TDK's Consolidated Financial Results for the First Half of Fiscal Year 2004
Ended September 30, 2003
TOKYO, Oct. 31 -- 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 the first half of fiscal year
("FY") 2004 and the 2nd quarter ("Qtr.") and Non-Consolidated business results
for the first half of FY 2004.
1) Summary
Consolidated results (April 1, 2003 - September 30, 2003)
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - (April 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Item (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Net sales 316,279 100.0 2,849,360 296,380 100.0 19,899 6.7
Operating
income 24,020 7.6 216,396 10,019 3.4 14,001 139.7
Income before
income taxes 25,014 7.9 225,351 7,636 2.6 17,378 227.6
Net income 19,257 6.1 173,486 4,645 1.6 14,612 314.6
Net income
per common
share Yen 145.27 U.S.$1.31 Yen 34.98
(Sales breakdown)
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - (April 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Product (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Electronic
materials
and
components 254,352 80.4 2,291,459 234,272 79.0 20,080 8.6
Electronic
materials 82,302 26.0 741,459 88,918 30.0 (6,616) -7.4
Electronic
devices 52,451 16.6 472,531 59,293 20.0 (6,842) -1.5
Recording
devices 111,423 35.2 1,003,811 78,173 26.4 33,250 42.5
Semiconduc-
tors &
others 8,176 2.6 73,658 7,888 2.6 288 3.7
Recording
media &
systems 61,927 19.6 557,901 62,108 21.0 (181) -0.3
Total sales 316,279 100.0 2,849,360 296,380 100.0 19,899 6.7
Overseas
sales 234,743 74.2 2,114,802 212,091 71.6 22,652 10.7
Notes:
1. The figures for net income per common share are calculated based upon
the weighted average number of shares of common stock (the total
outstanding number).
2. U.S.$1=Yen 111
Table of Contents
Non-Consolidated
Non-Consolidated results (April 1, 2003 - September 30, 2003)
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - (April 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Item (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Net sales 152,474 100.0 1,373,639 167,260 100.0 (14,786) -8.8
Operating
income 1,062 0.7 9,567 3,480 2.1 (2,418) -69.5
Current
income 4,819 3.2 43,414 6,937 4.1 (2,118) -30.5
Net
income 1,127 0.7 10,153 1,056 0.6 71 6.7
Net income
per common
share Yen 8.51 U.S.$0.07 Yen 7.96
Dividends
per share Yen 25.00 U.S.$0.22 Yen 25.00
Notes:
1. Any portion less than Yen one million is disregarded, the same being
applicable hereinafter. U.S.$1=Yen 111 (U.S. dollar translation is
added herein solely for convenience of readers outside Japan.)
2. The figures for net income per common share are calculated based upon
the weighted average number of shares of common stock (the total
outstanding number).
(Sales breakdown)
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - (April 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Product (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Electronic
materials
and compon-
ents 131,033 85.9 1,180,477 146,384 87.5 (15,351) -10.5
Electronic
materials 64,157 42.1 577,990 70,620 42.2 (6,463) -9.2
Electronic
devices 39,041 25.6 351,720 45,694 27.3 (6,653) -14.6
Recording
devices 20,562 13.5 185,243 24,055 14.4 (3,493) -14.5
Semiconduc-
tors &
others 7,272 4.7 65,513 6,013 3.6 1,259 20.9
Recording
media &
systems 21,440 14.1 193,153 20,876 12.5 564 2.7
Total sales 152,473 100.0 1,373,630 167,260 100.0 (14,787) -8.8
Overseas
sales 87,909 57.7 791,972 90,622 54.2 (2,713) -3.0
Note: U.S.$1=Yen 111
Table of Contents
Consolidated
2nd Qtr. Consolidated results
Consolidated results (July 1, 2003 - September 30, 2003)
Term The 2nd Qtr. of FY2004 The 2nd Qtr. of FY2003
(July 1, 2003 - (July 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Item (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Net
sales 163,063 100.0 1,469,036 147,672 100.0 15,391 10.4
Operating
income 13,840 8.5 124,685 4,033 2.7 9,807 43.2
Income
before
income
taxes 13,850 8.5 124,775 4,333 2.9 9,517 219.6
Net income 11,232 6.9 101,189 2,484 1.7 8,748 352.2
Net income
per common
share Yen 84.76 U.S.$0.76 Yen 18.71
(Sales breakdown)
Term The 2nd Qtr. of FY2004 The 2nd Qtr. of FY2003
(July 1, 2003 - (July 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Product (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Electronic
materials
and
components 130,563 80.1 1,176,243 116,102 78.6 14,461 12.5
Electronic
materials 41,882 25.7 377,315 43,058 29.2 (1,176) -2.7
Electronic
devices 26,634 16.3 239,946 29,449 19.9 (2,815) -9.6
Recording
devices 57,583 35.3 518,766 39,832 27.0 17,751 44.6
Semiconduc-
tors &
others 4,464 2.8 40,216 3,763 2.5 701 18.6
Recording
media &
systems 32,500 19.9 292,793 31,570 21.4 930 2.9
Total sales 163,063 100.0 1,469,036 147,672 100.0 15,391 10.4
Overseas
sales 121,960 74.8 1,098,739 105,900 71.7 16,060 15.2
Notes:
1. The figures for net income per common share are calculated based upon
the weighted average number of shares of common stock (the total
outstanding number).
2. U.S.$1=Yen 111
Table of Contents
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 & systems. 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,
society and employees, 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. As such, TDK's fundamental policy is to pay a stable dividend
while taking into consideration a broad range of factors, including the return
on equity (ROE), dividends as a percentage of equity (DOE) and the company's
results of operation on a consolidated basis.
Retained earnings are used to make TDK more competitive by developing new
products and technologies. Funds are strategically invested in R&D to respond
precisely to the rapid technological advances in the electronics industry.
(3) Medium- and Long-Term Management Strategy
In April 2000, TDK launched its Exciting 108 medium-term management plan
with the aim of becoming an exciting company and increasing TDK's value. The
plan runs through to the end of March 2004.
