TOKYO ELECTRON

July 30, 2013

Consolidated Financial Review
for the First Quarter Ended June 30, 2013
Company name:
URL:
Telephone number:
Stock exchange listing:Tokyo Electron Limited
http://www.tel.com(03) 5561-7000
Tokyo Stock Exchange 1st Section (Code 8035)

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

1. Financial highlights for the three months ended June 30, 2013
Three months ended
June 30, 2012
June 30, 2013
Net sales (Millions of yen)
134,179
103,452
Operating income (Millions of yen)
9,283
(9,646)
Ordinary income (Millions of yen)
11,248(9,898)Net income (Millions of yen)
5,720
(2,976)
Net income per share (Yen)
31.93(16.61)
Fully diluted net income per share (Yen)
31.88
Comprehensive income:Three months ended June 30, 2013: 2,092 million yen
Three months ended June 30, 2012: 2,649 million yen(1) Operating results (Cumulative)(2) Financial position
As ofMarch 31, 2013
Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Equity: 588,605 million yen (as of June 30, 2013)
593,032 million yen (as of March 31, 2013)

775,527
605,127
76.5

As of
June 30, 2013
778,631600,695
75.6

2. Dividends
Year ended
March 31, 2013
25.00
26.00
51.00

Year ending
March 31, 2014
25.00 (Forecast)
25.00 (Forecast)
50.00 (Forecast)

2Q-end dividend per share (Yen)
Year-end dividend per share (Yen)Annual dividend per share (Yen)
Note: Revision of dividends forecast : No
The interim dividend for the second quarter ended September 2012 is made up of ordinary dividend 15
yen and commemorative dividend 10 yen.
The year-end dividend for the year ended March 2013 is made up of ordinary dividend 16 yen andcommemorative dividend 10 yen.

3. Earnings forecasts for the year ending March 31, 2014

Net sales (Millions of yen)
Operating income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Note: Revision of earnings forecast : Yes

Six months ending
September 30, 2013
(Cumulative)
252,000(6,500)(1,000)(5.58)

1

Year ending
March 31, 2014
562,000
18,00013,00072.55

TOKYO ELECTRON
4. Others(1)

Important changes in subsidiaries during the current period: None(2)

Adoption of special accounting method in preparing quartely financial statement: Yes(3)

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

Number of shares outstanding (common stock)
1. Number of shares issued and outstanding (including treasury stock)
As of June 30, 2013:180,610,911 shares

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

2. Number of shares of treasury stock
As of June 30, 2013:

1,423,288 shares

As of March 31, 2013:

1,424,203 shares

3. Average number of shares outstanding
As of June 30, 2013:

179,187,348 shares

As of June 30, 2012:

179,169,890 shares

Notification of the changes for consolidated subsidiaries related to fiscal year, etc.:
Overseas consolidated subsidiaries with a closing date of December 31 previously produced financial statements dated on the sameday, and made adjustments necessary for consolidated accounting for important transactions taking place between that date and theconsolidated closing date. To achieve more appropriate disclosure of consolidated financial information, from the first quarter of thisconsolidated accounting period, the closing date was changed to March 31 or changes were made to the reporting method usedsuch that financial statements based on a provisional settlement of accounts carried out on the consolidated closing date are used.
With these changes, the first quarter of this consolidated accounting period covers the three months from April 1, 2013 to June 30,
2013 for the consolidated subsidiaries concerned. Adjustments were made for the period from January 1, 2013 to March 31, 2013 byreflecting profit and loss as changes to retained earnings.

Notification of the status of quarterly financial review procedures:This quarterly financial report is outside the jurisdiction of auditing procedures outlined in the Financial Instruments and Exchange
Act and remain incomplete at the time of announcing this report.

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

2

TOKYO ELECTRON

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

During the first quarter of the current fiscal year, some signs of economic recovery were seen in the UnitedStates and Japan, however with such factors as slowing growth in China and other emerging economies aswell as signs that the European economy has bottomed out, it was a generally weak trend towards recovery
in the global economy.
In the electronics industry, the primary area of the Tokyo Electron Group’s business activities, while demandfor products such as televisions and PCs remained sluggish, a steady shift has been seen in the market formobile devices including tablets, led by growing demand for smartphones in emerging markets.
Given these circumstances, consolidated orders for the TEL Group were on a track to recovery, but due tothe lead time required for shipping and selling, this is not evident in the consolidated financial results for the
first quarter of this current fiscal year, as follows. Consolidated net sales decreased by 22.9% from thesame period in the previous fiscal year, to 103,452 million yen, operating loss was 9,646 million yen,
compared to an operating income of 9,283 million yen for the same period in the previous fiscal year andordinary loss was 9,898 million yen, compared to an ordinary income of 11,248 million yen for the same
period in the previous fiscal year. Meanwhile, the net loss was 2,976 million yen, compared to a net incomeof 5,720 million yen for the same period in the previous fiscal year.

