HOYA's FINANCIAL REPORT 2006 for the year ended March 31, 2006
April 20, 2006

Annual Financial Highlights (unaudited)
HOYA CORPORATION and Consolidated Subsidiaries(Revised on May 12, 2006)

Contact : Naoji Ito, Manager of Corporate Communications
Tel:03(3952)1160 Fax:03(3952)0726 E-mail:naoji.ito@mb.hoya.co.jp

Performance for the years ended March 31, 2006 and 2005
(1)Results of Operations( The yen amounts shown therein are rounded down to the nearest million.)
Years ended March 31,
Variance
(%)
2006
2005

Net sales
Operating income
Ordinary income
Net income
Basic net income per share (Yen)ROE
Ordinary income / total assets
Ordinary income / net sales

344,228
101,095
103,637
75,620171.71
27.1%
29.1%
30.1%

308,172
84,92089,52564,135578.84
25.5%
28.6%
29.1%

11.7
19.0
15.8
17.9

Notes : No changes have been made in accounting policy.
Years ended March 31,(2)Dividends

2006

Annual cash dividends per share (Yen)

150.002005
150.00

As of March 31,(3)Financial Position
Total assets
Shareholders' equity
Shareholders' equity ratio
Shareholders' equity per share (Yen)(4)Conditions of Cash Flow
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period

2006

2005

361,537
279,48077.3%
648.87351,482
277,88979.1%
2,494.37

2006

2005

105,855-52,012-85,787
83,57476,000-35,524-11,692
112,874

Ref:Performance of HOYA CORPORATION for the years ended March 31, 2006 and 2005
Variance(%)
2006
2005
Net sales
Operating income
Ordinary income
Net income
EPS (Yen)
Total assets
Shareholders' equity

248,195
29,74644,78822,06250.14
219,063
95,598

224,608
35,131
46,536
24,967225.55
222,313
159,316

10.5
-15.3
-3.8
-11.6

With effect on November 15, 2005, HOYA CORPORATION carried out a four-for-one stock split. The per share information for the term underreview reflects the stock split assuming that the above stock split was exercised on the beginning of the term under review. The per share
information for the previous fiscal year is actual result and not adjusted.
The dividends per share for the term under review was Yen 150. The Interim dividend of Yen 120 doesn't reflect the stock split while the Yearend dividend of Yen 30 reflects it. Ｔ he value of dividends for the interim and previous fiscal year are actual result and not adjusted.
Hoya Corporation does not guarantee the accuracy or completeness of the information herein. Unless otherwise stated estimates or forecasts aresolely those of our company and subject to change without notice. Hoya Corporation accepts no liability whatsoever for any direct orconsequential loss arising from any use of this report.

11.Global Group Management
The HOYA Group consists of the HOYA CORPORATION (the "Company"), 62 consolidated
subsidiaries (5 in Japan and 57 overseas) and five affiliates (5 in Japan). The HOYA Group is
engaged in manufacturing, sales and businesses related to Electro-Optics, Photonics, Vision Care,
Health Care and Crystal products. Of the five affiliates, one (1) company is accounted for using theequity method (as of March 31, 2006).
Our products are manufactured by the Company itself and by other companies in the Group both inJapan and abroad. In Japan, most of our products are distributed directly to retailers, specialty
stores, assemblers, etc. Some products are exported to various countries abroad through our overseas
Group companies.
The HOYA Group has adopted a global group management system. Global Headquarters at the
HOYA CORPORATION formulate management strategies, which are enacted on a global basis by
the two major business segments such as Information Technology and Eye Care in line with theirrespective business responsibilities.
By area, regional headquarters in North America, Europe and Asia are in charge of reinforcing
relationships with the countries and areas in their respective regions, legal support and internal
audits, thereby supporting the promotion of business activities.
In July 2003, the HOYA Group has moved its financial headquarters to HOYA HOLDINGS, N.V. sothat this financial headquarters control global financial matters.

Global Group Management System
Global Headquarters（Formulation of Group Strategies））

Information Technology

Eye CareCrystalLegal and Financial
Support(area)Japan
Asia(Regional HQ)
North America(Regional HQ)
Europe(Regional HQ &Global Financial
Headquarters)

Global Business Expansion

2

The Company and its consolidated subsidiaries are engaged mainly in the manufacture and sales of products in
six major industries as per below: Electro-Optics, Photonics, Vision Care, Health Care, Crystal and Service.

Business
Categories

Industries

Products and Services
Photomasks and Maskblanks for semiconductors,
Masks and Devices for LCDs;

Photonics

HOYA CORP. Blanks Division, Mask Division,
MD Division, Optics Division, etc.

Electro-Optics Glass disks for hard disk drives (HDDs);
Information
Technology

Major Subsidiaries

HOYA CORPORATION USA

Optical lenses, Optical glasses,

HOYA MAGNETICS SINGAPORE PTE LTD

Optical communication related devices, etc.
Laser equipments for industrial,
dental, and medical purposes
Light sources for electronics industry, etc.
Eyeglass lenses, Eyeglass frames, etc.

HOYA GLASS DISK (THAILAND) LTD.
HOYA PHOTONICS, INC.
HOYA PHOTONICS CORPORATIONHOYA CANDEO OPTRONICS CORPORATIONHOYA CORP. Vision Care Company
HOYA LENS DEUTSCHLAND GMBH
HOYA LENS U.K. LTD.
HOYA LENS OF AMERICA, INC.

Vision Care
Eye Care

HOYA LENS THAILAND LTD.
Health Care
CrystalOthersService

Contact lenses and accessories,

HOYA CORP. Medical Division

Intraocular lenses, etc.
Crystal glass products

HOYA HEALTHCARE CORPORATIONHOYA CORP. Crystal Company
HOYA CRYSTAL, INC.
HOYA SERVICE CORPORATIONWELFARE CORPRATION

Design of information systems,
Outsourcing, etc.

3Business Flow Chart

NORTH AMERICA（Consolidated Subsidiaries)

INFORMATION TECHNOLOGYHOYA HOLDINGS, INC. (RHQ)
HOYA CORPORATION USA
RADIANT IMAGES, INC.

Photonics

QSTREAMS NETWORKS, INC.
HOYA LENS OF AMERICA, INC.
Products,

HOYA LENS CANADA, INC.

（Consolidated Subsidiary)Semi-finished

EAGLE OPTICS, INC.

HOYA PHOTONICS,

products,

HOYA LENS OF CHICAGO, INC.

INC.

Materials

Products

HOYA LENS OF NEW ORLEANS, INC.
VISION MEMBRANE TECHNOLOGIES, INC.

Electro-Optics

HOYA CRYSTAL, INC.
and, Vision Care North America 13 Branches

Products

EUROPE（Consolidated Subsidiaries)

HOYA CORPORATION
Blanks Division,

Products,

HOYA HOLDINGS N.V. (RHQ & FHQ)

Mask Division,

Semi-finished

HOYA LENS DEUTSCHLAND GMBH

MD Division,

products,

HOYA LENS U.K. LTD.

