TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

25

CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Financial Section

Corporate Data

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows
Independent Auditor’s Report

Notes to Consolidated Financial Statements
Tokyo Electron Limited and Subsidiaries
Years ended March 31, 2017 and 2016

1. Basis of Presentation of Consolidated Financial
Statements
The accompanying consolidated financial statements ofTokyo Electron Limited (hereinafter “the Company”) and its
subsidiaries (hereinafter collectively referred to as “Tokyo
Electron”) have been prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Act
of Japan and its related accounting regulations, and in conformity with accounting principles generally accepted inJapan, which are different in certain respects as to applicationand disclosure requirements of International Financial
Reporting Standards.
The Company uses financial statements prepared by foreign subsidiaries in accordance with International Financial
Reporting Standards or U.S. generally accepted accounting
principles for the preparation of the consolidated financial
statements, together with adjustment for certain items which
are required to be adjusted in the consolidation process.
The accompanying consolidated financial statements havebeen restructured and translated into English from the statutory Japanese language consolidated financial statements. Some
supplementary information included in the statutory Japanese
language consolidated financial statements is not presented in
the accompanying consolidated financial statements.
The amounts in the consolidated financial statements andassociated notes shown in millions of yen and in thousandsof yen, U.S. dollars and shares, as of and for the year ended
March 31, 2016 and prior periods are rounded. On the other
hand, such amounts as of and for the year ended March 31,2017 are rounded down and therefore the totals do not­necessarily agree with the sum of the individual account­balances for the corresponding period.
U.S. dollar amounts included herein are solely for the convenience of readers and are presented at the rate of ¥112.19
to $1.00, the approximate rate as of March 31, 2017. The
translation should not be construed as a representation that
the Japanese yen amounts shown could be converted into
U.S. dollars at that or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidation
The consolidated financial statements include the accountsof the Company and its 35 and 37 subsidiaries as of March 31,2017 and 2016, respectively. All significant inter-company
accounts, transactions and unrealized profits or losses havebeen eliminated through consolidation procedures.

There are 8 affiliates accounted for using the equity method as of March 31, 2017.
The fiscal year-end of all entities is March 31, except for 3
consolidated foreign subsidiaries. Financial statements provisionally closed for the period ending March 31 are used for
those subsidiaries.
(b) Foreign currency translation
All assets and liabilities denominated in foreign currencies
are translated into Japanese yen at the year-end rates, except
for those hedged by forward exchange contracts, which aretranslated at the contracted rates. Resulting exchange gains
and losses are included in earnings for the year.
Revenue and expense items are translated at the rates thatapproximate those prevailing at the time of the transactions.
The balance sheet accounts of foreign subsidiaries aretranslated into Japanese yen at the rates of exchange in
effect at the balance sheet date, except for shareholders’equity accounts, which are translated at the historical rates.
Revenue and expense accounts of foreign subsidiaries aretranslated at average rates of exchange in effect during theyear. Resulting translation adjustments are presented in net
assets as a component of accumulated other comprehensive
income in the consolidated balance sheets.
(c) Cash equivalents
Tokyo Electron considers all highly-liquid instruments purchased with original maturities of three months or less to be
cash equivalents.
(d) Short-term investments
Short-term investments consist of short term deposits
and low-risk financial instruments with original maturities ofmore than three months.
(e) Investment securities
Tokyo Electron examines the intent of holding each security
and classifies those securities as trading securities, held-to
maturity debt securities or other securities. Tokyo Electron has
no trading securities as of March 31, 2017 and 2016. Held-tomaturity debt securities are stated mainly at amortized cost.
Other securities with market prices are valued at fair value atthe balance sheet date. The differences between the bookvalue and fair value of other securities, net of applicable
income taxes, are presented in net assets as a component ofaccumulated other comprehensive income. Other securities
without market prices are valued at cost using the weightedaverage method.
The cost of sold securities is calculated using the weighted
average method.
(f) Inventories
Inventories other than raw materials are stated at the lowerof cost, determined by principally the specific identification

method, or net realizable value, which is defined as selling
price less estimated additional manufacturing costs and­estimated direct selling expenses. Raw materials are statedat the lower of cost, determined principally by the movingaverage method, or replacement cost.
(g) Property, plant and equipment
Property, plant and equipment are stated at cost.
Depreciation of buildings, machinery and equipment of theCompany and its domestic subsidiaries is computed using
the declining-balance method, except for buildings acquiredsince April 1, 1998 and facilities attached to buildings andstructures acquired since April 1, 2016 which are depreciatedusing the straight-line method, based on the estimated useful
lives of assets. Foreign subsidiaries mainly apply the straight-line
method over the estimated useful lives of assets.
Estimated useful lives of property, plant and equipment
are as follows:   Buildings
2 to 60 years   Machinery and equipment
2 to 17 years(h) Intangible assets (excluding goodwill)
Intangible assets are amortized by the straight-line method over their estimated useful lives.
(i) Goodwill
Goodwill is evaluated on an individual basis and amortizedby the straight-line method over a period not exceeding
20 years.
(j) Impairment of fixed assets
Tokyo Electron evaluates the carrying value of fixed assets
held for use in the business and idle assets.
If the carrying value of a fixed asset is impaired, a loss isrecognized based on the amount by which the carrying value
exceeds its recoverable amount, being the higher of the net
selling price or the value in use of the assets. Net selling priceis determined using the fair value less disposal costs andvalue in use is based on the total amount of discounted cash
flows estimated to be generated from the continuing use of
the individual assets or the asset group and the disposal of
the assets.
(k) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an
amount determined based on the historical experience ofbad debts with respect to ordinary receivables, and an estimate of uncollectible amounts determined by reference tospecific doubtful receivables from customers which are experiencing financial difficulties.
(l) Employee benefits
The Company and its domestic subsidiaries provide
defined benefit plans for their employees. Expected benefits
are attributed to accounting periods by the benefit formulabasis. Prior service costs are charged to earnings on astraight-line basis, beginning from the fiscal year in which
they are incurred, over a fixed number of years (4 years)
within the average remaining years of service of employees
when the changes occur. Actuarial differences are charged toearnings on a straight-line basis, beginning from the following fiscal year after they are incurred, over a fixed number ofyears (4 years) within the average remaining years of serviceof employees when the differences occur.
The provision for accrued pension and severance costs for
directors and audit & supervisory board members of theCompany and its domestic subsidiaries is calculated in accordance with internal regulations.
The Company and certain domestic subsidiaries decided to
discontinue the payment of severance pay for directors andaudit & supervisory board members after April 1, 2005, and at
the general shareholders’ meeting in June 2005, it was
resolved that the severance pay for directors and audit &supervisory board members until March 31, 2005 would be
paid at the termination of their service and the decision
regarding the payment amount for each director and audit &supervisory board member was delegated to the board of
directors and audit & supervisory board members. The accruals for severance costs for directors and audit & supervisoryboard members are included in Net liability for defined benefits in the consolidated balance sheets.
(m) Accrued warranty expenses
Tokyo Electron’s products are generally subject to warranty, and Tokyo Electron accrues estimated warranty costs
when product revenue is recognized. Estimated after-salerepair expenses over warranty periods are accrued based on
the historical ratio of actual repair expenses to corresponding
sales.
(n) Derivatives and hedge accounting
The Company and certain subsidiaries make use of derivatives in order to manage certain risks arising from adverse
fluctuations in foreign currency exchange rates. The amountof derivatives is limited to the extent of foreign currency
assets, liabilities and actual orders, and Tokyo Electron does
not trade in derivatives for speculative purposes.
Derivatives are carried at fair value in the consolidated balance sheet with changes in unrealized gain or loss charged or
credited to earnings, except for those which meet the criteria
for hedge accounting. Unrealized gains or losses on hedging
instruments, net of taxes, are reported in net assets as acomponent of accumulated other comprehensive income.
Receivables and payables hedged by qualified forward foreign exchange contracts are translated at the corresponding
foreign exchange contract rates.

TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

26

CONTENTS

Business Overview
and Financial Highlights

To Our Stakeholders

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Corporate Data

Financial Section

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows
Independent Auditor’s Report

Notes to Consolidated Financial Statements(o) Income taxes
Tokyo Electron records deferred tax assets and liabilities on
temporary differences between the carrying amounts ofassets and liabilities for financial reporting purposes and theamounts used for income tax purposes and net operating
loss carryforwards. Deferred tax assets and liabilities aremeasured using the enacted tax rates and laws which are
expected to be in effect when net operating loss carryforwards and temporary differences are expected to be realized.
(p) Revenue recognition
Revenue from Semiconductor and FPD (Flat Panel Display)production equipment is principally recognized at the time of
the customer confirmation of set-up and testing of products.
Revenue from equipment not requiring substantial installation is recognized at the time of shipment. Service revenue
maintenance is recognized ratably over the term of themaintenance contract.
(q) Per share information
Net income per share and net assets per share are computed based on the weighted-average number of shares ofcommon stock outstanding during each year. Net income diluted per share is computed based on the weighted-average
number of shares of common stock outstanding during eachyear after incorporating the dilutive potential effect of sharesof common stock to be issued upon the exercise ofstock options.
Dividends per share has been presented on an accruals
basis and include, in each fiscal year ended March 31, dividends
approved or to be approved after March 31 but applicable tothe year then ended.
The basis for the calculation of net income per share forthe fiscal years ended March 31, 2017 and 2016 is as follows:
Thousands of
U.S. dollars

Millions of yen

Net income attributable toowners of parent
Less components not pertaining
to holders of common stock
Net income pertaining toholders of common stock
Weighted-average number of shares of common stock
outstanding (thousands)

2017

2016

2017

¥115,208¥77,892$1,026,908—¥115,208

164,054—¥77,892—$1,026,908

168,924(r) Research and development expenses
Research and development expenses are charged to earnings as incurred and amounted to ¥83,800 million ($746,950
thousand) and ¥76,287 million for the years ended March 31,2017 and 2016, respectively.

(s) Reclassifications
Certain reclassifications have been made to the prior year’s
consolidated financial statements to conform with the presentation used for the year ended March 31, 2017.

3. Change in Accounting Policies and Adoption of
New Accounting Standards
Year ended March 31, 2017
In accordance with the revision to the Japanese Corporation
Tax Act, the Company and its domestic subsidiaries adopted
the “Practical Solution on a change in depreciation method
due to Tax Reform 2016” (ASBJ Practical Issues Task Force
No. 32, June 17, 2016) and changed the depreciation method
for facilities attached to buildings and structures acquiredsince April 1, 2016 from the declining-balance method to thestraight-line method, starting from the fiscal year ended
March 31, 2017.
The effect of this change on the consolidated financial
statements is immaterial.
Year ended March 31, 2016
The Company and its domestic subsidiaries adopted“Revised Accounting Standard for Business Combinations”(ASBJ Statement No.21, September 13, 2013 (hereinafter,“Statement No.21”)), “Revised Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No.22,
September 13, 2013 (hereinafter, “Statement No.22”)) and“Revised Accounting Standard for Business Divestitures”(ASBJ Statement No.7, September 13, 2013 (hereinafter,“Statement No.7”)) (together, the “Business Combination
Accounting Standards”), from the year ended March 31, 2016.
As a result, the Company changed its accounting policies torecognize in capital surplus the differences arising from thechanges in the Company’s ownership interest of subsidiaries
over which the Company continues to maintain control andto record acquisition related costs as expenses in the fiscal
year in which the costs are incurred. In addition, theCompany changed its accounting policy for the reallocationof acquisition costs due to the completion following provisional accounting to reflect such reallocation in the consolidated financial statements for the fiscal year in which thebusiness combination took place. The Company also changed
the presentation of net income and the term “non-controlling interests” is used instead of “minority interests”. In the
consolidated statement of cash flows, cash flows from acquisition or disposal of shares of subsidiaries with no changes inthe scope of consolidation are included in “Cash flows fromfinancing activities” and cash flows from acquisition related

costs for shares of subsidiaries with changes in the scope of
consolidation or costs related to acquisition or disposal ofshares of subsidiaries with no changes in the scope of consolidation are included in “Cash flows from operating activities”.
With regard to the application of the Business
Combination Accounting Standards, the Company followed
the provisional treatments in article 58-2 (4) of Statement
No.21, article 44-5 (4) of Statement No.22 and article 57-4 (4)of Statement No.7 with application from the beginning of
the year ended March 31, 2016 prospectively.
As a result of adoption of these standards, there is noeffect on the consolidated financial statements for the year
ended March 31, 2016.

