1

Net income attributable to owners of parent (Millions of yen)

131,384

93.4

184,126

40.1

Net income per share of common stock (Yen):
Basic

800.71

1,122.61

Diluted797.98

1,117.90

Comprehensive income:Nine months ended December 31, 2018:

176,536 million yen, 22.4%

Nine months ended December 31, 2017:

144,220 million yen, 110.3%(2) Consolidated Financial Position
As ofMarch 31, 2018
Total assets (Millions of yen)
Total net assets (Millions of yen)

1,171,447

771,509821,906

63.8

69.5

Equity ratio (%)
Equity:December 31, 2018

1,202,796

814,478 million yen (as of December 31, 2018)
767,146 million yen (as of March 31, 2018)

2. Dividends
Year ended

Year ending

March 31, 2018

March 31, 2019

1Q-end dividends per share (Yen)--

2Q-end dividends per share (Yen)

277.00413.00--Year-end dividends per share (Yen)

347.00311.00 (Forecast)

Annual dividends per share (Yen)

624.00724.00 (Forecast)

3Q-end dividends per share (Yen)

Note: Revision to the dividends forecast most recently announced: None

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TOKYO ELECTRON

3. Financial Forecasts for the Year Ending March 31, 2019 (April 1, 2018 to March 31, 2019)
Note: Percentages for year ending March 31, 2019 indicate changes from the previous fiscal year.
Year ending
March 31, 2019%
Net sales (Millions of yen)

1,280,000

13.2

Operating income (Millions of yen)

309,000

9.9

Ordinary income (Millions of yen)

315,000

12.2

Net income attributable to owners of parent (Millions of yen)

237,000

16.0

Net income per share (Yen)

1,445.13

Note: Revision to the financial forecasts most recently announced: None

Notes
(1) Changes in significant subsidiaries during the period(Changes in specified subsidiaries associated with changes in scope of consolidation): None
(2) Adoption of special accounting methods for preparation of quarterly financial statements: Yes
Please refer to "Notes" on page 11 for further information.
(3) Changes in accounting policies, changes in accounting estimates and restatements
1. Changes in accounting policies along with changes in accounting standards: None
2. Other changes of accounting policies besides the number 1 above: None
3. Changes in accounting estimates: None
4. Restatements: None
(4) Number of shares issued and outstanding (common stock)
1. Number of shares issued and outstanding (including treasury stock)
As of December 31, 2018 :

165,210,911 shares

As of March 31, 2018 :

165,210,911 shares

2. Number of shares of treasury stock
As of December 31, 2018:

1,264,296 shares

As of March 31, 2018:

1,097,342 shares

3. Average number of shares outstanding (Cumulative quarterly period)
Nine months ended December 31, 2018:

164,015,985 shares

Nine months ended December 31, 2017:

164,083,989 shares

Note: The number of shares of treasury stock includes the Company’s shares held by "Executive compensation Board Incentive Plan (BIP) trust"and "share-delivering Employee Stock Ownership Plan (ESOP) trust". (252,300 shares as of December 31, 2018)
In addition, these Company’s shares are included in the treasury stock which is deducted in calculating the average number of shares.

* Status of implementation of quarterly review proceduresThis Summary of Consolidated Financial Results is outside the scope of external auditor's quarterly review procedures
under the Financial Instruments and Exchange Act.
* Explanation of the appropriate use of financial forecast:
The financial forecasts and estimates in this Summary of Consolidated Financial Results are based on information available to
the Company at the time of report issuance and certain assumptions judged to be reasonable by the Company, and therefore
are not guarantees of future performance. Consequently, actual results may differ substantially from those described in thisSummary of Consolidated Financial Results. Please refer to "1. Qualitative Information on Financial Results for the Current
Quarter (3) Description of Financial Estimates Information such as Consolidated Financial Forecasts" on page 6.
The Company plans to hold an earnings release conference for investors and analysts on January 31, 2019.
Supplementary materials to be handed out at the conference will be posted on the Company's website.
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TOKYO ELECTRON

1. Qualitative Information on Financial Results for the Current Quarter(1) Description of Operating Results
While there has been a slowdown in economic growth in China, the global economy including the U.S. has been
robust during the first three quarters of the current fiscal year.
In the electronics industry, where the Tokyo Electron (TEL) Group operates, the rate at which semiconductor
shipments has been increasing is decelerating due to adjustments in data center investments and demand forsmartphones. However, TEL believes developments in new technologies such as artificial intelligence (AI) and thenext-generation telecommunication standards are expected to lead to a medium to long-term upward trend indemand for semiconductors. Under these circumstances, the consolidated financial results (cumulative) for the first
three quarters of the current fiscal year were net sales of 959,204 million yen (year-on-year growth of 23.8%),
operating income of 234,154 million yen (year-on-year growth of 29.1%), ordinary income of 241,907 million yen(year-on-year growth of 34.1%) and net income attributable to owners of parent of 184,126 million yen (year-on-year
growth of 40.1%).

