This represents a translation, for reference and convenience purpose, of the original document issued in Japanese. In the event of any
discrepancies between the Japanese and English versions, the former shall prevail.

Summary of financial results meetingfor the three months ended September 30, 2008
Tokyo, November 10, 2008
Note: This memo is posted for reference purposes for the convenience of those who
were unable to attend the meeting and is not a verbatim record of all statements made at
the meeting. Please be aware that it has been compiled in a concise form at the judgmentof the Company’s Corporate Communications Group. Please also refer to the cautionary
notes on the final page.
Note:
1Q: April 1 to June 30, 2008
2Q: July 1 to September 30, 2008
3Q: October 1 to December 31, 2008

[Presentation by Mr. Ema, CFO: Performance for the 2Q]
Business Performance
Sales:

Yen 128,372 million(+27.1% year on year )Operating Income:Yen 20,610 million(-23.2%)

Ordinary Income:Yen 27,511 million(-2.2%)Net Income:Yen 19,135 million(-9.0%)

Financial position
Total Assets:

Yen 651,744 million

Net Assets:

Yen 404,594 million

Owners' Equity Ratio:

61.5%

Performance for the quarter
・ The picture in the quarterly report (“the Report”) is a new transnasal endoscope, adevice to examine the stomach by being inserted nasally (released in August 2008 in
Japan).
・ The sales growth rates by product are shown on page 13 of the Report.
・ My talk will focus on the profits and losses and the segments' second quarter (2Q)
results.
・ Please note that the year-on year figures do not include those for Pentax for the first halfof last year because the Pentax sectors were not consolidated during such period.
・ We are going to initially examine Pentax's actual year-on-year results, before
proceeding to the impact of foreign exchange. We presently have around 100
consolidated subsidiaries, and since most are operating overseas, we need to translate
local currencies. By comparing the translated rates of the previous and current years,

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we are going to explain details of our actual performance by examining the extent of theactual effects of the exchange rates.
・ In the 2Q, sales increased by 27.1%, operating profit decreased by 23.2%, and net
income decreased by 9.0%. Of the sales increase, 33.0 billion yen was for Pentax. The
difference is for the former HOYA; 5.673 billion yen sales decrease, with the breakdown
given later.
・ Of the 5.673 billion yen sales decrease, 2.683 billion yen was due to the effect of
exchange rates.
・ We posted a 6.239 billion yen decrease in operating profit, of which 2.458 billion yen
was for the Pentax sectors, due mainly to the camera business. The remaining portionof this decrease was for the former HOYA, a 3.781 billion yen decrease, 1.876 billion
yen of which was attributable to the effect of exchange rates, which represents a
decrease of approximately 1.9 billion yen on a business activity basis. Divisionally, weposted a 4.1 billion yen decrease in the Electro-Optics Division (EO), an increase of
approximately 0.4 billion yen in the Vision Care Division (VC), and a 1.0 billion yen
increase in the Health Care Division (HC). As for operating profits, there was a 3.5 billion
yen decrease in EO, a 1.4 billion yen increase in VC, and a 0.1 billion yen decrease in
HC.
・ The Pentax sectors showed a drop in income of 11.7 billion yen (down 26%) on a
year-on-year basis in the 2Q compared with the equivalent for the previous year. In
terms of operating profit and loss, they posted a deficit of 2.4 billion yen, down 4.6 billion
yen on a year-on-year basis. As I repeated, the quarterly report and the supplementarymaterial do not include Pentax's figures for the previous first half.
・ Pentax's operating profit and loss include goodwill amortization and the revaluation ofpatent rights upon acquisition. The expenses after the acquisition increased byapproximately 1.2 billion yen from the ordinary level during the quarter, while the deficit
in this 2Q amounted to 2.4 billion yen, half of which was the amortization of
goodwill/patent rights.
・ The factor of 212 million yen of equity in the losses of associated companies innonoperating expenses does not indicate that NH Techno Glass was in the red. The
profit-and-loss account of NH Techno only went into the red in September, which was
due to the collective and simultaneous inclusion of all the past expenses incurred for themerger. Due to the sale of 21.5% of our NH Techno shares to the Carlyle Group in the
1Q, (editor's note： For details please refer to the News Release as of May 9 in the
HOYA website http://www.hoya.co.jp/english/news/latest/), our equity has declined to28.5% and the equity in earnings of associated companies in July-August lowered, but
in September, as a result of a stock price equivalent exchange in the merger of a Carlyle
Group subsidiary SPC and NH Techno, the equity increased to 47.4%. This increase is
not due to the cash repurchase of shares, but due to an equivalent exchange with thecorporate value computed upon the merger. It just happened that the merger with SPC
took place in a negative month and the equity increased, leading to an investment loss2

