Corporate Data
2-17-2 Higashi Gotanda, Shinagawa-ku, Tokyo 141-8664 Japan
Tel: +81-3-6422-7000
Fax: +81-3-6422-7111
http: //www.toshibatec.co.jp/
Established: February 21, 1950
Employees: 3,972〈Consolidated: 19,601〉(as of March 2006)
Common Stock: ¥39,971 million (as of March 2006)
Stock Listing: Tokyo Stock Exchange (1st Section)
Board of Directors and Corporate Auditors
President and Chief Executive Officer (as of June 29, 2006)◇Yoshihiro Maeda

Directors◇Tetsuo Satofuka◇Yoshiyasu Kikuchi

Haruo Asada
Kazuaki Ushiyama
Osamu Saito
Hisatsugu Nonaka◇：Representative Director

Corporate Auditors

Teruo Miyamoto
Noriyuki Nakamura
Hiroshi Inazuka
Yuzo Kato
Main Consolidated Companies (as of March 31, 2006)
・TOSEI DENKI CO., LTD.
・TEC PRECISION CO., LTD.
・TEC APPLIANCE CO., LTD.
・TOSHIBA TEC BUSINESS SOLUTIONS CORPORATION
・TEC ENGINEERING CORPORATION・TER CO., LTD.
・TEC INFORMATION SYSTEMS CORPORATION・TOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO., LTD.
・TOSHIBA TEC RETAIL INFORMATION SYSTEMS (Shenzhen)
・TOSHIBA TEC EUROPE IMAGING SYSTEMS S.A.
・TOSHIBA COPYING MACHINE (Shenzhen) CO., LTD.
・TIM ELECTRONICS SDN. BHD.
・TEC SINGAPORE ELECTRONICS PTE. LTD.
・P.T. TEC INDONESIA・TOSHIBA TEC AMERICA RETAIL INFORMATION SYSTEMS, INC.
・TOSHIBA AMERICA BUSINESS SOLUTIONS, INC
・TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
・TOSHIBA TEC NORDIC AB
・TOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
・TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH・TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
・TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LIMITEDFinancial Highlights
Years ended March 31

Thousands of
U.S.dollars

Millions of yen

Consolidated
Net sales
Operating income
Net income (loss)
Total assets
Total shareholders’ equity

2002¥337,204
5,090(5,136)
240,752
112,2442003¥341,667
12,741
3,947
247,671
114,863

2004¥355,113
15,034
7,991
256,311116,218

2005¥376,187
16,195
6,348
270,056
119,7792006¥443,402
17,157
6,034
323,476
128,066

Yen

Per share data:
Net income (loss) Basic
Total shareholders’ equity¥(17.83)
389.58¥13.57405.49¥28.16414.18

U.S.dollars¥22.44428.88¥21.40458.802002¥246,08713(5,874)39,971
185,633
103,4662003¥241,202
6,245
2,333
39,971
181,221104,0442004¥245,288
6,851
3,528
39,971
187,526
103,8442005¥257,510
5,691
4,055
39,971
198,634
105,2482006¥253,931
3,720
6,966
39,971
197,815
110,494

Yen

Per share data:
Net income (loss) Basic
Cash dividends
Total shareholders’ equity¥(20.39)0.00
359.11¥7.99
5.00
367.35¥12.41
6.00
370.14$0.182
3.906
Thousands of
U.S.dollars

Millions of yen

Non-Consolidated
Net sales
Operating income
Net income (loss)
Common stock
Total assets
Total shareholders’ equity

2006$3,774,598
146,054
51,3662,753,690
1,090,202

2006$2,161,667
31,66859,300340,266
1,683,962
940,615
U.S.dollars¥14.338.00
376.91¥24.849.00
395.91$0.211
0.077
3.370

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥117.47=US$1.00, theexchange rate prevailing on March 31, 2006.

CONTENTS
Financial Highlights ..........................................................................................................1
Consolidated Balance Sheets.............................................................................................3
Consolidated Statements of Operations.............................................................................5
Consolidated Statements of Shareholders' Equity .............................................................6
Consolidated Statements of Cash Flows ...........................................................................7
Notes to Consolidated Financial Statements .....................................................................8
Supplemental Information of Non-Consolidated Financial Statements ..........................13
1

REVIEW OF THE YEAR
The Japanese economy in fiscal year 2005 steadily recovered due to consumer spending and capital investments.
As for business conditions outside Japan, the US and European economy maintained a firm undertone, and the
Asian economy marked a great growth.
Under the circumstances as above, TOSHIBA TEC Group made the following efforts in order to accomplish thebasic policy of its midterm management plan, “Establishment of well-balanced global enterprise”.
*Improving merchantability by releasing new POS terminals and extending the digital MFP lineup*Strengthening cost competitiveness by procurement cost reduction and product design standardization*Strengthening marketability by expanding direct sales channels
These efforts resulted in the sales growth of the POS system and the digital MFP. Due to the sales growth andthe consolidation of TOSHIBA AMERICA BUSINESS SOLUTIONS, INC., the TOSHIBA TEC Group’s
consolidated sales recorded ¥443,402 million, an 18% increase over the previous fiscal year. Although the salesof business equipment for particular customers at the Document Processing & Telecommunication Systems
reduced and price competition has been severe at the market, the operating income marked ¥17,157 million, a
6% increase due to the sales growth as mentioned. Because of the temporary influences such as tax effectaccounting and minority interests due to the consolidation of TOSHIBA AMERICA BUSINESS SOLUTIONS,
INC., the net income ended at ¥6,034 million, a 5% decrease.

