TOKYO ELECTRON

May 14, 2009

Consolidated Financial Review
for the Year Ended March 31, 2009
Company name:
URL:
Telephone number:
Stock exchange listing:Company representative:
Person-in-charge:
Due date of annual general shareholder's meeting:Due date of starting delivery of dividends:
Due date of submitting of financial statement:

Tokyo Electron Limited
http://www.tel.com(03) 5561-7000
Tokyo Stock Exchange 1st Section (Code 8035)
Tetsuro Higashi, Chairman & CEO
Yukio Saeki, Director, Accounting Department

June 19, 2009
May 29, 2009
June 19, 2009

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

1. Financial highlights for the year ended March 31, 2009
(1) Operating results
Note: Percentages indicate changes from the same period of the previous fiscal year.
Year ended
March 31, 2008
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Fully diluted net income per share (Yen)
Return on equity
Ordinary income to total assets
Operating income to net sales
Profit/loss on equity method:

906,091
168,498
172,713106,271594.01592.71
Year ended 3/31/09: - million yen
Year ended 3/31/08: - million yen

March 31, 2009
%
6.4
17.0
20.0
16.4
21.4
22.1
18.6

508,082
14,71020,555
7,543
42.15
42.07
-

(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Net assets per share (Yen)
Equity: 518,387 million yen (as of March 31, 2009)
534,953 million yen (as of March 31, 2008)

As ofMarch 31, 2008
792,817545,24467.5
2,989.70

As ofMarch 31, 2009
668,998529,265
77.5
2,896.55(3) Cash flow

(Millions of yen)
Year ended

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalents at end of period

March 31, 2008
116,939(30,186)(27,033)
193,492

1

March 31, 2009
81,030(160,621)(46,015)65,883%(43.9)(91.3)(88.1)(92.9)
1.4
2.8
2.9

TOKYO ELECTRON

2. Dividends
Year ended
March 31, 2008

Year ended
March 31, 2009

70.00
55.00
125.00

20.00
4.00
24.00

Year ended
March 31, 2008

Year ended
March 31, 2009

22,365
21.0
4.5

4,294
56.9
0.8

1Q-end dividend per share (Yen)
2Q-end dividend per share (Yen)
3Q-end dividend per share (Yen)
Year-end dividend per share (Yen)Annual dividend per share (Yen)

Total dividend (Millions of yen)
Payout ratio (%)
Dividend on equity (%)

Year ending
March 31, 2010
(Forecast)
4.00
4.00
8.00
Year ending
March 31, 2010
(Forecast)-

3. Earnings forecasts for the year ending March 31, 2010
Note: Percentages for full business year indicated changes from the previous term, and for interim period indicatedchanges from the previous interim period.
Six months ending
Year ending
June 30, 2009
March 31, 2010
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)

126,000(42,000)(41,000)(26,000)(145.28)%(58.2)-

300,000(63,000)(61,000)(38,000)(212.33)%(41.0)-

4. Others(1) Important changes in subsidiaries. (Changes on specific subsidiaries with changes in scope of consolidation): None
(2) Changes in principles, procedures and display of accounting method concerning consolidated statement policies.
(Listed as changes in basis of presentation of consolidated financial statement)
1. Changes in accounting policies: Yes
2. Other changes: None
(3) Number of shares outstanding (common stock)
1. Number of shares issued
As of March 31, 2009:

180,610,911 shares

As of March 31, 2008:

180,610,911 shares

2. Number of shares of treasury stock
As of March 31, 2009:

1,643,398 shares

As of March 31, 2008:

1,678,927 shares

2

TOKYO ELECTRON(Reference) Non-consolidated financial review for the year ended March 31, 2009
1. Financial highlights for the year ended March 31, 2009
(1) Operating results
Note: Percentages indicate changes from the previous fiscal year.
Year ended
March 31, 2008
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Fully diluted net income per share (Yen)

767,505
86,233
95,92651,471287.71287.08March 31, 2009
%
6.6
21.4
25.1
(0.4)
-

389,458
8,405
14,979
9,922
55.45
55.33

As of
March 31, 2008
598,762354,60759.1
1,979.10

As ofMarch 31, 2009
486,594
349,04871.5
1,943.93%(49.3)(90.3)(84.4)(80.7)-(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Net assets per share (Yen)
Equity: 347,899 million yen (as of March 31, 2009)
354,123 million yen (as of March 31, 2008)

Explanations on the appropriate use of earnings forecast:
The performance forecasts and estimates stated in this Financial Review are based on certain assumptions judged to be reasonable at the present
time in light of information currently available. Consequently, actual operating results may differ substantially from the projections in the financial
review.

