TOKYO ELECTRON

April 28, 2014

Consolidated Financial Review
for the Year Ended March 31, 2014
Company name:
URL:
Telephone number:
Stock exchange listing:Tokyo Electron Limited
http://www.tel.com(03) 5561-7000
Tokyo Stock Exchange 1st Section (Code 8035)

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

1. Consolidated financial highlights for the year ended March 31, 2014
Year ended
March 31, 2013
March 31, 2014
Net sales (Millions of yen)
497,299
612,170
Operating income (Millions of yen)
12,54832,204
Ordinary income (Millions of yen)
16,69635,487
Net income (Millions of yen)
6,076
(19,408)
Net income per share (Yen)
33.91(108.31)
Fully diluted net income per share (Yen)
33.85
Return on equity (%)
1.0
(3.3)
Ordinary income to total assets (%)
2.1
4.4
Operating income to net sales (%)
2.5
5.3
Comprehensive income:Year ended March 31, 2014: (10,888) million yen
Year ended March 31, 2013: 15,826 million yen
Profit/loss on equity method: Year ended March 31, 2014: - million yen
Year ended March 31, 2013: - million yen(1) Operating results(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Net assets per share (Yen)
Equity: 578,091 million yen (as of March 31, 2014)
593,032 million yen (as of March 31, 2013)(3) Cash flow

As ofMarch 31, 2013
775,527
605,12776.5
3,309.58

As ofMarch 31, 2014
828,591
590,61369.8
3,225.92(Millions of yen)
Year ended
March 31, 2013
March 31, 2014
84,26644,449(141,769)(19,599)(10,625)(186)
85,313
104,797

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

1TOKYO ELECTRON
2. Dividends
Year ended
March 31, 2013
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 ended
March 31, 2014

25.00
26.00
51.00
9,138
150.4
1.5

25.00
25.00
50.00
8,959
1.5

Note: The effective date of the business combination with Applied Materials, Inc. has not yet been determined
despite this merger having been announced because it is conditional upon the approval of the General Meetingof Shareholders of both companies as well as approval from the relevant authorities in Japan, the U.S., andother countries subject to competition laws. Given these circumstances, TEL plans to declare a provisional
quarterly dividend of 10 yen per share for the first quarter of the fiscal year ending March 31, 2015.

3. Earnings forecasts for the year ending March 31, 2015

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)Year ending
September 30, 2014
(Cumulative)
278,000
18,00018,00011,00061.38

Year ending
March 31, 2015-

Note: Regarding TEL's forecasts for consolidated operating results of the next fiscal year ending March 31,
2015, we are disclosing provisional estimates for cumulative consolidated operating results through the second
quarter because the date on which the business combination with Applied Materials, Inc. will be effected has not
yet been determined.

4. Others(1)

Important changes in subsidiaries: None
(Changes on specific subsidiaries with changes in scope of consolidation)(2)

Changes in accounting principles, accounting estimation and restatement
1. Changes in accounting policies along with changes in accountins standards: Yes
2. Other changes of accounting policies besides number 1 above: None
3. Changes in accounting estimation: None
4. Restatement: None(3)

Number of shares issued and outstanding (common stock)
1. Number of shares issued and outstanding (including treasury stock)
As of March 31, 2014:

180,610,911 shares

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

2. Number of shares of treasury stock
As of March 31, 2014:

1,408,950 shares

As of March 31, 2013:

1,424,203 shares

3. Average number of shares outstanding
As of March 31, 2014:

179,192,909 shares

As of March 31, 2013:

179,177,531 shares

2

TOKYO ELECTRON(Reference) Non-consolidated financial review for the year ended March 31, 2014
(1) Operating results
Note: Percentages indicate changes from the previous fiscal year.
Year ended
March 31, 2013
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)

375,485
5,717
27,31422,984128.28128.04

March 31, 2014%(27.3)(19.8)(38.3)(41.3)-

462,282
16,23027,839(26,420)(147.44)-

As ofMarch 31, 2013
570,042
390,30368.2
2,170.52

As ofMarch 31, 2014
608,206
356,701
58.4
1,981.33(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Net assets per share (Yen)
Equity: 355,057 million yen (as of March 31, 2014)
388,929 million yen (as of March 31, 2013)* Notes on the status of auditing procedure execution:
This earnings report is outside the jurisdiction of auditing procedures outlined in the Financial Instruments
and Exchange Act and remain incomplete at the time of announcing this report.
* Explanation of 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 currently available information. Consequently, actual
operating results may differ substantially from the projections in this Financial Review.
The company plans to hold a financial meeting for analysts and investors on Monday, April 28, 2014. The
supplementary materials to these financial reports that will be handed out at this meeting will be posted
simultaneously on our company website.

3

%
23.1
183.9
1.9
-

ファイル名

1.Operating Results(1)Analysis of Operating Results(i) Business Environment during the Fiscal Year Ended March 31, 2014
The global economy in general showed signs of a gradual recovery during the fiscal year as the United States andJapanese economies showed a gradual rebound and signs of economic recovery were also seen in Europe,
offsetting the slowing of the growth rate in China and the deceleration in growth seen in other emerging nations.
Mobile devices remained firm overall in the electronics industry, the primary area in which the Tokyo Electron Group
conducts business. Demand for memory for data centers is also growing with the proliferation of cloud services andthe use of big data.