PRODUCTS LINE UP (as of March, 2006)
Retail Information Systems
General merchandise systems
Convenience store/Shopping center systems
Super market systems
Hospitality/Hotel systems
Barcode printers
Handheld terminals
OA Equipment/JIMCON
Supplies/Printing services
Environmental equipment

Document Processing & Telecommunication Systems
Full Color MFPs
B&W MFPs
Analog Copiers
Facsimiles
Inkjet printheads
Components (printed circuit boards, constant voltage power supplies, molded products etc)

Home Electric Appliances & Others
Vacuum cleaners
MotorsHealth equipment2

Consolidated Balance Sheets
March 31, 2006 and 2005

Millions of yen

ASSETS
Current assets
Cash and cash equivalents
Trade notes and accounts receivable
Inventories
Deferred income taxes (Note 9)
Prepaid expenses and other current assets
Allowance for doubtful accounts
Total current assets

Thousands of
U.S.dollars (Note 1)

2006

2005

2006

¥67,775
69,37247,729
9,375
10,396(2,810)201,837¥64,960
52,86434,302
8,608
10,719(1,956)
169,497$576,955
590,551
406,308
79,80888,499(23,921)
1,718,200

5,624
29,23932,62764,8191,853(94,290)
39,872

5,675
26,87523,79568,178
1,516(92,872)
33,16747,876248,906
277,748551,792
15,774(802,673)
339,423

35,951
7,684
43,635

8,076
6,196
14,272306,044
65,412
371,456

6,189
5,054
19,484
7,536(131)
38,132

23,9783,628
18,656
7,012(154)
53,12052,68643,024
165,863
64,153(1,115)
324,611

Total fixed assets

121,639

100,559

1,035,490

Total assets¥323,476¥270,056$2,753,690

Fixed assets
Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Intangible assets:
Goodwill
Other intangible assets

Investments and other assets:
Investment securities: (Note 11)
Unconsolidated subsidiaries and affiliates
Other
Deferred income taxes (Note 9)
Other investments and other assets
Allowance for doubtful accounts

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

3

Thousands of
U.S.dollars (Note 1)

Millions of yen

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITYCurrent liabilities
Trade notes and accounts payable
Short-term loans (Note 3)
Current portion of long-term debt (Note 3)
Accrued income and other taxes
Other current liabilities
Total current liabilities

2006

2005

2006

¥53,431
32,081
1,682
3,944
52,007
143,145¥46,180
21,122
4
7,105
41,228
115,639$454,848
273,100
14,31833,575442,725
1,218,566

Long-term liabilities
Long-term debt (Note 3)
Accrued retirement benefits (Note 4)
Other long-term liabilities
Total long-term liabilities

906
27,3083,694
31,9083,463
27,9342,414
33,811

7,713
232,468
31,446271,627

175,053

149,450

1,490,193

Minority interest in consolidated subsidiaries

20,357827

173,295

Shareholders’ equity
Common stock
Authorized-1,000,000,000 shares
Issued- 288,145,704 shares

39,971

39,971

340,266

Capital surplus

52,98652,985451,060

Retained earnings
Unrealized holding gains on securities
Foreign currency translation adjustments
Less treasury stock, at cost:
9,143,293 shares in 2006
9,015,037 shares in 2005

34,5401,218
2,669

31,575288(1,793)

294,032
10,36922,721(3,318)––(3,247)(28,246)–

Total shareholders’ equity

128,066

119,779

1,090,202

Total liabilities, minority interest and shareholders’ equity¥323,476¥270,056$2,753,690

Total liabilities
Contingent liabilities (Note 5)4

Consolidated Statements of Operations
Years ended March 31, 2006 and 2005

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Note 6)
Operating income
Non-operating income and expenses:
Interest and dividend income
Equity in earnings of affiliates
Interest expense
Excess of the fair value of acquired net assets over cost *1
Expenses of extra pension for early retirement
Loss on impairment of fixed assets
Amortization for transition obligation of retirement benefits
Restructuring cost *2
PCB wastes treatment cost
Other, net (Note 7)
Income before income taxes and minority interest
Income taxes:
Current
DeferredIncome before minority interest
Minority interest in income of consolidated subsidiaries
Net income

2006¥443,402
248,391
195,011
177,854
17,157

2005¥376,187
229,930
146,257
130,062
16,1952006$3,774,598
2,114,506
1,660,092
1,514,038
146,054

974
49
(560)
339
(1,291)(60)–––(2,815)
13,793

910
1,134
(525)
–
–
–
(1,613)(1,428)(400)(3,283)
10,9908,292
417(4,767)
2,886(10,990)
(511)
–
–
–
(23,964)
117,417

5,130
488
8,175
2,141
¥6,034

6,112(1,645)
6,523
175¥6,34843,671
4,154
69,592
18,226$51,366

Yen

Per share data
Net income-Basic
Cash dividends

Thousands of
U.S.dollars (Note 1)

2006¥21.40¥9.00

U.S dollars

2005¥22.44¥8.00

2006$0.182$0.077

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
* 1 An excess of the fair value of acquired net assets over cost, deemed as "negative goodwill" was recognized as current
earnings to the operations when U.S. subsidiary made business acquisition in accordance with "Statement of Financial
Accounting Standards No.141, 'Business Combinations' ".
* 2 Restructuring cost consists mainly of loss on disposal of domestic manufacturing facilities of the Home ElectricAppliances due to the overseas transfer of production.