of 200 million yen in the 2Q. Again, it is not the fact that NH Techno was in the red during
the quarter but that the equity changed as a result of the monthly profit-and-loss.
・ We accrued 4.4 billion yen of exchange gain, which brought a net increase of 5.1 billion
yen, since we lost 680 million yen from exchange in the previous 2Q. Ordinary income
decreased by 608 million yen.
・ Proceeds from the transfer of business under extraordinary profit and loss were due to a
profit of 883 million yen generated through the sale of Pentax's printer business.
・ As for additional retirement benefits paid to employees, we implemented a personnel
reform in five domestic and two overseas offices for the purpose of structural change.
We also concluded the sale of Pentax's land after reviewing their utilization andreevaluated the buildings, resulting in an impairment loss of 1.370 billion yen due to adecrease in value. After all, minus income taxes and minority interests, the net income
amounted to 19.135 billion yen (a 9.0% decrease year-on-year).
・ The characteristic points in the cash flow statement (page 7 of the Report) are as
follows: Income before income taxes and minority interests of 25.0 billion yen anddepreciation of 12.4 billion yen are the main accounts of income from operating activities.
We made a tax payment on approximately 21.0 billion yen in the 1Q gained from thetransfer of Pentax, achieved due to the merger, the calculation of which changed
significantly due to the merger of HOYA Corporation and Pentax at the end of March,
2008. A tax loss was also carried forward for the interim tax of the previous year, while
an income tax refund of 7.387 billion yen was made and reported in the 2Q. Due tocapital investments of approximately 12.0 billion yen and repayments of commercial
papers, etc., the ending balance of cash and cash equivalents stood at 189.473 billion
yen.
・ As for the segment information (page 8 of the Report), though the Pentax figures for
assets and the final number of employees at the end of the previous 2Q wereconsolidated, the profit-and-loss accounts, not yet consolidated, are shown as “－.” The
total for consolidated operating profit in the 2Q decreased by 6.239 billion yen on a
year-on-year basis. The breakdown is as follows: a 4.741 billion yen decrease in EO,
and a 2.458 billion yen loss in Pentax. For 4.741 million, the page 13 gives the sales
growth rates by product, the year-on-year increase/decrease rates for the 1Q, 2Q, andthe interim, as well as the increase/decrease rates for the 1Q and 2Q compared with theprevious quarters.
・ Mask blanks posted a drop in income of approximately 13% in both the 1Q and 2Q on a
year-on-year basis. They were affected by the semiconductor market conditions, theeffect of which was further accentuated due to our large market share of 86%. This sales
decrease led to EO's profit decline. In addition, the media in the MD business in the 2Q
fell slightly below the figure for the same term the previous year, despite a 5.4%
year-on-year increase in this 1Q, due to the poor 1Q performance last year. Comparedwith the previous period, in the 1Q we incurred a 9.1% drop in income, alongside a 7.3%
increase from 1Q in the 2Q, representing little change. The profit fell in the 2Q, but with3

the 1Q increase, the operating profit in the first half was offset.
・ With regard to optical lenses, trends show plastic is increasingly being adopted incamera lenses for cellular phones.
・ The breakdown of Pentax is: the Imaging Systems (IS) business treating single-lensreflex (SLR) cameras, compact digital cameras, and lens modules, which reported adrop in sales and a loss. The Life Care (LC) business treating medical instruments(endoscopes and artificial bones) however, achieved a 13% increase in sales, androughly doubled the operating profit on a year-on-year basis. LC sales are continuing to
improve smoothly, while image-related IS products, such as digital cameras, have
conversely experienced a considerable drop, namely 37% decrease in sales on a
year-on-year basis, thus showing a deficit.
・ The interim dividend is 30 yen per share. With the net income per share of 93.18 yen,
the dividend payout ratio is approximately 32.2%. We decided to maintain the sameamount of dividends per share as in the same period last year.

