TDK Corporation
1-13-1, Nihonbashi
Chuo-ku, Tokyo
103-8272 Japan
June 15, 2005
TDK Corporation
Corporate Communications Department
Michinori Katayama
+81(3)5201-7102
Amendments of FY March 2005 Earnings Release (Consolidated Results)
TDK Corporation has revised its consolidated results for fiscal 2005, ended
March 31, 2005, as announced on April 27, 2005.
1. Reasons for Amendments
In accordance with the Statement of Financial Accounting Standards No. 87
"Employers' Accounting for Pensions", the presentation of minimum pension
liability adjustments has been changed from the net amount to the gross amount
in the consolidated balance sheets. Accordingly, the consolidated balance
sheets of FY March 2005 Earnings Release is changed as follows:
There are no effects arising from this change on the consolidated statements of
income of TDK.
2. Amendments
(Yen millions)
Correction Original
As of March As of March
31, 2005 31, 2005
(ASSETS)
Noncurrent assets 297,398 36.8% 279,729 35.4%
Other assets 57,731 40,062
Total assets 807,689 100.0% 790,020 100.0%
(LIABILITIES)
Noncurrent liabilities 32,915 4.1% 15,246 1.9%
Retirement and severance benefits 28,839 11,170
Total liabilities 151,812 18.8% 134,143 17.0%
Total liabilities and stockholders' equity 807,689 100.0% 790,020 100.0%
Other changes resulting from these amendments are underlined in the
corresponding pages.
(1) Business Results and Financial Position
(2) Balance sheets
TDK Corporation
1-13-1, Nihonbashi
Chuo-ku, Tokyo
Contacts; 103-8272 Japan
TDK Corporation (Tokyo) Corporate Communications
Department
Michinori Katayama +81(3)5201-7102
TDK U.S.A. Corporation Francis J. Sweeney +1(516)535-2600
TDK Marketing Europe GmbH Marco Donadoni +49(2102)4870
FOR IMMEDIATE RELEASE
TOKYO - April 27, 2005 TDK Corporation today announced its Consolidated
business results prepared in conformity with accounting principles generally
accepted in the United States of America (the "U.S. GAAP") for fiscal year
("FY") 2005 and Non-Consolidated business results for FY 2005.
I. Consolidated
I-1) Summary
Consolidated results (April 1, 2004 - March 31, 2005)
FY2005 FY2004 Change
(April 1, 2004 - March 31, (April 1, 2003 -
2005) March 31, 2004)
Item/Term (Yen % (U.S.$ (Yen % (Yen Change
millions) thousands) millions) millions) (%)
Net sales 657,853 100.0 6,148,159 655,792 100.0 2,061 0.3
Operating income 59,830 9.1 559,159 56,510 8.6 3,320 5.9
Income from 62,072 9.4 580,112 55,712 8.5 6,360 11.4
continuing
operations
before income
taxes
Income from 48,613 7.4 454,327 42,863 6.5 5,750 13.4
continuing
operations
Net income 44,948 6.8 420,075 42,101 6.4 2,847 6.8
Per common share :
Net income/Basic Yen 339.76 U.S.$3.18 Yen 317.80
Net income/ Yen 339.55 U.S.$3.17 Yen 317.69
Diluted
____________
Note: As a result of the sale of a subsidiary in semiconductors & others
product, the operating results of the discontinued operation is presented as a
separate line item in the consolidated statements of income in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." Correspondence figures for
the previous fiscal year have been reclassed to conform to the presentation
used for the year ended March 31, 2005.
(Sales breakdown)
FY2005 FY2004 Change
(April 1, 2004 - March 31, (April 1, 2003 -
2005) March 31, 2004)
Product/Term (Yen % (U.S.$ (Yen % (Yen Change
millions) thousands) millions) millions) (%)
Electronic 545,214 82.9 5,095,458 519,792 79.3 25,422 4.9
materials and
components
Electronic 174,800 26.6 1,633,645 166,818 25.4 7,982 4.8
materials
Electronic devices 116,387 17.7 1,087,729 107,999 16.5 8,388 7.8
Recording devices 234,578 35.7 2,192,318 230,105 35.1 4,473 1.9
Semiconductors & 19,449 2.9 181,766 14,870 2.3 4,579 30.8
others
Recording media & 112,639 17.1 1,052,701 136,000 20.7 (23,361) -17.2
systems
Total sales 657,853 100.0 6,148,159 655,792 100.0 2,061 0.3
Overseas sales 473,828 72.0 4,428,299 487,169 74.3 (13,341) -2.7
____________
Note: U.S.$1=Yen 107
I-2) Management Policies
(1) Fundamental Management Policy
TDK was established in 1935 as the world's first company to commercialize a
magnetic material called ferrite. In the ensuing years, TDK has developed and
commercialized electronic materials, electronic devices, recording devices and
recording media, among other products. This drive has been based on the
company's founding spirit: "Contribute to culture and industry through
creativity."
To preserve its identity as a dynamic company, TDK is dedicated to creating
value for all stakeholders, including shareholders, customers, suppliers,
employees and society, by drawing on innovative thinking and a willingness to
tackle new challenges. TDK firmly believes that it must remain an organization
that is a constant source of exciting ideas that are of true value to
stakeholders.
(2) Fundamental Policy for Distribution of Earnings
Returning earnings to shareholders is one of TDK's highest management
priorities. Therefore, TDK's fundamental policy is to give consideration to a
consistent increase in dividends based on factors such as the return on equity
(ROE), dividends as a percentage of equity (DOE) and the company's results of
operations on a consolidated basis.
Retained earnings are used to make aggressive investments for growth, mainly in
the development of new products and technologies in key fields so as to respond
precisely to the rapid technological advances in the electronics industry.
(3) Policy Regarding Reduction of TDK's Share Trading Unit
On August 1, 2000, TDK reduced the Unit Stock (tangen) of its common shares
from 1,000 to 100 shares. This action led to an increase in the number of
individual shareholders and TDK's subsequent selection for an award from Tokyo
Stock Exchange for this achievement in the year ended March 31, 2004.
TDK believes that its shares now have sufficient liquidity. However, TDK will
consider a further reduction of the trading unit based on its stock price and
market needs as well as on a cost-benefit analysis.
(4) Medium- and Long-Term Management Strategy
In April 2004, TDK launched an initiative aimed at generating new growth with
the overriding aim of becoming an exciting company, an ongoing theme at TDK.