TDK is prioritizing three key fields in the electronics industry: IT Home
Electronics Appliances; High-Speed, Large-Capacity Networks; and Car
Electronics. By bolstering materials and process technologies, TDK fortes,
the company hopes to deliver in a timely manner the new products that
customers need. In the dynamically changing electronics industry, TDK aims to
raise its corporate value by increasing profitability without counting on
top-line growth and sales without relying on market expansion.
Environmental activities are also positioned as an important management
theme as TDK is determined to play its part in preserving the environment for
future generations. TDK is devoting its energies to achieve zero emission
status at all sites in Japan and five sites overseas. And, having formulated
a fundamental environmental plan, "TDK Environmental Action 2010," the company
is committed to contributing to the creation of a society oriented toward
recycling.
(4) Corporate Ethics
TDK has formulated a corporate code of ethics to guide the activities of
all members of TDK in their efforts to create an even better company. The
corporate code of ethics, which is based on TDK's corporate motto and
principles, specifies the rules that the company, management and employees
must observe in the conduct of business. The corporate code of ethics
demonstrates TDK's commitment to constantly upholding corporate ethical
standards and improving risk management.
(5) 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, society and employees. TDK put in place internal controls with
this fundamental recognition in mind. It has also implemented a number of
other measures in the same vein, such as appointing outside director and
statutory auditors, involving people outside the company in setting directors'
remuneration, and ensuring that corporate ethics are strictly observed.
(5-1) Management structure and other corporate governance systems
concerning decision-making, strategy execution and supervision
One of TDK's 7 directors is an outside director, who also serves as the
chairperson of the Remuneration Committee, which was set up to ensure the
fairness of directors' remuneration. Another committee, the Corporate Ethics
Committee, was established to ensure that TDK upholds corporate ethical
standards. Independent of this committee, TDK has a "hotline" that encourages
employees to report matters relating to corporate ethics and offer
suggestions. 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.
TDK applies the Corporate Auditor System in accordance with the Commercial
Code of Japan, and 3 of its 5 corporate auditors come from outside the
company. The role of the corporate auditor is not restricted to the
supervision of directors' activities. As required, they also audit business
activities. In addition, the Management Review & Support Department is
primarily responsible for auditing business activities.
Another defining aspect of TDK's corporate governance system is that it
receives advice and warnings from outside legal counsel and independent
auditors regarding risks associated with TDK's corporate activities.
(5-2) 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.
(5-3) 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 subsidiaries as well as domestic ones. And, to comply with the
U.S. Sarbanes-Oxley Act of 2002, a strict law relating to corporate governance
that was prompted by a series of scandals involving major corporations, TDK
formed a project team that includes outside experts to undertake a fundamental
review and reinforcement of corporate systems. Moreover, at the ordinary
general meeting of shareholders held in June 2003, a resolution was approved
that shortens the terms of directors to one year. This change was made to
give the company the best management structure with which to respond flexibly
to changes in its operating environment and to build greater trust with
shareholders.
(6) Policy Regarding Reduction of TDK's Share Trading Unit
On August 1, 2000, TDK reduced the trading unit of its common shares from
1,000 to 100 shares to broaden the shareholder base and increase the liquidity
of the company's shares. TDK now considers that its shares have sufficient
liquidity. 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.
3) Business Results and Financial Position
1. Summary
Consolidated results for the first half of fiscal 2004, the six-month
period from April 1, 2003 through September 30, 2003, are as follows:
TDK posted net sales of Yen 316,279 million (US$2,849,360 thousand), up
6.7% from Yen 296,380 million. Operating income rose 139.7%, from Yen 10,019
million, to Yen 24,020 million (US$216,396 thousand). Income before income
taxes was Yen 25,014 million (US$225,351 thousand), up 227.6% from Yen 7,636
million, and net income was Yen 19,257 million (US$173,486 thousand), an
increase of 314.6% from Yen 4,645 million. Net income per common share was
Yen 145.27 (US$1.31), compared with Yen 34.98 in the first half of the
previous fiscal year.
Average first-half yen exchange rates for the U.S. dollar and euro were
Yen 118 (previous year Yen 123) and Yen 134 (previous year Yen 117),
respectively, as the yen appreciated 4.1% versus the dollar and depreciated
14.5% against the euro. This had the effect of lowering net sales by
approximately Yen 4.9 billion and operating income by approximately Yen 2.8
billion.
(Sales by Segment)
The following is an explanation of sales by segment.
Electronic materials and components segment
In the electronic materials and components segment, net sales increased
8.6%, from Yen 234,272 million, to Yen 254,352 million (US$2,291,459
thousand). Sales in the electronic materials and electronic devices sectors
fell compared with one year earlier when demand was buoyant. Strong demand
was seen in some areas, such as for digital audio and visual products. The
main factor behind the higher sales in this segment was a sharp increase in
sales in the recording devices sector, where robust demand for HDD heads
carried over from the previous fiscal year. Sector results were as follows.
Electronic materials
Sales in the electronic materials sector decreased 7.4%, from Yen 88,918
million, to Yen 82,302 million (US$741,459 thousand).
(Capacitors) Sales of multilayer chip capacitors, which account for the
majority of capacitor sector sales, decreased in spite of a steady upturn in
demand that began in the fourth quarter of fiscal 2003, particularly in
respect of audio and visual equipment and communications products. There were
two main reasons for the year-on-year decrease: prices continued to fall due
to calls for discounts from customers, and orders weakened following an
increase during the first half of fiscal 2003 that followed a period of
inventory reductions by customers.
(Ferrite cores and magnets) In ferrite cores and magnets, overall sales of
ferrite cores declined year on year due to continuing calls for discounts on
flyback transformers and deflection yoke cores in a soft TV and computer
monitor market, the key applications for these products. The decline also
reflected stiff price-based competition in general-purpose power supply cores
despite brisk demand. Magnet sales also declined, despite solid growth in
demand from the automobile industry, driven by the increasing use of
electronics in vehicles. Inventory reductions by customers in other
industries and price discounting in all markets were to blame for the lower
overall magnet sales. As a result, sales for ferrite cores and magnets as a
whole fell year on year.
