TOKYO ELECTRON ANNUAL REPORT 2014

PAGE21

CONTENTSCONTENTS

Financial Highlights

Business Overview

Financial
Financial Review
Review

Talking about
Tokyo Electron

Top Message

Consolidated Eleven-Year
Eleven-Year Summary
Summary
Consolidated

Consolidated Statements of Changes in Net Assets

Review of Operations
and Business Outlook

Corporate GovernanceConsolidated Balance Sheets

Consolidated Statements of Cash Flows

Corporate Citizenship

Consolidated Statements
Statements ofof Operations
Operations
Consolidated

R&D / Intellectual Property

Financial Section

Corporate Data

Consolidated
Consolidated Statements
Statements ofof Comprehensive
Comprehensive Income
IncomeNotes to Consolidated Financial Statements

Independent Auditor’s Report

Consolidated Balance Sheets
Tokyo Electron Limited and Subsidiaries
As of March 31, 2014 and 2013
Thousands of
U.S. dollars

Millions of yen

ASSETS

2014

2013

2014

Current assets:

Thousands of
U.S. dollars

Millions of yen

LIABILITIES AND NET ASSETS

2014

2013

2014

¥ 53,668¥ 36,261$  521,455

Current liabilities:

Cash and cash equivalents

¥104,797¥ 85,314$1,018,237

Trade notes and accounts payable

Short-term investments

163,350

154,816

1,587,155

Short-term borrowings

11,531

3,756

112,038

Trade notes and accounts receivable

129,032

100,501

1,253,712

Income taxes payable

14,0152,286

136,174(1,503)(1,180)(14,604)

Accrued employees’ bonuses

8,584

6,829

83,405Inventories

168,277

135,698

1,635,027

Customer advances

39,901

18,985

387,689

Deferred income taxes

25,174

15,669244,598

Accrued warranty expenses

10,072

8,345

97,862

Prepaid expenses and other current assets

32,36530,683

314,468

Accrued expenses and other current liabilities

32,73930,208318,101

621,492

521,5016,038,593   Total current liabilities

170,510

106,670

1,656,724

Deferred tax liabilities

9,279

4,817

90,157—57,225—Net liability for retirement benefits

54,031—

524,981

Other liabilities

4,158

1,689

40,400237,978

170,401

2,312,262  Common stock   Authorized: 300,000,000 shares
Issued:180,610,911 shares as of March 31, 2014 and 2013

54,961

54,961

534,017  Capital surplus

78,02378,023758,094  Retained earnings

436,174

467,921

4,237,991(9,479)(9,589)(92,101)

5,593

4,214

54,34360(15)583Allowance for doubtful accounts   Total current assets

Accrued pension and severance costs
Property, plant and equipment:Land25,11225,030243,995

Buildings

151,634

163,857

1,473,319

Machinery and equipment

128,422140,066

1,247,785

Construction in progress

3,623

6,076

35,202308,791

335,029

3,000,301

Less: Accumulated depreciation

196,447

199,331

1,908,735   Net property, plant and equipment

112,344

135,698

1,091,566   Total property, plant and equipment  Total liabilities

Net assets:
Shareholders’ equity   Treasury stock, at cost   1,408,950 and 1,424,203 shares
as of March 31, 2014 and 2013, respectively

Investments and other assets:
Investment securities

20,027

18,669194,588

Accumulated other comprehensive income

Deferred income taxes

23,22423,206225,651   Net unrealized gains on investment securities

Net asset for retirement benefits

8,904

—

86,514   Net deferred gain (losses) on hedging instruments

Goodwill

9,400

38,373

91,333   Foreign currency translation adjustments

5,777(2,484)56,131Intangible assets

20,156

21,545195,842   Accumulated adjustments for retirement benefits

6,982

—

67,839Other assets

14,911

18,648144,880

Share subscription rights

1,644

1,375

15,974

Allowance for doubtful accounts

(1,866)(2,112)(18,131)

Minority interests

10,87910,721

105,703   Total investments and other assets

94,756

118,329920,677   Total net assets

590,614605,127

5,738,574¥828,592¥775,528$8,050,836

Total liabilities and net assets

¥828,592¥775,528$8,050,836

Total assets
See accompanying Notes to Consolidated Financial Statements.