5

Consolidated Statements of Shareholders’ Equity
Years ended March 31, 2006 and 2005

Thousands of
U.S.dollars (Note 1)

Millions of yen

2006

2005

2006

Common stock
Balance at beginning of year
Balance at end of year

¥39,971¥39,971¥39,971¥39,971$340,266$340,266

Capital surplus
Balance at beginning of year
Increase from selling treasury stock
Balance at end of year

¥52,9851¥52,986¥52,9841¥52,985$451,0519$451,060

Retained earnings
Balance at beginning of year
Net income
Cash dividends
Bonuses to directors and corporate auditors
Minimum pension liability adjustment
Decrease from inclusion in consolidation of subsidiaries
Decrease from inclusion in equity method
Decrease from merger of non-consolidated subsidiary
Balance at end of year

¥31,575
6,034(2,232)
(63)
(331)
(436)
–
(7)
¥34,540¥28,547
6,348(1,963)
(46)
–
(638)
(433)
(240)
¥31,575$268,793
51,367(19,001)(536)(2,818)(3,712)–(60)$294,033

Unrealized holding gains on securities
Balance at beginning of year
Net change during the year
Balance at end of year

¥288
930
¥1,218

¥324
(36)
¥288

$2,452
7,917$10,369

Foreign currency translation adjustments
Balance at beginning of year
Net change during the year
Balance at end of year¥(1,793)
4,462¥2,669¥(2,984)
1,191¥(1,793)$(15,263)
37,984$ 22,721

Treasury stock
Balance at beginning of year
Net change during the year
Balance at end of year¥(3,247)(71)¥(3,318)¥(2,624)(623)¥(3,247)$(27,642)(604)$(28,246)

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

6

Consolidated Statements of Cash Flows
Years ended March 31, 2006 and 2005

Millions of yen

Cash flows from operating activities
Income before income taxes and minority interest
Adjustment to reconcile income before income taxes andminority interest to net cash provided by operating activities:
Depreciation and amortization
Loss on impairment of fixed assets
Allowance for doubtful accounts
Accrual for retirement benefits, less payments
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Loss on sales or disposals of fixed assets
Gains on sales of investment securities
Write down of investment securities
Restructuring cost
Expenses of extra pension for early retirement
Changes in assets and liabilities:
Notes and accounts receivable
Inventories
Notes and accounts payable
Other
Sub TotalInterest and dividend income received
Interest expense payments
Payments of extra pension for early retirement
Income taxes payments
Net cash provided by operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of investment securities
Proceeds from sales of investment securities
Payments of loan receivable
Proceeds from loan receivable
Other
Net cash used in investing activities
Cash flows from financing activities
Proceeds (Repayments) of short-term loans, net
Proceeds of long-term debt
Repayments of long-term debt
Purchase of treasury stock
Payments of dividend
Payments of dividend to minority shareholders of subsidiaries
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from:
Subsidiaries inclusion in consolidation
Merger of non-consolidated subsidiary
Cash and cash equivalents at end of year

Thousands of
U.S.dollars (Note 1)

2006

2005

2006

¥13,793¥10,990$117,417

13,004
60
(286)
(626)
(974)
560
(49)
216
(429)
–
–
1,290

10,367
–
171
2,637
(910)
525
(1,134)
586
(44)
96
1,428
–

110,700
511(2,435)(5,329)(8,291)
4,767
(417)
1,839
(3,652)––
10,982(1,283)(2,375)(814)
4,130
26,217964(562)(1,291)(8,252)
17,076

12,114907(4,673)
1,874
34,934741(540)–(3,668)31,467(10,922)(20,218)(6,929)35,157223,180
8,206(4,784)(10,990)(70,247)
145,365(11,566)(6,283)(1,360)
759
(32)
96
472
(17,914)(8,425)(1,701)(7,068)
212
(30)
56
655
(16,301)(98,459)(53,487)(11,577)
6,461
(272)
817
4,018
(152,499)

841
–
(962)
(73)
(2,229)(450)
4(2,869)2,535(1,172)64,960(3,311)
1,160
(283)
(626)
(1,962)(237)
4(5,255)668
10,57953,772

7,159–(8,189)(621)(18,975)(3,831)
34(24,423)
21,580(9,977)552,992

3,928
59¥67,775517
92¥64,960

33,438502$576,955

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
7

Notes to Consolidated Financial Statements
1. Basis of Presenting Consolidated
Financial Statements
The consolidated financial statements of TOSHIBA TECCORPORATION (the ”Company”) have been prepared inaccordance with accounting principles generally accepted inJapan, which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company as
required by the Securities and Exchange Law of Japan.
Certain reclassifications have been made to present theconsolidated financial statements in a format which is morefamiliar to the readers outside Japan.
Solely for the convenience of the readers, the consolidated
financial statements have been presented in U.S. dollars bytranslating Japanese yen amounts at the exchange rate of¥117.47 = US$1.00 prevailing as of March 31, 2006. The
translation should not be construed as a representation that theJapanese yen could be converted into U.S. dollar at the above or
any other rate of exchange.

(C) Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid
investments, generally with original maturates of three months
or less.

(D) Investment Securities

2. Summary of Significant Accounting
Policies

Marketable securities classified as “Other securities” arereported at fair value with unrealized holding gains or losses,
net of taxes, included in shareholders’ equity. Cost of securities
sold is determined by the moving average method.
Non-marketable securities classified as “Other securities” arecarried at cost, which is determined by the moving averagemethod.