Electronic devices
In the electronic devices sector, sales decreased 11.5%, from Yen 59,293
million, to Yen 52,451 million (US$472,531 thousand).
(Inductive devices) Inductive devices, the largest product category in
this sector, saw sales decline year on year due to inventory cutbacks by
customers and price discounting pressure in the video game systems sector.
Another factor was the strong demand in the same period of the previous fiscal
year from TV manufacturers related to the 2002 FIFA World Cup(TM). On the
other hand, an expanding digital audio and visual products market, including
products like DVD players, plasma display panels and LCDs, and the increasing
use of electronics in vehicles resulted in higher demand in these areas.
(High-frequency components) Sales of high-frequency components decreased,
despite an upswing in sales volume for use in mobile phones, the main market
for these components. The continuing glut in the supply of high-frequency
components of all types prompted customers to demand price reductions that
were greater than in other electronic components sectors. Another reason for
the overall drop in sales was lower demand for components in fields other than
mobile phones.
(Other products) Overall, sales of other products decreased. Solid growth
continued to be recorded by sensors and actuators used in PCs and peripherals
and in communications products. However, this could not offset the negative
effect of scaled-back production by customers, which dented demand for DC-DC
converters for video game systems.
Recording devices
Recording devices sales jumped 42.5%, from Yen 78,173 million, to Yen
111,423 million (US$1,003,811 thousand). HDD heads, the main product in this
sector, saw a dramatic increase in sales on the back of brisk demand in the
HDD market, the main market for these heads. The strong sales growth also
reflected robust HDD sales at major TDK customers. Sales of other heads also
increased on buoyant demand.
Semiconductors & others
Sales in the semiconductors & others sector increased 3.7%, from Yen 7,888
million, to Yen 8,176 million (US$73,658 thousand) thanks to higher sales of
other products. Holding back further growth was lower sales of semiconductors
for LAN/WAN applications and set-top box modems due to sluggish levels of
investment in communications infrastructure equipment and curbs on capital
expenditures at customers. Sales of anechoic chambers for noise control also
fell.
Recording media & systems segment
In the recording media & systems segment, sales edged down 0.3%, from Yen
62,108 million, to Yen 61,927 million (US$557,901 thousand). Audiotape sales
shrank as the long-term decline in demand continued due to the shift to
optical media. Videotape sales also declined, as demand shifted from VHS
tapes to DVDs, which are rapidly gaining acceptance by consumers. On the
other hand, optical media products CD-Rs and DVDs both saw sales increase as
this market continues to expand. Growth in the DVD market is particularly
noteworthy. These sales increases offset falling sales of MDs resulting from
lower demand and of CD-Rs due to declining sales prices. While sales of
LTO-standard* (Linear Tape-Open) tape-based data storage media for computers
increased, the other products sector saw overall sales fall due to factors
such as lower software sales.
* Linear Tape-Open, LTO, LTO logo, Ultrium and Ultrium logo are trademarks
of HP, IBM and Seagate RSS in the U.S., other countries or both.
(Sales by Region)
By region, sales in Japan decreased 3.3%, from Yen 84,289 million, to Yen
81,536 million (US$734,558 thousand). While sales increased in the recording
devices sector, sales fell in the electronic materials and electronic devices
sectors as well as the recording media & systems segment.
In the Americas, sales dropped 23.0%, from Yen 56,294 million, to Yen
43,328 million (US$390,343 thousand). Sales in all sectors, with the
exception of semiconductors & others, fell due to a weak recovery in demand
and the appreciation of the yen against the U.S. dollar.
In Europe, sales increased 7.6%, from Yen 34,368 million, to Yen 36,987
million (US$333,216 thousand). The main reasons were strong demand for
optical media (CD-Rs and DVDs) and the yen's depreciation against the euro.
In Asia and Others, sales increased 27.2%, from Yen 121,429 million, to
Yen 154,428 million (US$1,391,243 thousand), mainly due to higher sales of
recording devices.
The overall result was a 10.7% rise in overseas sales year on year, from
Yen 212,091 million, to Yen 234,743 million (US$2,114,802 thousand). Overseas
sales accounted for 74.2% of consolidated net sales, a 2.6 percentage point
increase from 71.6%.
On a parent-company basis, net sales decreased 8.8%, from Yen 167,260
million, to Yen 152,474 million (US$1,373,639 thousand) and current income
decreased 30.5%, from Yen 6,937 million, to Yen 4,819 million (US$43,414
thousand). Net income increased 6.7%, from Yen 1,056 million, to Yen 1,127
million (US$10,153 thousand) and net income per common share was Yen 8.51
(US$0.07).
At today's meeting of TDK's Board of Directors, an interim dividend of Yen
25 per share of common stock was approved.
2. Financial Position
(2-1) The following table summarizes TDK's balance sheet at September 30,
2003, compared with March 31, 2003.
* Total assets Yen 750,715 million 0.5% increase
* Total stockholders' equity Yen 561,662 million 1.4% increase
* Equity ratio 74.8% 0.7 percentage
point increase
At the end of the interim period, cash and cash equivalents were Yen
22,855 million higher than on March 31, 2003, but net property, plant and
equipment and other assets decreased Yen 9,237 million and Yen 10,816 million,
respectively. As a result of the above items and other changes, total assets
increased Yen 3,378 million from March 31, 2003.
Total liabilities decreased Yen 4,267 million. Trade payables increased
Yen 3,494 million, but retirement and severance benefits decreased Yen 9,160
million.
Total stockholders' equity increased Yen 7,777 million. Retained earnings
increased Yen 15,376 million and accumulated other comprehensive loss
increased Yen 6,380 million.
(2-2) Cash Flows
(Yen millions)
Fiscal 2004 Interim Fiscal 2003 Interim Change
Net cash provided
by operating activities 52,031 44,070 7,961
Net cash used in investing
activities (18,535) (13,345) (5,190)
Net cash used in financing
activities (5,292) (4,340) (952)
Effect of exchange rate
changes on cash and cash
equivalents (5,349) (4,324) (1,025)
Net increase in cash and
cash equivalents 22,855 22,061 794
Cash and cash equivalents
at beginning of period 170,551 125,761 44,790
Cash and cash equivalents
at end of period 193,406 147,822 45,584
Operating activities provided net cash of Yen 52,031 million (US$468,748
thousand), a year-on-year increase of Yen 7,961 million. This mainly
reflected an increase of Yen 14,612 million in net income to Yen 19,257
million (US$173,486 thousand), and a decrease of Yen 4,861 million in
depreciation and amortization to Yen 23,642 million (US$212,991 thousand).