Optics Division

Processing

HOYA LENS ITALIA S.P.A.
HOYA LENS FINLAND OYCHOYA LENS NEDERLAND B.V.
HOYA LENS IBERIA S.A.
HOYA LENS FRANCE S.A.S.
HOYA LENS POLAND SP.Z.O.O.

U
Products

HOYA LENS BELGIUM N.V.
HOYA LENS HUNGARY RT

SHOYA LENS MFG. HUNGARY RT
HOYA LENS SWEDEN AB
HOYA LENS DANMARK A/SEYECARE

Products,

HOYA CONBIO FRANCE EURL

Semi-finished

HOYA MEDICAL EUROPE GMBH.

products

ASIA（Consolidated Subsidiaries)

Vision CareT

HOYA HOLDINGS ASIA PACIFIC PTE LTD (RHQ)
HOYA CORPORATIONHOYA MAGNETICS SINGAPORE PTE LTD
HOYA GLASS DISK (THAILAND) LTD.

Vision Care Company

HOYA OPTICS (THAILAND) LTD.

O

HOYA OPTICAL (ASIA) CO.,LTD.

M

HOYA OPTO-ELECTRONICS QINGDAO LTD.
HOYA MICROELECTRONICS (SUZHOU) LTD.
HOYA OPTICAL TECHNOLOGY (SUZHOU) LTD.
HOYA MICROELECTRONICS TAIWAN CO.,LTD.

E

HOYA GLASS DISK PHILIPPINES, INC.
HOYA GLASS DISK MALAYSIA SDN.BHD.
HOYA GLASS DISK VIETNAM LTD.

Health Care

HOYA ELECTRONICS KOREA CO.,LTD.

Products
R

HOYA CANDEO OPTRONICS KOREA CO.,LTD.
products

HOYA LENS THAILAND LTD.
HOYA LENS (S) PTE. LTD.

HOYA CORPORATIONHOYA LENS AUSTRALIA PTY.LTD.

Medical Division
products（Consolidated Subsidiary)

HOYA LENS HONGKONG LTD.
HOYA LENS KOREA CO.,LTD.

HOYA HEALTHCAREHOYA LENS TAIWAN LTD.

CORPORATIONSHOYA LENS PHILIPPINES, INC.

CRYSTAL

MALAYSIAN HOYA LENS SDN.BHD.
HOYA LENS GUANGZHOU LTD.
THAI HOYA LENS LTD.
THAI HOYA HOLDINGS LTD.

HOYA CORPORATION
Crystal Company

HOYA LENS SHANGHAI LTD.
HOYA HEALTHCARE (SHANGHAI) CO., LTD.
HOYA MEDICAL SINGAPORE PTE LTD.

JAPAN（Consolidated Subsidiaries)
HOYA CANDEO OPTRONICS CORPORATIONSERVICE

HOYA SERVICE CORP.

HOYA PHOTONICS CORPORATION(Affiliates)
NH TECHNO GLASS CORPORATIONWELFARE CORPORATION

other 3 companies（Consolidated Subsidiary)

Service

Products(Affiliate)

RHQ : Regional Headquarters
Service
FHQ : Financial Headquarters
Italic : affiliates accounted for by the equity method

TWO COINS CORP.

4

2. Management Policies
An outline of the management policies of the HOYA Group is as follows:

Top Priority Policy of the Management"Maximization of Corporate Value"
1. SVA management(SVA:Shareholders' Value Added or an increment in shareholder value during one fiscal year)
In order to maximize corporate value, we will streamline our management and carry out SVA
management. We are confident that we will be able to respond to the expectations of our shareholders
and satisfy all stakeholders with an increase in corporate value by producing profits that exceed
capital costs while paying due attention to all expenses.

2. Strategy of "Global Niche"
Applying our original technologies, which have been accumulated over many years, the Company willdevelop technologies that will prevail in the global marketplace, create new business fields withgrowth potential to attain the top market shares therein, and develop them into highly profitablebusinesses.

3. Harmonizing the interests of management, employees and shareholders
In order to improve business results and produce profits for both shareholders andmanagement/employees simultaneously, board members are obliged to own shares in the Company,
stock-options and an employee stock ownership plan have been established that allow employees tohave a sense of participation in the management of the Company.
The Company has adopted new system that places importance on the employees' abilities regardless ofage or sex so that they can work with enthusiasm.

4. Global group management
We will make the best combination of management resources in order to give full play to ourcompetitive edge in a global perspective and strive to increase our share of overseas business.
Measures designed to promote globalization include not only expansion of the worldwide marketing
network and transfer of manufacturing overseas, but also employment of locals in the senior
management of overseas subsidiaries regardless of race.

5. Middle- to long-term policy on appropriation of retained earnings
The Company carries out its globalized management emphasizing consolidated accounting and its
management emphasizing shareholder interests and exerts efforts to increase the enterprise value andshareholder value in response to shareholder expectations.
In terms of the cash dividend, the Company will determine the amount in consideration of the balanceamong repayment of profit to shareholders, welfare of employees and replenishment of retained
earnings for future business development.
Funds from retained earnings will be appropriated for investments for the Company to establish the
HOYA brand, accelerate further growth, enhance competitive edge of its products, and develop nextgeneration products.

5

3. Business Overview
3-1. Results of Operations(1) General Overview
Millions of Yen

Results of Operations
Net sales
Operating income
Ordinary income
Net income
EPS (Yen)

Year ended Mar. 31, 2006

344,228
101,095
103,637
75,620171.71

During the term under review, corporate earnings centered in export industries demonstrated steady
growth, reflecting a tone of weakness in the yen, driven by brisk sales of digital appliance related products.
The government also declared a breakaway from lackluster performance in the economy in August andannounced an upward revision of its overall assessment of the business climate. Corporate plans for capital
investment also improved and, prompted by an upturn in employment, greater optimism was evident inpersonal consumption while domestic demand showed firm recovery.
In the currency market during the term under review, the US dollar, euro and Thai baht appreciated by
5.9%, 1.8% and 4.9% respectively all against the yen, on a year-on-year basis.
Within that context, in the HOYA group, the Electro-Optics division saw continued demand for highprecision products as clients were active in aggressive production capacity reinforcement and new productdevelopment. In the Vision Care division, overseas eyeglass lens market enjoyed strong growth. In the
Health Care division, sales were strong in high-function products. As a result, consolidated sales during theterm under review increased 11.7% year-on-year to 344,228 million yen.

(Million Yen)

Annual net sales (Million Yen) and average exchange rate (Yen/USD & EURO)(Yen/USD or EURO)400,000

160.00132.65350,000
300,000

125.89200,000

140.00113.93107.60121.20112.76110.98236,802120.00100.00100.4780.00

150,000
100,000

135.73121.48111.19250,000

138.13

235,265

271,443

246,293344,228

308,172

60.00
40.00

50,000

20.00

0

0.00
Mar-01Mar-02
Net sales

Mar-03Mar-04average exchange rate (USD)

6

Mar-05Mar-06(EURO)

Ratio of Net Sales by Business Segment

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Service
CrystalHealth Care
Vision Care
Photonics
Electro-Optics

Mar-01Mar-02Mar-03Mar-04Mar-05Mar-06

During the term under review, the Electro-Optics division saws steady orders for high-precision products. In
the Eye Care sector, a boost in revenues was achieved through expanded sales of high-value-added products.
For the Group overall, operating income, ordinary income and net income for the term increased 19.0%,
15.8% and 17.9%, respectively, on a year-on-year basis. Together with the net sales, all three represented
record results for the term.
Net income per share for the term under review was 171.71 yen. The Company carried out a four-for-one stock
split on November 15, 2005 based on the decision in a meeting of the Board of Directors held on July 20, 2005
(For details, please refer to the Notes in this report).