(A) Basis of Consolidation and Accounting ofInvestments in Affiliated Companies(E) Inventories

The consolidated financial statements include the accounts of
the Company and its significant majority-owned subsidiaries(together the “Companies”). For the years ended March 31,
2006 and 2005, the accounts of 69 and 37 subsidiaries areconsolidated, respectively. The number of the consolidated
subsidiaries increased significantly due to the consolidation of
TOSHIBA AMERICA BUSINESS SOLUTIONS, INC. and its
27 subsidiaries. All significant inter-company transactions andaccounts are eliminated in consolidation.
All assets and liabilities of the subsidiaries are revaluated on
acquisitions, if applicable. The difference between the cost ofinvestments in subsidiaries and the equity in their assets at thedates of acquisition is principally amortized by the straight-line
method over 5 to 15 years, except for those recorded in U.S.
subsidiaries. (See Notes 2.(G))
The equity method of accounting is adopted for investments inmajor unconsolidated subsidiaries and affiliated companies. For
the year ended March 31, 2006, the equity method of accounting
has been adopted for the following company,
TOSHIBA TEC NETHERLANDS RETAIL INFORMATION SYSTEMS B.V.
The investments in the remaining unconsolidated subsidiaries
and affiliated companies are stated at cost.
Certain subsidiaries have year end which differs from that of
the Company. As a result, adjustments have been made for any
significant transactions which took place during the period
between the year end of the subsidiaries and the year end of theCompany.

(B) Foreign Currency Translation
Revenue and expense accounts of foreign subsidiaries aretranslated into yen using the annual average rate during the year.
The balance sheet accounts, except for the components ofshareholders’ equity, are translated at the rate in effect at thebalance sheet date. The components of shareholders’ equity are

8translated at their historical rates. Translation adjustments arepresented as a component of shareholders’ equity and minority
interest.
Foreign currency transactions are measured at the applicablerates of exchange prevailing at the transaction dates, unlesshedged by foreign exchange contracts. Assets and liabilities
denominated in foreign currencies at the balance sheet date arere-measured at the applicable rates of exchange prevailing atthat date, unless hedged by foreign exchange contracts.
Exchange differences are charged or credited to operations.

Finished goods, merchandise and semi-finished components
are principally stated at the lower of cost, determined by the
first-in, first-out method, or market, or at the cost determined by
the specific cost method. Work-in-process is principally statedat the lower of cost, determined by the moving average method,or market, or at the cost determined by the specific cost method.
Raw materials are principally stated at the lower of cost,
determined by the moving average method, or market.

(F) Property, Plant and Equipment and Depreciation
Property, plant and equipment are carried at cost. Material
improvements are capitalized, but repair and maintenanceincluding minor improvements are charged to income.
Depreciation of property, plant and equipment is generally
computed by the declining-balance method for the Company
and its domestic subsidiaries, and by the straight-line method forthe overseas subsidiaries, at the rates based on the estimateduseful lives of the respective assets. The useful lives of principal
property, plant and equipment are summarized as follows:
Buildings and structures
15 to 38 years
Machinery and equipment 5 to 11 years
Tools, furniture and fixtures 2 to 6 years(G) Intangible Assets and Amortization
Intangible assets are amortized by the straight-line method
over their estimated useful lives.
Goodwill recognized through purchase and acquisition ofsubsidiary is basically amortized by the straight-line method
over 5 to 15 years period. Concerning subsidiaries in U.S.,
goodwill is not amortized, but instead tested for impairment
annually and when events or circumstances indicate it might be
impaired, in accordance with the “Statement of Financial
Accounting Standards No.142, ‘Goodwill and Other Intangible
Assets’ ”.

(H) Allowance for Doubtful Accounts(N) Research and Development Expenses

Allowance for doubtful accounts is provided in the amountsufficient to cover probable losses on collection. It consists ofindividually estimated uncollectible amounts and an amountcalculated using the rate of actual losses on collection in the past.

Research and development costs are charged to income as
incurred.

(I) Retirement Benefits
Upon retirement or termination of employment, employees of
the Company and its domestic subsidiaries are generally entitledto lump-sum payments determined by reference to their current
basic rate of pay, length of service and conditions under which
the termination occurs.
The Company and domestic subsidiaries provide allowancefor the retirement benefits and make contributions to a noncontributory tax-qualified pension plans (the ”Funded Plan”) for
employees’ severance indemnities payable, as part of theexisting retirement plan.
Allowance for the employees’ retirement benefits are
determined mainly at the amount based on the retirement benefit
obligation and the fair value of the pension plan assets, asadjusted for unrecognized actuarial gain or loss.

(J) Leases
The Companies lease certain equipment under non-cancelable
lease agreements referred to as finance leases. Finance leases
other than those, which transfer the ownership of the leased
property to the Companies, are primarily accounted for as
operating leases.

(K) Income Taxes, Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax bases of theassets and liabilities and are measured using the enacted tax
rates and laws which will be in effect when the differences are
expected to reverse.
Starting from the year ended March 31, 2006, the Company
and its wholly owned domestic subsidiaries were permitted tofile the consolidated tax return in Japan for the Corporate Tax
purpose.

(L) Derivative Financial Instruments
The Company and certain subsidiaries have entered into
forward exchange contracts to hedge the foreign currencytransactions related to accounts receivable and payable
denominated in foreign currency.
Derivative financial instruments are reported at fair value withunrealized gain or loss, charged or credited to operations, except
for those which meet the criteria for the deferral hedge
accounting under which unrealized gains or losses is deferred asassets or liabilities. Receivables and payables hedged byqualified forward foreign exchange contracts are translated at
the corresponding foreign exchange contract rates.

(M) Revenue Recognition
Sales are generally recognized at the time of shipment of thegoods to customers except for sales of certain product, which
are recorded in the accounts upon customer acceptance.

