C O N S O L I D AT E D S I X - Y E A R S U M M A RYTokyo Electron Limited and its Subsidiaries
Years ended March 31, 2000, 1999, 1998, 1997, 1996 and 1995

Thousands of
U.S. dollars

Millions of yen

2000

2000

1999

1998

1997

1996

1995

Net sales ....................................................... $4,151,945 ¥440,729 ¥313,820 ¥455,585 ¥432,785 ¥401,775 ¥251,683
188,661
Semiconductor production equipment1 ....... 3,345,294 355,103 242,240 380,184 355,877 334,983
116,411
12,357
12,87815,262
14,40814,314
14,071
Computer systems 1 ...................................
Electronic components ..............................
678,766
72,051
57,73460,13962,50052,47848,951Other.........................................................
11,474
1,218
968
–
–
–
–
Operating income.........................................
337,40935,816
6,383
63,296
60,38967,754
24,425
Income before income taxes .........................
279,689
29,6896,038
62,83460,48765,09822,648Net income ...................................................
186,981
19,8481,866
30,00929,97530,964
9,731
Domestic sales ..............................................
Overseas sales...............................................

1,733,274
2,418,671

183,987
256,742

149,838
163,982

230,550
225,035

256,808
175,977

264,660
137,115

187,305
64,378Depreciation and amortization......................
Capital expenditures2 ....................................
R&D expenses...............................................

183,194
221,441
349,835

19,44623,506
37,135

17,921
23,47826,842

12,65233,302
26,813

10,16718,456
20,9887,730
25,606
17,277

5,911
14,884
12,068

Total assets ...................................................
Total shareholders’ equity .............................

4,705,596
2,577,513

499,499273,603

414,903257,716

493,600
261,009

387,077
207,476

400,050
180,842

318,275
153,267

8,946

7,835

7,287

6,277

5,616

4,751

Number of employees ..................................
U.S. dollars

Net income per share of common stock:3
Basic.......................................................... $Diluted4 .....................................................
Cash dividends per share of common stock:
Actual........................................................
Adjusted3 ...................................................

Yen

1.07 ¥ 113.53 ¥1.04
110.6410.70 ¥ 174.68 ¥ 181.97 ¥ 188.05
10.70
168.43172.74178.25

0.13
0.13

14.00
14.00

12.00
12.00

30.00
30.00

28.00
25.45

24.00
21.82

16.00
14.55

175,660
7,147

174,624
8,576

174,569
9,562

150,189
11,097

149,706
12,676

149,674
12,231

0.7
2.0
62.1
0.69

12.8
13.9
52.9
1.03

18.5
16.9
45.2
1.12

6.5
9.7
48.2
0.86

Number of shares outstanding (thousands) ..
Number of shareholders ...............................

¥

59.11
59.11

Percent

ROE ........................................................................................
Operating income margin .......................................................
Shareholders’ equity ratio .......................................................
Asset turnover (times) .............................................................

7.5
8.1
54.8
0.96

U.S. dollars

15.4
14.0
53.6
1.10

Thousands of yen

Net sales per employee ................................ $ 464,107 ¥ 49,265 ¥ 40,054 ¥ 62,520 ¥ 68,948 ¥ 71,541 ¥ 52,975
1 Results are retroactively restated due to a structural reorganization in fiscal 1997. The LCD Department, formerly part of Computer systems, has been included in
Semiconductor production equipment.
2 Capital expenditures represent the gross increase in property, plant and equipment, intangible assets and other depreciable assets in each fiscal year.
3 Per share amounts prior to the year ended March 1998 have been restated to reflect a 1.1-for-1 stock split.
4 Dilution is not assumed for years ended March 1995 and March 1999.
TOKYO ELECTRON LIMITED23

C O N S O L I D AT E D B A L A N C E S H E E T
Tokyo Electron Limited and its Subsidiaries
March 31, 2000 and 1999ASSETS

Thousands of
U.S. dollars

Millions of yen

2000

1999

2000

Current assets:
Cash and time deposits...................................................................
Marketable securities (Note 3).........................................................
Trade notes and accounts receivable...............................................

