TOKYO ELECTRON

April 28, 2017

Consolidated Financial Review
for the Year Ended March 31, 2017
Company name:
URL:
Telephone number:
Stock exchange listing:Notes:
Notes:
1.

Tokyo Electron Limited
http://www.tel.com(03) 5561-7000
Tokyo Stock Exchange 1st Section (Code 8035)

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.

Consolidated financial highlights for the year ended March 31, 2017

(1) Operating results
Note: Percentages indicate changes from the same period of the previous fiscal year.
Year ended
March 31, 2016

March 31, 2017%%

Net sales (Millions of yen)

663,948

8.3

799,719 20.4

Operating income (Millions of yen)

116,788 32.5

155,697 33.3

Ordinary income (Millions of yen)

119,399 28.5

157,549 32.0

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

77,891

115,208 47.9

8.4

Net income per share of common stock (Yen):
Basic

461.10702.26

Diluted

460.00700.35Return on equity (%)

13.0

19.1

Ordinary income to total assets (%)

14.3

18.0

Operating income to net sales (%)

17.6

19.5

Comprehensive income:Year ended March 31, 2017: 119,998 million yen, 96.8%

Profit/loss on equity method:Year ended March 31, 2017: 342 million yen

Year ended March 31, 2016: 60,984 million yen, (24.1)%

Year ended March 31, 2016: 325 million yen(2) Financial position
As ofMarch 31, 2016

March 31, 2017

Total assets (Millions of yen)793,367

957,447

Total net assets (Millions of yen)

564,239645,999

70.9

67.2

3,428.37

3,919.50

Equity ratio (%)
Net assets per share (Yen)
Equity:643,094 million yen (as of March 31, 2017)562,369 million yen (as of March 31, 2016)(Millions of yen)

(3) Cash flows
Year ended
March 31, 2016

March 31, 2017

Cash flows from operating activities

69,398

136,948

Cash flows from investing activities(150,013)(28,893)

Cash flows from financing activities(138,600)(39,380)

95,638164,366

Cash and cash equivalents at end of period

1TOKYO ELECTRON

2.

Dividends
Year ended
March 31, 2016

March 31, 2017

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

2Q-end dividends per share (Yen)

125.00128.003Q-end dividends per share (Yen)--

Year-end dividends per share (Yen)

112.00224.00

Annual dividends per share (Yen)

237.00352.00Total dividends (Millions of yen)

39,19457,752

Payout ratio (%)

51.4

50.1

Dividend on equity (%)

6.8

9.6

Note: Regarding the year-end dividends forecast for the fiscal year ended March 31, 2017, please refer to the press release
Note: "Announcement on Dividends Forecast Revision for the Fiscal Year Ended March 31, 2017" published today.

3.

Financial forecasts for the fiscal year ending March 31,2018

Note: Percentages indicate changes from the same period of the previous fiscal year.
Year ending
September 30, 2017

Net sales (Millions of yen)March 31, 2018%%

480,000 36.1

980,000 22.5

Operating income (Millions of yen)

104,000 73.3

216,000 38.7

Ordinary income (Millions of yen)

104,000 66.8

216,000 37.1

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

79,000 88.2

163,000 41.5

Net income per share (Yen)

481.48993.44

4.

Others(1)䚷Important changes in subsidiaries (Changes on specific subsidiaries associated with changes in scope of consolidation): None

(2)䚷Changes in accounting policies, changes in accounting estimates and restatements
1. Changes in accounting policies along with changes in accounting standards: Yes
2. Other changes of accounting policies besides the number 1 above: None
3. Changes in accounting estimates: None
4. Restatements: None

(3) Number of shares issued and outstanding (common stock)
1. Number of shares issued and outstanding (including treasury stock)
As of March 31, 2017:

165,210,911 shares

As of March 31, 2016:

165,210,911 shares

2. Number of shares of treasury stock
As of March 31, 2017:

1,135,104 shares

As of March 31, 2016:

1,176,800 shares

3. Average number of shares outstanding
As of March 31, 2017:

164,054,693 shares

As of March 31, 2016:

168,924,437 shares

2

TOKYO ELECTRON(Reference) Non-consolidated financial review for the fiscal year ended March 31, 2017

