TOKYO ELECTRON

July 30, 2010

Consolidated Financial Review
for the First Quarter Ended June 30, 2010
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, 2010
Three months ended
June 30, 2009
June 30, 2010
68,915
144,889(14,388)
18,321(14,021)
19,063(11,035)
14,727(61.66)
82.27
82.12

(1) Operating results (Cumulative)
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Fully diluted net income per share (Yen)(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Net assets per share (Yen)
Equity: 520,221 million yen (as of June 30, 2010)
511,818 million yen (as of March 31, 2010)

As ofMarch 31, 2010
696,351
523,36973.5
2,859.37

As ofJune 30, 2010
710,785
531,89373.2
2,906.23

Year ended
March 31, 2010

Year ending
March 31, 2011
(Forecast)
34.00
37.00
71.00

2. Dividends

2Q-end dividend per share (Yen)
Year-end dividend per share (Yen)Annual dividend per share (Yen)
Note: Revision of dividends forecast for during this period: Yes

4.00
8.00
12.00

3. Earnings forecasts for the year ending March 31, 2011
Six months ending
September 30, 2010
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Note: Revision of earnings forecast for during this period: Yes

1

325,000
40,50042,00030,000167.60Year ending
March 31, 2011
670,000
86,50088,00063,000351.95

TOKYO ELECTRON
4. Others(1) Important changes in subsidiaries during the current period: None
New: -

Excluded: -(Note: Changes in specified subsidiaries resulting in a change in scope of consolidation for the current quarterly accounting period.)(2) Adoption of simplified accounting method or any special accounting method: Yes(Note: Adoption of simplified accounting methods, or use of any special accounting methods
for preparing the quarterly consolidated financial statements.)(3) Changes in accounting principles, procedures and display of accounting method concerning consolidated statement
policies:
1. Changes in accounting policies: Yes
2. Other changes: None
(Note: Changes in accounting principles, procedures, or methods of presentation related to the preparationof the quarterly consolidated financial statements, as described in the "Amendment to fundamental items
that form the basis for preparing quarterly consolidated financial statements.")(4) Number of shares outstanding (common stock)
1. Number of shares issued
As of June 30, 2010:

180,610,911 shares

As of March 31, 2010:

180,610,911 shares

2. Number of shares of treasury stock
As of June 30, 2010:

1,608,496 shares

As of March 31, 2010:

1,614,225 shares

3. Average number of shares outstanding
Three months ended June 30, 2010:

178,999,952 shares

Three months ended June 30, 2009:

178,969,913 shares

Notification of the status of quarterly financial review procedures:
At the time of disclosing these quarterly financial results, the quarterly financial statement review proceduresare being conducted in accordance with the provisions of the Financial Instruments and Exchange Act.
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 at the present time in light of information currently available. Consequently, actual operating
results may differ substantially.

2

1. Qualitative Information on Forecasts for Consolidated Financial Results(1) Qualitative Information on Consolidated Operating Results
During the first quarter of the current consolidated fiscal period, the global economy generally
showed signs of a moderate recovery following an expansion in domestic demand in developing
countries, centering on China and India, as well as a result of economic stimulus measures taken
by various countries, even though concerns remained about the increasing volatility of financial
markets centering on Europe, the credit crunch, and a worsening unemployment situation. The
Japanese economy is showing definite signs of improvement supported by increased exports
and production, although the unemployment situation remains difficult.
In the electronics industry, in which the Tokyo Electron group conducts its business, the market
for PCs, digital home appliances, high performance mobile devices known as ‘smart phones,’ etc.
is expanding rapidly. As a result, the demand in semiconductors and FPD related markets
remains brisk.
Under these circumstances, consolidated net sales for the first quarter were 144,889 million yen(up 110.2% compared to the same period of the previous year). Consolidated operating income
and ordinary income, respectively, were 18,321 million yen (compared to operating loss of
14,388 million yen in the previous fiscal year) and 19,063 million yen (compared to ordinary lossof 14,021 million yen in the previous fiscal year). Net income for the first quarter was 14,727
million yen (compared to net loss of 11,035 million yen in the previous fiscal year).
The overview of each business segment is as described below.
(i) Semiconductor Production Equipment
Following increased demand for electronic devices such as PCs, digital home appliances andmobile phones, semiconductor manufacturers are increasing production and stepping up capital
investment. As a result, business related to this segment progressed steadily Under thesecircumstances, net sales from external customers in this segment during the consolidated firstquarter were 103,166 million yen (up 238.9% compared to the same period of the previous year).
(ii) FPD/PV (Flat Panel Display/Photovoltaic Cell) Production Equipment
In the midst of firm demand for LCD panels due to the expanding flat-panel television market,
panel manufacturers have increased production and resumed capital investment. As a result of
these developments, net sales from external customers during the first quarter were 20,306
million yen (up 1.8% compared to the same period of the previous year). In the photovoltaic cell3

