TOKYO ELECTRON

January 31, 2011

Consolidated Financial Review
for the Third Quarter Ended December 31, 2010
Company name:
URL:
Telephone number:
Stock exchange listing:Tokyo Electron Limited
http://www.tel.com(03) 5561-7000
Tokyo Stock Exchange 1st Section (Code 8035)

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

1. Financial highlights for the nine months ended December 31, 2010
Nine months ended
December 31, 2009 December 31, 2010
268,180
478,063(16,098)
68,157(12,639)
71,774(16,219)
52,121(90.62)291.13290.64(1) Operating results (Cumulative)
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Fully diluted net income per share (Yen)(2) Financial position

Total assets (Millions of yen)
Net assets (Millions of yen)
Equity ratio (%)
Net assets per share (Yen)
Equity: 551,159 million yen (as of December 31, 2010)
511,818 million yen (as of March 31, 2010)

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

As ofDecember 31, 2010
767,913562,94271.8
3,078.22

2. Dividends
Year ended
March 31, 2010
2Q-end dividend per share (Yen)
4.00
Year-end dividend per share (Yen)
8.00
Annual dividend per share (Yen)
12.00
Note: Revision of dividends forecast for during this period: None

Year ending
March 31, 2011
38.00
64.00 (Forecast)102.00 (Forecast)

3. Earnings forecasts for the year ending March 31, 2011
Year ending
March 31, 2011
Net sales (Millions of yen)
Operating income (Millions of yen)
Ordinary income (Millions of yen)
Net income (Millions of yen)
Net income per share (Yen)
Note: Revision of earnings forecast for during this period: None

1675,000
92,00095,00066,000368.61

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

Excluded: -(Note: Changes in specified subsidiaries resulting in a change in scope of consolidation for the current quarterly accounting period.)(2) Adoption of simplified accounting method or any special accounting method: Yes(Note: Adoption of simplified accounting methods, or use of any special accounting methods for preparing the quarterly
consolidated financial statements.)(3) Changes in accounting principles, procedures and display of accounting method
concerning consolidated statement policies:
1. Changes in accounting policies: Yes
2. Other changes: None
(Note: Changes in accounting principles, procedures, or methods of presentation related to the preparationof the quarterly consolidated financial statements, as described in the "Amendment to fundamental items
that form the basis for preparing quarterly consolidated financial statements.")(4) Number of shares outstanding (common stock)
1. Number of shares issued (including treasury stock)
As of December 31, 2010:

180,610,911 shares

As of March 31, 2010:

180,610,911 shares

2. Number of shares of treasury stock
As of December 31, 2010:

1,559,100 shares

As of March 31, 2010:

1,614,225 shares

3. Average number of shares outstanding
Nine months ended December 31, 2010: 179,029,939 shares
Nine months ended December 31, 2009: 178,985,315 shares

Notification of the status of quarterly financial review procedures:
At the time of disclosing these quarterly financial results, the quarterly financial statement review procedures are being conductedin accordance with the provisions of the Financial Instruments and Exchange Act.
Explanations on the appropriate use of earnings forecast:
The performance forecast and estimate stated in this Financial Review are based on certain assumptions judged to be reasonable
at the present time in light of information currently available. Consequently, actual operating results may differ substantially.