Profits (Million Yen)
100,000
80,00060,00052,98250,874
20,037

68,166
66,55439,54884,92089,52564,135101,095
103,637
75,620043,89745,77423,74020,00045,12748,184
21,86040,000Mar-01Mar-02Mar-03Mar-04Mar-05Mar-06

Operating Income

Ordinary Income

Net Income

The management at HOYA strives hard to increase shareholder value in response to shareholder expectations.
Considering the results of the fiscal year under review, the management proposes that a year-end dividend forthe fiscal year be 30 yen per share. Consequently, the total dividend for the fiscal year, including an interim
dividend of 120 yen per share already paid, will amount to 150 yen per share.

7(2) Segment Overview
1)Information Technology
Electro-Optics

Annual Net sales of Electro-Optics (Million Yen)
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,00060,00040,00020,0000190,551
165,664
135,071
112,341Mar-01

101,496

111,460

Mar-02Mar-03Mar-04Mar-05Mar-06In terms of mask blanks for manufacturing semiconductors, HOYA received a decent volume of orders forsuch high-precision products as blanks for phase-shift masks, etc., and sales increased on a year-on-yearbasis.
In photomasks for semiconductor production, sales remained flat year-on-year as there was a large orders by
special reason for volume products in the previous year, while orders from overseas market and for nextgeneration products such as masks for 65nm level semiconductors increased. In terms of LCD masks, thedemand of large LCD masks were healthy as LCD panel manufacturers launched new production lines andthe development of new models remained vigorous, resulting in increased sales on a year-on-year basis.
In HDD (hard disk) glass disks, there was a decline in small-size disks for portable music players, which havebeen surging in growth, given the expansion in the sales of notebook computers, 2.5-inch disks have been
moving vigorously, bringing an increase in sales year-on-year.
In optical lenses, the Company has begun shipments for camera-equipped mobile phones and other new uses
and has furthermore been promoting strategies for products with high value added properties. As a result,
together with a gradual recovery in the market for digital cameras and other products, sales increased
steadily on a year-on-year bases.

Photonics

Annual Net sales of Photonics (Million Yen)
12,00010,74910,092

10,000
8,000

6,533

7,157
5,485

6,000

4,116

4,000
2,000
0
Mar-01Mar-02Mar-03Mar-04Mar-05Mar-06This segment covers laser-related equipment for industrial, dental and medical applications, light sources forelectronics industry or special optical glasses, etc.
The reason why the sales of this segment have jumped up on the fiscal year ended March 31, 2005 is becausethat some businesses was transferred from Electro-Optics to this segment as part of its corporate
restructuring initiatives.

82) Eye Care
Vision Care

Annual Net sales of Vision Care (Million Yen)
120,000
100,000

104,456
86,19893,184

94,38898,203

94,971Mar-02Mar-03Mar-04Mar-0580,00060,00040,00020,0000
Mar-01Mar-06

In spite of a slowdown in the domestic market for eyeglass lenses compared to the previous year, HOYA
demonstrated growth in the high-end price range through the market introduction of new products andvalue-added enhancements of progressive lenses and other products. Sales overall, however, essentiallyhovered at much the same level as the previous year due to intense price competition in the low-pricerange.
Overseas, sales growth in all region such as Asia and Oceania, the United States and Europe, remained
strong reflecting the higher value-added products promoted by HOYA. Especially there was a sign ofrecovery in Germany, Europe's largest market, while other markets showed an indication of growth.
Aggregate sales in the term in overseas markets increased on a year-on-year basis.
As a result, revenues of the Vision Care division as a whole increased on a year-on-year basis.

Health Care

Annual Net sales of Health Care (Million Yen)

40,00035,48335,00031,40930,00025,00026,71628,38023,105
20,12920,00015,00010,0005,000
0Mar-01Mar-02Mar-03Mar-04Mar-05Mar-06In the area of contact lenses, within the context of persistent price competition by discount shops in themarket, HOYA boosted sales year-on-year through the establishment of new retail stores and expanded
sales of multifocal lenses and other high value-added products through consulting sales capitalizing on its
specialized knowledge.
Sales of intraocular lenses (IOL) increased on a year-on-year basis due to favorable sales of soft
intraocular lenses, especially yellow-lens, during the term both in Japan and overseas.

93) Others
CrystalIn terms of crystal, HOYA is reducing the scale of its operations in this sector as part of its businessrestructuring initiatives and the sales decreased on a year-on-year basis.

3-2. Financial Position
Millions of Yen
As of Mar. 31, 2006
361,537
279,480
77.3%

Total assets
Shareholders' equity
Shareholders' equity ratio

At the end of the year under review, current assets decreased Yen 20,598 million and fixed assets
increased Yen 30,864 million against the end of the previous year. As a result, total assets increased Yen
10,055 million. Shareholders'equity increased Yen 1,591 million. During the year under review, theCompany acquired 15,686,800 shares of treasury stock and cancelled 14,379,000 shares at Yen 53,180
million.

3-3. Conditions of Cash FlowsNet cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period

Millions of Yen
Year ended Mar. 31, 2006
105,855-52,012-85,787
83,574

Cash flow from operating activities amounted to 105,855 million yen, comprised of 97,367 million yen inincome before income taxes and minority interests and 26,251 million yen in depreciation andamortization among others. Cash flow from investment activities amounted to 52,012 million yen in cash
payments that were mainly used for investment in order to handle next-generation products. Free cash
flow amounted to 53,843 million yen and used 64,031 million yen for acquisition of treasury stock and23,402 million yen for payment of dividends. As a result, the term-end balance of cash and cash
equivalents decreased 29,300 million yen from the end of the previous fiscal year.

103-4. Management Issues and Business Risks
1.

Management Issues Faced by the HOYA Group:
We at HOYA Group hoist maximization of its corporate value as our principal policy and carry out management of the Group witha global perspective in order to acquire top shares in the worldwide market. On steering our manifold business operations, we
determine the best combination of our management resources in order to give full play to our competitive edge, technologicalacumen, development capability and steering force, and face up to improving results.

(1) Flexible Adaptation to Changing Markets and Efficient Implementation of Management Resources
In the manifold business areas of HOYA Group, we will grasp the needs of our customers properly and devise strategies in advanceof market competition in order to adapt nimbly and flexibly to moves in customers, markets, products and competition, etc. We
realize as important management issues that the HOYA Group allocate management resources of the Group appropriately when
judging plant and equipment investment, business tie-ups, M&As, withdrawal from or reduction in business operation, etc.; and wewill keenly face up to the issues.