The overview of each business segment is as described below.
From the first quarter of the current fiscal year, revisions have been made to the reportable segments basedon “Accounting Standards for Disclosures about Segments of an Enterprise and Related Information.”
Figures for the corresponding period of the previous fiscal year listed below for comparison have beenadjusted in accordance with the new business segments.

(i) Semiconductor Production Equipment
With the favorable conditions for smartphones and tablets, the DRAM and NAND flash memory supply anddemand balance improved significantly and a trend seen among memory manufacturers was the resumingof investment in increased production capacity. However, this trend did not significantly impact on sales of
products in this segment during the first quarter of this current fiscal year and as a result, net sales fromexternal customers were 74,944 million yen (down 31.1% compared to the same period for the previous
fiscal year).

(ii) FPD (Flat Panel Display) Production Equipment
The market for small and medium-sized LCD panels for mobile devices was comparatively robust, and after

3

TOKYO ELECTRON

a significant correction phase in the previous fiscal year, the FPD production equipment market is showing
a gradual recovery. Given these circumstances, net sales from external customers in this segment during
the first quarter of the current fiscal year were 4,906 million yen (up 3.5% compared to the same period of
the previous fiscal year).

(iii) PV (Photovoltaic Panel) Production Equipment
The TEL Group has engaged in efforts to accelerate development aimed at achieving maximum conversion
efficiency in thin-film silicon photovoltaic panels and to develop a customer base in the Sun Belt regions,however, this has not been reflected in new orders and sales in the first quarter of the current fiscal year. As
a result, net sales from external customers in this segment during the first quarter of this current fiscal year
were 2,062 million yen (compared to net sales of 29 million yen in the same period of the previous fiscal
year).

(iv) Electronic Components and Computer Networks
In the electronic components segment, there was a moderate recovery in demand for automotive andindustrial equipment, and in the computer networks segment, there were signs of a recovery in capital
investment by communications-related businesses. Consequently, net sales from external customers in thissegment during the first quarter of the current fiscal year were 21,426 million yen (up 4.0% compared to thesame period of the previous fiscal year).

(v) Others
Net sales from external customers in this segment during the first quarter of the current fiscal year were 111
million yen (up 10.0% compared to the same period of the previous year).

4

TOKYO ELECTRON(For reference)

Consolidated Operating Results(Millions of yen)
FY 2013
Full YearNet Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income (loss)
Ordinary Income (loss)
Net Income (loss)

Note:

497,299
392,026
40,278117,092
38,701
57,510105,386
19,951
13,10420,077
83
84,664448
12,548
16,696
6,076

1Q

2Q

3Q

4Q

134,179
108,703
10,032
26,62910,457
24,21429,338
5,666
2,363
4,740
29
20,605
101
9,283
11,2485,720

132,421
105,963
10,18629,152
12,944
14,46329,456
6,196
3,563
4,425
34
21,859
137
2,918
4,211
370

91,91068,056
6,349
28,8797,673
5,759
15,238
2,153
2,003
4,681
1
19,10566(6,865)(6,654)(7,026)

138,788
109,30313,70932,431
7,626
13,07431,352
5,935
5,174
6,229
18
23,093
142
7,211
7,891
7,012

FY 2014
1Q
103,452
74,944
11,648
15,101
5,666
11,18424,509
4,711
2,123
4,906
2,062
21,426111(9,646)(9,898)(2,976)

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

Production and Order Performance
1. Production(Millions of yen)
FY 2013
Full Year

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Total

Note:

343,875
16,99871
360,945

1Q

2Q

3Q

4Q

96,6812,098
23
98,80388,2944,467
4492,806

68,8943,026
371,92490,005
7,406
97,411

FY 2014
1Q
79,3586,037
2,146
87,542

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

2. Orders Received(Millions of yen)
FY 2013
Full Year

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
Others
Total

Note:

342,547
21,882
83
85,666448
450,627

1Q

2Q

3Q

4Q

76,0292,799
2922,631
101
101,590

66,9288,051
34
20,658137
95,81091,3243,668
418,54866
113,612108,265
7,362
14
23,827
142
139,612

1. Offset elimination has been carried out on the dealing between segments.
2. The above amounts do not include consumption taxes.

