HOYA GROUP Annual Financial Report March 2007

April 23, 2007

Annual Financial Highlights (unaudited)
HOYA CORPORATION and Consolidated Subsidiaries
Contact : Naoji Ito, Manager of Corporate Communications
Tel:03(3952)1160 Fax:03(3952)0726 E-mail:naoji.ito@mb.hoya.co.jp

Performance for the years ended March 31, 2007 and 2006
( The yen amounts shown therein are rounded down to the nearest million.)
Years ended March 31,(1)Results of Operations
Net sales
Operating income
Ordinary income
Net income
Basic net income per share (Yen)
Diluted net income per share (Yen)ROE
Ordinary income / total assets
Operating margin

2007

2006

390,093
107,213102,909
83,391
193.50192.78
25.9%
25.4%
27.5%

344,228
101,095
103,637
75,620171.71171.08
27.1%
29.1%
29.4%

Variance
(%)

13.3
6.1
-0.7
10.3

Notes : Canges in accounting policy.
From this fiscal year, the company has changed its classification of industry segment.
Years ended March 31,(2)Dividends

2007

Annual cash dividends per share (Yen)

2006

65.00

60.00

As of March 31,(3)Financial Position

2007

2006

Total assets
Net assets
Owner's equity ratio
Net assets per share (Yen)447,644
367,14581.6%
845.98361,537
279,48077.3%
648.87(4)Conditions of Cash Flow

2007

2006

98,793-46,652-23,891
120,621

105,855-52,012-85,787
83,574

Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period(Note)

Hoya Corporation does not guarantee the accuracy or completeness of the information herein. Unless otherwise stated estimates orforecasts are solely those of our company and subject to change without notice. Hoya Corporation accepts no liability whatsoever for any
direct or consequential loss arising from any use of this report.

1

HOYA GROUP Annual Financial Report March 2007

Ref:Performance of HOYA CORPORATION for the years ended March 31, 2007 and 2006
2007
274,961
28,45938,99629,75069.03
68.77
227,02999,803

Net sales
Operating income
Ordinary income
Net income
Basic net income per share (Yen)
Diluted net income per share (Yen)
Total assets
Net assets

2006
248,195
29,74644,78822,06250.14
49.96
219,063
95,598

Variance(%)
10.8
-4.3
-12.9
34.8

(Notes)1. HOYA CORPORATION "the Company" carried out a four-for-one stock split with effect on November 15,
2005, on the shares of shareholders recorded on September 30, 2005.
2. The per share information for the previous fiscal year reflects the stock split assuming that the above stock
split was exercised on the beginning of the previous fiscal year.
3. The dividends per share for the previous fiscal year was Yen 60. The Interim dividend of Yen 30 has
already reflect the stock split as well as the Year-end dividend of Yen 30 reflects it. For your reference, theoriginal value of per share dividend for the interim of the year ended March 2006 was Yen 120.

2

HOYA GROUP Annual Financial Report March 2007

1. Business Overview(1) Results of Operations
1. General Overview
Variance (%)
year-on-year( 13.3 )( 6.1 )
( -0.7 )( 10.3 )21.79

Millions of Yen

Results of Operations
Net sales
Operating income
Ordinary income
Net income
EPS (Yen)

Year ended Mar. 31, 2007

390,093
107,213102,909
83,391
193.50

Economic conditions during the term under review were marked by a continuing tone of expansion in
the business climate with the increase in capital investment spreading from large companies andmanufacturing industries to SMEs and non-manufacturing industries. It was also positive factor in
the currency market during the term under review, that the major currencies were appreciated allagainst the yen, on a year-on-year basis. Improvements in corporate performance led to increased
employment, improvement in household income and increased expenses, reinforcing the virtuous
cycle of further upward growth in corporate capital investment.
Meanwhile, for the HOYA Group overall, in the Electro-Optics sector, the general proactive
reinforcement of production capacity by clients and the development of new products were vigorous,
promoting robust demand overall and leading to increased revenues. In Vision-Care division, themarket overseas for eyeglass lenses showed an expansion while the Healthcare division also
performed well, showing an increase in revenues.
As a result, consolidated net sales, operating profits and net income during the term under review
increased year-on-year basis and posted historical records.

(Million Yen)

Annual net sales (Million Yen) and average exchange rate (Yen/USD & EURO)(Yen/USD or EURO)150.95450,000
400,000

135.73132.65125.89160.00138.13140.00121.20116.96113.93350,000

120.00121.48300,000
110.98112.76100.00107.60250,000

80.00
200,000

390,093150,000
100,000

235,265

246,293

271,443344,228

308,172

60.00
40.00
20.00

50,0000

0.00
Mar-02Mar-03
Net sales

Mar-04Mar-05Mar-06average exchange rate (USD)3

Mar-07(EURO)HOYA GROUP Annual Financial Report March 2007

Ratio of Net Sales by Business Segment

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Mar-02Mar-03

Electro-Optics

Mar-04

Photonics

Mar-05

Vision Care

Mar-06

Health Care

Mar-07
OthersProfits (Million Yen)
100,000
80,00060,00068,166
66,55439,54884,92089,52564,135101,095
103,637
75,620107,213102,909
83,391052,98250,874
20,03720,00043,89745,77423,74040,000Mar-02Mar-03Mar-04Mar-05Mar-06Mar-07

Operating Income

Ordinary Income

4

Net Income

HOYA GROUP Annual Financial Report March 2007

2. Segment Overview
1)Information Technology
Electro-Optics

Annual Net sales of Electro-Optics (Million Yen)

240,000

219,252
190,551

200,000
165,664
160,000

135,071

120,000

111,460

101,496

80,00040,0000
Mar-02Mar-03Mar-04Mar-05Mar-06Mar-07In terms of mask blanks for manufacturing semiconductors, HOYA received a decent volume of orders forsuch high-precision products as blanks for phase-shift masks, etc., and sales increased on a year-on-yearbasis.
There was also an increase in orders for photomasks for semiconductor production, high precision
products and next-generation developed products, leading to higher sales volume year-on-year.
Competition among mask producers for orders in the area of large-size masks for LCD use also intensified
due to the broad reduction in panel prices by LCD panel producers. The sales volume declined year-onyear due in part to the especially strong demand for the new production lines of panel producers in theprevious year.
In terms of glass disks for hard disk drives (HDDs), the demand remained strong and, thanks to acommencing of shipment from new factory in Vietnam, the sales increased substantially on a year-on-yearbasis.
In optical lenses, a trend toward increase in lens shipments for digital cameras has supported the overall
growth of sales, in addition to the broad increase of demand for lenses for mobile telephones equippedwith cameras, resulting in higher sales year-on-year.
Annual Net sales of Photonics (Million Yen)

Photonics

12,00010,74910,092

10,000
8,000

9,092
7,157
5,485

6,000

4,116
4,000
2,000
0
Mar-02Mar-03Mar-04Mar-05Mar-06Mar-07This segment covers laser-related equipment for industrial, dental and medical applications.
With laser-equipped industrial and medical equipment as major products, clients in the industrial area
include producers of semiconductors, LCD panels, optical devices and so forth. The market has been
fraught with intense competition as well as industry restructuring, leading to a decline in sales against theprevious year.