3

Operating Results(1) Analysis of Operating Results(i) Business Environment during the Fiscal Year Ended March 31, 2009
During the fiscal year under review, the effects of the recession triggered by the financial crisis in the UnitedStates have spread to Europe and Asia, leading to a global economic downturn.
The electronics industry, in which the Company conducts business, is experiencing decline in demand forelectronic devices such as PCs, mobile phones, and digital home appliances as a result of the economic
downturn. Demand and prices are also falling in semiconductor markets, and semiconductor manufacturers
are delaying and freezing investment in facilities.

(ii) Overview of Profits and Losses during the Fiscal Year Ended March 31, 2009
It is under these harsh economic conditions, the Company’s financial results were down sharply from theprevious fiscal year as a result of the substantial impact from the deterioration of the business environment
including a marked drop in sales in the semiconductor production equipment business sector.

However,the Company managed to maintain profitability over the entire fiscal year due to efforts to reinforce fixed
cost reductions and improve profits and losses from the outset of last year. Profits and losses for the fiscal
year were as follows.

Consolidated net sales for the fiscal year decreased by 43.9% compared to the previous fiscal year, to508,082 million yen. Domestic net sales decreased by 35.5%, to 208,870 million yen, and overseas net
sales decreased 48.6%, to 299,211 million yen, with overseas net sales accounting for 58.9% ofconsolidated net sales. Consolidated orders for the fiscal year fell 50.9%, to 365,952 million yen, andconsolidated order backlogs dropped 43.7%, to 182,833 million yen.

Cost of sales for the fiscal year dropped 37.7%, to 370,673 million yen, and gross profit decreased 55.9%,
to 137,408 million yen. As a result, gross profit margin decreased by 7.4 percentage points, to 27.0%.

Selling, general, and administrative (SG&A) expenses decreased 14.1%, to 122,697 million yen, with theirratio to net sales increasing by 8.3 percentage points to 24.1%.

As a result, operating income decreased 91.3%, 14,710 million yen. Ordinary income decreased by 88.1%,
to 20,555 million yen, with non-operating income and expenses at 6,809 million yen and 964 million yen,respectively. In terms of margins, the operating income margin decreased by 15.7 percentage points, to2.9%, and the ordinary income margin dropped 15.1 percentage points, to 4.0%.

4The Company posted unusual or infrequent loss of 10,918 million yen (compared to unusual or infrequentloss of 3,493 million yen in the previous fiscal year) due to loss on revaluation of investment securities andprovision of allowance for doubtful accounts.

Income before income taxes for the fiscal year was 9,636 million yen, a 94.3% decrease over the previous
fiscal year, and net income was 7,543 million yen, a 92.9% decrease.

As a result, net income per share was 42.15 yen (594.01 yen for the previous fiscal year).

(iii) Overview of Operations during the Fiscal Year Ended March 31, 2009 by Business Segment

Industrial Electronic Equipment BusinessNet sales from external customers for this segment during the fiscal year decreased by 47.9% compared tothe previous fiscal year, to 413,874 million yen.

(a) Semiconductor Production Equipment
The global fall in semiconductor demand forced semiconductor manufacturers to curtail production andpostpone and limit capital investment. As a result of these factors, consolidated net sales in this segment
tumbled to 325,383 million yen, down 55.2% from the previous fiscal year. Also, semiconductor
manufacturers adjusted inventories, and there were gradual signs that the market had bottomed out
including a start of a recovery in semiconductor prices towards the end of the fiscal year, but capital
investment has yet to recover and harsh conditions are ongoing.

Developments concerning products during the fiscal year under review include the market launch of several
new products such as a high-productivity model “CLEAN TRACK™ LITHIUS Pro™ V”, coater/developers, ahigh-productivity model with reduced environmental impact “Trias™ SPAi”, plasma processing system for
nitridation and oxidation, and a high-functionality model “NS300+”, scrubber system.

(b) Flat Panel Display/Photovoltaic Cell (FPD/PV) Production Equipment*
Sales in this segment were primarily of production equipment for the large liquid crystal display (LCD)
manufacturing lines of panel manufacturers, and consolidated net sales were 88,107 million yen, up 29.5%
from the previous fiscal year. The situation concerning orders, however, is serious, with panel
manufacturers curtailing production and limiting capital investment. In the PV production equipment area,
the Company continued product development and worked to build business foundations including theconclusion in February 2009 of a representative agreement for the Asia Oceania region with Oerlikon Solar,a Swiss manufacturer of PV production equipment.

5

* Starting from the second half of the current fiscal year, the name of this segment was changed from “Flat Panel Display (FPD)
Production Equipment” to “Flat Panel Display/Photovoltaic Cell (FPD/PV) Production Equipment.”(c) Others
Consolidated net sales for this segment decreased by 15.5% compared to the previous fiscal year, to 384
million yen.

Electronic Components and Computer Networks Business

Sales of custom ICs for mobile phone base stations and memory ICs for PCs were relatively strong in thefirst half, but the market rapidly turned downward in the second half, and as a result, sales in thesemiconductors and electronic devices segment were sluggish overall. This segment was also subject tothe effects of product adjustments in various areas including consumer and industrial equipment.