2

1. Qualitative Information on Consolidated Operating Results

During the first three quarters of the current fiscal year (the nine-month period from April to December 2010),
the global economy was on track toward recovery in various regions. Europe and the United States showedsigns of moderate economic recovery, while the economies of China, India, and other emerging markets
experienced rapid economic growth, primarily as a result of internal demand, but the trend of growth slowed
somewhat in the second half. The Japanese economy also showed signs of moderate recovery, but there
are still causes for concern including the effects of the high value of the yen and an adverse employment
environment.
In the electronics industry, the primary area of the Tokyo Electron group’s business activities, there wassome adjustment in the second half. However, supported by rapidly expanding demand for consumer
electronics such as smartphones and tablet PCs, the market for the semiconductors that are key
components in these products was generally favorable.
Under these circumstances, consolidated net sales for the first three quarters of the current fiscal year were478,063 million yen (up 78.3% compared to the same period of the previous fiscal year). Consolidated
operating income and ordinary income were 68,157 million yen (compared to an operating loss of 16,098
million yen for the same period of the previous year) and 71,774 million yen (compared to an ordinary lossof 12,639 million yen for the same period of the previous year), respectively. Net income for the first threequarters was 52,121 million yen (compared to a net loss of 16,219 million yen in the previous fiscal year).
In the third quarter (October to December 2010), net sales were 159,662 million yen (up 39.7% comparedto the same period of the previous fiscal year), operating income was 25,815 million yen (up 367.5%),
ordinary income was 26,667 million yen (up 305.7%), and net income for the third quarter was 18,667
million yen (compared to net losses of 58 million yen in the same period of the previous year).

The overview of each business segment is as described below.

1) Semiconductor Production Equipment
The semiconductor market recovered rapidly as a result of the expansion of semiconductor use to new
applications including smartphones and tablet PCs. Demand for PCs declined in the second half, causing
weakness in the DRAM market, but the semiconductor market as a whole was strong and investment inwafer fab equipment was up sharply from the previous year. Under these circumstances, net sales fromexternal customers in this segment during the first three quarters of the current fiscal year were 355,603
million yen (up 124.1% compared to the same period of the previous year). Net sales from externalcustomers in this segment during the third quarter were 115,373 million yen (up 50.8%).

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2) Flat Panel Display/Photovoltaic Cell (FPD/PV) Production Equipment
In the FPD production equipment business, the large LCD panel market is experiencing some inventory
adjustments, but investment in new facilities for small- and medium-size panels is rising thanks to thegrowth of the smartphone and tablet PC markets, and both orders and sales for FPD production equipment
are steady. In the photovoltaic cell production equipment sector, the thin-film silicon PV cell market we areentering is still in its early stages but substantial growth is expected over the medium to long term. Under
these circumstances, net sales from external customers in this segment during the first three quarters of thecurrent fiscal year were 54,853 million yen (up 15.7% compared to the same period of the previous fiscal
year). Net sales from external customers in this segment during the third quarter were 21,992 million yen(up 31.8%).

3) Electronic Components and Computer Networks
In the semiconductors and electronic devices business, among semiconductor products, demand forindustrial equipment including medical devices and factory automation equipment remained strong. As aresult, sales of analog ICs and custom ICs were up. In the computer systems-related business, productsales were sluggish but sales of maintenance services were strong. Under these circumstances, net sales
from external customers in this segment during the first three quarters of the current fiscal year were 67,298
million yen (up 8.8% compared to the same period of the previous fiscal year). Net sales from externalcustomers in this segment during the third quarter were 22,222 million yen (up 5.7%).

4) Other
Net sales from external customers in this segment during the first three quarters of the current fiscal year
were 308 million yen (up 12.4% compared to the same period of the previous fiscal year). Net sales fromexternal customers in this segment during the third quarter were 73 million yen (up 17.2%).

Note: From the first quarter of the current consolidated fiscal year, the business segment information is provided in conformity
with the "Accounting Standard for Disclosures about Segments of an Enterprise and Related Information" (Corporate AccountingStandards, ASBJ Statement No.17, dated 27 March, 2009), and "Guidance on Accounting Standard for Disclosures about
Segments of an Enterprise and Related Information" (Corporate Accounting Standards, ASBJ Guidance No.20, dated 21 March,
2008). Due to this reason, the comparison of net sales from external customers to the same period of the previous fiscal year foreach business segment has been made after rearrangement of the first quarter financial results into the reported segments after
applying the above standards.