5

HOYA GROUP Annual Financial Report March 2007

2) Eye Care
Annual Net sales of Vision Care (Million Yen)

Vision Care
140,000

119,808
120,000
100,000

93,184

94,38898,203Mar-02Mar-03Mar-04

104,456
94,97180,00060,00040,00020,0000
Mar-05Mar-06Mar-07The slump in the domestic market for eyeglass lenses continued as before but HOYA realized growth in
the high price bracket through the value-added enhancement of products centered in high-function
coatings and newly-designed progressive lenses. In the low price bracket, however, overall sales in thedomestic market were at essentially the level as in the previous year due to stiff price competition.
In eyeglass lenses in markets overseas, the expansion continued to advance in sales for newly
designed progressive lenses, high refraction lenses and other high value added products in AsiaOceania, Europe and North America and the markets remained firm. There was an overall increase in
the sales volume year-on-year in spite of tough competition due to a price offensive in low-end lenses.
In Europe, a recovery in the market became especially apparent centered in Germany, the largest
market, and sustained expansion was realized.
As a result, an increase was realized in the sector overall year-on-year.

Annual Net sales of Health Care (Million Yen)

Health Care
50,00040,84940,00030,00035,483
26,71628,380Mar-03Mar-04

31,40923,10520,00010,0000
Mar-02Mar-05Mar-06Mar-07

In contact lenses, in addition to the healthy sales results made by the existing directly-owned stores, itwill continue to pursue differentiation from competitors through expanded sales in bifocal lenses andother high value added products through the continued establishment of new directly-owned stores andconsulting sales taking advantage of specialized knowledge.
In intraocular lenses, flexible (soft) intraocular lenses, especially yellow-lenses, have been
demonstrating robust performance in the domestic market, recording an increase in sales volume yearon-year.

6

HOYA GROUP Annual Financial Report March 2007

3) Others

Millions of Yen
Year ended Mar. 31, 2007

1,089

Net sales

In crystal, the crystal operations were reduced in scale through restructuring and, in services, thespin-off of the temporary staff outplacement service effective March 1, 2006, resulting in a reduction
in sales year-on-year in both sectors.

(2) Financial Position
1. Assets, Liabilities and Net assets
Millions of Yen
As of Mar. 31, 2007
447,644
367,145
81.6%

Total assets
Net assets
Owner's equity ratio

At the end of the year under review, current assets increased Yen 63,433 million and fixed assets
increased Yen 22,785 million against the end of the previous year. As a result, total assets increased
Yen 86,107 million. Net assets increased Yen 87,664 million to Yen 367,145 million.

2. Conditions of Cash FlowsNet cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents at end of period

Millions of Yen
Year ended Mar. 31, 2007
98,793-46,652-23,891
120,621

Cash flow from operating activities amounted to 98,793 million yen, comprised of 107,132 million yen
in income before income taxes and minority interests and 36,338 million yen in depreciation andamortization among others. Cash flow from investment activities amounted to 46,652 million yen in
cash payments that were mainly used for investment in order to handle next-generation products.
Free cash flow amounted to 52,141 million yen and used 25,810 million yen for payment of dividends.
As a result, the term-end balance of cash and cash equivalents increased 37,047 million yen from theend of the previous fiscal year.

(3) Middle- to long-term policy on appropriation of retained
earnings and dividends for the year under review
The Company carries out its globalized management emphasizing consolidated accounting and its
management emphasizing shareholder interests and exerts efforts to increase the enterprise value
and shareholder value in response to shareholder expectations.
In terms of the cash dividend, the Company will determine the amount in consideration of the balanceamong repayment of profit to shareholders, welfare of employees and replenishment of retained
earnings for future business development.
The management at HOYA strives hard to increase shareholder value in response to shareholder
expectations. Considering the results of the fiscal year under review, the management proposes thata year-end dividend for the fiscal year be 35 yen per share, up Yen 5.00 per share compared to thesame period last year. Consequently, the total dividend for the fiscal year, including an interim
dividend of 30 yen per share already paid, will amount to 65 yen per share.
Funds from retained earnings will be appropriated for investments for the Company to establish the
HOYA brand, accelerate further growth, enhance competitive edge of its products, and develop nextgeneration products.

7

HOYA GROUP Annual Financial Report March 2007

2.Global Group Management
The HOYA Group consists of the HOYA CORPORATION (the "Company"), 67 consolidated
subsidiaries (5 in Japan and 62 overseas) and four affiliates (4 in Japan). The HOYA Group is
engaged in manufacturing, sales and businesses related to Electro-Optics, Photonics, Vision Care,
Health Care and Crystal products. Of the four affiliates, one (1) company is accounted for using
the equity method (as of March 31, 2007).
Our products are manufactured by the Company itself and by other companies in the Group both inJapan and abroad. In Japan, most of our products are distributed directly to retailers, specialty
stores, assemblers, etc. Some products are exported to various countries abroad through ouroverseas Group companies.
The HOYA Group has adopted a global group management system. Global Headquarters at the
HOYA CORPORATION formulate management strategies, which are enacted on a global basis by
the two major business segments such as Information Technology and Eye Care in line with theirrespective business responsibilities.
By area, regional headquarters in North America, Europe and Asia are in charge of reinforcing
relationships with the countries and areas in their respective regions, legal support and internal
audits, thereby supporting the promotion of business activities.
In July 2003, the HOYA Group has moved its financial headquarters to Europe. This financial
headquarters control global financial matters. At this moment this function is settled in the HOYACORPORATION Netherlands Branch.

Global Group Management System
Global Headquarters（Formulation of Group Strategies）

Eye Care

Others(area)Japan

Legal and Financial
SupportInformation Technology

Asia(Regional HQ)
North America(Regional HQ)
Europe(Regional HQ &Global Financial
Headquarters)

Global Business Expansion

8

HOYA GROUP Annual Financial Report March 2007

The Company and its consolidated subsidiaries are engaged mainly in the manufacture and sales of
products in four major industries as per below: Electro-Optics, Photonics, Vision Care, Health Care andothers.
(1) From this fiscal year, the company has changed its segmentation of industry as follows, because the sales and profits
for both Crystal and Service declined due to the Company's re-organization and the necessity of classified disclosure has
decreased :Business
Categories

Industries

Products and Services

Major Subsidiaries

Electro-Optics Photomasks and Maskblanks for semiconductors, HOYA CORP. Blanks Division, Mask Division,
Information
Masks and Devices for LCDs,
MD Division, Optics Division, etc.
Technologies
Glass disks for hard disk drives (HDDs),
HOYA CORPORATION USA
Optical lenses, optical glasses,
HOYA MAGNETICS SINGAPORE PTE LTD
Optical communication related devices, etc.
HOYA GLASS DISK (THAILAND) LTD.
Photonics
Lazer equipments for industrial, dental,
HOYA PHOTONICS, INC.
and medical purposes,
HOYA PHOTONICS CORPORATIONLight sources for electronics industry, etc.
HOYA CANDEO OPTRONICS CORPORATION
Eye Care
Vision Care
Eyeglass lenses, eyeglass frames, etc.
HOYA CORP. Vision Care Company
HOYA LENS DEUTSCHLAND GMBH
HOYA LENS U.K. LTD.
HOYA LENS OF AMERICA, INC.
HOYA LENS THAILAND LTD.
Health Care
Contact lenses and accessories,
HOYA CORP. Medical Division,
Intraocular lenses, etc.
HOYA HEALTHCARE CORPORATION, etc.
OthersCrystal glass products ;HOYA CORP. Crystal Company
Design of information systems, outsourcing, etc. HOYA SERVICE CORPORATION(2) Formerly the company's business segment classification was as follows:Business
Categories