Investing activities used net cash of Yen 18,535 million (US$166,982
thousand), an increase of Yen 5,190 million. A Yen 6,354 million increase in
capital expenditures to Yen 20,826 million (US$187,622 thousand) was the main
reason.
Financing activities used net cash of Yen 5,292 million (US$47,676
thousand), Yen 952 million more year on year. This primarily reflected a Yen
565 million increase in sale (purchase) of treasury stock, net and a Yen 659
million increase in dividends paid.
3. Fiscal 2004 Projections
TDK's consolidated and non-consolidated projections for fiscal 2004, as
announced in July and May 2003, respectively, have been revised, as detailed
below, based on the following considerations.
* TDK had assumed an average yen-U.S. dollar exchange rate for the fiscal
year of Yen 120. But given that the actual average rate in the first
half of fiscal 2004 was Yen 118, TDK is now assuming an average rate of
Yen 110 for the second half of the year.
* There were signs of an upturn in some markets in the first half of the
year, highlighted by growth in demand for products used in digital home
electronic appliances and a recovery in demand for those used in
notebook computers and mobile phones. On the other hand, the downside
of the growth in digital products is lower demand for existing
products, leading to disparity between sectors in the electronics
market.
* There was some divergence between the assumptions and premises used by
TDK at the start of the fiscal year and actual results for the first
half, prompting the need for revisions. Both electronic materials and
electronic devices have seen orders pick up in respect of some products
while other categories continue to face stiff competition. TDK has
thus revised its projected results for the second half of the year
based on new assumptions.
* In HDD heads, the mainstay product in the recording devices sector,
first-half results were strong on the back of rising demand for HDDs.
Given the order backlog in the third quarter, TDK believes that net
sales for fiscal 2004 may exceed initial estimates.
* TDK also believes that consolidated earnings may marginally exceed
previous projections, with the benefits of cost cutting and higher
production volumes outstripping the negative effects of exchange rates
and pressure to discount prices. On a non-consolidated basis, TDK
forecasts that it will have difficulty fully absorbing the effect of
exchange rate fluctuations.
Consolidated Projections for Fiscal 2004
Revised projection % change As of July 2003
Yen millions from FY03 Yen millions
Net sales Yen 636,000 4.5 Yen 635,000
Operating income 45,000 103.8 41,000
Income before income taxes 46,000 154.4 42,000
Net income 33,500 178.7 30,000
Non-Consolidated Projections for Fiscal 2004
Revised projection % change As of May 2003
Yen millions from FY03 Yen millions
Net sales Yen 307,800 -4.0 Yen 321,000
Operating income 2,100 -34.0 8,000
Current income 7,500 -17.4 13,000
Net income 2,400 - 7,000
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 basis, 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
4) Statements of income
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - (April 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Item (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Net
sales 316,279 100.0 2,849,360 296,380 100.0 19,899 6.7
Cost of
sales 227,919 72.1 2,053,324 223,738 75.5 4,181 1.9
Gross profit 88,360 27.9 796,036 72,642 24.5 15,718 21.6
Selling, gen-
eral and
administra-
tive
expenses 64,340 20.3 579,640 62,623 21.1 1,717 2.7
Operating
income 24,020 7.6 216,396 10,019 3.4 14,001 139.7
Other income
(deductions):
Interest and
dividend
income 655 5,901 708 (53)
Interest
expense (212) (1,910) (198) (14)
Foreign
exchange
gain (loss) (2,037) (18,351) (1,699) (338)
Other-net 2,588 23,315 (1,194) 3,782
Total other
income
(deductions) 994 0.3 8,955 (2,383) -0.8 3,377 -
Income before
income taxes 25,014 7.9 225,351 7,636 2.6 17,378 227.6
Income taxes 5,511 1.7 49,649 2,756 1.0 2,755 100.0
Income before
minority
interests 19,503 6.2 175,702 4,880 1.6 14,623 299.7
Minority
interests (246) 0.1 (2,216) (235) -0.0 (11) -4.7
Net income 19,257 6.1 173,486 4,645 1.6 14,612 314.6
Net income
per common
share Yen 145.27 U.S.$1.31 Yen 34.98
Average common
shares
outstanding 132,559 thousands 132,802 thousands
Notes:
1. The figures for net income per common share are calculated based upon
the weighted average number of shares of common stock (the total
outstanding number).