The electronics industry, to which TDK belongs, is becoming extremely
competitive as the advent of a full-fledged digital age shortens product
lifespans. To achieve growth in the future in this operating environment, TDK
must deliver new products that the market demands, without delay, precisely
when those products are needed, while keeping a close eye on market movements.
With this in mind, over the medium term, TDK will increase the share of sales
of new products in consolidated net sales and execute various initiatives to
drive growth.
TDK is aiming for growth by delivering the value customers demand in a timely
manner through the development of products rooted in the company's core
materials, process and evaluation & simulation technologies, which underpin its
core electronic materials and components business.
Strengthening its operations in this way is thus an important theme at TDK. TDK
is also reaffirming the importance of coexisting with society as a responsible
corporate citizen by conducting its own social activities based on two key
corporate philosophies: "Creativity" and "Culture." Furthermore, TDK will
comply with the U.S. Sarbanes-Oxley Act of 2002 and all other applicable laws
and regulations as it strengthens corporate governance.
(5) Pressing Issues
From a medium-term perspective, the electronics industry, TDK's field of
operations, is expected to see the growth of digital home appliances, the
convergence of information and communications, as typified by the increasingly
diverse functions offered by mobile phones, and the greater use of electronics
in motor vehicles. These trends are expected to result in continued expansion
in demand for the electronic components that TDK develops, manufactures and
sells.
At the same time, however, in the dynamically changing electronics industry, a
faster response than ever before will be required by the company's electronic
components business. TDK has continuously reformed and improved the structure
of its businesses, but it believes that responding to the changes in the
electronics industry requires making this process of reform and improvement an
ongoing drive. Furthermore, in the digital era of the electronics industry,
falling prices due to stiffer competition with new products, greater inventory
risk and other challenges are unavoidable. Nevertheless, TDK is determined to
be a company that can surmount these challenges and grow. And, to remain an
attractive and exciting company, TDK aims to grow by creating greater value. In
this vein, TDK will refine its core technologies (materials, process and
evaluation & simulation technologies) while honing in on three key fields that
it believes harbor prospects for growth: IT home electronics; high-speed,
large-capacity networks; and car electronics. Increasing the company's ability
to generate earnings by supplying products and technologies imbuing value that
these markets demand on a timely basis is a key issue. Moreover, TDK will take
on the challenge of advancing along a growth trajectory while making
investments that are prudent yet aggressive.
(6) Basic Stance on and Strategy to Improve Corporate Governance
Companies must conduct their activities and manage their operations in a fair,
impartial and transparent manner, abiding by laws and regulations, and with the
recognition that their existence is supported by shareholders, customers,
suppliers, employees and society. TDK has put in place various internal control
systems with this fundamental recognition in mind. It has also implemented a
number of other measures in the same vein, such as appointing an outside
director and outside statutory auditors; involving people outside the company
in setting directors' remuneration; and building a corporate ethics system, in
which reports are submitted directly to the Board of Directors, that includes
education and diffusion programs and other activities.
(6-1) Management structure and other corporate governance systems concerning
decision-making, strategy execution and supervision
In consideration of the size of the company, the streamlining of management,
the speed of decision-making and other factors, TDK has adopted the corporate
auditor system within the meaning of the Commercial Code of Japan; three of its
five corporate auditors come from outside the company. Furthermore, one of
TDK's seven directors is an outside director. Moreover, having introduced the
post of corporate officer, TDK has clearly demarcated responsibilities:
directors are responsible for decision-making and oversight, while corporate
officers have responsibility for executing day-to-day operations. Corporate
officers execute policies set by the Board of Directors in their respective
areas of responsibility.
Two full-time corporate auditors, three part-time corporate auditors and two
staff members perform audits. The auditors examine the performance of directors
mainly from the perspective of legality by inspecting departments, examining
important documents and attending important meetings. Collaboration among
corporate auditors involves submitting reports and holding discussions at
monthly meetings of the Board of Corporate Auditors.
The 8-member Management Review & Support Dept., an internal audit organization
that reports to the CEO of TDK, carries our periodic audits and offers support
from the perspective of the consistency of business execution and management
policy and the rationality of management efficiency. In the fiscal year ended
March 31, 2005, the department made preparations to comply with the U.S.
Sarbanes-Oxley Act of 2002, which requires companies to undertake
self-evaluations of the establishment and operation of internal control
systems.
Two certified public accountants, Seiichi Sasa and Hideaki Koyama, who belong
to the independent registered public accounting firm KPMG AZSA & Co., conduct
financial audits of the company. Mr. Sasa has been involved with these audits
for two years and Mr. Koyama for four years. Twelve accountants, seven
assistant accountants and eight other staff also assist in these audits.
To ensure the transparency of directors' remuneration, TDK has introduced
bonuses linked to the company's results and, at the same time, has the outside
director serve as chairperson of the Compensation Advisory Committee. Moreover,
to ensure corporate ethical standards are upheld, a Corporate Ethics Committee
was established at TDK and ethics councils were formed at domestic and overseas
subsidiaries. These actions are part of ongoing efforts to build a global
corporate ethics management framework that also encompasses domestic and
overseas subsidiaries. To monitor the state of compliance with corporate
ethical standards, a "helpline" has been established, creating an internal
system that encourages employees to report matters involving corporate ethics
and to offer suggestions.
The Compensation Advisory Committee and Corporate Ethics Committee report
directly to the Board of Directors.
Another defining aspect of TDK's corporate governance system is the ability to
receive advice and directives from outside legal counsel regarding risks
associated with TDK's corporate activities. Moreover, to give the company the
best managerial structure for responding flexibly to the various changes in its
operating environment, and to build greater trust with shareholders, the
company has set the terms of directors to one year.
In the fiscal year ended March 31, 2005, the directors and corporate auditors
were paid remuneration of �194 million and �59 million, respectively. The total
amount paid to directors and corporate auditors was thus �254 million.
Furthermore, bonuses totaling �103 million were paid to TDK directors. The
amount of remuneration related to audit certification of the parent company
that was paid to independent auditors KPMG AZSA & Co. was �94 million.
(6-2) Personal, financial and trading relationships between the company and the
outside director and outside corporate auditors, and other beneficial
relationships
There are no personal or financial relationships between TDK and the outside
director or the three outside corporate auditors.
