TOKYO ELECTRON

July 29, 2016

Consolidated Financial Review
for the First Quarter Ended June 30, 2016
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 three months ended June 30, 2016

(1)

Operating results (Cumulative)

Note: Percentages indicate changes from the same period of the previous fiscal year.
Three months ended
June 30, 2015

June 30, 2016%%

Net sales (Millions of yen)

155,7622.9

147,976(5.0)

Operating income (Millions of yen)

30,27977.4

22,095(27.0)

Ordinary income (Millions of yen)

30,207

78.6

24,083(20.3)Net income attributable to owners of parent (Millions of yen)

19,481

64.6

12,684(34.9)Net income per share of common stock (Yen):
Basic
DilutedComprehensive income:(2)

Three months ended June 30, 2016:
Three months ended June 30, 2015:

109.5377.33

109.2277.16

2,791 million yen, (87.1%)
21,616 million yen, 76.6%

Financial position
As ofMarch 31, 2016

June 30, 2016

Total assets (Millions of yen)793,367

754,695

Total net assets (Millions of yen)

564,239549,795

70.9

72.5

Equity ratio (%)
Equity:2.

546,810 million yen (as of June 30, 2016)
562,369 million yen (as of March 31, 2016)

Dividends
Year ending

Year ended

March 31, 2017

March 31, 2016

(Forecast)

1Q-end dividends per share (Yen)--

2Q-end dividends per share (Yen)

125.0089.00

3Q-end dividends per share (Yen)--

Year-end dividends per share (Yen)

112.00171.00

Annual dividends per share (Yen)

237.00260.00Note: Revision of dividends forecast: None

1

TOKYO ELECTRON
3.

Financial forecasts for the fiscal year ending March 31, 2017

Note: Percentages for year ending March 31, 2017 indicate changes from the previous fiscal year, and those for six months ending
September 30, 2016 indicate changes from the same period of the previous fiscal year.

Six months ending

Year ending

September 30, 2016

March 31, 2017

(Cumulative)%%

Net sales (Millions of yen)

330,000(3.2)

714,000

7.5

Operating income (Millions of yen)

49,000(20.0)

124,000

6.2

Ordinary income (Millions of yen)

49,000(21.5)

124,000

3.9

Net income attributable to owners of parent (Millions of yen)

29,000(29.9)

85,0009.1

Net income per share (Yen)

176.79518.17

Note: Revision of financial forecasts: None

*Notes :(1)

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

(2)

Changes in accounting principles, accounting estimation and restatement
1. Changes in accounting policies along with changes in accounting 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 outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
As of June 30, 2016:

165,210,911 shares

As of March 31, 2016: 165,210,911 shares
2. Number of shares of treasury stock
As of June 30, 2016:

1,171,263 shares

As of March 31, 2016: 1,176,800 shares
3. Average number of shares outstanding
As of June 30, 2016:

164,038,149 shares

As of June 30, 2015:

177,865,767 shares*Notification of the status of quarterly financial review procedures:This quarterly financial report is outside the jurisdiction of auditing procedures outlined in the Financial Instruments and Exchange
Act and remains incomplete at the time of this report’s publication.
*Explanation of the appropriate use of financial forecast:
The financial forecasts and estimates as provided in this Consolidated Financial Review are based on certain assumptions judged
to be reasonable at time of report issuance and in light of currently available information. Consequently, actual operating results
may differ substantially from the projections in this Consolidated Financial Review.
The company plans to hold a financial meeting for analysts and investors on July 29, 2016. Supplementary schedules and otherinformation deemed relevant to these financial reports will be handed out at this meeting and posted simultaneously on ourcompany website.

2

TOKYO ELECTRON

1. Qualitative Information on Financial Results for the Current Quarter(1) Description of Operating Results

In the first quarter of the current fiscal year, the world economy continued to experience a modest recovery, but themarket outlook remains cautious due to the impact of the economic slowdown in China and the problems stemmingfrom Brexit.
In the electronics industry, sluggish conditions were seen in the electronic equipment market, due to the production
adjustments for high-performance smartphones, however, investments in leading-edge technologies by logic
semiconductor makers remained strong, and in general, the semiconductor production equipment market, of which
the Tokyo Electron (TEL) Group is a part, generally showed strength.
Under these circumstances, TEL Group’s consolidated results (cumulative) for the first quarter of the current fiscal
year were net sales of 147,976 million yen (a year-on-year decrease of 5.0%), operating income of 22,095 million yen(a year-on-year decrease of 27.0%), ordinary income of 24,083 million yen (a year-on-year decrease of 20.3%), andquarterly net income attributable to owners of parent of 12,684 million yen (a year-on-year decrease of 34.9%).

The overview of each business segment is as described below.