Held-to-maturity securities classified as current assets are¥244,500 million ($2,179,338 thousand) and ¥160,999 million
as of March 31, 2017 and 2016, respectively.
Reconciliation of held-to-maturity securities as of March
31, 2017 and 2016 to the amounts of short-term investmentsin the consolidated balance sheets are as follows:
Millions of yen

2017

Held-to-maturity (current)
Deposits and low-risk financial instruments with original
maturities of three months
or less

2016¥244,500 ¥160,999

Thousands of
U.S. dollars

2017$2,179,338(93,500)(45,000)—

25,036—¥151,000 ¥141,035$1,345,931

Deposits with original maturities
of more than three months(833,407)

4. Additional Information

Short-term investments

The Company and its domestic subsidiaries adopted“Revised Implementation Guidance on Recoverability ofDeferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016)
from the year ended March 31, 2017.

Net loss on devaluation of investment securities was ¥105
million ($939 thousand) and ¥331 million for the years ended
March 31, 2017 and 2016, respectively.
For the year ended March 31, 2017, the amount of gain andloss on sale of available-for-sale securities was immaterial.

5. Securities
Other securities as of March 31, 2017 and 2016 are as follows:

For the year ended March 31, 2016, the Company soldavailable-for-sale securities and recognized the following
gain and loss on sale:

Millions of yen

2017:

Cost

Non-current
Securities with market prices¥7,183¥22,704

1,381

1,399

14

14

Total

¥8,580¥24,119

2016:

Cost

  Equity securities

Millions of yen

Carrying value

Amount of sale

Gain on sale

Equity securities¥1,275¥446

Loss on sale

¥247

Total

¥1,275¥446¥247

Securities without market prices  Unlisted stock  Other6. Inventories
Inventories as of March 31, 2017 and 2016 are as follows:

Millions of yen

Non-current¥7,204¥18,580

Securities without market prices  Unlisted stock

1,318

1,334

Total

¥8,522¥19,914

2017:

Cost

Carrying value$64,032$202,378

12,314

12,472Thousands of U.S. dollars

Non-current
Securities with market prices  Equity securities
Securities without market prices  Unlisted stock  OtherTotal

2017

Finished products

Securities with market prices  Equity securities

Millions of yen

Carrying value

133

133

$76,480$214,983

Work in process, raw materials
and supplies
Total

2016¥152,629 ¥130,479
83,626

Thousands of
U.S. dollars

2017$1,360,456

64,601

745,405¥236,256 ¥195,080$2,105,861

The amounts of change in inventory provision included incost of sales in the consolidated statements of income forthe years ended March 31, 2017 and 2016 were a decrease of¥3,060 million ($27,283 thousand) and an increase of ¥758
million, respectively.

TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

27

CONTENTS

Business Overview
and Financial Highlights

To Our Stakeholders

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Corporate Data

Financial Section

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows
Independent Auditor’s Report

Notes to Consolidated Financial Statements
7. Other Income (Expenses)

9. Short-term Borrowings

Loss on disaster
Loss on disaster of ¥7,521 million ($67,039 thousand) for
the year ended March 31, 2017 represents the actual and current estimated expenses relating to the recovery of buildings,
production and development facilities as well as the disposalof inventories caused by the impact of the Kumamoto earthquake in 2016.
Loss on impairment of property, plant and equipment,
goodwill and other assets
For the year ended March 31, 2016, the following loss on
impairment was recognized:(2) Movement of plan assets

There are no short-term borrowings classified as current
liabilities as of March 31, 2017 and 2016.
As of March 31, 2017 and 2016, Tokyo Electron had unusedlines of credit amounting to ¥126,944 million ($1,131,512 thousand) and ¥114,960 million, respectively.

10. Employee Benefits
The Company and its domestic subsidiaries provide a cash
balance plan and a non-contributory retirement and severance benefit plan as defined benefit plans for their employees. Further, certain consolidated overseas subsidiaries­provide defined benefit plans for their employees.

(1) Goodwill and non-current assets of TEL FSI, Inc.
Loss on impairment
Location

Chaska,Minnesota,
U.S.A.

Use

Business assets

Type of Asset

Goodwill
Buildings
Other intangible
assets
Total

Millions of yen¥3,8252,756
2,880¥9,461

Tokyo Electron performed an impairment test and recognized loss on impairment of assets of TEL FSI, Inc., a subsidiary
manufacturing semiconductor production equipment, due to
TEL FSI, Inc.’s reconsideration of its business plan. Tokyo
Electron recognized the difference between the book value
and the recoverable amount of goodwill, buildings, and otherintangible assets as loss on impairment. The recoverable
amount was measured as value in use, and was calculated bydiscounting future cash flows at a discount rate of 14.0-14.5%.
(2) Others
Loss on impairment of ¥266 million was recognized forother asset groups of Tokyo Electron.