In the computer systems segment, the trend towards limiting capital investment increased because of poor
corporate performance and uncertainty concerning the future economic developments, and it appeared thatcompanies continued putting off new investment in IT.

As a result of these developments, consolidated net sales from external customers in this segment during
the fiscal year under review were down 15.3% from the previous fiscal year to 94,207 million yen.

(For reference）
Consolidated
Year ended March 31, 2009
Net Sales
Industrial Electronic Equipment
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
ＦＰＤ/PV Production Equipment
OthersElectronic Components & Computer Networks
Operating Income
Ordinary Income
Net Income

1Q
154,827
129,904
112,546
32,896
18,9097,900
14,842
25,724
3,788
8,484
17,26493
24,923
21,43022,263
12,853

2Q
146,398
119,196
96,15633,36916,010
6,942
11,791
13,1603,236
11,64522,915
124
27,202
4,852
6,644
4,508

First
Half
301,225
249,100
208,702
66,26534,92014,842
26,63338,884
7,025
20,12940,179218
52,12526,282
28,907
17,361

3Q
101,088
78,25357,82721,007
13,538
5,751
5,700
4,896
3,301
3,631
20,37055
22,835(2,001)(74)(7,686)

4Q
105,767
86,52058,852
18,061
16,915
9,794
5,211
5,526
760
2,582
27,557110
19,246(9,570)(8,278)(2,132)

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

6

SecondFull YearHalf
206,856 508,082
164,774 413,874
116,680 325,383
39,068 105,334
30,45465,374
15,54630,38910,91237,546
10,42349,308
4,062
11,087
6,213
26,34347,927
88,107166384
42,081
94,207(11,572)
14,710(8,352)
20,555(9,818)
7,543（Millions of yen）
Year ended
March 31, 2008
906,091
794,910
726,439
191,934
108,708
36,92973,212
254,972
29,86430,81968,016454
111,181
168,498
172,713106,271

(iv) Projected Operating Results for the Next Fiscal Year Ending March 31, 2010
There are concerns that the global financial crisis will become more serious or that the global economic
downturn will intensify.

In semiconductor markets, it will still be some time before capital investment by

manufacturers recovers fully despite expectations that demand will increase starting in the second half.
Under these challenging circumstances, the Company will make company wide efforts to reduce costs
substantially and reinforce profit structures while continuing the development of technologies in growthareas and implementing measures to enhance its manufacturing capabilities to enable it to achieve growththat exceeds that of the market when economic conditions improve. The financial forecast for the next fiscal
year (the fiscal year ending March 31, 2010) is set forth below.

Consolidated Forecast
Year ending March 31, 2010
Net Sales
Industrial
Electronic Semiconductor Production Equipment
Equipment FPD/PV Production Equipment
OthersElectronic Components & Computer Networks
Operating Income
Ordinary Income
Net Income(Billions of yen, Y/Y change)
InterimFull Year
126.0-58.2%
300.0-41.0%
89.5-64.1%
223.0-46.1%
60.0-71.3%
164.0-49.6%
29.5-26.6%
59.0-33.0%
0.0
0.0
36.5-30.0%
77.0-18.3%(42.0)(63.0)(41.0)(61.0)(26.0)(38.0)-(2) Analysis of Financial Conditions(i)Financial Conditions
Current assets at the end of the fiscal year were down 134,546 million yen from the end of the previous
fiscal year to 505,687 million yen. Major factors in the decline were a decrease in trade notes and accounts
receivable of 104,483 million yen and a decrease in inventories of 26,909 million yen.

Tangible fixed assets decreased by 4,199 million yen from the end of the previous fiscal year, to 99,906
million yen.

Intangible fixed assets decreased by 2,493 million yen from the end of the previous fiscal year, to 10,760
million yen.

Investments and other assets increased 17,419 million yen from the end of the previous fiscal year to
52,644 million yen because of an increase in deferred income taxes and other factors.
As a result, total assets decreased by 123,819 million yen from the end of the previous fiscal year, to668,998 million yen.

7

Current liabilities fell by 109,548 million yen from the end of the previous fiscal year to 89,272 million yen.
Major factors in the decrease were a decline in trade notes and accounts payable of 30,939 million yen, adecrease from the redemption of the 11th issue of unsecured corporate bonds worth 30,000 million yen,
and a decrease in income taxes payable of 26,487 million yen.

Long-term liabilities increased by 1,708 million yen from the end of the previous fiscal year to 50,460 million
yen.

Net assets were down 15,979 million yen from the end of the previous fiscal year to 529,265 million yen asa result of posting a net income of 7,543 million yen, 9,841 million yen in deductions for payment of theyear-end dividend for the previous fiscal year and 3,578 million yen for payment of the interim dividend, and10,114 in valuation and translation adjustments. The equity ratio was 77.5%.