(ii) Overview of Profit and Losses during the Fiscal Year Ended March 31, 2014
Under these circumstances, profit and losses for the fiscal year were as follows.
Consolidated net sales for the fiscal year increased by 23.1% from the previous fiscal year, to 612,170 million yen.
Domestic net sales increased by 36.4%, to 161,630 million yen, and overseas net sales increased 18.9%, to 450,539
million yen, with overseas net sales accounting for 73.6% of consolidated net sales. Consolidated orders for the fiscal
year increased 54.5%, to 696,194 million yen, and consolidated order backlogs increased 46.6%, to 265,129 million
yen.
Cost of sales for the fiscal year increased 21.2%, to 410,277 million yen, and gross profit increased 27.2%, to201,892 million yen. As a result, gross profit margin increased by 1.1 percentage points, to 33.0%.
Selling, general, and administrative (SG&A) expenses increased 16.1% to 169,687 million yen, and the ratio toconsolidated net sales decreased by 1.7 percentage points to 27.7%.
As a result of these developments, operating income was up 156.6% to 32,204 million yen. Ordinary income,adjusted for non-operating income of 5,473 million yen and non-operating expenses of 2,191 million yen, was up
112.5% to 35,487 million yen.
Extraordinary losses were 47,243 million yen (compared to extraordinary income of 1,070 million yen in the previous
fiscal year) as a result of impairment losses relating to goodwill and others arising from review of the PV production
equipment business and the TEL NEXX, Inc. business plan, recognition of impairment of fixed assets pursuant to thefacility restructuring plan, and other factors.
Losses before income taxes were 11,756 million yen (compared to income of 17,766 million yen in the previous fiscal
year), and net losses were 19,408 million yen (compared to net income of 6,076 million yen in the previous fiscal
year).
As a result, net loss per share was 108.31 yen (net income per share was 33.91 yen in the previous fiscal year).

4

ファイル名(iii) Overview of Operations by Business Segment during the Fiscal Year Ended March 31, 2014
The overview of each business segment is as described below.
From the current fiscal year, revisions have been made to the reportable segments based on “Accounting Standards
for Disclosures about Segments of an Enterprise and Related Information.”
Figures for the previous fiscal year listed below for comparison have been adjusted in accordance with the new
business segments.
Semiconductor Production Equipment
DRAM and NAND flash memory were firm on the back of strong demand for mobile devices and server demand forthe growth area of data centers. Demand for high-performance NAND flash memory for SSD (solid state drives) andother applications is also increasing. Against this backdrop, the memory makers pushed ahead with investment,
primarily aimed at increased production. Capital investment in devices with new structures and other advanced
technology for logic semiconductors also continues. Given these circumstances, net sales from external customers inthis segment during the fiscal year were 478,841 million yen (up 22.1% compared to the previous fiscal year).
FPD (Flat Panel Display) Production Equipment
Capital investment for large flat panels continues in China and demand for mobile devices also kept demand firm forsmall to medium-sized displays. FPD production equipment sales for TEL also remained strong as a result. Net sales
from external customers in this segment during the fiscal year were 28,317 million yen (up 41.0% compared to theprevious fiscal year). During the fiscal year, TEL announced a new inkjet printing system for manufacturing organic
light-emitting diode (OLED) panels.

PV (Photovoltaic Panel) Production Equipment
TEL concluded a sales representative agreement with Oerlikon Solar of Switzerland in 2009 with the intent ofentering the thin-film silicon PV panel market, and commenced sales & marketing activities for an end-to-end
manufacturing line for the production of PV panels. TEL acquired the company in 2012 and targeted business growthfrom fusion with TEL’s production equipment technology, but a state of oversupply of panel production equipment
persisted due to changes in the market environment. Despite our greatest efforts to reduce costs and step up
development directed at improving conversion efficiency, the environment has remained severe.

TEL made thedecision to withdraw from production development and sales of the equipment at the end of March this year after
concluding that we could not expect to recover our investment going forwards, and adopted a structure of only
supporting equipment that has already been installed. Given these circumstances, net sales from external customers
in this segment during the fiscal year were 3,805 million yen (compared to net sales of 83 million yen in the previous
fiscal year). Impairment losses totaling 32,789 million yen on goodwill and fixed assets were booked accompanying
the revision of the business plan for and the withdrawal from the segment.

Electronic Components and Computer Networks
In the electronic components segment, overall demand was strong for general-purpose ICs owing to growth indemand for components for installation in vehicles in China and elsewhere in the Asian region, in addition to5

ファイル名increased demand for components for industrial equipment and the advent of new commercial uses. In the computer
networks segment, product sales in the form of new cloud-related commercial applications remained firm, due in partto advancements in cloud computing. Given these circumstances, net sales from external customers in this segment
during the fiscal year were 100,726 million yen (up 19.0% compared to the previous fiscal year).

Other
Net sales from external customers in this segment during the fiscal year were 479 million yen (up 7.0% compared tothe previous year).
(For reference）
Consolidated（ Millions of yen）
Year ended March 31, 2014

Year ended
March 31, 2013
Net Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income(loss)
Ordinary Income(loss)
Net Income(loss)

1Q

2Q

First
Half

3Q

4Q

SecondHalf

Full Year497,299

103,452

151,048

254,500

138,400

219,269

357,670

612,170

392,026
40,278117,092
38,701
57,510105,386
19,951
13,10420,077
83
84,664448
12,548
16,696
6,076

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

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

194,773
33,23344,817
13,57528,86456,059
9,635
8,587
9,393
3,288
46,786258(1,822)588
2,476

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

181,784
21,60135,071
12,24429,877
52,68826,496
3,803
10,110(679)
27,910144
24,95926,395
16,212

284,068
43,19159,546
16,06044,53874,19239,261
7,277
18,923517
53,939221
34,02734,898(21,885)

478,841
76,424
104,363
29,63673,403130,252
48,897
15,86528,317
3,805
100,726
479
32,20435,487(19,408)

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

(iv) Projected Operating Results for the Next Fiscal Year Ending March 31, 2015
We are disclosing provisional estimates for cumulative consolidated operating results through the second quarterbecause the date on which the business combination with Applied Materials, Inc. will be effected has not yet been
determined. TEL assumes that the end of the first half of the consolidated fiscal year may not come depending on thetiming of the business combination with Applied Materials, Inc.
Based on the assumption that capital investment in core semiconductor production equipment by semiconductor
manufacturers will continue, primarily for mobile devices, TEL’s forecasts for consolidated operating results for the
first half of the next fiscal year ending March 31, 2015 are as follows.

