TOKYO ELECTRON

January 30, 2014

Consolidated Financial Review
for the Third Quarter Ended December 31, 2013
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 nine months ended December 31, 2013
Nine months ended
December 31, 2012
December 31, 2013
Net sales (Millions of yen)
358,511
392,900
Operating income (Millions of yen)
5,336
7,244
Ordinary income (Millions of yen)
8,805
9,091
Net income (Millions of yen)(936)
(35,621)
Net income per share (Yen)(5.23)(198.79)
Fully diluted net income per share (Yen)Comprehensive income:Nine months ended December 31, 2013: (25,936) million yen
Nine months ended December 31, 2012:
3,099 million yen(1) Operating results (Cumulative)(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Equity: 556,120 million yen (as of December 31, 2013)
593,032 million yen (as of March 31, 2013)

As ofMarch 31, 2013
775,527
605,127
76.5

As of
December 31, 2013
801,290568,279
69.4

2. Dividends
Year ended
March 31, 2013
25.00
26.00
51.00

Year ending
March 31, 2014
25.00
25.00 (Forecast)
50.00 (Forecast)

2Q-end dividend per share (Yen)
Year-end dividend per share (Yen)Annual dividend per share (Yen)
Note: Revision of dividends forecast : None
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 ended March 2013 is made up of ordinary dividend 16 yen andcommemorative dividend 10 yen.

3. Earnings forecasts for the year ending March 31, 2014
Year ending
March 31, 2014
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Note: Revision of earnings forecast : None

605,000
30,00033,000(22,000)(122.77)

1

TOKYO ELECTRON

4. Others(1) Important changes in subsidiaries during the current period(changes on specific subsidiaries with changes in scope of consolidation): 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: None
2. Other changes of accounting policies besides number 1 above: None
3. Changes in accounting estimates: None
4. Restatement: None
(4) Number of shares outstanding (common stock)
1. Number of shares issued and outstanding (including treasury stock)
As of December 31, 2013:180,610,911 shares

As of March 31, 2013:180,610,911 shares

2. Number of shares of treasury stock
As of December 31, 2013:

1,413,144 shares

As of March 31, 2013:

1,424,203 shares

3. Average number of shares outstanding
Nine months ended December 31, 2013: 179,190,171 shares
Nine months ended December 31, 2012: 179,175,008 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

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

During the first three quarters of the current fiscal year (the nine-month period from April to December 2013),
the global economy including Japan recovered at a moderate pace despite some uncertainty concerning
future developments including the effects of fiscal issues in Europe and the United States.
In the electronics industry, the primary area of the Tokyo Electron (TEL) Group’s business activities,
demand for mobile devices remained brisk. In addition, demand for memory used by data centers grew dueto the proliferation of cloud services and the use of big data.
Under these circumstances, consolidated net sales in the first three quarters of the current fiscal year were392,900 million yen (up 9.6% compared to the same period of the previous year), consolidated operating
income was 7,244 million yen (up 35.8% compared to the same period of the previous year), andconsolidated ordinary income was 9,091 million yen (up 3.3% compared to the same period of the previousyear). In addition, 46,583 million yen of loss on impairment of goodwill and others as a result of review ofbusiness plans for the PV Production Equipment business and TEL NEXX, Inc. and loss on impairment of
fixed assets in conjunction with the facility restructuring plan was reported, resulting in a quarterly net lossof 35,621 million yen (compared to a quarterly net loss of 936 million yen in the same period of the previousyear).

The overview of each business segment is as described below.
From the first quarter of the current fiscal year, revisions have been made to the reportable segments basedon “Accounting Standards for Disclosures about Segments of an Enterprise and Related Information.”
Figures for the corresponding period of the previous fiscal year listed below for comparison have beenadjusted in accordance with the new business segments.