(O) Appropriation of Retained Earnings
Under the Commercial Code of Japan, the appropriation ofretained earnings with respect to a given financial period is
made by the resolution at the shareholders’ general meeting,held subsequent to the close of such financial period. The
accounts for that period do not, therefore, reflect suchappropriation.

(P) Impairment of Fixed Assets
A new accounting standard for the “impairment of fixed assets” hasbeen introduced in Japan. The Company and its domestic
consolidated subsidiaries implemented this accounting standard fromthe year ended March 31, 2006. According to the accounting
standard, fixed assets are reviewed for impairment whenever eventsor changes in circumstances indicate that the carrying amount of anasset may not be recoverable. For the year ended March 31, 2006,
the loss on the impairment of tangible fixed assets was ¥60 millions($511 thousands).

3. Short-Term Loans and Long-Term Debt
The average interest rate for short-term loans
outstanding at March 31, 2006 and 2005 is 4.3 % and3.6%, respectively.
The long-term debt at March 31, 2006 and 2005,
consists of the following :Millions of yen

2006Long-term debt:
Due serially through 2022, with interest
rate of 3.17% to 6.10%¥2,5882,588
Less current portion

1,682
¥906

Thousands of
U.S.dollars

2005

2006

¥3,4673,467$22,031
22,031

4¥3,463

14,318$7,713

The aggregate annual maturities of long-term debt (including
the current portion) outstanding at March 31, 2006 are as
follows:
Year ending
March 31

Millionsof yenThousands of
U.S.dollars

2007
2008
2009
2010 and thereafter¥1,68272822
12¥2,588$14,318
613
6,998
102
$22,031

4. Retirement Benefits
The Company and its domestic subsidiaries have defined
benefit plans, i.e., the Funded Plans and the lump-sum payment
plans, covering substantially all employees who are entitled to
lump-sum or annuity payments, the amounts of which are
determined by reference to their basic rates of pay, length ofservice, and the conditions under which termination occurs.

9The following table sets forth the funded status of the plans,
and the amounts recognized in the consolidated balance sheets
as of March 31, 2006 and 2005 for the Companies' defined
benefit plans:Millions of yen

2006
2005
Retirement benefit obligation¥(65,464) ¥(63,218)
Plan assets
31,88523,344
Unfunded retirement benefit obligation (33,579) (39,874)
Unrecognized actuarial gain or loss
5,054
10,378Unrecognized past service cost
1,344
1,562
Net amount recognized in the
consolidated balance sheet(27,181) (27,934)
Prepaid pension cost127
0
Accrued retirement benefit obligation¥(27,308) ¥(27,934)

2006¥3,092
1,311(498)

Service cost
Interest cost
Expected return on plan assets
Amortization of net retirement
benefit obligation at transition–
Amortization of actuarial gain or loss 1,443
Amortization of past service cost
218
Total
¥5,566

2006$(557,283)
271,431(285,852)
43,024
11,441(231,387)
1,081$(232,468)

Thousands of
U.S.dollars

2005¥3,286
1,225
(206)

2006
$26,321
11,160(4,239)

1,613
1,555
218
¥7,6910
12,284
1,856$47,382

Apart from the retirement benefit expenses above, additional
retirement benefit payments are included in Non-operating
expenses. The additional retirement benefit payments for theyears ended March 31, 2006 and 2005 were ¥1,410 millions($12,007 thousands) and ¥178 millions, respectively.
The assumption used in accounting for the above plans in2006 and 2005 are as follows:
2006

Major components of selling, general and administrative
expenses at March 31, 2006 and 2005 are as follows:

Thousands of
U.S.dollars

The components of retirement benefit expenses for the years
ended March 31, 2006 and 2005 are as follows:
Millions of yen

6. Selling, General and Administrative Expenses

2005

Discount rates
Mainly 2.0%
2.0%〜2.3%
Expected return on assets
Mainly 2.0%
0.0%〜2.0%
Amortization period of
10 years Straight-line method 10 years Straight-line method
past service cost
Amortization period of
actuarial gain or loss 10 years Straight-line method 10 years Straight-line method
Amortization period of–
5 years Straight-line method
net transition obligation

Millions of yen

Delivering expense
Advertising expense
Personal expense
Depreciation and amortization
Research and development expense
Other selling expense

2005¥6,582
2,243
63,1692,560
18,898
7,047"Other, net" for the years ended March 31, 2006 and 2005,
consists of the following :Millions of yen

2006
2005
Write-down and disposal of inventories ¥(1,041)¥(940)
Loss on sales or disposals
of property, plant and equipment
(216)
(586)
Foreign exchange gain or loss
13
(414)
Other, net(1,571) (1,343)¥(2,815) ¥(3,283)

Millions of yen

2006
Trade notes receivablediscounted or endorsed¥7,253
Guarantees on lease contracts
112
Guarantees on employees' bank loans 1,325

Thousands of
U.S.dollars

2005

2006

¥15,058252
1,589$61,743953
11,279Thousands of
U.S.dollars

2006$(8,862)(1,839)111(13,374)$(23,964)

8. Research and Development Expenses
Research and development costs charged to income for theyears ended March 31, 2006 and 2005 are as follows:
Millions of yen

2006¥27,6032005¥25,761

Thousands of
U.S.dollars

2006$234,979

9. Income Taxes and Deferred Tax Assets
and Liiabilities
There is no significant difference between the statutory tax
rate (40.6%) and the Company's effective tax rate for the years
ended March 31, 2006 and 2005.
Significant components of the Companies' deferred tax assets
and liabilities at March 31, 2006 and 2005 are as follows:
Millions of yen

