Tokyo Electron

Annual Report 2011

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Tokyo Electron Limited and Subsidiaries

1. Basis of Presentation of Consolidated Financial
Statements
The accompanying consolidated financial statements of Tokyo Electron
Limited (hereinafter “the Company”) and its subsidiaries (hereinaftercollectively referred to as “Tokyo Electron”) have been prepared in accordance with the provisions set forth in the Financial Instruments andExchange Law of Japan and its related accounting regulations, and in
conformity with accounting principles generally accepted in Japan, which
are different in certain respects as to application and disclosure requirementsof International Financial Reporting Standards.
The Company uses financial statements prepared by foreign subsidiaries
in accordance with International Financial Reporting Standards or U.S.
generally accepted accounting principles for the preparation of the consolidated financial statements, together with adjustment for certain items
which are required to be adjusted in the consolidation process.
The accompanying consolidated financial statements have been restructured and translated into English from the statutory Japanese language
consolidated financial statements. Some supplementary information
included in the statutory Japanese language consolidated financial statements, which is not required for fair presentation, is not presented in theaccompanying consolidated financial statements.
U.S. dollar amounts included herein are solely for the convenience ofreaders and are presented at the rate of ¥83.15 to $1.00, the approximate
rate as of March 31, 2011. The translation should not be construed as arepresentation that the Japanese yen amounts shown could be converted
into U.S. dollars at that or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidation
The consolidated financial statements include the accounts of theCompany and its 32 and 30 subsidiaries for the years ended March 31,
2011 and 2010, respectively.
Investments in affiliates in which the Company’s ownership is 20% to
50% are accounted for by the equity method.
All significant inter-company accounts, transactions and unrealized
profits or losses have been eliminated in consolidation.
The fiscal year-end of all entities is March 31, except for three consolidated foreign subsidiaries, which use a December 31 year-end, and adjustment is made for any significant transactions between the different fiscal
year-ends.
(b) Foreign currency translation
All assets and liabilities denominated in foreign currencies are translated
into Japanese yen at the year-end rates, except for those hedged by forward
exchange contracts, which are translated at the contracted rates. Resulting
exchange gains and losses are included in earnings for the year.
Revenue and expense items are translated at the rates that approximate
those prevailing at the time of the transactions.
The balance sheet accounts of foreign subsidiaries are translated into
Japanese yen at the rates of exchange in effect at the balance sheet date,
except for shareholders’ equity accounts, which are translated at thehistorical rates. Revenue and expense accounts of foreign subsidiaries aretranslated at average rates of exchange in effect during the year. Resulting
translation adjustments are presented in net assets as a component ofaccumulated other comprehensive income and minority interests in the
consolidated financial statements.

44(c) Investment securities
Tokyo Electron examines the intent of holding each security and classifies
those securities as trading securities, held-to-maturity debt securities orother securities. Tokyo Electron has no trading or held-to-maturity debt
securities. Other securities with market prices are valued at fair market value
prevailing at the balance sheet date. The differences between the book andmarket prices of other securities, net of applicable income taxes, are presented in net assets as a component of accumulated other comprehensive
income. Other securities without market value are valued at cost using theweighted-average method.
The cost of sold securities is calculated using the weighted-average method.
(d) Inventories
Inventories other than raw materials are stated at the lower of cost,
determined by the specific identification method, or net realizable value,
which is defined as selling price less estimated additional manufacturingcosts and estimated direct selling expenses. Raw materials are stated at thelower of cost, determined principally by the moving-average method, or net
realizable value, which is defined as selling price less estimated additional
manufacturing costs and estimated direct selling expenses.
(e) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation of buildings,
machinery and equipment of the Company and its domestic subsidiaries iscomputed using the declining balance method, except for buildings acquired
subsequent to March 31, 1998 which are depreciated using the straight-line
method, based on the estimated useful lives of assets. Foreign subsidiaries
mainly apply the straight-line method over the estimated useful lives of assets.
Estimated useful lives of property, plant and equipment are as follows:		 Buildings
2 to 60 years
		 Machinery and equipment
2 to 17 years(f) Intangible assets
Intangible assets, which primarily comprise of capitalized costs forcomputer software and goodwill, are amortized by the straight-line
method over their estimated useful lives. Capitalized costs for computer
software for internal use are amortized over a period of 2 to 5 years.
Goodwill is evaluated on an individual basis and amortized over a period
not exceeding 20 years.
(g) Impairment of fixed assets
Tokyo Electron evaluates the carrying value of fixed assets held for use in
the business.
If the carrying value of a fixed asset is impaired, a loss is recognizedbased on the amount by which the carrying value exceeds its recoverable
amount, being the higher of the net selling price or the value in use of theassets. Net selling price is determined using the fair value less disposal costs
and value in use is based on the total amount of discounted cash flows
estimated to be generated from the continuing use of the individual assets
or the asset group and the disposal of the assets.
(h) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount determinedbased on the historical experience of bad debts with respect to ordinary
receivables, and an estimate of uncollectible amounts determined by reference to specific doubtful receivables from customers which are experiencing
financial difficulties.