The overview of each business segment is as described below.

(i) Semiconductor Production Equipment
Against the backdrop of the slowdown in demand for data centers and smartphones, some of the memory
manufacturers are reviewing their capital investment plans, and the semiconductor manufacturing equipment industry
has now entered a period of adjustment. However, net sales to external customers in this segment for the first threequarters of the current fiscal year were 877,982 million yen (year-on-year growth of 20.4%).

(ii) Flat Panel Display (FPD) Production Equipment
The FPD production equipment market was robust, with continued capital investment for small to medium-sized
OLED panels for smartphones in addition to capital investment for large-sized LCD panels for televisions in China.
Consequently, net sales to external customers in this segment for the first three quarters of the current fiscal year
were 81,066 million yen (year-on-year growth of 79.0%).

(iii) Other
Net sales to external customers in this segment for the first three quarters of the current fiscal year were 154 million
yen (year-on-year decrease of 49.4%).

3

TOKYO ELECTRON(For reference)

Consolidated Operating Results（Millions of yen）
FY2019Net Sales
Semiconductor Production Equipment
Japan
North America
EuropeSouth Korea
TaiwanChina
Southeast Asia
FPD Production Equipment
Other
Operating Income
Ordinary Income
Net Income Attributable to Owners of Parent
Note:

1Q

2Q

3Q

Total

295,569
280,400
51,14628,496
17,75588,98626,31554,964
12,734
15,11355
72,41875,21255,741

395,465
358,057
58,04845,91031,34586,55848,05771,306
16,83037,35453
103,000
106,034
79,553

268,169
239,525
54,09522,767
18,61360,96029,38438,09915,60428,59846
58,73560,66048,831

959,204
877,982
163,291
97,17467,714
236,505
103,757
164,370
45,16981,066
154
234,154
241,907
184,126

Intersegment sales or transfers are eliminated.

(2) Description of Financial Conditions(i) Financial Conditions
Current assets at the end of the third quarter of the current fiscal year were 909,708 million yen, a decrease of 36,888
million yen compared to the end of the previous fiscal year. This was mainly due to a decrease of 69,500 million yen
in short-term investments included in securities, a decrease of 19,208 million yen in prepaid consumption tax, adecrease of 14,811 million yen in trade notes and accounts receivable, an increase of 36,806 million yen in cash anddeposits, and an increase of 24,222 million yen in inventories.
Tangible fixed assets increased by 16,289 million yen from the end of the previous fiscal year, to 142,242 million yen.
Intangible fixed assets decreased by 5,933 million yen from the end of the previous fiscal year, to 9,948 million yen.
Investments and other assets decreased by 4,817 million yen from the end of the previous fiscal year, to 109,547
million yen.
As a result, total assets decreased by 31,349 million yen from the end of the previous fiscal year, to 1,171,447 million
yen.
Current liabilities decreased by 83,142 million yen from the end of the previous fiscal year, to 285,310 million yen.
This was largely due to a decrease of 48,546 million yen in income taxes payable, a decrease of 18,963 million yen in
trade notes and accounts payable, and a decrease of 15,188 million yen in accrued employees' bonuses.
Long-term liabilities increased by 1,396 million yen from the end of the previous fiscal year, to 64,230 million yen.
Net assets increased by 50,396 million yen from the end of the previous fiscal year, to 821,906 million yen. This waslargely due to an increase stemming from 184,126 million yen in net income attributable to owners of parent and adecrease resulting from the payment of 124,754 million yen in year-end dividends for the previous fiscal year andinterim dividends for the current fiscal year. As a result, the equity ratio was 69.5%.

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TOKYO ELECTRON

The above comparisons to the previous fiscal year are made on the condition that "Partial Amendments to AccountingStandard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) was adopted from the beginning of
the first quarter of this fiscal year, and such amendments was also retrospectively applied to the balances as of theend of previous fiscal year.