(2) Creation of New Business and Technologies
Securing corporate earnings and maintaining growth is imperative for any business enterprise. To meet such necessity, we realize it
is an important management issue not only to expand our existing businesses, but also to introduce vectors for growth different fromthe existing ones by developing technologies that others cannot imitate and by creating new businesses and business areas.
We will strive ceaselessly to develop technologies that will prevail across the world and products with an enhanced competitive
advantage; to explore and create new businesses; and to acquire and nurture talent able to carry our next generation of business.

2.

Business Risks(1) Fluctuation of Exchange Rates - As HOYA Group develops its business on a global scale, if the currencies of those countries inwhich HOYA Group has major manufacturing operations appreciate, export prices of its products would rise, which would incur an
increase in costs on a consolidated basis. If the currencies of those countries in which HOYA has major sales operations depreciate,
it would bring about a decrease in sales.
(2) Influence of International Situations - At present, the situation in certain countries, is extremely tense. Hereafter, in the event thatmovement of people, goods or money were restrained extraordinarily in a certain region, or if certain unexpected events took placein those countries in which HOYA Group has business operations - including changes in the political, economic or legal
environments, labor shortages, strikes, or natural calamities, etc., - certain problems may arise in the execution of business
operations.
(3) Our Business as in Production Goods - Every part of the Electro-Optics products range, which constitutes a major portion of the
HOYA Group revenue, involves intermediate production goods, components or materials. Therefore, growth of the business thereof
is affected substantially by the market conditions of such products as semiconductors, LCD panels and HDDs that are manufactured
utilizing HOYA Group products, and by that of personal computers and home appliances, etc. that are manufactured utilizing theresultant products.
(4) Emergence of Discounters and Lowering of Prices in the Consumer Goods Sector - In recent years in the eyeglass and contact lensmarkets, discount shops of an unprecedented type have emerged and brought about a lowering of prices. If the influence of suchdiscount shops swells to an extent that cannot be absorbed by HOYA's cost reduction efforts and strategies for adding high value
both in Japan and abroad, the business results and financial condition of HOYA Group might be adversely affected.
(5) Competence for Developing New Products - In the industrial sector to which HOYA belongs, technological advances are swift and
HOYA strives at all times to develop state-of-the-art technologies. However, if HOYA Group fails to sufficiently predict changes inthe sector and markets or to develop new products that meet customer needs in time, the business results and financial condition of
HOYA Group might be adversely affected.
(6) Competition - HOYA Group, which has the top market share for its many products in their respective sectors, is constantly exposed
to relentless competition. There is no guarantee that HOYA Group can maintain its overwhelming market share and compete
efficiently in future. If customers shift allegiance due to cost pressures or inefficiency of HOYA's competitiveness, the businessresults and financial condition of HOYA Group might be adversely affected.
(7) Production Capacity - At present, HOYA Group reinforces its production capacity so as to meet orders that exceed existingproduction capacity in multiple business areas. However, if the setting up of such capacity were delayed for any reason, it would
affect not only HOYA's results but also the production and sales plans of its customers, which might bring about increased market
share for its competitors, etc., and adversely affect the business results and financial condition of HOYA Group.
(8) New business - New business is important for future growth. In the event that no promising new business is developed, the growth of
HOYA Group might not be achieved as planned. Besides, HOYA may carry out mergers and acquisitions as a part of its businessstrategy. If unexpected obstacles emerge after such acquisition and unscheduled time and costs are required, the business results
and financial condition of HOYA Group might be adversely affected.
Hoya Corporation does not guarantee the accuracy or completeness of the information herein. Unless otherwise stated estimates or forecasts aresolely those of our company and subject to change without notice. Hoya Corporation accepts no liability whatsoever for any direct or consequential
loss arising from any use of this report.

11

4. Consolidated Financial Statements (unaudited)(1) Consolidated Balance Sheets

Millions of Yen
As of Mar.31,
2006
2005

Variance
Value(%)

212,273
83,57478,38041,1787,407
3,246-1,512
149,152
120,603
29,54858,493
8,648
23,912
7,424
21,12314,060
2,757
4,601
-295
111
361,537

232,871
112,874
73,61936,1656,500
4,947-1,235
118,288
95,15825,11445,016
8,937
16,0905,489
17,64010,383
3,097
4,461
-301
322
351,482-20,598-29,300
4,761
5,013
907
-1,701-277
30,86425,445
4,434
13,477
-289
7,822
1,935
3,483
3,677
-340
140
6
-211
10,05579,30528,07014,342
4,207
32,685
1,831
619
1,211
81,137919
6,264
15,898266,345110
7,142-16,279
279,480

70,792
24,452
194
10,022
3,917
32,204
1,970
542
1,427
72,762830
6,264
15,898268,25537-4,687-7,878277,889

8,513
3,618
-194
4,320
290
481
-139
77
-216
8,375
89
-1,91073
11,829-8,401
1,591

11.5
10.7
-0.7
-252.4
106.6
0.6

Total

361,537

351,482

10,055

2.9

notes:
Accumulated depreciation
Guarantees of borrowings and lease obligations for customers
Number of shares of treasury stock

181,8182,206
4,401,607

166,3441,369
967,762(Million Yen)
(Million Yen)

HOYA CORPORATION and Consolidated Subsidiaries
ASSETS
Current assets
Cash and deposits
Notes and accounts receivable - trade
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful receivables
Fixed asstes
Tangible fixed assets
Buildings and structures
Machinery and carriers
Land
Other tangible fixed assets
Intangible fixed assets
Investments and other assets
Investment securities
Deferred tax assets
Other assets
Allowance for doubtful receivables
Deferred charges
Total Assets
LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities
Notes and accounts payable - trade
Short-term bank loans
Income taxes payable
Accrued bonuses to employees
Other current liabilities
Long-term liabilities
Reserve for periodic repairs
Other long-term liabilities
Total Liabilities
Minority interest
Common stock
Additional paid-in capital
Retained earnings
Net unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Treasury stock - at cost
Total Shareholders' Equity

12(stocks)

-8.8

26.1
26.7

35.3
19.7

-65.5
2.9
12.0

-7.1

(2) Consolidated Statements of Income
HOYA CORPORATION and Consolidated Subsidiaries
Millions of Yen
Years ended Mar. 31,
2006
2005
344,228
308,172
172,033
158,023
172,194
150,148
71,09865,228101,095
84,920
4,869
6,623
1,788
1,013
242
875
1,285
3,707
1,552
1,026
2,327
2,017
142
86
706
552
1,478
1,378
103,637
89,525
2,389
719
109
194
2,280
524
8,660
6,779
3,725
1,980
1,688
842
1,232
859
625
948
1,263
1,388
885
97,367
83,46622,24918,690
-511
531
9
108
75,62064,135171.71578.84

Variance
Value(%)
36,056
11.7
14,0108.9
22,046
14.7
5,870
9.0
16,17519.0-1,754
-26.5
775
-633
-2,422
526
310
15.4
56
154
100
14,112
15.8
1,670
232.3
-85
1,756
1,881
27.7
1,745
846
373
-323
-1,263503
13,901
16.7
3,559
19.0
-1,042-99-91.7
11,48517.9-407.13

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
Equity in earnings of affiliates
OthersNon-operating expenses
Interest expense
Sales Discount
OthersOrdinary income
Extra-ordinary gains
Gain on sales of property, plant and equipment
OthersExtra-ordinary losses
Maintenance of Environment
Additional retirement benefits paid to employees
Loss on impairment
Loss on disposal of property, plant and equipment
Loss on close of factory
OthersIncome before income taxes and other items
Income taxes - Current
Income taxes - Deferred
Minority interests in net income
Net income
Basic net income per share(Yen)
Notes:
1. Net income per share for the term under review decreased drastically as the company carried out a four-forone stock split on November 15, 2005 and the number of outstanding shares increased four times. For details,
please refer to the Notes at the next page.