Defined benefit plans(1) Movement of defined benefit obligations
Thousands of
U.S. dollars

Millions of yen

2017

Balance at April 1, 2016
and 2015

Millions of yen

2017

Balance at April 1, 2016
and 2015¥116,228 ¥112,272

2016

Actuarial gain (loss)¥70,905$557,534

1,266

1,271

11,286540(2,304)

4,818

Employer contributions

2,940

2,997

26,206

Benefits paid

(1,011)(5,506)(9,014)

Increase by transfer

1,289

—

11,495

Effect of change in scope of
consolidation—(4,461)—

Foreign currency exchange
rate changes

84

(380)

754

Other

(6)

27

(56)

¥67,653¥62,549$603,026

Actuarial gain (loss)

Balance at March 31, 2017and 2016(3) Reconciliation from defined benefit obligations and plan
assets to liability (asset) for defined benefits
Millions of yen$1,035,998

Thousands of
U.S. dollars

2017

2016

2017

Service cost

6,080

5,677

54,198Funded defined benefit
obligations¥63,761¥62,003$568,333

Interest cost

772

1,273

6,882

Plan assets(67,653)(62,549)(603,026)

Actuarial loss

(3,075)

9,690(27,412)Funded status(3,892)(546)(34,692)

Benefits paid

(2,708)(7,748)(24,141)

Increase by transfer

1,327

—

11,828

Unfunded defined benefit
obligations

54,89954,225489,343—(4,548)—Net liability for defined benefits
at March 31, 2017 and 2016

¥51,007¥53,679$454,651

Net liability for defined benefits

55,82555,302497,600(4,818)(1,623)(42,949)¥51,007¥53,679$454,651

Effect of change in scope of
consolidation
Foreign currency exchange
rate changes

101

(475)

906

Net asset for defined benefits

Other

(65)

87

(583)

Net liability for defined benefits
at March 31, 2017 and 2016

¥118,660 ¥116,228$1,057,677

Balance at March 31, 2017and 2016

Note: The provision for accrued pension and severance costs for directors andaudit & supervisory board members of ¥374 million ($3,342 thousand)as of March 31, 2017 and 2016 is not included.

(4) Defined benefit costs
Loss on business restructuring
Loss on business restructuring of ¥2,235 million for theyear ended March 31, 2016 represents losses relating to thebusiness restructuring in U.S. subsidiaries, which mainly consists of inventory disposal costs.

Expected return on plan assets

8. Pledged Assets
Tokyo Electron did not hold any assets pledged as collateral as of March 31, 2017 and 2016.

Millions of yen

Service costThousands of
U.S. dollars

2017

2016

2017

¥6,080¥5,677$54,198

772

1,273

6,882

(1,266)(1,271)(11,286)

Net actuarial gain amortization

291(2,268)

2,600

Other

290

243

2,590

¥6,168¥3,654$54,985

Interest cost

Total defined benefit costs for the years ended
March 31, 2017 and 2016

Millions of yen

2017¥62,549

Expected return on plan assets

2017

2016

(5) Remeasurements of defined benefit plants
Thousands of
U.S. dollars

Thousands of
U.S. dollars

2017

2016

2017

¥3,869¥(13,594)$34,494(6) Accumulated remeasurements of defined benefit plants
Millions of yen

2017

Net actuarial loss that is
yet to be recognized (before tax) ¥(2,712)

Thousands of
U.S. dollars

2016

2017

¥(6,582)$(24,180)(7) Plan assets
1. Plan assets comprise:
2017

2016

Bonds

39%

46%

Life insurance company generalaccount

26

26

Equity securities

20

17

Cash and cash equivalents

3

2

Other

12

9

Total

100%

100%

2. Long-term expected rate of return   Current and target asset allocations, and historical andexpected returns on the various categories of plan assets
have been considered in determining the long-term
expected rate of return.
(8) Actuarial assumptions   The principal actuarial assumptions at and for the years
ended March 31, 2017 and 2016 are as follows:
2017

2016

Discount rate

0.71%

0.59%

Long-term expected rate of return

2.00%

2.00%

The expected rates of salary increase for the years ended
March 31, 2017 and 2016 are also considered as one of theactuarial assumptions, which are set based on the salary
increase index by age group as of January 1, 2014.

TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

28

CONTENTS

Business Overview
and Financial Highlights

To Our Stakeholders

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Corporate Data

Financial Section

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows
Independent Auditor’s Report

Notes to Consolidated Financial Statements
11. Income Taxes
Significant components of the deferred tax assets and liabilities
as of March 31, 2017 and 2016 are as follows:
Thousands of
U.S. dollars

Millions of yen

2017

2016

2017

Elimination of unrealized profit ininventories¥19,276¥14,100$171,817

Net liability for defined benefits

18,102

17,717

161,352

Net operating loss carryforwards

15,402

17,061

137,292

Deferred tax assets

Accrued employees’ bonuses

4,977

2,831

44,365

Devaluation of inventories

3,995

4,913

35,610Loss on impairment of property, plant and equipment and otherassets

2,765

3,037

24,652

Accrued warranty expenses

2,168

2,395

19,330Other

11,35012,366

101,169

Total gross deferred tax assets

78,03874,420695,591

Less valuation allowance(9,808)(11,995)(87,429)

Total deferred tax assets

68,22962,425608,162

Deferred tax liabilities
Undistributed earningsof subsidiaries(5,197)(5,383)(46,323)

Net unrealized gains on
investment securities(4,757)(3,487)(42,408)

Intangible assets identified
through business combination(3,016)(3,741)(26,889)

Other(4,310)(3,146)(38,420)

Total deferred tax liabilities(17,282)(15,757)(154,042)

Net deferred tax assets¥50,947¥46,668$454,119Net deferred tax assets are included in the consolidatedbalance sheets as of March 31, 2017 and 2016 as follows:
Thousands of
U.S. dollars

Millions of yen

2017

2016

2017

Current assets¥36,892¥31,204$328,837

Investments and other assets

19,12820,782

170,505———(5,073)(5,318)(45,222)