(i) Semiconductor Production Equipment
Demand for DRAM used in mobile devices remained strong, while demand for high-end NAND flash
memory grew. Under these circumstances, in addition to prior increases in capital investment for logic
semiconductors, memory makers are starting to resume investment for the primary purpose of increasing
production, and net sales from external customers in this segment during the first three quarters of thecurrent fiscal year were 297,057 million yen (up 5.1% compared to the same period of the previous fiscal
year).

(ii) FPD (Flat Panel Display) Production Equipment
LCD panel makers continued to make capital investments, particularly in China, and the TEL Group’s sales

3

of FPD production equipment were firm. Given these circumstances, net sales from external customers inthis segment during the first three quarters of the current fiscal year were 18,206 million yen (up 31.5%
compared to the same period of the previous fiscal year).

(iii) PV (Photovoltaic Panel) Production Equipment
The environment in the market for thin-film silicon photovoltaic panels in which the TEL Group is active
remains adverse, and no new orders for PV production equipment were obtained. Given thesecircumstances, net sales from external customers in this segment during the first three quarters of thecurrent fiscal year were 4,485 million yen (compared to net sales of 65 million yen in the same period of theprevious fiscal year). As a result of a review of the business plan for this segment and future cash flows
generated by this business, a loss on impairment of goodwill and fixed assets of 32,635 million yen wasreported.

(iv) Electronic Components and Computer Networks
In the electronic components segment, the industrial equipment business environment is improving, and as
a result, overall sales were solid, particularly sales of general-purpose ICs. In the computer networks
segment, sales of storage devices and network equipment were steady, particularly to existing large
customers. Given these circumstances, net sales from external customers in this segment during the first
three quarters of the current fiscal year were 72,816 million yen (up 18.3% compared to the same period of
the previous year).

(v) Others
Net sales from external customers in this segment during the first three quarters of the current fiscal year
were 334 million yen (up 9.8% compared to the same period of the previous year).

4

(For reference)

Consolidated Operating Results（ Millions of yen）
FY2014

Net Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income(loss)
Ordinary Income(loss)
Net Income(loss)
Note:

1Q

2Q

3Q

Total

103,452
74,944
11,648
15,101
5,666
11,18424,509
4,711
2,123
4,906
2,062
21,426111(9,646)(9,898)(2,976)

151,048
119,828
21,58529,715
7,909
17,67931,550
4,924
6,463
4,486
1,225
25,359146
7,824
10,487
5,452

138,400
102,284
21,58924,474
3,815
14,66021,504
12,764
3,474
8,813
1,196
26,029
76
9,067
8,502
(38,098)

392,900
297,057
54,82369,291
17,391
43,52577,56322,40012,061
18,206
4,485
72,816
334
7,244
9,091
(35,621)

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

Production and Order Performance
1. Production（ Millions of yen）
FY2014
1Q
79,3586,037
2,146
87,542

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Total
Note:

2Q
105,784
4,777
1,212
111,774

3Q
145,9449,508
1,226
156,679

Total
331,087
20,323
4,585
355,996

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

2. Orders Received（ Millions of yen）
FY2014
1Q
97,70814,491
1,185
23,872
111
137,369

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
Others
Total
Note:

2Q
151,322
6,351
1,101
24,735
146
183,657

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

5

3Q
143,495
3,885
1,447
26,52576
175,431

Total
392,526
24,7293,733
75,133
334
496,458

3. Orders Backlog（ Millions of yen）
FY2014
1Q
164,587
25,584
7,618
17,231215,022

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
Others
Total
Note:

2Q
196,081
27,4497,494
16,606247,6323Q
237,292
22,522
7,744
17,102
284,663

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

(2) Description of Financial Conditions(i) Financial Conditions
Current assets at the end of the third quarter of the current consolidated fiscal year were 592,367 million
yen, up 70,866 million yen compared to the end of the previous fiscal year. The major factors influencing
this result were a 38,376 million yen increase in trade notes and accounts receivable, a 57 billion yen
increase in inventories, and a 41,493 million yen decrease in short-term investments included in securities.
Tangible fixed assets fell by 20,143 million yen from the end of the previous consolidated fiscal year to115,554 million yen as a result of impairment of fixed assets in accordance with the facility restructuring
plan.
Intangible fixed assets decreased by 28,814 million yen from the end of the previous consolidated fiscal
year to 31,103 million yen as a result of impairment of goodwill and others in conjunction with review ofbusiness plans for the PV Production Equipment business and TEL NEXX, Inc.
Investments and other assets increased by 3,854 million yen from the end of the previous fiscal year, to62,265 million yen.
As a result, total assets increased by 25,762 million yen compared to the end of the previous fiscal year, to801,290 million yen.
Current liabilities were up 57,154 million yen compared to the end of the previous fiscal year, to 163,824
million yen. The major factors causing the increase were a 15,222 million yen increase in notes payable andaccounts payable and a 28,972 million yen increase in customer advances.
Long-term liabilities were up 5,455 million yen compared to the end of the previous fiscal year, to 69,186
million yen.
Net assets were down 36,847 million yen compared to the end of the previous fiscal year, to 568,279 million
yen. The main factors were a decrease due to a reported quarterly net loss of 35,621 million yen, adecrease due to payment of 4,658 million yen in year-end dividends for the previous fiscal year and 4,479

6

million yen in interim dividends for the current fiscal year, a decrease of 3,190 million yen in retained
earnings due to changes in accounting periods at consolidated subsidiaries, and an increase of 10,136
million yen due to translation adjustments resulting from the depreciation of the yen. The equity ratio was
69.4%.

(ii) Cash Flow
Cash and cash equivalents at the end of the third quarter of the current consolidated fiscal year decreased
by 2,188 million yen compared to the end of the previous fiscal year, to 83,125 million yen. The combined
balance including the 129,379 million yen in time deposits and short-term investments with periods tomaturity or redemption of at least three months that are not included in cash and cash equivalents, was212,504 million yen, down 27,624 million yen from the end of the previous fiscal year. The overall situation
regarding cash flow during the first three quarters of the current fiscal year is as described below.
Cash flow from operating activities decreased by 83,743 million yen compared to the same period of theprevious fiscal year to negative 12,110 million yen. The main positive factors included a 46,583 million yen
loss on impairment, a 26,289 million yen increase in customer advances, 18,643 million yen in depreciation
and amortization, and a 12,504 million yen increase in trade notes and accounts payable. The main
negative factors were a loss before income taxes for the current quarter of 37,542 million yen, a 53,371
million yen increase in inventories, and a 34,764 million yen increase in trade notes and accounts
receivable.
Cash flow from investing activities was positive 16,776 million yen, compared to negative 150,415 million
yen in the same period of the previous financial year. The primary positive factor was a 25,435 million yen
decrease in time deposits and short-term investments. The primary negative factor was 6,969 million yen in
payments for purchase of tangible fixed assets.
Cash flow from financing activities was positive 251 million yen, compared to negative 11,382 million yen in
the same period of the previous fiscal year. This was primarily the result of a 7,933 million yen increase in
short term loans, a 2,000 million yen increase in long-term loans, and payment of 9,138 million yen in
dividends.

7

Consolidated Cash Flow (Summary)Nine months ended
December 31, 2012

（ Millions of yen）
Nine months ended
December 31, 2013

71,632
9,349
18,426
6
75,982
6,857(20,271)(18,720)(150,415)(80,000)(55,068)(15,346)(11,382)(3,268)(12,110)(37,542)
18,643
46,583(34,764)(53,371)
12,50435,836
16,77625,435(8,659)251(5,899)Cash flow from operating activities
Income before income taxes (loss)
Depreciation and amortization
Loss on impairment
Decrease in trade notes and accounts receivable (increase)
Decrease in inventories (increase)
Increase in accounts payable (decrease)
OthersCash flow from investing activities
Decrease in time deposits (increase)
Purchase of investments in subsidiaries resulting in change in scope of consolidation
Others (purchase of fixed assets)
Cash flow from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents (decrease)(93,433)(982)