(i) Semiconductor Production Equipment
Capital investments for leading-edge technology by logic semiconductor makers and 3D NAND flash memory
business remained robust, net sales to external customers in this segment in the first quarter of the current fiscal
year were 130,796 million yen (a year-on-year decrease of 6.8%).

(ii) Flat Panel Display (FPD) Production Equipment
The FPD production equipment segment continued to benefit from strong capital investment in China for small to
medium-sized flat panel displays used primarily for mobile devices and capital investment in large flat panel displays.
Given these circumstances, net sales to external customers in this segment in the first quarter of the current fiscal
year were 17,064 million yen (a year-on-year growth of 69.4%).

(iii) Other
Net sales to external customers in this segment in the first quarter of the current fiscal year were 115 million yen (ayear-on-year decrease of 97.8%).

3

TOKYO ELECTRON(For reference)
Consolidated Operating Results(Millions of yen)
FY 2016
Full YearNet Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
Southeast Asia
FPD Production Equipment
Other
Operating Income
Ordinary Income
Net Income Attributable to Owners of Parent

Note:

663,948
613,032
116,272
103,460
51,08899,574
161,930
63,60517,09944,687
6,228
116,788
119,399
77,891

1Q

2Q

3Q

4Q

155,762
140,365
25,011
30,776
17,05328,14023,13014,084
2,169
10,0705,326
30,27930,207
19,481

185,189
176,62237,80929,491
9,620
25,211
52,92817,041
4,520
8,205
361
30,97032,177
21,895

158,771
146,523
27,02823,42814,856
15,25743,354
17,2195,379
11,724522
25,51325,655
17,858164,225
149,520
26,423
19,765
9,557
30,96542,517
15,2605,030
14,68618
30,02531,35918,656

147,976
130,796
17,81917,022
5,234
19,80530,50430,04910,36017,064115
22,09524,083
12,684

Intersegment sales or transfers are eliminated.

1. Production(Millions of yen)
FY 2016
Full Year

Semiconductor Production Equipment
FPD Production Equipment
Other
Total

Note:

FY 20171Q

592,230
50,944
5,124
648,299

1Q

2Q

3Q

4Q

147,830
10,435
5,124
163,390

150,176
12,758
162,935

131,554
10,295
141,849

162,669
17,455
180,124

FY 20171Q
140,236
9,623
149,860

1. Amounts are based on sales prices.
2. The above amounts do not include consumption taxes.

2. Orders Received(Millions of yen)
FY 2016
Full Year

Semiconductor Production Equipment
FPD Production Equipment
Other
Total

Note:

626,275
50,503
2,541
679,320

1Q

2Q

3Q

4Q

156,663
11,847
1,835
170,346

122,499
12,502
204
135,206

159,307
13,947492
173,747

187,804
12,2069200,020

FY 2017
1Q
197,470
15,955
111
213,538

1. Intersegment sales or transfers are eliminated.
2. The above amounts do not include consumption taxes.

3. Orders Backlog(Millions of yen)
FY 2016

Semiconductor Production Equipment
FPD Production Equipment
Other
Total

Note:

1. Intersegment sales or transfers are eliminated.
2. The above amounts do not include consumption taxes.

4

1Q

2Q

3Q

4Q

276,766
33,388201
310,355

222,643
37,68644
260,373

235,426
39,90813
275,348

273,71037,4284
311,143

FY 20171Q
340,384
36,3191
376,704

TOKYO ELECTRON(2) Description of Financial Conditions(i) Financial Conditions
Current assets at the end of the first quarter of the current fiscal year stood at 586,378 million yen, a decrease of
31,037 million yen compared to the end of the previous fiscal year. Factors contributing to the decrease were a22,204 million yen decline in prepaid consumption tax, a 13,756 million yen decrease in trade notes and accounts
receivable, a 13,499 million yen drop in short-term investments included in securities, an 8,401 million yen increase ininventories and a 7,768 million yen rise in cash and deposits.
Tangible fixed assets declined by 1,575 million yen from the end of the previous fiscal year, to 94,741 million yen.
Intangible fixed assets decreased by 1,884 million yen from the end of the previous fiscal year, to 15,718 million yen.
Investment and other assets were down by 4,175 million yen from the end of the previous fiscal year, to 57,856
million yen.
As a result, total assets declined by 38,672 million yen from the end of the previous fiscal year to 754,695 million yen.
Current liabilities stood at 143,314 million yen, a decrease of 22,746 million yen compared to the end of the previous
fiscal year. Factors contributing to the decrease were a 14,523 million yen decline in income taxes payable, a 7,276
million yen decrease in accrued employees' bonuses, a 3,509 million yen decrease in trade notes and accounts
payable.
Long-term liabilities stood at 61,586 million yen, a decrease of 1,481 million yen compared to the end of the previous
fiscal year.
Net assets stood at 549,795 million yen, a decrease of 14,443 million yen compared to the end of the previous fiscal
year. This net decrease is mainly due to the fact that TEL recorded a 12,684 million yen in quarterly net income
attributable to owners of parent, a decrease stemming from the payment of 18,371 million yen in fiscal year-end
dividends in the previous fiscal year and a decrease of 9,886 million yen in accumulated other comprehensive
income. As a result, the equity ratio was 72.5%.