Other current liabilities
Other non-current liabilities

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during
the period in which temporary differences become deductible and net operating loss carry forwards are available to be
utilized. For assessment of the realizability of deferred tax
assets, management considers the scheduled reversal ofdeferred tax liabilities, future estimated taxable income, tax
planning strategies and level of net operating loss carryforwards, if any, in accordance with accounting principles generally accepted in Japan.
Based on the level of historical taxable income and future estimated taxable income over the periods which the temporary­ ifferences are deductible and net operating loss carry ford
wards are available to be utilized, management believes Tokyo
Electron will realize the benefits of deferred tax assets, net of­valuation allowance, as of March 31, 2017 and 2016.
The Company and its wholly-owned domestic subsidiaries
apply a consolidated tax filing system for corporate tax ­purposes.
On March 31, 2016, amendments to the Japanese tax regulations were enacted into law. Based on the amendments,
the statutory income tax rates utilized for the measurementof deferred tax assets and liabilities expected to be settled orrealized from April 1, 2016 to March 31, 2018 and on or after
April 1, 2018 were changed from 32.34% to 30.86% and30.62%, respectively, as of March 31, 2016.
Due to these changes in statutory income tax rates, netdeferred tax assets (after deducting the deferred tax liabilities) decreased by ¥1,781 million, and deferred income tax
expense increased by ¥1,893 million for the fiscal year ended
March 31, 2016.
Significant components of the difference between thestatutory and effective tax rates for the years ended March
31, 2017 and 2016 are as follows:
Statutory tax rate in Japan

2017

2016

30.86%

33.06%

Adjustments:

In cases where dividend distribution of surplus is made,the lesser of an amount equal to 10% of the dividend or theexcess, if any, of 25% of common stock over the total of
additional paid-in capital and legal reserve must be set aside
as additional paid-in capital or legal reserve. Legal reserve is
included in retained earnings in the accompanying consolidated balance sheets.
Both appropriations of legal reserve and additional paid-in
capital used to eliminate or reduce a deficit generally requirea resolution of the shareholders’ meeting.
Additional paid-in capital and legal reserve may not be­distributed as dividends. All additional paid-in capital and legal
reserve may be transferred to other capital surplus and retained
earnings, respectively, which are potentially available for dividends.

The Company is subject to restriction of dividends basedon the Japanese Corporate Act, which restricts the amount ofdividends to retained earnings on a consolidated basis.
The Company’s articles allow for the distribution of earnings to shareholders on dates other than the mid-term andyear-end, by a resolution of the board of directors in accordance with Japanese laws and regulations.
At the board of directors’ meeting held on May 12, 2017, thedistribution of cash dividends amounting to ¥36,752 million($327,595 thousand) was resolved. Such appropriations havenot been accrued in the consolidated financial statements asof March 31, 2017 since they are recognized in the period inwhich they are resolved at the board of directors’ meeting.

13. Other Comprehensive Income
Other comprehensive income for the years ended March 31, 2017 and 2016 is as follows:
Thousands of
U.S. dollars

Millions of yen

2017

2016

2017

¥4,152¥ (2,379)$37,016

(6)

(201)

(56)

Sub-total, before tax

4,146(2,580)36,960Net unrealized gains on investment securities
Net unrealized gains (losses) arising during the year
Reclassification adjustments

Tax credits(8.41)(7.49)Tax expense(1,271)

1,024(11,331)

Others, net

0.26

1.23

Sub-total, net of tax

2,875(1,556)25,629Effective tax rate

22.71%

26.80%Net deferred gains (losses) arising during the year

15

(168)

141

Reclassification adjustments

—

—

—

Sub-total, before tax

15

(168)

141

The Company received notification from the National Tax
Agency, Japan (NTA) dated February 14, 2017, that agreement had
been reached through the Mutual Agreement Procedure (MAP)
between the NTA and U.S. income tax authorities concerning
the transfer pricing adjustments assessed during prior historicalperiods relating to the transactions between the Company andits U.S. subsidiary. As a result, ¥405 million ($3,616 thousand)of tax benefit is included in current income tax expense as thedifference between the current tax refunds and the estimatedamount recorded in the prior year.

12. Net Assets
Net assets comprises four subsections, which are shareholders’ equity, accumulated other comprehensive income,share subscription rights and non-controlling interests.
Under Japanese laws and regulations, the entire amount
paid for new shares is required to be designated as common
stock. However, a company may, by a resolution of the boardof directors, designate an amount not exceeding one half ofthe price of the new shares as additional paid-in capitalwhich is included in capital surplus.

Net deferred gains (losses) on hedging instruments

Tax expense

(4)

56

(43)

Sub-total, net of tax

10

(112)

97

Adjustments during the year(933)

(5,705)(8,317)

Reclassification adjustments

—

(1)

—

(933)

(5,706)(8,317)

Foreign currency translation adjustments

Sub-total, before tax

—

—

—

(933)

(5,706)(8,317)

Adjustments during the year

3,578

(11,326)

31,893

Reclassification adjustments

291(2,268)2,600

Sub-total, before tax

3,869(13,594)

34,494

Tax expense(1,187)

4,361(10,582)

Sub-total, net of tax

2,682(9,233)23,911

Tax expense
Sub-total, net of tax
Remeasurements of defined benefit plans

Share of other comprehensive income of associates accounted for using the equity method
Adjustments during the year

114

(345)

1,021

Total other comprehensive income¥4,750¥(16,952)$42,342TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

29

CONTENTS

Business Overview
and Financial Highlights

To Our Stakeholders

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Corporate Data

Financial Section

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows
Independent Auditor’s Report

Notes to Consolidated Financial Statements
14. Share Subscription Rights
Stock option plan
The Company’s shareholders have approved annual stock
option plans for directors and selected employees since theyear ended March 31, 1999. The options under the plans vest
immediately or over three-year period with restriction on
exercise up to three years after the date of grant, and havean exercise period of seventeen years from the date on
which the options become exercisable.
Options to purchase 194,400 shares of the Company wereauthorized and granted at an exercise price of ¥1 ($0.01) for
the year ended March 31, 2017.

A summary of stock options outstanding and exercisable as of March 31, 2017 and 2016 is as follows:
2017
Weighted-average exercise price

Number ofshares

305,500

Outstanding at the beginning of year

2016

Yen

U.S. dollars

Number ofshares¥1$0.01

378,200

Weighted-average
exercise priceYen¥1

Granted

194,400

1

0.01

135,700

1

Exercised

42,4001

0.01

207,400

1

—

—

—

1,000

1

Outstanding at the end of year

457,500

1

0.01

305,500

1

Exercisable at the end of year

127,400

1

0.01

169,800

1

Expired (forfeited)

Short-term investments consist of time deposits and low
risk financial instruments and Tokyo Electron trade withhighly-rated financial institutions to mitigate credit risks.
Investment securities consist of mainly equity interests inlisted companies exposed to equity market risks. Conditions,
including market prices, for these investment securities aremonitored on a regular basis.
Trade payables, which consist of notes and accounts payable, mainly mature within one year. Trade payables are
exposed to liquidity risks which are managed through activities such as implementing cash management plans.
See note 17 for detailed discussion on derivative financial
instruments.