Consolidated Forecast(Billions of yen, Y/Y change)

The first half of the fiscal year ending March 31, 2015
Net Sales
Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
OthersOperating Income
Ordinary Income
Net Income

278.0
260.0
16.0
2.0
0.0
18.0
18.0
11.0

9.2%
33.5%
70.3%
-39.2%

344.1%

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

6ファイル名We are not disclosing our earnings forecasts for the full fiscal year since these are linked to the timing of the businesscombination. However, our forecasts for the second half based on the TEL Group call for 307 billion yen in sales and48 billion yen in operating income.
We also sold part of the shares that TEL owned in Tokyo Electron Device Ltd. in April of this year. This resulted inreclassification of the company from a consolidated subsidiary to an equity method affiliate of the TEL Group. The
Electronic Components and Computer Network segment will be eliminated from the fiscal year ending March 2015,
and the equity income for the company will be included in adjustments to segment income or losses disclosed. The
year-on-year change of sales will be affected by the elimination of the reporting segment noted above; however, theincrease over the previous fiscal year will be 33.8% compared to the sales for the same period in the previous fiscal
year are combined according to the segments after the change.

Note: The financial forecasts and estimates stated in this announcement are based on certain assumptions judged tobe reasonable by the Company in light of information currently available concerning economic conditions in Japanand overseas, fluctuations in foreign exchange rates, and other factors that may have an impact on performance. The
company does not promise that the forecasts or estimates will be accurate.
They are therefore susceptible to the impact of many uncertainties, including market conditions, competition, thelaunching of new products (and their success or failure), and global conditions in the semiconductor related industry.
Consequently, actual sales and profits may differ substantially from the projections stated in this announcement.

(2) Qualitative Information on Consolidated Financial Conditions(i) Financial Conditions
Current assets at the end of the fiscal year were 621,492 million yen, up 99,991 million yen compared to the end of
the previous fiscal year. The major factors influencing this result were a 32,578 million yen increase in inventories, a
28,531 million yen increase in trade notes and accounts receivable, and a 21,303 million yen increase in short-term
investments included in securities.
Tangible fixed assets fell by 23,353 million yen from the end of the previous consolidated fiscal year to 112,344 million
yen as a result of impairment of fixed assets in accordance with the facility restructuring plan.
Intangible fixed assets decreased by 30,362 million yen from the end of the previous consolidated fiscal year to29,556 million yen as a result of impairment of goodwill and others in conjunction with review of business plans for
the PV production equipment business and TEL NEXX, Inc.
Investments and other assets increased by 6,788 million yen from the end of the previous fiscal year, to 65,199
million yen.
As a result, total assets increased by 53,063 million yen compared to the end of the previous fiscal year, to 828,591
million yen.
Current liabilities were up 63,839 million yen compared to the end of the previous fiscal year, to 170,509 million yen.
The major factors causing the increase were a 20,915 million yen increase in customer advances, a 17,406 million

7ファイル名yen increase in trade notes and accounts payable and an 11,729 million yen increase in accrued income taxes.
Long-term liabilities were up 3,738 million yen compared to the end of the previous fiscal year, to 67,468 million yen.
Net assets were down 14,513 million yen compared to the end of the previous fiscal year, to 590,613 million yen.
The main factors were a decrease due to a reported net loss of 19,408 million yen, a decrease due to payment of
4,658 million yen in year-end dividends for the previous fiscal year and 4,479 million yen in interim dividends for thecurrent fiscal year, a decrease of 3,190 million yen in retained earnings due to changes in accounting periods at
consolidated subsidiaries, an increase of 8,260 million yen due to translation adjustments resulting from thedepreciation of the yen, and an increase of 6,981 million yen due to remeasurements of defined benefit plans.
The equity ratio was 69.8%.

(ii) Cash Flow
Cash and cash equivalents at the end of the fiscal year increased by 19,483 million yen compared to the end of theprevious fiscal year, to 104,797 million yen. The combined balance including the 163,349 million yen in time deposits
and short-term investments with periods to maturity or redemption of at least three months that are not included in
cash and cash equivalents, was 268,146 million yen, up 28,016 million yen from the end of the previous fiscal year.
The overall situation regarding cash flow during the fiscal year was as follows.
Cash flow from operating activities decreased by 39,817 million yen compared to the previous fiscal year to 44,449
million yen. The main positive factors included a 46,969 million yen loss on impairment, 24,888 million yen in
depreciation and amortization, a 19,083 million yen increase in customer advances, and a 15,605 million yen
increase in trade notes and accounts payable. The main negative factors were a loss before income taxes for thecurrent fiscal year of 11,756 million yen, a 32,088 million yen increase in inventories, and a 25,357 million yen
increase in trade notes and accounts receivable.
Cash flow from investing activities was negative 19,599 million yen, compared to negative 141,769 million yen in theprevious year. This was primarily the result of 9,451 million yen in payments for purchase of tangible fixed assets, andan 8,542 million yen increase in time deposits and short-term investments.
Cash flow from financing activities was negative 186 million yen, compared to negative 10,625 million yen in theprevious fiscal year. This was primarily the result of a 7,551 million yen increase in short term loans, a 2,000 million
yen increase in long-term loans, and payment of 9,138 million yen in dividends.

Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

76.5
96.2
0.0
1,227.59

69.8
136.8
0.3
529.83Equity ratio (%)
Equity ratio at market value (%)
Interest-bearing debt to cash flow ratio (times)
Interest coverage ratio (times)
Equity 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

8

ファイル名* 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 × Numberof 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 on Profit Allocation and Payment of Dividends for the Current and Next Fiscal Years
The dividend policy of TEL is to link dividend payments to business performance and earnings on an ongoingbasis. Its basic policy for returning profits to shareholders is to maintain a payout ratio of around 35% based on
consolidated net income.
TEL will effectively use internal capital reserves and concentrate investment in growth areas to raise corporate
value through earnings growth, and TEL provides returns directly to shareholders by linking dividend payments tobusiness performance and earnings.
The year-end dividend for the current fiscal year (ended March 2014) will remain at 25 yen per share, unchanged
from the figure disclosed on April 30, 2013. While the dividend policy noted above remains unchanged, thedividend for the full fiscal year will be 50 yen per share (a 25 yen interim dividend and a 25 yen year-end dividend),
as a special return to shareholders in light of the financial condition of the TEL Group and global financial andeconomic trends, in addition to the policy on linkage to earnings.
In regard to the dividends for the next fiscal year (ending March 2015), the effective date of the businesscombination with Applied Materials, Inc. has not yet been determined despite this merger having been announced
because it is conditional upon the approval of the General Meeting of Shareholders of both companies as well as
approval from the relevant authorities in Japan, the U.S., and other countries subject to competition laws. Given
these circumstances, TEL plans to declare a provisional quarterly dividend of 10 yen per share for the first quarterof the fiscal year.

Current fiscal year
(ended March, 2014)

2Q-endDividend per share
Year-endTotal

25 yen25 yen50 yen9

ファイル名2. Management Policy(1) Basic Management Policy
The basic management policy of the TEL Group is to raise its corporate value through profit-oriented operations byplacing the highest priority on customers, enhancing product and technology development capabilities, andinvigorating its workforce.
Under this fundamental policy, the TEL Group will engage in the development of vibrant and internationallycompetitive companies, with high growth potential and profitability that are attractive to investors.

(2) Management Tasks
The Group, one of the world’s leading suppliers of semiconductor and flat panel display (FPD) production equipment,
engages in dynamic business activities in the electronics industry, a field characterized by rapid technologicalinnovation, with its corporate philosophy that “We strive to contribute to the development of a dream-inspiring society
through our leading-edge technologies and reliable service and support”.

The markets in which we operate are increasingly dominated by our customers, the semiconductor manufacturers
and others. Securing and maintaining a strong position in sectors in which we currently operate and establishing new
products and technology are vital tasks for us. We recognize the need to improve competitiveness throughtechnological differentiation, thorough cost reduction, and other means, and regard the following as the priority
policies to concentrate on in order to achieve this.

(i) Enhancing Products to Improve Market Position
To acquire and maintain high shares in the markets in which we are already operating, we must further improve theproductivity, reliability and processing performance of our products and resolve the issues facing our customers. The
TEL Group will strive to strengthen our technical competitiveness and improve our market position in each of our
product areas, including etching system, cleaning system, coater/developer, and wafer deposition system.
We will continue to expand our business and intensify development of 3-D transistor and NAND flash memory and amultiple patterning technology, which will be important in the future, particularly in regard to etching system, where
market growth is anticipated.
In our cleaning system business, we have made progress with the adoption of the wet wafer cleaning process wehave been concentrating on in new mass production by customers in Japan, Taiwan, and South Korea, consequently
recording historical highs in sales and profits in our cleaning business on a six-month basis this fiscal year. Moreover,the number of processing steps is expected to increase in the future as miniaturization progresses, and we will strive
to expand the business by releasing new products with high performance and high yields in our dry cleaning systemline.
In our FPD production equipment business, the first machine was shipped from our Kunshan factory in China inAugust. We will utilize this factory to improve profitability in the future, while meeting the needs of our Chinese
customers also.

10ファイル名(ii) Technological Innovation for Continuous Growth
The TEL Group is the global leader in process development using multiple patterning, and we are concentrating on
process development with a focus on costs to avoid an increase in patterning costs. TEL also leads other companies
in the development of cleaning technology that addresses pattern collapse in increasingly fine patterns due tominiaturization, and in thin film deposition technology with good tracking. At the same time, it is focusing on the rapid
establishment of equipment technology through an alliance involving industry, academia, and government in themass production of MRAM (magnetic memory), which is attracting attention as the next generation of memory. TEL is
also actively incorporating the knowledge of research institutes inside and outside of Japan as we work on
developing next-generation device technology.
We are also developing equipment that will dramatically improve yield in the organic EL manufacturing process by
incorporating the inkjet printing method with the goal of creating energy-saving displays, and released a new inkjet
printing system for manufacturing OLED panels, in March of this year.
TEL will continue with R&D in the future as well, striving to achieve efficiency and strategic concentration of resources
with an eye on promising technology.

(iii) Pursuit of the Best Solutions
Amid increasing market domination by our customer base, the TEL Group is working to strengthen our partnershipwith each customer through such means as putting into place a system for development and evaluation that is nearto the customer to ascertain future needs at an early stage, while also enhancing operations and services to enable
us to offer the best solution early on.
We will also provide the best solutions for back-end processes such as testing systems and wafer-level packaging
through proposals that integrate multiple products to make use of the strengths of the TEL Group with its extensive
product line-up.
In addition to marketing and sale of the latest equipment, we are also working to build a system that will enable theeffective and efficient provision of products and services and expand our business by utilizing information on TEL
equipment in operation around the world and knowledge accumulated in the field in our field solutions business,
involving the relocation, upgrading, improvement of performance, and parts business for equipment sold previously.

(iv) Measures to Fulfill our Corporate Social Responsibility
Based on our “Safety First” principle, the TEL Group believes in ensuring that all individuals involved in our businessactivities can work safely, use equipment safely, and maintain health, and we view this as an important part of ourcorporate social responsibility.
Based on the policy of “solving environmental problems with technology”, TEL is also engaged in efforts born of ourdesire to contribute to reduced power consumption during the operation of equipment, efficient operation ofequipment and systems in general, and overall energy savings in the operation of customer plants in order to achieveenergy efficiency in the use of our equipment and peripheral equipment and thereby reduce the overall burden acustomer’s plant places on the environment.