(6-3) Measures taken to enhance corporate governance over the past year
To ensure that corporate ethical standards are being upheld, TDK has put in
place a global corporate ethics framework that encompasses the activities of
overseas as well as domestic subsidiaries. Activities are ongoing to oversee
and refine this system. Because TDK is listed on the New York Stock Exchange,
it is subject to the U.S. Sarbanes-Oxley Act of 2002, an extremely strict law
relating to corporate governance that was prompted by a series of scandals
involving U.S. companies. To comply with this law, a project team that includes
outside experts is undertaking a fundamental review of and rebuilding corporate
systems, including those of subsidiaries. At the same time, TDK continues to
identify and take countermeasures against risk factors associated with its
business activities. In addition, TDK restricts the work that is outsourced to
independent auditors so as to preserve their impartiality and independence.
I-3) Business Results and Financial Position
1. Summary
Consolidated results for fiscal 2005, ended March 31, 2005, were as follows.
In the electronics industry in the first half of fiscal 2005, demand for
digital home appliances, such as LCD and plasma flat-screen TVs and DVD
recorders, was boosted by the Summer Olympic Games in Athens, and other events.
This resulted in strong demand for the TDK Group's electronic components in the
first half. However, demand for these components began to cool in the second
half in line with production cutbacks of finished products that use them. In
this business environment, TDK continued to implement profit structure reforms.
TDK also actively made investments to drive growth, such as by ramping up
production capacity of capacitors and forging a strategic alliance regarding
HDD heads.
As a result, TDK posted consolidated net sales of �657,853 million
(U.S.$6,148,159 thousand), up 0.3% from �655,792 million. Operating income rose
5.9%, from �56,510 million to �59,830 million (U.S.$559,159 thousand). Income
from continuing operations before income taxes increased 11.4%, from �55,712
million to �62,072 million (U.S.$580,112 thousand). Net income rose 6.8%, from
�42,101 million to �44,948 million (U.S.$420,075 thousand). Basic net income
per common share was �339.76 (U.S.$3.18), up from �317.80.
During the year, the average exchange rate was �107.55 for the U.S. dollar and
�135.17 for the euro, representing a 5.0% appreciation in the yen's value
against the U.S. dollar and a 1.9% decline against the euro. Overall, exchange
rate movements had the effect of lowering net sales by approximately �20.6
billion and operating income by approximately �4.0 billion.
(Sales by Segment)
TDK's businesses are broadly classified into two business segments: the
electronic materials and components segment and the recording media & systems
segment.
(1) Electronic materials and components segment
This segment is made up of four product sectors: (1-1) electronic materials,
(1-2) electronic devices, (1-3) recording devices, and (1-4) semiconductors &
others.
Segment net sales increased 4.9%, from �519,792 million to �545,214 million
(U.S.$5,095,458 thousand). Segment operating income rose 15.0%, from �58,715
million to �67,520 million (U.S.$631,028 thousand).
Looking at electronic materials and electronic devices, demand for components
was strong in the fiscal year's first half on the back of higher demand for
digital home appliances driven by the Athens Summer Olympic Games. However, the
second half saw sales prices of components drop as demand cooled due to
inventory cutbacks of digital home appliances. The overall result, however, was
a year-on-year increase in sales of both electronic materials and electronic
devices.
In recording devices, HDD demand was lackluster in the first half of fiscal
2005 due to inventory cutbacks by customers following strong HDD demand in the
second half of the previous fiscal year. Demand for HDD heads also picked up in
the second half of fiscal 2005 once this adjustment phase ended. The result was
a year-on-year increase in sales of recording devices.
Sector results were as follows.
(1-1) Electronic materials
This sector is broken down into two product categories: capacitors, and ferrite
cores and magnets.
Sales in the electronic materials sector rose 4.8%, from �166,818 million to
�174,800 million (U.S.$1,633,645 thousand).
(Capacitors) Sales rose year on year. Sales of multilayer chip capacitors, the
main product in the capacitors sector, were strong in the first half, as
previously mentioned. In the second half, amid lackluster demand, TDK was able
to absorb sales price declines and the effect of forex movements by improving
the sales mix. These factors led to higher year-on-year sales.
(Ferrite cores and magnets) Sales of ferrite cores and magnets increased year
on year. In ferrite cores, sales declined from the previous fiscal year despite
higher demand for general-purpose power supply cores for digital home
appliances and cores for communications equipment. This decrease was due to a
reduction in output of deflection yoke cores and flyback transformers cores
used in CRT TVs. However, sales of magnets increased year on year, the result
of steadily rising demand for use in automotive and HDD applications. The net
result was a year-on-year increase in sales of ferrite cores and magnets as a
whole.
(1-2) Electronic devices
This sector has three product categories: inductive devices, high-frequency
components and other products.
Sales in the electronic devices sector rose 7.8%, from �107,999 million to
�116,387 million (U.S.$1,087,729 thousand).
(Inductive devices) Sales increased year on year. Inductive devices, the
largest product category in the electronic devices sector, posted higher sales
despite lower sales prices and the negative effect of forex movements. The
increase was attributable to higher demand spurred by acceleration in the pace
at which automobiles are incorporating electronics and the increasing
sophistication of mobile phones, as well as new product launches.
(High-frequency components) Sales of high-frequency components declined
marginally year on year because higher sales volume and an improved product mix
failed to completely offset persistently strong discounting pressure from
mobile phone handset manufacturers, the main customer for these components.
(Other products) Sales of other products rose year on year. In power systems,
sales of DC-DC converters and DC-AC inverters were healthy. Sensors and
actuators recorded higher sales due to growth in demand for use in PCs and
peripherals and communications equipment. As a result of this, overall sales of
other products were higher than in the previous fiscal year.
(1-3) Recording devices
This sector has two product categories: HDD heads and other heads.
Sector sales increased 1.9%, from �230,105 million to �234,578 million
(U.S.$2,192,318 thousand).
(HDD heads) Sales increased year on year. In HDD heads, the main product in
this sector, TDK had to overcome the loss of business from a major customer
that started producing heads in house in 2004, as well as the impact of falling
sales prices and unfavorable forex movements. Cutbacks in HDD inventories at
customers in the first half of the year also shaped the market. However, demand
for HDD heads rose in the second half of the fiscal year following the end of
these cutbacks, leading to higher year-on-year sales.
(Other heads) Sales of other heads declined year on year, due to sluggish sales
of optical pickups.
(1-4) Semiconductors & others
Sector sales climbed 30.8%, from �14,870 million to �19,449 million
(U.S.$181,766 thousand). TDK recorded slightly higher sales of anechoic
chambers for electromagnetic noise control and growth in external sales of
manufacturing equipment due to higher investments in semiconductor facilities
and equipment by customers.