2. Effect of Exchange Rate Change on Net Sales and Incomes ("2006 A" is the actual value of this period. "2006
B" is the nominal value of this period which temporarily exchanged by the currency rate of the same period
last year. unit : millions of Yen)
2006 A
2006 Binfluences
Net sales
Million Yen
344,228
339,510
4,718
Operating income
Million Yen
101,095
98,277
2,818
Ordinary income
Million Yen
103,637
100,824
2,813
Net income
Million Yen
75,62072,9702,650
3. Average rates of major foreign currencies:
US Dollar
Euro
Thail Baht

Yen
Yen
Yen

13

Years ended Mar. 31,
2006
2005
113.93107.60138.13135.732.81
2.68

Variance(%)
-5.9%
-1.8%
-4.9%

Notes Relating to Stock Split
In a meeting of the Board of Directors held on July 20, 2005, HOYA CORPORATION "the Company" decided to carryout a four-for-one stock split. The details are as follows:
1. Number of shares to be increased
Outstanding shares before stock split
Increase in shares
Outstanding shares after increase

112,349,005 shares
337,047,015 shares
449,396,020 shares

2. Method
With effect on November 15, 2005, the shares of shareholders recorded on September 30, 2005 will be split four forone.
3. Date entitled to dividend
October 1, 2005
The per share information for the term under review reflects the stock split assuming that the above stock split was
exercised on the beginning of the term under review. The per share information for the previous fiscal year is actual
result and not adjusted. For your reference, per share information for the previous fiscal year which is re-calculated
assuming that the above stock split was exercised on the beginning of the term is as follows :Shareholders' equity per share (Yen)
Basic net income per share (Yen)
Diluted net income per share (Yen)Years ended Mar. 31,
2006
2005
648.87623.59171.71144.71171.08144.38

Variance
25.28
27.00
26.70

The dividends per share for the term under review was Yen 150. The Interim dividend of Yen 120 doesn't reflect thestock split while the Year-end dividend of Yen 30 reflects it. For your reference, (1) The per share dividend for theinterim and previous fiscal year which are re-calculated assuming that the above stock split was exercised on the
beginning of the last fiscal year (2) The per share dividend assuming that the above stock split was not occured (thevalue of dividends for the interim and previous fiscal year are actual result and not adjusted).
(1)
Interim dividends per share (Yen)
Year-end dividends per share (Yen)Annual dividends per share (Yen)(2)
Interim dividends per share (Yen)
Year-end dividends per share (Yen)Annual dividends per share (Yen)Years ended Mar. 31,
2006
2005
30.00
15.00
30.00
22.50
60.00
37.50
2006
2005
120.00120.00240.0060.00
90.00
150.00

Variance
15.00
7.50
22.50
Variance
60.00
30.00
90.00

Notes Relating to Purchase of Treasury Stock
HOYA CORPORATION has completed the acquisition of the Treasury Stock, resolved at the Board of Directors
meeting held on October 20, 2005 in accordance with Article 211-3, Section 1-2 of the Commercial Code of Japan.
1. Period of the purchase2. Total number of shares purchased
3. Total cost of acquisition

From November 15, 2005 to December 1, 2005
15,686,800 shares
63,999,973,000 Yen

4. Method of the purchase
Purchase on the Tokyo Stock Exchange(Note)
Decision of the Board of Directors meeting held on October 20, 2005 is as follows:
Type of shares to be purchased:
Common shares of the Company
Number of shares to be purchased:
16,000,000 shares (Maximum)
Value of the purchase:
64,000 million yen (Maximum)
Period of the purchase:
From October 21, 2005 to December 20, 2005

14

(3) Consolidated Statements of Retained Earnings
HOYA CORPORATION and Consolidated Subsidiaries
Millions of Yen
Years ended Mar. 31,
2006
2005

Variance

Additional Paid-In Capital
Balance at the beginning of the period
Adjustment of retained earnings
Appropriations
Balance at the end of the period

15,89815,89815,89815,898-268,255
75,62075,62077,52923,39865
53,180871
13266,345

247,175
64,13564,13543,056
12,24162
30,702
49
268,255

21,080
11,485
11,48534,473
11,157
3
22,478822
13-1,910Retained Earnings
Balance at the beginning of the period
Adjustment of retained earnings
Net income
Appropriations
1. Cash dividends
2. Bonuses to directors
3. Cancellation of treasury stock
4. Loss on deposit of treasury stock
5. Others
Balance at the end of the period15(4) Consolidated Statements of Cash Flows
HOYA CORPORATION and Consolidated Subsidiaries

Millions of Yen
Years ended Mar.31,
2006
2005
Variance

OPERATING ACTIVITIES:
Income before income taxes and minority interests
Depreciation and amortization
Loss on impairment of long-lived assets
Gain on transfer of businesses
Provision for (reversal of ) accrued allowances for doubtful receivables
Provision for (reversal of ) accrued bonuses to employees
Provision for (Reversal of ) reserve for periodic repairs
Interest income and dividend receivable
Interest expense payable
Foreign exchange loss (gain)
Equity in earnings of affiliates
Gain on sales of property, plant and equipment and investment securities
Loss on disposal of property, plant and equipment and investment securities
Bonus to directors
Other(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories(Increase) decrease in other current assets
Increase (decrease) in notes and accounts payable
Increase (decrease) in income taxes payable
Increase (decrease) in other current liabilities
Sub totalInterest and dividend receivable
Interest payable
Income taxes - paid

97,367
26,251
1,232-1,783234
278
76-1,794142-598-1,285
-109
625
-65
204
-4,041-2,546
2,097
3,643
662
1,757
122,348
1,865-112-18,246
105,855

83,466
21,660
859
-344
194
184
-1,02286-233-3,707
-194
948
-63
553
-5,393-2,5252,427-1,629-706
3,848
98,409958-109-23,257
76,00013,901
4,591
373-1,783
578
84
-108
-772
56
-365
2,422
85
-323
-2
-349
1,352
-21
-330
5,272
1,368
-2,091
23,939907-35,011
29,855Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Purchase of stocks of subsidiary for consolidation
Payment for loans
Proceeds from loans
Increase in investments and other assets-47,741266-2,069-337-2
116-4,630-33,393
540
-10
-96
211
-3,096-14,348-274-2,059-337
94-95-1,534

Decrease in investments and other assets
Proceeds from transfer of businesses

155
2,230
-52,012321-35,524-166
2,230-16,488-207-64,031
1,855-23,402-1-85,787
2,645-29,300
112,874
83,574

-157
-161
-38
911
-12,245-0-11,692
3,665
32,44980,425
112,874-50
161-63,993944-11,157-1-74,095-1,020-61,749
32,449-29,300

Net cash provided by operating activities

INVESTING ACTIVITIES:Net cash used in investing activities

FINANCING ACTIVITIES:Net increase (decrease) in short-term bank loans
Repayments of long-term bank loans
Payments for purchase of treasury stock
Proceeds from sales of treasury stock
Dividends paid
Dividends paid for minority shareholders

Net cash used in financing activities
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIODCASH AND CASH EQUIVALENTS, END OF PERIOD

16

(5) Preparation of the Consolidated Financial Statements
Scope of Consolidation and Application of the Equity Method1.