Millions of yen

Selling, general andadministrative expenses

Thousands of
U.S. dollars

2017

2016

2017

¥1,141¥967$10,178

Valuation method of fair value per unit of stock options
Fair value as of the grant date for stock options granted forthe year ended March 31, 2017 was ¥5,874 ($52.36) per unit,
which was evaluated as follows:(1) Valuation method used : Black-Scholes model(2) Major underlying assumptions and estimates:
12th Stock Acquisition Rights

Volatility (Note 1)

39.58%

Expected residual period (Note 2)

11.5 years

Expected dividends (Note 3)

190.0 ($1.69) per share

Risk-free interest rate (Note 4)(0.1%)

Notes: 1. Calculated based on the stock price performance for 11.5 years (fromDecember 2004 to June 2016).
2. Calculated on the assumption that the share subscription rights
would be exercised at the mid-point of the exercise period.
3. Based on the dividends paid for the years ended March 31, 2016
and 2015.
4. Based on Japanese government bond yield corresponding to the
expected residual period.

(3) Method of estimating the number of vested stock options
It is not necessary to estimate the number of vested stock
options as the rights to exercise stock options are vested
immediately when granted.

Fair value of financial instruments
Carrying amount and estimated fair value of financial
instruments as of March 31, 2017 and 2016 are set out below.
Fair value of financial instruments which is practically difficult
to estimate are excluded (see note 5).
Carrying
amountEstimated
fair value1

Cash and cash equivalents¥164,366¥164,366

Short-term investments

151,000

151,060

133,794

133,794

22,70422,7042017:

Assets Trade notes and accounts receivable, net of allowance for
doubtful accounts (¥63 million)

15. Leases
Future minimum lease payments on non-cancelable operating leases are as follows:
Millions of yen

Thousands of
U.S. dollars

2017

2016

2017

Due within one year

¥3,554¥2,397$31,685

Due over one year

6,272

4,756

55,908

Total¥9,827¥7,153$87,593

Investment securities

Policy for financial instruments
Tokyo Electron limits its fund management to short-termbank deposits and low-risk financial instruments.
Trade receivables, which consist of notes and accounts
receivable, are exposed to credit risk in the event of non-performance by the counterparties. Execution and managementof credit risk, maturity and receivable balance are conductedpursuant to the internal management rules for credit control.
Credit risk of major customers is assessed on a regular basis.

Cash and cash equivalents$1,465,075$1,465,075

Short-term investments

1,345,931

1,346,470

1,192,569

1,192,569

202,378

202,378

706,100

706,100(2,729)(2,729)437

437

Assets Trade notes and accounts receivable, net of allowance for
doubtful accounts ($569 thousand))Investment securities
Liabilities
Trade notes and accounts payable
Derivatives (see note 17)
Hedge accounting not applied

Notes: 1.	Fair value calculation of financial instruments
Cash and cash equivalents, short-term investments, trade notes andaccounts receivable and trade notes and accounts payable.
 The carrying amounts approximate fair value because of the shortmaturity of these instruments.
		 Investment securities
	  The fair values of marketable securities are based on quoted market prices.
	  See note 5 for further information by classification of investment
securities.
Derivatives
	  See note 17 for detailed discussion on derivative financial­instruments.
2.	The following unlisted equity securities are not included in the above
as they do not have quoted market prices and therefore it is considered extremely difficult to measure their fair value.

Trade notes and accounts payable

2017

Hedge accounting applied

79,217

79,217

(306)

(306)

49

49

Carrying
amountCash and cash equivalents¥ 95,638¥ 95,638

Short-term investments

141,035

140,785

—

133

Total

¥1,414¥1,334$12,605

Millions of yen
2017:

Within 1 year

After 1 through5 years

Cash and cash equivalents¥164,366¥—

Short-term investments

151,000—

Trade notes and accounts receivable

133,858—

116,455

116,455

18,58018,58055,05055,050

1,182

1,182

33

33

2016:

Within 1 year

After 1 through5 years

Cash and cash equivalents¥ 95,638¥—

Short-term investments

141,035—

Trade notes and accounts receivable

116,503—

Derivatives (see note 17)
Hedge accounting not applied
Hedge accounting applied$12,472

Millions of yen

Liabilities
Trade notes and accounts payable¥1,334

14

Estimated
fair value1

AssetsInvestment securities¥1,399

Other

Unlisted stocks

3. Maturities of financial assets and securities are as follows:

Millions of yen Trade notes and accounts receivable, net of allowance for
doubtful accounts (¥48 million)

2017

2016

Reported amount In balance sheet

Derivatives (see note 17)
Hedge accounting not appliedThousands of
U.S. dollars

Millions of yen

Liabilities

2016:

16. Fair Value of Financial Instruments

Estimated
fair value1

2017:

Hedge accounting applied

Millions of yen

Amounts expensed related to stock options
The amounts expensed related to stock options for theyears ended March 31, 2017 and 2016, are as follows:

Thousands of U.S. dollars
Carrying
amountThousands of U.S. dollars
2017:

Within 1 year

After 1 through5 years

Cash and cash equivalents$1,465,075$—

Short-term investments

1,345,931—

Trade notes and accounts receivable

1,193,138—

TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

30

CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Corporate Data

Financial Section

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows
Independent Auditor’s Report