Cash and cash equivalents at beginning of period

158,776

85,313-(1,206)

Cash and cash equivalents at end of period

65,342

83,125

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

234,191

212,504

Increase in cash and cash equivalents from changes in accounting periods at consolidated
subsidiaries (decrease)(3) Description of Financial Estimates Information such as Consolidated Performance Forecasts

For the current fiscal year ending March 31, 2014, the consolidated financial forecast for the full year was
revised as follows in “Announcement on Consolidated Financial Forecast Revision and Extraordinary Loss”
published on December 18, 2013.

Consolidated Forecast(Billions of yen, Y/Y change)
FY2014(E)Net Sales

605.0

21.7%

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income
Ordinary Income
Net Income(loss)

475.0
26.0
7.0
96.5
0.5
30.0
33.0
(22.0)

21.2%
29.5%
14.0%
11.6%
139.1%
97.6%
-

Note:

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

Note: The financial forecasts and estimates stated in this announcement are based on certain assumptions judged to bereasonable by the Company in light of information currently available concerning economic conditions in Japan and overseas,8

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 announcement.

9

TOKYO ELECTRON

Consolidated Balance Sheet
As ofMarch 31, 2013ASSETS
Current assets
Cash and deposit(Millions of yen)
As ofDecember 31, 2013

49,63263,500Trade notes and accounts receivable

100,500

138,877

Securities

190,497

149,004

Merchandise and finished goods

87,397

130,688

Work in process

33,402

46,148Raw materials and supplies

14,89815,861Others46,351

48,843

Allowance for doubtful accounts
Total current assets(1,179)(557)

521,501

592,367

135,697

115,554

38,372
21,54559,918

9,923
21,18031,10360,522(2,112)58,410254,026
775,527

64,228(1,963)62,265208,923
801,290

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

10

TOKYO ELECTRON

Consolidated Balance Sheet
As ofMarch 31, 2013
LIABILITIESCurrent liabilities
Trade notes and accounts payable(Millions of yen)
As ofDecember 31, 2013

36,261

51,483

Short-term borrowings

3,756

11,994

Accrued warranty expenses

8,344

9,369

Other allowance

6,908

3,592

Others51,39987,385

Total current liabilities

106,670

163,824

56,64359,184

580

580

Long-term liabilities
Accrued pension and severance costs
Other allowance
Others

6,505

9,421

Total long-term liabilities

63,73069,186

170,400

233,01054,961
78,023467,920(9,588)591,315

54,961
78,023419,966(9,507)543,4434,214(14)(2,483)
1,716
1,374
10,720605,127

4,810
213
7,653
12,677
1,572
10,587568,279

775,527801,290

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

11

TOKYO ELECTRON

Consolidated Statement of Income(Millions of yen)
Nine months ended
December 31, 2013

Nine months ended
December 31, 2012

Net sales

358,511

392,900

Cost of sales

244,622

262,520Gross profit

113,889

130,380

54,85957,394

Selling, general & administrative expenses
Research and development expenses
Others53,69265,741

Total selling, general & administrative expenses

108,552

123,135

5,336

7,244

Interest income

1,022

1,009

Dividend revenue

245

1,791

1,263

1,117

Operating income (loss)
Non-operating income

Revenue from grants
Others

1,415

851

Total non-operating income

3,947

4,770

227
251
478
8,805

2,619
304
2,923
9,091

Non-operating expenses
Foreign currency translation loss
OthersTotal non-operating expenses
Ordinary income (loss)
Unusual or infrequent profit
Gain on sale of fixed assets
OthersTotal unusual or infrequent profit
Unusual or infrequent loss
Loss on impairment
Loss on liquidation of subsidiaries and affiliates
Reorganization costs
OthersTotal unusual or infrequent loss
Income (loss) before income taxes
Income taxes
Prior year’s corporate tax
Income (loss) before minority interests
Minority interests
Net income (loss)