【Explanation of general state of company performance by Mr. Hamada, COO】
Mask blanks and Photmasks for LSI production
・ Sales have dropped on a year-on-year basis, although the market share itself has been
maintained at virtually the same level. Please understand that the decrease in ourblanks sales, with a large share of 86%, resulted from the overall deterioration in thesemiconductor market, lowered unit prices, and diminished demand.
・ As this business will continue to be important to us, we are going to keep making therequired investments in it as a profitable cash cow. However, since we can no longer
count on strong growth in this segment, we should move when we consider it necessary.
・ Masks for semiconductors are also declining compared with the same term last year,
and as with blanks, are directly affected by the semiconductor market conditions. This
does not indicate the fact that the industry trend itself equals ours, for our market sharein them is less than 10%, but rather the fact that they are worsening.
・ Broadly divided into memories and logics, the memory market itself is worsening
considerably, while DRAMs have also experienced a decrease of 30 to 40% in the pastfew months. Moreover, the NAND market is also rapidly worsening, with market prices
lowering to half or less. Logics do not appear to be dropping very much.
・ As for overall trends in semiconductor development, the number of masks has been
increasing, in terms of both type and production, with chip manufacturers managing tocontinue investing in miniaturization, while mid to low-end products seem to be declining
overall. Macroscopically, with reference to the so-called Long Tail effect, the period
seems to be extended slightly instead of a new generation emerging and replacing theold in a flash, as was previously the case. We do not expect the numbers of masks todecrease significantly in terms of type and production from a macroscopic perspective
because conventional products will survive.

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Large Photomasks for liquid crystal display (LCD)・ There has been a slight increase in sales from the same term last year, which is partly
because our share fell over the past 4 to 5 years. Now that we have finally reached thebottom and signs of recovery are emerging, we should aggressively strive to grab anincreased market share. Still, with the economy in its present state, where TV sales
appear to be in considerable decline, we cannot necessarily be optimistic about the
future in October-December and are working to brace our energies. As you probably
have learned from the quantitative data you may have obtained, retail (POS) level sales
in TVs and digital cameras, the leading items, have been fluctuating wildly over the pastfew months. I have no time to await figures from a statistics company and hence contact
local companies almost daily to check the latest from the Europe and U.S. markets.
Under such circumstances, the single-month sales of the biggest mass merchandiser inFrance, they say, for example, decreased by 40% in October on a year-on-year basis,
and as seen in the example of U.S. Circuit City, they are experiencing a 20 to 30%
decline year-on-year all-round, hence we anticipate being significantly affected bymarket conditions as a manufacturer of parts and materials.
Glass memory disks (MD) for HDD
・ Partly because of having lagged behind others in launching new technology in the firsthalf of the previous year, this segment resulted in a year-on-year increase in this 1Q,
and a decrease in the 2Q respectively. Half the factor behind this decrease isattributable to exchange rates; with the majority of media (glass plates coated withmagnetic film) expressed on a dollar basis, and the larger portion of the substrates(polished glass plates) on the dollar, with some yen. The remaining half of the decrease
was due to the decline in unit prices. In total, sales in this division decreased between 10
and 20%.
・ As for media, I would like to refrain from comment today because the circumstances are
moving as per currently reported (editor's note: For details please refer to the News
Release as of September 30 "SDK and HOYA to Consolidate HD Media Operations" on
the

HOYA

website:http://www.hoya.co.jp/english/news/latest/).