(1) Operating results
Note: Percentages indicate changes from the same period of the previous fiscal year.
Year ended
March 31, 2016

March 31, 2017%

Net sales (Millions of yen)

582,623

Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)

5.0%
751,09728.9

42,092 (10.6)

60,55743.9

74,861 (13.5)

61,895 (17.3)

63,54946,682 (26.5)

0.4

Net income per share of common stock (Yen):
Basic

376.20284.56

Diluted375.30283.78(2) Financial position
As ofMarch 31, 2016

March 31, 2017

Total assets (Millions of yen)

625,968

768,651

Total net assets (Millions of yen)329,351

340,518

52.4

44.0

1,997.82

2,059.40

Equity ratio (%)
Net assets per share (Yen)
Equity:337,898 million yen (as of March 31, 2017)327,709 million yen (as of March 31, 2016)*Note
This Consolidated Financial Review is outside the scope of the audit procedures under the Financial Instruments and Exchange Act.

*Explanation of the appropriate use of financial forecast:
The financial forecasts and estimates provided in this Consolidated Financial Review are based on certain assumptions
judged to be reasonable by the Company and available information at the time of report issuance, and therefore are notguarantees of future performance. Consequently, actual results may differ substantially from those described in thisConsolidated Financial Review. Please refer to (3) Future forecast on page 7 for further details.
The Company plans to hold an earnings release conference for analysts and investors on April 28, 2017. Supplementary
presentation materials to be handed out at the conference will be posted simultaneously on the Company's website.

3ࣇ࢓࢖ࣝྡ
TOKYO ELECTRON

1. Operating Results(1) Overview of Operating Results(i) Business Environment during the Fiscal Year Ended March 31, 2017
In the fiscal year under review, there was generally a modest recovery in the global economy, with the US economy maintaining
moderate growth and the Chinese economy also showing signs of a recovery.
In the electronics industry, which the Tokyo Electron (TEL) Group is part of, semiconductor manufacturers stepped up capital
investment against the backdrop of an increase in demand for servers used in data centers stemming from growing in frequency
and volumes of the data communications, associated with the continued evolution of the Internet of things (IoT), and higher
functionality and sales volumes for smartphones made in China; thus, the semiconductor production equipment market was buoyant.

(ii) Overview of Profit and Losses during the Fiscal Year Ended March 31, 2017
In this environment, the consolidated business results for the fiscal year under review are as follows.
Net sales for the fiscal year increased 20.4% from the previous fiscal year to 799,719 million yen. Domestic net sales decreased
17.0% from the previous year to 101,122 million yen, while overseas net sales increased 28.9% to 698,597 million yen to accountfor 87.4% of net sales. Orders received during the fiscal year increased 53.4% to 1,036,883 million yen, as well as, the orders
backlog grew 78.9% to 537,885 million yen.
Cost of sales increased 20.3% to 477,427 million yen and gross profit increased 20.6% to 322,291 million yen. As a result, the grossprofit margin expanded by 0.1 points to 40.3%.
Selling, general and administrative (SG&A) expenses increased 10.8% to 166,594 million yen, while the ratio to consolidated net
sales declined 1.8 points to 20.8%.
As a result of the foregoing, operating income increased 33.3% to 155,697 million yen and operating margin increased 1.9 points to
19.5%. After adjustment of non-operating income of 2,931 million yen and non-operating expenses of 1,079 million yen, ordinary
income increased 32.0% to 157,549 million yen.
Extraordinary losses totaled 8,433 million yen (compared to a loss of 12,932 million yen in the previous fiscal year), due mainly tothe recording of an unusual or infrequent loss resulting from the impact of the Kumamoto Earthquake, amongst other factors.
Income before income taxes was 149,116 million yen (year-on-year growth of 40.1%) and net income attributable to owners ofparent was 115,208 million yen - year-on-year growth of 47.9%.
As a result of the foregoing, net income per share was 702.26 yen - compared to net income per share of 461.10 yen in the previous
fiscal year.

4ࣇ࢓࢖ࣝྡ
TOKYO ELECTRON(iii) Overview of Operations by Business Segment during the Fiscal Year Ended March 31, 2017
The overview of each business segment is as described below.

