TOKYO ELECTRON

Oct 31, 2012

Consolidated Financial Review
for the Second Quarter Ended September 30, 2012
Company name:
URL:
Telephone number:
Stock exchange listing:Tokyo Electron Limited
http://www.tel.com(03) 5561-7000
Tokyo Stock Exchange 1st Section (Code 8035)

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

1. Financial highlights for the six months ended September 30, 2012
Six months ended
September 30, 2011 September 30, 2012
Net sales (Millions of yen)326,350
266,600
Operating income (Millions of yen)
36,85912,202
Ordinary income (Millions of yen)
39,722
15,459Net income (Millions of yen)
26,657
6,090
Net income per share (Yen)148.85
33.99
Fully diluted net income per share (Yen)148.63
33.94
Comprehensive income:Year ended 9/30/2012: 1,898 million yen
Year ended 9/30/2011: 20,048 million yen(1) Operating results (Cumulative)(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Equity: 583,700 million yen (as of September 30, 2012)
586,789 million yen (as of March 31, 2012)

As ofMarch 31, 2012
783,610598,60274.9

As of
September 30, 2012
745,079595,670
78.3

2. Dividends
Year ended
March 31, 2012
53.00
27.00
80.00

Year ending
March 31, 2013
25.00
26.00 (Forecast)
51.00 (Forecast)

2Q-end dividend per share (Yen)
Year-end dividend per share (Yen)Annual dividend per share (Yen)
Note: Revision of dividends forecast : No
The interim dividend for the second quarter ended September 2012 is made up of ordinary dividend
15 yen and commemorative dividend 10 yen.
The year-end dividend for the year ending March 2013 is made up of ordinary dividend 16 yen andcommemorative dividend 10 yen.

3. Earnings forecasts for the year ending March 31, 2013
Year ending
March 31, 2013
Net sales (Millions of yen)
Operating income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Note: Revision of earnings forecast : Yes

501,000
12,500
7,000
39.07

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TOKYO ELECTRON

4. Others(1) Important changes in subsidiaries during the current period: None
(2) Adoption of special accounting method in preparing quartely financial statement: Yes(3) Changes in accounting policies, accounting estimation, and restatement
1. Changes in accounting policies along with changes in accounting standards: Yes
2. Other changes of accounting policies besides number 1 above: None
3. Changes in accounting estimates: Yes
4. Restatement: None
(4) Number of shares outstanding (common stock)
1. Number of shares issued and outstanding (including treasury stock)
As of September 30, 2012:

180,610,911 shares

As of March 31, 2012:

180,610,911 shares

2. Number of shares of treasury stock
As of September 30, 2012:

1,435,138 shares

As of March 31, 2012:

1,446,079 shares

3. Average number of shares outstanding
Six months ended September 30, 2012:

179,172,561 shares

Six months ended September 30, 2011:

179,086,953 shares

Notification of the status of quarterly financial review procedures:This quarterly financial report is outside the jurisdiction of auditing procedures outlined in the Financial Instruments and Exchange Act
and remain incomplete at the time of announcing this report.
Explanations on the appropriate use of earnings forecast:
The performance forecast and estimate stated in this Financial Review are based on certain assumptions judged to be reasonable
at the present time in light of information currently available. Consequently, actual operating results may differ substantially.

2

TOKYO ELECTRON

Qualitative Information on Financial Results for the Second Quarter(1) Qualitative Information on Consolidated Operating Results

During the first half of the current fiscal year, with increased uncertainty due to the prolonged European debt
crisis and fiscal austerity in the United States, growth in China and other emerging market economies
slowed and concerns about a global economic slowdown increased. In Japan, the economic recovery
stalled due to problems resulting from the aforementioned global economic uncertainties.
In the electronics industry where the Tokyo Electron group conducts its business, sales of PCs andtelevisions remain sluggish, and the industry is dependent on demand for smartphones and tablet PCs.
Even smartphones however, which are selling briskly, have yet to take on the role of spurring electronic
component market growth in earnest, as electronic component market conditions are greatly dependent onsales of certain select models.
Given this background, consolidated net sales in the first half of the current fiscal year were 266,600 million
yen (down 18.3% from the same period of the previous year). Consolidated operating income was 12,202
million yen (down 66.9% from the same period of the previous year), and consolidated ordinary income was15,459 million yen (down 61.1% from the same period of the previous year). Net income for the first half
was 6,090 million yen (down 77.2% from the same period of the previous year).