(2) Recording media & systems segment
This segment is made up of four product categories: audiotapes, videotapes,
optical media and other products.
Segment sales declined 17.2%, from �136,000 million to �112,639 million
(U.S.$1,052,701 thousand). The segment recorded an operating loss of �7,690
million (U.S.$71,869 thousand), an increase of 248.8% from last year's
operating loss of �2,205 million.
(Audiotapes and videotapes) Sales of audiotapes and videotapes declined year on
year. While TDK maintained a high market share, demand is declining for these
products as a whole.
(Optical media) Sales of optical media increased, with higher DVD sales volumes
offsetting a sharp fall in prices of DVDs and lower CD-R sales.
(Other products) Sales of other products decreased year on year. There was an
increase in sales of LTO-standard* (Linear Tape-Open) tape-based data storage
media for computers. However, a decline in sales caused by the sale in the
previous fiscal year of a U.S. software development subsidiary and lower sales
of recording equipment brought overall sales of other products down year on
year.
*Linear Tape-Open, LTO, LTO logo, Ultrium and Ultrium logo are trademarks of
HP, IBM and Certance LLC in the U.S., other countries or both.
(Sales by Region)
Detailed geographic segment information can be found in the segment information
on page 18 of the consolidated results.
By region, in Japan, sales in the electronic devices sector and recording media
& systems segment declined, while higher sales were recorded in the electronic
materials, recording devices and semiconductors & others sectors.
In the Americas, sales decreased in the electronic materials and recording
devices sectors as well as the recording media & systems segment. The higher
yen versus the U.S. dollar also impacted sales in the Americas.
In Europe, lower sales were recorded in the electronic materials and
semiconductors & others sectors as well as the recording media & systems
segment.
In Asia (excluding Japan) and other areas, sales declined in the recording
devices sector and recording media & systems segment, but sales increased in
the electronic materials and electronic devices sectors.
The overall result was a 2.7% decrease in overseas sales year on year, from
�487,169 million to �473,828 million (U.S.$4,428,299 thousand). Overseas sales
accounted for 72.0% of consolidated net sales, a 2.3 percentage point decrease
from 74.3% one year earlier.
On a parent-company basis, net sales increased 3.9%, from �316,050 million to
�328,452 million (U.S.$3,069,644 thousand). Operating income increased 392.8%,
from �1,756 million to �8,653 million (U.S.$80,869 thousand). Current income
rose 197.3%, from �10,277 million to �30,550 million (U.S.$285,514 thousand).
Net income increased 786.3%, from �4,458 million to �39,513 million
(U.S.$369,280 thousand). Basic net income per common share was �297.93
(U.S.$2.78), compared with �32.87 a year earlier.
TDK plans to pay a year-end dividend of �40 per common share. Together with the
interim dividend of �30 per common share paid in December 2004, the planned
dividend per common share applicable to the year will be �70.
2. Financial Position
(2-1) The following table summarizes TDK's consolidated balance sheet at March
31, 2005.
Total assets �807,689 million (4.9% increase)
Total stockholders' equity �650,715 million (12.9% increase)
Equity ratio 80.6% (5.8 percentage point
increase)
At the end of the year, cash and cash equivalents were �24,353 million higher
than on March 31, 2004. Net trade receivables were �9,668 million higher and
net property, plant and equipment rose �8,024 million. However, other assets
decreased �9,489 million. As a result of the above items and other changes,
total assets increased �37,370 million.
Total liabilities decreased �39,012 million. Trade payables and income taxes
payable increased �2,175 million and �3,978 million, respectively, while
retirement and severance benefits declined �44,682 million following the
transfer of the substitutional portion of Employees' Pension Fund (EPF)
liabilities to the government.
Total stockholders' equity increased �74,496 million due to a �36,449 million
increase in retained earnings and a �38,730 million decrease in accumulated
other comprehensive loss.
Amendments (June 15, 2005)
(2-2) Cash Flows
(� millions)
Fiscal Fiscal Change
2005 2004
Net cash provided by operating activities 93,582 113,820 (20,238)
Net cash used in investing activities (60,863) (37,647) (23,216)
Net cash used in financing activities (9,458) (9,661) 203
Net cash provided by (used in) discontinued (1,625) 761 (2,386)
operations
Effect of exchange rate changes on cash and cash 2,717 (10,669) 13,386
equivalents
Net increase in cash and cash equivalents 24,353 56,604 (32,251)
Cash and cash equivalents at beginning of period 227,155 170,551 56,604
Cash and cash equivalents at end of period 251,508 227,155 24,353
Operating activities provided net cash of �93,582 million (U.S.$874,598
thousand), a year-on-year decrease of �20,238 million. Net income rose �2,847
million to �44,948 million (U.S.$420,075 thousand) and depreciation and
amortization increased �2,080 million to �52,806 million (U.S.$493,514
thousand). In changes in assets and liabilities, inventories decreased �11,329
million, trade payables decreased �7,955 million, accrued expenses decreased
�12,718 million, income taxes payables, net decreased �1,856 million and
retirement and severance benefits decreased �6,766 million.
Investing activities used net cash of �60,863 million (U.S.$568,813 thousand),
�23,216 million more than a year earlier. This mainly reflected a �16,534
million increase to �61,005 million (U.S.$570,140 thousand) in capital
expenditures and a �2,423 million increase to �2,424 million (U.S.$22,654
thousand) in payments for purchase of investments in securities.
Financing activities used net cash of �9,458 million (U.S.$88,393 thousand),
�203 million less than a year earlier. The main outflow was �7,938 million
(U.S.$74,187 thousand) for dividends paid.
(2-3) Trends in Cash Flow Indicators
FY2001 FY2002 FY2003 FY2004 FY2005
Stockholders' equity ratio (%) 77.8 77.9 74.1 74.8 80.6
Capital adequacy ratio on a market value basis 133.8 121.7 80.4 136.7 120.2
(%)
No. of years to redeem debt 0.10 0.07 0.02 0.00 0.00
Interest coverage ratio (times) 138.0 32.8 180.9 352.4 288.8
[Notes]
Stockholders' equity ratio = Total stockholders' equity / Total assets
Capital adequacy ratio on a market value basis = Market capitalization (*1) /
Total assets
(*1) Market capitalization = Closing price of TDK's common shares on the Tokyo
Stock Exchange on March 31, 2005 x Shares issued and outstanding at year-end
after deducting treasury stock
Amendments (June 15, 2005)
No. of years to redeem debt = Interest-bearing liabilities (*2) / Cash flows
from operating activities (*3)
(*2) Interest-bearing liabilities: The balance of "short-term debt" and
"long-term debt" included in "long-term debt, excluding current installments"
on the consolidated balances sheets.