(ii) Cash Flow
The balance of cash and cash equivalents at the end of the fiscal year fell from 193,492 million yen at theend of the previous fiscal year by 127,609 million yen to 65,883 million yen. The combined balance of cash
and cash equivalents plus time deposits and certificates of deposit with deposit terms of over three months,
which are not included in cash and cash equivalents, increased from 203,562 million yen at the end of theprevious fiscal year by 6,593 million yen to 210,156 million yen. Cash flows during the fiscal year underreview were as follows.

Cash flow from operating activities during the fiscal year was 81,030 million yen, 35,909 million yen lower
than the previous fiscal year. Major positive factors included net income before income taxes of 9,636
million yen, depreciation and amortization of 23,068 million yen, a decrease in trade notes and accounts
receivable of 102,412 million yen, and a decrease in inventories of 21,282 million yen. The major negative
factors were a decrease in accounts payable of 29,942 million yen and the payment of income taxes of
40,836 million yen.

Cash flow from investing activities was 160,621 million yen, primarily the result of a net increase in time
deposits of 134,374 million yen and the acquisition of tangible fixed assets worth 17,227 million yen. Cashflow from investing activities in the previous fiscal year was 30,186 million yen.

Cash flow from financing activities was 46,015 million yen, primarily the result of the redemption of the 11th
issue of unsecured corporate bonds worth 30,000 million yen and the payment of 13,420 million yen in
dividends. Cash flow from financing activities in the previous fiscal year was 27,033 million yen.

8

Fiscal year ended
March 31, 2008
67.5
136.8
0.3
335.66Equity ratio (%)
Equity ratio at market value (%)
Interest-bearing debt to cash flow ratio (times)
Interest coverage ratio (times)

Fiscal year ended
March 31, 2009
77.5
97.4
0.0
401.23Equity ratio: (Equity / Total assets) x 100
Equity ratio at market value: (Market capitalization / Total assets) x 100
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Cash flow from operating activities
Interest coverage ratio: Cash flow from operating activities / Interest expenses* All indicators are calculated using financial figures on a consolidated basis.
* Market capitalization is calculated based on the following formula: Closing stock price at fiscal year-end × Number of shares
outstanding at fiscal year-end after deduction of treasury stock.
* Cash flow from operating activities corresponds to the cash flow from operating activities in the consolidated statement of cash
flow. Interest-bearing debt includes all liabilities for which the Company is paying interest among the liabilities reported on the
consolidated balance sheet. Interest expenses correspond to the interest paid in the consolidated statement of cash flow.

(3) Basic Policy for Profit Allocation and Payment of Dividends for Current and Next Fiscal Years

The dividend policy of the Company is to link dividend payments to business performance and earnings on
an ongoing basis. Its basic policy for returning profits to shareholders is to maintain a payout ratio of around
20% based on consolidated net income.

In order to expand the Company’s business scope, internal capital reserves are used effectively for R&D,
capital investment, and global business expansion. The priority is also placed on sound cash flow
management and earnings growth in order to respond to the support provided to the Company byshareholders.

Although a loss was recorded in the second half of the fiscal year, the Company intends to pay a year-end
dividend for the fiscal year under review (the fiscal year ended March 31, 2009) of four yen per share (for a
total dividend of 24 yen per share when combined with the 20-yen interim dividend) to meet shareholder
expectations.

Although the outlook for financial results in the next fiscal year (the fiscal year ending March 31, 2010) is
extremely severe, as discussed above, the Company plans to pay a dividend of eight yen per share for the9entire year (a four-yen interim dividend and a four-yen year-end dividend) from the perspective ofcontinuing the return of profits to shareholders.

(4) Business-related and Other Risks
The following are possible risks that may have an impact on the Company’s operating results, stock prices,or financial position.

(i) Impact from Changes in the Semiconductor Market
The Company has been able to achieve a high profit margin by concentrating resources in the high-techfield, including semiconductor production equipment, where technologies undergo rapid change and theCompany is able to display its strength.

The semiconductor market may enjoy broad growth throughtechnological change, while on the other hand, the size of the market may temporarily contract due to an
imbalance of supply and demand.

Therefore, the Company has been actively involved in businessstructural reforms to be able to generate profit even when such rapid changes take place.

However, thepossibility does exist that business results will be negatively impacted by an unexpectedly broad contractionin the size of the market, resulting in order write-offs, excess capacity and head-count, or increased
inventories.

(ii) Impact from Transactions Concentrated on Particular Customers
The Company has been successful in expanding its business transactions with the world’s leading
semiconductor manufacturers both inside and outside of Japan by providing products equipped withsuperior, cutting-edge technology and offering a service system with high customer satisfaction.