Industries

Products and Services

Major Subsidiaries

Electro-Optics Photomasks and Maskblanks for semiconductors, HOYA CORP. Blanks Division, Mask Division,
Information
Masks and Devices for LCDs,
MD Division, Optics Division, etc.
Technologies
Glass disks for hard disk drives (HDDs),
HOYA CORPORATION USA
Optical lenses, optical glasses,
HOYA MAGNETICS SINGAPORE PTE LTD
Optical communication related devices, etc.
HOYA GLASS DISK (THAILAND) LTD.
Photonics
Lazer equipments for industrial, dental,
HOYA PHOTONICS, INC.
and medical purposes,
HOYA PHOTONICS CORPORATIONLight sources for electronics industry, etc.
HOYA CANDEO OPTRONICS CORPORATION
Eye Care
Vision Care
Eyeglass lenses, eyeglass frames,
HOYA CORP. Vision Care Company
Ophthalmic equipments, etc.
HOYA LENS DEUTSCHLAND GMBH
HOYA LENS U.K. LTD.
HOYA LENS OF AMERICA, INC.
HOYA LENS THAILAND LTD.
Health Care
Contact lenses and accessories,
HOYA CORP. Medical Division,
Intraocular lenses, etc.
HOYA HEALTHCARE CORPORATION, etc.
OthersCrystalCrystal glass products
HOYA CORP. Crystal Company
HOYA CRYSTAL, INC.
Service
Design of information systems,
HOYA SERVICE CORPORATION
Placement of temporary staff, outsourcing, etc.
WELFARE CORPRATION

9HOYA GROUP Annual Financial Report March 2007
Business Flow Chart

NORTH AMERICA

INFORMATION TECHNOLOGY（Consolidated Subsidiary)

Products,(Regional headquarters)
HOYA HOLDINGS, INC.
（Consolidated Subsidiaries)
HOYA CORPORATION USA
HOYA LENS OF AMERICA, INC.
HOYA LENS CANADA, INC.
HOYA LENS OF CHICAGO, INC.

HOYA PHOTONICS,
INC.

Semi-finishedproducts,
Materials

HOYA LENS OF NEW ORLEANS, INC.
EAGLE OPTICS, INC. and other 3 subsidiaries(and, Vision Care North America 13 Branches)

Photonics

Products

Electro-Optics

HOYA CORPORATION
Blanks Division,
Mask Division,
MD Division,
Optics Division

EUROPE(Regional headquarters)
HOYA HOLDINGS N.V.
（Consolidated Subsidiaries)
HOYA LENS DEUTSCHLAND GMBH
HOYA LENS U.K. LTD.
HOYA LENS ITALIA S.P.A.
HOYA LENS FINLAND OYHOYA LENS NEDERLAND B.V.

Products,
Semi-finishedproducts,
Processing

ProductsC

HOYA LENS IBERIA S.A.
HOYA LENS FRANCE S.A.S.
HOYA LENS POLAND SP.Z.O.O.

EYECARE

Vision Care

HOYA CORPORATION
Vision Care Company

U

HOYA LENS BELGIUM N.V.
Products
HOYA LENS HUNGARY RT
HOYA LENS MFG. HUNGARY RT
HOYA LENS SWEDEN AB
HOYA LENS DANMARK A/SHOYA HILL OPTICS SA (PTY) LTD.
HOYA MEDICAL EUROPE GMBH. and other 1 subsidiary
ASIA(Regional headquarters)
HOYA HOLDINGS ASIA PACIFIC PTE LTD（Consolidated Subsidiaries)
HOYA MAGNETICS SINGAPORE PTE LTD
HOYA GLASS DISK (THAILAND) LTD.
HOYA OPTICS (THAILAND) LTD.
HOYA OPTICAL (ASIA) CO.,LTD.

Products,
Semi-finishedproducts

S

T

O

HOYA OPTO-ELECTRONICS QINGDAO LTD.
HOYA MICROELECTRONICS (SUZHOU) LTD.
HOYA OPTICAL TECHNOLOGY (SUZHOU) LTD.
HOYA MICROELECTRONICS TAIWAN CO.,LTD.

M

E

HOYA CORPORATION
Medical Division

HOYA GLASS DISK PHILIPPINES, INC.
HOYA GLASS DISK MALAYSIA SDN.BHD.
HOYA GLASS DISK VIETNAM LTD.
HOYA ELECTRONICS KOREA CO.,LTD.
HOYA ELECTRONICS MALAYSIA SDN.BHD.
HOYA CANDEO OPTRONICS KOREA CO.,LTD.
HOYA LENS THAILAND LTD.

（Consolidated Subsidiary)
HOYA HEALTHCAREHOYA LENS (S) PTE. LTD.
HOYA LENS AUSTRALIA PTY.LTD.
HOYA LENS HONGKONG LTD.
HOYA LENS KOREA CO.,LTD.

Health Care
products

CORPORATION

Products
R

S

HOYA LENS TAIWAN LTD.
HOYA LENS PHILIPPINES, INC.
MALAYSIAN HOYA LENS SDN.BHD.
HOYA LENS GUANGZHOU LTD.

OTHERSHOYA CORPORATION
Crystal Company（Consolidated Subsidiary)

THAI HOYA LENS LTD.
THAI HOYA HOLDINGS LTD.

HOYA SERVICE CORP.
WELFARE CORPORATION(Affiliate)

HOYA LENS SHANGHAI LTD.
HOYA LENS INDIA PRIVATE LIMITED.
HOYA HEALTHCARE (SHANGHAI) CO.,LTD.

TWO COINS CORP.

HOYA MEDICAL SINGAPORE PTE LTD.and other 4 companies

JAPAN

Products（Consolidated Subsidiaries)
HOYA CANDEO OPTRONICS CORPORATION

Service

HOYA PHOTONICS CORPORATION(Affiliates)
NH TECHNO GLASS CORPORATION
other 2 companies

Italic : affiliates accounted for by the equity method

10ServiceHOYA GROUP Annual Financial Report March 2007

3. Management Policies
An outline of the management policies of the HOYA Group is as follows:

Top Priority Policy of the Management"Maximization of Corporate Value"
1. SVA management(SVA:Shareholders' Value Added or an increment in shareholder value during one fiscal year)
In order to maximize corporate value, we will streamline our management and carry out SVA
management. We are confident that we will be able to respond to the expectations of ourshareholders and satisfy all stakeholders with an increase in corporate value by producing profitsthat exceed capital costs while paying due attention to all expenses.

2. Strategy of "Global Niche"
Applying our original technologies, which have been accumulated over many years, the Company
will develop technologies that will prevail in the global marketplace, create new business fields withgrowth potential to attain the top market shares therein, and develop them into highly profitablebusinesses.

3. Harmonizing the interests of management, employees and shareholders
In order to improve business results and produce profits for both shareholders andmanagement/employees simultaneously, board members are obliged to own shares in the
Company, stock-options and an employee stock ownership plan have been established that allow
employees to have a sense of participation in the management of the Company.
The Company has adopted new system that places importance on the employees' abilities
regardless of age or sex so that they can work with enthusiasm.

4. Global group management
We will make the best combination of management resources in order to give full play to ourcompetitive edge in a global perspective and strive to increase our share of overseas business.
Measures designed to promote globalization include not only expansion of the worldwide marketing
network and transfer of manufacturing overseas, but also employment of locals in the senior
management of overseas subsidiaries regardless of race.