(ii) Cash Flow
Cash and cash equivalents at the end of the first quarter of the current fiscal year stood at 114,910 million yen, an
increase of 19,271 million yen compared to the end of the previous fiscal year. The combined balance including
116,032 million yen in time deposits and short-term investments with periods to maturity or redemption of at least
three months not included in cash and cash equivalents was 230,943 million yen, down 5,730 million yen from theend of the previous fiscal year. The overall situation regarding cash flow during the first quarter of the current fiscal
year is described below.
Cash flow from operating activities was a positive 22,193 million yen, up 4,799 million yen compared to the same
period of the previous fiscal year. Positive contributors were 16,191 million yen in net income before income taxes,
3,994 million yen in depreciation and amortization, a 22,140 million yen decrease in prepaid consumption tax, and a
10,636 million yen decrease in trade notes and accounts receivable. Negative contributors were income taxes paid of
19,414 million yen and an increase of 12,488 million yen in inventories.
Cash flow from investing activities was a positive 20,063 million yen compared to a negative 32,028 million yen in the5

TOKYO ELECTRON

same period of the previous year. The primary positive contributor was 24,998 million yen in income associated with adecrease in short-term investments and the primary negative contributor was 4,762 million yen in payments forpurchases of fixed assets.
Cash flow from financing activities was a negative 18,375 million yen, compared to a negative 36,362 million yen in
the same period of the previous fiscal year. This was primarily the result of the payment of 18,371 million yen in
dividends.

Consolidated Statements of Cash Flows (Summary)Three month ended
June 30, 2015

(Millions of yen)Three month ended
June 30, 2016

17,39429,0994,624
13,427(18,515)(6,123)(5,117)(32,028)(29,987)(2,041)(36,362)
2,262

22,193
16,191
3,994
10,636(12,488)(1,452)
5,313
20,06324,998(4,934)(18,375)(4,609)Net increase (decrease) in cash and cash equivalents(48,734)

19,271

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of period

317,632
268,897

95,638114,910

Cash and cash equivalents, time deposits and short-term investments with periods tomaturity or redemption of at least three months

298,936

230,943

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Decrease in trade notes and accounts receivable
Increase in inventories
Decrease in trade notes and accounts payable
Other, net
Cash flows from investing activities
Decrease (increase) in time deposits and short-term investments
Other (Acquisition of fixed assets)
Cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents(3) Description of Financial Estimates Information such as Consolidated Financial Forecasts
There are no changes in the consolidated financial forecast for the fiscal year ending March 31, 2017 from theforecasts released at the time of the previous announcement on May 12, 2016.

Note: The financial forecasts and estimates stated in this announcement are based on certain assumptions judged to be reasonable by theCompany in light of information currently available concerning economic conditions in Japan and 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, the launching 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.

6

TOKYO ELECTRON

Consolidated Balance Sheets(Millions of yen)
As of

As of

March 31, 2016

June 30, 2016

ASSETS
Current assets
Cash and deposit

75,674

83,443

Trade notes and accounts receivable

116,503102,746

Securities

160,999

147,500

Merchandise and finished goods

130,478

133,995

Work in process

41,55644,779Raw materials and supplies

23,04424,706

Others69,20749,265

Allowance for doubtful accounts

(48)

(58)

617,416

586,378

96,316

94,741Others17,603

15,718

Total intangible fixed assets

17,603

15,718Others63,85759,639Total current assets
Long-term assets
Tangible fixed assets
Intangible fixed assets

Investments and other assets

Allowance for doubtful accounts(1,825)(1,782)

Total investments and other assets

62,031

57,856

Total long-term assets

175,951

168,317793,367

754,695

Total assets

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TOKYO ELECTRON

Consolidated Balance Sheets(Millions of yen)
As of

As of

March 31, 2016

June 30, 2016

LIABILITIESCurrent liabilities
Trade notes and accounts payable

55,05051,540

Income taxes payable

22,4607,937

Accrued warranty expenses

8,686

7,571

Other allowances

13,044

4,582

Others

66,81871,681

Total current liabilities

166,060

143,314Long-term liabilities
Other allowances
Net liability for defined benefit

374

374

55,30255,506

Others

7,390

5,704

Total long-term liabilities

63,067

61,586229,128

204,900

Common stock

54,961

54,961

Capital surplus

78,02378,023Retained earnings

427,618

421,907

Treasury stock, at cost

(8,050)(8,012)