production equipment business, the market underwent a temporary slowdown, but it is expected
to grow in the future due to the spread of environmental measures being implemented
worldwide.
(iii) Electronic Components and Computer Networks
There was a clear recovery in demand for semiconductor products used in industrial equipment,
owing to an improvement in production activities by companies, and business related to the salesof software for embedded equipment and system maintenance services also progressed steadily.
As a result of these developments, net sales from external customers for this segment during thefirst quarter were 21,321 million yen (up 15.6% compared to the same period of the previousyear).
(iv) Others
Net sales from external customers in this segment during the consolidated first quarter were 95
million yen (up 7.2% compared to the same period of the previous year).
Note: From the first quarter of the current consolidated fiscal year, the business segment
information is provided in conformity with the "Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information" (Corporate Accounting Standards, ASBJ
Statement No.17, dated 27 March, 2009), and "Guidance on Accounting Standard forDisclosures about Segments of an Enterprise and Related Information" (Corporate AccountingStandards, ASBJ Guidance No.20, dated 21 March, 2008). Due to this reason, the comparison of
net sales from external customers to the same period of the previous fiscal year for eachbusiness segment has been made after rearrangement of the first quarter financial results into
the reported segments after applying the above standards.

4

(For reference）
Consolidated（Millions of yen）
FY2011
1Q

Net Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia
ＦＰＤ/PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income (Loss)
Ordinary Income (Loss)Net Income (Loss)

144,889
103,166
18,404
17,552
2,942
21,44534,014
4,649
4,158
20,306
21,321
95
18,321
19,063
14,727FY2010
Full Year
418,636
262,391
44,17455,555
10,93744,716
76,795
7,616
22,59571,361
84,473410(2,180)2,558(9,033)

1Q

2Q

3Q

4Q

68,91530,437
4,932
12,430
2,833
2,861
5,917
483
979
19,94318,44589(14,388)(14,021)(11,035)

84,97551,69910,812
8,364
2,315
8,823
16,6192,106
2,656
10,79922,354
121(7,232)(5,191)(5,125)

114,289
76,511
10,675
13,273
2,433
13,391
27,913
3,149
5,675
16,68621,028
63
5,521
6,573
(58)

150,456
103,743
17,753
21,487
3,355
19,64026,344
1,877
13,28323,931
22,644136
13,91815,198
7,186

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

(2) Qualitative Information on Consolidated Financial Conditions(i) Financial Conditions
Current assets at the end of the first quarter of the current consolidated fiscal year were 569,192
million yen, up 16,252 million yen compared to the end of the previous fiscal year. Major factors
include a 12,964 million yen increase in inventories, and a 5,436 million yen increase in tradenotes and accounts receivable.
Tangible fixed assets decreased by 472 million yen from the end of the previous fiscal year, to91,655 million yen.
Intangible fixed assets decreased by 244 million yen from the end of the previous fiscal year, to
5,341 million yen.
Investments and other assets decreased by 1,102 million yen compared to the end of theprevious fiscal year, to 44,596 million yen.
As a result, total assets increased by 14,433 million yen compared to the end of the previous
fiscal year, to 710,785 million yen.
Current liabilities were up 5,932 million yen compared to the end of the previous fiscal year, to125,094 million yen. Major factors included an increase in customer advances of 6,927 millionyen.
Long-term liabilities decreased by 22 million yen from the end of the previous fiscal year, to53,797 million yen.
Net assets increased because of a net income of 14,727 million yen was reported for the current

5first quarter and year-end dividends for the previous fiscal year of 1,431 million yen were paid,
and as a result net assets at the end of the current first quarter were 531,893 million yen. The
equity ratio was 73.2%.

(ii) Cash Flow
Cash and cash equivalents at the end of the first quarter of the current fiscal year increased by
782 million yen compared to the end of the previous fiscal year, to 124,721 million yen. The
combined balance of cash and cash equivalents, plus 120,000 million yen in time deposits andcertificates of deposit with deposit terms of over three months (which are not included in cash
and cash equivalents), was 244,721 million yen. The overall situation regarding cash flow during
the first quarter of the current fiscal year is as follows.
Cash flow from operating activities decreased by 4,507 million yen compared to the same periodof the previous fiscal year to 9,864 million yen.