11

ファイル名TEL is also engaged in efforts to reduce the environmental burden of group business activities and logistics also
through such means as introducing solar power generation equipment into main plants.
It is TEL’s desire to build a relationship of trust with citizens and the many different stakeholders in local communities
through communication in order to remain a good company solidly rooted in the local community as we grow alongwith society.
TEL is also making greater efforts in addressing corporate social responsibility (CSR), a subject of heightenedinterest in recent years, by enacting a policy on CSR while also strengthening our organizational functions forpractical implementation.

(v) Efforts Directed at Business Integration with Applied Materials, Inc.
The TEL Group has established an integration management office for the business combination with Applied
Materials, Inc., and concrete discussions regarding and preparatory work for the business combination will take place
within this office. We will diligently work on preparations for the listing of the ordinary shares of the combined holding
company on the Tokyo Stock Exchange (TSE), discussing this with TSE, JASDEC (Japan Securities Depository
Center, Inc.) and other relevant parties. Moreover, we anticipate that the combined holding company will not be aconstituent stock of the Tokyo Stock Price Index (TOPIX) after relisting in light of the current guidelines for calculation
because it will be a foreign corporation, however we will continue to work to ensure liquidity on the TSE so that theshares of the combined holding company are attractive to various investors in Japan.

In addition to the key policies noted above, human resources are the source of our growth and we will continue toallocate human resources in positions and with responsibilities commensurate to their abilities and performance. We
will be proactive in further improving skill development programs, and will tie this into a dramatic leap forward for the
TEL Group. TEL will also put a system into place that provides fair evaluation and compensation according to thedegree of contribution, and will succeed in making this a company filled with dreams and dynamism.

The TEL Group will strive to increase corporate value in the future as well, by making our customers the first priority,
improving our capabilities in developing products and technology, strengthening international competitiveness, andendeavoring to stimulate employees, based on earnings-oriented management.

12

TOKYO ELECTRON

Consolidated Balance Sheet(Millions of yen)
As ofMarch 31, 2014

As ofMarch 31, 2013ASSETS
Current assets
Cash and deposit

49,632

56,345Trade notes and accounts receivable

100,500

129,032

Securities

190,497

211,800

Merchandise and finished goods

87,397

114,289

Work in process

33,402

38,074

Raw materials and supplies

14,89815,912

Deferred income taxes

15,66925,173

Others30,68232,365

Allowance for doubtful accounts(1,179)(1,502)

521,501

621,492

Total current assets
Long-term assets
Tangible fixed assets
Buildings and structures

163,857

151,633

Accumulated depreciation(92,009)(93,185)

Buildings and structures, net

71,84758,448

Machinery and carriers

108,360

97,055

Accumulated depreciation(81,233)(76,255)

Machinery and carriers, net

27,12620,800Land

25,03025,112Others37,781

34,989(26,087)(27,005)

Accumulated depreciation
Others, net
Total tangible fixed assets

11,693

7,983

135,697

112,344

Intangible fixed assets
Goodwill

38,372

9,400

Others21,545

20,155

Total intangible fixed assets

59,91829,556

18,66920,026

Investments and other assets
Investment securities

-

8,904

Deferred income taxes

23,20523,223

Others

18,647

14,911

Allowance for doubtful accounts(2,112)(1,866)

Total investments and other assets

58,41065,199254,026

207,099775,527

828,591

Net defined benefit asset

Total long-term assets
Total assets

13

TOKYO ELECTRON(Millions of yen)
As ofMarch 31, 2013

As ofMarch 31, 2014

LIABILITIESCurrent liabilities
Trade notes and accounts payable

36,26153,667

Short-term borrowings

3,756

11,531

Income taxes payable

2,285

14,014

Accrued employees' bonuses

6,829

8,584

Accrued warranty expenses

8,344

10,072Others49,192

72,639Total current liabilities

106,670

170,509

Deferred tax liabilities

4,817

9,279

Accrued pension and severance costs

56,643--53,448Long-term liabilities

Net defined benefit liability
Others

2,269

4,740

Total long-term liabilities

63,73067,468170,400

237,978

Common stock

54,961

54,961

Capital surplus

78,02378,023Retained earnings

467,920

436,174

Total liabilities
NET ASSETS
Shareholders' equity

Treasury stock
Total shareholders' equity(9,588)(9,478)591,315559,679

4,214

5,592

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

(14)

60

(2,483)

5,777

-

6,981

1,716

18,411

Subscription rights to shares

1,374

1,643

Minority interests

10,72010,878

Total net assets

605,127590,613775,527

828,591

Total liabilities and net assets

14Consolidated Statement of Income(Millions of yen)
Year ended
March 31, 2013

Year ended
March 31, 2014

Net sales

497,299

612,170

Cost of sales

338,545

410,277

Gross profit

158,754201,892

Salaries and allowances

24,61928,140Research and development expenses

73,24878,663

Others48,33862,882

Total selling, general & administrative expenses

146,206

169,687

12,54832,204

1,392

1,343

Selling, general & administrative expenses

Operating income (loss)
Non-operating income
Interest income
Dividend revenue
Revenue from grants

266

1,818

2,671

1,154

Others

1,794

1,157

Total non-operating income

6,125

5,473

1,520

1,229

Loss on revaluation of investment securities

153

230

Others

303

731

1,977

2,191

16,69635,487

Gain on sale of fixed assets

943

433

Reversal of allowance for doubtful accounts

558

Non-operating expenses
Foreign currency translation loss

Total non-operating expenses
Ordinary income (loss)
Unusual or infrequent profit

Gain on sale of investment securities-

Others-Total unusual or infrequent profit

74
18

1,501

526

6

46,969Unusual or infrequent loss
Loss on impairment
Loss on liquidation of subsidiaries and affiliates