Annual Report 2011(i) Accrued pension and severance costs
The Company and its domestic subsidiaries provide an accrual for defined
benefit employees’ pension and severance costs based on the projected
benefit obligation and fair value of pension assets on the account settlement
date. Prior service costs are charged to earnings on a straight-line basis,beginning from the fiscal year in which they are incurred, over a fixed
number of years (four years) within the average remaining years of service of
employees when the changes occur. Actuarial differences are charged toearnings on a straight-line basis, beginning from the fiscal year after they arerecognized, over a fixed number of years (four years) within the averageremaining years of service of employees when the differences occur.
The provision for accrued pension and severance costs for directors andstatutory auditors of the Company and its domestic subsidiaries is calculated
in accordance with internal regulations.
The Company and certain domestic subsidiaries decided to discontinue
the payment of severance pay for directors and statutory auditors after
April 1, 2005, and at the general shareholders’ meeting in June 2005, it
was resolved that the severance pay for directors and statutory auditors
until March 31, 2005 would be paid at the termination of their service andthe decision regarding the payment amount for each director and statutory
auditor was delegated to the board of directors and statutory auditors. As
discussed in note 9, the accruals for severance costs for directors andstatutory auditors are included in accrued pension and severance costs inthe consolidated balance sheets.
(j) Accrued warranty expenses
Tokyo Electron’s products are generally subject to warranty, and Tokyo
Electron accrues such estimated costs when product revenue is recognized.
To prepare for future repairs during warranty periods, estimated after-salerepair expenses over warranty periods are accrued based on the historicalratio of actual repair expenses to corresponding sales.
(k) Leases
Until the year ended March 31, 2008, non-cancelable leases of theCompany and its domestic subsidiaries had been primarily accounted for as
operating leases (whether such leases were classified as operating or
finance leases), except for leases that transfer ownership to the lessee atthe end of the lease, which had been accounted for as finance leases.
Effective from the year ended March 31, 2009, the Company and its
domestic subsidiaries adopted “Accounting Standard for Lease Transactions” and “Guidance on Accounting Standard for Lease Transactions.” Asa result, the Company and its domestic subsidiaries capitalized leased
assets under finance leases commencing after March 31, 2008 and suchleased assets are depreciated using the straight-line method over theperiod of the lease contract with zero residual value.
(l) Derivatives and hedge accounting
The Company and a domestic subsidiary make use of derivatives in orderto manage certain risks arising from adverse fluctuations in foreign currency
exchange rates. The amount of derivatives is limited to the extent of foreign
currency assets, liabilities and actual orders, and the Company and thedomestic subsidiary do not trade in derivatives for speculative purposes.
Derivatives are carried at fair value in the consolidated balance sheet withchanges in unrealized gain or loss charged or credited to earnings, except
for those which meet the criteria for hedge accounting. Unrealized gains orlosses on hedging derivatives, net of taxes, are reported in net assets as acomponent of accumulated other comprehensive income. Receivables andpayables hedged by qualified forward foreign exchange contracts aretranslated at the corresponding foreign exchange contract rates.

Tokyo Electron(m) Income taxes
Tokyo Electron records deferred tax assets and liabilities on temporary
differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes, which are measured using the enacted tax rates and laws which are
expected to be in effect when the differences are expected to reverse.
(n) Revenue recognition
Revenue from Semiconductor and FPD (Flat Panel Display)/PV (Photovoltaic cell) production equipment is principally recognized at the time of thecustomer confirmation of set-up and testing of products. Revenue fromsuch equipment not requiring substantial installation is recognized at thetime of shipment. Revenue from other products, such as electronic components, is recognized at the time of shipment. Service revenue from maintenance is recognized ratably over the term of the maintenance contract.
(o) Per share information
	Net income (loss) per share and net assets per share are computed basedon the weighted-average number of shares of common stock outstanding
during each year.
Dividends per share has been presented on an accruals basis andinclude, in each fiscal year ended March 31, dividends approved or to beapproved after March 31 but applicable to the year then ended.
(p) Research and development expenses
Research and development expenses are charged to earnings as incurredand amounted to ¥70,568 million ($848,683 thousand) and ¥54,074
million for the years ended March 31, 2011 and 2010, respectively.
(q) Cash equivalents
For purposes of the consolidated statements of cash flows, Tokyo
Electron considers all highly-liquid instruments purchased with original
maturities of three months or less to be cash equivalents.
(r) Short-term investments
Short-term investments consist of time deposits and certificates ofdeposit with original maturities of more than three months.
(s) Reclassifications
	Certain reclassifications have been made to the prior year’s consolidated
financial statements to conform with the presentation used for the year
ended March 31, 2011.
As described in note 3(c), the consolidated balance sheet and consolidated statement of changes in net assets for the year ended March 31,
2010 has been modified to conform with the new presentation rules forthe year ended March 31, 2011. Also, the Company prepared a consolidated statement of comprehensive income for the year ended March 31,
2010 as well as that for the year ended March 31, 2011.

3. Change in Accounting Policies and Adoption of New
Accounting Standards(a) Accounting standards for asset retirement obligations
Effective from April 1, 2010, the Company and its domestic subsidiaries
adopted “Accounting Standards for Asset Retirement Obligations” (Statement No. 18 issued by the Accounting Standards Board of Japan) and“Guidance on Accounting Standards for Assets Retirement Obligations”(Guidance No. 21 issued by the Accounting Standards Board of Japan). The
adoption of this standard had no significant impact on the consolidated
financial statements.
(b) Accounting standard for disclosures about segments of anenterprise and related information
As mentioned in note 17, effective from the year ended March 31,

45

Tokyo Electron

Annual Report 20112011, the Company adopted “Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information” (Statement No. 17
issued by the Accounting Standards Board of Japan) and “Guidance on
Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (Guidance No. 20 issued by the Accounting Standards Board of Japan). The accounting standards require the Company toadopt a management approach as the segment reporting method. As aresult of the adoption of this standards, the Company changed the basis ofsegmentation and segment measures.
(c) Accounting standard for presentation of comprehensive income
Effective from the year ended March 31, 2011, the Company adopted
the new accounting standard, “Accounting Standard for Presentation ofComprehensive Income” (Statement No. 25 issued by the AccountingStandards Board of Japan). As a result of the adoption of this standards,
the Company prepared the consolidated statement of comprehensive
income for the year ended March 31, 2011.
(d) Accounting standard for consolidated financial statement
Effective from the year ended March 31, 2011, the Company adopted“Partial amendments to the accounting standards of financial statements”(Cabinet office ordinance No. 5) in accordance with “Accounting Standard
for Consolidation Financial Statement” (Statement No. 22 issued by
Accounting Standards Board of Japan). As a result of the adoption of thisstandard, the Company added a subtotal of “Income (loss) before minority
interests” in the consolidated statements of operations for the years ended
March 31, 2011 and 2010.

4. Investment Securities
Investment securities, which solely comprise of other securities, as ofMarch 31, 2011 and 2010 are as follows:
Millions of yen
2011:

Cost

Carrying value¥ 9,763¥ 14,445
370

Securities with market prices
Equity securities����������������������������������������������
Securities without market prices
Unlisted stock�������������������������������������������������

365 Other�������������������������������������������������������������

911

911

Total������������������������������������������������������������������

¥ 11,039¥ 15,726

Millions of yen
2010:

Cost

Carrying value¥ 9,277¥ 13,615
194

Securities with market prices
Equity securities����������������������������������������������
Securities without market prices
Unlisted stock�������������������������������������������������

194 Other�������������������������������������������������������������

912

912

Total������������������������������������������������������������������

¥ 10,383¥ 14,721

Thousands of U.S. dollars
2011:

Cost

Carrying value$117,414$173,722

Unlisted stock�������������������������������������������������

4,390

4,450

 Other�������������������������������������������������������������

10,956

10,956

Total������������������������������������������������������������������

$132,760$189,128

Securities with market prices
Equity securities����������������������������������������������
Securities without market prices

	Losses on devaluation of investment securities were ¥34 million ($409
thousand) and ¥72 million for the years ended March 31, 2011 and2010, respectively.