¥ 79,519
835
175,153¥ 46,910
835
140,746$ 749,119
7,866
1,650,052

Allowance for doubtful accounts ....................................................
Inventories (Note 4).........................................................................
Deferred tax assets (Note 7) ............................................................
Prepaid expenses and other current assets1 .....................................
Total current assets .....................................................................

(1,029)112,4815,306
2,892
375,157(1,134)88,085–15,306
290,748(9,694)
1,059,642
49,98627,2453,534,216

Investments and other assets:
Investments in securities (Note 3) ....................................................
Intangible and other assets1 ............................................................
Deferred tax assets (Note 7) ............................................................
Total investments and other assets..............................................

9,010
14,3672,145
25,522

8,633
23,430–32,06384,880135,346
20,207240,433

Foreign currency translation adjustment ..................................

1,094

–

10,306

Property, plant and equipment:
Land................................................................................................
Buildings .........................................................................................
Machinery and equipment ..............................................................
Construction in progress .................................................................
Total property, plant and equipment...........................................
Less: Accumulated depreciation .....................................................
Net property, plant and equipment .............................................
Total assets ...................................................................................

16,554
89,79567,520877
174,746
77,02097,726¥499,499

17,163
81,527
62,777
97
161,564
69,472
92,092¥414,903

155,949
845,926
636,081
8,262
1,646,218
725,577
920,641$4,705,596

See accompanying Notes to Consolidated Financial Statements.
1 Due to a change in reporting entity, short-term loans to subsidiaries and affiliates in 1999 are included in prepaid expenses and other current assets in 1999. Also,
investments in and advances to subsidiaries and affiliates in 1999 are included in intangible and other assets in 1999.

24

TOKYO ELECTRON LIMITEDLIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands of
U.S. dollars

Millions of yen

2000

1999

2000

Current liabilities:
Short-term borrowings (Note 6) ......................................................
Current portion of long-term debt (Note 6) ....................................
Trade notes and accounts payable ..................................................

¥ 23,998
32,69962,574¥ 21,657
1,536
35,019$ 226,076
308,045589,487

Accrued income taxes .....................................................................
Allowance for employees’ bonuses .................................................
Accrued expenses and other current liabilities.................................
Total current liabilities .................................................................

11,843
7,375
7,969
146,458

1,488
4,117
5,238
69,055111,569
69,47775,073
1,379,727

Long-term debt, less current portion (Note 6)...............................
Allowance for retirement and severance benefits.......................
Other non-current liabilities ...........................................................
Total liabilities..............................................................................

67,278
11,581545
225,862

77,7099,344
777
156,885

633,801
109,100
5,135
2,127,763

Foreign currency translation adjustment......................................

–

276

–

Minority interest..............................................................................

34

26

320

47,16345,532444,305

70,225
157,876(1,661)
273,603¥499,499

68,594
144,715(1,125)
257,716¥414,903

661,564
1,487,292(15,648)
2,577,513$4,705,596

Shareholders’ equity:
Common stock, par value ¥50 per share (Note 8)...........................
Authorized: 300,000,000 shares
Issued and outstanding: 175,659,848 at March 31, 2000
174,623,995 at March 31, 1999
Additional paid-in capital (Note 8)...................................................
Retained earnings ..........................................................................
Treasury stock at cost (Note 9) ........................................................
Total shareholders’ equity ...........................................................
Total liabilities and shareholders’ equity ..................................

TOKYO ELECTRON LIMITED25

C O N S O L I D AT E D S TAT E M E N T O F I N C O M ETokyo Electron Limited and its Subsidiaries
Years ended March 31, 2000, 1999 and 1998

Thousands of
U.S. dollars

Millions of yen

2000

1999

1998

2000

Net sales ........................................................................
Cost of sales .................................................................
Gross profit ................................................................
Selling, general and administrative expenses ................
Operating income.........................................................