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(For reference)
Consolidated（Millions of yen）
FY2011Net Sales
Semiconductor Production Equipment
Japan
U.S.
EuropeKorea
TaiwanChina
S.E.Asia and others
ＦＰＤ/PV Production Equipment
Electronic Components & Computer Networks
OthersOperating Income
Ordinary Income
Net Income

1Q

2Q

3Q

Total

144,889
103,166
18,404
17,552
2,942
21,44534,014
4,649
4,158
20,306
21,321
95
18,321
19,063
14,727

173,510137,063
28,54722,474
7,028
30,12637,082
5,195
6,608
12,55323,754138
24,02026,04318,726

159,662
115,373
16,927
20,974
5,609
17,09235,383
7,960
11,424
21,992
22,222
73
25,815
26,667
18,667

478,063355,603
63,87961,001
15,58068,664
106,480
17,80522,191
54,85367,298308
68,157
71,774
52,121

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

2. Qualitative Information on Consolidated Financial Conditions

1) Financial Conditions
Current assets at the end of the third quarter of the current fiscal year were 609,004 million yen, up 56,064
million yen compared to the end of the previous fiscal year. The major factors influencing this result were a
41,479 million yen increase in inventories and a 12,500 million yen decrease in certificates of deposit
included in securities.
Tangible fixed assets increased by 15,782 million yen from the end of the previous fiscal year, to 107,910
million yen.
Intangible fixed assets decreased by 1,132 million yen from the end of the previous fiscal year, to 4,453
million yen.
Investments and other assets increased 847 million yen from the end of the previous fiscal year, to 46,545
million yen.
As a result, total assets increased by 71,562 million yen compared to the end of the previous fiscal year, to767,913 million yen.
Current liabilities were up 30,241 million yen compared to the end of the previous fiscal year, to 149,403
million yen. The major factors influencing this result were an increase in short-term borrowings of 5,965
million yen, as well as an increase in income taxes payable of 19,049 million yen.
Long-term liabilities were up 1,747 million yen compared to the end of the previous fiscal year, to 55,567
million yen.

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Net assets were 562,942 million yen, as a result of a net income of 52,121 million yen reported for the first
three quarters of the current fiscal year combined with a decrease due to year-end dividends for theprevious fiscal year of 1,431 million yen and interim dividends for the current fiscal year of 6,804 million yen.
The equity ratio was 71.8%.

2) Cash Flow
Cash and cash equivalents at the end of the third quarter of the current fiscal year decreased by 10,693
million yen compared to the end of the previous fiscal year, to 113,246 million yen. The combined balance of
cash and cash equivalents, plus 120,000 million yen in time deposits and certificates of deposit with deposit
terms of over three months (which are not included in cash and cash equivalents), was 233,246 million yen.
The overall situation regarding cash flow during the first three quarters of the current fiscal year is as
described below.
Cash flow from operating activities decreased by 15,121 million yen compared to the same period of theprevious fiscal year to 19,772 million yen. Major positive factors included 71,672 million yen in income
before income taxes and 12,442 million yen in depreciation and amortization. The major negative factors
included an 18,267 million yen increase in trade notes and accounts receivable and a 47,327 million yen
increase in inventories.
Cash flow from investing activities was a negative 26,918 million yen compared to the positive 2,664 million
yen in the same period of the previous fiscal year, primarily as a result of the 24,609 million yen in payment
for purchase of tangible fixed assets.
Cash flow from financing activities was a negative 2,194 million yen compared to the positive 1,025 million
yen in the same period of the previous fiscal year, mainly as a result of 5,965 million yen in income from anincrease in short-term borrowings and payment of 8,236 million yen in dividends.

In addition, the overall situation for cash flow in the third quarter of the current fiscal year was as follows:
Cash flow from operating activities was a negative 21,415 million yen, compared to the negative 5,473
million yen in the same period of the previous fiscal year. The main positive factors were 26,623 million yen
in income before income taxes and 4,622 million yen in amortization and depreciation. The major negative
factors included a 19,702 million yen increase in trade notes and accounts receivable, a 15,949 million yen
increase in inventories, a 5,252 million yen decrease in trade notes and accounts payable, and a 6,133
million yen increase in consumption tax receivable.
Cash flow from investing activities was a negative 10,931 million yen compared to the positive 59,784
million yen in the same period of the previous fiscal year, primarily as a result of the 10,795 million yen in
payment for purchase of tangible fixed assets.
Cash flow from financing activities was a negative 2,512 million yen compared to the positive 89 million yen
in the same period of the previous fiscal year, mainly as a result of 4,463 million yen in income from an-6-increase in short-term borrowings and payment of 6,804 million yen in interim dividends.