2. U.S.$1=Yen 111
Consolidated
5) Balance sheets
ASSETS
Term As of As of Change As of
Sep. 30, 2003 Mar. 31, 2003 Sep. 30, 2002
Item (Yen % (U.S.$ (Yen % (Yen (Yen %
millions) thousands) millions) millions) millions)
Current
assets 446,324 59.5 4,020,937 420,962 56.3 25,362 406,300 55.8
Cash and
cash
equival-
ents 193,406 1,742,396 170,551 22,855 147,822
Net trade
receivables 141,343 1,273,360 140,023 1,320 137,796
Inventories 77,663 699,667 73,917 3,746 83,714
Other current
assets 33,912 305,514 36,471 (2,559) 36,968
Noncurrent
assets 304,391 40.5 2,742,261 326,375 43.7 (21,984) 321,374 44.2
Investments
in secur-
ities 16,791 151,270 18,722 (1,931) 14,737
Net property,
plant and
equipment 216,670 1,951,982 225,907 (9,237) 244,040
Other assets 70,930 639,009 81,746 (10,816) 62,597
TOTAL 750,715 100.0 6,763,198 747,337 100.0 3,378 727,674 100.0
LIABILITIES AND STOCKHOLDERS' EQUITY
Term As of As of Change As of
Sep. 30, 2003 Mar. 31, 2003 Sep. 30, 2002
Item (Yen % (U.S.$ (Yen % (Yen (Yen %
millions) thousands) millions) millions) millions)
Current
liabilities 109,836 14.7 989,514 105,014 14.0 4,822 99,683 13.7
Short-term
debt 1,620 14,595 1,919 (299) 1,834
Trade
payables 60,454 544,631 56,960 3,494 55,896
Accrued
expenses 37,766 340,234 39,571 (1,805) 33,031
Income taxes
payables 2,163 19,486 1,057 1,106 2,484
Other current
liabilities 7,833 70,568 5,507 2,326 6,438
Noncurrent
liabilities 75,989 10.1 684,585 85,078 11.4 (9,089) 58,971 8.1
Long-term debt,
excluding
current
installments 165 1,486 94 71 255
Retirement and
severance
benefits 75,811 682,982 84,971 (9,160) 58,318
Deferred
income taxes 13 117 13 - 398
Total
liabilities 185,825 24.8 1,674,099 190,092 25.4 (4,267) 158,654 21.8
Minority
interests 3,228 0.4 29,081 3,360 0.5 (132) 4,425 0.6
Common stock 32,641 294,063 32,641 - 32,641
Additional
paid-in
capital 63,051 568,027 63,051 - 63,051
Legal reserve 16,494 148,595 15,953 541 15,955
Retained
earnings 541,295 4,876,532 525,919 15,376 521,859
Accumulated
other compre-
hensive
income
(loss) (85,204) (767,604) (78,824) (6,380) (64,100)
Treasury
stock (6,615) (59,595) (4,855) (1,760) (4,811)
Total stock-
holders'
equity 561,662 74.8 5,060,018 553,885 74.1 7,777 564,595 77.6
TOTAL 750,715 100.0 6,763,198 747,337 100.0 3,378 727,674 100.0
Total common
shares
outstanding 132,376 thousands 132,625 thousands 132,634 thousands
Note: U.S.$1=Yen 111
Consolidated
6) Statements of stockholders' equity
Term FY2003 The first half of FY2003
The first half (April 1, 2002 - (April 1, 2002 -
of FY2004 Mar. 31, 2003) Sep. 30, 2002)
(April 1, 2003 -
Sep. 30, 2003)
Item (Yen (U.S.$ (Yen (Yen millions)
millions) thousands) millions)
Common
stock:
Balance at
beginning
of period 32,641 294,063 32,641 32,641
Balance at
end of
period 32,641 294,063 32,641 32,641
Additional
paid-in
capital:
Balance at
beginning
of period 63,051 568,027 63,051 63,051
Balance at
end of
period 63,051 568,027 63,051 63,051
Legal
reserve:
Balance at
beginning of
period 15,953 143,721 15,683 15,683
Transferred
from
retained
earnings 541 4,874 270 272
Balance at
end of
period 16,494 148,595 15,953 15,955
Retained
earnings:
Balance at
beginning
of period 525,919 4,738,009 520,143 520,143
Net income 19,257 173,486 12,019 4,645
Cash divi-
dends (3,316) (29,874) (5,973) (2,657)
Losses on
sales of
treasury
stock (24) (215) - -
Transferred
to legal
reserve (541) (4,874) (270) (272)
Balance at
end of
period 541,295 4,876,532 525,919 521,859
Accumulated
other
comprehen-
sive income
(loss):
Balance at
beginning
of period (78,824) (710,127) (43,999) (43,999)
Other com-
prehensive
income (loss)
for the period,
net of tax (6,380) (57,477) (34,825) (20,101)
Balance at
end of
period (85,204) (767,604) (78,824) (64,100)
Treasury
stock:
Balance at
beginning
of period (4,855) (43,739) (3,592) (3,592)
Acquisition
of treasury
stock (1,854) (16,703) (1,263) (1,219)
Exercise of
stock option 94 847 - -
Balance at
end of
period (6,615) (59,595) (4,855) (4,811)
Total stock-
holders'
equity 561,662 5,060,018 553,885 564,595
Disclosure
of compre-
hensive in-
come (loss):
Net income
for the
period 19,257 173,486 12,019 4,645
Other com-
prehensive
income (loss)
for the per-
iod, net of
tax (6,380) (57,477) (34,825) (20,101)
Total com-
prehensive
income (loss)
for the
period 12,877 116,009 (22,806) (15,456)
Note: U.S.$1=Yen 111
Consolidated
7) Statements of cash flows
Term The first half
of FY2003
The first half of FY2004 (April 1, 2002 -
(April 1, 2003 - Sep. 30, 2003) Sep. 30, 2002)
Item (Yen millions) (U.S.$ thousands) (Yen millions)
Cash flows from
operating
activities:
Net income 19,257 173,486 4,645
Adjustments to
reconcile net
income to net cash
provided by opera-
ting activities:
Depreciation and
amortization 23,642 212,991 28,503
Loss on disposal
of property and
equipment 1,231 11,090 2,441
Deferred income
taxes 2,494 22,468 2,533
Loss on securities 1,068 9,622 949
Changes in assets
and liabilities:
Decrease (increase)
in trade
receivables (6,860) (61,802) 306
Decrease (increase)
in inventories (6,323) (56,964) 4,616
Increase in trade
payables 6,411 57,757 5,451
Increase (decrease)
in income taxes
payables, net 2,072 18,667 5,865
Other-net 9,039 81,433 (11,239)
Net cash provided
by operating
activities 52,031 468,748 44,070
Cash flows from
investing activities:
Capital
expenditures (20,826) (187,622) (14,472)
Proceeds from
sales and
maturities of
investments 1,830 16,487 11
Payment for pur-
chase of invest-
ments (96) (865) (30)
Other-net 557 5,018 1,146
Net cash used in
investing
activities (18,535) (166,982) (13,345)
Cash flows from
financing
activities:
Proceeds from
long-term debt 35 315 35
Repayment of long-
term debt (212) (1,910) (439)
Increase (decrease)
in short-term
debt, net (15) (135) (60)
Sale (purchase)
of treasury
stock, net (1,784) (16,072) (1,219)
Dividends paid (3,316) (29,874) (2,657)
Net cash used in
financing
activities (5,292) (47,676) (4,340)
Effect of exchange
rate changes on
cash and cash
equivalents (5,349) (48,189) (4,324)
Net increase in
cash and cash
equivalents 22,855 205,901 22,061
Cash and cash
equivalents at
beginning of
period 170,551 1,536,495 125,761
Cash and cash
equivalents at
end of period 193,406 1,742,396 147,822
Note: U.S.$1=Yen 111
8) Summary of Significant Accounting Policies
1. The consolidated financial statements are prepared in conformity with
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 of 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 carry forwards.