(*3) Cash flows from operating activities: "Net cash provided by operating
activities" on the consolidated statements of cash flows. Interest coverage
ratio = Cash flows from operating activities / Interest payments (*4)
(*4) Interest payments: "Interest expense" on the consolidated statements of
income
3. Business Risks
With development, production and sales bases in countries around the world, the
TDK Group is engaged in global business activities. Furthermore, the
electronics industry, the main field of operations of the TDK Group, is seeing
dramatic technological innovation and changes in market prices, resulting in
intense competition in new product development and efforts to win customers.
Because of these and other factors, the TDK Group is subject to various
business risks that include, but are not limited to, changes in demand and
foreign exchange rates caused by world economic trends; unpredictable events in
conducting business overseas; more intense competition in the development of
new products in line with rapid technological innovation; the ability to
respond to intense price competition and diversifying demands from customers;
the ability to acquire intellectual property rights; the ability to procure raw
materials and other products; increasingly stringent environmental regulations
internationally, and unavoidable natural disasters.
4. Fiscal 2006 Projections
TDK's consolidated and non-consolidated projections for fiscal 2006, the year
ending March 31, 2006, are as follows.
[Consolidated Projections for Fiscal 2006]
Year ending % Year ended
March change March
2006 from 2005
FY05
(� (�
millions) millions)
Net sales 690,000 4.9 657,853
Operating income 67,000 12.0 59,830
Income before income taxes 69,000 11.2 62,072
Net income 50,000 11.2 44,948
[Non-Consolidated Projections]
Year ending % Year ended
March change March
2006 from 2005
FY05
(� (�
millions) millions)
Net sales 334,900 2.0 328,452
Operating income 17,300 99.9 8,653
Current income 39,800 30.3 30,550
Net income 27,000 -31.7 39,513
Note:
The projections are based principally on the following assumptions:
* An average yen-U.S. dollar exchange rate of �100 for the full year.
* There is expected to be a weak recovery generally in demand for passive
components (electronic materials and electronic devices) in the first half
of fiscal 2006. However, with current inventories of finished products
estimated to be at generally suitable levels, in the second half of fiscal
2006, there is expected to be an increase in production of finished
products in line with growth in demand at the end of 2005. This increase is
expected to also lead to higher demand for components in the second half of
the fiscal year.
* Sales of recording devices are expected to increase in fiscal 2006,
continuing on from the previous fiscal year. With the base of demand
widening for HDDs, double-digit annual growth is expected to continue in
fiscal 2006. Furthermore, the growth in demand for HDDs for video recorders
and other consumer product applications is also expected to boost demand
for HDD heads, supporting sales of these products.
* Lower sales are forecast in the recording media & systems segment. Sales of
audiotapes and videotapes are expected to decline in line with falling
demand. While sales of optical media products and tape-based data storage
media for computers are forecast to increase, this growth is unlikely to
fully offset the decline in sales of audiotapes and videotapes. In fiscal
2006, TDK plans to implement strategies to counter falling DVD sales
prices, a factor behind the deterioration in earnings in fiscal 2005, as
well as push ahead with ongoing structural reforms of production and sales
divisions.
Cautionary Statement About Projections
This earnings release contains forward-looking statements, including
projections, plans, policies, management strategies, targets, schedules,
understandings and evaluations, about TDK and its group companies that are not
historical facts. These forward-looking statements are based on current
forecasts, estimates, assumptions, plans, beliefs and evaluations in light of
information available to management on the date of this earnings release.
In preparing forecasts and estimates, TDK and its group companies have used, as
their bases, certain assumptions as necessary, in addition to confirmed
historical facts. However, due to their nature, there is no guarantee that
these statements and assumptions will prove to be accurate in the future. TDK
therefore wishes to caution readers that these statements, facts and certain
assumptions contained in this earnings release are subject to a number of risks
and uncertainties and may prove to be inaccurate.
The electronics markets in which TDK and its group companies operate are highly
susceptible to rapid changes. Furthermore, TDK and its group companies operate
not only in Japan, but in many other countries. As such, factors that can have
significant effects on its results include, but are not limited to, shifts in
technology, demand, prices, competition, economic environments and foreign
exchange rates.
The premises and assumptions used in computing the projections in this earnings
release include, but are not limited to, those explained above.
Consolidated
I-4) Statements of income
FY2005 FY2004 Change
(April 1, 2004 - March 31, (April 1, 2003 -
2005) March 31, 2004)
Item/Term (Yen % (U.S.$ (Yen % (Yen Change
millions) thousands) millions) millions) (%)
Net sales 657,853 100.0 6,148,159 655,792 100.0 2,061 0.3
Cost of sales 484,323 73.6 4,526,383 476,407 72.6 7,916 1.7
Gross profit 173,530 26.4 1,621,776 179,385 27.4 (5,855) -3.3
Selling, general and 119,886 18.2 1,120,430 122,875 18.8 (2,989) -2.4
administrative
expenses
Transfer to the
government of the
substitutional
portion of
Employees' Pension
Fund:
Subsidy from the (33,533) -5.1 (313,392) - - (33,533) -
government
Loss on settlement 27,347 4.2 255,579 - - 27,347 -
Operating income 59,830 9.1 559,159 56,510 8.6 3,320 5.9
Other income
(deductions):
Interest and 1,692 15,813 1,189 503
dividend income
Interest expense (324) (3,028) (323) (1)
Foreign exchange (856) (8,000) (3,064) 2,208
gain (loss)
Other-net 1,730 16,168 1,400 330
Total other income 2,242 0.3 20,953 (798) -0.1 3,040 -
(deductions)
Income from 62,072 9.4 580,112 55,712 8.5 6,360 11.4
continuing
operations before
income taxes
Income taxes 12,980 1.9 121,308 12,490 1.9 490 3.9
Income from 49,092 7.5 458,804 43,222 6.6 5,870 13.6
continuing
operations before
minority interests
Minority interests 479 0.1 4,477 359 0.1 120 33.4
Income from 48,613 7.4 454,327 42,863 6.5 5,750 13.4
continuing
operations
Loss from 3,665 0.6 34,252 762 0.1 2,903 381.0
discontinued
operations, net of
taxes
Net income 44,948 6.8 420,075 42,101 6.4 2,847 6.8
____________
Notes:
1. In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets", the figures for the year ended March 31, 2004 relating
to discontinued operations have been reclassified accordingly.
