TOKYO ELECTRON ANNUAL REPORT 2018

PAGE20CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Review of Operations
and Business Outlook

Interview with the CEO

Innovation Drives the Evolutionof Semiconductors

Financial Section
Investor Information

Corporate Governance

Financial Review
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Changes in Net Assets
Consolidated Subsidiaries
Consolidated Statements of Cash Flows
Independent Auditor’s Report
Notes to Consolidated Financial Statements

Investor Information

Consolidated Balance Sheets
Tokyo Electron Limited and Subsidiaries
As of March 31, 2018 and 2017

Thousands ofU.S. dollars

Millions of yen

ASSETS

2018

2017

LIABILITIES AND NET ASSETS

2018

Current assets:

Thousands of
U.S. dollars

Millions of yen

2018

2017

2018

¥ 108,607¥ 79,217$ 1,022,284

Current liabilities:

Cash and cash equivalents

¥ 257,877¥164,366$ 2,427,314

Short-term investments

116,000

151,000

1,091,867

Income taxes payable

66,046

31,069621,671

Trade notes and accounts receivable

159,570

133,858

1,501,982

Accrued employees’ bonuses34,467

21,853

324,429

(59)

(63)

(563)

Customer advances

100,208

67,976943,231

Inventories

344,071

236,256

3,238,620

Other current liabilities

59,12247,653556,501

Deferred income taxes

50,50536,892475,385

368,452

247,7703,468,118

Other current assets

69,13753,628650,768   Total current assets

997,102775,938

9,385,375

Net liability for defined benefits

59,68456,200561,784

Other liabilities

9,058

7,476

85,267   Total non-current liabilities

68,742

63,677647,052  Total liabilities

437,195

311,447

4,115,171

54,961

54,961

517,330

Allowance for doubtful accounts

Property, plant and equipment:

Trade notes and accounts payable   Total current liabilities
Non-current liabilities:

Land

28,03024,855

263,843

Buildings

159,474

145,901

1,501,081

Machinery and equipment

138,932

132,043

1,307,725

Construction in progress

11,0606,026

104,108

337,498

308,826

3,176,759

Less: Accumulated depreciation

211,546

208,385

1,991,209  Common stock   Authorized: 300,000,000 shares
Issued: 165,210,911 and 165,210,911 shares
as of March 31, 2018 and 2017, respectively   Net property, plant and equipment

125,952

100,441

1,185,550  Capital surplus

78,011

78,023734,290  Retained earnings

625,390

503,325

5,886,581(7,518)(7,766)(70,771)

17,134

10,788161,278   Total property, plant and equipment

Net assets:
Shareholders’ equity   Treasury stock, at cost   1,097,342 and 1,135,104 shares
as of March 31, 2018 and 2017, respectively
Accumulated other comprehensive income

Investments and other assets:
Investment securities

33,12824,119311,827   Net unrealized gains on investment securities

Deferred income taxes

17,846

19,128167,979   Net deferred gains on hedging instruments

278

59

2,623

—

4,818—   Foreign currency translation adjustments

5,507

5,789

51,843

Intangible assets

15,882

15,401

149,492   Accumulated remeasurements of defined benefit plans(6,618)(2,086)(62,293)

Other assets

20,215

19,416190,282

Share subscription rights

4,363

2,620

41,068

Allowance for doubtful accounts

(1,422)(1,816)(13,386)

Non-controlling interests

—284—   Total investments and other assets

85,65081,067806,196

771,509645,999

7,261,950¥1,208,705¥957,447$11,377,121¥1,208,705¥957,447$11,377,121

Net asset for defined benefits

Total assets
See accompanying Notes to Consolidated Financial Statements.