(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.
2. During this consolidated accounting period, TDK had 72 subsidiaries (20
in Japan and 52 overseas). TDK also had 8 affiliates (5 in Japan and 3
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) and total comprehensive income (loss) for
the six months ended September 30, 2003 and 2002 were as follows;
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - Sep. 30, 2003) (April 1,2002 - Sep. 30,2002)
Item (Yen millions) (U.S.$ thousands) (Yen millions)
Net income 19,257 173,486 4,645
Other compre-
hensive income
(loss), net
of tax:
Foreign currency
translation
adjustments (14,709) (132,513) (15,542)
Minimum pension
liability
adjustments 8,296 74,739 (2,600)
Net unrealized
gains (losses)
on securities 33 297 (1,959)
Total comprehen-
sive income
(loss) 12,877 116,009 (15,456)
Note: U.S.$1=Yen 111
4. Adoption of new accounting standards
(1) Accounting for Revenue Arrangements with Multiple Deliverables
In November 2002, the Emerging Issues Task Force reached a consensus on
Issue 00-21 ("EITF 00-21"), "Accounting for Revenue Arrangements with Multiple
Deliverables." EITF 00-21 provides guidance on when and how to account for
arrangements that involve the delivery or performance of multiple products,
services and/or rights to use assets. TDK adopted EITF 00-21 on July 1, 2003.
The adoption of EITF 00-21 did not have a material effect on TDK's
consolidated financial position and results of operations.
(2) Consolidation of Variable Interest Entities
In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest
Entities, an interpretation of ARB No. 51". FIN 46 addresses consolidation by
a primary beneficiary of a variable interest entity ("VIE"). FIN 46 applies
immediately to all new VIEs created or acquired after January 31, 2003, TDK
has not entered into any new arrangements with VIEs after January 31, 2003.
For VIEs created or acquired before February 1, 2003, the provisions of FIN 46
must be adopted by December 31, 2003. The effect on TDK's consolidated
financial statements of adopting the provisions of FIN 46 has not been
determined.
Consolidated
9) Segment Information
The following industry and geographic segment information are required by
the Japanese Securities Exchange Law.
1. Industry segment information
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - (April 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Product (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Electronic
materials
and components
Net sales 254,352 100.0 2,291,459 234,272 100.0 20,080 8.6
Unaffilia-
ted custo-
mers 254,352 2,291,459 234,272 20,080 8.6
Interseg-
ment - - - - -
Operating
expenses 228,520 89.8 2,058,739 223,557 95.4 4,963 2.2
Operating
income 25,832 10.2 232,720 10,715 4.6 15,117 141.1
Recording
media &
systems
Net sales 61,927 100.0 557,901 62,108 100.0 (181) -0.3
Unaffilia-
ted cust-
omers 61,927 557,901 62,108 (181) -0.3
Interseg-
ment - - - - -
Operating
expenses 63,739 102.9 574,225 62,804 101.1 935 1.5
Operating
income
(loss) (1,812) -2.9 (16,324) (696) -1.1 (1,116) -160.3
TOTAL
Net sales 316,279 100.0 2,849,360 296,380 100.0 19,899 6.7
Unaffilia-
ted cust-
omers 316,279 2,849,360 296,380 19,899 6.7
Interseg-
ment - - - - -
Operating
expenses 292,259 92.4 2,632,964 286,361 96.6 5,898 2.1
Operating
income 24,020 7.6 216,396 10,019 3.4 14,001 139.7
Note: U.S.$1=Yen 111
2. Geographic segment information
Term The first half of FY2004
(April 1, 2003 -Sep. 30, 2003)
Region (Yen millions) % (U.S.$ thousands)
Japan Net sales 158,716 100.0 1,429,874
Operating income 3,508 2.2 31,604
Americas Net sales 49,713 100.0 447,865
Operating income (loss) (605) -1.2 (5,450)
Europe Net sales 36,568 100.0 329,441
Operating income (loss) (59) -0.2 (532)
Asia and
others Net sales 185,691 100.0 1,672,892
Operating income 21,560 11.6 194,234
Intersegment
elimina-
tions Net sales 114,409 1,030,712
Operating income (loss) 384 3,460
Total Net sales 316,279 100.0 2,849,360
Operating income 24,020 7.6 216,396
Term The first half of FY2003
(April 1, 2002 - Sep. 30, 2002) Change
Region (Yen millions) % (Yen millions) %
Japan Net sales 173,895 100.0 (15,179) -8.7
Operating
income 2,664 1.5 844 31.7
Americas Net sales 50,938 100.0 (1,225) -2.4
Operating
income (loss) (309) -0.6 (296) -95.8
Europe Net sales 34,162 100.0 2,406 7.0
Operating
income (loss) (2,295) -6.7 2,236 97.4
Asia and
others Net sales 148,987 100.0 36,704 24.6
Operating
income 9,870 6.6 11,690 118.4
Interseg-
ment
elimina-
tions Net sales 111,602 2,807
Operating
income (loss) (89) 473
Total Net sales 296,380 100.0 19,899 6.7
Operating
income 10,019 3.4 14,001 139.7
Notes:
1. The sales are classified by geographic areas of the seller and include
transfers between geographic areas.