However,since the Company’s net sales may at times be temporarily concentrated on particular customers due to thetiming of large-scale capital investments by major semiconductor manufacturers, there is the possibility of anegative impact on business results from intensified sales competition.

(iii) Impact from Research and Development
The Company has created cutting-edge technologies through its ongoing implementation of proactive R&D
investment

andactivities,

includingminiaturization,

vacuum,coating/developing, cleaning, wafer-transfer, and clean technologies.

plasma,thermal-processing,

By promptly introducing new

products on the market that are equipped with these technologies, the Company has successfully obtained
a large market share in each of the product fields, along with a high profit margin.

However, the possibility

does exist that the ill-timed introduction of new products may have a negative impact on the Company’s
performance.

10

(iv) Safety-related impact
The Company always carries out operations, including development, manufacturing, sales, services, andadministration, with the necessity of paying attention to safety and health in mind.

In accordance with thisbasic principle, the Company is making an active and continued effort to improve the safety of its products
and eliminate any harmful impact on health.

If damage were to be caused to customers or orders were to

be canceled, or some other unexpected event were to occur due to a problem arising from the safety of theCompany’s products or other causes, it would likely adversely affect the performance of the Company.

(v) Impact from Quality Issues
The Company has been proactively developing superior, cutting-edge technologies utilized in new productsthat are promptly introduced onto the market, while at the same time establishing a quality assurance
system, including obtaining ISO 9001 certification.

The Company has also worked to establish aworld-class service system, and this has resulted in a large number of customers adopting our products.
However, because of the cutting-edge nature of our technologies, in addition to other factors, many of thetechnologies developed are in unknown fields, and the possibility exists that business results may be
negatively affected by the unforeseen appearance of defective products.

(vi) Impact of Intellectual Property Rights
In order for the Company to set its products apart from rival products and enhance its competitive strength,
the Company has promoted an R&D strategy for the prompt development of cutting-edge technologies,
together with business and intellectual property strategies. This has made it possible for the Company toobtain many of its own proprietary technologies, thereby successfully ensuring a large market share andhigh profit margin in each product field.

However, partly because the Company’s products use many of theconsolidated and optimized cutting-edge technologies, there may be cases where a negative impact on
business results arises from avoiding the use of third-party technologies and intellectual property rights.

(vii) Impact of Fluctuating Foreign Exchange Rates
By succeeding in actively developing overseas operations, the Company has increased the proportion of its
overseas sales.

As a rule, the Company carries out export transactions on a yen-basis in order to avert

exchange-related risks, but there are some exports involving foreign currency.

In these cases, theCompany employs an exchange risk hedge, such as a forward exchange contract at the time an order isplaced.

However, since for overseas customers, exchange-related risks can arise from fluctuations inprices due to drastic exchange fluctuations, this may have an indirectly negative impact on the Company’s
performance.

11

(viii) Other Risks
The Company has been active in creating new high-growth and high-revenue businesses, pursuing evenhigher revenue in existing businesses, and improving its structure so that it can earn profits even as themarket shrinks.

It has also worked to promote environmental protection activities and restructure its

compliance and risk management systems.

However, to the extent that the Company performs its

operations, it is subject - just like other companies in the same or different industries - to the impact fromfactors that include the global or local economic environment, natural disasters, wars, terrorism,
unavoidable incidents (such as infectious diseases), financial or stock markets, government regulation,
provision systems of suppliers, market conditions for products and real estate, securing of personnel
domestically or overseas, competition over standardization, loss of important personnel, etc., and thus it
can be assumed that the Company’s business performance will be negatively affected at times by suchfactors.

Note: The financial forecasts and estimates stated in this interim financial review are based on certain
assumptions judged to be reasonable at the present time in light of information currently available
concerning economic conditions in Japan and overseas, fluctuations in foreign exchange rates, and otherfactors that may have an impact on performance.

They are therefore susceptible to the impact of many uncertainties, including market conditions, competition,
the launching of new products (and their success or failure), and global conditions in the semiconductor
production equipment business.

Consequently, actual sales and profits may differ substantially from the

projections stated in this financial review.

Management Policy(1) Basic Management Policy
The basic management policy of the TEL Group is to raise its corporate value through profit-oriented
operations by placing the highest priority on customers, enhancing product and technology development
capabilities, and invigorating its workforce.

Under this basic fundamental policy, the TEL Group will engage in the development of vibrant andinternationally competitive companies with high growth potential and profitability that are attractive toinvestors.