5

FY 2014
1Q
97,70814,491
1,185
23,872
111
137,369

TOKYO ELECTRON

3. Orders Backlog(Millions of yen)
FY 2013

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
Others
Total

Note:

1Q

2Q

3Q

4Q

157,737
12,260015,809185,807

118,702
15,885
14,608149,196

142,654
14,873
8,425
14,051
180,004

141,616
16,0058,421
14,785
180,829

FY 20141Q
164,587
25,584
7,618
17,231215,022

1. Offset elimination has been carried out on the dealing between segments.
2. The above amounts do not include consumption taxes.

(2) Description of Financial Conditions(i) Financial Conditions
Current assets at the end of the first quarter of the current fiscal year were 518,614 million yen, down 2,886
million yen compared to the end of the previous fiscal year. The major factors influencing this result were a17,180 million yen decrease in short-term investments included in securities, an 11,075 million yen
decrease in prepaid consumption tax, a 15,756 million yen increase in inventories and a 6,603 million yen
increase in cash and deposits.
Tangible fixed assets increased by 823 million yen from the end of the previous fiscal year, to 136,521
million yen.
Intangible fixed assets increased by 2,759 million yen from the end of the previous fiscal year, to 62,677
million yen as a result of a 1,310 million yen increase in goodwill and other factors.
Investments and other assets increased by 2,407 million yen from the end of the previous fiscal year, to60,818 million yen.
As a result, total assets increased by 3,103 million yen compared to the end of the previous fiscal year, to778,631 million yen.
Current liabilities were up 6,441 million yen compared to the end of the previous fiscal year, to 113,111
million yen. The major causal factor in the rise was an 8,267 million yen increase in customer advances.
Long-term liabilities were up 1,094 million yen compared to the end of the previous fiscal year, to 64,824
million yen.
Net assets were 600,695 million yen, down 4,432 million yen from the end of the previous fiscal year. The
main factors were a decrease due to a reported quarterly net loss of 2,976 million yen, a decrease ofretained earnings of 3,244 million yen due to changes in accounting periods at consolidated subsidiaries, adecrease due to payment of 4,658 million yen in year-end dividends for the previous fiscal year and anincrease of 6,142 million yen from translation adjustments due to effects from the depreciation of the yen.
The equity ratio was 75.6%.

6

TOKYO ELECTRON(ii) Cash Flow
Cash and cash equivalents at the end of the first quarter of the current consolidated fiscal year increased by
7,053 million yen compared to the end of the previous fiscal year, to 92,367 million yen. The combined
balance including the 137,184 million yen in time deposits and short-term investments with periods tomaturity or redemption of at least three months that are not included in cash and cash equivalents, was229,552 million yen, down 10,577 million yen from the end of the previous fiscal year. The overall situation
regarding cash flow during the first quarter of the current fiscal year was as described below.
Cash flow from operating activities decreased by 37,234 million yen compared to the same period of theprevious fiscal year to negative 1,370 million yen. The main positive factors included an 11,135 million yen
decrease in prepaid consumption tax, a 7,669 million yen increase in customer advances and 6,307 million
yen in depreciation and amortization. The main negative factors were a 9,845 million yen net loss before
income taxes, a 15,751 million yen increase in inventories.
Cash flow from investing activities was positive 13,207 million yen, compared to negative 46,065 million yen
in the same period of the previous financial year. This primary positive factor was a 17,651 million yen
decrease in time deposits and short-term investments. The primary negative factor was 3,211 million yen in
payments for purchase of tangible fixed assets.
Cash flow from financing activities was negative 1,442 million yen, compared to negative 4,889 million yen
in the same period of the previous fiscal year. This was primarily the result of the payment of 4,658 million
yen in dividends.

Consolidated Cash Flow (Summary)

Cash flow from operating activities
Income before income taxes (loss)
Depreciation and amortization
Decrease in trade notes and accounts receivable (increase)
Decrease in inventories (increase)
Increase in accounts payable (decrease)
OthersCash flow from investing activities
Decrease in time deposits and short-term investments (increase)
Purchase of investments in subsidiaries resulting in change in scope of consolidation
Others (purchase of fixed assets)
Cash flow from financing activities
Effect of exchange rate changes on cash and cash equivalents

Three month ended
June 30, 2012

(Millions of yen)Three month ended
June 30, 2013

35,864
11,231
5,585
26,0105,112(11,425)(650)(46,065)(21,000)(15,830)(9,234)(4,889)(835)(1,370)(9,845)6,307
5,111(15,751)715
12,092
13,207
17,651(4,443)(1,442)(2,134)