Semiconductor Production Equipment
In addition to an increase in demand for servers used in data centers, smartphone manufacturers accelerated the pace of internal
memory expansion, so demand for 3D NAND flash memory and DRAM was brisk. Given these market conditions, memory
manufacturers maintained capital investment in order to boost production capacity. Logic semiconductor manufacturers also
proactively allocated capital investment to cutting-edge technologies targeting more advanced semiconductor functionality. Under
these circumstances, the segment’s net sales to external customers during the fiscal year under review were 749,893 million yen(up 22.3% compared to the previous fiscal year).

In this segment, the new product, "Triase+™ EX-II™ TiON" single wafer deposition system, was released during this fiscal year.

Flat Panel Display (FPD) Production Equipment
The FPD production equipment market was strong, with capital investment in small to medium-sized flat panel displays for mobile
devices growing, and capital investment in large-sized flat panel displays in China also providing a boost. Under thesecircumstances, the segment’s net sales to external customers during the fiscal year under review were 49,387 million yen (up 10.5%
compared to the previous fiscal year).

Other
The segment’s sales to external customers during the fiscal year under review totaled 438 million yen (down 93.0% from theprevious fiscal year).

(For reference䠅䠅Consolidated Operating Results

䠄Millions of yen䠅Year ended March 31, 2017

Year ended
March 31, 2016
Net 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

1Q

2Q

First
Half

3Q

4Q

SecondHalf

Full Year

663,948

147,976

204,745

352,722

186,364

260,632

446,997

799,719

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

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

196,211
26,42934,416
6,695
29,03158,28924,04417,3048,414
119
37,91638,281
29,281

327,008
44,24851,43911,93048,83788,79454,093
27,66425,479234
60,01262,36541,966

179,373
20,32924,634
15,06133,37662,36013,798
9,812
6,887
103
34,14733,32725,951

243,511
26,62525,48532,93755,57574,755
22,777
5,355
17,020100
61,53661,85747,290422,885
46,954
50,11947,99888,951
137,116
36,575
15,167
23,908203
95,684
95,18473,242749,893
91,203
101,559
59,929137,788
225,91090,66942,832
49,387438
155,697
157,549
115,208

Note: Intersegment sales or transfers are eliminated.

5ࣇ࢓࢖ࣝྡ
TOKYO ELECTRON(2) Qualitative Information on Consolidated Financial Conditions(i) Financial Conditions
Current assets at the end of the fiscal year totaled 775,938 million yen, an increase of 158,522 million yen when compared to theend of the previous fiscal year. This was mainly attributable to an increase of 83,500 million yen in short-term investments included
in securities, an increase of 41,176 million yen in inventories, and an increase of 17,354 million yen in trade notes and accounts
receivable.
Tangible fixed assets increased by 4,124 million yen from the end of the previous fiscal year, to 100,441 million yen.
Intangible fixed assets decreased by 2,201 million yen from the end of the previous fiscal year, to 15,401 million yen.
Investments and other assets increased by 3,634 million yen from the end of the previous fiscal year, to 65,666 million yen.
As a result of the foregoing, total assets increased by 164,079 million yen from the end of the previous fiscal year, to 957,447 million
yen.
Current liabilities increased by 81,709 million yen when compared to the end of the previous fiscal year, to 247,770 million yen. This
was largely due to a 34,453 million yen increase in customer advances, a 24,167 million yen increase in trade notes and accounts
payable, a 10,230 million yen increase in provisions for bonuses, and an 8,608 million yen increase in income taxes payable.
Long-term liabilities increased by 609 million yen when compared to the end of the previous fiscal year, to 63,677 million yen.
Net assets increased by 81,760 million yen when compared to the end of the previous fiscal year, to 645,999 million yen.
Contributing factors were an increase of 115,208 million yen in net income attributable to owners of parent and a decrease resulting
from the payment of 39,371 million yen in year-end dividends for the previous fiscal year and interim dividends for the current fiscal
year. As a result, the equity ratio was 67.2%.