12(2) Management Tasks
The TEL Group is currently facing a serious global recession, and the condition of the markets in which it isactive is severe. As such, it will make extensive efforts to substantially reduce costs and reinforce profit
structures. In doing so, it is crucial that the TEL Group maintains the ability to develop highly competitive
products in cutting-edge technology fields so that it can achieve continuous growth and high profitability inthe future. The TEL Group will advance intensive R&D investment in high-growth areas and work to rapidly
market products in order to achieve growth that greatly exceeds that of the market during the coming
economic recovery. It will work to rapidly expand the photovoltaic cell production equipment segment, which
the TEL Group entered last year, and develop it into a core group business. With respect to reinforcing
manufacturing capabilities, the TEL Group will intensively reduce manufacturing costs by emphasizing
internal production, changing materials and components, and other measures, in addition to focusing on theongoing improvement of quality and the reduction of manufacturing lead times. With respect to humanresources, which are the source of growth, the TEL Group will reallocate personnel in a way that best
responds to changes in the business environment while implementing extensive skill enhancement
programs and taking other measures to further develop human resources and lead to future advances.

Considering environmental responses to be a high-priority management issue, the Company conducts
internal activities to reduce environmental impact while saving energy and decreasing the amount of
restricted chemicals needed when the semiconductor and FPD production equipment that it sells is used. In
addition to reducing the environmental impact of its existing businesses and products, the TEL Group
believes that contributing to the solving of global environmental issues through the development of the
newly established photovoltaic cell production equipment business is one of its most important group
missions.

With respect to finances, although the Company has adequate shareholders’ equity and cash on hand,
given the current severe financial conditions, it will continue to streamline inventories, reduce manufacturing
lead times as well as maintaining and enhancing profitability, among other measures, in order to maximize
cash flows and build an even stronger financial structure.

With regard to compliance, corporate ethics and risk management, areas that have been implemented
thoroughly for many years, the Company will take necessary measures based on the basic policy forinternal controls adopted by the resolution of the Board of Directors, including appointing an executive
officer in charge of compliance and internal control and the establishing of the Risk Management & Internal
Control Department in April 2009.

13

Others

Executive Changes (Effective June 19, 2009)(i) Candidate for Corporate Director
Corporate Director & Senior Vice President

Takashi Nakamura (current Senior Vice President)(ii) Retiring Corporate Director
Corporate Director

Yuichi Honda (to be appointed as Statutory Auditor)

Corporate Director

Yasuhiro Tsunemi

Note: Mr. Yasuhiro Tsunemi is an external corporate director as stipulated in Article 2 Item 15 of theCompany Law.

(iii) Candidate for Statutory Auditor
Statutory Auditor

Yuichi Honda (current Corporate Director)(iv) Retiring Statutory Auditor
Statutory Auditor

Takeo Tanaka (to be appointed as Corporate Consultant)

14

TOKYO ELECTRON

Consolidated Balance Sheet(Millions of yen)
As ofMarch 31, 2008ASSETS

As ofMarch 31, 2009

Current assets
Cash and deposit

67,54051,156

Trade notes and accounts receivable

224,170

119,687

Securities

136,022

159,001

Merchandise and finished goods-

88,416Work in process-

29,306

Raw materials and supplies-

16,518Inventories

161,151

Defferd income taxes

24,140

11,480

Others27,27130,139(62)(20)

640,233

505,687

119,577

121,568

Accumulated depreciation(67,279)(71,308)

Buildings and structures, net

52,29750,259Allowance for doubtful accounts
Total current assets-

Long-term assets
Tangible fixed assets
Buildings and structures

Machinery and carriers

69,81872,586

Accumulated depreciation(51,388)(54,999)

Machinery and carriers, net

18,42917,587

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

29,917-(21,467)

-

8,449

-

Land

20,72920,678Construction in progress

4,199

4,708

Others
Accumulated depreciation-

31,886-(25,213)

Others, net-

Total tangible fixed assets

6,672

104,105

99,906

Others13,253

10,760Total intangible fixed assets

13,253

10,760Investment securities

8,837

9,131

Deferred income taxes

14,846

31,939Others

11,843

19,118Intangible fixed assets

Investments and other assets

Allowance for doubtful accounts
Total investments and other assets
Total long-term assets
Total assets

15

(301)

(7,545)35,22452,644

152,584

163,311792,817

668,998

TOKYO ELECTRON(Millions of yen)
As ofMarch 31, 2008

As ofMarch 31, 2009

LIABILITIESCurrent liabilities
Trade notes and accounts payable

55,332

24,393

Income taxes payable

28,239Accrued employees' bonuses

12,726

4,965

Accured warranty expenses

9,815

6,115

Others

92,706

53,798

Total current liabilities

198,820

89,272

43,70447,046-Long-term liabilities
Accrued pension and severance costs
Others

5,047

3,413

Total long-term liabilities

48,75250,460247,572

139,732

54,961

54,961

Total liabilities

NET ASSETS
Shareholders' equity
Common stock
Capital surplus

78,392

78,114Retained earnings

410,866

404,435

Treasury stock(11,369)(11,111)

Total shareholders' equity

532,850

526,398

2,172

(842)

460

66

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Translation adjustments(529)(7,235)