Major positive factors include cash flow income

from 19,250 million yen in income before income taxes, 3,726 million yen in depreciation andamortization, and a 7,420 million yen increase in customer advances . Major negative factors
were a 6,786 million yen increase in trade notes and accounts receivable and a 14,490 million
yen increase in inventories.
Cash flow from investing activities was 4,441 million yen compared to the 5,372 million yen in thesame period of the previous fiscal year, primarily as a result of the 4,113 million yen in payment
for purchase of tangible fixed assets.
Cash flow from financing activities was a negative 3,715 million yen as compared to a negative
1,002 million yen in the same period of the previous fiscal year, mainly as a result of a 2,167
million yen of net decrease in short-term borrowings and payment of 1,431 million yen in
dividends.

3. Qualitative Information on Forecasts for Consolidated Financial Results
In the midst of a moderate recovery in the global economy, we expect the trend towards recovery
to continue with Asia at the center, even though some concerns remain about the economic
trends in Europe and North America. In the semiconductor market, the demand forsemiconductors is showing a sharp increase, and semiconductor manufacturers are also
stepping up capital investment. Given these circumstances, we expect sales of semiconductor
production equipment to increase in the first half of the current consolidated fiscal year, and forprofits to improve compared to our earlier forecast, released on May 12, 2010. Accordingly, thecompany has revised the consolidated financial forecast for the first half of the fiscal year as well6

as the entire fiscal year, as follows.

Consolidated forecast
Net Sales
Semiconductor Production Equipment
FPD/PV Production Equipment
Electronic Components & Computer Networks
Operating Income
Ordinary Income
Net Income(Billions of yen, Y/Y change)
InterimFull Year
325.0
111.2%
670.0
60.0%
250.0
204.4%
511.0
94.7%
32.0
4.1%
69.0
-3.3%
43.0
5.4%
90.0
6.5%
40.5
86.5
42.0
88.0
30.0
63.0
-

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

Note: The financial forecasts and estimates stated in this interim financial review are based on certain assumptions judged to bereasonable at the present time 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.
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 production equipment business.
Consequently, actual sales and profits may differ substantially from the projections stated in this financial review.

7

TOKYO ELECTRON

Consolidated Balance Sheet(Millions of yen)
As ofMarch 31, 2010

As ofJune 30, 2010ASSETS
Current assets
Cash and deposit

56,93950,721

Trade notes and accounts receivable

124,462

129,898

Securities

187,000

194,000

Merchandise and finished goods

87,20192,809Work in process

37,79344,186

Raw materials and supplies

13,455

14,418Others46,26344,275

Allowance for doubtful accounts(176)(1,118)552,939569,192

92,12791,655

Others

5,586

5,341

Total intangible fixed assets

5,586

5,341

53,151

48,602

Total current assets
Long-term assets
Tangible fixed assets
Intangible fixed assets

Investments and other assets
OthersAllowance for doubtful accounts(7,452)(4,006)

Total investments and other assets

45,69844,596

143,412

141,593

696,351

710,785

Total long-term assets
Total assets

8

TOKYO ELECTRON(Millions of yen)
As ofMarch 31, 2010

As ofJune 30, 2010

LIABILITIESCurrent liabilities
Trade notes and accounts payable

52,35954,247

Income taxes payable

4,355

8,134

Other allowance

11,338

9,451

Others51,10953,259Total current liabilities

119,161

125,094

49,90650,500

621

611

3,291

2,684

Long-term liabilities
Accrued pension and severance costs
Other allowance
OthersTotal long-term liabilities

53,82053,797

172,982

178,891

Common stock

54,961

54,961

Capital surplus

78,03478,023Retained earnings

393,970

407,265

Treasury stock(10,900)(10,861)

Total shareholders' equity

516,065

529,388

2,504

837

(67)

92

Translation adjustments(6,683)(10,097)

Total valuation and translation adjustments

Total liabilities
NET ASSETS
Shareholders' equity

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(4,247)(9,166)

Subscription rights to shares

1,578

1,668

Minority interests

9,973

10,004

Total net assets

523,369

531,893

696,351

710,785

Total liabilities and net assets

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TOKYO ELECTRON

Consolidated Statement of Income(Millions of yen)Three months ended
June 30, 2009

Three months ended
June 30, 2010

Net sales

68,915

144,889

Cost of sales

57,71595,742Gross profit

11,19949,146

Selling, general & administrative expenses
Research and development expenses

12,166

14,836

Others13,421

15,988

Total selling, general & administrative expenses

25,58830,825(14,388)

18,321

Interest income

281

155

Revenue from development grants

380

474

Others211

256

Total non-operating income

873

886

Operating income (loss)
Non-operating income

Non-operating expenses
Foreign currency translation loss
Maintenance and operation cost of closed business bases
OthersTotal non-operating expenses