(ii) Cash Flows
Cash and cash equivalents at the end of the current fiscal year increased by 68,728 million yen when compared to the end of theprevious fiscal year, to 164,366 million yen. The combined balance including time deposits and short-term investments with periods
to maturity or redemption of at least three months which are not included in cash and cash equivalents was 315,366 million yen, an
increase of 78,693 million yen from the end of the previous fiscal year. The various cash flows for the fiscal year under review wereas described below.
Cash flows from operating activities were 136,948 million yen, an increase of 67,550 million yen when compared to the previous
fiscal year. This was mainly attributable to inflows of 149,116 million yen in net income before income taxes, 17,872 million yen in
depreciation and amortization, an increase of 34,444 million yen in customer advances, an increase of 24,053 million yen in tradenotes and accounts payable; and outflows of an increase of 44,102 million yen in inventories, 32,622 million yen for payment ofincome taxes and an increase of 17,411 million yen in trade notes and accounts receivable.
Cash flows from investing activities were negative 28,893 million yen compared to a negative 150,013 million yen in the previous
fiscal year. The main factors were outflows of 17,557 million yen for purchase of tangible fixed assets and 9,967 million yen
associated with an increase in time deposits and short-term investments.
Cash flows from financing activities were a negative 39,380 million yen, compared to a negative 138,600 million yen in the previous
fiscal year. These were mainly attributable to the payment of 39,371 million yen in dividends.

6ࣇ࢓࢖ࣝྡ
TOKYO ELECTRON

Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

70.9
151.7
-

67.2
208.3
-

Equity 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 flows from operating activities
Interest coverage ratio: Cash flows from operating activities / Interest expenses* All indicators are calculated using financial figures on a consolidated basis.
* Market capitalization is calculated based on the following formula: Closing stock price at fiscal year-end × Number of shares
outstanding at fiscal year-end after deduction of treasury stock.

(3) Future Forecast
In light of strong demand for semiconductors driven by servers used in data centers and the increasingly high functionality and large
capacity of mobile devices, we expect to continue to see strong trends in capital investment in semiconductor manufacturing
equipment—one of the company's core segments. In FPD production equipment, we expect robust demand with continuing ofinvestment in small to medium-sized flat panel displays for mobile devices, and launching of investment in large-sized flat panel
displays. Based on the current business and economic environment, the financial forecasts for the next fiscal year (the year ending
March 31, 2018) is set forth below.

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

Year ending March 31, 2018

Interim

Net Sales

480.0
451.0
29.0
0.0
104.0
104.0
79.0

Semiconductor Production Equipment
FPD Production Equipment
Other
Operating Income
Ordinary Income
Net Income Attributable to Owners of Parent

Full Year
36.1%
37.9%
13.8%
73.3%
66.8%
88.2%

980.0
910.0
70.0
0.0
216.0
216.0
163.0

22.5%
21.4%
41.7%
38.7%
37.1%
41.5%

Note: Intersegment sales or transfers are eliminated.

Note: The financial forecasts and estimates stated in this announcement are based on certain assumptions judged to be reasonable
by the Company in light of information currently available concerning economic conditions in Japan and overseas, fluctuations inforeign exchange rates, and other factors that may have an impact on performance. The company does not promise that theforecasts 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 andprofits may differ substantially from the projections stated in this announcement.

7ࣇ࢓࢖ࣝྡ
TOKYO ELECTRON(4) Basic Policy on Profit Allocation and Payment of Dividends for the Current and Next Fiscal YearsTEL utilizes capital reserves to raise corporate value through earnings growth and provide returns directly to shareholders byconcentrating investment in high-growth areas and linking dividend payments to business performance.
Basic policy concerning shareholder return is as follows.

Shareholder Return Policy• Our dividend policy is to link dividend payments to business performance on an ongoing basis and a payout ratio is around
50% based on net income attributable to owners of parent. But with an annual dividend per share of not less than 150 yen.
Note: A dividend policy review is required if TEL does not generate net income for two consecutive fiscal years.
• TEL will flexibly consider share buybacks.

The year-end dividend for the current fiscal year (the year ended March 31, 2017) is scheduled to be 224 yen per share. The
dividend for the full year will be 352 yen per share, which includes the interim dividend of 128 yen per share.
Dividends are forecasted for the next fiscal year (the year ending March 31, 2018) to be 497 yen per share for the entire year an interim dividend of 241 yen and year-end dividend of 256 yen, in accordance with the above consolidated forecast for net
income attributable to owners of parent for the next fiscal year pursuant to the stated dividend policy.