134

Reorganization costs

132-

Others158

800

Total unusual or infrequent loss

431

47,769-

Income (loss) before income taxes

17,766(11,756)

Provision for income taxes and enterprise taxes

6,254

15,994

Prior year's corporate tax

2,194

-

Deferred income taxes

2,958(8,537)

Total income taxes

11,408

7,456

Income (loss) before minority interests

6,358(19,213)

Minority interests

282

195

Net income (loss)

6,076(19,408)

15

TOKYO ELECTRON

Consolidated Statement of Comprehensive Income(Millions of yen)
Year ended
March 31, 2013

Income (loss) before minority interests

Year ended
March 31, 2014

6,358

(19,213)

Valuation difference on available-for-sale securities

651

1,365

Deferred gains or losses on hedges

55

91

8,760

6,867

Other comprehensive income

Translation adjustments
Total other comprehensive income
Comprehensive income

9,467

8,324

15,826(10,888)

15,425(11,150)400

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

16

TOKYO ELECTRON

Consolidated Statements of Changes in Net Assets
Year ended March 31, 2013

(Millions of yen)
Shareholders' equity

Balance at beginning of period

Common stock

Capital surplus

Retained earnings

54,961

78,023471,186

Treasury stock(9,747)

Total shareholders'equity594,422

Changes of items during the period
Cash dividends(9,316)(9,316)

Net income (loss)

6,076

6,076

Purchase of treasury stock
Disposal of treasury stock
Net change except shareholders'equityTotal changes of items during theperiodBalance at end of period

(15)

(15)

(24)

173

148

-

-

(3,265)

158(3,106)54,961

78,023467,920(9,588)591,315

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Deferred gains orlosses on hedges

3,575

(51)

Translation
adjustments(11,157)

Total accumulated Subscription rights Minority interests
to shares
othercomprehensive
income(7,633)

1,156

10,656

Total net assets

598,602

Changes of items during the period
Cash dividends(9,316)

Net income (loss)

6,076

Purchase of treasury stock(15)

Disposal of treasury stock148

Net change except shareholders'equityTotal changes of items during theperiodBalance at end of period

638

36

8,674

9,349

217

63

9,631

638

36

8,674

9,349

217

63

6,524

4,214

(14)

(2,483)

1,716

1,374

10,720605,127

17

TOKYO ELECTRON

Consolidated Statements of Changes in Net Assets
Year ended March 31, 2014

(Millions of yen)
Shareholders' equity

Balance at beginning of period

Common stock

Capital surplus

Retained earnings

54,961

78,023467,920

Increase (decrease) from changes
in accounting periods at
consolidated subsidiaries

Total shareholders'equityTreasury stock(9,588)591,315(3,190)(3,190)Cash dividends(9,138)(9,138)Net income (loss)(19,408)

Changes of items during the period(19,408)

Purchase of treasury stock
Disposal of treasury stock

(29)

(29)

(8)

139

131

Net change except shareholders'equityTotal changes of items during theperiodBalance at end of period--(28,555)

110(28,445)

54,961

78,023436,174(9,478)559,679

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Deferred gains orlosses on hedges

4,214

(14)

Translation
adjustments(2,483)Remeasurements
Total accumulatedof defined benefit other comprehensive
plansincome-1,716

Subscription
rights tosharesMinority
interests

Total net
assets

1,374

10,720605,127

Increase (decrease) from changes
in accounting periods at
consolidated subsidiaries(3,190)Changes of items during the period
Cash dividends(9,138)Net income (loss)(19,408)

Purchase of treasury stock(29)

Disposal of treasury stock131

Net change except shareholders'equity

1,378

74

8,260

6,981

16,695269

157

17,122

Total changes of items during theperiod

1,378

74

8,260

6,981

16,695269

157(11,323)

Balance at end of period

5,592

60

5,777

6,981

18,411

1,643

10,878590,613

18

TOKYO ELECTRON

Consolidated Cash Flow

(Millions of yen)
Year ended
March 31, 2014

Year ended
March 31, 2013

Cash flow from operating activities
Income (loss) before income taxes
Depreciation and amortization
Loss on impairment
Amortization of goodwill
Increase (decrease) in accrued pension and severance costs
Increase (decrease) in net defined benefit liability
Increase (decrease) in accrued employees' bonuses
Increase (decrease) in accrued warranty expenses
Interest and dividend revenue
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
Decrease (increase) in prepaid consumption tax
Increase (decrease) in accrued consumption tax
Increase (decrease) in customer advances
OthersSubtotal
Receipts from interest and dividends
Interest paid
Income taxes paid or refund (paid)
Net cash generated by operating activities

17,766
26,630
6
1,141
1,864
(2,750)(2,918)(1,659)57,54920,278(15,481)2,862
596(12,455)(3,011)90,4201,586(68)(7,671)
84,266(11,756)
24,88846,969
4,262
2,885
1,396
1,255
(3,161)(25,357)(32,088)
15,605(2,912)
1,122
19,083860
43,052
3,222(83)(1,741)44,449(15,056)
15,000(177,000)
111,000(19,012)(1,234)(55,079)(1,097)710(141,769)

(98)
9,871
(192,515)
174,200(9,451)(1,640)35(19,599)

(646)
(15)
(9,316)(646)(10,625)

7,551
2,000
(29)
(9,138)
(569)
(186)

(5,334)(73,462)
158,776(3,973)
20,69085,313-(1,206)

Cash flow from investing activities
Payment into time deposits
Proceeds from time deposits
Payment for purchase of short-term investments
Proceeds from redemption of short-term investments
Payment for purchase of tangible fixed assets
Payment for purchase of intangible fixed assets
consolidation
Payments for transfer of business
OthersNet cash used in investing activities

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

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

19

85,313

104,797

TOKYO ELECTRON

Note: Loss on impairment
The Tokyo Electron Group groups its business assets into small units that generate independent cash flow. For thosebusiness sites we have decided to restructure or handle otherwise, we are grouping assets separately based on eachindividual business.
During the current fiscal year (the year ended March 31, 2014), we are posting a loss on impairment of the following asset
groups.
(i)

Loss on impairment of goodwill and long-term assets for consolidated subsidiary TEL Solar Holding AG
Location

PurposeAccounting treatment

Loss on impairment(Millions of yen)

Trubbach, St. Gallen,
Switzerland

Plant

Goodwil, machineryand equipment, etc.