3. Qualitative Information on Forecasts for Consolidated Financial Results

There are no changes in the forecast of consolidated financial results for the entire fiscal year from the
projections released at the time of the previous announcement on November 2, 2010.

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TOKYO ELECTRON

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

As of
December 31, 2010ASSETS
Current assets
Cash and deposit

56,93958,746

Trade notes and accounts receivable

124,462

140,739

Securities

187,000

174,500

Merchandise and finished goods

87,201

122,624

Work in process

37,79344,266

Raw materials and supplies

13,455

13,038Others46,26356,258

Allowance for doubtful accounts(176)(1,170)552,939

609,004

92,127

107,910

Others

5,586

4,453

Total intangible fixed assets

5,586

4,453

53,15150,510Total current assets
Long-term assets
Tangible fixed assets
Intangible fixed assets

Investments and other assets
OthersAllowance for doubtful accounts(7,452)(3,964)

Total investments and other assets

45,69846,545

143,412

158,909696,351

767,913

Total long-term assets
Total assets

8

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

As of
December 31, 2010

LIABILITIESCurrent liabilities
Trade notes and accounts payable

52,35952,653

Short-term borrowings

5,105

11,071

Income taxes payable

4,355

23,404

Other allowance

11,33812,017

Others46,00350,256

Total current liabilities

119,161

149,403

49,90651,816621

625

Long-term liabilities
Accrued pension and severance costs
Other allowance
Others

3,291

3,125

Total long-term liabilities

53,82055,567

172,982

204,971

54,961

54,961

Total liabilities
NET ASSETS
Shareholders' equity
Common stock
Capital surplus

78,03478,042Retained earnings

393,970

437,855

Treasury stock(10,900)(10,519)

Total shareholders' equity

516,065

560,340

2,504

2,537

(67)

47

Translation adjustments(6,683)(11,765)

Total valuation and translation adjustments(4,247)(9,180)

Subscription rights to shares

1,578

1,463

Minority interests

9,973

10,319Total net assets

523,369

562,942696,351

767,913

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total liabilities and net assets

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TOKYO ELECTRON

Consolidated Statement of Income(Millions of yen)
Nine months ended
December 31, 2009

Nine months ended
December 31, 2010

Net sales

268,180

478,063

Cost of sales

205,077

310,611Gross profit

63,103

167,452

Research and development expenses

38,38751,014

Others40,814

48,280Total selling, general & administrative expenses

79,201

99,294(16,098)

68,157786

496

Revenue from development grants

1,357

2,609

Others

1,633

1,032

Total non-operating income

3,776

4,138

Selling, general & administrative expenses

Operating income (loss)
Non-operating income
Interest income

Non-operating expenses
Lease expenses of fixed assets

103-

Building demolition cost-226

Maintenance and operation cost of closed business bases-

150

Others214

143

Total non-operating expenses

317

521

(12,639)

71,774

15

311

-

120

25

-

Ordinary income (loss)
Unusual or infrequent profit
Reversal of allowance for doubtful accounts
Reversal of expenses for integration and closure of business bases
Gain on sale of fixed assets
OthersTotal unusual or infrequent profit

-

92

40

523

-

460

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

7,508

-

Others2,436

165

Total unusual or infrequent loss

9,945

625

Income (loss) before income taxes(22,543)

71,672

Provision for income taxes and enterprise taxes(6,648)18,927

Income before minority interests-

52,744

Minority interests

324

623

Net income (loss)(16,219)

52,121

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TOKYO ELECTRON

Consolidated Cash Flow
Nine months ended
December 31, 2009

(Millions of yen)
Nine months ended
December 31, 2010

(22,543)
14,927
7,508
2,174(2,867)(1,892)(827)
9,861(1,762)
18,541
4,926(2,279)2,358
28,126
923
(33)
5,878
34,89371,672
12,442
1,942(2,296)(1,037)1,324(559)(18,267)(47,327)
1,533(3,621)
1,979
3,295
4,868
25,951606(29)(6,755)
19,772