Total valuation and translation adjustments

2,102(8,011)

483

1,148

Minority interests

9,807

9,729

Total net assets

545,244529,265

792,817

668,998

Subscription rights to shares

Total liabilities and net assets

16

TOKYO ELECTRON

Consolidated Statement of Income(Millions of yen)
Year ended
March 31, 2008

Year ended
March 31, 2009

Net sales

906,091

508,082

Cost of sales

594,794

370,673

Gross profit

311,297

137,408

Salaries and allowances

20,044

19,042

Provision for accrued bonuses

3,411

1,269

Provision for retirement allowances

1,990

1,998

Other personal expenses

11,647

7,044

Selling, general & administrative expenses

Depreciation and amortization

5,355

5,872

Research and development expenses

66,07260,987

Others34,277

26,481

Total selling, general & administrative expenses

142,799

122,697

168,498

14,710Interest income

1,416

1,707

Revenue from development grants

2,170

2,700

Others

1,544

2,400

Total non-operating income

5,131

6,809

343

175

Operating income
Non-operating income

Non-operating expenses
Interest expenses
Lease expenses of fixed assets

240

266

Loss on sale of trade notes and accounts receivable

167

132

Others164389

Total non-operating expenses

916

964

172,713

20,555

2,364

67

Ordinary income
Unusual or infrequent profit
Gain on sale of fixed assets
Gain on reversal of subscription rights to shares

466-

Others

188

18

3,020

85

-

7,360

Total unusual or infrequent profit
Unusual or infrequent loss
Provision of allowance for doubtful accounts
Loss on retirement or sale of fixed assets

884

Loss on impairment

808

-

-

2,432

Office relocation expenses

729

212

Amortization of goodwill

4,072

Loss on revaluation of investment securities

Others

352

-

18

646

6,513

11,004

Income before income taxes

169,219

9,636

Provision for income taxes and enterprise taxes

56,568

4,552

Deferred income taxes

5,373(2,762)

Total income taxes

61,942

1,790

Minority interests

1,005

303

106,271

7,543

Total unusual or infrequent loss

Net income

17Consolidated Statements of Changes in Net Assets

TOKYO ELECTRON(Millions of yen)

Year ended
March 31, 2008

Year ended
March 31, 2009

54,961
54,961

54,961
54,961

78,34645
78,39278,392(278)
78,114

328,026

410,866-(551)(23,431)106,271
410,866(13,420)7,543(2)404,435(12,167)(40)
838(11,369)(11,369)(38)
296(11,111)449,166

532,850-(551)(23,431)106,271(40)
884
532,850(13,420)
7,543
(38)
17
(2)
526,398

Shareholders' equity
Common stock
Balance at beginning of period
Balance at end of period

Capital surplus
Balance at beginning of period
Disposal of treasury stock
Balance at end of period

Retained earnings
Balance at beginning of period
Changes in accounting treatment
by subsidiaries outside Japan
Cash dividends
Net income
Effect of changes in scope of consolidation
Balance at end of period

Treasury stock
Balance at beginning of period
Purchase of treasury stock
Disposal of treasury stock
Balance at end of period

Total shareholders' equity
Balance at beginning of period
Changes in accounting treatment
by subsidiaries outside Japan
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Effects of changes in scope of consolidation
Balance at end of period

18Consolidated Statements of Changes in Net Assets

TOKYO ELECTRON(Millions of yen)

Year ended
March 31, 2008

Year ended
March 31, 2009

Valuation and Translation Adjustments
Valuation difference on available-for-sale securities
Balance at beginning of period
Net change
Balance at end of period

5,853(3,680)
2,172

2,172
(3,014)(842)

Deferred gains or losses on hedges
Balance at beginning of period
Net change
Balance at end of period

(177)
637
460

460
(393)
66

Translation adjustments
Balance at beginning of period
Net change
Balance at end of period

5,332(5,862)
(529)

(529)
(6,705)(7,235)

Total Valuation and Translation Adjustments
Balance at beginning of period
Net change
Balance at end of period

11,008(8,905)
2,102

2,102
(10,114)(8,011)

584
(100)
483

483
664
1,148

9,051
756
9,807

9,807
(78)
9,729

469,810545,244-(551)(23,431)106,271(40)
884(8,249)545,244(13,420)
7,543
(38)
17
(2)
(9,527)529,265

Subscription rights to shares
Balance at beginning of period
Net change
Balance at end of period

Minority interests
Balance at beginning of period
Net change
Balance at end of period

Total net assets
Balance at beginning of period
Changes in accounting treatment
by subsidiaries outside Japan
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Effects of changes in scope of consolidation
Net change except shareholders' equity
Balance at end of period