¥440,729
303,839
136,890
101,074
35,816¥313,820
225,962
87,85881,475
6,383¥455,585
304,825
150,760
87,46463,296$4,151,945
2,862,355
1,289,590
952,181
337,409

Other income (expenses):
Interest and dividend income .......................................
Interest expenses ..........................................................
Patent royalties for prior years ......................................
Devaluation of golf memberships.................................
Other, net ....................................................................
Income before income taxes .......................................

276(1,960)(1,575)(1,253)(1,615)29,689898(2,003)
–
–
760
6,038

1,664
(1,640)––(486)
62,834

2,600(18,464)(14,837)(11,804)(15,215)
279,689

Provision for income taxes (Note 7):
Current.........................................................................
Deferred.......................................................................

14,545(4,709)4,167–

32,825–137,023(44,362)

Minority interest ..............................................................
Net income ....................................................................

5¥ 19,848

5
1,866

–
¥ 30,009

47$ 186,981

Per share of common stock:
Net income — basic.....................................................
Net income — diluted..................................................
Cash dividends.............................................................
See accompanying Notes to Consolidated Financial Statements.

26

TOKYO ELECTRON LIMITED¥Yen¥ 113.53
110.64
14.00

¥

10.70
10.70
12.00

U.S. dollars¥ 174.68
168.43
30.00

$

1.07
1.04
0.13

C O N S O L I D AT E D S TAT E M E N T O F S H A R E H O L D E R S ’ E Q U I T YTokyo Electron Limited and its Subsidiaries
Years ended March 31, 2000, 1999 and 1998

Thousands of
U.S. dollars

Millions of yen

Common stock
Balance at beginning of year........................................
Conversion of convertible bonds (Note 8) ....................
Exercise of warrants .....................................................
Balance at end of year .................................................
Additional paid-in capital
Balance at beginning of year........................................
Conversion of convertible bonds (Note 8) ....................
Exercise of warrants ....................................................
Balance at end of year .................................................
Retained earnings
Balance at beginning of year........................................
Increase (decrease) resulting from change inreporting entity, net..................................................
Cumulative effect of applying deferred tax accounting ..
Net income for year .....................................................
Cash dividends ............................................................
Bonuses to directors.....................................................
Balance at end of year .................................................
Treasury stock, at cost (Note 9) ...................................

2000

1999

1998

2000

¥ 45,532
1,631–
47,163¥ 45,445
87–
45,532¥ 30,755
5,476
9,214
45,445$ 428,940
15,365–444,305

68,594
1,631–
70,22568,50787–
68,59453,823
5,476
9,208
68,507646,199
15,365–661,564

144,715

147,082

122,914

1,363,307(7,309)2,717
19,848(2,095)–
157,876(1,661)

(210)
–
1,866
(3,665)(358)
144,715(1,125)(816)–
30,009(4,689)(336)
147,082(25)(68,856)
25,596
186,981(19,736)–
1,487,292(15,648)¥273,603¥257,716¥261,009$2,577,513(1998: 4,101 shares; 1999: 247,191 shares;
2000: 303,761 shares)

Total shareholders’ equity...........................................
See accompanying Notes to Consolidated Financial Statements.

TOKYO ELECTRON LIMITED27

C O N S O L I D AT E D S TAT E M E N T O F C A S H F L OW STokyo Electron Limited and its Subsidiaries
Year ended March 31, 2000

Millions of yen

Thousands of
U.S. dollars

2000

2000

Income before income taxes ......................................................................................................
Depreciation and amortization...................................................................................................
Increase in allowance for retirement and severance benefits......................................................
Increase in allowance for doubtful accounts ..............................................................................
Increase in allowance for employees’ bonuses ...........................................................................
Interest and dividend revenue....................................................................................................
Interest expenses .......................................................................................................................
Foreign currency translation loss ................................................................................................
Bond issuance cost ....................................................................................................................
Stock issuance cost ....................................................................................................................
Gain (loss) from prior year adjustment .......................................................................................
Gain (loss) on sale of fixed assets ...............................................................................................
Loss on disposal of fixed assets ..................................................................................................
Loss from devaluation of golf memberships...............................................................................
Increase in trade notes and accounts receivable.........................................................................
Increase in inventories................................................................................................................
Increase in accounts payable......................................................................................................
Increase in prepaid consumption tax..........................................................................................
Others........................................................................................................................................
Subtotal.....................................................................................................................................
Receipts from interest and dividends..........................................................................................
Interest paid...............................................................................................................................
Income taxes paid......................................................................................................................
Net cash generated by operating activities .........................................................................