2. U.S.$1=Yen 107
Consolidated
I-5) Balance sheets
ASSETS
As of March 31, 2005 As of March 31, Change
2004
Item/Term (Yen % (U.S.$ (Yen % (Yen
millions) thousands) millions) millions)
Current assets 510,291 63.2 4,769,074 475,773 61.8 34,518
Cash and cash equivalents 251,508 2,350,542 227,155 24,353
Marketable securities 1,609 15,037 402 1,207
Net trade receivables 147,999 1,383,168 138,331 9,668
Inventories 74,924 700,224 77,301 (2,377)
Other current assets 34,251 320,103 32,584 1,667
Noncurrent assets 297,398 36.8 2,779,421 294,546 38.2 2,852
Investments in securities 22,698 212,131 18,381 4,317
Net property, plant and 216,969 2,027,748 208,945 8,024
equipment
Other assets 57,731 539,542 67,220 (9,489)
TOTAL 807,689 100.0 7,548,495 770,319 100.0 37,370
LIABILITIES AND STOCKHOLDERS' EQUITY
As of March 31, 2005 As of March 31, Change
2004
Item/Term (Yen % (U.S.$ (Yen % (Yen
millions) thousands) millions) millions)
Current liabilities 118,897 14.7 1,111,187 115,218 15.0 3,679
Short-term debt 103 963 416 (313)
Trade payables 62,092 580,299 59,917 2,175
Accrued expenses 42,636 398,467 45,534 (2,898)
Income taxes payables 8,667 81,000 4,689 3,978
Other current liabilities 5,399 50,458 4,662 737
Noncurrent liabilities 32,915 4.1 307,617 75,606 9.8 (42,691)
Long-term debt, excluding 81 757 27 54
current installments
Retirement and severance 28,839 269,523 73,521 (44,682)
benefits
Deferred income taxes 751 7,019 215 536
Other noncurrent liabilities 3,244 30,318 1,843 1,401
Total liabilities 151,812 18.8 1,418,804 190,824 24.8 (39,012)
Minority interests 5,162 0.6 48,242 3,276 0.4 1,886
Common stock 32,641 305,056 32,641 -
Additional paid-in capital 63,051 589,262 63,051 -
Legal reserve 16,918 158,112 16,497 421
Retained earnings 597,205 5,581,355 560,756 36,449
Accumulated other (51,657) (482,776) (90,387) 38,730
comprehensive income (loss)
Treasury stock (7,443) (69,560) (6,339) (1,104)
Total stockholders' equity 650,715 80.6 6,081,449 576,219 74.8 74,496
TOTAL 807,689 100.0 7,548,495 770,319 100.0 37,370
____________
Note: U.S.$1=Yen 107
Amendments (June 15, 2005)
Consolidated
I-6) Statements of stockholders' equity
FY2005 FY2004
(April 1, 2004 - (April 1, 2003 -
March 31, 2005) March 31, 2004)
Item/Term (Yen (U.S.$ (Yen millions)
millions) thousands)
Common stock:
Balance at beginning of period 32,641 305,056 32,641
Balance at end of period 32,641 305,056 32,641
Additional paid-in capital:
Balance at beginning of period 63,051 589,262 63,051
Balance at end of period 63,051 589,262 63,051
Legal reserve:
Balance at beginning of period 16,497 154,177 15,953
Transferred from retained earnings 421 3,935 544
Balance at end of period 16,918 158,112 16,497
Retained earnings:
Balance at beginning of period 560,756 5,240,710 525,919
Net income 44,948 420,075 42,101
Cash dividends (7,938) (74,187) (6,625)
Losses on sales of treasury stock (140) (1,308) (95)
Transferred to legal reserve (421) (3,935) (544)
Balance at end of period 597,205 5,581,355 560,756
Accumulated other comprehensive income
(loss):
Balance at beginning of period (90,387) (844,738) (78,824)
Other comprehensive income (loss) for 38,730 361,962 (11,563)
the period, net of tax
Balance at end of period (51,657) (482,776) (90,387)
Treasury stock:
Balance at beginning of period (6,339) (59,243) (4,855)
Acquisition of treasury stock (1,672) (15,626) (1,865)
Exercise of stock option 568 5,309 381
Balance at end of period (7,443) (69,560) (6,339)
Total stockholders' equity 650,715 6,081,449 576,219
Disclosure of comprehensive income
(loss):
Net income for the period 44,948 420,075 42,101
Other comprehensive income (loss) for 38,730 361,962 (11,563)
the period, net of tax
Total comprehensive income for the 83,678 782,037 30,538
period
____________
Note: U.S.$1=Yen 107
Consolidated
I-7) Statements of cash flows
FY2005 FY2004
(April 1, 2004 - (April 1, 2003 -
March 31, 2005) March 31, 2004)
Item/Term (Yen (U.S.$ (Yen millions)
millions) thousands)
Cash flows from operating activities:
Net income 44,948 420,075 42,101
Loss from discontinued operations, net 3,665 34,252 762
of tax
Income from continuing operations 48,613 454,327 42,863
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 52,806 493,514 50,726
Loss on disposal of property and 1,190 11,121 1,363
equipment
Deferred income taxes (5,220) (48,785) 2,214
Loss (gain) on securities, net 142 1,327 1,093
Gain on sale of a subsidiary (1,799) (16,813) (567)
Changes in assets and liabilities:
Increase in trade receivables (7,343) (68,626) (7,680)
Decrease (increase) in inventories 3,461 32,346 (7,868)
Increase in trade payables 245 2,290 8,200
Increase (decrease) in accrued expenses (3,840) (35,888) 8,878
Increase (decrease) in income taxes 3,848 35,963 5,704
payables, net
Increase (decrease) in retirement and 2,519 23,542 9,285
severance benefits, net
Other-net (1,040) (9,720) (391)
Net cash provided by operating 93,582 874,598 113,820
activities
Cash flows from investing activities:
Capital expenditures (61,005) (570,140) (44,471)
Proceeds from sale and maturities of 1,788 16,710 1,814
investments in securities
Payment for purchase of investments in (2,424) (22,654) (1)
securities
Payment for purchase of other (221) (2,065) (442)
investments
Proceeds from sales of property, plant 999 9,336 4,299
and equipment
Acquisition of minority interests - - (366)
Proceeds from sale of a subsidiary - - 1,523
Other-net - - (3)
Net cash used in investing activities (60,863) (568,813) (37,647)
Cash flows from financing activities:
Proceeds from long-term debt 218 2,037 69
Repayment of long-term debt (164) (1,533) (479)
Increase (decrease) in short-term debt, (330) (3,084) (1,047)
net
Sale (purchase) of treasury stock, net (1,244) (11,626) (1,579)
Dividends paid (7,938) (74,187) (6,625)
Net cash used in financing activities (9,458) (88,393) (9,661)
Net cash provided by (used in) (1,625) (15,187) 761
discontinued operations
Effect of exchange rate changes on cash 2,717 25,393 (10,669)
and cash equivalents
Net increase in cash and cash 24,353 227,598 56,604
equivalents
Cash and cash equivalents at beginning 227,155 2,122,944 170,551
of period
Cash and cash equivalents at end of 251,508 2,350,542 227,155
period
____________
Notes:
1. In accordance with SFAS No.144, "Accounting for the Impairment or Disposal
of Long-Lived Assets", the figures for the year ended March 31, 2004 relating
to discontinued operations have been reclassified accordingly.