Comments

onsubstrates should also be avoided since they relate to the same issue.
・ In macroscopic terms, the SSD, a product using a NAND-type flash memory, has
emerged as a competitor to the HDD, which uses a glass substrate. However, it isdifficult to predict what this ratio will be in three years and the extent to which HDDs will
be replaced by NANDs, with each industry having its own speculations, plans, anddesires. Some people say 50 to 60% of all notebook PCs will adopt a flash SSD in three
years, while others predict a figure of 10% or so. We plan to make careful investments
by focusing on the movements of industrial reorganization, the economy, and exchange
rates, as well as the way technologies will develop over the three years, or to what
extent, for example, the market for 4 to 5 hundred dollar notebook PCs recently released
will grow.

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Optical lenses
・ This segment posted a year-on year decrease in two consecutive quarters. Most cellular
phones have adopted a plastic lens into the camera and the same trend has emerged indigital camera lenses. At the same time, market conditions are expected to become
considerably difficult with digital camera sales, having grown up to September on a
year-on-year basis, starting to fall from the same month. As reported in the previous
financial results meeting, some differences are also emerging between the figures on a
shipment basis and those of the sales values at shops. As for digital cameras, likewise,
the market for compact cameras has halved on a year-on-year basis in the case of some
big mass merchandisers, although the decline in single-lens reflex cameras is relatively
minor. From a macroscopic perspective, the market for compact cameras appears to be
dropping on a year-on-year basis globally, in sales as well as shipments. It seems thatsingle-lens reflex cameras are not dropping much.
・ Sales of single-lens reflex cameras also trigger those of interchangeable lenses, so wewill continue focusing on the former product.
Vision care (eyeglass lenses)
・ This segment remained flat on a year-on-year basis in both the 2Q and the first half.
Since sales are made worldwide, including Europe, the U.S., and Asia, exchange rates
have begun to exert their effects. Although unit prices are dropping in Japan, elsewherein Asia, they are still increasing slightly on a local currency basis. In Europe they have
dropped, while in the U.S., with an increasing number of baby boomers beginning topurchase eyeglasses, there is no decline. Considering the fact that our shares of the
U.S. and European markets remain small, as I stated clearly in the previous meeting, weplan to market aggressively with a clear and global view of the countries in which we cangain more shares, capitalize on our advantages, and where interest has accumulated,as one of the HOYA Group's growth or focus segments.
Healthcare (contact lenses)
・ We run some 150 stores of the Eye City retailing brand. Though it is one of the biggest
franchise chains in Japan marketing contact lenses, its market share is 14 to 15%, andhence has the potential for further growth. Because the market itself has not grownsignificantly and there remains plenty of room for improvement or evolution as a retailer,
we are planning to focus more on this contact lens division, considering it as a future
growth segment, although it differs from the businesses in which HOYA is engaged as amanufacturer.
・ As for overseas operations, we have already launched six stores in China. In the
Chinese market, there are fewer people using contact lenses than currently in Japan,
but given the signs of potentially explosive growth, particularly among women in their
twenties, we are going to extend the business there.

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Intraocular lenses (IOL)
・ The majority of sales were in Japan, but we are strengthening Europe and Asia in futurewith a view to growing significantly in markets in which we newly entered. Under these
economic circumstances, this segment achieved a year-on-year increase.
・ In North America, FDA approval was granted, and we are planning full scale entry to thismarket in the near future, which will help further expand our global operations in Europe,Asia, Japan, and the U.S.
Pentax：endoscopes
・Given the high sales ratios in the U.S. and Europe, exchange effects are unavoidable.
However, it showed a year-on-year increase, and as a matter of fact, the demand forendoscopes rarely diminishes due to any change of business climate. Though hospitals
in the U.S. may find it difficult to appropriate their budget or to get such items leased,
they remain not directly affected in terms of fundamentals.

・

In Japan we recently launched a lower endoscope (colonoscope) EPK-i, with plans toimprove our shares by marketing the same. This business also clearly remains one ofour growth segments.