TOKYO ELECTRON ANNUAL REPORT 2014

PAGE

22CONTENTSCONTENTS

Financial Highlights

Business Overview

Financial
Financial Review
Review

Talking about
Tokyo Electron

Top Message

Consolidated Eleven-Year
Eleven-Year Summary
Summary
Consolidated

Consolidated Statements of Changes in Net Assets

Review of Operations
and Business Outlook

Corporate GovernanceConsolidated
Consolidated Balance
Balance Sheets
SheetsConsolidated Statements of Cash Flows

Corporate Citizenship

Consolidated Statements of Operations

R&D / Intellectual Property

Financial Section

Consolidated Statements of Comprehensive Income

Notes to Consolidated Financial Statements

Independent Auditor’s Report

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2014 and 2013

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2014 and 2013
Thousands ofU.S. dollars

Millions of yen

Net sales
Cost of sales Gross profit
Selling, general and administrative expenses
Operating income

2014

2013

2014

¥497,300$5,948,018

Income (loss) before minority interests

410,278

338,545

3,986,378

Other comprehensive income:

201,892

158,755

1,961,640

Changes in fair value of investment securities

169,687

146,206

1,648,727

Changes in deferred gains (losses) on hedging instruments

32,205

12,549312,913

Foreign currency translation adjustments
Total other comprehensive incomeComprehensive income (loss)

Interest and dividend income

3,162

1,659

30,723

Revenue from grants

1,154

2,672

11,213

Owners of the Company

Gain on sale of property, plant and equipment

433

943

4,207

Minority interests

Reversal of allowance for doubtful accounts

—558—(1,229)(1,520)(11,941)(46,969)(7)(456,364)

Loss on sale and disposal of property, plant and equipment

(492)

(153)

(4,780)Loss on devaluation of investment securities, net

(308)

(44)

(2,993)Foreign exchange loss, net Loss on impairment of property, plant and equipment,
goodwill and other assets

Other, net

288

1,110

2,797

(11,756)

17,767(114,225)

Current

15,995

6,255

155,412

Prior years

—

2,195

—

Income (loss) before income taxes and minority interests
Income taxes:

Deferred
Income (loss) before minority interests
Minority interests
Net income (loss)

(8,538)

2,959(82,958)(19,213)6,358(186,679)

196

282

1,904

¥ (19,409)¥  6,076$ (188,583)

Yen

U.S. dollars

Per share of common stock:
Net income (loss) — basic
Net income — diluted
Net assetsCash dividends
See accompanying Notes to Consolidated Financial Statements.

¥ (108.31)¥  33.91$    (1.05)—33.85—3,225.92

3,309.58

31.34

50.00

51.00

0.49

Thousands ofU.S. dollars

Millions of yen¥612,170

Other income (expenses):

Corporate Data2014

2013

2014

¥(19,213)¥ 6,358$(186,679)

1,365

652

13,2639256894

6,867

8,760

66,721

8,324

9,468

80,878(10,889)

15,826(105,801)(11,151)

15,426(108,346)

262

400

2,545

Total comprehensive income (loss) attributable to:

See accompanying Notes to Consolidated Financial Statements.

TOKYO ELECTRON ANNUAL REPORT 2014

PAGE

23

CONTENTSCONTENTS

Financial Highlights

Business Overview

Talking about
Tokyo Electron

Top Message

Financial
Financial Review
Review

Consolidated Eleven-Year
Eleven-Year Summary
Summary
Consolidated

Consolidated Statements of Changes in Net Assets

Review of Operations
and Business Outlook

Corporate GovernanceConsolidatedConsolidated Balance
Balance Sheets
SheetsConsolidated Statements of Cash Flows

Corporate Citizenship

Consolidated Statements
Statements ofof Operations
Operations
Consolidated

R&D / Intellectual Property

Financial Section

Consolidated
Consolidated Statements
Statements ofof Comprehensive
Comprehensive Income
IncomeNotes to Consolidated Financial Statements

Independent Auditor’s Report

Consolidated Statements of Changes in Net Assets

Consolidated Statements of Cash Flows

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2014 and 2013

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2014 and 2013
Thousands ofU.S. dollars

Millions of yen
Shareholders’ equity

Balance as of April 1, 2012

Millions of yen

Accumulated other comprehensive income

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

Unrealized
gains oninvestment
securities¥54,961¥78,023¥471,186¥(9,748)¥3,576

Deferred
gains(losses) on
hedging
instruments¥(51)

Foreign
Accumulated
currency
adjustments
Sharetranslation for retirement subscription
adjustments
benefits
rightsMinority
interests

Total
net assets¥(11,158)¥10,657¥598,603¥—¥1,157

Cash dividends

——(9,317)

—

—

—

—

—

—

—

(9,317)

Net income

—

—

6,076

———

—

——

—

6,076

Repurchase of treasury stock

—

—

—

(15)

——————(15)

Disposal of treasury stock

—

—

(24)

174

—

—

—

—

—

—

150

Other, netBalance as of March 31, 2013

—

—

—

—

638

36

8,674

¥54,961¥78,023¥467,921¥(9,589)¥4,214¥(15)¥ (2,484)