Contingent liabilities at March 31, 2006 and 2005 are as
follows :2006$63,259
38,188757,91335,771
177,169
131,310

7. Non-Operating Income and ExpensesOther, Net

5. Contingent liabilities

10

2006
¥7,431
4,486
89,032
4,202
20,812
15,425

Thousands of
U.S.dollars

Deferred tax assets:
Accrued retirement benefits
Intangible assets
Accrued bonuses
Elimination of consolidated
unrealized gains
Other
Valuation allowanceThousands of
U.S.dollars

2006

2005

2006

¥10,788
7,370
3,483

¥11,015
7,225
3,408

$91,836
62,73929,6502,908
6,424
30,973(527)
30,446

1,989
5,782
29,419(728)
28,691

24,75554,687
263,667(4,486)259,181

Thousands of
U.S.dollars

Millions of yen

Deferred tax liabilities:
Retained earnings appropriatedfor tax allowable reserves
Unrealized gains on securities
Other
Net deferred tax assets

2006

2005

2006

474
837
276
1,587
¥28,859

491
411
526
1,428
¥27,263

4,035
7,125
2,350
13,510$245,671

10. Leases(A) Finance leases
The following pro forma amounts represent the acquisition
cost, accumulated depreciation and net book value of leased
property as of March 31, 2006 and 2005, which would havebeen reflected in the consolidated balance sheets if the financelease accounting had been applied to the finance leasetransactions currently accounted for as operating leases:
Millions of yen

2006
¥155
108
¥263

¥149
102
¥251

¥346
197
¥543

¥187
117
¥304

¥159
80
¥239

Thousands of U.S.dollars

2006
Machinery and equipment
Tools, furniture and fixtures

Acquisition
cost

Accumulated
depreciation

New book
value$2,588
1,788$4,376$1,319920$2,239$1,269868$2,137(1) Future minimum lease payments (including the interest
portion thereon) subsequent to March 31, 2006 and 2005
for finance lease transactions accounted for as operatingleases are summarized as follows:

Due within one year
Due after one year

(1) Information regarding marketable Other Securities as ofMarch 31, 2006 and 2005 is as follows:
Millions of yen

2006

2005

Acquisition Carrying Unrealized Acquisition Carrying Unrealized
cost
value
gain(loss)
cost
value
gain(loss)

Securities whose carrying value exceeds their acquisition cost:
Stocks¥1,231 ¥3,078 ¥1,847¥983¥2,024 ¥1,041
Securities whose acquisition cost exceeds their carrying value:
Stocks
31
29
(2)
272
221
(51)
Total
¥1,262 ¥3,107 ¥1,845 ¥1,255¥2,245 ¥990
Thousands of U.S.dollars

2006
Acquisition
cost

Carrying
value

Unrealized
gain (loss)

Securities whose carrying value exceeds their acquisition cost:
Stocks$10,479 $26,202$15,723
Securities whose acquisition cost exceeds their carrying value:
Stocks
264
247
(17)
Total
$10,743 $26,449$15,7062005

Acquisition Accumulated New book Acquisition Accumulated New bookcost
depreciation
value
cost
depreciation
value

Machinery and equipment ¥304
Tools, furniture and fixtures 210¥514

11. Securities

2006
¥83
168
¥251

Millions of yen

Thousands of
U.S.dollars

2005
¥74
165
¥239

2006
$707
1,430
$2,137(2) The proceeds from sales of securities, except those of theaffiliated companies, for the years ended March 31, 2006
and 2005 were ¥693 millions ($5,900 thousands) and ¥212
millions, respectively. The realized gains on those sales forthe years ended March 31, 2006 and 2005 were ¥425
millions ($3,619 thousands) and ¥45 millions, respectively.
The realized losses on those sales for the years ended
March 31, 2006 and 2005 were ¥7 millions ($58
thousands) and ¥1 million, respectively.

12. Derivative Financial Instruments
Fair value information of the derivative financial instruments
at March 31,2006 and 2005 is summarized below according to
the disclosure requirements applicable to the respective year:
Millions of yen

2006
Contract
amountFair
value

Forward exchange contracts:
Sell Euros ¥1,391 ¥1,400

2005
Unrealized Contractgain(loss) amount

Fair
value

Unrealizedgain(loss)¥(9) ¥1,556 ¥1,562¥(6)

Thousands of U.S.dollars(2) Lease payments for the years ended March 31, 2006 and2005, are ¥84 millions($714 thousands) and ¥87 millions,
respectively.

(B) Operating leases
Future minimum lease payments subsequent to March 31,
2006 and 2005 for noncancelable operating leases are
summarized as follows:

Due within one year
Due after one year

2006
¥138
52
¥190

Millions of yen

Thousands of
U.S.dollars

2005
¥117
151
¥268

2006
$1,174443$1,6172006
Forward exchange contracts:
Sell Euros

Contract
amountFair
value

Unrealizedgain(loss)$11,841$11,918$(77)

Above forward exchange contracts are taken by the Company
to hedge the foreign currency risk on inter-company
transactions. They meet the criteria for deferral hedge
accounting, and holding gains or losses of these financial
instruments are deferred in the Non-Consolidated Financial
Statements of the Company.