5. Middle- to long-term policy on appropriation of retained earnings
The Company carries out its globalized management emphasizing consolidated accounting and its
management emphasizing shareholder interests and exerts efforts to increase the enterprise value
and shareholder value in response to shareholder expectations.
In terms of the cash dividend, the Company will determine the amount in consideration of thebalance among repayment of profit to shareholders, welfare of employees and replenishment ofretained earnings for future business development.
Funds from retained earnings will be appropriated for investments for the Company to establish the
HOYA brand, accelerate further growth, enhance competitive edge of its products, and develop
next-generation products.

11

HOYA GROUP Annual Financial Report March 2007

4. Consolidated Financial Statements (unaudited)(1) Consolidated Balance Sheets
HOYA CORPORATION and Consolidated Subsidiaries

Millions of Yen
Mar. 31, 2007ASSETS
Current assets
Cash and deposits
Notes and accounts receivable - trade
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful receivables
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Machinery and carriers
Tools, equipment and fixtures
Lands
Construction in progress
Total tangible fixed assets
Intangible fixed assets
Total intangible fixed assets
Investments and other assets
Investment securities
Deferred tax assets
Other assets
Allowance for doubtful receivables
Total investment and other assets
Total fixed assets
Deferred charges
Total deferred charges
TOTAL ASSETS

12Mar. 31, 2006

Variance(%)

120,621
94,29649,721
7,067
5,309-1,311
275,706

83,57478,38041,1787,407
3,246-1,512
212,273

29.9

33,87175,961
12,311
9,154
11,918143,218

29,54858,493
10,716
8,648
13,196
120,603

18.8

6,248

7,424

-15.8

14,575
2,723
5,493
-322
22,470171,937

14,060
2,757
4,601
-295
21,123
149,152

6.4
15.3

－
447,644111
361,537－
23.8

HOYA GROUP Annual Financial Report March 2007

HOYA CORPORATION and Consolidated Subsidiaries
LIABILITIES AND NET ASSETSLIABILITIESCurrent liabilities
Notes and accounts payable - trade
Income tax payable
Accrued bonuses to employees
Other current liabilities
Total current liabilities
Long-term liabilities
Allowance for special repairs
Other long-term liabilities
Total long-term liabilities
Total Liabilities
NET ASSETS
Shareholders' equity
Paid-in capital
Capital surplus
Earned surplus
Treasury stock
Advances on subscription to treasury stock
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Translation adjustments
Total valuation and translation adjustments
New share subscription rights
Minority interest
Total Net Assets
TOTAL LIABILITIES AND NET ASSETSMINORITY INTERESTSHAREHOLDERS' EQUITY
Common stock
Capital surplus
Retained earnings
Net unrealized gain (loss) on available-for-sale securities
Foreign currency translation adjustments
Treasury stock - at cost
Total Shareholders' Equity
TOTAL LIABILITIES, MINORITY INTERESTS ANDSHAREHOLDERS' EQUITY
Notes:
1. Accumulated depreciation
2. Guarantees of borrowings and lease obligations forcustomers and Group's employees
3. Number of shares of treasury stock (unit : shares)

13

Millions of Yen
As of
Mar.31,2007 Mar.31,2006 Variance(%)

28,77912,821
4,327
32,252
78,181

28,07014,342
4,207
32,68579,305

-1.4

890
1,427
2,317
80,499

619
1,211
1,831
81,137

26.5
-0.8

6,264
15,898322,513-12,7531
331,924

－
－
－
－
－
－

－

-85
33,26333,177167
1,876
367,145

－
－
－
－
－
－

－
－
－
－

447,644

－

－

－

919

－

－
－
－
－
－
－
－

6,264
15,898266,345110
7,142-16,279
279,480

－
－
－
－
－
－
－

－

361,537－

223,095

Millions of Yen
181,818

2,774

2,210

3,447,681

4,401,607

HOYA GROUP Annual Financial Report March 2007

(2) Consolidated Statements of Income
HOYA CORPORATION and Consolidated Subsidiaries
Millions of Yen
Years ended Mar. 31,
2007
2006
390,093344,228
197,410172,033
192,682
172,194
85,46971,098107,213101,095
5,827
4,869
2,901
1,788
－
242
642
1,285
2,283
1,552
10,131
2,327
86
142
822
706
－
6,711
2,510
1,478
102,909
103,637
10,513
2,389
9,629
109
884
2,280
6,290
8,660
3,327
625
1,055
1,688
767
3,725
87
1,232
1,053
1,388
107,132
97,36723,491
22,249
70
-511
178
9
83,39175,620Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
Equity in earnings of affiliates
OthersNon-operating expenses
Interest expense
Sales DiscountForeign exchange losses
OthersOrdinary income
Extra-ordinary gains
Gain on sales of property, plant and equipment
OthersExtra-ordinary losses
Loss on disposal of property, plant and equipment
Additional retirement benefits paid to employees
Maintenance of Environment
Loss on impairment
OthersIncome before income taxes and other items
Income taxes - Current
Income taxes - Deferred
Minority interests in net income
Net income
Basic net income per share(Yen)

193.50171.71

Variance
Value(%)
45,865
13.3
25,37714.8
20,488
11.9
14,371
20.2
6,118
6.1
958
19.7
1,113
-242
-643
731
7,804 335.4
-56
116
6,711
1,032
-728
-0.7
8,124 340.1
9,520-1,396-2,370
-27.4
2,702
-633
-2,958-1,145
-335
9,765
10.0
1,242
5.6
581
169
7,771
10.3
21.79

Diluted net income per share(Yen)
192.78171.0821.70
Notes:
1. Effect of Exchange Rate Change on Net Sales and Incomes ("2007 A" is the actual value of this period.
"2007 B" is the nominal value of this period which temporarily exchanged by the currency rate of the same
period last year. unit : millions of Yen)
2007 A
2007 Binfluences
Net sales
Million Yen
390,093383,270
6,823
Operating income
Million Yen
107,213101,272
5,941
Ordinary income
Million Yen
102,909
96,777
6,132
Net income
Million Yen
83,391
77,9705,421
2. Average rates of major foreign currencies:
US Dollar
Euro
Thail Baht

Yen
Yen
Yen

14

Years ended Mar. 31,
2007
2006
116.96113.93150.95138.133.24
2.81

Variance(%)
-2.7%
-9.3%
-15.3%HOYA GROUP Annual Financial Report March 2007

(3) Consolidated Statements of Shareholders' Equity
HOYA CORPORATION and Consolidated Subsidiaries
Millions of Yen
Shareholders' Equity
Paid-in
CapitalBALANCE MARCH 31, 2006
Net income
Appropriations
Cash dividends
Bonus to directors
Repurchase of treasury stocks
Disposal of treasury stocks

CapitalSurplus6,264

EarnedSurplus15,898266,345
83,391

Advances on
Total
subscription
Shareholders'to treasury
Equitystock-16,279
272,228
83,391

Treasury
Stock-25,843-64-1,606

Increase / decrease due to change inaccounting standard of overseas
consolidated subsidiaries-25,843
-64
-12
1,932

-12
3,539

290

290

Others1

1

Net increase / decrease during the term
under review except in Shareholders'EquityTotal increase / decrease during the term
under review

BALANCE MARCH 31, 2007--

56,1673,526

159,695

6,264

15,898322,513-12,7531

331,924

Millions of Yen
Valuation and Translation Adjustments
New Share
Valuation
Total
difference on Translation Valuation and Subscription
Rightsavailable-for- Adjustments Translation
sale securities
Adjustments
BALANCE MARCH 31, 2006
Net income
Appropriations
Cash dividends
Bonus to directors
Repurchase of treasury stocks
Disposal of treasury stocks