   Total net assets
Total liabilities and net assetsTOKYO ELECTRON ANNUAL REPORT 2018

PAGE

21

CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Review of Operations
and Business Outlook

Interview with the CEO

Innovation Drives the Evolutionof Semiconductors

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Consolidated Subsidiaries

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2018 and 2017

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2018 and 2017

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

2018

2017

2018

¥1,130,728
655,695
475,032
193,860
281,172¥ 799,719
477,427
322,291
166,594
155,697$10,643,151
6,171,832
4,471,318
1,824,741
2,646,577

859

1,032

8,088

571
334
(2,897)77—342300(791)
55
6

5,382
3,150(27,274)
731—

Other income (expenses):
Interest and dividend income
Share of profit of associates accounted for using the equity method
Insurance dividend income
Foreign exchange loss, net
Gain on sales of property, plant and equipment
Gain on sales of investment securities Loss on impairment of property, plant and equipment,goodwill and other assets
Loss on disaster
Loss on revision of retirement benefit plan
Other, net
Income before income taxes

(925)

(362)

(8,714)—(3,154)(795)
275,242(7,521)—
357
149,116—(29,690)(7,487)2,590,762

Income taxes:
Current
DeferredNet income

83,434(12,591)
204,399

40,633(6,765)
115,248785,340(118,522)
1,923,944

28¥ 204,371

39¥ 115,208

269$ 1,923,674

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

Yen

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

¥ 1,245.48
1,241.22
4,674.49
624.00¥Investor Information

Thousands ofU.S. dollars

Millions of yen

U.S. dollars

702.26700.35
3,919.50
352.00

$

11.72
11.68
44.00
5.87

Financial Section
Investor Information

Corporate GovernanceThousands ofU.S. dollars

Millions of yen

Net income
Other comprehensive income (loss):
Net unrealized gains on investment securitiesNet deferred gains on hedging instruments
Foreign currency translation adjustments
Remeasurements of defined benefit plans Share of other comprehensive income of associates accounted
for using the equity method
Total other comprehensive income (loss)
Comprehensive income 
Total comprehensive income attributable to:
Owners of parent
Non-controlling interests
See accompanying Notes to Consolidated Financial Statements.

2018

2017

2018

¥204,399¥115,248$1,923,944

6,337
198
(242)
(4,494)2,875
10(933)
2,682

59,6571,869(2,286)(42,308)

(46)
1,752
206,152

114
4,750
119,998(436)
16,494
1,940,439

206,122
29

119,94256

1,940,162
276

TOKYO ELECTRON ANNUAL REPORT 2018

PAGE

22CONTENTS

Business Overview
and Financial Highlights

To Our Stakeholders
ステークホルダーの皆さまへ

Review of Operations
and Business Outlook

Interview with the CEO

Innovation Drives the Evolutionof Semiconductors

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial StatementsIndependent Auditor’s Report
Consolidated Subsidiaries

Consolidated Statements of Changes in Net Assets

Consolidated Statements of Cash Flows

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2018 and 2017

Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2018 and 2017

Financial Section
Investor Information

Corporate Governance

Investor Information

Thousands ofU.S. dollars

Millions of yen
Shareholders’ equity

Millions of yen

Accumulated other comprehensive income
Noncontrollinginterests

CapitalsurplusRetainedearnings¥54,961¥78,023¥427,618

Cash dividends——(39,371)—Net income attributable toowners of parent——

115,208—

Repurchase of treasurystocks

—

—

—

(6)

—

—

—

——

—

(6)

Disposal of treasury stocks

——

(130)

290

—

—

—

—

—

—

159

—

2,886

9(953)

2,791

979

56

5,769

¥(7,766) ¥10,788¥ 59¥5,789¥(2,086)¥2,620¥284¥645,999

Balance as of March 31, 2016

Other, net

Treasurystock

Net unrealized Net deferred
Foreign
Accumulated
gains ongains oncurrency
remeasurements
Shareinvestment
hedgingtranslation of defined benefit subscription
securities
instruments adjustments
plansrights

Commonstock¥(8,051) ¥ 7,903

Total
net assets¥ 50¥6,743¥(4,878)¥1,641¥229¥564,239

—

—

—

—

—

—

(39,371)

—

—

—

—

—

—

115,208———¥54,961¥78,023¥503,325

Cash dividends——(82,203)

—

—

—

—

—

—

—

(82,203)