11

(B) Geographic Segments

13. Segment Information

Millions of yen(A) Business Segment
The Companies operate in three business segments.
The products line up of these segments is presented on thesecond page of this report.
Millions of yen

Thousands of
U.S.dollars

2006
2005
2006
Net Sales
Retail Information Systems
Unaffiliated customers¥171,667 ¥165,086 $1,461,369
Intersegment
2,021
1,793
17,204
Total
173,688 166,879
1,478,573
Document Processing & Telecommunication Systems
Unaffiliated customers
256,829 195,429
2,186,337
Intersegment
6,735
5,044
57,334
Total
263,564 200,473
2,243,671
Home Electric Appliances & Others
Unaffiliated customers
14,905
15,672
126,883
Intersegment
239
193
2,035
Total
15,144
15,865
128,918
Eliminations(8,994) (7,030)(76,564)
Consolidated¥443,402 ¥376,187 $3,774,598
Operating Income
Retail Information Systems¥7,892¥6,595Document Processing & Telecommunication Systems
9,522
10,952Home Electric Appliances & Others(257) (1,365)
Eliminations
0
13
Consolidated¥17,157 ¥16,195$67,183
81,059(2,188)–$146,054

Identifiable Assets
Retail Information Systems¥68,515 ¥67,479$583,255
Document Processing & Telecommunication Systems
206,946 150,988
1,761,693
Home Electric Appliances & Others 7,364
9,598
62,688
Corporate and Eliminations
40,651
41,991
346,054
Consolidated¥323,476 ¥270,056 $2,753,690
Depreciation and Amortization
Retail Information Systems¥2,874¥2,669Document Processing & Telecommunication Systems
9,376
6,643
Home Electric Appliances & Others
754
1,055
Consolidated¥13,004 ¥10,367
Capital Expenditures
Retail Information Systems¥3,710¥3,118Document Processing & Telecommunication Systems
12,626
6,494Home Electric Appliances & Others
985
782
Consolidated¥17,321 ¥10,394$24,466
79,816
6,419$110,701$31,583
107,483
8,385$147,451

2006

2006

Net SalesJapan
Unaffiliated customers
Intersegment
Total
American States
Unaffiliated customers
Intersegment
Total
EuropeUnaffiliated customers
Intersegment
Total
Asia and others
Unaffiliated customers
Intersegment
Total
Eliminations
Consolidated

35,06034,492
298,459
55,614
39,690473,432
90,674
74,182771,891(150,771) (90,444) (1,283,485)¥443,402 ¥376,187 $3,774,598

Operating Income
Japan
American States
EuropeAsia and others
Eliminations
Consolidated¥6,348¥8,745
2,770
5
2,038
2,841
6,380
6,384
(379) (1,780)¥17,157 ¥16,195

Identifiable Assets
Japan
American States
EuropeAsia and others
Corporate and Eliminations
Consolidated¥227,299 ¥187,185 $1,934,953
42,5491,966
362,21264,176
62,974546,318
45,52537,999387,546(56,073) (20,068)(477,339)¥323,476 ¥270,056 $2,753,690¥219,491 ¥252,174
86,20843,151
305,699 295,325$1,868,486
733,872
2,602,358

93,744532
94,276

3,605
4
3,609

798,025
4,529
802,554

95,107
8,417
103,524

85,916
7,599
93,515

809,628
71,652881,280$54,039
23,58017,34954,312(3,226)$146,054(note 1) Criteria of geographical segmentation and the name of countries or areas mainly
included in each segment except for Japan are as follows:(1) Criteria:geographical closeness(2) Countries & Areas①American States
U.S.A., Canada, Mexico, Puerto Rico, Panama, Venezuela, Brazil, Chile* The segment "North America" has been changed to "American States"from the year ended March 31, 2006.
It is due to the consolidation of TOSHIBA AMERICA BUSINESSSOLUTIONS, Inc., which has the subsidiaries in Latin Americancountries as mentioned above.
②Europe
U.K., France, Germany, Belgium, Spain, Netherlands③Asia and others
Singapore, Malaysia, Indonesia, China, Australia(note 2) Corporate assets mainly consist of cash, time deposits, securities and investmentswith financial institutions of the Company.
Corporate assets at March 31, 2006 and 2005, are ¥41,096 millions ($349,844
thousands) and ¥42,508 millions, respectively.

(C) Net Sales by Region
Millions of yen

2006(note) Corporate assets mainly consist of cash, time deposits, securities and investments withfinancial institutions of the Company.
Corporate assets at March 31, 2006 and 2005, are ¥41,096 millions ($349,844 thousands)
and ¥42,508 millions, respectively.

2005

Thousands of
U.S.dollars

Net SalesJapan
American States
EuropeAsia and others
Net sales

2005¥190,576 ¥188,740
116,860
65,830103,112
94,13632,85427,481¥443,402 ¥376,187

Thousands of
U.S.dollars

2006$1,622,338
994,807877,773
279,680$3,774,598(Note) Net sales by region are determined based upon the locations of the customers.
Therefore, this information is different from the net sales for geographic segments,
which are determined based upon where the sales originated.

12

Supplemental Information
Non-Consolidated Balance Sheets
March 31, 2006 and 2005

Thousands of
U.S.dollars

Millions of yen

ASSETS
Current assets
Cash and time deposits
Trade notes and accounts receivable
Inventories:
Finished goods
Work-in-process and raw materials
Deferred income taxes
Prepaid expenses and other current assets
Allowance for doubtful accounts
Total current assets

2006

2005

2006

¥38,937
24,934¥42,358
25,415$331,463
212,259

10,266
4,899
4,210
11,356(420)
94,182

10,311
3,778
4,884
12,245(373)
98,61887,39341,70435,83996,671(3,575)
801,754

4,717
20,125
10,78546,318
1,387(59,959)
23,373

4,841
20,461
15,23054,9781,182(73,293)
23,39940,155
171,320
91,811
394,297
11,807(510,420)
198,970