Number of consolidated subsidiaries : 62 companies(Major consolidated subsidiaries :<overseas> HOYA HOLDINGS, INC., HOYA HOLDINGS N.V.,
HOYA HOLDINGS ASIA PACIFIC PTE LTD., HOYA PHOTONICS, INC.
<domestic> HOYA CANDEO OPTRONICS CORPORATION, HOYA HEALTHCARE CORPORATION

2.

Number of unconsolidated subsidiaries : None3.

Number of affiliates : 5 companies(Number of affiliates accounted for by the equity method : 1company, NH TECHNO GLASS CORPORATION)

Notes: Changes in Accounting Policies and Others
1. Changes in scope of consolidation and application of the equity met (In comparison to March 31, 2005)
1) Scope of consolidation: 4 companies increased in total.

5 companies increased due to the establishment:

HOYA MEDICAL EUROPE GMBH. (Germany)
HOYA HEALTHCARE (SHANGHAI) CO., LTD. (China)
HOYA CANDEO OPTRONICS KOREA CO., LTD. (Korea)
VISION MEMBRANE TECHNOLOGIES, INC. (U.S.A.)
Other one company (overseas)

1 company increased due to the transfer to theconsolidated subsidiary:

QSTREAMS NETWORKS, INC. (U.S.A.)

1 company decreased due to the merger into
the parent company:

HOYA ADVANCED SEMICONDUCTOR TECHNOLOGIES
CO.,LTD. (Japan)

1 company decreased due to the closing:

HOYA LENS MEXICO, SA.DE.CV. (Mexico)2) Application of the equity method
None

Consolidated
subsidiaries
Nonconsolidated
subsidiaries
Affiliates(accounted for by the equity
method)as of Mar. 31, as of Mar. 31,
2006
2005
62
58
(do 5, os57)(do 6, os52)(do -, os -)(do -, os -)55(do 5, os -)(do 5, os -)(1)(1)(do 1, os -)(do 1, os -)variance+4(do-1, os +5)(do-, os -)(do-, os-)(-)
(do-, os-)

Total Hoya Group

67

63

+4

(accounted for by the equity
method)

(1)

(1)

(-)

(do : domestic, os : overseas)
2. Changes in accounting policies
None

17

Notes Relating to Consolidated Statements of Cash Flows
1. Cash and Cash Equivalents at the End of the Period
Cash and deposits
Total

Millions of Yen
Years ended Mar. 31,
2006
2005
83,574
112,874
83,574
112,874

2. Details of Important Non-financial Trading
Year ended Mar.31, 2006

Millions of Yen
Cancellation of treasury stock
53,180(with effect on Feb 1, 2006 for 14,379,000 shares)
RE : The number of total issued and outstanding shares after the cancellation was 435,017,020 shares.

Year ended Mar.31, 2005

Millions of Yen
Cancellation of treasury stock
30,702(with effect on June 1, 2004 for 3,775,400 shares)

18

Notes Relating to Investment Securities and Derivatives
1.Investment securities with market values:（Millions of Yen））
As of Mar. 31,
2006
Available-for-sale

Securities ofwhich fair value
exceeds cost

Cost

2005

Fair Value

Variance

Cost

Fair Value

Variance

Marketable Equity securities

1,692

1,874

181

159

308

148

Government bonds
Corporate bonds

1,692

1,874

181

159

308

148

-

-

-

-

-

-

1,692

1,874

181

159

308

148

Others
Sub total
Marketable Equity securities
Securities ofwhich fair value
Government bonds
does NOT exceed
Corporate bonds
cost
Others
Sub total
Total

2. Condition of sales of marketable securitiearket during this fiscal year:（Millions of Yen））
Years ended March 31,
2006
Value of sales
Total of gains from sales

2005

-

Total of losses from sales-

3. Investment securities of without market values:（Millions of Yen））
As of Mar. 31,
2006
Non-marketable stock of subsidiaries
Total

11,104
11,104
802
279
1,081

Non-marketable equity securities
OthersTotal

4. Derivatives
None

19

2005

9,486
9,486
274
314
588

Notes Relating to Income Taxes
1. Breakdown of major factors giving rise to deferred tax assets and liabilities:
Millions of Yen
As of Mar. 31,
2006
2005

(1) Current deferred tax assets and liabilities
Deferred tax assets
Inventories - intercompany unrealized profits
Maintenance of environment
Accrued bonuses to employees
Accrued enterprise taxes
Amortization of goodwill
Other
Total amount of deferred tax assets - current(2) Non-current deferred tax assets and liabilities
Deferred tax assets
Amortization of goodwill and property, plant and equipment
Loss on impairment of long lived assets
Allowance for doubtful receivables
Loss on close of factory
Other
Total amount of deferred tax assets - fixed
Deferred tax liabilities
Reserve for deferred income taxes on fixed assets
Special depreciation reserve
Net unrealized gain on available-for-sale securities
Other
Total amount of deferred tax liabilities - fixed
Net amount of deferred tax assets - fixed

1,692
1,474
1,601
727
1,911
7,407

2,166
323
1,529
691
285
1,505
6,500

1,962
556
105
1,078
3,702

1,876
861
117
510
681
4,047

-406
-298
-74
-165
-945
2,757

-434
-313
-35
-165
-949
3,097

2. The effective income tax rates of the companies differed from the statutory tax rate for the following
reasons:
Years ended Mar.31,
2006
2005
Statutory tax rate of the Company(Adjustment)
Lower income tax rates applicable to income in certain foreign countries
Expenses not permanently deductible for income tax purposes
Per capita portion
Non-taxable dividend income
Intercompany cash dividend and transactions
Equity in earnings of affiliates
Tax credit on experiment and research expenses
Other adjustment - net
Effective income tax rate

40.4 %

40.4 %

-18.2
0.4
0.1
-1.8
1.8
-0.5
-0.5
0.6
22.3

-13.8
0.4
0.1
-2.6
0.8
-1.8
-0.8
0.3
23.0

Notes Relating to Employees' Retirement Benefits
1. Systems of employees' retirement benefits the Company adopts
The Company had systems to support lump sum severance pay and an employees' pension fund (Kosei Nenkin
Kikin). During the third quarter of the fiscal year ended in March 2003, the system of lump sum severance
pay was abolished. The employees' pension fund was dissolved with approval for its dissolution sanctioned by
the Minister of Health, Labor and Welfare on January 29, 2003 and this has been in the process of completion.
On May 26, 2004, the Company obtained approval from the Minister of Health, Labor and Welfare for thecompletion of the liquidation thereof.