Dividend per share
2Q-endYear-end

Total

Current fiscal year
(ended March 31, 2017)

128 yen

224 yen352 yenNext fiscal year
(ending March 31, 2018)

241 yen

256 yen

497 yen

2. Basic philosophy on the selection of accounting standards
The consolidated financial statements of TEL group have been prepared in conformity with accounting principles generally acceptedin Japan. In regard to the application of IFRS, we will pay close attention to domestic and international implementation adoption
trends and respond accordingly.

8

TOKYO ELECTRON

Consolidated Balance Sheets(Millions of yen)
As of

As of

March 31, 2016

March 31, 2017

ASSETS
Current assets
Cash and deposit

75,67470,866

Trade notes and accounts receivable

116,503

133,858

Securities

160,999

244,500

Merchandise and finished goods

130,478

152,629Work in process

41,556

51,112

Raw materials and supplies

23,04432,514

Deferred income taxes

31,20336,892Others38,00353,628

Allowance for doubtful accounts
Total current assets

(48)

(63)

617,416

775,938

147,653

145,901(99,794)(100,003)

Long-term assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures , net
Machinery and carriers
Accumulated depreciation
Machinery and carriers , net

47,85945,89899,976102,144(83,172)(83,804)

16,803

18,340Land

23,867

24,855

Others32,96635,925(25,180)(24,577)

7,786

11,34796,316

100,441

Accumulated depreciation
Others, net
Total tangible fixed assets
Intangible fixed assets
Others17,603

15,401

Total intangible fixed assets

17,603

15,401OthersInvestment securities

19,914

24,119Deferred income taxes

20,781

19,128

Net asset for defined benefits

1,623

4,818

Others

21,537

19,416

Allowance for doubtful accounts(1,825)(1,816)

Total investments and other assets

62,031

65,666

175,951

181,508

793,367

957,447

Total long-term assets
Total assets

9

TOKYO ELECTRON

Consolidated Balance Sheets(Millions of yen)
As of

As of

March 31, 2016

March 31, 2017

LIABILITIESCurrent liabilities
Trade notes and accounts payable

55,05079,217

Income taxes payable

22,46031,069Accrued employees’ bonuses

11,623

21,853Customer advances

33,522

67,976

Others43,40347,653

Total current liabilities

166,060

247,770

55,30255,825Long-term liabilities
Net liability for defined benefits
Others

7,765

7,851

Total long-term liabilities

63,067

63,677229,128

311,447

Common stock

54,961

54,961

Capital surplus

78,02378,023Retained earnings

Total liabilities
NET ASSETS
Shareholders' equity

427,618

503,325

Treasury stock, at cost

(8,050)(7,766)

Total shareholders' equity

552,551628,543

Net unrealized gains (losses) on investment securities

7,902

10,788Net deferred gains (losses) on hedging instruments

50

59

Foreign currency translation adjustments

6,742

5,789

Accumulated remeasurements of defined benefit plans(4,877)(2,086)

Total accumulated other comprehensive income (loss)

9,817

14,551

1,641

2,620

Accumulated other comprehensive income

Share subscription rights
Non-controlling interests
Total net assets
Total liabilities and net assets

10

228

284

564,239645,999

793,367

957,447

TOKYO ELECTRON

Consolidated Statements of Income(Millions of yen)
Year ended

Year ended

March 31, 2016

March 31, 2017

Net sales

663,948799,719

Cost of sales

396,738

477,427

Gross profit

267,209322,291

Salaries and allowances

24,21023,724

Research and development expenses

76,28683,800

Selling, general & administrative expenses

Others49,92359,069Total selling, general and administrative expenses

150,420

166,594

116,788

155,697

Operating income
Non-operating income
Interest income

547

722

Dividend income

308

310

Share of profit of associates accounted for using the equity method

325

342

Dividend income of insurance

296

300

Foreign exchange gain

886-

Others

1,433

1,255

Total non-operating income

3,798

2,931

-

791

Non-operating expenses
Foreign exchange loss
Commission for purchase of treasury stock