The overview of each business segment is as described below.

(i) Semiconductor Production Equipment
Because of the global economic slowdown, PC sales remain flat. In addition, sales of smartphones andtablet PCs are not expected to achieve the initially-anticipated growth. As a result, supply and demand for
DRAMs has not improved, and flash memory demand is sluggish. Although some capital investment inadvanced equipment has been made for logic-based semiconductor products, capital investment inmemory-related equipment remains sluggish, and the semiconductor production equipment market as awhole continues to undergo an adjustment phase. Given these circumstances, net sales from externalcustomers in this segment during the first half of the current fiscal year were 214,666 million yen (down
13.6% compared to the same period of the previous year).

(ii) FPD/PV (Flat Panel Display/Photovoltaic Panel) Production Equipment
Sales of high-performance small- and medium-sized LCD panels for smartphones grew, but television
replacement demand remained stagnant and PC sales were sluggish. As a result, demand for LCD panel
production equipment was weak, and net sales from external customers in this segment during the first halfof the current fiscal year were 9,230 million yen (down 74.8% compared to the same period of the previous

3

TOKYO ELECTRON

year).

(iii) Electronic Components and Computer Networks
In the electronic components segment, sales increased despite sluggish demand for digital home appliancerelated products and industrial equipment related products, due to higher overseas sales and an expansionof revenues relating to commercial rights. In addition, sales of computer networks related products andmaintenance services were strong in conjunction with the expansion of cloud computing. Given thesecircumstances, net sales from external customers in this segment during the first half of the current fiscal
year were 42,465 million yen (up 3.5% compared to the same period of the previous year).

(iv) Others
Net sales from external customers in this segment during the first half of the current fiscal year were 238
million yen (down 1.4% compared to the same period of the previous year).

(For reference)

Consolidated Operating Results（ Millions of yen）
FY2012
1H

Net Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
FPD/PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income
Ordinary Income
Net Income
Note:326,350
248,394
50,36553,57930,98837,88344,16315,80015,61336,67741,037
241
36,85939,722
26,657FY20122H
306,740
229,479
32,522
61,242
18,33770,85630,8549,594
6,070
33,211
43,830219
23,58424,324
10,067

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

4

FY2013
1H
266,600
214,666
20,21855,782
23,402
38,677
58,795
11,863
5,927
9,230
42,465238
12,202
15,459
6,090

1Q

2Q

134,179
108,703
10,032
26,62910,457
24,21429,338
5,666
2,363
4,769
20,605
101
9,283
11,2485,720

132,421
105,963
10,18629,152
12,944
14,46329,456
6,196
3,563
4,460
21,859
137
2,918
4,211
370

TOKYO ELECTRON

Production and Order Performance
1. Production（ Millions of yen）
FY2012
1H

Semiconductor Production Equipment
FPD/PV Production Equipment
Total
Note:

232,433
29,957
262,390

FY20122H
219,931
25,898245,829

FY2013
1H
184,976
6,633
191,609

1Q

2Q

96,681
2,121
98,80388,2944,511
92,806

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

2. Orders Received（ Millions of yen）
FY2012
1H

Semiconductor Production Equipment
FPD/PV Production Equipment
Electronic Components & Computer Networks
OthersTotal
Note:

186,224
10,63342,092
241
239,192

FY20122H
251,390
7,964
42,183219
301,758

FY2013
1H
142,957
10,91443,290238
197,401

1Q

2Q

76,0292,829
22,631
101
101,590

66,928
8,085
20,658137
95,8101. Offset elimination has been carried out on the dealing between segments.
2. The above amounts do not include consumption taxes.