2. U.S.$1=Yen 107
Consolidated
I-8) Summary of Significant Accounting Policies
1. The consolidated financial statements are prepared in conformity with the
U.S. GAAP.
(1) Marketable Securities
Statement of Financial Accounting Standards ("SFAS") No.115, "Accounting for
Certain Investments in Debt and Equity Securities" is adopted.
(2) Inventories
Inventories are stated at the lower of cost or market. Cost is determined
principally by the average method.
(3) Depreciation
Depreciation of property, plant and equipment is principally computed by the
declining-balance method for assets located in Japan and certain foreign
subsidiaries, and by the straight-line method for assets of other foreign
subsidiaries based on estimated useful lives.
(4) Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
base and operating loss and tax credit carryforwards.
(5) Derivatives Financial Instruments
SFAS No.133, "Accounting for Derivative Instruments and Hedging Activities" and
SFAS No.138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an amendment of FASB Statement No.133" are adopted.
(6) Goodwill and Other Intangible Assets
SFAS No.141, "Business Combinations" and SFAS No.142, "Goodwill and Other
Intangible Assets" are adopted.
(7) Retirement and Severance Benefits
SFAS No. 87, "Employers' Accounting for Pensions" is adopted. Gain and loss
related to the transfer of the substitutional portion of its Employees' Pension
Fund to the government was accounted for in accordance with the Emerging Issues
Task Force issue 03-2 ("EITF 03-2"), "Accounting for the Transfer to the
Japanese Government of the Substitutional Portion of Employee Pension Fund
Liabilities".
2. As of March 31,2005, TDK had 71 subsidiaries (18 in Japan and 53 overseas).
TDK also had 6 affiliates (4 in Japan and 2 overseas) whose financial
statements are accounted for by the equity method.
3. Comprehensive income comprises net income and other comprehensive income.
Other comprehensive income includes changes in foreign currency translation
adjustments, minimum pension liability adjustments and net unrealized gains
(losses) on securities. The net income, other comprehensive income (loss), net
of tax and total comprehensive income for the years ended March 31, 2005 and
2004 were as follows;
FY2005 FY2004
(April 1, 2004 - (April 1,2003 -
March 31, 2005) March 31,2004)
Item/Term (Yen (U.S.$ (Yen millions)
millions) thousands)
Net income 44,948 420,075 42,101
Other comprehensive income (loss), net
of tax:
Foreign currency translation adjustments 5,636 52,672 (26,287)
Minimum pension liability adjustments 32,941 307,860 14,186
Net unrealized gains (losses) on 153 1,430 538
securities
Total comprehensive income 83,678 782,037 30,538
____________
Note: U.S.$1=Yen 107
Consolidated
I-9) Segment Information
The following industry and geographic segment information are required by the
Japanese Securities Exchange Law.
1. Industry segment information
FY2005 FY2004 Change
(April 1, 2004 - March 31, (April 1, 2003 -
2005) March 31, 2004)
Product/Term (Yen % (U.S.$ (Yen % (Yen Change
millions) thousands) millions) millions) (%)
Electronic
materials and
components
Net sales 545,214 100.0 5,095,458 519,792 100.0 25,422 4.9
Unaffiliated 545,214 5,095,458 519,792 25,422 4.9
customers
Intersegment - - - - -
Operating 477,694 87.6 4,464,430 461,077 88.7 16,617 3.6
expenses
Operating income 67,520 12.4 631,028 58,715 11.3 8,805 15.0
Recording media
& systems
Net sales 112,639 100.0 1,052,701 136,000 100.0 (23,361) -17.2
Unaffiliated 112,639 1,052,701 136,000 (23,361) -17.2
customers
Intersegment - - - - -
Operating 120,329 106.8 1,124,570 138,205 101.6 (17,876) -12.9
expenses
Operating income (7,690) -6.8 (71,869) (2,205) -1.6 (5,485) -248.8
(loss)
TOTAL
Net sales 657,853 100.0 6,148,159 655,792 100.0 2,061 0.3
Unaffiliated 657,853 6,148,159 655,792 2,061 0.3
customers
Intersegment - - - - -
Operating 598,023 90.9 5,589,000 599,282 91.4 (1,259) -0.2
expenses
Operating income 59,830 9.1 559,159 56,510 8.6 3,320 5.9
____________
Note: U.S.$1=Yen 107
2. Geographic segment information
FY2005 FY2004 Change
(April 1, 2004 - March 31, (April 1, 2003 -
2005) March 31, 2004)
Region/Term (Yen % (U.S.$ (Yen % (Yen Change
millions) thousands) millions) millions) (%)
Japan Net sales 339,493 100.0 3,172,832 329,782 100.0 9,711 2.9
Operating 26,382 7.8 246,561 8,538 2.6 17,844 209.0
income
Americas Net sales 87,594 100.0 818,636 100,971 100.0 (13,377) -13.2
Operating 5,496 6.3 51,364 4,985 4.9 511 10.3
income
Europe Net sales 71,682 100.0 669,925 80,641 100.0 (8,959) -11.1
Operating (5,125) -7.1 (47,897) (115) -0.1 (5,010) -
income
(loss)
Asia and Net sales 400,866 100.0 3,746,411 380,781 100.0 20,085 5.3
others
Operating 33,551 8.4 313,561 42,912 11.3 (9,361) -21.8
income
Intersegment Net sales 241,782 2,259,645 236,383 5,399
eliminations
Operating 474 4,430 (190) 664
income
(loss)
Total Net sales 657,853 100.0 6,148,159 655,792 100.0 2,061 0.3
Operating 59,830 9.1 559,159 56,510 8.6 3,320 5.9
income
____________
Notes:
1. Net sales in each geographic area are based on the location of TDK entities
where the sales are generated.