32,789Regarding the goodwill posted at the time we acquired TEL Solar Holding AG, a consolidated subsidiary in the PV
production equipment business, given that sales have been trending below initial plans due to significant deterioration of
the business environment, we implemented an impairment test. And as a result, we wrote down this goodwill to arecoverable value and are posting this reduced value as an unusual or infrequent loss. The recoverable value wasgauged based on value in use. We set this value at zero as we cannot foresee the forecast of future cash flow.
We also decreased the book value of the machinery, equipment, etc. possessed by TEL Solar Holding AG and its
consolidated subsidiary to a recoverable value and posting the reduced value as an unusual or infrequent loss. The
recoverable value was gauged in accordance with the net selling price. However, given that we believe it will be difficult totransfer or sell this machinery, equipment, etc. to another party, we value the net selling price at zero.

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

PurposeAccounting treatment

Billerica, Massachusetts,
U. S. A.

Plant

Goodwill, etc.

Loss on impairment(Millions of yen)

5,009

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

20

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

Loss on impairment(Millions of yen)

Location

PurposeAccounting treatment

Tsukuba, Ibaraki(Technology Center Tsukuba)

R&D center

Buildings and structures,
machinery andequipment, etc.

4,648

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

Buildings and structures,land, etc.

3,355

Buildings and structures,
etc.

292

Others‐There is no expectation for future use of the aforementioned asset groups given the decision by
management to restructure the facility or handle otherwise, we reduced book value to a recoverable value
and are posting the reduced amount as an unusual or infrequent loss.
We note that the recoverable value is gauged in accordance with the net selling price.
The value of land, buildings and structures were calculated based on the real estate judgement value,
which was based on a rational assessment by a third party, the value of machinery, equipment and others
excluding land, buildings and structures, we value the net selling price at zero given the difficulty of transfer
or sale to another party.
(iv) Others
In the others grouping, we are posting 873 million yen on unusual or infrequent loss as a loss on
impairment.

21

TOKYO ELECTRON

Segment Information(i) Overview of reportable segments
The reportable segments by the company provide separate financial information pertaining to the various
segments of the company, which is reviewed periodically by the management to evaluate corporate performanceas well as make decisions about the allocation of management resources.
The corporate structure consists of product and service segments based on business units (BUs), and thereportable segments are as follows: Semiconductor Production Equipment, FPD (Flat Panel Display) Production
Equipment, PV (Photovoltaic Panel) Production Equipment, and Electronic Components and Computer Networks.

The Semiconductor Production Equipment segment consists of coaters/developers, plasma etch systems, thermal
processing systems, single wafer deposition systems, cleaning systems used in wafer processing, wafer probers
used in the wafer testing process and other semiconductor production equipment, and we are engaged in thedevelopment, manufacturing, sales and provision of maintenance services, etc. for such products.
The FPD Production Equipment segment consists of coaters/developers, plasma etch/ash systems used in the
manufacturing of flat panel displays, and we are engaged in the development, manufacturing, sales and provisionof maintenance services, etc. for such products.
The PV Production Equipment segment consists of photovoltaic panel production equipment used in the
manufacturing of thin film silicon photovoltaic panels, and we are engaged in the development, manufacturing,sales and provision of maintenance services, etc. for such products. Also, we have scaled down our businessstructure of the PV production equipment, by halting development, production, and sales activities for thisbusiness and limit operations to support for equipment already delivered as of the end of March, 2014.
The Electronic Components and Computer Networks segment consists of semiconductor products centering on
integrated circuits (IC), other electronic components, computer networks and software, etc., and we are engaged
in the design, development, procurement, and sales, etc. for such products.

(ii) Items Related to Changes in Reportable Segments
With the acquisition of TEL Solar Holding AG as a consolidated subsidiary, from the first quarter of the current
fiscal year, the reportable segment has been divided from FPD/PV Production Equipment to FPD Production
Equipment, and PV Production Equipment.
(iii) Ways of estimating net sales, profits or losses, assets, and other amounts in reportable segment
Accounting method used in each reportable segment is almost the same as the method used to prepare
consolidated financial statements. Inter-segment revenues or transfers are based on prevailing market prices.
Moreover, shared assets have not been allotted to each reportable segments, but associated costs have been
distributed among them according to rational standards.

22

TOKYO ELECTRON(iv) Net sales, profits or losses, assets, and other amounts in reportable segment
Year ended March 31, 2014

(Millions of yen)
Reportable Segment
Semiconductor
Production
Equipment

Sales to external customers

FPD Production
Equipment

Electronic
Components &Computer Networks

PV Production
Equipment

478,841

28,317

3,805

100,726

34

-

-

1,074

Net sales

478,876

28,317

3,805

101,801

Segment income (loss)

74,284(36)(46,426)

722

Segment assets

273,142

21,251

2,145

57,464

Depreciation and amortization

10,113

235

10

476

Amortization of goodwill

1,473

-

2,685

102

Loss on impairment

5,009

-

32,789-

Increase in the amount of tangible fixed
assets and intangible fixed assets

8,109

102

856

825

Inter-segment sales or transfers

Others *1

Total Segment

Eliminations *2

Consolidated Total *3

Sales to external customers

479

612,170-

612,170

Inter-segment sales or transfers

11,75912,868(12,868)-

Net sales

12,238625,039(12,868)

612,170

Segment income (loss)