Net income attributable toowners of parent——

204,371

—

—

—

—

—

—

—

204,371

Repurchase of treasury
stocks

—

—

—

(16)

—

—

—

—

—

—

(16)

Disposal of treasury stocks——(102)

264

—

—

—

—

—

—

161

Change in equity of parent arising from transactions
with non-controllingshareholders—(12)————————(12)

Other, net—

—

—

—

6,345

219(281)(4,531)

1,742

(284)

3,209

¥54,961¥78,011¥625,390¥(7,518) ¥17,134¥278¥5,507¥(6,618)¥4,363¥ —¥771,509

Balance as of March 31, 2017

Balance as of March 31, 2018

Thousands of U.S. dollars
Shareholders’ equity

Commonstock

Balance as of March 31, 2017

Capitalsurplus

Accumulated other comprehensive income

Retainedearnings

Treasurystock

Net unrealized Net deferred
Foreign
Accumulated
gains ongains on
currency
remeasurements
Shareinvestment
hedgingtranslation of defined benefit subscription
securities
instruments adjustments
plansrightsTotal
net assets$ 557$54,493$(19,639)$24,664$2,682$6,080,571

Cash dividends——(773,754)

—

—

—

—

—

—

—

(773,754)

Net income attributable toowners of parent—— 1,923,674

—

—

—

—

—

—

—

1,923,674

Repurchase of treasury
stocks

—

—

—

(154)

—

—

—

—

—

—

(154)

Disposal of treasury stocks

—

—

(969)

2,486

—

—

—

—

—

—

1,517

Change in equity of parent arising from transactions
with non-controllingshareholders

—

(114)

—

—

—

—

—

—

—

—

(114)

Other, net—

—

—

—

59,725

2,065(2,649)(42,654)

16,403(2,682)30,209$517,330 $734,290 $5,886,581 $(70,771) $161,278$2,623$51,843$(62,293)$41,068$

Balance as of March 31, 2018

$517,330 $734,404 $4,737,629 $(73,104) $101,552

Noncontrollinginterests

See accompanying Notes to Consolidated Financial Statements.

—$7,261,950

Cash flows from operating activities:
Income before income taxesDepreciation and amortization Loss on impairment of property, plant and equipment,
goodwill and other assets
Amortization of goodwill
Increase in accrued employees’ bonuses
Increase in accrued directors' bonuses
Increase (decrease) in accrued warranty expenses
Interest and dividend income
Increase in trade notes and accounts receivable
Increase in inventories
Increase in trade notes and accounts payable
Increase in prepaid consumption tax
Increase in accrued consumption tax
Increase in customer advances
Other, net
Subtotal
Receipts from interest and dividends
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 purchases of property, plant and equipment
Payment for acquisition of intangible assets
Other, netNet cash used in investing activities
Cash flows from financing activities:
Payment for purchases of treasury stock
Dividends paid
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalentsCash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See accompanying Notes to Consolidated Financial Statements.

2018

2017

2018

¥275,242
20,619¥149,116
17,872$2,590,762
194,088925
600
12,710
2,573
2,769
(859)
(25,971)(109,846)
28,535(13,896)
1,297
31,684
8,851
235,238
1,115(49,771)
186,582362
631
10,112623(220)(1,032)(17,411)(44,102)
24,053(12,350)359
34,444
5,843
168,304
1,266(32,622)
136,948

8,714
5,652
119,642
24,227
26,069(8,088)(244,458)(1,033,948)
268,594(130,807)
12,208298,239
83,3182,214,216
10,495(468,480)
1,756,231(131,000)
166,000(41,750)(4,431)(651)(11,833)(202,200)
192,232(17,557)(1,116)(252)(28,893)(1,233,057)
1,562,500(392,982)(41,715)(6,128)(111,383)(16)(82,203)(329)(82,549)
1,312
93,511
164,366¥257,877(6)(39,371)(2)(39,380)53
68,72895,638¥164,366(154)(773,754)(3,103)(777,012)
12,350880,187
1,547,127$2,427,314