Total shareholders' equity

552,551546,879

7,902

5,225

Total liabilities

NET ASSETS
Shareholders' equity

Accumulated other comprehensive income
Net unrealized gains on investment securities
Net deferred gains on hedging instruments

50

137

Foreign currency translation adjustments

6,742

(741)

Accumulated remeasurements of defined
benefit plans(4,877)(4,690)Total accumulated other comprehensive income

9,817

(68)

1,641

2,763

Share subscription rights
Non-controlling interests

228

221

Total net assets

564,239549,795

Total liabilities and net assets

793,367

754,695

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TOKYO ELECTRON

Consolidated Statements of Income(Millions of yen)Three months ended

Three months ended

June 30, 2015

June 30, 2016

Net sales

155,762

147,976

Cost of sales

90,05790,650Gross profit

65,70457,325

Selling, general and administrative expenses
C Research and development expenses

17,577

17,767

Others17,84817,461

Total selling, general and administrative expenses

35,42535,22930,27922,095

Dividend income

268

278

Foreign exchange gain
C Others

-

1,302

600

467

869

2,048

Maintenance cost for domestic closed facilities

47

26

Foreign exchange loss

810-

Others82

34

Operating income
Non-operating income

Total non-operating income
Non-operating expenses

Total non-operating expenses
Ordinary income

941

61

30,20724,083258

23

Unusual or infrequent profit
Gain on sales of fixed assets
Gain on sales of investment securities
Total unusual or infrequent profit

-

6

258

29

-

7,828

Unusual or infrequent loss
Loss on disaster
Loss on sales of subsidiaries’ stock

1,110

-

255

93

1,366

7,921

Income before income taxes

29,09916,191

Income taxes

9,610

3,492

Net income

19,488

12,6987

13

19,481

12,684

OthersTotal unusual or infrequent loss

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

9

TOKYO ELECTRON

Consolidated Statements of Comprehensive Income(Millions of yen)

Net income

Three months ended

Three months ended

June 30, 2015

June 30, 2016

19,488

12,698555(2,673)

Other comprehensive income (loss)
Net unrealized gains (losses) on investment securities
Net deferred gains (losses) on hedging instruments

(32)

31

Foreign currency translation adjustments

2,129(7,447)

Remeasurements of defined benefit plans

(521)

181

(3)

0

2,127

(9,906)

21,616

2,791

21,602

2,798

14

(7)

Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

10

TOKYO ELECTRON

Notes
Going concern : None
Remarkable changes in shareholders' equity : None
Note on consolidated statements of income :Loss on disaster
These are actual and current estimated expenses relating to the recovery of buildings, production and development facilities as wellas the disposal of inventories caused by the impact of the Kumamoto earthquake in 2016.
Segment information :(i)

General information about reportable segments

A reportable segment is a component or an aggregated component of TEL Group. For each of the components, discrete financial
information is available and the operating result is regularly reviewed by management to make decisions about resources to beallocated to the segment and assess its performance.
The operation of TEL Group consists of segments by products and services based on business units (BUs), and TEL Groupidentifies as a reportable segment, “semiconductor production equipment (SPE)” and “flat panel display (FPD) production
equipment”. Products of the SPE segment consist of coater/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 othersemiconductor production equipment. The SPE segment principally develops, manufactures, sells and distributes such products.
Products of the FPD production equipment segment consist of coater/developers and etch/ash systems used in the manufacture offlat panel displays. The FPD production equipment segment principally develops, manufactures, sells and distributes such products.
(ii) Information about reportable segment net sales, segment profit (loss)
Three months ended June 30, 2016

(Millions of yen)
Reportable Segments
Semiconductor
Production
Equipment

Net sales

FPD Production

Other*1

Total

Equipment

130,796

17,064

3,288

151,149

26,7201,197

131

28,049Segment profit(loss)

Eliminations andConsolidated *3
Corporate *2
Net sales(3,173)

147,976(11,858)

16,191

Segment profit(loss)
Notes:*1. “Other” includes all other operating segments which are not included in the reportable segments, including PV Production
Equipment business, group-wide logistic services, facility maintenance and insurance.
11

TOKYO ELECTRON*2. ”Eliminations and Corporate” segment loss totaling 11,858 million yen includes corporate expenses not allocated to any
reportable segments. The corporate expenses consist of research and development costs of 3,542 million yen, pertaining tofundamental research and element research, and loss on disaster costs of 7,828 million yen.
*3. Segment profit is adjusted to income before income taxes on consolidated statements of Income.
(iii) Impairment losses on fixed assets and goodwill, etc. in reportable segments
Significant impairment losses related to fixed assets: None
Significant changes in goodwill amount: None
Significant income related to negative goodwill: None12