¥29,689
19,446
2,153
213
3,175
(276)
1,964
747
101
24
(398)
(392)
2,149
1,253
(31,675)(27,196)
22,416(3,542)
10,67630,527280(1,923)(3,757)25,127$279,689
183,194
20,283
2,007
29,911(2,600)18,502
7,037
951
226
(3,749)(3,693)
20,245
11,804(298,398)(256,203)
211,173(33,368)
100,573
287,584
2,638(18,116)(35,394)
236,712

Cash flow from investing activities:
Proceeds from repayment of time deposits ................................................................................
Payment for purchase of property, plant and equipment...........................................................
Proceeds from sale of property, plant and equipment ...............................................................
Payment for acquisition of intangible assets...............................................................................
Proceeds from sale of intangible assets......................................................................................
Payment for acquisition of investment securities ........................................................................
Proceeds from sale of investment securities ...............................................................................
Loans to third parties .................................................................................................................
Collection of loans .....................................................................................................................
Others........................................................................................................................................
Net cash used in investing activities.....................................................................................

150(14,577)
1,566(4,100)
26
(500)
103
(68)
90
1,118
(16,192)

1,413(137,325)
14,753(38,625)
245(4,710)
970
(641)
848
10,533(152,539)

Cash flow from financing activities:
Increase in short-term borrowings .............................................................................................
Decrease in commercial paper ...................................................................................................
Proceeds from long-term debt ...................................................................................................
Repayment of long-term debt....................................................................................................
Proceeds from issuance of bonds...............................................................................................
Increase in treasury stock ...........................................................................................................
Dividends paid ...........................................................................................................................
Others........................................................................................................................................
Net cash generated by financing activities ..........................................................................

13,022(10,000)
5,700(2,477)
19,899(454)(2,095)(25)
23,570122,675(94,206)
53,698(23,335)
187,461(4,277)(19,736)(236)
222,044

Foreign currency translation difference in cash and cash equivalents .............................................
Net increase in cash and cash equivalents ...............................................................................
Cash and cash equivalents at beginning of year.............................................................................
Cash and cash equivalents of newly consolidated subsidiaries at beginning of year .......................
Cash and cash equivalents at end of year................................................................................

(469)
32,036
46,761
722¥79,519(4,418)
301,799
440,518
6,802$749,119

Cash flow from operating activities:

Please refer to Note 2 (k) regarding cash flow data for prior years.

28

TOKYO ELECTRON LIMITEDN O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Tokyo Electron Limited and its Subsidiaries

1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements of Tokyo
Electron Limited and its subsidiaries (hereinafter “the Company”) havebeen prepared from those that have been filed with the Minister ofFinance of Japan as required by the Securities and Exchange Law andthat conform with accounting principles generally accepted in Japan.
For the convenience of readers outside Japan, however, the presentation of the consolidated financial statements and the information
contained therein have been modified in some respects.
2. Summary of Significant Accounting Policies(a) Principles of consolidation
The consolidated financial statements include the accounts of theCompany and all of its 28 subsidiaries. Seven subsidiaries reported
as non-consolidated subsidiaries in prior fiscal years are consolidated
in 2000 due to the increasing significance of their aggregatedimpact to the consolidated financial statements. The effect of thischange has been shown as decreasing the cumulative retained earnings of prior years by ¥7,309 million at the beginning of the year
ended March 31, 2000.
All significant inter-company accounts, transactions and unrealized
profits or losses have been eliminated in consolidation. The fiscal yearsof all the subsidiaries end on March 31, the fiscal year-end of the
Parent Company.
U.S. dollar amounts included herein are solely for the convenienceof readers and are made at the rate of ¥106.15 to $1.00, theexchange rate prevailing at March 31, 2000. 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.
(b) Foreign currency translation
Current assets and liabilities denominated in foreign currencies aretranslated into Japanese yen at the rate prevailing at the balance sheet
date, except for those hedged by forward exchange contracts, which
are translated at the contracted rates. Non-current assets and liabilities denominated in foreign currencies are translated at historical rates.
The financial statements of foreign subsidiaries have been translated in accordance with current accounting standards in Japan.
(c) Marketable securities and investments in securities
Marketable securities and investments in securities are stated principally at cost, cost being determined principally by the weighted average method.
(d) Inventories
Inventories other than raw materials are stated principally at cost,
cost being determined principally by the individual method.
Raw materials are stated principally at cost, cost being determinedprincipally by the moving-average method.