662-

Others

525

287

1,187

1,079

119,399

157,549

1,025

55

445

6

1,470

61

-

7,521

Total non-operating expenses
Ordinary income
Unusual or infrequent profit
Gain on sales of fixed assets
Gain on sale of investment securities
Total unusual or infrequent profit
Unusual or infrequent loss
Loss on disaster
Loss from restructuring

2,235

-

Others12,168973

Total unusual or infrequent loss

14,403

8,494

Income before income taxes

106,466

149,116

Provision for income taxes and enterprise taxes

32,55940,633

Deferred income taxes(4,029)(6,765)

Total income taxes

28,53033,867

Net income

77,936115,24844

39

77,891

115,208

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

11

TOKYO ELECTRON

Consolidated Statements of Comprehensive Income(Millions of yen)

Net income

Year ended

Year ended

March 31, 2016

March 31, 2017

77,936115,248(1,555)2,875

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

(111)

10

Foreign currency translation adjustments(5,705)(933)

Remeasurements of defined benefit plans(9,233)

2,682

(345)

114

Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income(16,951)

4,750

60,984

119,998

60,961

119,942

22

56(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

12

TOKYO ELECTRON

Consolidated Statements of Changes in Net Assets
Year ended March 31, 2016

(Millions of yen)

Shareholders' equity

Balance at beginning of period

Common stock

Capital surplus

Retained earnings

54,961

78,023

488,816

Treasury stock(9,064)

Total
shareholders'equity612,736

Changes of items during theperiodCash dividends(33,013)(33,013)

Net income attributable toowners of parent

77,891

77,891

Repurchase of treasury
stock
Disposal of treasury
stock
Cancellation of treasury
stock(105,809)(105,809)

(725)

1,472

746

(105,351)

105,351-

Net change except
shareholders' equity
Total changes of items during
the period

Balance at end of period--(61,198)

1,013(60,184)

54,961

78,023427,618(8,050)552,551

Accumulated other comprehensive income

Net unrealized
Net deferred
Accumulated
Foreign currency
gains (losses) on gains (losses) on
remeasurements
translation
investment
hedgingof defined benefit
adjustments
securities
instruments
plans
Balance at beginning of period

9,463

122

12,481

4,681

Total
accumulated
othercomprehensive
income (loss)

Share
subscription rights

Non-controllinginterests

Total net assets

26,7471,420

257

641,162

Changes of items during theperiodCash dividends(33,013)

Net income attributable toowners of parent

77,891

Repurchase of treasury
stock(105,809)

Disposal of treasury
stock

746

Cancellation of treasurystock
Net change except
shareholders' equity-(1,560)(71)(5,738)(9,559)(16,929)

220

(29)

(16,738)

Total changes of items during
the period(1,560)(71)(5,738)(9,559)(16,929)

220

(29)

(76,923)

Balance at end of period

7,902

50

6,742

(4,877)

9,817

1,641

228

564,239

13

TOKYO ELECTRON

Consolidated Statements of Changes in Net Assets
Year ended March 31, 2017

(Millions of yen)
Shareholders' equity

Balance at beginning of period

Common stock

Capital surplus

Retained earnings

54,961

78,023427,618

Treasury stock(8,050)Total
shareholders'equity552,551

Changes of items during theperiodCash dividends(39,371)(39,371)

Net income attributable toowners of parent

115,208

115,208

Repurchase of treasury
stock
Disposal of treasury
stock

(6)

(6)

(130)

290

159

Net change except
shareholders' equity
Total changes of items during
the period

Balance at end of period--

75,707283

75,991

54,961

78,023503,325(7,766)

628,543

Accumulated other comprehensive income

Net unrealized
Net deferred
Accumulated
Foreign currency
gains (losses) on gains (losses) on
remeasurements
translation
investment
hedgingof defined benefit
adjustments
securities
instruments
plans
Balance at beginning of period

7,902

50

6,742

(4,877)

Total
accumulated
othercomprehensive
income (loss)

Share
subscription rights

Non-controllinginterests

Total net assets

9,817

1,641

228

564,239

Changes of items during theperiodCash dividends(39,371)

Net income attributable toowners of parent

115,208

Repurchase of treasury
stock

(6)

Disposal of treasurystock
Net change except
shareholders' equity

159

2,886

9

(953)

2,791

4,733

979

56

5,769

Total changes of items during
the period

2,886

9

(953)