(ii) Cash Flows
Cash and cash equivalents at the end of the third quarter of the current fiscal year decreased by 89,193 million yen
compared to the end of the previous fiscal year, to 168,684 million yen. The combined balance including 172,500
million yen in time deposits and short-term investments with maturities of more than three months that are notincluded in cash and cash equivalents was 341,184 million yen, a decrease of 32,693 million yen from the end of theprevious fiscal year. The overall situation regarding cash flows during the first three quarters of the current fiscal year
was as described below.
Cash flows from operating activities were positive 124,509 million yen, an increase of 26,100 million yen compared tothe same period of the previous fiscal year. The major positive factors were 241,700 million yen in income before
income taxes, a 19,190 million yen decrease in prepaid consumption tax, 16,983 million yen in depreciation andamortization, and a 13,586 million yen decrease in trade notes and accounts receivable. The major negative factors
were 102,915 million yen in payment of income taxes, a 28,083 million yen increase in inventories, a 17,860 million
yen decrease in trade notes and accounts payable, and 15,020 million yen decrease in accrued employees’ bonuses.
Cash flows from investing activities were negative 82,045 million yen compared to positive 40,986 million yen in thesame period of the previous fiscal year. This was largely due to the payment of 56,500 million yen for an increase intime deposits and short-term investments and the payment of 32,914 million yen for the purchase of fixed assets.
Cash flows from financing activities were a negative 129,760 million yen compared to a negative 82,544 million yen in
the same period of the previous fiscal year. This was largely due to the payment of 124,754 million yen in dividends.

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TOKYO ELECTRON

Consolidated Statements of Cash Flows (Summary)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Other, net
Cash flows from investing activities
Decrease (increase) in time deposits and short-term investments
Other, net
Cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents

Nine months ended
December 31, 2017

（Millions of yen）
Nine months ended
December 31, 2018

98,409179,627
14,531(16,642)(94,407)13,505
1,794
40,98675,000(34,013)(82,544)
4,023

124,509
241,700
16,983
13,586(28,083)(17,860)(101,816)(82,045)(56,500)(25,545)(129,760)(1,897)

Net increase (decrease) in cash and cash equivalents

60,875(89,193)

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

164,366
225,241

257,877
168,684

Cash and cash equivalents, time deposits and short-term investments with maturities ofmore than three months

301,241

341,184(3) Description of Financial Estimates Information such as Consolidated Financial Forecasts
There are no changes in the consolidated financial forecast for the fiscal year ending March 31, 2019 from theforecasts released at the time of the previous announcement on October 31, 2018.

Note: The financial forecasts and estimates stated in this announcement are based on certain assumptions judged to be reasonable by the Company inlight of information currently available concerning economic conditions in Japan and overseas, fluctuations in foreign exchange rates, and other factorsthat may have an impact on performance. The company does not promise 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 theirsuccess or failure), and global conditions in the semiconductor related industry. Consequently, actual sales and profits may differ substantially from the
projections stated in this announcement.

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TOKYO ELECTRON

Consolidated Balance Sheets(Millions of yen)
As of

As of

March 31, 2018

December 31, 2018ASSETS
Current assets
Cash and deposits

87,377

124,184

Trade notes and accounts receivable

159,570

144,759

Securities

286,500

217,000

Merchandise and finished goods

220,497

238,354Work in process

75,50474,652

Raw materials and supplies

48,06955,285

Others69,13755,563(59)(91)

946,597

909,708

125,952

142,242

Others

15,882

9,948

Total intangible fixed assets

15,882

9,948

115,786

110,972(1,422)(1,424)

114,364

109,547

Allowance for doubtful accounts
Total current assets
Long-term assets
Tangible fixed assets
Intangible fixed assets

Investments and other assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total long-term assets
Total assets

7

256,199

261,738

1,202,796

1,171,447

TOKYO ELECTRON

Consolidated Balance Sheets(Millions of yen)
As of

As of

March 31, 2018

December 31, 2018

LIABILITIESCurrent liabilities
Trade notes and accounts payable

108,60789,643

Income taxes payable

66,046

17,500

Customer advances

100,208

96,228

Accrued employees’ bonuses

34,467

19,279Accrued warranty expenses

11,284

13,605

Other allowances

4,618

3,850

Others43,21845,202

Total current liabilities

368,452

285,310Long-term liabilities
374

1,259

Net defined benefit liabilities

Other allowances

59,30959,846

Others

3,150

3,124

Total long-term liabilities
Total liabilities

62,83464,230431,287

349,541

NET ASSETS
Shareholders' equity
Common stock

54,961

54,961

Capital surplus

78,01178,011Retained earnings

625,390684,729

Treasury stock, at cost

(7,518)(11,936)

Total shareholders' equity

750,843805,765

17,134

8,760

Accumulated other comprehensive income
Net unrealized gains (losses) on investment securities
Net deferred gains (losses) on hedging instruments

278

10

Foreign currency translation adjustments

5,507

4,999

Accumulated remeasurements of defined benefit plans(6,618)(5,058)

Total accumulated other comprehensive income (loss)