¥—

218

64

9,630

—

¥1,375¥10,721¥605,127

Adjustments due to the changes in fiscal year-end ofconsolidated subsidiaries——(3,190)

——

—

—

———

(3,190)Cash dividends——(9,139)———————(9,139)(19,409)

Net loss——(19,409)

———

—

—

—

—

Repurchase of treasury stock

—

—

—

(30)

—

—

—

——

—

(30)

Disposal of treasury stock

—

—(9)

140

—

—

—

——

—

131

Other, netBalance as of March 31, 2014

——

—

—

1,379

75

8,261

6,982

269

158

17,124¥54,961¥78,023¥436,174¥(9,479)¥5,593¥ 60¥   5,777¥6,982¥1,644¥10,879¥590,614

Foreign
Accumulated
currency
adjustments
Sharetranslation for retirement subscription
adjustments
benefits
rightsMinority
interests

Total
net assets

Thousands of U.S. dollars
Shareholders’ equity

Accumulated other comprehensive income

Treasurystock

Unrealized
gains oninvestment
securities

Deferred
gains(losses) on
hedging
instruments

Balance as of March 31, 2013 $534,017 $758,094 $4,546,453 $(93,169)$40,944$(146)

Commonstock

CapitalsurplusRetainedearnings$(24,135) $—$13,360$104,168 $5,879,586

Adjustments due to the changes in fiscal year-end of
consolidated subsidiaries——(30,995)

——

—————

(30,995)

Cash dividends

——(88,797)

——

—

—

—

—

—

(88,797)(188,583)

Net loss——(188,583)

——

—

—

—

—

—

Repurchase of treasury stock

—

—

—

(292)

—

—

—

—

—

—

(292)

Disposal of treasury stock

—

—

(87)

1,360

—

—

—

—

—

—

1,273

Other, net

—

—

—

—

13,399729

80,266

67,839

2,614

1,535

166,382

Balance as of March 31, 2014 $534,017 $758,094 $4,237,991 $(92,101)$54,343$ 583$ 56,131$67,839$15,974

See accompanying Notes to Consolidated Financial Statements.

$105,703 $5,738,574

Corporate Data

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Depreciation and amortization
 Loss on impairment of property, plant and equipment,
goodwill and other assets
Amortization of goodwill
Increase in accrued pension and severance costs
Increase in net liability for retirement benefits
Increase (decrease) in accrued employees’ bonuses
Increase (decrease) in accrued warranty expenses
Interest and dividend income(Increase) decrease in trade notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in trade notes and accounts payable(Increase) decrease in prepaid consumption tax
Increase in accrued consumption tax
Increase (decrease) in customer advances
Other, net
Subtotal
Receipts from interest and dividends
Interest paid
Income taxes paidNet cash provided by operating activities
Cash flows from investing activities:
Payment for purchases of short-term investments
Proceeds from maturities of short-term investments
Payment for purchase of property, plant and equipment
Proceeds from sale of property, plant and equipmentPayment for acquisition of intangible assets Payment for acquisition of investments in newly consolidated
subsidiaries
Payments for transfer of business
Other, netNet cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings, net
Proceeds from long-term borrowings
Increase in treasury stock, net
Dividends paid
Other, netNet cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Decrease in cash and cash equivalents due to the changes infiscal year-end of consolidated subsidiaries			Cash and cash equivalents at end of year
See accompanying Notes to Consolidated Financial Statements.

2014

2013

2014

¥ (11,756)
24,888¥ 17,767
26,631$ (114,225)
241,819

46,9697456,364

4,262
—
2,887
1,396
1,256
(3,162)(25,358)(32,088)
15,606(2,913)
1,123
19,083859
43,052
3,223(84)(1,742)44,449

1,141
1,825
—
(2,750)(2,918)(1,659)57,54920,279(15,482)2,862
596(12,456)(2,972)90,4201,587(68)(7,672)
84,26741,411—
28,051
13,564
12,204(30,723)(246,386)(311,776)
151,632(28,304)
10,911
185,416
8,347
418,305
31,316(816)(16,926)
431,879(192,614)
184,071(9,451)897(1,640)(192,057)
126,000(19,012)
3,630(1,234)(1,871,492)
1,788,486(91,829)8,716(15,935)——(862)(19,599)(55,079)(1,097)(2,920)(141,769)——(8,375)(190,429)

7,5512,000(30)(9,139)(569)(187)(3,973)
20,69085,314

(646)
—
(15)
(9,317)(647)(10,625)(5,335)(73,462)
158,776

73,36819,433(292)(88,797)(5,529)(1,817)(38,603)
201,030
828,935(1,207)¥104,797—¥ 85,314(11,728)$1,018,237