2. U.S.$1=Yen 111
3. Sales by region
Term The first half of FY2004 The first half of FY2003
(April 1, 2003 - (April 1, 2002 -
Sep. 30, 2003) Sep. 30, 2002) Change
Region (Yen % (U.S.$ (Yen % (Yen %
millions) thousands) millions) millions)
Americas 43,328 13.7 390,343 56,294 19.0 (12,966) -23.0
Europe 36,987 11.7 333,216 34,368 11.6 2,619 7.6
Asia and
others 154,428 48.8 1,391,243 121,429 41.0 32,999 27.2
Overseas
sales
total 234,743 74.2 2,114,802 212,091 71.6 22,652 10.7
Japan 81,536 25.8 734,558 84,289 28.4 (2,753) -3.3
Net sales 316,279 100.0 2,849,360 296,380 100.0 19,899 6.7
Notes:
1. Sales by region are classified by geographic areas of the buyer.
2. U.S.$1=Yen 111
Table of Contents
Consolidated
10) Fair Value of Securities
Gross Gross
Unrealized Unrealized Fair
(Yen millions) Cost Holding Gains Holding Losses Value
As of Sep. 30, 2003
Equity securities 1,262 180 13 1,429
Debt securities 1,099 -- 2 1,097
Total 2,361 180 15 2,526
As of March 31, 2003
Equity securities 3,455 122 11 3,566
Debt securities 2,495 3 -- 2,498
Total 5,950 125 11 6,064
As of Sep. 30, 2002
Equity securities 5,766 150 2,622 3,294
Debt securities 3,287 12 -- 3,299
Total 9,053 162 2,622 6,593
Gross Gross
U.S.$1=Yen 111 Unrealized Unrealized Fair
(U.S.$ thousands) Cost Holding Gains Holding Losses Value
As of Sep. 30, 2003
Equity securities 11,369 1,622 117 12,874
Debt securities 9,901 -- 18 9,883
Total 21,270 1,622 135 22,757
11) Fair Value of Derivatives
Contract Carrying Estimated Fair
(Yen millions) Amount Amount Value
As of Sep. 30, 2003
Forward foreign exchange
contracts 3,124 (21) (21)
Currency swap agreements
for loans to its
subsidiaries 10,418 (9) (9)
As of March 31, 2003
Forward foreign exchange
contracts 19,016 39 39
Currency swap agreements
for loans to its
subsidiaries 13,794 (287) (287)
As of Sep. 30, 2002
Forward foreign exchange
contracts 17,549 (84) (84)
Currency swap agreements
for loans to its
subsidiaries 13,613 (48) (48)
Contract Carrying Estimated Fair
(U.S.$ thousands) U.S.$1=Yen 111 Amount Amount Value
As of Sep. 30, 2003
Forward foreign exchange
contracts 28,144 (189) (189)
Currency swap agreements
for loans to its
subsidiaries 93,856 (81) (81)
Table of Contents
Non-Consolidated
12) Statements of income (Non-Consolidated)
Term The first half The first half
of FY2004 of FY2003
(April 1, 2003 (April 1, 2002
- Sep. 30, 2003) - Sep. 30, 2002)
Item (Yen (U.S.$ (Yen (Yen Change
millions) % thousands) millions) % millions) %
Income
Sales 152,474 100.0 1,373,639 167,260 100.0 (14,786) -8.8
Other
income 7,411 66,765 5,815
159,885 1,440,405 173,075
Costs and
expenses
Cost of
sales 123,309 1,110,891 136,194
S.G.A.
expenses 28,103 253,180 27,585
Interest
expenses 12 108 8
Other expenses 3,641 32,801 2,350
155,066 1,396,990 166,138
Current income 4,819 3.2 43,414 6,937 4.1 (2,118) -30.5
Extraordinary
profit 446 4,018 253
Extraordinary
loss 4,724 42,558 5,102
Income before
income taxes 541 0.4 4,873 2,088 1.2 (1,547) -74.1
Income taxes
Current (100) (900) (1,077)
Deferred (486) (4,378) 2,109
Net income 1,127 0.7 10,153 1,056 0.6 71 6.7
Note: U.S.$1=Yen 111
Non-Consolidated
13) Balance sheets (Non-Consolidated)
ASSETS
Term
As of Sep. 30, 2003 As of Mar. 31, 2003
Item (Yen millions) % (U.S.$ thousands) (Yen millions) %
Current assets
Cash 57,015 513,648 55,240
Marketable
securities 12,999 117,108 11,399
Trade receivables
Notes 3,778 34,036 4,429
Accounts 74,120 667,747 70,136
Allowance for
doubtful
receivables (131) (1,180) (112)
Net trade
receivables 77,767 700,603 74,454
Inventories 23,962 215,873 26,136
Prepaid expenses
and other
current assets 68,875 620,495 57,686
Total current
assets 240,620 47.0 2,167,747 224,917 44.1
Investments and
advances
Investments in
securities 7,543 67,954 8,885
Share of
subsidiaries 103,353 931,108 103,085
Other 30,726 276,810 37,469
Allowance for
doubtful
receivables (714) (6,432) (632)
Total investments
and advances 140,908 27.6 1,269,441 148,807
Property, plant
and equipment
Land 13,784 124,180 14,929
Buildings 42,500 382,882 43,811
Machinery and
equipment 56,778 511,513 57,451
Construction in
progress 5,834 52,558 7,545
Total property,
plant and
equipment 118,897 23.2 1,071,144 123,737 24.3
Other assets 11,223 2.2 101,108 12,097 2.4
TOTAL 511,650 100.0 4,609,459 509,561 100.0
Term Change As of Sep. 30, 2002
Item (Yen millions) (Yen millions) %
Current assets
Cash 1,775 51,904
Marketable securities 117,108 11,399
Trade receivables
Notes (651) 5,230
Accounts 3,984 79,395
Allowance for
doubtful receivables (19) (116)
Net trade receivables 3,313 84,510
Inventories (2,174) 25,755
Prepaid expenses and other
current assets 11,189 50,083
Total current assets 15,703 220,153 43.1
Investments and advances
Investments in securities (1,342) 4,200
Share of subsidiaries 268 105,807
Other (6,743) 46,727
Allowance for doubtful