12,838(9,723)
(347)
(102)
2,664

(24,609)(2,309)(26,918)

2,630(1,431)
(173)
1,025

5,965
(8,236)75(2,194)347
38,931
65,883
104,815(1,352)(10,693)
123,939
113,246

Cash flow from operating activities
Income (loss) before income taxes
Depreciation and amortization
Loss on impairment
Increase in accrued pension and severance costs (decrease)
Increase in allowance for doubtful accounts (decrease)
Increase in accrued employees' bonuses (decrease)
Increase in accrued warranty expenses (decrease)
Interest and dividend income
Decrease in trade notes and accounts receivable (increase)
Decrease in inventories (increase)
Increase in accounts payable (decrease)
Decrease in consumption tax receivable (increase)
Increase in customer advances (decrease)
Decrease in specific doubtful receivables (increase)
OthersSubtotal
Receipts from interest and dividends
Interest paid
Income taxes paid or refund (paid)
Net cash generated by operating activities

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

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

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

11

TOKYO ELECTRON

Segment Information(i) Overview of reportable segments
The reportable segments by the company provide separate financial information pertaining to thevarious segments of the company, which is reviewed periodically by the management to evaluate
corporate performance as well as make decisions about the allocation of management resources.
The corporate structure consists of product and service segments based on business units (BUs),
and the reportable segments are as follows: Semiconductor Production Equipment, FPD/PV (Flat
Panel Display and Photovoltaic Cell) Production Equipment, and Electronic Components andComputer Networks.

The Semiconductor Production Equipment segment consists of coaters/developers, plasma etchsystems, thermal processing systems, single wafer deposition systems, cleaning systems used inwafer processing, wafer probers used in the wafer testing process and other semiconductor
production equipment, and we are engaged in the development, manufacturing, sales and provision ofmaintenance services, etc. for such products.
The FPD/PV (Flat Panel Display and Photovoltaic Cell) Production Equipment segment consists ofcoaters/developers, plasma etch/ash system used in the manufacturing of flat panel displays, andplasma CVD systems used in the manufacturing of thin film silicon PV cells, and we are engaged in
the development, manufacturing, sales and provision of maintenance services, etc. for such products.
The Electronic Components and Computer Networks segment consists of semiconductor products
centering on integrated circuits (IC), other electronic components, computer networks and software,etc., and we are engaged in the design, development, procurement, and sales, etc. for such products.
(ii) Net sales and profit/loss in reportable segments
Nine months ended December 31, 2010

( Millions of yen)

Reportable Segment
Semiconductor
Production
Equipment

FPD/PV
Production
Equipment

Electronic
Components &Computer
Networks

Net sales

355,60354,85368,004

11,555

Segment income

84,721

5,765

2,031

1,548

Total Segment

Eliminations

Consolidated
Total

Net sales

490,016(11,952)

478,063

Segment income

94,067(22,394)

71,672Others

Notes:
1. The "Others" segment includes all other businesses which are not included in the reported
business segments, such as the transportation of products, etc. of the Tokyo Electron Group
companies, equipment leasing and insurance, etc.
2. The eliminations of segment income amounting to 22,394 million yen includes corporate
expenses pertaining to the corporate account which are not allocated to any specific reportablesegments. The corporate account expenses are mainly R&D expenses of 16,543 million yen,pertaining to fundamental research and element research conducted by the company not related
to any of the reportable segments.
3. Segment income is adjusted against quarterly net income before taxes in the quarterly
consolidated income statement.
(iii) Impairment losses on fixed assets and goodwill, etc. in reportable segments
Significant impairment losses related to fixed assets: None
Significant changes in goodwill amount: None
Significant income related to negative goodwill: None
(Additional Information)
From the first quarter of the current consolidated fiscal year, the business segment information is provided
in conformity with the "Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation" (Corporate Accounting Standards, ASBJ Statement No.17, dated March 27, 2009), and"Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation" (Corporate Accounting Standards, ASBJ Guidance No.20, dated March 21, 2008).

12