12

930
930

88
18
107

6
133
132
113
386
9,349
7,916
2,194
(760)
175
(936)

46,583
158
46,741(37,542)(2,032)(35,510)
111(35,621)

Consolidated Statement of Comprehensive Income

TOKYO ELECTRON

Nine months ended
December 31, 2012

(Millions of yen)
Nine months ended
December 31, 2013

(760)

(35,510)

Valuation difference on available-for-sale securities

(643)

608

Deferred gains or losses on hedges

(34)

197

Translation adjustments

4,539

8,768

Total other comprehensive income

3,860

9,573

3,099

(25,936)

2,888(26,116)

211

180

Income (loss) before minority interests
Other comprehensive income

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

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TOKYO ELECTRON

Note: Loss on impairment
The Tokyo Electron Group groups its business assets into small units that generate independent cash flow. For thosebusiness sites we have decided to restructure or handle otherwise, we are grouping assets separately based on eachindividual business.
During the first three quarters of the current fiscal year (the nine-month period from April 1, 2013 to December 31, 2013),
we are posting a loss on impairment of the following asset groups.
(i)Loss on impairment of goodwill and long-term assets for consolidated subsidiary TEL Solar Holding AG
Location

PurposeAccounting treatment

Loss on impairment(Millions of yen)

Trubbach, St. Gallen,
Switzerland

Plant

Goodwil, machinery,equipment, etc.

32,635Regarding the goodwill posted at the time we acquired TEL Solar Holding AG, a consolidated subsidiary in the PV
production equipment business, given that sales have been trending below initial plans due to significant deterioration of
the business environment, we implemented an impairment test. And as a result, we wrote down this goodwill to arecoverable value and are posting this reduced value as an unusual or infrequent loss. The recoverable value was gauged
based on value in use. We set this value at zero as we cannot foresee the forecast of future cash flow.
We also decreased the book value of the machinery, equipment, etc. possessed by TEL Solar Holding AG and its
consolidated subsidiary to a recoverable value and posting the reduced value as an unusual or infrequent loss. The
recoverable value was gauged in accordance with the net selling price. However, given that we believe it will be difficult totransfer or sell this machinery, equipment, etc. to another party, we value the net selling price at zero.

(ii) Loss on impairment of goodwill for consolidated subsidiary TEL NEXX, Inc.
Location

PurposeAccounting treatment

Billerica, Massachusetts,
U. S. A.

Plant

Goodwill, etc.

Loss on impairment(Millions of yen)

5,009

Regarding the goodwill and other items posted at the time we acquired the consolidated subsidiary TEL NEXX, Inc., in thesemiconductor production equipment (SPE) business, given that sales have been trending below initial plans, we
implemented an impairment test. And as a result, we wrote down this goodwill to a recoverable value and are posting thiswrite-down as an unusual or infrequent loss. We note that the recoverable book value was gauged in accordance withvalue in use and applying a 14.0% discount to future cash flow.

14

TOKYO ELECTRON(iii) Loss on impairment of long-term assets in line with plans to restructure business locations

Loss on impairment(Millions of yen)

Location

PurposeAccounting treatment

Tsukuba, Ibaraki(Technology Center Tsukuba)

R&D center

Buildings and structures,
machinery, equipment,
etc.

4,403

Sendai, Miyagi(Technology Center Sendai)R&D center

Buildings and structures,land, etc.

3,345

Buildings and structures,
etc.