2. Details of liabilities for employees' retirement benefits(1) Breakdown of liabilities for employees' retirement benefits
None(2) Breakdown of expenses for employees' retirement benefits
Additional retirement benefits paid to employees
Expenses for employees' retirement benefits(3) Calculation basis of liabilities for employees' retirement benefits
None

20

Millions of Yen
Years ended Mar.31,
2005
2006

1,688
1,688

842
842

Notes Relating to Impairment of Fixed Assets
1. Crystal Division(1) Group of assets applied :Production facilities of crystal glassware, mainly at Musashi Factory, Crystal Division(2) Breakdown of impairment

Machinery, etc.
Total

Millions of Yen
Years ended Mar.31,
2006
2005
864
864

92
92

2. Photonics Division(1) Group of assets applied :Production facilities of photonics products at Maebashi Factory, HOYA CANDEO OPTRONICSCORPORATION(2) Breakdown of impairment

Land
Buildings and Others
Total

Millions of Yen
Years ended Mar.31,
2006
2005
449
317
766

3. Headquarters(1) Group of assets applied :Land for lease at Machida-city, Tokyo(2) Breakdown of impairment

Land
Total

Millions of Yen
Years ended Mar.31,
2006
2005
368
368

21

-

5. Segment Information (unaudited)
HOYA CORPORATION and Consolidated Subsidiaries(1) Industry Segments
Annual : for the year ended March 31, 2006
Millions of Yen

Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
AssetsDepreciation
Loss on impairment
Capital Expenditures
R&D Expenses
Number of employees (p)ElectroOptics

Photonics

VisionCare

HealthCare

CrystalService

Total

Elimin.
Consolidated
or corp.*190,551744
191,296
116,434
74,86239.1%
204,191
18,71537,243
8,289
17,133

10,092 104,456
246
0
10,339 104,457
9,405 84,088
933 20,369
9.0% 19.5%
7,605 98,243
108
6,444
208
7,958
1,683
2,566
191
6,794

35,483
035,48328,624
6,859
19.3%
19,927
855
2,391
1,555
733

1,864
33
1,898
2,052
-154
-8.2%
840
864
761
39
86

1,777
4,333
6,111
5,464
646
10.6%
3,984
53
159
185

344,228
5,357
349,585
246,068
103,51629.6%
334,792
26,177864
48,722
14,13425,122(5,357)(5,357)(2,936)(2,421)
26,745
74
368
63
54

344,228
344,228
243,132
101,095
29.4%
361,537
26,251
1,232
48,785
14,13425,176

Annual : for the year ended March 31, 2005
Millions of Yen

Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
AssetsDepreciation
Loss on impairment
Capital Expenditures
R&D Expenses
Number of employees (p)ElectroOptics

Photonics

VisionCare

HealthCare

CrystalService

Total

Elimin.
Consolidated
or corp.*

165,664
526
166,190102,899
63,29038.1%
162,638
14,72931,962
7,797
13,462

10,749233
10,982
10,090
892
8.1%
7,648
126
766
191
894
226

94,971
17
94,98877,90917,07818.0%
90,765
5,899
6,786
1,523
6,464

31,409031,40924,2677,141
22.7%
18,329
668
737
716
601

3,672
50
3,722
4,143
-420
-11.3%
1,899
92
92
25
168

1,706
5,054
6,760
6,087
673
10.0%
3,215
81
218
256

308,172
5,881
314,054
225,398
88,65528.2%
284,497
21,506859
39,98910,957
21,177(5,881)(5,881)(2,146)(3,735)66,985
154
186
57

Total

Elimi. or
Consolidated
corp.*

308,172
308,172
223,252
84,92027.6%
351,482
21,660859
40,175
10,957
21,234

Ref : Differences between the years ended Mar.31, 2006 and 2005
Millions of Yen
ElectroOptics
Net sales:
To outside customers
Variance
Intersegment
Total
Operating expenses
Operating income
Variance
AssetsDepreciation
Loss on impairment
Capital Expenditures
R&D Expenses
Number of employees (p)Photonics

VisionCare

HealthCare

CrystalService24,887
-657
9,485
4,074
-1,80815.0%-6.1% 10.0%
13.0% -49.2%
218
13
-17
0
-17
25,106
-643
9,469
4,074
-1,824
13,535
-685
6,179
4,357
-2,091
11,572
41
3,291
-282
266
18.3%
4.6% 19.3%-3.9%
41,553
-43
7,478
1,598
-1,059
3,986
-18
545
187
-766
772
5,281
17
1,172
1,654
669
492
789
1,043
839
14
3,671
-35
330
132
-82
*Elimi. or corp. : Eliminations or corporate

71
4.2%
-721
-649
-623
-27
-4.0%
769
-28
-59
-71

22

36,056
11.7%
-524
524
35,531524
20,670-790
14,861 1,314
16.8%
50,295 -40,240
4,671
-80
5
368
8,733
-123
3,177
3,945
-3

36,056
11.7%
36,056
19,88016,17519.0%
10,055
4,591
373
8,610
3,177
3,942

Notes:1. Products and Services of each Business Division:
Business Category
Information Technology

Division
Electro-Optics

Photonics
Eye Care

Vision Care
Health Care
CrystalService

Others

Products and Services
Photomasks and Maskblanks for semiconductors,
Masks and devices for liquid-crystal displays (LCDs)
Glass disks for hard disk drives (HDDs), Optical Communication,
Optical lenses, Optical glasses, Electronic glasses, etc.
Laser equipments for industrial, dental and medical purposes,
Light sources for electronics industry, Special optical glasses, etc.
Eyeglass lenses, Eyeglass frames, etc.
Contact lenses, Intraocular lenses, etc.
Crystal glass products
Design of information systems, Outsourcing, etc.

2. Amounts and composition of unallocable operating expenses are included in "Eliminations or Corporate".
Corporate operating expenses mainly consist of the administration expenses of the headquarters of the Company
and the overseas regional headquarters, which are not allocated to each industry segment. Corporate operating
expenses for the years ended Mar. 31, 2006 and 2005 are as follows:
2006
2005

2,317 Million Yen
2,873 Million Yen

3. Corporate assets included in "Eliminations or Corporate" mainly consist of cash, time deposits, investments
securities and administrative assets of the Company and the overseas regional headquarters. Corporate assets as ofMar. 31, 2006 and 2005 are as follows:
2006
2005

34,912 Million Yen
75,075 Million Yen

23

(2) Geographical Segments
Annual : for the year ended March 31, 2006
Millions of Yen
Japan
Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
AssetsNorth
America

Europe

Asia

Total

35,471
221
35,692
34,606
1,086
3.0%
22,37739,231
683
39,91433,366
6,548
16.4%
63,34524,526
120,813145,340
97,225
48,11433.1%
149,298344,228
145,618 (145,618)
489,846 (145,618)
395,612 (152,479)
94,234
6,861
19.2%
398,861-37,323