Pentax：digital cameras
・This segment features a very hard-fought struggle compared with the same term lastyear. The effects of exchange rates were relatively minor until the 2Q and POS demandvaries from country to country. However, in France for example, it declined suddenly inAugust, while the same happened in Germany slightly earlier and likewise in the U.S., it
declined in July and August. According to the monthly shipment statistics issued by the
CIPA, until September they were riding on the crest of a wave and shipping of newly
manufactured items continued relatively briskly one after the other, but around summer,
in-store sales clearly started slowing down with lost momentum, as seen in the
year-on-year increases of 15% or 20% they had enjoyed up to then. Our sales also
decreased significantly on a year-on-year basis, with accumulated stocks andproduction and marketing carried out while keeping the market conditions in mind.
Another factor was price; there was a significant drop in unit prices. The decline in theunit prices of compact digital cameras had a particularly grave impact, given the adventof a new low-end product at 79 dollars finally realized. This unit price decline wasdamaging to us, in terms of both sales and profits.

・Essentially, the products we are now producing and selling were developed lastsummer or autumn, with a roadmap that lacked strategy in my view. As I said in theprevious meeting, we remade a completely new roadmap for the next fiscal year inaccordance with the "scrap & build" policy: creating unique cameras of a new anddifferent field, and releasing and commencing the marketing of interchangeable lenses
at the same time as new cameras. As for new products for this year, a new single-lensreflex camera K-m model (an entry level high-end model) was launched about two

7weeks ago, while new compact digital cameras have also been released on a quarterly
basis. Next year, we are planning to launch some three types, including minor designchange versions, of single-lens reflex (SLR) cameras. With a desire to offer cameras
which will demonstrate our advantages, as announced in the Photokina held inGermany, we will relaunch ourselves next year as a manufacturer of all-weather
cameras which are strong outdoors, highly water-resistnat, splash-proof, and dustproof,
small and light, easily portable and tough (durable).

【Explanation of the current (October) conditions by Mr. Suzuki, President & CEO】
・

A glance at the current (October) conditions shows the yen basically strengthening (125
yen to the Euro and 98 yen to the dollar), and while affected by exchange rates, profits
in endoscopes, eyeglasses, and cameras in particular are decreasing, since a large
portion of their sales are of overseas. Total sales are also declining due to the impact of
exchange on the HOYA side, but the figures are basically beginning to settle at levels
generally just under those of the previous year. Optical products are rapidly contracting,and as the market suddenly started production adjustments in October, they have beena considerable slowdown. With these facts in mind, the October performance is likely tosettle at a level similar to that of the previous year. Likewise Pentax, given the fact that asignificant portion of its sales are overseas, is being directly affected by exchange rates.
Apart from such effects, endoscopes are continuing to grow at a rate just under 10% or
so on a year-on-year basis, whereas the performance of cameras has been poor, with aclear and remarkable decline in terms of both local currency and exchange.

【Questions and answers】
Q： In order to forecast the performance in the following fiscal year, how should weconsider the fixed expenses, which may change subject to HOYA's specific mannerof business? Also, will you explain about the possible changes in sales and fixed
expenses made by separating the HDD media business?
A：(CFO Ema) We are establishing a joint venture with Showa Denko for HDD memory disks.
It will not be consolidated, meaning both sales and operating profit will decrease for such
portion; however, it will be an equity method company, of which we will hold 25% of theequity, meaning that 25% of its net income will come to HOYA via the equity method, withan equivalent amount of ordinary income. As the business grows, we will acquire increased
equity in the earnings of associated companies. Moreover, if our equity increases above
25%, our investment gain will also increase.
(CEO Suzuki) Our costs will decrease instead of a drop in sales, and the resulting 25%
profit will accrue to the nonoperating income based on the equity method. This will dependon the joint company's profit.