2,791

4,733

979

56

81,760

Balance at end of period

10,78859

5,789(2,086)

14,5512,620

284

645,999

14

TOKYO ELECTRON

Consolidated Statements of Cash Flows(Millions of yen)
Year ended

Year ended

March 31, 2016

March 31, 2017

Cash flows from operating activities
Income before income taxes

106,466

149,116

Depreciation and amortization

19,257

17,872

Amortization of goodwill

970

631

Increase (decrease) in accrued employees’ bonuses(283)

10,112

Interest and dividend revenue(855)(1,032)

Loss (gain) on sales of affiliates’ shares

1,110

-

Decrease (increase) in trade notes and accounts receivable(8,649)(17,411)

Decrease (increase) in inventories(23,535)(44,102)31

24,053

Decrease (increase) in prepaid consumption tax(1,910)(12,350)

Increase (decrease) in customer advances(15,003)

34,444

Others

6,199

6,970

Subtotal

83,797

168,304

Receipts from interest and dividends

956

1,266

Income taxes paid or refund (paid)(15,356)(32,622)Net cash provided by operating activities

69,398

136,948

Payment into time deposits(25,000)(25,000)

Proceeds from time deposits

12

50,034(184,490)(177,200)

Proceeds from redemption of short-term investments

68,492

142,198

Payment for purchase of fixed assets(11,294)(17,557)

Payment for acquisition of intangible assets(707)(1,116)

Others

2,974

(252)

(150,013)(28,893)

Payment for purchase of treasury stock(105,532)(6)

Dividends paid

(33,013)(39,371)

(55)

(2)

(138,600)(39,380)(2,776)53

Net increase (decrease) in cash and cash equivalents(221,993)

68,728Cash and cash equivalents at beginning of period

317,632

95,638Cash and cash equivalents at end of period

95,638164,366

Increase (decrease) in trade notes and accounts payable

Cash flows from investing activities

Payment for purchase of short-term investments

Net cash provided by (used in) investing activities
Cash flows from financing activities

OthersNet cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

15

TOKYO ELECTRON

Notes
Going concern
None

Changes in accounting policies, changes in accounting estimates and restatements

In accordance with the revision to the Corporation Tax Act, the Company and its domestic subsidiaries applied the“Practical Solution on a change in depreciation method due to Tax Reform 2016” (ASBJ Practical Issues Task Force No. 32, dated
June 17, 2016) and changed the depreciation method for buildings and accompanying facilities and structures acquired on or after
April 1, 2016 from the declining-balance method to the straight-line method, starting from the fiscal year ended March 31, 2017.
The effect of this change on the consolidated financial statements is immaterial.
Notes 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.

Provision for income taxes and enterprise taxes
The Company received notification from the National Tax Agency, Japan (NTA) dated February 14, 2017, that the agreement had
been reached through the Mutual Agreement Procedure (MAP) between the NTA and U.S. income tax authorities concerning thetransfer pricing adjustments assessed during prior historical periods relating to the transactions between the Company andits U.S. subsidiary. As a result, 405 million yen of tax benefit is included in current income tax expense as the difference between
the current tax refunds and the estimated amount recorded in prior fiscal year.

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 of coater/developers, plasma etch systems, thermal processing systems,
single wafer deposition systems, cleaning systems, 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, etch/ash systems used in the manufacture offlat panel displays. The FPD production equipment segment principally develops, manufactures, sells and distributes such products.

(ii) Means to measure net sales, profit or loss, assets and other items in each reportable segment
The method used to account for each reportable segment is similar to those applied to prepare consolidated financial statements.
Intersegment revenues or transfers are based on prevailing market prices.
Shared assets are not allocated to each reportable segment, but the associated costs are allocated based on reasonable standards.