110

7,142

7,252

-

Minority
Interest

919

Total Net
Assets

280,400
83,391-25,843
-64
-12
1,932

Increase / decrease due to change inaccounting standard of overseas
consolidated subsidiaries

290

Others1

Net increase / decrease during the term
under review except in Shareholders'Equity-195

26,121

25,925167

956

27,049Total increase / decrease during the term
under review-195

26,121

25,925167

956

86,744-85

33,26333,177167

1,876

367,145BALANCE MARCH 31, 2007
Notes:
1. Condition of issued stocks

Commonstock

beginning of
the period
435,017,020

increaseduring theperiod－decreaseduring theperiod－end of theperiod435,017,020 unit : shares

increasedecreaseend of the
beginning ofCommonduring theduring theperiodthe period
stockperiodperiod4,401,607
2,861
956,787
3,447,681 unit : shares
The breakdown of increase/decrease of treasury stock (by reason) is as follows :Increase due to repurchase of treasury stock less than one unit
2,861 shares
Decrease due to sale of treasury stock less than one unit
387 shares
Decrease due to exercise of stock option
956,400 shares

2. Condition of treasury stock

15

HOYA GROUP Annual Financial Report March 2007

(4) Consolidated Statements of Cash Flows
HOYA CORPORATION and Consolidated Subsidiaries

Millions of Yen
Years ended Mar.31,
2007
2006
Variance

OPERATING ACTIVITIES:
Income before income taxes and minority interests
107,132
97,367
Depreciation and amortization
36,33826,251
Loss on impairment of long-lived assets
87
1,232
－
Gain on transfer of businesses-1,783
Provision for (reversal of ) accrued allowances for doubtful receivables-242
234
Provision for (reversal of ) accrued bonuses to employees
154
278
Provision for (Reversal of ) reserve for periodic repairs
26776Interest income and dividend receivable-2,922-1,794
Interest expense payable86
142
Foreign exchange loss (gain)
4,782
-598
Equity in earnings of affiliates-642-1,285Gain on sales of property, plant and equipment and investment securities-9,629-109
Loss on disposal of property, plant and equipment and investment securities
3,327
625
Loss on write-down of investment securities
7
13
Bonus to directors
-64
-65
Other
-705
204
(Increase) decrease in notes and accounts receivable-13,800-4,041(Increase) decrease in inventories-4,798-2,546(Increase) decrease in other current assets
2,249
2,097
Increase (decrease) in notes and accounts payable-1,208
3,643
Increase (decrease) in income taxes payable-1,022
662
Increase (decrease) in other current liabilities
241
1,757
Sub total
119,639
122,348
Interest and dividend receivable
2,556
1,865
Interest payable-40-112
Income taxes - paid
-23,361-18,246
Net cash provided by operating activities
98,793
105,855
INVESTING ACTIVITIES:
Purchases of property, plant and equipment-52,379-47,741
Proceeds from sales of property, plant and equipment
10,217266
Purchases of investment securities-407-2,069－Proceeds from sales of investment securities
30
Expenditure for acquisition of subsidiary's stocks for consolidation
-908
-337
Expenditure for loans-584-2
Income from collection of loans
77
116
Expenditure for other investments-3,274-4,630
Income from other investments
576
155
－
Proceeds from transfer of businesses
2,230
Net cash used in investing activities-46,652-52,012FINANCING ACTIVITIES:－Net increase (decrease) in short-term bank loans-207
Payments for purchase of treasury stock-12-64,031
Proceeds from sales of treasury stock
1,934
1,855
Dividends paid
-25,810-23,402
Dividends paid for minority shareholders-2-1
Net cash used in financing activities-23,891-85,787
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALE
8,798
2,645
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
37,047-29,300
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD
83,574
112,874
CASH AND CASH EQUIVALENTS, END OF PERIOD
120,621
83,574
Notes
Years ended Mar. 31,
1. Cash and Cash Equivalents at the End of the Period
2007
2006
Cash and deposits
120,621
83,574
Total
120,621
83,574

9,765
10,087-1,145
1,783
-476
-124
191
-1,128
-56
5,380
643
-9,520
2,702
-6
1
-909
-9,759-2,252152-4,851-1,684-1,516-2,709691
72-5,115-7,062-4,638
9,951
1,662
30
-571
-582
-39
1,356
421
-2,2305,360
20764,01979-2,408-1
61,896
6,153
66,347-29,300
37,047

2. Details of Important Non-financial Trading
Year ended Mar.31, 2007
None
Millions of Yen
Year ended Mar.31, 2006
Cancellation of treasury stock
53,180(with effect on Feb 1, 2006 for 14,379,000 shares)
RE : The number of total issued and outstanding shares after the cancellation was 435,017,020 shares.

16

HOYA GROUP Annual Financial Report March 2007

(5) Preparation of the Consolidated Financial Statements
Scope of Consolidation and Application of the Equity Method1.

Number of consolidated subsidiaries : 67 companies(Major consolidated subsidiaries :<overseas> HOYA HOLDINGS, INC., HOYA HOLDINGS N.V.,
HOYA HOLDINGS ASIA PACIFIC PTE LTD., HOYA PHOTONICS, INC.
<domestic> HOYA CANDEO OPTRONICS CORPORATION, HOYA HEALTHCARE CORPORATION

2.

Number of unconsolidated subsidiaries : None3.

Number of affiliates : 4 companies(Number of affiliates accounted for by the equity method : 1company, NH TECHNO GLASS CORPORATION)

Notes:Changes in Accounting Policies and Others
1. Changes in scope of consolidation and application of the equity method:(In comparison to March 31, 2006)
1) Scope of consolidation: 5 companies increased in total.

5 companies increased due to the establishment:

HOYA LENS INDIA PRIVATE LIMITED. (India)
HOYA LENS VIETNAM LTD. (Vietnam)
Other three companies (overseas)

1 company increased due to the acquisition

HOYA HILL OPTICS SA (PTY) LTD. (South Africa)

1 company decreased due to the merger into
the other subsidiary

HOYA CRYSTAL, INC. (U.S.A.)* merged into HOYA CORPORATION USA (USA)2) Application of the equity method
None

Consolidated
subsidiaries
Nonconsolidated
subsidiaries
Affiliates(accounted for by the equity
method)as of Mar. 31, as of Mar. 31,
2007
2006
67
62
(do 5, os62)(do 5, os57)(do -, os -)(do -, os -)45(do 4, os -)(do 5, os -)(1)(1)(do 1, os -)(do 1, os -)variance+5(do-, os +5)(do-, os -)-1(do-1, os-)(-)
(do-, os-)

Total Hoya Group

71

67

+4

(accounted for by the equity
method)

(1)

(1)

(-)

(do : domestic, os : overseas)
2.

Changes in accounting policy :From this fiscal year, the company has changed its classification of industry segment.