3. Orders Backlog
FY2012
1H
Semiconductor Production Equipment
FPD/PV Production Equipment
Electronic Components & Computer Networks
OthersTotal
Note:

166,773
39,447
15,430221,651

FY2012
2H
188,684
14,20013,783
216,669

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

5（ Millions of yen）
FY2013
1Q

2Q

157,737
12,26015,809185,807

118,702
15,885
14,608149,196

TOKYO ELECTRON(2) Qualitative Information on Consolidated Financial Conditions(i) Financial Conditions
Current assets at the end of the second quarter of the current consolidated fiscal year were 551,215 million
yen, down 55,835 million yen compared to the end of the previous fiscal year. The major factors influencing
this result were a 55,321 million decrease in trade notes and accounts receivable, a 16,480 million yen
decrease in inventories, and a 33,209 million yen increase in short-term investments included in securities.
Tangible fixed assets increased by 262 million yen from the end of the previous fiscal year, to 127,147
million yen.
Intangible fixed assets increased by 15,150 million yen from the end of the previous fiscal year, to 19,854
million yen as a result of a 15,134 million yen increase in goodwill and other factors.
Investments and other assets increased by 1,891 million yen from the end of the previous fiscal year, to46,862 million yen.
As a result, total assets decreased by 38,531 million yen compared to the end of the previous fiscal year, to745,079 million yen.
Current liabilities were down 36,551 million yen compared to the end of the previous fiscal year, to 88,242
million yen. The major factors causing the decline were a 14,089 million yen decrease in trade notes andaccounts payable and a 13,010 million yen decrease in customer advances.
Long-term liabilities were up 952 million yen compared to the end of the previous fiscal year, to 61,166
million yen.
Net assets at the end of the second quarter were 595,670 million yen, down 2,932 million yen from the endof the previous fiscal year. The main factors were an increase stemming from the posting of 6,090 million
yen in net income for the first half, the payment of 4,837 million yen in year-end dividends relating to theprevious fiscal year, a 2,444 million yen decrease from translation adjustments due to effects of the highvalue of the yen, and a 1,993 million yen decrease in valuation difference on available-for-sale securities.
The equity ratio was 78.3%.

(ii) Cash Flow
Cash and cash equivalents at the end of the second quarter of the current consolidated fiscal year
decreased by 17,125 million yen compared to the end of the previous fiscal year, to 141,651 million yen.
The combined balance including the 144,568 million yen in time deposits and short-term investments withperiods to maturity or redemption of at least three months that are not included in cash and cash
equivalents, was 286,219 million yen, up 38,594 million yen from the end of the previous fiscal year. The
overall situation regarding cash flow during the first half of the current fiscal year is as described below.
Cash flow from operating activities increased by 47,209 million yen compared to the same period of theprevious year to 73,920 million yen. The main positive factors included 15,539 million yen in income before

6TOKYO ELECTRON

income taxes, a 54,615 million yen decrease in trade notes and accounts receivable, and a 14,836 million
yen decrease in inventories. The main negative factors were a 14,319 million yen decrease in accounts
payable and a 12,318 million yen decrease in customer advances.
Cash flow from investing activities was 84,218 million yen, compared to 72,489 million yen in the same
period of the previous fiscal year. This was primarily the result of 15,830 million yen in purchase ofinvestments in subsidiaries resulting in changes in scope of consolidation, 11,811 million yen in payment forpurchase of tangible fixed assets, and a 50,499 million yen increase in short-term investments.
Cash flow from financing activities was 6,473 million yen, mainly as a result of the payment of 4,837 million
yen in dividends. Cash flow from financing activities in the same period of the previous fiscal year was
16,750 million yen.

(3) Qualitative Information on Forecasts for Consolidated Financial Results

Because of uncertain prospects for the global economy, it appears that somewhat more time will be
required for a full-fledged recovery in capital investment by semiconductor manufacturers. As a result,orders in the semiconductor production equipment segment, our main business, are currently weak andsales are expected to fall short of the previous prediction. Accordingly, we have revised the previous
consolidated forecasts for the full fiscal year released on July 30, 2012.