receivables (82) (1,052)
Total investments and
advances (7,899) 155,682 30.5
Property, plant and
equipment
Land (1,145) 16,515
Buildings (1,311) 44,925
Machinery and equipment (673) 63,295
Construction in progress (1,711) 6,796
Total property, plant and
equipment (4,840) 131,533 25.7
Other assets (874) 3,556 0.7
TOTAL 2,089 510,925 100.0
Note: U.S.$1=Yen 111
Non-Consolidated
LIABILITIES AND STOCKHOLDERS' EQUITY
Term As of Sep. 30, 2003 As of Mar. 31, 2003
Item (Yen millions) % (U.S.$ thousands) (Yen millions) %
Current
liabilities
Trade
payables
accounts 36,655 330,225 32,843
Accrued
expenses 10,003 90,117 8,387
Accrued income
taxes 65 585 52
Other current
liabilities 15,758 141,963 19,389
Total current
liabilities 62,483 12.2 562,909 60,672 11.9
Retirement and
severance
benefits 33,746 304,018 29,337
Directors'
retirement
allowance 296 2,666 309
Total noncurrent
liabilities 34,043 6.7 306,693 29,646 5.8
Total
liabilities 96,526 18.9 869,603 90,319 17.7
Stockholders'
equity
Common stock 32,641 294,063 32,641
Additional
paid-in
capital 59,256 533,837 59,256
Legal reserve 8,160 73,513 8,160
Retained
earnings 321,723 2,898,405 323,999
Unrealized
holding gain
(loss) on
other
securities (44) (396) 37
Treasury
stock (6,615) (59,594) (4,854)
Total stockholders'
equity 415,123 81.1 3,739,846 419,241 82.3
TOTAL 511,650 100.0 4,609,459 509,561 100.0
Term Change As of Sep. 30, 2002
Item (Yen millions) (Yen millions) %
Current liabilities
Trade payables accounts 3,812 38,055
Accrued expenses 1,616 9,589
Accrued income taxes 13 27
Other current liabilities (3,631) 14,060
Total current liabilities 1,811 61,733 12.1
Retirement and severance
benefits 4,409 25,417
Directors' retirement
allowance (13) 302
Total noncurrent
liabilities 4,397 25,720 5.0
Total liabilities 6,207 87,453 17.1
Stockholders' equity
Common stock -- 32,641
Additional paid-in capital -- 59,256
Legal reserve -- 8,160
Retained earnings (2,276) 328,238
Unrealized holding gain
(loss) on other securities (81) (15)
Treasury stock (1,761) (4,810)
Total stockholders'
equity (4,118) 423,471 82.9
TOTAL 2,089 510,925 100.0
Note: U.S.$1=Yen 111
Supplementary Information
Ratio of results on a Consolidated basis to results on a
Non-Consolidated basis
Ratio of the Ratio of the
first half corresponding
of FY2004 period of the previous year
Net sales 2.1 1.8
Operating income 22.6 2.9
Income before income taxes 46.2 3.7
Net income 17.1 4.4
Exchange rates used for conversion
Term April 1, 2003 - April 1, 2002 -
Sep. 30, 2003 Sep. 30, 2002
Item US$=Yen Euro=Yen US$=Yen Euro=Yen
Sales 118.08 133.51 123.07 116.92
The end of the period 111.25 129.19 122.60 120.37
Non-Consolidated
Term April 1, 2003 - April 1, 2002 - April 1, 2002 -
Sep. 30, 2003 Sep. 30, 2002 March 31, 2003
Amount Ratio to Amount Ratio to Change Amount Ratio to
Item (Yen sales (%) (Yen sales (%) (%) (Yen sales (%)
millions) millions) millions)
Invest-
ment in
facil-
ities 8,993 -- 6,999 -- 28.5 24,959 --
Depreci-
ation
expens-
es 11,127 7.3 12,518 7.5 -11.1 26,529 8.3
Research
and
develop-
ment
expens-
es 11,568 7.6 10,967 6.6 5.5 22,530 7.0
Result of
financial
opera-
tion 3,262 2,678 21.8 2,829
Number of
employees
(as at the
end of the
period) 6,176 6,304 6,212
Consolidated
Term April 1, 2003 - April 1, 2002 - April 1, 2002 -
Sep. 30, 2003 Sep. 30, 2002 March 31, 2003
Amount Ratio to Amount Ratio to Change Amount Ratio to
Item (Yen sales (%) (Yen sales (%) (%) (Yen sales (%)
millions) millions) millions)
Invest-
ment
in
facil-
ities 20,826 -- 14,472 -- 43.9 41,451 --
Deprecia-
tion
expens-
es 23,642 7.5 28,503 9.6 -17.1 57,789 9.5
Research
and
develop-
ment
expens-
es 17,179 5.4 15,649 5.3 9.8 31,862 5.2
Result of
financial
operation 443 510 -13.1 802
Number of
employees
(as at the
end of the
period) 34,535 31,728 31,705
Ratio of
overseas
production 60.4% 55.6% 56.0%
OVERSEAS SALES BY DIVISION
Term April 1, 2003 - April 1, 2002 - April 1, 2002 -
Sep. 30, 2003 Sep. 30, 2002 March 31, 2003
Amount Ratio to Amount Ratio to Change Amount Ratio to
Item (Yen sales (%) (Yen sales (%) (%) (Yen sales (%)
millions) millions) millions)
Elec-
tronic
materials
and
compon-
ents 188,074 59.5 167,212 56.4 12.5 341,615 56.1
Elec-
tronic
mater-
ials 60,211 19.0 64,577 21.8 -6.8 122,761 20.2
Elec-
tronic
devices 29,583 9.4 29,360 9.9 0.8 58,671 9.6
Recording
devices 94,222 29.8 69,154 23.3 36.2 152,476 25.0
Semi-
conduc-
tors &
others 4,058 1.3 4,121 1.4 -1.5 7,707 1.3
Recording
media &
systems 46,669 14.7 44,879 15.2 4.0 101,762 16.7
Overseas
sales 234,743 74.2 212,091 71.6 10.7 443,377 72.8
SOURCE TDK Corporation
-0- 10/31/2003
/CONTACT: Michinori Katayama, Corporate Communications Department of TDK
Corporation(Tokyo), +81-3-5201-7102; or Francis J. Sweeney of TDK U.S.A.
Corporation, +1-516-535-2600; or Ron Matier of TDK UK Limited,
+44-1737-773773/
(TDK)
END