17

HOYA GROUP Annual Financial Report March 2007

(6) Notes for Consolidated Financial Statements
Notes Relating to Investment Securities and Derivatives
1.Investment securities with market values:（Millions of Yen）
As of Mar. 31,
2007
Available-for-sale

Securities ofwhich fair value
exceeds cost

Securities ofwhich fair value
does NOT
exceed cost

Cost

2006

Fair Value

Variance

Cost

Fair Value

Variance

Marketable Equity securities

159

267

108

1,692

1,874

181

Government bonds
Corporate bonds
Others
Sub total

159

267

108

1,692

1,874

181

Marketable Equity securities

1,532

1,274

-258

-

-

-

Government bonds
Corporate bonds
Others
Sub total
Total

1,532
1,692

1,274
1,541

-258
-150

1,692

1,874

181

2. Condition of sales of marketable securitiearket during this fiscal year:（Millions of Yen）
Years ended March 31,
2007

2006

－
－
－

Value of sales
Total of gains from sales
Total of losses from sales－－－

3. Investment securities of without market values:（Millions of Yen）
As of Mar. 31,
Non-marketable stock of subsidiaries
Total
Non-marketable equity securities
Others
Total

2007

2006

11,678
11,678
1,099
256
1,355

11,104
11,104
802
279
1,081

4. Derivatives
Significant hedge accounting methods(1) Hedge accounting methods
Deferral hedging is applied. Appropriation is adopted for hedging exchange risks when the criteria for
appropriation are met.
(2) Hedging methods, items covered by hedging and hedging strategy
Exchange risks are hedged based mainly on the company's "Internal Management Regulations", and thecompany has adopted a policy of not conducting any speculative derivative trading.
Hedging method: forward exchange contracts
Items hedged: Foreign currency denominated debt

18

HOYA GROUP Annual Financial Report March 2007

Notes Relating to Income Taxes
1. Breakdown of major factors giving rise to deferred tax assets and liabilities:
Millions of Yen
As of Mar. 31,
2007
2006

(1) Current deferred tax assets and liabilities
Deferred tax assets
Inventories - intercompany unrealized profits
Accrued bonuses to employees
Accrued enterprise taxes
Inventories - loss on write-down
Maintenance of environment
Other
Total amount of deferred tax assets - current(2) Non-current deferred tax assets and liabilities
Deferred tax assets
Excess amount of inclusion in deductible expenses fordepreciation
Loss on impairment not deductible
Loss on disposal of fixed assets not deductible
Excess amount of inclusion in deductible expenses forallowance for doubtful receivables
Other
Total amount of deferred tax assets - fixed
Deferred tax liabilities
Reserve for deferred income taxes on fixed assets
Special depreciation reserve
Net unrealized gain on available-for-sale securities
Other
Total amount of deferred tax liabilities - fixed
Net amount of deferred tax assets - fixed

2,647
1,655
922
78
－
1,763
7,067

1,692
1,601
727
253
1,474
1,657
7,407

1,576
622
518

1,962
1,376
－

110
600
3,429

105
258
3,702

-307
-232
－
-165
-705
2,723

-406
-298
-74
-165
-945
2,757

2. The effective income tax rates of the companies differed from the statutory tax rate for thefollowing reasons:Years ended Mar.31,
2007
2006
Statutory tax rate of the Company(Adjustment)
Lower income tax rates applicable to income in certain foreign countries
Expenses not permanently deductible for income tax purposes
Per capita portion
Non-taxable dividend income
Intercompany cash dividend and transactions
Equity in earnings of affiliates
Tax credit on experiment and research expenses
Other adjustment - net
Effective income tax rate

1940.4 %

40.4 %

-17.1
0.4
0.1
-1.5
1.5
-0.2
-0.7
-0.9
22.0

-18.2
0.4
0.1
-1.8
1.8
-0.5
-0.5
0.6
22.3

HOYA GROUP Annual Financial Report March 2007

Notes Relating to Employees' Retirement Benefits
1.

Systems of employees' retirement benefits the Company adopts
The Company had systems to support lump sum severance pay and an employees' pension
fund (Kosei Nenkin Kikin). During the third quarter of the fiscal year ended in March 2003,
the system of lump sum severance pay was abolished. The employees' pension fund was
dissolved with approval for its dissolution sanctioned by the Minister of Health, Labor andWelfare on January 29, 2003 and this has been in the process of completion. On May 26,
2004, the Company obtained approval from the Minister of Health, Labor and Welfare for thecompletion of the liquidation thereof.

2.

Details of liabilities for employees' retirement benefits(1) Breakdown of liabilities for employees' retirement benefits
None(2) Breakdown of expenses for employees' retirement benef
Additional retirement benefits paid to employees
Expenses for employees' retirement benefits

Millions of Yen
Years ended Mar.31,
2007
2006
1,055
1,688
1,055
1,688

(3) Calculation basis of liabilities for employees' retirement benefits
None

Notes Relating to Impairment of Fixed Assets(Units : Millions of Yen)

1. Crystal Division(1) Tokyo Studio, etc. in the Crystal Division
Location
Akishima-shi, Tokyo, etc.
Use
Facilities for manufacturing crystal glassware, etc.
Asset Class
Machinery and equipment, etc.
In the Crystal Division, which experienced a substantial decline in demand for personal consumption andfor corporate gifts amid the sluggish market, and book value of the asset group relating to this division
was decreased to its recoverable amount, and the decrease was posted as impairment loss under
extraordinary losses.

(2) Breakdown of impairment
Machinery, etc.
Total

Years ended Mar.31,
2006
2007
87
864
87
864

The recoverable amount of the asset group was measured in terms of its value in use while its future cash
flows were computed by discounting them by 5%.

2. Headquarters(1) Leased assets of head office
Location
Use
Asset Class

Machida-shi, Tokyo
Leasing
Land

The book value of the leased assets located in Machida City, Tokyo was reduced to the amount ofpotential recovery because of a decline in market price. The amount of reduction is recorded under
extraordinary losses as asset impairment losses.

(2) Breakdown of impairment
Land
Total

Years ended Mar.31,
2006
2007
368
368

The recoverable amount for this group of assets is measured based on the posted price.

20

HOYA GROUP Annual Financial Report March 2007

Per Share Information
Years ended Mar. 31,
2007
2006
845.98648.87193.50171.71
192.78171.08

Net asset per share (Yen)
Basic net income per share (Yen)
Diluted net income per share (Yen)The basement of the calculation of per share information as follows:

Years ended Mar. 31,
2007
2006
Net asset per share (Yen)Net assets (Millions of Yen)
(Minority interest) (Millions of Yen)
(Advances on subscription to treasury stock) (Millions of Yen)
(New share subscription rights) (Millions of Yen)
(Bonus to directors) (Millions of Yen)
Net assets on common stock (Millions of Yen)
Number of common stocks issued end of the term excluding
treasury stocks (unit:shares)

367,145
1,876
1
167
－
365,100

279,480－－－65
279,415

431,569,339

430,615,413

Basic net income per share
Net income (Millions of Yen)(bonus to directors) (Millions of Yen)
Net income on common stock (Millions of Yen)
Average number of common stocks (unit:shares)

83,391－
83,391
430,967,580

75,62065
75,554440,007,888

Diluted net income per share (Yen)
Net income (Millions of Yen)(bonus to directors) (Millions of Yen)
Net income on common stock (Millions of Yen)
Number of common stocks increased (unit:shares)
Average number of common stocks (unit:shares)

83,391－
83,391
1,615,517
432,583,097

75,62065
75,554
1,624,888
441,632,776

Material facts occuring after the closing of accounts"Regarding Management Integration between HOYA and PENTAX"HOYA and PENTAX have been carrying out discussions on the merger of the twocompanies to achieve management integration based on the Basic Understanding forManagement Integration signed and released on December 21, 2006. However, HOYA
found it difficult to achieve integration through a way of share swap merger.
In order to overcome the above circumstances, HOYA proposed to PENTAX on April 7,
2007, to begin the discussion between the two companies on a takeover offer from HOYA inplace of share swap, according to the basic agreement.
At this moment the discussion, including the possibilities of TOB, is continueing. The final
target of the integration is increasing corporate value and HOYA is striving to find the best
way to achieve this aim.