398

54

-

56

108

32

506

144

(14,021)

19,063

Reversal of allowance for doubtful accounts-

310

Gain on sale of fixed assets

1-

Others-12

Total unusual or infrequent profit

1322

Ordinary income (loss)
Unusual or infrequent profit

Unusual or infrequent loss
Loss on retirement or sale of fixed assets
Loss on impairment

10

93

4,375

-

-

42

Effect of accounting standard adoption
for asset retirement obligations
Total unusual or infrequent loss

4,386

135

Income (loss) before income taxes(18,406)

19,250

Provision for income taxes and enterprise taxes(7,418)

4,392-

14,857

Income before minority interests
Minority interests
Net income (loss)

10

48

130

(11,035)

14,727

TOKYO ELECTRON

Consolidated Cash Flow

(Millions of yen)Three months ended Three months ended
June 30, 2009
June 30, 2010

Cash flow from operating activities
Income (loss) before income taxes
Depreciation and amortization
Loss on impairment
Increase in accrued pension and severance costs (decrease)
Increase in allowance for doubtful accounts (decrease)
Increase in accrued employees' bonuses (decrease)
Increase in accrued warranty expenses (decrease)
Interest and dividend income
Decrease in trade notes and accounts receivable (increase)
Decrease in inventories (increase)
Increase in accounts payable (decrease)
Decrease in prepaid consumption tax (increase)
Increase in customer advances (decrease)
Decrease in specific doubtful receivables (increase)
OthersSubtotal
Receipts from interest and dividends
Interest paid
Income taxes paid
Net cash generated by operating activities(18,406)
4,913
4,375
657
(2,566)(1,026)(297)
23,531
9,089(4,584)
10,315(8,626)(2,251)
15,124356(9)(1,099)14,372

19,2503,726
622(2,333)(2,661)722(172)(6,786)(14,490)
2,756
6,513
7,420
3,278
(3,125)
14,721201(9)(5,049)9,864(3,665)(1,331)(93)(282)(5,372)(4,113)(328)(4,441)

(126)
(715)
(159)
(1,002)(2,167)(1,431)(116)(3,715)685
8,682
65,88374,566(925)
782
123,939
124,721

Cash flow from investing activities
Decrease in time deposits (increase)
Payment for purchase of tangible fixed assets
Payment for purchase of intangible fixed assets
OthersNet cash used in investing activities

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

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents (decrease)
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11

TOKYO ELECTRON

Segment Information(i) Overview of reportable segments

The reportable segments by the company provide separate financial information pertaining to thevarious 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 the reportable segments are as follows: Semiconductor Production Equipment, FPD/PV (Flat
Panel Display and Photovoltaic Cell) Production Equipment, and Electronic Components andComputer Networks.
The Semiconductor Production Equipment segment consists of coaters/developers, plasma etchsystems, thermal processing systems, single wafer deposition systems, cleaning systems used inwafer processing, wafer probers used in the wafer testing process and other semiconductor
production equipment, and we are engaged in the development, manufacturing, sales and provisionof maintenance services, etc. for such products.
The FPD/PV (Flat Panel Display and Photovoltaic Cell) Production Equipment segment consists ofcoaters/developers, plasma etch/ash system used in the manufacturing of flat panel displays, andplasma CVD systems used in the manufacturing of thin film silicon PV cells, 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 profit/loss in reportable segments
Three months ended June 30, 2010
Reportable Segment
Semiconducor
Production
Equipment

FPD/PV
Production
Equipment

Electronic
Components &Computer
Networks

Net sales

103,166

20,306

21,5003,692

Segment income

22,314

2,787

412

629

Total Segment

Eliminations

Consolidated
Total

Net sales

148,666(3,777)

144,889

Segment income

26,143(6,893)

19,250

Others

Notes:
1. 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.
2. The eliminations of segment income amounting to 6,893 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 4,923 million yen,pertaining to fundamental research and element research conducted by the company not related
to any of the reportable segments.
3. Segment income is adjusted against quarterly net income before taxes in the quarterly
consolidated income statement.
(iii) Impairment losses on fixed assets and goodwill, etc. in reportable segments
Significant impairment losses related to fixed assets: None
Significant changes in goodwill amount: None
Significant income related to negative goodwill: None
(Additional Information)
From the first quarter of the current consolidated fiscal year, the business segment information is provided
in conformity with the "Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation" (Corporate Accounting Standards, ASBJ Statement No.17, dated March 27, 2009), and"Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation" (Corporate Accounting Standards, ASBJ Guidance No.20, dated March 21, 2008).

12