(e) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation ofproperty, plant and equipment is computed on the declining-balancemethod for the Parent Company and its domestic subsidiaries at rates
based on the estimated useful lives of assets as prescribed by Japanese
tax laws, while the straight-line method is mainly applied for foreignsubsidiaries over the estimated useful lives of their assets.
(f) Retirement and severance benefits
The Parent Company and certain of its subsidiaries have fundedpension plans to provide retirement and severance benefits to substantially all directors, statutory auditors, and employees to the extent of
the amount required according to internal regulations for directors
and statutory auditors, and the maximum amount allowable according
to each country’s tax laws or internal regulations for employees.
Under the plans, employees are entitled to lump-sum payments basedon the current rate of pay and the length of service upon retirement or
termination of employment for reasons other than cause for dismissal.
(g) Leases
Finance lease transactions, unless the lessee practically acquires
legal title to the leased asset, are treated as operating lease transactions.
(h) Income taxes
In accordance with the revised accounting standards effective April
1, 1999, the Company records deferred tax assets and liabilities on
temporary differences between the carrying amounts of assets andliabilities for financial reporting purposes and the amounts used forincome tax purposes.
(i) Derivatives
The Company makes use of derivatives only to reduce exchange
risk of foreign currencies. The amount of derivatives is limited to theextent of foreign currency assets, debt and actual orders, and theCompany does not trade in derivatives for investment purposes.
(j) Per share information
Net income per share is computed based on the weighted average
number of shares of common stock outstanding during each year.
Dividends per share have been presented on an accrual basis andinclude, in each fiscal year ended March 31, dividends approved or to
be approved after such March 31 but applicable to the year thenended.
(k) Statement of cash flows
Beginning from the year ended March 31, 2000, the Company
presents the consolidated statement of cash flows with the format
instructed by the revised Securities and Exchange Law effective April 1,

TOKYO ELECTRON LIMITED29

1999. The Company has not retroactively restated the prior year’s presentation, and therefore prior year figures are not presented so as not
to mislead readers outside Japan. Following is a summary of cash
flows already presented in prior years.
Millions of yen

1999
Net cash generated by operating activities ...... ¥ 49,828
Net cash used in investing activities ................. (24,346)
Net cash generated by (used in)financing activities ...................................... (48,189)
Effect of exchange rate changes......................
(1,440)Net increase (decrease) in cash andcash equivalents ......................................... (24,147)
Cash and cash equivalents at end of year........ ¥47,745

1998¥ 17,473(45,326)
66,878873
39,898¥71,892(l) Cash and cash equivalents
Cash and cash equivalents presented in the statement of cash flows
include cash on hand, cash in banks and time deposits whose expiration dates are within three months.
3. Marketable Securities and Investments in Securities
Marketable securities at March 31, 2000 and 1999 were as follows:
Millions of yen

Listed stock.....................................
Other..............................................
Total ........................................