16,302

8,712

Share subscription rights
Total net assets
Total liabilities and net assets

8

4,363

7,427

771,509821,906

1,202,796

1,171,447

TOKYO ELECTRON

Consolidated Statements of Income(Millions of yen)
Nine months ended

Nine months ended

December 31, 2017

December 31, 2018

Net sales

774,750959,204

Cost of sales

453,261565,312Gross profit

321,488393,891

Selling, general & administrative expenses
Research and development expenses

70,01883,889Others70,05875,848

Total selling, general and administrative expenses

140,077

159,737

181,411234,154

325

1,790

-

2,490

Others

1,912

3,651

Total non-operating income

2,237

7,931

Operating income
Non-operating income
Dividend income
Foreign exchange gain

Non-operating expenses
Maintenance and operation costs of closed facilities

56

55

2,986

-

178

122

3,222

178

180,426

241,907

Gain on sales of fixed assets

72

52

Total unusual or infrequent profit

72

52

Loss on disposal and sales of fixed assets

335

257

Loss on valuation of investment securities

536-

Foreign exchange loss
OthersTotal non-operating expenses
Ordinary income
Unusual or infrequent profit

Unusual or infrequent loss

Others

-

1

871

259

Income before income taxes

179,627

241,700

Income taxes

48,21457,574

Net income

131,412

184,126

28-

131,384

184,126

Total unusual or infrequent loss

Net income attributable to non-controlling interests
Net income attributable to owners of parent

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TOKYO ELECTRON

Consolidated Statements of Comprehensive Income(Millions of yen)
Nine months ended

Nine months ended

December 31, 2017

December 31, 2018

131,412

184,126

Net unrealized gains (losses) on investment securities

6,960(8,362)

Net deferred gains (losses) on hedging instruments

(177)

(262)

Foreign currency translation adjustments

6,717

(539)

Remeasurements of defined benefit plans

(693)

1,518

0

57

12,807(7,589)144,220

176,536

144,191

176,536

29-

Net income
Other comprehensive income (loss)

Share of other comprehensive income of associates
accounted for using the equity method
Total other comprehensive income (loss)
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

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TOKYO ELECTRON

Notes
Going concern: None
Significant changes in Shareholders' Equity: None
Changes in significant subsidiaries during the period: None
Adoption of special accounting methods for preparation of quarterly financial statements: Yes
The company and a part of its consolidated subsidiaries calculate tax expenses by reasonably estimating the annual effective tax rate on
income before income taxes after the application of tax effect accounting for the fiscal year, and applying this rate to income before income
taxes for the current quarter under review.
Changes in accounting policies, changes in accounting estimates and restatements: None
Additional information"Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) was adopted
from the beginning of the first quarter of this fiscal year. As a result, deferred tax assets are classified as "Investments and other assets"
and deferred tax liabilities are classified as "Long term liabilities" respectively.

Note on Consolidated Statements of Income

Income taxes
Current income tax expense for the nine months ended December 31, 2018 includes net of 647 million yen of estimated tax benefit fromthe expected resolution of the Mutual Agreement Procedure being finalized by the Japanese and Korean income tax authorities fortransfer pricing adjustments assessed during prior historical periods. The 647 million yen is the difference between the current
projected tax refunds and the estimated amount recorded in prior fiscal year.

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TOKYO ELECTRON

Segment information(i) General information about reportable segments
A reportable segment is a component or an aggregated component of TEL Group. For each of the components, discrete financial
information is available and the operating result is regularly reviewed by management to make decisions about resources to beallocated to the segment and assess its performance.
The operation of TEL Group consists of segments by products and services based on business units (BUs), and TEL Groupidentifies as a reportable segment, "semiconductor production equipment (SPE)" and "flat panel display (FPD) production equipment".
Products of the SPE segment consist of coater/developers, etch systems, deposition systems, cleaning systems, wafer probers usedin the wafer testing process and other semiconductor production equipment. The SPE segment principally develops, manufactures,
sells such products and provide services on them.
Products of the FPD production equipment segment consist of coater/developers, etch/ash systems used in the manufacture offlat panel displays. The FPD production equipment segment principally develops, manufactures, sells such products and provide serviceson them.
(ii) Net sales and profit or loss in reportable segments
Nine months ended December 31, 2018 (April 1, 2018 to December 31, 2018)(Millions of yen)

Reportable Segments
Semiconductor
Production
Equipment

FPD Production
Equipment

Others *1

Total

Net sales

877,982

81,066

14,338973,388

Segment profit (loss)

244,990

17,837

88262,916

Adjustments *2

Consolidated *3

Net sales(14,183)

959,204

Segment profit (loss)(21,216)

241,700

Notes:*1. "Others" includes all other operating segments which are not included in the reportable segments, including group-wide logistic
services, facility maintenance and insurance.
*2. "Adjustments" for segment loss totaling 21,216 million yen mainly consists of research and development costs of 11,951 million yen
pertaining to the fundamental research and element research of TEL and other general and administrative costs that do notbelong to reportable segments.
*3. Segment profit (loss) is adjusted against income before income taxes in Consolidated Statements of Income.

(iii) 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 gains on negative goodwill: None12