Net increase in cash and cash equivalents (decrease)(15,926)

8,260

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from changes in accounting periods at consolidated
subsidiaries (decrease)158,776

85,313-(1,206)

Cash and cash equivalents at end of period

142,849

92,367

Cash and cash equivalents and time deposits and short-term investments with periods tomaturity or redemption of at least three months that are not included in cash and cash
equivalents

252,692

229,552

7

TOKYO ELECTRON(3) Description of Financial Estimates Information such as Consolidated Performance Forecasts

Due to signs of improvement in sales of our core semiconductor production equipment segment, growth isexpected in the first half of the fiscal year and the original forecast for the second half of the fiscal year isunchanged. Accordingly, growth is expected for the full year. In the PV production equipment segment, due
to a slight delay in the originally forecast period for investment decisions by customers, the net sales
forecasts for both the first and second halves of the fiscal year have been reduced. As a result of thesefactors, profit for the entire group is expected to increase for the first half of the fiscal year and a slightdecline in profits is expected for the second half of the fiscal year, although for the full year the forecasts
remain unchanged. Based on this, consolidated forecasts for the first half and full year announced on April
30, 2013 have been revised as follows.

Consolidated Forecast(Billions of yen, Y/Y change)
FY2014(E)Net Sales

1st Half
252.0

Semiconductor Production Equipment
FPD Production Equipment
PV Production Equipment
Electronic Components & Computer Networks
Operating Income (loss)
Net Income (loss)

196.0
10.0
4.0
42.0
(6.5)
(1.0)

Note:

-5.5%
-8.7%
9.1%
-1.1%

Full Year
562.0
13.0%
436.0
26.0
11.0
89.0
18.0
13.0

11.2%
29.5%
5.1%
43.4%
113.9%

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

Note: The financial forecasts and estimates stated in this announcement are based on certain assumptions judged to bereasonable by the Company in light of information currently available concerning economic conditions in Japan and overseas,fluctuations in foreign exchange rates, and other factors that may have an impact on performance. The company does notpromise that the forecasts or estimates will be accurate.
They are therefore susceptible to the impact of many uncertainties, including market conditions, competition, the launching of
new products (and their success or failure), and global conditions in the semiconductor related industry. Consequently, actual
sales and profits may differ substantially from the projections stated in this announcement.

8

TOKYO ELECTRON

Consolidated Balance Sheet(Millions of yen)
As ofMarch 31, 2013

As ofJune 30, 2013ASSETS
Current assets
Cash and deposit

49,632

56,235Trade notes and accounts receivable

100,500

95,845

Securities

190,497

173,316

Merchandise and finished goods

87,397

100,967

Work in process

33,40235,896

Raw materials and supplies

14,898

14,589Others46,351

42,223

Allowance for doubtful accounts
Total current assets(1,179)(461)

521,501

518,614135,697

136,521

38,372

39,683Long-term assets
Tangible fixed assets
Intangible fixed assets
Goodwill
Others21,54522,993

Total intangible fixed assets

59,91862,677

Others60,522

62,917

Allowance for doubtful accounts(2,112)(2,099)Investments and other assets

Total investments and other assets
Total long-term assets
Total assets

958,41060,818254,026

260,017775,527

778,631TOKYO ELECTRON(Millions of yen)
As ofMarch 31, 2013

As ofJune 30, 2013

LIABILITIESCurrent liabilities
Trade notes and accounts payable

36,261

37,686

Accrued warranty expenses

8,344

8,360

Other allowance

6,908

3,777

Others55,15563,287

Total current liabilities

106,670

113,11156,643

57,463Long-term liabilities
Accrued pension and severance costs
Other allowance

580

573

Others

6,505

6,788

Total long-term liabilities

63,73064,824

170,400

177,936

Common stock

54,961

54,961

Capital surplus

78,02378,023Retained earnings

467,920457,038

Total liabilities
NET ASSETS
Shareholders' equity

Treasury stock
Total shareholders' equity(9,588)(9,581)

591,315

580,441

4,214

4,497

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(14)

7

Translation adjustments(2,483)

3,658

Total accumulated other comprehensive income

1,716

8,164

1,374

1,464

Subscription rights to shares
Minority interests

10,72010,624

Total net assets

605,127

600,695

775,527

778,631

Total liabilities and net assets

10

TOKYO ELECTRON

Consolidated Statement of Income

Net sales
Cost of sales
Gross profit
Selling, general & administrative expenses
Research and development expenses
OthersTotal selling, general & administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend revenue
Foreign currency translation gain
OthersTotal non-operating income
Non-operating expenses
Foreign currency translation loss
Compensation expenses
OthersTotal non-operating expenses
Ordinary income (loss)
Unusual or infrequent profit
Gain on sale of fixed assets
Total unusual or infrequent profit
Unusual or infrequent loss
Loss on sale of fixed assets
Total unusual or infrequent loss
Income (loss) before income taxes
Income taxes
Prior year's corporate tax
Income (loss) before minority interests
Minority interests
Net income (loss)