Notes to Consolidated Financial Statements
17. Derivative Financial Instruments

18. Segment Information

Thousands of U.S. dollars

Tokyo Electron is subject to risk from adverse fluctuations
in foreign currency exchange rates in its operating andfinancing activities. The Company and certain subsidiaries
enter into forward foreign exchange contracts in order tohedge such risks, but do not enter into such transactions for
speculative purposes. The Company implements a ratio analysis of the total cumulative cash flow fluctuations to assess
effectiveness of hedging for all derivative transactions,
except for transactions where the critical terms of the hedging instrument and hedged item match and the Company
could conclude that changes in fair value or cash flows are
expected to completely offset. Execution and managementof all derivative transactions are conducted pursuant to theinternal management rule.
The estimated fair values of the derivative financial instruments as of March 31, 2017 and 2016 are as follows:
1. Derivative financial instruments not designated as hedging
instruments

2017:

Contract
amountFair value

Sell U.S. dollars$58,225$ 388$

Sell Korean won

5,258(3,151)(3,151)

496

(2)

(2)

36

36

Buy Taiwan dollars

5,961

2

2

Buy Chinese yuan

3,605

(3)

(3)

Buy EURO

640

(0)

(0)

Buy Singapore dollars

379

(0)

(0)

$92,517$(2,729)$(2,729)

Total

Note: The fair values are based on the quoted forward foreign exchange rates.

2. Derivative financial instruments designated as hedging
instruments
The contract amounts of forward foreign exchange contracts, entered into to hedge future transactions and receivables and payables denominated in foreign currencies thathave been translated by the corresponding contracted rates,
are as follows:
Millions of yen

2017:

Millions of yen

388

17,950

Sell Singapore dollars
Buy U.S. dollars

Gains(losses)

Contract
amountThousands of U.S. dollars

Fair value

Contract
amount2017:

Fair value

Gains(losses)

Sell U.S. dollars¥ 6,532¥   43¥   43Future transactions denominated ina foreign currency

Sell Korean won

589

(353)

(353)

Sell U.S. dollars¥4,117¥50$36,700

$452

1

(0)

13

(7)

340

(0)

3,034

(6)

Sell Singapore dollars
Buy U.S. dollars

55

(0)

(0)

2,013

4

4

Buy U.S. dollars

0Information about reportable segment net sales, segment profit (loss), segment assets and other items
Reportable segment information as of and for the years ended March 31, 2017 and 2016 is as follows:

Buy Chinese yuan

404

(0)

(0)

Monetary assets and liabilities in foreign
currency (Note)

Buy EURO

71

(0)

(0)

Sell U.S. dollars

130

—

1,163

—

Buy U.S. dollars

127

—

1,137

—

¥4,717¥49$42,048$437

Buy Taiwan dollars

Buy Singapore dollars
Total

668

42
¥10,3790(0)¥(306)(0)¥(306)

Total

Millions of yen

Contract
amountFair value

Gains(losses)

Sell U.S. dollars¥51,173¥1,773¥1,773

Sell Korean won

1,068

(612)

(612)

Sell Singapore dollars

58

(0)

(0)

Sell U.S. dollars¥1,371

Buy Korean won

879

2

2

Sell Korean won

2016:

Contract
amountFair value(14,372)—

Total

749,893

49,387

14,810814,091(14,372)

799,719

Segment profit

182,709

4,618

82

187,410(38,294)

149,116

Segment assets

374,51327,494

2,646

404,654552,792

957,447

Intersegment sales or transfers¥¥¥799,719

—

9,202

8,670

17,872

—

631

—

631

¥63

Loss on impairment

362

—

—

362

—

362

33

(19)

Capital expenditures, including intangible assets

10,881

562

472

11,917

10,34722,264(1)

Buy EURO

361

(8)

10

Buy GBP19(3)

Buy EURO

359

9

9

Buy U.S. dollars

13

(0)

Buy Swiss francs

95

1

1

Monetary assets and liabilities inforeign currency (Note)
Sell U.S. dollars

162—

Buy U.S. dollars

200—

Buy Singapore dollars

21—

Buy EURO

12—¥2,192¥33

Total

14,372

Sales to external customers

89

(1)

(0)

¥799,719

14,372

Consolidated—

10¥1,182438—

Eliminations
andCorporate

418

834

(0)

¥49,387

—

Total

631

431

¥1,182¥749,893

Other

8,694

Buy U.S. dollars

33

FPD
production
equipment

Amortization of goodwill

Future transactions denominated in a foreign currency

Buy Taiwan dollars¥54,930

Semiconductor
production
equipment

Net sales

2016:

Buy Singapore dollars

Millions of yen
Reportable Segment

2017:

Millions of yen

Total

Basis of measurement of reportable segment net sales, segment profit (loss), segment assets and other items
The accounting policies applied in each reportable segment are generally consistent with those applied for the preparation of
the consolidated financial statements. Intersegment sales or transfers are determined based on current market prices. Assets incommon use have not been allocated to each reportable segment, while costs associated with those assets have been allocatedto reportable segments on a systematic basis.

Fair value

Contract
amountSell Korean won

General information about reportable segments
A reportable segment is a component or an aggregated component of Tokyo Electron. 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 be allocated to the segment and assess its performance.
The operation of Tokyo Electron consists of segments by products and services based on business units (BUs), and Tokyo
Electron identifies 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 other semiconductor 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 of flat panel displays. The FPD production equipment segment principally develops, manufactures, sells and distributes suchproducts.

Note: The fair value of these derivative financial instruments, which is based on
the quoted foreign exchange rates, is included in the carrying value ofhedged assets and liabilities.

Depreciation and amortization

TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

31

CONTENTS

Business Overview
and Financial Highlights

To Our Stakeholders

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Corporate Data

Financial Section

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows
Independent Auditor’s Report

Notes to Consolidated Financial Statements
Other information(1) Domestic and overseas net sales by destination for the years ended March 31, 2017 and 2016 are as follows:

Millions of yen
Reportable Segment

2016:

Semiconductor
production
equipment

FPD
production
equipment

Other

Eliminations
andCorporate

Total

Consolidated

Net sales
Sales to external customers
Intersegment sales or transfers

Millions of yen

2017:¥613,033¥44,687¥ 6,229¥663,949¥—¥663,949

Net sales——

11,592

11,592(11,592)—

Total

613,033

44,687

17,821

675,541(11,592)

663,949

Segment profit

123,163

4,747

2,036

129,946(23,479)

106,467

Segment assets

321,100

25,1862,134

348,420444,948

793,368

8,792

424

45

9,261

9,996

19,257

970

—

—

970

—

970

Loss on impairment

9,711

—

—

9,711

16

9,727

2017:

Capital expenditures, including intangible assets

8,500

285

13

8,798

5,952

14,750Net sales

Depreciation and amortization
Amortization of goodwill

Japan

U.S.A.