21

HOYA GROUP Annual Financial Report March 2007

(7) Segment Information (unaudited)
HOYA CORPORATION and Consolidated Subsidiaries

1. Industry Segments
Annual : for the year ended March 31, 2007
ElectroOptics
Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
AssetsDepreciation
Loss on impairment
Capital Expenditures
R&D Expenses
Number of employees (p)219,252413
219,665
139,581
80,084
36.5%
258,746
27,448－39,89910,503
19,570

Photonics

VisionCare

9,092 119,808
248
0
9,341 119,808
8,850 98,641
490 21,167
5.2% 17.7%
7,760 118,228
125
7,405
－
－
155 11,671
1,159
1,674
199
7,506

Millions of Yen
HealthOthersCare
40,849040,84931,634
9,214
22.6%
24,410
1,169
－
2,118
1,460
910

1,089
2,765
3,855
4,205
-350
-9.1%
2,518
45
87
90
122
198

Total

Elimin.
Consolidated
or corp.*

390,093
3,427 -3,427
393,521 -3,427
282,914-34
110,606 -3,393
28.1%
411,664 35,979
36,193145－
87
53,935496－
14,92028,38367

390,093
390,093282,880
107,21327.5%
447,644
36,33887
54,432
14,92028,450

Annual : for the year ended March 31, 2006

Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
AssetsDepreciation
Loss on impairment
Capital Expenditures
R&D Expenses
Number of employees (p)ElectroOptics

Photonics

VisionCare

190,551744
191,296
116,434
74,86239.1%
204,191
18,715－37,243
8,289
17,133

10,092 104,456
246
0
10,339 104,457
9,405 84,088
933 20,369
9.0% 19.5%
7,605 98,243
108
6,444
－
－
208
7,958
1,683
2,566
191
6,794

Millions of Yen
HealthOthersCare
35,483
035,48328,624
6,859
19.3%
19,927
855
－
2,391
1,555
733

3,641
4,366
8,009
7,517
492
6.1%
4,824
53
864
921
39
271

Total

Elimin.
Consolidated
or corp.*－344,228
5,357 -5,357
349,585 -5,357
246,068 -2,936
103,516 -2,421－
29.6%
334,792 26,745
26,17774864
368
48,722
63－
14,13425,122
54344,228－
344,228
243,132
101,095
29.4%
361,537
26,251
1,232
48,785
14,13425,176

Ref : Differences between the years ended Mar.31, 2007 and 2006
ElectroOptics
Net sales:
To outside customers
Variance
Intersegment
Total
Operating expenses
Operating income
Variance
AssetsDepreciation
Loss on impairment
Capital Expenditures
R&D Expenses
Number of employees (p)Photonics

VisionCare

Millions of Yen
HealthOthersCare

28,701 -1,000 15,352
5,366-2,552
15.1%-9.9% 14.7%
15.1% -70.1%
-331
2
0
0
-1,601
28,369-998 15,351
5,366-4,154
23,147-555 14,553
3,010-3,312
5,222
-443
798
2,355
-842
7.0% -47.5%
3.9%
34.3% -171.1%
54,555155 19,985
4,483-2,306
8,733
17
961
314
-8
-777
2,656
-53
3,713
-273
-831
2,214
-524
-892
-95
83
2,437
8
712
177
-73
*Elimi. or corp. : Eliminations or corporate

22

Total

Elimi. or
Consolidated
corp.*

45,865
13.3%-1,93043,93636,8467,090
6.8%
76,872
10,016
-777
5,213
786
3,261

1,930
1,930
2,902
(972)
9,234
71
-368
433
13

45,865
13.3%
45,86539,7486,118
6.1%
86,107
10,087-1,145
5,647
786
3,274

HOYA GROUP Annual Financial Report March 2007
Notes:
1. Products and Services of each Business Division:(1) From this fiscal year, the company has changed its segmentation of industry as follows, because thenecessity of classified disclosure for both Crystal and Service has decreased due to the decline of sales
and profits by the Company's re-organization :Division
Products and Services
Business Category

Information
Technologies

Electro-Optics

Photonics
Eye Care

Vision Care
Health Care

OthersPhotomasks and Maskblanks for semiconductors,
Masks and devices for liquid-crystal displays (LCDs)
Glass disks for hard disk drives (HDDs),
Optical lenses, optical glasses, electronic glasses,
Optical communication related devices, etc.
Lazer equipments for industrial, dental, and medical purposes,
Light sources for electronics industry, special optical glasses, etc.
Eyeglass lenses, eyeglass frames, etc.
Contact lenses and accessories, intraocular lenses, etc.
Crystal glass products; Design of information systems, etc.

(2) Formerly the company's business segment classification was as follows:Business Category
Division
Products and Services

Information
Technologies

Electro-Optics

Photonics
Eye Care
OthersVision Care
Health Care
CrystalService

Photomasks and Maskblanks for semiconductors,
Masks and devices for liquid-crystal displays (LCDs)
Glass disks for hard disk drives (HDDs),
Optical lenses, optical glasses, electronic glasses,
Optical communication related devices, etc.
Lazer equipments for industrial, dental, and medical purposes,
Light sources for electronics industry, special optical glasses, etc.
Eyeglass lenses, eyeglass frames, ophthalmic equipments, etc.
Contact lenses and accessories, intraocular lenses, etc.
Crystal glass products
Design of information systems, placement of temporary staff, etc.

(3) The business results for the year ended Mar. 31, 2006 according to the former business segment are as
follows:
Millions of Yen
Electro- Photo- Vision
HealthElimin.
Consoli
Crystal Service
Total
or corp.* -dated
Optics
nics
Care
Care
Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating income ratio
AssetsDepreciation
Loss on impairment
Capital Expenditures
R&D Expenses
Number of employees (p)190,551 10,092 104,456
35,483744
246
00
191,296 10,339 104,457
35,483
116,434 9,405
84,08828,62474,862933
20,369
6,859
39.1%
9.0%
19.5%
19.3%
204,191 7,605
98,24319,927
18,715
108
6,444
855
－
－
－
－
37,243
208
7,958
2,391
8,289 1,683
2,566
1,555
17,133
191
6,794
733
*Elimi. or corp. : Eliminations or corporate

1,864
33
1,898
2,052
-154
-8.2%
840
－
864
761
39
86

1,777
4,333
6,111
5,464
646
10.6%
3,984
53
－
159
－
185

344,228
5,357
349,585
246,068
103,51629.6%
334,792
26,177864
48,722
14,13425,122－(5,357)(5,357)(2,936)(2,421)－
26,745
74
368
63
－
54

344,228－
344,228
243,132
101,095
29.4%
361,537
26,251
1,232
48,785
14,13425,176

2. Amounts and composition of unallocable operating expenses are included in "Eliminations or Corporate".
Corporate operating expenses mainly consist of the administration expenses of the headquarters of theCompany and the overseas regional headquarters, which are not allocated to each industry segment. Corporate
operating expenses for the year ended Mar. 31, 2007 and 2006 are as follows:2007
3,369 million Yen
2006
2,629 million Yen
3. Corporate assets included in "Eliminations or Corporate" mainly consist of cash, time deposits, investments
securities and administrative assets of the Company and the overseas regional headquarters. Corporate assets
as of Mar. 31, 2007 and 2006 are as follows:2007 61,381 million Yen
2006 35,135 million Yen

23

HOYA GROUP Annual Financial Report March 2007

2. Geographical Segments
Annual : for the year ended March 31, 2007
Millions of Yen
Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
Assets