Consolidated Forecast(Billions of yen, Y/Y change)
FY2013(E)Net Sales

501.0-20.9%

Semiconductor Production Equipment
FPD/PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income
Net Income

393.0
19.0
88.5
0.5
12.5
7.0

-17.8%-72.8%
4.3%
8.4%-79.3%-80.9%

Note:

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

Note: The financial forecasts and estimates stated in this financial review are based on certain assumptions judged to bereasonable by the TEL Group in light of information currently available concerning economic conditions in Japan and overseas,fluctuations in foreign exchange rates, and other factors that may have an impact on performance. The company does notpromise that the forecasts or estimates will be accurate.
They are therefore susceptible to the impact of many uncertainties, including market conditions, competition, the launching of
new products (and their success or failure), and global conditions in the semiconductor related industry. Consequently, actual
sales and profits may differ substantially from the projections stated in this financial review.

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TOKYO ELECTRON

Consolidated Balance Sheet
As ofMarch 31, 2012ASSETS
Current assets
Cash and deposit

35,834(Millions of yen)
As of
September 30, 2012

41,219Trade notes and accounts receivable

150,305

94,983

Securities

211,790

245,000

Merchandise and finished goods

101,789

92,464Work in process

35,10427,241

Raw materials and supplies

12,575

13,283

Others61,02637,869Allowance for doubtful accounts(1,376)(847)

607,050

551,215

126,885

127,147

4,703
4,703

15,134
4,719
19,854

48,819(3,848)44,971
176,560
783,61050,559(3,697)46,862
193,864
745,079

Total current assets
Long-term assets
Tangible fixed assets
Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets
Investments and other assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total long-term assets
Total assets

8

TOKYO ELECTRON

Consolidated Balance Sheet
As ofMarch 31, 2012
LIABILITIESCurrent liabilities
Trade notes and accounts payable

46,986(Millions of yen)
As of
September 30, 2012

32,897

Accrued warranty expenses

8,903

7,979

Other allowance

9,077

6,698

Others59,826

40,667

Total current liabilities

124,794

88,24254,64655,559

619

571

4,947

5,034

Long-term liabilities
Accrued pension and severance costs
Other allowance
OthersTotal long-term liabilities
Total liabilities
NET ASSETS
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Translation adjustments
Total accumulated other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

960,213

61,166

185,007

149,40954,961
78,023471,186(9,747)594,42254,961
78,023
472,429(9,670)595,7433,575(51)(11,157)(7,633)
1,156
10,656598,6021,582(22)(13,602)(12,042)
1,251
10,718595,670783,610745,079

TOKYO ELECTRON

Consolidated Statement of Income
Six months ended
September 30, 2011

(Millions of yen)Six months ended
September 30, 2012

Net sales

326,350

266,600

Cost of sales

212,807180,963

Gross profit

113,543

85,637

Selling, general & administrative expenses
Research and development expenses

41,14837,417

Others35,53436,017

Total selling, general & administrative expenses

76,68373,43436,85912,202Others

3,096

3,385

Total non-operating income

3,096

3,385

68
164
233
39,72234
93
127
15,459

12
1,437
171
1,621

283
283

212
938
811
155
2,118
39,225
12,242
26,983325
26,657

63
132
7
203
15,539
7,057
2,194
6,287
196
6,090

Operating income
Non-operating income

Non-operating expenses
Maintenance and operation cost of closed business bases
OthersTotal non-operating expenses
Ordinary income
Unusual or infrequent profit
Gain on sale of fixed assets
Gain on collection written-off claims
OthersTotal unusual or infrequent profit
Unusual or infrequent loss
Loss on sale or disposal of fixed assets
Loss from earthquake damage
Loss from restructuring
Loss on revaluation of investment securities
OthersTotal unusual or infrequent loss
Income before income taxes
Income taxes
Prior year’s corporate tax
Income before minority interests
Minority interests
Net income

10Consolidated Statement of Comprehensive Income

Income before minority interests

TOKYO ELECTRON

Six months ended
September 30, 2011

(Millions of yen)Six months ended
September 30, 2012

26,983

6,287(1,924)(1,993)

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

51

78(5,061)(2,474)(6,935)(4,388)20,048

1,898

19,744

1,681

303

217

(Breakdown)Comprehensive income attributable to owners
Comprehensive income attributable to minority interests

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TOKYO ELECTRON

Consolidated Cash Flow

(Millions of yen)Six months ended
Six months ended
September 30, 2011 September 30, 2012

Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Increase in accrued pension and severance costs (decrease)
Increase in accrued employees' bonuses (decrease)
Increase in accrued warranty expenses (decrease)
Interest and dividend revenue
Decrease in trade notes and accounts receivable (increase)
Decrease in inventories (increase)
Increase in accounts payable (decrease)
Decrease in prepaid consumption tax (increase)
Increase in accrued consumption tax (decrease)
Increase in customer advances (decrease)
OthersSubtotal
Receipts from interest and dividends
Interest paid
Income taxes (paid) refund
Net cash generated by operating activities

39,225
10,523
1,320
(359)
699
(491)
2,446
6,013
(10,198)
10,671(2,610)891(2,700)55,430425(18)(29,126)
26,711

15,53911,789919(1,996)(832)(847)
54,615
14,836(14,319)
10,118(25)(12,318)(2,320)75,156651(20)(1,867)73,9205,000(60,499)(15,175)
94(5,227)(50,499)(11,811)
1,536-(15,830)(1,908)(72,489)(1,097)(1,287)(84,218)(2,844)(13,608)(297)(16,750)(1,308)(4,837)(328)(6,473)(1,416)(63,945)
165,050
101,104(352)(17,125)
158,776
141,651

Cash flow from investing activities
Decrease in time deposits (increase)
Decrease in short-term investments (increase)
Payment for purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Purchase of investments in subsidiaries resulting in change in scope of
consolidation
Payments for transfer of business
OthersNet cash used in investing activities

Cash flow from financing activities
Net increase in short-term borrowings (decrease)
Dividends paid
OthersNet cash generated by financing activities

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

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TOKYO ELECTRON

Segment Information(i) Overview of reportable segments

The reportable segments by the company provide separate financial information pertaining to the various
segments of the company, which is reviewed periodically by the management to evaluate corporate
performance as well as make decisions about the allocation of management resources.
The corporate structure consists of product and service segments based on business units (BUs), and thereportable segments are as follows: Semiconductor Production Equipment, FPD/PV (Flat Panel Display andPhotovoltaic Panel) Production Equipment, and Electronic Components and Computer Networks.
The Semiconductor Production Equipment segment consists of coaters/developers, plasma etch systems,
thermal processing systems, single wafer deposition systems, cleaning systems used in wafer processing,wafer probers used in the wafer testing process and other semiconductor production equipment, and we areengaged in the development, manufacturing, sales and provision of maintenance services, etc. for suchproducts.
The FPD/PV Production Equipment segment consists of coaters/developers, plasma etch/ash systems usedin the manufacturing of flat panel displays, and plasma CVD systems used in the manufacturing of thin film
silicon PV panels, and we are engaged in the development, manufacturing, sales and provision ofmaintenance services, etc. for such products.
The Electronic Components and Computer Networks segment consists of semiconductor products centering
on integrated circuits (IC), other electronic components, computer networks and software, etc., and we areengaged in the design, development, procurement, and sales, etc. for such products.
(ii) Net sales and profit/loss in reportable segments
Six months ended September 30, 2012

(Millions of yen)
Reportable Segment

Semiconductor
Production
Equipment

FPD/PV Production
Equipment

Electronic
Components &Computer Networks

Others

Net sales

214,681

9,230

42,866

5,890

Segment income
or loss

30,782(3,366)677

776

Total Segment

Eliminations

Consolidated Total

Net sales

272,669(6,068)266,600

Segment income
or loss

28,870(13,330)

15,539Notes:
1. The "Others" segment includes all other businesses which are not included in the reported businesssegments, such as the transportation of products, etc. of the Tokyo Electron Group companies, equipment
leasing and insurance, etc.
2. The eliminations of segment income amounting to 13,330 million yen includes corporate expenses
pertaining to the corporate account which are not allocated to any specific reportable segments. The
corporate account expenses are mainly R&D expenses of 10,247 million yen, pertaining to fundamental
research and element research conducted by the company not related to any of the reportable segments.
3. Segment income is adjusted against net income before taxes in consolidated income statement.

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TOKYO ELECTRON

Segment Information(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 income related to negative goodwill: None14