EuropeSouth Korea

Taiwan

China

Other

Total

¥101,122¥101,566¥59,998¥145,216¥233,754¥115,126¥42,935¥799,719

Note: Sales are classified in countries or regions based on location of customers.
Millions of yen

2016:

Net salesJapan

U.S.A.

EuropeSouth Korea

Taiwan

China

Other

Total

¥121,808¥103,574¥56,659¥107,273¥170,095¥87,325¥17,215¥663,949

Note: Sales are classified in countries or regions based on location of customers.
Thousands of U.S. dollars
Japan

U.S.A.

Europe$901,348$905,310$534,791

South Korea

TaiwanChina$1,294,379 $2,083,557 $1,026,173

Other

Total

$382,699$7,128,260

Thousands of U.S. dollars
Reportable Segment

2017:

Semiconductor
production
equipment

FPD
production
equipment

Other

Eliminations
andCorporate

Total(2) Net property, plant and equipment by location as of March 31, 2017 and 2016 are as follows:
Consolidated

Net sales
Sales to external customers
Intersegment sales or transfers$6,684,140$440,210$

3,910 $7,128,260 $— $7,128,260—

Property, plant and equipment——

128,105

128,105

Total

6,684,140

440,210132,015

7,256,366(128,105) 7,128,260

Segment profit

1,628,573

41,171730

1,670,475(341,336) 1,329,138

2016:

Property, plant and equipment

Segment assets(128,105)Millions of yen

2017:

3,338,207

245,073

23,591

3,606,871

4,927,286

8,534,157

Depreciation and amortization

77,4993,727

801

82,02877,281

159,310

Amortization of goodwill

5,625

—

—

5,625

—

5,625

Japan

U.S.A.

Other

Total

¥77,407¥11,228¥11,805¥100,441

Japan

U.S.A.

Other

Total

¥75,580¥9,724¥11,013¥96,317

Millions of yen

Thousands of U.S. dollars

Loss on impairment

3,235

—

—

3,235

—

3,235

Capital expenditures, including intangible assets

96,995

5,015

4,212

106,222

92,232

198,455

Notes: 1.	“Other” includes all other operating segments which are not included in the reportable segments, including Photovoltaic panel Production Equipment
business, group-wide logistic services, facility maintenance and insurance.
2. (1) “ Eliminations and Corporate” segment loss totaling ¥38,294 million ($341,336 thousand) and ¥23,479 million for the years ended March
31, 2017 and 2016, respectively, includes corporate expenses not allocated to any reportable segments. The corporate expenses consistof research and development costs of ¥17,830 million ($158,935 thousand) and ¥13,583 for the years ended March 31, 2017 and 2016,
respectively, pertaining to fundamental research and element research, not allocated to any of the reportable segments, and the loss on
disaster of ¥7,521 million ($67,039 thousand) for the year ended March 31, 2017.
(2)  “Eliminations and Corporate” segment assets totaling ¥552,792 million ($4,927,286 thousand) and ¥444,948 million as of March 31, 2017 and 2016,
respectively, consist mainly of cash and cash equivalents, short-term investments and buildings not allocated to any of the reportable segments.
(3) “Eliminations and Corporate” capital expenditures totaling ¥10,347 ($92,232 thousand) and ¥5,952 million for the years ended March 31, 2017 and 2016,
respectively, consist mainly of capital expenditures for buildings, machinery and equipment not allocated to any of the reportable segments.

2017:

Property, plant and equipment

Japan

U.S.A.

Other

Total

$689,964$100,088$105,223$895,277(3) Major customer information
Net sales to external customers that represent 10 percent or more of net sales are as follows:

Millions of yen

Thousands of
U.S. dollars

2017

2017

Semiconductor production equipment¥143,488$1,278,974

Taiwan Semiconductor
Manufacturing Company Ltd.

Semiconductor production equipment

127,621

1,137,549

Samsung Electronics Co., Ltd.

Semiconductor production equipment and FPD production equipment

112,151

999,657

Micron Technology, Inc.

Semiconductor production equipment

84,111

749,722

Name of customer

Intel Corporation

Related reportable segment			

Note: The amounts include sales to the customer and its subsidiaries.
Millions of yen

Related reportable segment

Name of customer

Samsung Electronics Co., Ltd.

Semiconductor production equipment and FPD production equipment

Intel Corporation

Semiconductor production equipment

Taiwan Semiconductor
Manufacturing Company Ltd.

Semiconductor production equipment

Note: The amounts include sales to the customer and its subsidiaries.

2016¥100,672
83,79571,938

TOKYO ELECTRON ANNUAL REPORT 2017

PAGE

32

CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Interview with the CEO
Message from the CFO

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Financial Section

Financial Review
Consolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Consolidated Statements of Changes in Net Asset
Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Independent Auditor’s Report

Information about reportable segment goodwill
Reportable segment information about amortization of goodwill for the years ended March 31, 2017 and 2016, and unamortized balances as of March 31, 2017 and 2016 are as follows:
Millions of yen
Semiconductor
production
equipment

FPD
production
equipment

Total

Amortization of goodwill

¥ 631

¥—

¥ 631

Goodwill

3,376

—

3,376

2017:

Millions of yen
Semiconductor
production
equipment

FPD
production
equipment

Total

Amortization of goodwill

¥ 970

¥—

¥ 970

Goodwill

4,095

—

4,095

2016:

Thousands of U.S. dollars
Semiconductor
production
equipment

FPD
production
equipment

Total

Amortization of goodwill$ 5,625$—$ 5,625

Goodwill

30,100—30,1002017:

Corporate Data