46

	Net gain on sale of investment securities was ¥91 million ($1,094
thousand) for the year ended March 31, 2011.
	No gain on sale of investment securities was recognized for the year
ended March 31, 2010.

5. Inventories
Inventories as of March 31, 2011 and 2010 are as follows:
Millions of yen

Finished products���������������������������

Thousands of
U.S. dollars

2011

2010

2011

¥111,918¥ 87,202$1,345,977

Work in process, raw materials
and supplies���������������������������������

57,00751,248685,592

Total����������������������������������������������

¥168,925¥138,450$2,031,569

The amounts of change in inventory provision included in cost of sales in
the consolidated statements of operations for the years ended March 31,
2011 and 2010 were an increase of ¥1,202 million ($14,456 thousand)and a decrease of ¥3,581 million, respectively.

6. Impairment of Property, Plant and Equipment andIntangible Assets
For assessing fixed asset impairment, the Company generally groups fixed
assets used for normal operations at a business unit level for which profits
are reasonably controllable. Also, the Company assesses the recoverability of
individual assets not used in normal operations or that are idle.
The Company and its domestic subsidiaries recognized losses on impairment of property, plant and equipment of ¥811 million ($9,753 thousand),
which is included in the consolidated statement of operations for the year
ended March 31, 2011. The losses on impairment of property, plant andequipment were attributed to buildings, machinery and equipment in Japan
primarily of the Yokohama warehouse in Kanagawa, which was determined
to be sold.
The Company and its domestic subsidiaries recognized losses on impairment of property, plant and equipment of ¥4,786 million, which is includedin the consolidated statement of operations for the year ended March 31,
2010. The loss on impairment of property, plant and equipment was attributed to land, buildings and equipment in Japan primarily of the Sagami Plant
in Kanagawa, the Saga Plant in Saga and the Kansai Technology Center in
Hyogo, all of which are not expected to be used after integration of domestic production and development centers.
Since TEL Epion Inc. (“Epion”) determined to adversely change its futurebusiness plan made upon acquisition of Epion due to change of the industry
business environment in the year ended March 31, 2010, Epion recognized
loss on impairment of intangible assets of ¥2,767 million, which is also
included in the consolidated statement of operations for the year ended
March 31, 2010.

7. Pledged Assets
Tokyo Electron did not hold any assets pledged as collateral as of March
31, 2011 and 2010.

8. Short-term Borrowings
Short-term borrowings represent 365-day notes issued by Tokyo Electron
to banks and bore interest at an average annual rate of 0.39 % and 0.49%
as of March 31, 2011 and 2010, respectively.
As of March 31, 2011, Tokyo Electron has unused lines of credit
amounting to ¥142,184 million ($1,709,970 thousand).

Annual Report 2011

9. Accrued Pension and Severance Costs
The Company and its domestic subsidiaries have defined benefit plans(cash balance plan and noncontributory retirement and severance benefit
plans) covering substantially all their employees who meet eligibility
requirements. The benefits under the plans are based on length of service
and certain other factors.
The cash balance plan provides for pension or lump-sum payment
benefits to employees who retire or terminate their employment forreasons other than dismissal for cause. Under the cash balance plan, eachparticipant has an account which is credited yearly based on the current
rate of pay and market-related interest rate. The noncontributory plansprovide for lump-sum payment benefits to employees who retire or terminate their employment for reasons other than dismissal for cause. Certain
foreign subsidiaries have noncontributory retirement and severance benefit
plans that provide for pension or lump-sum payment benefits to employees
who retire or terminate their employment for reasons other than dismissal
for cause.
The funded status of the defined benefit plans, a substantial portion ofwhich consists of domestic benefit plans, as of March 31, 2011 and 2010is as follows:
Thousands of
U.S. dollars

Tokyo Electron

Significant assumptions of domestic pension plans used to determine
the above amounts are as follows:2011 and 2010

Allocation method of benefit obligation��������������������

Straight-line method

Discount rate������������������������������������������������������������

2.00%

Expected rate of return on plan assets�����������������������

2.00%

Amortization period of actuarial difference���������������

4 years

Amortization period of prior service cost�������������������

4 years

10. Income Taxes
Significant components of the deferred tax assets and liabilities of Tokyo
Electron as of March 31, 2011 and 2010 are as follows:
Thousands of
U.S. dollars

Millions of yen
2011

2010

2011

Accrued pension andseverance costs����������������������������

¥21,172¥20,099$254,624

Elimination of unrealized profit
in inventories�������������������������������

Deferred tax assets

10,309

1,836

123,981

Tax credit for research anddevelopment��������������������������������

5,910

5,499

71,076

2011

2010

2011

Devaluation of inventories��������������

4,716

4,282

56,717

Benefit obligation�������������������������

¥(89,350)¥(84,097)$(1,074,564)

Accrued employees’ bonuses���������

4,471

2,425

53,770Fair value of plan assets����������������

41,282

38,732496,476

Accrued warranty expenses������������

2,795

1,907

33,614

Funded status�������������������������������

(48,068)(45,365)(578,088)

Unrecognized actuarial difference��

(90)

(288)

(1,082)

Unrecognized prior service cost�����

25

125

300

Loss on impairment of property,
plant and equipment andintangible assets���������������������������

2,258

2,114

27,156

Net amount recognized����������������

(48,133)(45,528)(578,870)

Accrued business taxes������������������

1,581

–

19,014

Net operating loss carryforwards����

1,475

14,717

17,739Other���������������������������������������������

8,619

9,100

103,656

Total gross deferred tax assets��������

63,306

61,979761,347

Less valuation allowance����������������

(9,031)(10,458)(108,611)

Total deferred tax assets������������������

54,27551,521

652,736

Undistributed earnings offoreign subsidiaries����������������������

(3,087)(2,957)(37,125)

Net unrealized gains on
investment securities��������������������

(1,916)(1,705)(23,043)

Prepaid pension andseverance costs����������������������������

(1,635)(1,773)(19,663)

Other���������������������������������������������

(1,532)(1,161)(18,425)

Total gross deferred tax liabilities����

(8,170)(7,596)(98,256)

Net deferred tax assets�������������������

¥46,105¥43,925$554,480

Millions of yen

Amounts recognized in
the consolidated balance sheets
consist of:Prepaid pension and   severance costs (Note 1)����������

4,097

4,379

49,272

Accrued pension and   severance costs (Note 2)����������

(52,230)(49,907)(628,142)

Net amount recognized����������������

¥(48,133)¥(45,528)$ (578,870)

Notes: 1.	The prepaid pension and severance costs as of March 31, 2011 and 2010 isincluded in other assets in the consolidated balance sheets.
2.	The provision for accrued pension and severance costs for directors and statutory
auditors (¥596 million ($7,167 thousand) as of March 31, 2011 and ¥621 million asof March 31, 2010) is not included.