19

TOKYO ELECTRON

Consolidated Cash Flow
Year ended
March 31, 2008

(Millions of yen)
Year ended
March 31, 2009

Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Loss on impairment
Amortization of goodwill
Increase in accrued pension and severance costs (decrease)
Decrease in prepaid pension expenses (increase)
Increase in accured employees' bonuses (decrease)
Increase in accrued warranty expenses (decrease)
Interest and dividend revenue
Interest expenses
Foreign currency translation loss (gain)
Loss on sale of fixed assets (gain)
Loss on disposal of fixed assets
Loss on revaluation of investment securities (gain)
Office relocation expenses
Gain on reversal of subscription rights to shares
Decrease in trade notes and accounts receivable (increase)
Decrease in inventories (increase)
Increase in accounts payable (decrease)
Decrease in prepaid consumption tax (increase)
Increase in customer advances (decrease)
OthersSubtotal
Receipts from interest and dividends
Interest paid
Income taxes paid
Net cash generated by operating activities

169,219
21,413
808
5,672
3,754
(4,035)(1,404)(4,322)(1,491)343
694(2,332)
852
729
(466)
2,473
28,342(27,373)(1,446)2,130(3,924)
189,6371,372(348)(73,721)116,939

9,636
23,068(7,761)(3,345)(1,805)
175
103
350
2,432
212
102,412
21,282(29,942)
4,509
5,321
(9,756)
120,319
1,749(201)(40,836)
81,030(44,070)
34,000(19,338)
4,270(4,041)(1,006)(30,186)(353,803)
219,429(17,227)655(1,182)(7,815)(677)(160,621)

4,351(3,000)(5,500)843(23,431)(297)(27,033)(2,262)(30,000)(20)(13,420)(311)(46,015)(617)
59,103
134,389
193,492(2,068)(127,676)
193,49267
65,883

3,426

Cash flow from investing activities
Payment into time deposits
Proceeds from time deposits
Payment for purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Payment for purchase of intangible fixed assets
Payment for purchase of investment securities
OthersNet cash used in investing activities

Cash flow from financing activities
Net increase in short-term borrowings (decrease)
Repayment of long-term borrowings
Redemption of straight bonds
Net decrease in treasury stock (increase)
Dividends paid
OthersNet cash generated by financing activities

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

20

TOKYO ELECTRON

Segment Information(1) Information by business segment(Millions of yen)
Year ended March 31, 2009 (4/1/08 - 3/31/09)
Industrial
Electronic
Equipment

Electronic
Components
andComputer
Networks413,874

94,207

Total

Eliminations
andConsolidated
Corporate

1. Net sales, operating income and expenses
Net sales(1) Sales to external customers

508,082-

508,082

942

494

1,436

(1,436)-414,816

94,701

509,518(1,436)

508,082

401,973

92,861

494,834(1,463)493,371

12,843

1,840

14,68327

14,710Assets631,061

40,680671,741(2,743)

Depreciation expenses

22,860473

23,333-23,333

Capital expenditure

19,467698

20,166-

20,166(2) Intersegment sales or transfers
Total
Operating expenses
Operating income
2. Assets, depreciation expenses and capital expenditure

668,998

Note: 1. Method of classifying businesses: Businesses are classified after considering similarities in type of product,function, or method of sales.
2. Major products in each business segment:
Business segment
Industrial Electronic Equipment
Electronic Components and Computer Networks

Major products
Semiconductor Production Equipment, FPD Production Equipment,
Photovoltaic Cell Production Equipment, Others
Semiconductor Products, Boards, Computer Systems and Networks,
and Software, Other Electronic Components

21

TOKYO ELECTRON

Segment Information(2) Information by geographic segment(Millions of yen)
Year ended March 31, 2009 (4/1/08 - 3/31/09)
Other
Regions

Japan

Total

Eliminations
andConsolidated
Corporate

1. Net sales, Operating income and expenses
Net sales(1) Sales to external customers

435,434

72,647508,082-

508,082(2) Intersegment sales or transfers

47,182

41,40388,586(88,586)-

Total
Operating expenses
Operating income
2. Assets

482,617

114,051596,668(88,586)

508,082475,295

108,975

584,270(90,899)493,371

7,322

5,075

12,3972,313

14,710638,047

67,154705,201(36,203)

668,998

Note: 1. National and regional categories are determined on the basis of geographic proximity.
2. Main countries and territories in other regions: U.S., Europe, Taiwan(3) Overseas sales(Millions of yen)
Year ended March 31, 2009 (4/1/08 - 3/31/09)
Overseas sales
Consolidated net sales
Proportion of overseas sales
in consolidated net sales (%)

Taiwan80,327

Korea
72,507

U.S.
65,536

Others
80,839Total
299,211508,082

15.8

14.3

Note: 1. National and regional categories are determined on the basis of geographic proximity.
2. Main countries in others: Singapore, China, Israel
3. Overseas sales indicates net sales in countries and territories except Japan.

22

12.9

15.9

58.9