2000
¥825
10
¥835

Thousands of
U.S. dollars

1999
¥825
10
¥835

2000
$7,772
94$7,866

Investments in securities at March 31, 2000 and 1999 were as follows:
Millions of yen

2000
Listed stock..................................... ¥8,086
Mutual funds..................................
810
Other..............................................
114
Total ........................................ ¥9,010

Thousands of
U.S. dollars

1999¥8,107216
310¥8,633

2000$76,175
7,631
1,074$84,880

4. Inventories
Inventories at March 31, 2000 and 1999 were as follows:
Millions of yen

Thousands of
U.S. dollars

2000
1999
2000
Finished products............................ ¥ 38,909 ¥32,595 $ 366,547
Work in process,raw materials and supplies......... 73,572 55,490
693,095
Total ........................................ ¥112,481 ¥88,085 $1,059,642
5. Pledged Assets
The Company did not hold any assets pledged as collateral at
March 31, 2000 and 1999.

30

TOKYO ELECTRON LIMITED

6. Short-Term Borrowings and Long-Term Debt
Short-term bank loans are represented by 365-day notes issued by
the Company to banks and bore interest at the average annual rate of
1.47% at March 31, 2000. Long-term debt at March 31, 2000 and1999 was as follows:
Millions of yen

2000
1999
0.90% unsecured convertible
bonds due 2003 .......................... ¥15,601 ¥18,864
2.45% unsecured bondsdue 2000 ..................................... 30,000 30,000
2.00% unsecured bondsdue 2002 ..................................... 20,000 20,000
1.39% unsecured bondsdue 2004 ..................................... 20,000–
Other loans from banks ............... 14,376 10,381
Current portion............................ (32,699) (1,536)
Total...................................... ¥67,278 ¥77,709

Thousands of
U.S. dollars

2000$146,971
282,619
188,413
188,413
135,430(308,045)$633,801

The 0.90% yen unsecured convertible bonds due 2003 are convertible at the option of holders into common stock through September
29, 2003. At March 31, 2000, the conversion price was ¥3,150.00
per share, subject to adjustment in certain events.
7. Income Taxes
The Parent Company and its domestic subsidiaries are subject toseveral taxes based on income, with an aggregate statutory tax rate of
approximately 42% in 2000 and 48% in 1999.
Significant components of the deferred tax assets and liabilities of
the Company as of March 31, 2000 were as follows:
Millions of yen

Deferred tax assets
Tax loss carryforwards ................................... ¥ 4,882
Elimination of unrealized gain on inventories
3,172
Allowance for bonuses..................................
1,350
Elimination of unrealized gain
on fixed assets............................................
1,173
Enterprise taxes payable ................................
1,007
Allowance for retirement benefits.................
838
Devaluation of golf memberships..................
519
Other ............................................................
2,188
Subtotal of deferred tax assets ...................... 15,129
Valuation allowance...................................... (5,936)
Total amount of deferred tax assets........
9,193
Deferred tax liabilities
Allowance for extraordinary depreciation...... (1,028)
Elimination of unrealized gainon allowance for doubtful accounts...........
(314)
Allowance for domestic market
development for imported products...........
(252)
Other ............................................................
(173)
Total amount of deferred tax liabilities... (1,767)
Net deferred tax assets ............................. ¥ 7,426

Thousands of
U.S. dollars$ 45,992
29,882
12,718
11,050
9,487
7,894
4,889
20,613
142,525(55,921)86,604(9,684)(2,958)(2,374)(1,630)(16,646)$ 69,958

The differences between the aggregate statutory tax rate and theeffective tax rate of the Company for financial statement purposes forthe year ended March 31, 2000 were as follows:
Domestic statutory tax rate..................................................
Non-recognition of temporary differences...........................
Tax credits and others..........................................................
Permanent differences such as non-taxable
dividend income .............................................................
Tax rate difference...............................................................
Expenses not deductible for tax purposes............................
Others .................................................................................
Effective tax rate..................................................................