	Net pension cost of the plans is as follows:
Thousands of
U.S. dollars

Millions of yen
2011

2010

2011

Service cost������������������������������������

¥5,474¥5,358$65,833

Deferred tax liabilities

	Net deferred tax assets are included in the consolidated balance sheets
as of March 31, 2011 and 2010 as follows:

Interest cost�����������������������������������

1,666

1,572

20,036

Expected return on plan assets�������

(767)

(676)

(9,224)

Amortization of actuarial
difference������������������������������������

2011

2010

2011

286

697

3,439

Current assets��������������������������������

¥27,610¥26,625$332,051
249,285

Millions of yen

Thousands of
U.S. dollars

Amortization of prior service cost���

100

101

1,203

Investments and other assets���������

20,72820,506

Net pension cost����������������������������

¥6,759¥7,052$81,287

Other current liabilities�������������������

(1)(1,062)(12)

Other liabilities�������������������������������

(2,232)(2,144)(26,844)

The Company and its wholly-owned domestic subsidiaries apply aconsolidated tax filing system for corporate tax purposes.

47

Tokyo Electron

Annual Report 2011

The ultimate realization of deferred tax assets is dependent upon thegeneration of future taxable income during the period in which those
temporary differences become deductible. For assessment of the realizabilityof deferred tax assets, management considers the scheduled reversal ofdeferred tax liabilities, future estimated taxable income, tax planning
strategies and level of net operating loss carryforwards, if any, in accordancewith accounting principles generally accepted in Japan.
Based on the level of historical taxable income and future estimatedtaxable income over the periods which the deferred tax assets are
deductible, management believes Tokyo Electron will realize the benefitsof these deferred tax assets, net of valuation allowance, as of March 31,
2011 and 2010.
The Company is subject to corporate tax, inhabitants’ tax and a deductible
enterprise tax, which in the aggregate resulted in a statutory income tax rateof approximately 40.69% for the years ended March 31, 2011 and 2010.
Significant components of the difference between the statutory andeffective tax rates for the years ended March 31, 2011 and 2010 are
as follows:
Statutory tax rate in Japan����������������������������������������

2011

2010

40.69 %

40.69 %

Adjustments:
Tax credit of research and development���������������������

(7.22)–

Effect of elimination of unrealized profit
in inventories����������������������������������������������������������

(4.15)(27.86)

Difference in statutory tax rates of subsidiaries����������

(2.26)

6.54

Change in valuation allowance���������������������������������

(1.89)(18.14)

Expenses not deductible for tax purposes������������������

0.86(5.28)

Change in deferred tax liabilities on
undistributed earnings of foreign subsidiaries����������

(0.13)(4.28)

Others, net���������������������������������������������������������������

0.98

1.02

Effective tax rate�������������������������������������������������������

26.88 %

(9.35)%

11. Net Assets
	Net assets comprises four subsections, which are shareholders’ equity,
accumulated other comprehensive income, share subscription rights andminority interests.
Under Japanese laws and regulations, the entire amount paid for new
shares is required to be designated as common stock. However, a company
may, by a resolution of the board of directors, designate an amount notexceeding one-half of the price of the new shares as additional paid-in
capital which is included in capital surplus.
In cases where dividend distribution of surplus is made, the lesser of anamount equal to 10% of the dividend or the excess, if any, of 25% ofcommon stock over the total of additional paid-in capital and legal reserve
must be set aside as additional paid-in capital or legal reserve. Legal
reserve is included in retained earnings in the accompanying consolidatedbalance sheets.
Both appropriations of legal reserve and additional paid-in capital used
to eliminate or reduce a deficit generally require a resolution of theshareholders’ meeting.
Additional paid-in capital and legal reserve may not be distributed as
dividends. All additional paid-in capital and legal reserve may be transferred
to other capital surplus and retained earnings, respectively, which arepotentially available for dividends.
The maximum amount that the Company can distribute as dividends is
calculated based on the non-consolidated financial statements of theCompany in accordance with Japanese laws and regulations.
At the general shareholders’ meeting on June 23, 2006, in accordancewith Japanese laws and regulations, the Company altered its articles toallow for the distribution of earnings to shareholders on dates, other thanthe mid-term and year-end, by a resolution of the board of directors.
At the board of directors’ meeting held on May 13, 2011, the distributionof cash dividends amounting to ¥13,608 million ($163,656 thousand) was
resolved. Such appropriations have not been accrued in the consolidated
financial statements as of March 31, 2011 since they are recognized in the
period in which they are resolved at the board of directors’ meeting.

12. Share Subscription Rights
Stock option plan
The Company’s shareholders have approved annual stock option plansfor directors and selected employees since the year ended March 31, 1999.
The options under the plans vest immediately with restriction on exercise up
to two or three years after the date of grant, and have an exercise period ofeight to twenty years from the date of grant.

	No options to purchase shares of the Company were authorized andgranted for the year ended March 31, 2011 and 2010.
Shareholders of Tokyo Electron Device Limited, a domestic listed subsidiary, have approved annual stock option plans for directors and selected
employees since the year ended March 31, 2005.