Japan

North
America

Europe

Asia

Total

270,373
26,847297,220
257,021
40,19913.5%
193,390

37,455305
37,761
36,915845
2.2%
13,50751,336812
52,14944,663
7,485
14.4%
107,564

30,927
159,124
190,052
135,226
54,82528.8%
207,158

390,093
187,089 -187,089
577,182 -187,089
473,826 -190,946
103,3553,857
17.9%
521,619-73,975

Elimi. or
Consolidated
corp.
390,093
390,093282,880
107,21327.5%
447,644

Annual : for the year ended March 31, 2006
Millions of Yen
Net sales:
To outside customers
Intersegment
Total
Operating expenses
Operating income
Operating margin
Assets

Japan

North
America

Europe

Asia

Total

244,998
23,900268,898
230,413
38,48414.3%
163,840

35,471
221
35,692
34,606
1,086
3.0%
22,37739,231
683
39,91433,366
6,548
16.4%
63,34524,526
120,813145,340
97,225
48,11433.1%
149,298－344,228
145,618 -145,618
489,846 -145,618
395,612 -152,479
94,234
6,861
－
19.2%
398,861-37,323

Elimi. or
Consolidated
corp.
344,228－
344,228
243,132
101,095
29.4%
361,537

Ref : Differences between the years ended Mar.31, 2007 and 2006
Millions of Yen
Japan
Net sales:
To outside customers
Variance
Intersegment
Total
Operating expenses
Operating income
Variance
AssetsNorth
America

EuropeAsia

25,375
1,984
12,105
6,401
10.4%
5.6%
30.9%
26.1%
2,947
84
129
38,311
28,322
2,069
12,23544,712
26,6082,309
11,29738,001
1,715
-241
937
6,711
4.5%
-22.2%
14.3%
13.9%
29,550-8,87044,21957,860*Elimi. or corp. : Eliminations or corporate

Total

Elimi. or
Consolidated
corp.

45,865
13.3%
41,47187,336
78,214
9,121
9.7%
122,758-41,471-41,471-38,467-3,004-36,652

45,865
13.3%
45,86539,7486,118
6.1%
86,107

Notes:
1. The Company and subsidiaries are summarized in four segments by geographic area based on the countries
where the Group offices are located. The segments consisted of the following countries:
North America:
Europe:Asia:

United States of America, Canada, etc.
Netherlands, Germany, United Kingdom, etc., including South Africa
Singapore, Thailand, China, Republic of Korea, Taiwan, etc., including Australia

2. Amounts and composition of unallocable operating expenses are included in "Eliminations or Corporate".
Corporate operating expenses mainly consist of the administration expenses of the headquarters of theCompany, which are not allocated to each industry segment. Corporate operating expenses for the years ended
Mar. 31, 2007 and 2006 are as follows:
2007

2,993 Million Yen

2006

2,317 Million Yen

3. Corporate assets included in "Eliminations or Corporate" mainly consist of cash, time deposits, investments
securities and administrative assets of the Company. Corporate assets as of Mar. 31, 2007 and 2006 are as
follows:
2007

59,046 Million Yen

2006

24

33,958 Million Yen

HOYA GROUP Annual Financial Report March 2007

3. Sales to Foreign Customers
Annual : for the year ended Mar. 31, 2007
Millions of Yen
Overseas Sales (A)Total Consolidated Net Sales (B)Overseas Sales ratio A/B
Regional Sales ratio

North
America

Europe44,95453,524 113,059

11.5%
21.3%

13.7%
25.3%

Asia

Other

Total

7

29.0%
53.4%

0.0%
0.0%

211,545
390,09354.2%
100.0%

Annual : for the year ended Mar. 31, 2006
Millions of Yen
Overseas Sales (A)Total Consolidated Net Sales (B)Overseas Sales ratio A/B
Regional Sales ratio
Ref:

EuropeAsia

42,673

41,20085,988

859

12.4%
25.0%

12.0%
24.1%

25.0%
50.4%

0.2%
0.5%

Other

Total

170,722344,22849.6%
100.0%

Differences between the years ended Mar.31, 2007 and 2006
Millions of Yen
Overseas Sales (A)Total Consolidated Net Sales (B)Variance of Overseas Sales

Note:

North
America

North
America

Europe

Asia

2,281

12,32427,071

5.3%

29.9%

31.5% -99.2%

Other

-852

Total

40,82345,865
23.9%

The Company and subsidiaries are summarized in four segments by geographic area based on
the countries where the Customers are located. The segments consisted of the following
countries:
North America: United States of America, Canada, etc.
Europe:Netherlands, Germany, United Kingdom, etc., including South Africa
Asia:
Singapore, Republic of Korea, Taiwan, etc., including Australia
Other:
Saudi Arabia, Brazil, etc.

25

HOYA GROUP Annual Financial Report March 2007

(8) Composition of Net Sales by Business Category
HOYA CORPORATION and Consolidated Subsidiaries(Unaudited)

Millions of Yen [%]Business Category
Company
Electro-Optics
Domestic
Overseas
total
Photonics
Domestic
Overseas
total
Information Technology
Domestic
Overseas
total

Years ended March 31,
2007
2006

Variance
Value%

97,405 ( 44.4 )
121,846 ( 55.6 )
219,252 [ 56.2 ]94,448 ( 49.6 )96,103 ( 50.4 )
190,551 [ 55.4 ]

2,957
25,74328,701

3.1
26.8
15.1

5,216 ( 57.4 )
3,876 ( 42.6 )9,092 [ 2.3 ]5,519 ( 54.7 )
4,573 ( 45.3 )10,092 [ 2.9 ]

-303
-697
-1,000

-5.5
-15.2
-9.9

102,622 ( 44.9 )
125,722 ( 55.1 )
228,344 [ 58.5 ]99,967 ( 49.8 )100,677 ( 50.2 )
200,644 [ 58.3 ]

2,655
25,04527,700

2.7
24.9
13.8

35,635 ( 29.7 )84,173 ( 70.3 )
119,808 [ 30.7 ]

36,089 ( 34.5 )
68,367 ( 65.5 )
104,456 [ 30.4 ]-454
15,806
15,352

-1.3
23.1
14.7

39,287 ( 96.2 )1,561 ( 3.8 )40,849 [ 10.5 ]34,228 ( 96.5 )
1,254 ( 3.5 )35,483 [ 10.3 ]

5,059
307
5,366

14.8
24.5
15.1

74,923 ( 46.6 )
85,735 ( 53.4 )
160,658 [ 41.2 ]70,317 ( 50.2 )
69,622 ( 49.8 )
139,940 [ 40.7 ]

4,606
16,113
20,718

6.6
23.1
14.8

OthersDomestic
Overseas
total

1,002 ( 92.0 )
87 ( 8.0 )1,089 [ 0.3 ]3,220 ( 88.4 )421 ( 11.6 )3,642 [ 1.0 ]-2,218-334-2,553

-68.9
-79.3
-70.1

Total Net Sales
Domestic
Overseas
Total

178,547 ( 45.8 )
211,545 ( 54.2 )
390,093 [ 100.0 ]

173,506 ( 50.4 )
170,722 ( 49.6 )
344,228 [ 100.0 ]

5,041
40,82345,865

2.9
23.9
13.3

Vision Care
Domestic
Overseas
total
Health Care
Domestic
Overseas
total
Eye Care
Domestic
Overseas
total

Notes: 1.Figures of less than a million yen are omitted.
2.Figures in ( ) are percentages of business category sales.
3.Figures in [ ] are percentages of total net sales.

26