42.05%
-4.27
-2.57
-1.87
-1.42
0.86
0.35
33.13

8. Shareholders’ Equity
The Company issued 1,035,853 shares and 55,237 sharesof common stock in 2000 and 1999, respectively, in connection withconversion of convertible bonds.
Conversion of convertible bonds into common stock has beenaccounted for in accordance with the provisions of the JapaneseCommercial Code by crediting one-half of the conversion price to boththe common stock account and the additional paid-in capital account.
9. Share Repurchase Under Stock Option Program
At the Annual Shareholders’ Meeting held on June 26, 1998 andon June 29, 1999, stock option plans were approved in order to further increase directors’ incentive and motivation to raise corporate performance with the aim of maximizing corporate value. Pursuant tothis approval, from July 1, 1998 to March 31, 2000, the Company
repurchased 299,000 shares of its common stock with a total value of¥1,612 million.
10. Leases
Information relating to finance leases, excluding those leases forwhich the ownership of the leased assets is considered to be transferred to the lessee, as of and for the years ended March 31, 2000
and 1999, was as follows:
Leased assets not recorded in the consolidated balance sheets:
Millions of yen

2000
Acquisition cost......................................... ¥52
Accumulated depreciation ........................ 37
Net leased property................................... ¥15

1999
¥76
53
¥23

Lease payments and depreciation computed by the straight-line
method over the lease terms with no residual value and imputed interest expense were ¥11 million in the year ended March 31, 2000 and¥16 million in the year ended March 31,1999.
Future minimum operating lease payments:

Due within one year ...................................
Due over one year ......................................
Total ....................................................

Millions of yen

Thousands of
U.S. dollars

2000
¥ 98
76
¥174

2000
$ 923
716
$1,639

11. Segment Information
The Company does not disclose segment information as it operates
in a single segment.
12. Contingent Liabilities
The Company did not hold any contingent liabilities at March 31,
2000 and 1999.
13. Subsequent Event
On June 9, 2000, 1.59% unsecured bonds with warrants due
2006 were issued as approved at the Board Meeting held on May 17,
2000. This was in relation to the stock-based compensation plan
introduced and implemented as of the same date of the issuance ofthe bonds with warrants. Under this plan, the bond portion (¥4,500
million) was sold to the public and the warrant portion (¥715,950
thousand) was repurchased by the Company and granted to its
eligible employees worldwide as an incentive linked to the Company’s
future stake. A summary of terms and conditions of the bonds withwarrants are as follows:
Bond amount .................................... ¥4,500 million
Interest rate ....................................... 1.59%
Issued stocks...................................... Common stock, ¥50 par value
Exercise price ..................................... ¥14,070
Exercise period................................... July 1, 2002 – June 8, 2006

Thousands of
U.S. dollars

2000
$480
339
$141

Future minimum lease payments (Machinery and Equipment) :Due within one year ...................................
Due over one year ......................................
Total ....................................................

Millions of yen

Thousands of
U.S. dollars

2000
¥11
4
¥15

2000
$103
38
$141

TOKYO ELECTRON LIMITED31

I N D E P E N D E N T A U D I TO R S ’ R E P O R T

To the Board of Directors, Tokyo Electron Limited
We have examined the consolidated balance sheets of Tokyo Electron Limited and its consolidated subsidiaries as of March 31, 2000 and 1999, the related statements of income and shareholders’ equity for each of
the three years in the period ended March 31, 2000, and the statement of cash flows for the year ended March
31, 2000, all expressed in yen. Our examinations were made in accordance with auditing standards generally
accepted in Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated statements present fairly the financial position of Tokyo Electron Limited andits consolidated subsidiaries at March 31, 2000 and 1999, the results of their operations for each of the three
years in the period ended March 31, 2000, and their cash flows for the year ended March 31, 2000, in conformity with accounting principles generally accepted in Japan applied on a consistent basis.
The amounts expressed in U.S. dollars have been translated on the basis described in Note 2-a.

Tokyo, Japan
June 28, 2000

Masatoshi Yoshino
Certified Public Accountant

32

TOKYO ELECTRON LIMITED

Eiji Miyashita
Certified Public Accountant

Fumihiko Sugiura
Certified Public Accountant