A summary of stock options outstanding and exercisable as of March 31, 2011 and 2010 is as follows:
Tokyo Electron Limited

2011

Number ofsharesOutstanding at the beginning of year������������������������������������������������������������������

48

1,779,100

2010

Weighted-average exercise
price
Yen

¥5,720U.S. dollars

Number ofshares$ 68.79

2,052,300

Weightedaverage
exercise priceYen¥5,927

Granted��������������������������������������������������������������������������������������������������������������

–

–

–

–

–

Exercised�������������������������������������������������������������������������������������������������������������

67,1001

0.01

40,000

1

Expired (forfeited)�����������������������������������������������������������������������������������������������

415,200

8,625

103.73

233,200

8,520

Outstanding at the end of year���������������������������������������������������������������������������

1,296,800

5,086

61.17

1,779,100

5,720

Exercisable at the end of year������������������������������������������������������������������������������

1,120,500

5,886

70.79

1,504,200

6,765

Annual Report 2011

Tokyo Electron Device Limited

Tokyo Electron

2011

Number ofshares2010

Weighted-average exercise
price
Yen

U.S. dollars

Number ofshares

Weightedaverage
exercise price
Yen

Outstanding at the beginning of year������������������������������������������������������������������

650¥308,698$3,712.54

650¥308,698

Granted��������������������������������������������������������������������������������������������������������������

–

–

–

–

–

Exercised�������������������������������������������������������������������������������������������������������������

–

–

–

–

–

Expired (forfeited)�����������������������������������������������������������������������������������������������

–

–

–

–

–

Outstanding at the end of year���������������������������������������������������������������������������

650

308,698

3,712.54650

308,698

Exercisable at the end of year������������������������������������������������������������������������������

650

308,698

3,712.54650

308,698

13. Leases
As mentioned in note 2 (k), effective from the year ended March 31,
2009, the Company and its domestic subsidiaries adopted “AccountingStandard for Lease Transactions” and “Guidance on Accounting Standard
for Lease Transactions”. As permitted under the standards, finance leases
which commenced on or before March 31, 2008 continue to be accounted
for as operating leases. Pro forma information of leased property acquiredon or before March 31, 2008 including acquisition cost, accumulated
depreciation, obligation under finance leases, and depreciation expense offinance leases that do not transfer ownership of leased property to thelessee on an “as if capitalized” basis for the years ended March 31, 2011
and 2010, are as follows:	Leased assets not recorded in the consolidated balance sheets:
Thousands of
U.S. dollars

Millions of yen
2011

Acquisition cost�����������������������������

2010

¥947

¥955

2011

$11,389

Accumulated depreciation�������������

690

540

8,298

Net leased property������������������������

¥257

¥415

$ 3,091

balance are conducted pursuant to the internal management rules for
credit control. Credit risk of major customers is assessed on a regular basis.
Short-term investments consist of time deposits and certificates ofdeposit and the Company and its listed subsidiary trade with highly-rated
financial institutions to mitigate credit risks.
Investment securities consist of mainly equity interests in listed companies exposed to equity market risks. Conditions, including market prices,
for these investment securities are monitored on a regular basis.
Trade payables, which consist of notes and accounts payable andincome taxes payable, mainly mature within one year. Trade payables are
exposed to liquidity risks which are managed through activities such as
implementing cash management plans.
See note 15 for detailed discussion on derivative financial instruments.
Fair Value of Financial Instruments
	Carrying amount and estimated fair value of financial instruments as ofMarch 31, 2011 and 2010, respectively are set out below. Fair value offinancial instruments which is practically difficult to estimate are excluded(see note 4).
Millions of yen

Future minimum lease payments:
Thousands of
U.S. dollars

Millions of yen
2011

Due within one year�����������������������

2010

¥139

¥159

2011

$1,672Due over one year��������������������������

118

256

1,419

Total����������������������������������������������

¥257

¥415

$3,091

	Lease payments relating to finance leases accounted for as operatingleases amounted to ¥158 million ($1,900 thousand) and ¥167 million,
which approximated the corresponding depreciation on the respective
leased property computed by the straight-line method over the lease terms,
for the years ended March 31, 2011 and 2010, respectively.
Future minimum lease payments on non-cancelable operating leases:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

Carrying
amountEstimated
fair value 1 Cash and cash equivalents�������������������������������

¥165,051¥165,051

Trade notes and accounts receivable, net of   allowance for doubtful accounts   (¥1,154 million)���������������������������������������������

135,231

135,231

Short-term investments�����������������������������������

120,000

120,000

Investment securities���������������������������������������

14,445

14,445Trade notes and accounts payable�������������������

53,61253,612

Income taxes payable��������������������������������������

25,32825,328Hedge accounting not applied�������������������������

327

327

Hedge accounting applied�������������������������������

(44)

(44)

2011:

AssetsLiabilities

Derivatives (see note 15)

Millions of yen

Due within one year�����������������������

¥1,984¥1,744$23,861

Due over one year��������������������������

4,361

1,052

52,4472010:

Total����������������������������������������������

¥6,345¥2,796$76,308

Assets14. Fair Value of Financial Instruments
Policy for Financial Instruments
Tokyo Electron limits its fund management to short-term bank deposits
and certificates of deposit, and obtains funds by utilizing bank-loans or
liquidating trade-receivables.
Trade receivables, which consist of notes and accounts receivable, areexposed to credit risk in the event of non-performance by the counterparties. Execution and management of credit risk, maturity and receivable

Carrying
amountEstimated
fair value 1 Cash and cash equivalents�������������������������������

¥123,940¥123,940

Trade notes and accounts receivable, net of   allowance for doubtful accounts   (¥176 million)������������������������������������������������

124,286

124,286

Short-term investments�����������������������������������

120,000

120,000

Investment securities���������������������������������������

13,615

13,61552,35952,359Liabilities
Trade notes and accounts payable�������������������
Derivatives (see note 15)
Hedge accounting not applied�������������������������

124

124

Hedge accounting applied�������������������������������

(165)

(165)

49

Tokyo Electron

Annual Report 2011

Thousands of U.S. dollars

15. Derivative Financial Instruments

Carrying
amountEstimated
fair value 1 Cash and cash equivalents�������������������������������

$1,984,979$1,984,979

Trade notes and accounts receivable, net of   allowance for doubtful accounts   ($13,879 thousand)���������������������������������������

1,626,350

1,626,350

Short-term investments�����������������������������������

1,443,175

1,443,175

Investment securities���������������������������������������

173,722

173,722

Trade notes and accounts payable�������������������

644,762

644,762

Income taxes payable��������������������������������������

304,606

304,606

Hedge accounting not applied�������������������������

3,933

3,933

Tokyo Electron is subject to risk from adverse fluctuations in foreign
currency exchange rates in its operating and financing activities. The
Company and its listed domestic subsidiary enter into forward foreignexchange contracts in order to hedge such risks, but do not enter intosuch transactions for speculative purposes. The Company and its domestic
subsidiary implement a ratio analysis of the total cumulative cash flow
fluctuations to assess effectiveness of hedging. Execution and management of all derivative transactions are conducted pursuant to the internalmanagement rule for derivatives and the assessment of effectiveness ofhedging activities is reported on a semiannual basis to the Corporate
Director in charge of Finance.
The estimated fair values of the derivative financial instruments as ofMarch 31, 2011 and 2010 are as follows:

Hedge accounting applied�������������������������������

(529)

(529)

2011:

AssetsLiabilities

Derivatives (see note 15)

Note: 1. Fair value calculation of financial instruments		Cash and cash equivalents, trade notes and accounts receivable, short-term
investments and trade notes, accounts payable and income taxes payable		 The carrying amounts approximate fair value because of the short maturity ofthese instruments.
		 Investment securities
		  The fair values of marketable securities are based on quoted market prices.
		  See note 4 for further information by classification of investment securities.
		 Derivatives
		  See note 15 for detailed discussion on derivative financial instruments.