3,544
3,544

3,769
3,769

30,16930,16954,621
4,537
14,3793,291(112)
76,716

49,605
3,458
15,822
4,082(119)
72,848464,978
38,623
122,406
28,015(953)
653,069

Total fixed assets

103,633

100,016882,208

Total assets¥197,815¥198,634$1,683,962

Fixed assets
Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Intangible assets:
Other intangible assets

Investments and other assets:
Investment securities
Subsidiaries and affiliates
Other
Deferred income taxes
Other investments and other assets
Allowance for doubtful accounts

13Millions of yen

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities
Trade notes and accounts payable
Current portion of long–term debt
Accrued income taxes
Other payables and current liabilities
Total current liabilities

2006

2005

2006

¥39,733
2
465
27,61567,815¥38,241
4
2,480
30,761
71,486$338,240
17
3,958
235,081577,296

Long-term liabilities
Long-term debt
Accrued retirement benefits
Other long-term liabilities
Total long-term liabilities

15
19,41279
19,50623
21,811
66
21,900128
165,250673
166,051

Total liabilities

87,321

93,386743,347

Shareholders’ equity
Common stock
Authorized-1,000,000,000 shares
Issued- 288,145,704 shares

39,971

39,971

340,266

52,98652,985451,060

12,717
7,254
884

10,743
4,534
262

108,258
61,752
7,525(3,318)––(3,247)(28,246)–

Total shareholders’ equity

110,494

105,248

940,615

Total liabilities and shareholders’ equity¥197,815¥198,634$1,683,962

Capital surplus
Retained earnings :Voluntary reserve
UnappropriatedUnrealized holding gains on securities
Less treasury stock, at cost:
9,143,293 shares in 2006
9,015,037 shares in 2005

14

Thousands of
U.S.dollars

Supplemental Information
Non-Consolidated Statements of Operations and Retained Earnings
Years ended March 31, 2006 and 2005

Thousands of
U.S.dollars

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income and expenses:
Interest and dividend income
Interest expense
Expenses of extra pension for early retirement
Loss on impairment of fixed assets
Amortization for transition obligation of retirement benefits
Restructuring cost * 1
PCB wastes treatment cost
Other, net
Income before income taxes
Income taxes:
Current
Deferred
Net income

Unappropriated retained earnings at beginning of year
Transfer from voluntary reserve
Appropriation of retained earnings:
Cash dividends
Bonuses to directors and corporate auditors
Transfer to voluntary reserve
Cash interim dividends
Unappropriated retained earnings at end of year

2006
¥253,931
185,035
68,896
65,176
3,720

2005¥257,510
187,172
70,33864,647
5,691

2006$2,161,667
1,575,168
586,499554,831
31,668

7,083
(15)
(589)
(60)
–
–
–
(1,677)
8,462

5,276
(15)
–
–
(1,300)(1,428)(164)(2,638)
5,422

60,296(128)(5,014)(511)–––(14,276)
72,035

(208)
1,704
6,966

2,031
(664)
4,055

(1,771)
14,50659,300

4,534
25

4,442
27

38,597213(1,116)(39)(2,000)(1,116)¥7,254(841)(27)(2,000)(1,122)¥4,534(9,500)(332)(17,026)(9,500)$61,752*1 Restructuring cost consists mainly of loss on disposal of domestic manufacturing facilities of the Home ElectricAppliances due to the overseas transfer of production.

15

16

Corporate Data
2-17-2 Higashi Gotanda, Shinagawa-ku, Tokyo 141-8664 Japan
Tel: +81-3-6422-7000
Fax: +81-3-6422-7111
http: //www.toshibatec.co.jp/
Established: February 21, 1950
Employees: 3,972〈Consolidated: 19,601〉(as of March 2006)
Common Stock: ¥39,971 million (as of March 2006)
Stock Listing: Tokyo Stock Exchange (1st Section)
Board of Directors and Corporate Auditors
President and Chief Executive Officer (as of June 29, 2006)◇Yoshihiro Maeda

Directors◇Tetsuo Satofuka◇Yoshiyasu Kikuchi

Haruo Asada
Kazuaki Ushiyama
Osamu Saito
Hisatsugu Nonaka◇：Representative Director

Corporate Auditors

Teruo Miyamoto
Noriyuki Nakamura
Hiroshi Inazuka
Yuzo Kato
Main Consolidated Companies (as of March 31, 2006)
・TOSEI DENKI CO., LTD.
・TEC PRECISION CO., LTD.
・TEC APPLIANCE CO., LTD.
・TOSHIBA TEC BUSINESS SOLUTIONS CORPORATION
・TEC ENGINEERING CORPORATION・TER CO., LTD.
・TEC INFORMATION SYSTEMS CORPORATION・TOSHIBA TEC DOCUMENT PROCESSING SYSTEMS CO., LTD.
・TOSHIBA TEC RETAIL INFORMATION SYSTEMS (Shenzhen)
・TOSHIBA TEC EUROPE IMAGING SYSTEMS S.A.
・TOSHIBA COPYING MACHINE (Shenzhen) CO., LTD.
・TIM ELECTRONICS SDN. BHD.
・TEC SINGAPORE ELECTRONICS PTE. LTD.
・P.T. TEC INDONESIA・TOSHIBA TEC AMERICA RETAIL INFORMATION SYSTEMS, INC.
・TOSHIBA AMERICA BUSINESS SOLUTIONS, INC
・TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
・TOSHIBA TEC NORDIC AB
・TOSHIBA TEC U.K. IMAGING SYSTEMS LTD.
・TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH・TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
・TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LIMITED