11

Three months
ended June 30,
2012(Millions of yen)Three months
ended June 30,
2013

134,179
90,067
44,111

103,452
73,53529,916

17,92816,89934,827
9,283

17,993
21,57039,563(9,646)

289
184
513
1,042
2,029

326
237
373
937

14
50
64
11,248

1,096
91
1,188
(9,898)

1
1

74
74

17
17
11,231
3,255
2,194
5,782
62
5,720

21
21
(9,845)(6,876)(2,969)6(2,976)

TOKYO ELECTRON

Consolidated Statement of Comprehensive Income

Income (loss) before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Translation adjustments
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners
Comprehensive income attributable to minority interests

12

Three months
ended June 30,
2012(Millions of yen)Three months
ended June 30,
2013

5,782

(2,969)(1,000)70(2,202)(3,132)
2,649

288
53
4,719
5,061
2,092

2,563
86

2,016
75

TOKYO ELECTRON

Segment Information(i) Overview of reportable segments
The reportable segments by the company provide separate financial information pertaining to the various
segments of the company, which is reviewed periodically by the management to evaluate corporate
performance as well as make decisions about the allocation of management resources.
The corporate structure consists of product and service segments based on business units (BUs), and thereportable segments are as follows: Semiconductor Production Equipment, FPD(Flat Panel Display)
Production Equipment, Photovoltaic Panel (PV) Production Equipment, and Electronic Components andComputer Networks.
The Semiconductor Production Equipment segment consists of coaters/developers, plasma etch systems,
thermal processing systems, single wafer deposition systems, cleaning systems used in wafer processing,wafer probers used in the wafer testing process and other semiconductor production equipment, and weare engaged in the development, manufacturing, sales and provision of maintenance services, etc. forsuch products.
The FPD Production Equipment segment consists of coaters/developers, plasma etch/ash systems usedin the manufacturing of flat panel displays, and we are engaged in the development, manufacturing, sales
and provision of maintenance services, etc. for such products.
The PV Production Equipment segment consists of photovoltaic panel production equipment used in the
manufacturing of thin film silicon photovoltaic panels, and we are engaged in the development,
manufacturing, sales and provision of maintenance services, etc. for such products.
The Electronic Components and Computer Networks segment consists of semiconductor products
centering on integrated circuits (IC), other electronic components, computer networks and software, etc.,
and we are engaged in the design, development, procurement, and sales, etc. for such products.
(ii) Net sales and income (loss) in reportable segments
Three months ended June 30, 2013

(Millions of yen)
Reportable Segments

Semiconductor
Production
Equipment

FPD Production
Equipment

PV Production
Equipment

Electronic
Components &Computer
Networks

Total

Others

Net sales

74,954

4,906

2,062

21,6202,818

106,362

Segment
income (loss)

2,279

(307)

(2,571)

(21)

379

(240)

Eliminations

Consolidated Total

Net sales(2,910)103,452

Segment
income (loss)(9,605)(9,845)

Notes:
1.

2.

3.

The "Others" segment includes all other businesses which are not included in the reported
business segments, such as the transportation of products, etc. of the Tokyo Electron Group
companies, equipment leasing and insurance, etc.
The eliminations of segment income (loss) amounting to 9,605 million yen includes corporate
expenses pertaining to the corporate account which are not allocated to any specific reportablesegments. The corporate account expenses are mainly R&D expenses of 4,768 million yen,pertaining to fundamental research and element research conducted by the company not
related to any of the reportable segments.
Segment income (loss) is adjusted against loss before income taxes in consolidated statement of income.

13

TOKYO ELECTRON

Segment Information(iii)

Items Related to Changes in Reportable Segments
With the acquisition of TEL Solar Holding AG as a consolidated subsidiary, from thefirst quarter of the current fiscal year, the reportable segment has been changed from
FPD/PV Production Equipment to FPD Production Equipment, and PV Production
Equipment.

(iv)

Impairment losses on fixed assets and goodwill, etc. in reportable segments
Significant impairment losses related to fixed assets: None
Significant changes in goodwill amount: None
Significant income related to negative goodwill: None14