1. Derivative financial instruments not designated as hedging instruments
Millions of yen
2011:

Contract
amountSell U.S. dollars���������������������������

¥ 7,405¥(72)¥(72)

Sell Korean won��������������������������

1,235

350

350

Buy U.S. dollars���������������������������

4,763

49

49

Total�������������������������������������������

¥13,403

¥327

¥327

2010:

Contract
amountSell U.S. dollars���������������������������

¥ 7,268¥(240)¥(240)

Sell Korean won��������������������������

1,235

290

290

Buy U.S. dollars���������������������������

5,211

74

74

Total�������������������������������������������

¥13,714

¥ 124

¥ 124

2011:

Contract
amountSell U.S. dollars���������������������������

$ 89,056$    (865)$    (865)Sell Korean won��������������������������

14,853

4,209

4,209

Buy U.S. dollars���������������������������

57,282589

589

Total�������������������������������������������

$161,191$3,933$3,933

Millions of yen

2. Maturities of financial assets and securities are as follows:
Millions of yen
After 1 throughWithin 1 year
5 years

2011:

Cash and cash equivalents��������������������������������������
Trade notes and accounts receivable�����������������������
Short-term investments�������������������������������������������

¥165,051
136,385
120,000¥ –––Millions of yen
After 1 throughWithin 1 year
5 years

2010:

Cash and cash equivalents��������������������������������������
Trade notes and accounts receivable�����������������������
Short-term investments�������������������������������������������

¥123,940
124,462
120,000

¥ –
–
–

2011:

Thousands of U.S. dollars
After 1 throughWithin 1 year
5 years

Cash and cash equivalents��������������������������������������
Trade notes and accounts receivable�����������������������
Short-term investments�������������������������������������������

$1,984,979
1,640,229
1,443,175

$ –
–
–

3. Repayment schedule of short-term borrowings and capital lease obligations is as follows:

Within 1 year

Millions of yen
After 1 through2 years

Short-term borrowings�������������������

¥7,996¥ –¥–Capital lease obligations�����������������

127

103

64

Within 1 year

Millions of yen
After 1 through2 years

After 2 through5 years¥5,106
26

¥ –
24

¥–
1

2011:

2010:

Short-term borrowings�������������������
Capital lease obligations�����������������

2011:

Short-term borrowings�������������������
Capital lease obligations�����������������

After 2 through5 years

Thousands of U.S. dollars
After 1 throughAfter 2 throughWithin 1 year
2 years
5 years$96,164
1,527

$
–
1,239

$ –
770

(Supplementary information)
Effective from the year ended March 31, 2010, the Company and its
domestic subsidiaries adopted “Accounting Standard for Financial Instruments” (Statement No. 10 (revised 2008) issued by the Accounting Standards Board of Japan) and “Guidance on Disclosures about Fair Value of
Financial Instruments” (Guidance No. 19 issued by the Accounting Standards Board of Japan).

50

Unrealized
gains (losses)

Fair value

Unrealized
gains (losses)

Fair value

Thousands of U.S. dollars
Unrealized
gains (losses)

Fair value

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

2. Designated derivative financial instruments
Millions of yen

Thousands of U.S. dollars

2011: Hedge accounting

Contract
amountFair value

Contract
amountFair value

Sell U.S. dollars�����������������������

¥ 6,411¥(54)$ 77,102$(649)

Sell Korean won����������������������

37

11

445

132

Buy U.S. dollars�����������������������

4,099

(1)

49,296(12)

Total���������������������������������������

¥10,547¥(44)$126,843$(529)

2010: Hedge accounting

Contract
amountFair value

Sell U.S. dollars�����������������������

¥ 9,003¥(193)

Sell Korean won����������������������

96

23

Buy U.S. dollars�����������������������

3,859

5

Total���������������������������������������

¥12,958¥(165)

Millions of yen

Annual Report 2011

The contract amounts of forward foreign exchange contracts, enteredinto to hedge receivables and payables denominated in foreign currencies
that have been translated by the corresponding contracted rates, are as
follows:
Contract amountThousands of
U.S. dollars

Millions of yen
2011

2010

2011

Sell U.S. dollars������������������������������

¥ 90

¥614

Buy U.S. dollars������������������������������

62

206

$1,082746

Total����������������������������������������������

¥152

¥820

$1,828

Note:	The fair value of these derivative financial instruments, which is based on the quoted
foreign exchange rates, is included in the carrying value of hedged assets (Trade notes
and accounts receivable) and liabilities (Trade notes and accounts payable).

16. Other Income (Expenses)
As discussed in note 6, losses on impairment of property, plant andequipment of ¥811 million ($9,753 thousand) were recognized for the year
ended March 31, 2011 and losses on impairment of property, plant andequipment and intangible assets of ¥7,553 million were recognized for theyear ended March 31, 2010.
Reversal of allowance for doubtful accounts of ¥1,892 million ($22,754
thousand) for the year ended March 31, 2011 is related to the subsequent
collection of specific accounts receivable.
Expenses for plant relocation of ¥1,839 million ($22,117 thousand) wererecognized as a result of the transfer of etch system business.
	Loss from natural disasters of ¥1,114 million ($13,397 thousand) for theyear ended March 31, 2011 represents losses relating to the Great East
Japan Earthquake which occurred on March 11, 2011, which mainly consists of fixed costs during the inactive period and repair costs for damaged
facilities.
Expenses for integration of domestic facilities of ¥1,909 million, including expenses for transportation of machineries is recognized for the year
ended March 31, 2010.