16

TOKYO ELECTRON(iii) Net sales, profit or loss, assets and other items in reportable segments
Year ended March 31,2017(Millions of yen)
Reportable Segments
Semiconductor
Production
Equipment

Others *1

FPD Production
Equipment

Total

Sales
Sales to external customers

749,893

49,387438

799,719--

14,372

14,372749,893

49,387

14,810814,091

Segment profit (loss)

182,709

4,618

82

187,410Segment assets

374,51327,494

2,646

404,654

8,694

418

89

9,202

Amortization of goodwill

631

-

-

631

Loss on impairment

362

-

-

362

Intersegment sales or transfers
Net sales

Other items
Depreciation and amortization

Increase in the amount of tangible
and intangible fixed assets

10,881

562

Eliminations andCorporate *2

472

11,917

Consolidated *3

Sales
Sales to external customers-

799,719

Intersegment sales or transfers(14,372)-

Net sales(14,372)

799,719

Segment profit (loss)(38,294)

149,116

Segment assets

552,792

957,447

8,670

17,872

Amortization of goodwill-

631

Loss on impairment-

362

Other items
Depreciation and amortization

Increase in the amount of tangible
and intangible fixed assets

10,34722,264

Notes:*1. "Others" 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.

*2. a) "Eliminations and Corporate" segment loss totaling 38,294 million yen includes corporate expenses not allocated to any
reportable segments. The corporate expenses consist of research and development costs of 17,830 million yen, pertaining tofundamental research and element research, and loss on disaster of 7,521 million yen.

17

TOKYO ELECTRONb) The main elements included in "Eliminations and Corporate" of segment assets worth 552,792 million yen are cash
and deposit, securities, and buildings and structures which are not allocated to each reportable segment.

c) The main elements included in "Eliminations and Corporate" of tangible and intangible fixed assets worth 10,347
million yen are the investments in buildings and structures, machinery and carriers, Tools, furniture and fixtures
which are not allocated to each reportable segment.

*3. Segment profit is adjusted against net income before taxes in Consolidated Statements of Income.

(iv) Impairment loss on fixed assets in reportable segments
Refer to (iii) Net sales, profit or loss, assets and other items in reportable segments.

(v) Amortization and balance of goodwill in reportable segments
Year ended March 31, 2017

(Millions of yen)

Semiconductor
Production Equipment

Amortization of goodwill
Balance at end of the period

FPD Production
Equipment

Total Segment

631

-

631

3,376

-

3,376

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

18

TOKYO ELECTRONPer share information
Year ended
March 31, 2017
Net assets per share (Yen)

3,919.50

Net income per share (Yen)702.26

Fully diluted net income per share (Yen)

700.35

Note: Net income per share and fully diluted net income per share are calculated based on the following elements.
Net income per share (Yen)

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

115,208

Net income not pertaining to owners of common stock (Millions of yen)㻙

Net income attributable to owners of parent pertaining to common stock(Millions of yen)

115,208

The average number of common stock (Thousands of share)

164,054

Fully diluted net income per share (Yen)The adjustments to net income attributable to owners of parent (Millions of yen)

Increase in common stock (Thousands of share)㻙

446[Share subscription rights (Thousands of share)][446]

Details of dilutive shares, not included in the computation of fully diluted
net income per share as there is no dilution effect.

Significant subsequent event
None

19

㻙

TOKYO ELECTRON

Other
ࠉ(1) Production, Orders and Salesࠉ (i) Production(Millions of yen)
Year ended
March 31, 2016

Year ended
March 31, 2017

Production

Production

Semiconductor Production Equipment592,230

758,348

FPD Production Equipment

50,94445,344

Others

5,124

㻙

Total

648,299803,693(Notes) 1. Amounts are based on sales prices.
(Notes) 2. The above amounts do not include consumption taxes.

ࠉ(ii) Orders

Year ended
March 31, 2016
Orders received

Year ended
March 31, 2017

Order backlog

Orders received

Order backlog

Semiconductor Production Equipment

622,935

263,288

950,784

464,179

FPD Production Equipment

50,50337,42885,65773,698Others

2,541

4

442

8

Total

675,980

300,721

1,036,883

537,885(Notes) 1. Intersegment sales or transfers are eliminated.
(Notes) 2. The above amounts do not include consumption taxes.

ࠉ(iii) SalesYear ended
March 31, 2016

Year ended
March 31, 2017

Sales

Sales

Semiconductor Production Equipment

613,032

749,893

FPD Production Equipment

44,68749,387

Others

6,228

438

Total

663,948799,719(Notes) 1. Intersegment sales or transfers are eliminated.
(Notes) 2. The above amounts do not include consumption taxes.

20