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Q： I understand that HOYA is a keen observer of industry trends. Please give us good
indications including local factors, if any, that you see under these bad high-techmarket conditions.
A：(CEO Suzuki) As the final demand is basically slackening, there is no good news. The
current condition is that because the bottom is unseen, and with the future uncertain,
companies remain unable to establish a clear direction with all the terrible figures. In my
opinion, we should henceforth focus on cash, including semiconductor market. Cash islikely to decide the outcome for a while, but raising money is becoming difficult, withtightened credit; hence judging a company by examining its cash flow over time will be theway forward.
Q ： EO is likely to deteriorate considerably from October to December and fromJanuary to March respectively. Are you taking any countermeasures in terms of
products and costs?
A： (COO Hamada) We are presently amidst a storm that is set to worsen, hence we are now
encouraging our employees to take forward-looking measures. We're also striving to avoid
rushing to approve investments in new technology, such as the leading edge of LCD,
which was postponed, unless careful consideration is given to the same. We are not
implementing cost reductions in R&D itself, since this may eliminate the seeds of futuretechnology, but we will carefully decide on the details of equipment installation in factories
or the additions of factories with future demand in mind. At the same time, as there is aneed to remain nimble amid such challenges, we are working on reducing variable costs,
not only fixed expenses, in every business as well as planning to streamline theorganization and personnel by merging and closing down branches and facilities. SGA,
including the costs of material and consumables, are under overall review with our productquality ensured. The command for cost reduction has been given everywhere in SGA,
from materials and consumables to tools, and the entire company is striving to establish a
low-cost operation structure, though we are not definitely saying how much or by when.
Q： Give us your estimates for the full-year capital investments, depreciation, R&D
expenses, and extraordinary losses.
A：(CFO Ema) Our estimation of the capital investments as of now is 48 billion yen, withdepreciation of approximately 50 billion yen. The full-year R&D expenses are likely to be
twice the first half amount, 9.167 billion yen.
Q ： What are the sales growth and profits in each Pentax segment? How will theextraordinary loss of the year be?
A：(CFO Ema) In the 2Q, the Life Care (LC) business increased its income by 13.0% from thesame term last year, the Imaging Systems (IS) business decreased by 37.1%, and the
Optical Component (OC) decreased by 31.6%. In terms of profits, LC doubled its profits
from the same term last year, while IS experienced a deficit. The amount of extraordinary

9

loss for the year is uncertain. Our estimate will be included in the announcement of
earnings results for the 3Q. Extraordinary loss is expected to increase.
Q: Give us slightly more explanation about VC's profit increase in the 2Q. Was it due tothe improved profitability in imports with the depreciation of the Thai baht? Do you
think this trend will persist during the 3Q?
A：(CEO Suzuki) The weak baht is telling. However, this need not be attributed to a temporary
exchange impact alone because we have been making structural changes, such asconcentrating production bases to improve profitability, although the exchange benefit istelling, particularly in this 2Q. This benefit of such extent will not continue for long. In the 3Q,
it will be hard to obtain profits because the portions in Euro will be diminished. Profitability
may be lowered with costs on a dollar basis and sales on a Euro basis respectively. We
have taken measures to improve profitability in terms of structural aspects excluding
exchange effects.
Q: It can be seen from the data concerning the consolidated personnel that you
downsized by some 200 people in the 2Q in advanced nations alone, but in which
fields? In future, will the personnel be reduced in advanced nations, or in Asia, you
production base?
A：(COO Hamada) As we are going to seek optimization in every business omnidirectionally,
there is no specific target area at present. On a divisional basis, personnel downsizing will
come mainly in businesses with less growth and others whose conditions are expected toworsen in future, namely, those other than the Eye Care and Medical segments.
Certain statements contained in this report constitute forward-looking statements
regarding the company’s future performance and environment of the industry in which
the company is involved. Forward-looking statements are based on the judgment of thecompany and corporate group obtained based on information obtainable at the time thestatements are made and they also contain risks and uncertainties. The company does
not guarantee the completeness or accuracy of the content. Consequently, you areadvised to refrain from making investment judgments relying entirely on these forecasts.
Actual performance and the industry environment may differ materially from thoseexpressed by the forward-looking statements for a number of reasons. You arerequested to make final decisions regarding investment, etc., on your own. Please beaware that we cannot take responsibility for the outcome of investments.

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