Tokyo Electron

17. Segment Information
General information about reportable segments
A reportable segment is a component or an aggregated component ofTokyo Electron. For each of the components, its discrete financial information is available and its operating result is regularly reviewed by the management to make decisions about resources to be allocated to the segment
and assess its performance.
The operation of Tokyo Electron consists of segments by products andservices based on business units (BUs), and Tokyo Electron identifies as areportable segment, “Semiconductor Production Equipment (SPE),” “FlatPanel Display and Photovoltaic Cell (FPD/PV) Production Equipment,” and“Electronic Components and Computer Networks.”
Products of the SPE segment consist of coaters/developers, plasma etchsystems, thermal processing systems, single wafer deposition systems,
cleaning systems used in wafer processing, wafer probers used in thewafer testing process and other semiconductor production equipment.
The SPE segment principally develops, manufactures, services and distributes such products.
Products of the FPD/PV Production Equipment segment consist of coaters/developers, plasma etch/ash system used in the manufacture of flat
panel displays, and plasma CVD systems used in the manufacture of thinfilm silicon PV cells. The FPD/PV segment principally develops, manufactures, services and distributes such products.
The Electronic Components and Computer Networks segment principally designs, develops, procures, and distributes semiconductor products
centering on integrated circuits (IC), other electronic components, computer networks and software.
Basis of measurement of reported segment net sales, segment
profit, segment assets and other items
The accounting policies applied in each reportable segment are generally
consistent with that applied for the preparation of the consolidated financial statements. Intersegment sales or transfers are determined based on
current market prices. Assets in common use have not been allocated toeach reportable segment, while costs associated with these assets havebeen allocated to reportable segments on a systematic basis.

51

Tokyo Electron

Annual Report 2011

Information about reported segment net sales, segment profit, segment assets and other items
Reportable segment information as of and for the year ended March 31, 2011 is as follows:
Millions of yen
Reportable Segment

2011:

Semiconductor
production
equipment

FPD/PV
production
equipment

Electronic
components &computer
networks

Other

Total

Eliminations
and Corporate

Consolidated¥668,722

Net sales
Sales to external customers�������������������������������������������������

¥511,332¥66,721¥90,216¥    453¥668,722¥        –Intersegment sales or transfers��������������������������������������������

0

–

1,100

14,90816,008(16,008)–

Total�����������������������������������������������������������������������������������

511,332

66,721

91,316

15,361

684,730(16,008)

668,722

Segment profit��������������������������������������������������������������������

120,846

6,641

2,907

1,916

132,310(32,731)

99,579Segment assets�������������������������������������������������������������������

239,70742,81250,255

2,094

334,868

474,337

809,205

OthersDepreciation and amortization��������������������������������������������

7,369

543

456

354

8,722

8,985

17,707

Capital expenditures, including intangible and other assets���

13,182

553

774

28

14,537

26,723

41,260Eliminations
and Corporate

Consolidated$$8,042,357

Thousands of U.S. dollars
Reportable Segment

2011:

Semiconductor
production
equipment

FPD/PV
production
equipment

Electronic
components &computer
networks

Other

Total

Net sales
Sales to external customers�������������������������������������������������

$6,149,513$802,417$1,084,979$ 5,448$8,042,357

Intersegment sales or transfers��������������������������������������������

0–

13,229179,290

192,519(192,519)––

Total�����������������������������������������������������������������������������������

6,149,513

802,417

1,098,208

184,738

8,234,876(192,519)

8,042,357

Segment profit��������������������������������������������������������������������

1,453,349

79,86834,961

23,043

1,591,221(393,639)

1,197,582

Segment assets�������������������������������������������������������������������

2,882,826

514,877

604,390

25,183

4,027,276

5,704,594

9,731,870

OthersDepreciation and amortization��������������������������������������������

88,623

6,530

5,484

4,258

104,895

108,058

212,953

Capital expenditures, including intangible and other assets���

158,533

6,651

9,308

337

174,829

321,383

496,212

Notes: 1. “Other” includes all other operating segments which are not included in the reportable segments, including group-wide logistic services, leasing and insurance.
2 (1)	“Eliminations and Corporate” segment profit totaling ¥32,731 million ($393,639 thousand) includes corporate expenses not allocated to any reportable segments. The corporate
expenses mainly consist of research and development costs of ¥22,719 million ($ 273,229 thousand) pertaining to fundamental research and element research, not allocated toany of the reportable segments.
		 (2)	“Eliminations and Corporate” segment assets totaling ¥474,337 million ($5,704,594 thousand) consists mainly of cash and cash equivalents, short-term investments, buildings, notallocated to any of the reportable segments.
3	“Eliminations and Corporate” capital expenditures totaling ¥26,723 million ($321,383 thousand), consists mainly of capital expenditures for buildings not allocated to any of thereportable segments.
4. Reported segment income is reconciled to Income before income taxes and minority interests in the consolidated statement of operations.

52

Annual Report 2011

Tokyo Electron(Supplementary Information)
	As mentioned in note 3 (b), from the year ended March 31, 2011, the Company adopted the “Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation” (Statement No. 17 issued by the Accounting Standards Board of Japan), and “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (Guidance No. 20 issued by the Accounting Standards Board of Japan). Since it is impractical to revise previously reported segment information, the Company
discloses current period segment information on the old basis of segmentation and segment measures as follows:

Millions of yen

2011:

1. Net sales and operating income
Net sales(1) Sales to external customers���������������������������������������������������������������������������������������
(2) Intersegment sales or transfers����������������������������������������������������������������������������������
Total������������������������������������������������������������������������������������������������������������������������������
Operating expenses�������������������������������������������������������������������������������������������������������
Operating income����������������������������������������������������������������������������������������������������������
2. Assets, depreciation and amortization expenses, impairment losses and capital expenditures
Assets����������������������������������������������������������������������������������������������������������������������������
Depreciation and amortization expenses������������������������������������������������������������������������
Capital expenditures, including intangible and other assets��������������������������������������������

Industrial
electronicequipment

Electronic
components andcomputer networks

Total

Eliminations
and corporate

Consolidated¥578,506
536
579,042483,934¥ 95,108¥90,216
1,100
91,316
88,570¥ 2,746¥668,722
1,636
670,358
572,504¥ 97,854¥
–(1,636)(1,636)(1,652)¥ 16¥668,722–
668,722570,852¥ 97,870¥762,227
17,494
40,486¥50,254456
774¥812,481
17,95041,260¥(3,276)––¥809,205
17,95041,260Millions of yen

2010:

1. Net sales and operating income (loss)
Net sales(1) Sales to external customers���������������������������������������������������������������������������������������
(2) Intersegment sales or transfers����������������������������������������������������������������������������������
Total������������������������������������������������������������������������������������������������������������������������������
Operating expenses�������������������������������������������������������������������������������������������������������
Operating income (loss)�������������������������������������������������������������������������������������������������
2. Assets, depreciation and amortization expenses, impairment losses and capital expenditures
Assets����������������������������������������������������������������������������������������������������������������������������
Depreciation and amortization expenses������������������������������������������������������������������������
Loss on impairment of property, plant and equipment and intangible assets�������������������
Capital expenditures, including intangible and other assets��������������������������������������������

Industrial
electronicequipment

Electronic
components andcomputer networks

Total

Eliminations
and corporate

Consolidated¥334,164785
334,949
339,218¥ (4,269)¥84,473673
85,146
83,066¥ 2,080¥418,637
1,458
420,095
422,284¥ (2,189)¥
–(1,458)(1,458)(1,466)¥
8¥418,637–
418,637
420,818¥ (2,181)¥654,026
19,7597,553
16,070¥45,649485–
122¥699,675
20,244
7,553
16,192¥(3,323)–––¥696,352
20,244
7,553
16,192Thousands of U.S. dollars

2011:

Industrial
electronicequipment

Electronic
components andcomputer networks

Total

Eliminations
and corporate

1. Net sales and operating income
Net sales(1) Sales to external customers���������������������������������������������������������������������������������������
$6,957,378$1,084,979$8,042,357$–(2) Intersegment sales or transfers����������������������������������������������������������������������������������
6,446
13,22919,675(19,675)
Total������������������������������������������������������������������������������������������������������������������������������
6,963,824
1,098,208
8,062,032(19,675)
Operating expenses�������������������������������������������������������������������������������������������������������
5,820,012
1,065,183
6,885,195(19,867)
Operating income����������������������������������������������������������������������������������������������������������
$1,143,812$ 33,025$1,176,837$ 192
2. Assets, depreciation and amortization expenses, impairment losses and capital expenditures
Assets����������������������������������������������������������������������������������������������������������������������������
$9,166,891$ 604,378$9,771,269$(39,399)
Depreciation and amortization expenses������������������������������������������������������������������������
210,391
5,484
215,875–
Capital expenditures, including intangible and other assets��������������������������������������������
486,903
9,309
496,212–
Notes: 1. Method of classifying business segments: Business segments are classified after considering similarities in types of products and services, as well as sales methods.
2. Major products in each business segment:		 Business segment
Major products
		 Industrial electronic equipment
Semiconductor production equipment, FPD production equipment, PV production equipment and others
		 Electronic components and computer networks
Semiconductor products, boards, electronic components, computer networks and software
3. Depreciation expenses and capital expenditures include those for long-term prepaid expenses.

Consolidated$8,042,357–
8,042,357
6,865,328$1,177,029$9,731,870
215,875
496,21253

Tokyo Electron

Annual Report 2011

Other Information(1) Domestic and overseas net sales by destination for the years ended March 31, 2011 and 2010 are as follows:

Thousands of
U.S. dollars

Millions of yen
2011

2010

2011

¥182,165
169,276
106,374
103,013
107,894¥668,722¥162,609
91,47455,641
52,94855,965¥418,637$2,190,800
2,035,791
1,279,302
1,238,882
1,297,582$8,042,357

Net sales

Japan��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Taiwan������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Korea��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
United States of America��������������������������������������������������������������������������������������������������������������������������������������������������
Others������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

Note:	For the reporting of domestic and overseas net sales, overseas net sales (other than Japan) include export sales of the Company and its domestic subsidiaries and sales of foreignsubsidiaries, except for export sales to Japan.

(2) Geographical segment information as of and for the years ended March 31, 2011 and 2010 are as follows:
Millions of yen
2011:

Japan

Property, plant and equipment¥97,775

Thousands of U.S. dollars

Other regions¥14,777

Total

Japan

Other regions

Total¥112,552$1,175,887$177,715$1,353,602

Eliminations
and corporate

Consolidated

Millions of yen
2010:

Japan

Other regions

Total

1. Net sales and operating income (loss)
Net sales(1) Sales to external customers������������������������������������������������������������������������������

¥369,382¥49,255¥418,637(2) Intersegment sales or transfers�������������������������������������������������������������������������

31,85626,08957,945¥(57,945)–¥418,637–

Total���������������������������������������������������������������������������������������������������������������������

401,238

75,344

476,582(57,945)418,637

Operating expenses����������������������������������������������������������������������������������������������

402,436

74,027476,463(55,645)

420,818

Operating income (loss)����������������������������������������������������������������������������������������

¥ (1,198)¥ 1,317¥

119¥ (2,300)¥ (2,181)

2. Total assets�������������������������������������������������������������������������������������������������������

¥665,518¥67,453¥732,971¥(36,619)¥696,352

Notes: 1.	For the reporting of geographical segment information, net sales and operating income (loss) are separated based on the location of the Company and its subsidiaries. Assets are
separated by geographic location.
2. Other regions comprise primarily Taiwan, the United States of America and Korea.

(3)	  Major customer information
	 Net sales to external customers that represent 10 percent or more of the company’s total net sales are as follows:
Millions of yen
Name of customer

Samsung Electronics Co., Ltd.

Related reportable segment

Semiconductor production equipment and FPD/PV production equipment

Thousands of
U.S. dollars

2011

2011

¥101,074$1,215,562

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

18. Subsequent Event
Grant of Stock Options under the Stock Options Plans
	On May 13, 2011, the Company’s board of directors decided to submit
a resolution to the shareholders’ meeting for approval of the issuance ofstock subscription rights to directors and selected employees of Tokyo
Electron. The issuance of stock subscription rights is intended to enable thegrant of stock options. Under these stock option plans, options to purchase
up to 105,900 shares of the Company at an exercise price of ¥1 ($0.01),
will be granted to directors of the Company as of March 31, 2011 (excluding outside directors and directors who resigned on June 17, 2011), andoptions to purchase up to 140,000 shares of the Company at an exercise

54

price of ¥1 ($0.01), will be granted to certain executive officers of theCompany as of March 31, 2011, certain directors of the Company who
resigned on June 17, 2011, certain directors and executive officers ofdomestic subsidiaries and certain chairmen, presidents, and vice chairmenof overseas subsidiaries as of March 31, 2011, who was determined by aresolution at a board of directors meeting subsequent to the approval of
grant at the general meeting of shareholders. This grant of stock options
was approved at the general meeting of the shareholders of the Company
on June 17, 2011.