2. U.S.$1=Yen 107
3. Sales by region
FY2005 FY2004 Change
(April 1, 2004 - March 31, (April 1, 2003 -
2005) March 31, 2004)
Region/Term (Yen % (U.S.$ (Yen % (Yen Change
millions) thousands) millions) millions) (%)
Americas 77,813 11.8 727,224 88,734 13.5 (10,921) -12.3
Europe 71,702 10.9 670,112 80,710 12.3 (9,008) -11.2
Asia and others 324,313 49.3 3,030,963 317,725 48.5 6,588 2.1
Overseas sales total 473,828 72.0 4,428,299 487,169 74.3 (13,341) -2.7
Japan 184,025 28.0 1,719,860 168,623 25.7 15,402 9.1
Net sales 657,853 100.0 6,148,159 655,792 100.0 2,061 0.3
____________
Notes:
1. Overseas sales are based on the location of the customers.
2. U.S.$1=Yen 107
Consolidated
I-10) Fair Value of Securities
(Yen millions) Cost Gross Gross Fair
Unrealized Unrealized Value
Holding Holding
Gains Losses
As of March 31, 2005
Equity securities 5,951 1,054 - 7,005
Debt securities 1,698 - - 1,698
Total 7,649 1,054 - 8,703
As of March 31, 2004
Equity securities 2,782 1,054 - 3,836
Debt securities 1,101 - - 1,101
Total 3,883 1,054 - 4,937
U.S.$1=Yen 107 Cost Gross Gross Fair
(U.S.$ thousands) Unrealized Unrealized Value
Holding Holding
Gains Losses
As of March 31, 2005
Equity securities 55,617 9,850 - 65,467
Debt securities 15,869 - - 15,869
Total 71,486 9,850 - 81,336
I-11) Fair Value of Derivatives
(Yen millions) Contract Carrying Estimated
Amount Amount Fair
Value
As of March 31, 2005
Forward foreign exchange contracts 4,349 (88) (88)
Currency option contracts 24,641 (366) (366)
Currency swap agreements for loans to its 11,067 (312) (312)
subsidiaries
As of March 31, 2004
Forward foreign exchange contracts 18,638 396 396
Currency option contracts 16,340 91 91
Currency swap agreements for loans to its 12,605 252 252
subsidiaries
(U.S.$ thousands) Contract Carrying Estimated
U.S.$1=Yen 107 Amount Amount Fair
Value
As of March 31, 2005
Forward foreign exchange contracts 40,645 (822) (822)
Currency option contracts 230,290 (3,421) (3,421)
Currency swap agreements for loans to its 103,430 (2,916) (2,916)
subsidiaries
Consolidated
I-12) Conditions of Production and Orders
1. Production results
FY2005 FY2004 Change
(April 1, 2004 - (April 1, 2003 -
March 31, 2005) March 31, 2004)
Product/Term (Yen (U.S.$ (Yen millions) (Yen Change
millions) thousands) millions) (%)
Electronic materials and 545,712 5,100,112 518,567 27,145 5.2
components
Electronic materials 175,538 1,640,542 164,244 11,294 6.9
Electronic devices 116,000 1,084,112 107,579 8,421 7.8
Recording devices 235,143 2,197,598 231,782 3,361 1.5
Semiconductors & others 19,031 177,860 14,962 4,069 27.2
Recording media & systems 89,551 836,925 112,658 (23,107) -20.5
Total 635,263 5,937,037 631,225 4,038 0.6
____________
Notes :
1. Monetary amounts are calculated using sales prices.
2. U.S.$1=Yen 107
2. Orders conditions
Orders of FY2005 Orders of FY2004
(April 1, 2004 - (April 1, 2003 -
March 31, 2005) March 31, 2004)
(Yen (U.S.$ (Yen millions) Change
millions) thousands) (%)
Electronic materials and 536,947 5,018,196 503,485 6.6
components
Outstanding orders Outstanding
orders
(As of March 31,
2005) (As of March
31, 2004)
(Yen (U.S.$ (Yen Change(%)
millions) thousands) millions)
Electronic materials and 45,462 424,879 54,582 -16.7
components
____________
Notes :
1. For products other than electronic materials and components, forecast
production is used.
2. U.S.$1=Yen 107
Consolidated
I-13) Supplementary Information (Consolidated)
Exchange rates used for conversion
April 1, 2004 - April 1, 2003 -
March 31, 2005 March 31, 2004
Item/Term US$=Yen Euro=Yen US$=Yen Euro=Yen
Average rate for the period 107.55 135.17 113.19 132.65
The end of the period 107.39 138.87 105.69 128.88
Consolidated
April 1, 2004 - April 1, 2003 -
March 31, 2005 March 31, 2004
Item/ Term Amount Ratio Amount Ratio Change
to to
(Yen (Yen (%)
millions) sales millions) sales
(%) (%)
Capital expenditures 61,005 - 44,471 - 37.2
Depreciation and amortization 52,806 8.0 50,726 7.7 4.1
Research and development 36,348 5.5 32,948 5.0 10.3
Result of financial income 1,368 866 58.0
Number of employees (as at the end of 37,115 36,804
the period)
Ratio of overseas production 59.0% 58.6%
Overseas sales by division
April 1, 2004 - April 1, 2003 -
March 31, 2005 March 31, 2004
Product/Term Amount Ratio Amount Ratio to Change
to
(Yen (Yen sales (%)
millions) sales millions) (%)
(%)
Electronic materials and components 391,949 59.6 383,699 58.5 2.2
Electronic materials 126,644 19.2 121,446 18.5 4.3
Electronic devices 70,199 10.7 61,373 9.4 14.4
Recording devices 186,768 28.4 195,137 29.7 -4.3
Semiconductors & others 8,338 1.3 5,743 0.9 45.2
Recording media & systems 81,879 12.4 103,470 15.8 -20.9
Overseas sales 473,828 72.0 487,169 74.3 -2.7
END
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