316

Others‐There is no expectation for future use of the aforementioned asset groups given the decision by management
to restructure the facility or handle otherwise, we reduced book value to a recoverable value and are posting
the reduced amount as an unusual or infrequent loss.
We note that the recoverable value is gauged in accordance with the net selling price.
Values of land, buildings and structures were calculated based on the market value, which was based on arational assessment by a third party.
The value of machinery, equipment and others excluding land, buildings and structures, we value the net
selling price at zero given the difficulty of transfer or sale to another party.

(iv) Others
In the others grouping, we are posting 873 million yen from loss on impairment as an unusual or infrequent
loss.

15

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 performanceas 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(Flat Panel Display) Production
Equipment, Photovoltaic Panel (PV) 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 are engaged
in the development, manufacturing, sales and provision of maintenance services, etc. for such products.
The FPD Production Equipment segment consists of coaters/developers, plasma etch/ash systems used in the
manufacturing of flat panel displays, and we are engaged in the development, manufacturing, sales andprovision of maintenance services, etc. for such products.
The PV Production Equipment segment consists of photovoltaic panel production equipment used in the
manufacturing of thin film silicon photovoltaic panels, and we are engaged in the development, manufacturing,sales and provision of maintenance 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 are engaged
in the design, development, procurement, and sales, etc. for such products.
(ii) Net sales and income (loss) in reportable segments
Nine months ended December 31, 2013
(Millions of yen)
Reportable Segments
Others
Semiconductor
Production
Equipment

FPD Production
Equipment

PV Production
Equipment

Total

Electronic
Components &Computer Networks

Net sales

297,086

18,206

4,485

73,556

8,891

402,226

Segment
income (loss)

37,950294(42,005)

201

1,051

(2,508)Eliminations

Consolidated Total

Net sales(9,325)392,900

Segment
income (loss)(35,033)(37,542)

Notes:
1.
The "Others" segment is all other businesses which are not included in the reported business segments,
such as the transportation of products, facility management and insurance, etc. of the Tokyo ElectronGroup companies.
2.

The eliminations of segment income (loss) amounting to 35,033 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 14,741 million yen, pertaining to fundamental
research and element research conducted by the company not related to any of the reportable segments,
and 8,938 million yen in loss on impairment relating to buildings and structures that became idle as aresult of facility restructuring.

3.

Segment income (loss) is adjusted against loss before income taxes in consolidated statement of income.

16

TOKYO ELECTRON

Segment Information(iii)

Items Related to Changes in Reportable Segments
With the acquisition of TEL Solar Holding AG as a consolidated subsidiary, from the first quarter of the current fiscal year, thereportable segment has been divided from FPD/PV Production Equipment to FPD Production Equipment, and PV Production
Equipment.

(iv)

Impairment losses on fixed assets and goodwill, etc. in reportable segments
Significant impairment losses related to fixed assets:
The amounts of loss on impairment for each segment during the first three quarters of the current fiscal year are as follows.
For details, refer to the Consolidated Statement of Income.
(Millions of yen)
Reportable Segments
Semiconductor
Production
Equipment

Loss on impairment

5,009

Eliminations

Loss on impairment

FPD Production
Equipment

8,938

PV Production
Equipment-

32,635

Electronic
Components &Computer
Networks

Others

-

Total

-

37,644

Consolidated
Total
46,583

Note: Adjustment amounts are related primarily to buildings and structures that became idle as a result of facility
restructuring.
Significant changes in goodwill amount:
During the third quarter of the current consolidated fiscal year, goodwill for the semiconductor production equipment, as aresult of recording a loss on impairment, decreased 4,976 million yen compared to the end of the previous fiscal year. For the
PV production equipment segment, the goodwill amount increased due to the allocation of the goodwill amount to theacquisition value of TEL Solar Holding AG - provisionally calculated during the previous fiscal year - being finalized during thethird quarter of the current consolidated fiscal year. However, this amount was recorded as a loss on impairment, resulting ina decrease of 23,396 million yen compared to the end of the previous fiscal year.
Significant income related to negative goodwill: None17