1,267

29,810(41,566)(11,756)

Segment assets

1,870

355,874

472,717

828,591

Depreciation and amortization48

10,88314,00424,888

Amortization of goodwill

-

4,262

-

4,262

Loss on impairment-

37,7989,170

46,969

40

9,935

5,108

15,043

Increase in the amount of tangible fixed
assets and intangible fixed assets

Notes:The "Others" segment is all other businesses which are not included in the reported business segments, such as the transportation of*1
products of the Tokyo Electron Group companies, equipment leasing and insurance, etc.
*2 a) The eliminations of segment income or loss amounting to 41,566 million yen includes corporate expenses pertaining to the corporate
account which are not allocated to any specific reportable segments. The corporate account expenses are mainly R&D expenses of
19,735 million yen, pertaining to fundamental research and element research conducted by the company not related to any of thereportable segments, and 9,170 million yen in loss on impairment relating to buildings and structures that became idle as a result offacility restructuring.
b) The main constituents of the eliminations of segment assets worth 472,717 million yen are cash, savings, securities, buildings andstructures, etc. unallocated to each reportable segment.
c) The main constituents of the eliminations of loss on impairment worth 9,170 million yen are related primarily to buildings and structures,etc. that became idle as a result of facility restructuring.
d) The main constituent of the eliminations of tangible fixed assets and intangible fixed assets worth 5,108 million yen is capital investments
in buildings, structures, machinery and carriers unallocated to each reportable segment.
*3

Segment income or loss is adjusted against net loss before taxes in consolidated income statement.

23

TOKYO ELECTRON(v)

Impairment loss on fixed assets in reportable segments
Refer to (iv) Net sales, profits or losses, assets, and other amounts in reportable segment.

(vi) Amortization and un-depreciated balance of goodwill in reportable segments
Year ended March 31, 2014

(Millions of yen)
Semiconductor
Production
Equipment

FPD Production
Equipment

PV Production
Equipment

Electronic
Components &Computer
Networks

Total Segment

Amortization of goodwill

1,473

-

2,685

102

4,262

Balance at end of period

9,091

-

308

9,400

(vii) Income related to negative goodwill in reportable segments
None

24

-

TOKYO ELECTRON
Material ｓubsequent events
Change in the scope of consolidation as result of subsidiary
The Board of Directors adopted a resolution on March 26, 2014 to sell a portion of TEL’s holdings of shares ofTokyo Electron Device Limited (TED) (listed on the first section of the Tokyo Stock Exchange), a consolidated
subsidiary of TEL, and TED changed from a consolidated subsidiary to an equity-method affiliate effective April
15, 2014. In accordance with this change, TED’s financial results will be reflected in TEL’s consolidated
statement of income pursuant to investment profit or loss on equity method as of the fiscal year started April 1,
2014.
(i) Reasons for change
In the midst of a rapidly changing business landscape for the Tokyo Electron Group, the group has spentconsiderable effort investigating future growth strategies for both TEL and TED as we look to develop ourbusinesses going forward. As a result, TEL has sold a portion of its shares in TED in order to improve the valueof both our enterprises. This enables us to plan for a greater concentration of management resources in ourcore equipment business, and for TED to actively drive its development business and overseas expansion in
addition to existing sales of electronic components and computer network related products while becoming
even more independent and building its own growth strategies for the future.
(ii) Method of change
Of the 5,875,300 ordinary shares of TED stock that TEL held as of the end of the consolidated fiscal year, TED
purchased 636,000 shares through a share repurchase and 1,484,000 shares were sold through anunderwritten offering (Daiwa Securities Co. Ltd. and Nomura Securities Co., Ltd.).

(iii) Change date
April 15, 2014 (the date of transfer of the TED shares sold through an underwritten offering)(iv) Overview of subsidiary changed (Tokyo Electron Device Limited)(1)Company NameTokyo Electron Device Limited(2)Address

1-4, Kinko-cho, Kanagawa-ku, Yokohama City, Kanagawa, Japan(3)Representative Director

Yasuyuki Kuriki, President, Representative Director(4)Business Operation

Electronic Components, Computer Network(5)Capital Stock2,495,750,000 yen (as of March 31, 2014)(6)EstablishedMarch 3, 1986(v) Number of shares sold and sale price
Number of shares sold

2,120,000 shares

Sale price

2,731 million yen

25

TOKYO ELECTRON(vi) Voting rights (number of shares held) and proportion of voting rights of all shareholders before and after change

StatusNumber of voting rights(number of shares held)

Proportion of voting rights
of all shareholders

Before change(as of March 31, 2014)

Consolidated subsidiary

58,753（5,875,300 shares）

55.43%

After change

Equity method affiliate

37,553（3,755,300 shares）

37.69%

Note:
1. The proportion of voting rights of all shareholders before the change was calculated on the basis of 105,985 voting
rights of all shareholders as of March 31, 2014.
2. The percentage of total voting rights was calculated based on 99,625 units, which is a reduction of 6,360 units from the105,985 total voting rights as of March 31 2014, as a result of the repurchase of 636,000 shares by TED.
3. The proportion of voting rights of all shareholders was truncated to two decimal places.
4. With respect to the underwritten offering, 222,600 shares of additional offering (Over Allotment) was conducted, andexercise of the Green Shoe Option which was given to the underwriter may further reduce the number of voting rights(number of shares held) by a maximum of 2,226 (222,600 shares) after the change. In that case, the proportion of voting
rights of all shareholders will be 35.45%.

Changes in Reportable Segments
The TEL Group “Electronic Components and Computer Networks” segment was handled by TED and its subsidiaries, andin conjunction with the change of the company from a consolidated subsidiary to an equity-method affiliate, this reportablesegment will be eliminated effective the following consolidated fiscal year and investment profit or loss on equity method
relating to Tokyo Electron Device will be included in segment income adjustment amounts.

26