244,998
23,900268,898
230,413
38,48414.3%
163,840

Elimi. or
Consolidated
corp.
344,228
344,228
243,132
101,095
29.4%
361,537

Annual : for the year ended March 31, 2005
Millions of Yen
Japan
Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
Assets230,945
19,048249,994
204,41245,581
18.2%
165,938

North
America

Europe

Asia

Total

30,775
199
30,97530,91262
0.2%
17,12833,803
255
34,05828,195
5,863
17.2%
32,927

12,64789,748102,396
71,00331,39330.7%
104,191

308,172
109,252 (109,252)
417,424 (109,252)
334,524 (111,272)
82,9002,020
19.9%
320,185
31,297

Elimi. or
Consolidated
corp.
308,172
308,172
223,252
84,92027.6%
351,482

Ref : Differences between the years ended Mar.31, 2006 and 2005
Millions of Yen
Japan
Net sales:
To outside customers
Variance
Intersegment
Total
Operating expenses
Operating income
Variance
AssetsNorth
America

EuropeAsia

14,053
4,696
5,428
11,879
6.1%
15.3%
16.1%
93.9%
4,852
22
428
31,065
18,904
4,717
5,856
42,94426,001
3,694
5,171
26,222-7,097
1,024
685
16,721-15.6% 1651.6%
11.7%
53.3%
-2,0985,249
30,41845,107*Elimi. or corp. : Eliminations or corporate

Total
36,056
11.7%
36,36672,422
61,088
11,334
13.7%
78,676

Elimi. or
Consolidated
corp.
-36,366-36,366-41,207
4,841-68,620

36,056
11.7%
36,056
19,88016,17519.0%
10,055

Notes:
1. The Company and subsidiaries are summarized in four segments by geographic area based on the countries where theGroup offices are located. The segments consisted of the following countries:
North America:
Europe:Asia:

United States of America, Canada, etc.
Netherlands, Germany, United Kingdom, etc.
Singapore, Thailand, China, Republic of Korea, Taiwan, etc.

2. Amounts and composition of unallocable operating expenses are included in "Eliminations or Corporate". Corporate
operating expenses mainly consist of the administration expenses of the headquarters of the Company, which are notallocated to each industry segment. Corporate operating expenses for the years ended Mar. 31, 2006 and 2005 are as
follows:
2006

2,317 Million Yen

2005

2,561 Million Yen

3. Corporate assets included in "Eliminations or Corporate" mainly consist of cash, time deposits, investments securities
and administrative assets of the Company. Corporate assets as of Mar. 31, 2006 and 2005 are as follows:2006

33,958 Million Yen

2005

24

72,840 Million Yen

(3) Sales to Foreign Customers
Annual : for the year ended Mar. 31, 2006
Millions of Yen

Overseas Sales (A)Total Consolidated Net Sales (B)Overseas Sales ratio A/B
Regional Sales ratio

North
America

EuropeAsia

42,673

41,20085,988

859

12.4%
25.0%

12.0%
24.1%

25.0%
50.4%

0.2%
0.5%

Other

Total

170,722344,22849.6%
100.0%

Annual : for the year ended Mar. 31, 2005
Millions of Yen

Overseas Sales (A)Total Consolidated Net Sales (B)Overseas Sales ratio A/B
Regional Sales ratio
Ref:

EuropeAsia

43,51936,43061,797

10

14.1%
30.7%

11.8%
25.7%

20.1%
43.6%

0.0%
0.0%

Other

Total

141,758
308,17246.0%
100.0%

Differences between the years ended Mar.31, 2006 and 2005
Millions of Yen

Overseas Sales (A)Total Consolidated Net Sales (B)Variance of Overseas Sales

Note:

North
America

North
America

Europe

-846

4,770

24,191

-1.9%

13.1%

39.1% 8490.0%

Asia

Other

849

Total

28,96436,056
20.4%

The Company and subsidiaries are summarized in four segments by geographic area based on the
countries where the Customers are located. The segments consisted of the following countries:
North America:
United States of America, Canada, etc.
Europe:Netherlands, Germany, United Kingdom, etc.
Asia:
Singapore, Republic of Korea, Taiwan, etc.
Other:
Saudi Arabia, Brazil, etc.

25

6. Composition of Net Sales by Business Category(Unaudited)

HOYA CORPORATION and Consolidated Subsidiaries
Millions of Yen [%]Business Category
Company
Electro-Optics
Domestic
Overseas
total
Photonics
Domestic
Overseas
total
Information Technology
Domestic
Overseas
total
Vision Care
Domestic
Overseas
total
Health Care
Domestic
Overseas
total
Eye Care
Domestic
Overseas
total
CrystalDomestic
Overseas
total
Service
Domestic
Overseas
total
OthersDomestic
Overseas
total
Total Net Sales
Domestic
Overseas
Total

Years ended March 31,
2006
2005

Variance
Value%

94,448 (96,103 (
190,551 [49.6 )
50.4 )
55.4 ]

86,964 (78,699 (165,664 [52.5 )
47.5 )
53.8 ]

7,484
17,40424,887

8.6
22.1
15.0

5,519 (
4,573 (
10,092 [54.7 )
45.3 )
2.9 ]

7,291 (
3,457 (
10,749 [67.8 )
32.2 )
3.5 ]-1,772
1,116
-657

-24.3
32.3
-6.1

99,967 (100,677 (
200,644 [49.8 )
50.2 )
58.3 ]

94,256 (82,157 (176,413 [53.4 )
46.6 )
57.2 ]

5,711
18,52024,231

6.1
22.5
13.7

36,089 (68,367 (104,456 [34.5 )
65.5 )
30.4 ]

36,601 (
58,370 (94,971 [38.5 )
61.5 )
30.8 ]

-512
9,997
9,485

-1.4
17.1
10.0

34,228 (
1,254 (
35,483 [96.5 )
3.5 )
10.3 ]

30,692 (716 (31,409 [97.7 )
2.3 )
10.2 ]

3,536
538
4,074

11.5
75.1
13.0

70,317 (69,622 (139,940 [50.2 )
49.8 )
40.7 ]

67,293 (59,086 (126,380 [53.2 )
46.8 )
41.0 ]

3,024
10,536
13,560

4.5
17.8
10.7

1,442 (
421 (
1,864 [

77.4 )
22.6 )
0.5 ]

3,158 (
514 (
3,672 [

86.0 )
14.0 )
1.2 ]-1,716-93-1,808

-54.3
-18.1
-49.2

1,777 ( 100.0 )- (-)
1,777 [
0.5 ]

1,706 ( 100.0 )- (-)
1,706 [
0.6 ]

71
71

4.2
4.2

3,220 (
421 (
3,642 [

4,864 (
514 (
5,378 [

90.4 )
9.6 )1.7 ]-1,644-93-1,736

-33.8
-18.1
-32.3

166,414 ( 54.0 )141,758 ( 46.0 )
308,172 [ 100.0 ]

7,092
28,96436,056

4.3
20.4
11.7

88.4 )
11.6 )
1.0 ]

173,506 ( 50.4 )
170,722 ( 49.6 )
344,228 [ 100.0 ]Notes: 1.Figures of less than a million yen are omitted.
2.Figures in ( ) are percentages of business category sales.
3.Figures in [ ] are percentages of total net sales.

26