Earnings release conference 1Q of Fiscal Year March 2011 TDK Corporation July 29, 2010 FY March, 2011(July 29, 2010) 1 Consolidated Results FY March 2011 Mr. Tadakazu Momozuka General Manager Finance & Accounting Department Passive Components business Mr. Shinichi Araya Director, Senior Vice President FY March, 2011(July 29, 2010) 2 Consolidated Results 1Q FY March 2011 Mr. Momozuka Tadakazu General Manager Finance & Accounting Department FY March, 2011(July 29, 2010) 3 Consolidated results for 1Q of FY March 2011 1Q FY2010 1Q FY2011 Change (April 1.2009 - June 30.2009) (April 1.2010 - June 30.2010) ％ Yen millions Yen millions ％ Yen millions Net Sales 181,546 100 221,925 100 40,379 Operating Income(Loss) △3,645 △2.0 20,209 9.1 23,854 - Income before income tax（Loss) △5,418 △2.1 18,818 8.5 24,236 - Net income(Loss) attributable to TDK Corp △3,216 △2.2 14,523 6.5 17,739 - Per common share Net income(loss) attributable to TDK Corp/Basic Yen(24.93) Yen appreciation Yen 97.36 Yen 132.66 Yen 92.01 Yen 117.03 5.50% 11.80% Net sales：Lowered 9.3 billion Yen Ex-rate impact to Net sales & Operating Income Operating income：Lowered 3.2billion Yen FY March, 2011(July 29, 2010) 22.2 Yen 112.59 Exchange rate US $ vs JP Yen EURO vs JP Yen ％ 4 Features in 1Q FY March 2011 results Electronics markets saw an ongoing recovery in not only consumer electronics but also in automobile and industrial equipment Net Sales 22.2% up vs 1Q’ FY2010 Remarkable recovery in passive components （31% increase vs 1Q’FY2010） FY March, 2011(July 29, 2010) 5 Statement of operation in 1Q, FY March 2011 results Term Item Net sales Cost of sales Gross profit Selling, general and administrative expenses Restructuring cost Operating income (loss) Other income (deductions): Interest and dividend income Interest expense Foreign exchange gain (loss) Other-net Total other income (deductions) Income (loss) before income taxes Income taxes Net income (loss) Less:Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to TDK Note: FY March, 2011(July 29, 2010) U.S.$1=Yen 88, for convenience only. 1Q of FY2011 (April 1,2010 June 30,2010) 1Q of FY2010 (April 1, 2009 June 30, 2009) (Yen millions) 181,546 146,420 35,126 37,348 1,423 (3,645) % 100.0 80.7 19.3 20.5 0.8 -2.0 (Yen millions) 221,925 164,790 57,135 36,926 20,209 Change % (U.S.$ thousands) 100.0 74.3 25.7 16.6 9.1 2,521,875 1,872,614 649,261 419,613 229,648 (Yen millions) Change(%) 40,379 18,370 22,009 (422) (1,423) 23,854 22.2 12.5 62.7 -1.1 - (89) 369 (487) 589 382 - -1.0 355 (652) (1,131) 37 (1,391) -0.6 4,034 (7,409) (12,852) 420 (15,807) (5,418) -3.0 18,818 8.5 213,841 24,236 - (1,705) -1.0 4,332 2.0 49,227 6,037 - (3,713) -2.0 14,486 6.5 164,614 18,199 - (497) -0.2 460 - (3,216) -1.8 17,739 - 444 (1,021) (644) (552) (1,773) (37) 14,523 -0.0 6.5 (420) 165,034 6 Breakdown of Operating Income Changes Breakdown Breakdown Operating Operating income income increase increase 23.9 23.9 billion billion Yen Yen （Unit : Yen billion) 23.9 【Change in operating income total】 Change in sales and products mix 32.5 Rationalization and cost reduction and Purchased materials saving 5.3 SG&A expenses decrease 0.1 Exchange fluctuations（US$=Yen 97.4=>92.0) Sales price reduction（4.6％） FY March, 2011(July 29, 2010) (3.2) (10.8) 7 Sector classification change 【Previous Classification】 Constituent Main business Classification Electronic materials and Components Ceramic capacitors Electronic Ferrite cores materials Magnets Inductive devices Electronic Hihg-frequency devices devices Sensors & Actuators Power supplies Sector Al electrolytic capacitors Film capacitors Inductors Ceramic components Sensors Energy devices others Main business Ceramic capacitors Al electrolytic capacitors Film capacitors Passive components Inductive devices (Coils/Ferrite cores/Transformers) High-frequency devices Piezoelectric materials products, Cuircuit protection devices Recording HDD Heads devices others Other Recording media 【New Classification】 Sensors Recording devices Magnetic Application Power supplies Magnets Products Recoring media Other Energy devices Mechatronics Other Recording media FY March, 2011(July 29, 2010) 8 Net sales comparison １Q FY’11 vs 1Q FY’10 1Q of FY2010 1Q of FY2011 Change (April 1.2009 - June 30.2009) (April 1.2010 - June 30.2010) Yen millions ％ Yen millions ％ Yen millions ％ Capacitors 28,812 15.9 37,985 17.1 9,173 31.8 Inductive・devices 24,758 13.6 32,513 14.6 7,755 31.3 Other 26,653 14.7 34,583 15.6 7,930 29.8 Passive compnents TTL 80,223 44.2 105,081 47.3 24,858 31.0 Recording devices 62,854 34.6 71,668 32.3 8,814 14.0 Other 24,076 13.3 28,594 12.9 4,518 18.8 Magnetic application products TTL 86,930 47.9 100,262 45.2 13,332 15.3 Other 14,393 7.9 16,582 7.5 2,189 15.2 221,925 100.0 Net Sales FY March, 2011(July 29, 2010) 181,546 100.0 40,379 9 22.2 Segment information 1Q’FY11 vs 1Q’FY10 N et sales by industry segm ent 1Q FY2010 1Q FY2011 ( A pr il 1 .2 0 0 9 - Ju n e 3 0 .2 0 0 9 ) (A pr il 1 .2 0 1 0 - Ju n e 3 0 .2 0 1 0 ) Ye n m illio n s ％ Ye n m illio n s ％ C h ange Ye n m illio n s ％ P assive c om p on e n ts 8 0 ,2 2 3 4 4 .2 1 0 5 ,0 8 1 4 7 .3 2 4 ,8 5 8 31.0 M a g n e tic A pplic a tio n P ro dc u ts 8 6 ,9 3 0 4 7 .9 1 0 0 ,2 6 2 4 5 .2 1 3 ,3 3 2 15.3 1 4 ,3 9 3 1 8 1 ,5 4 6 7 .9 1 0 0 .0 1 6 ,5 8 2 2 2 1 ,9 2 5 7 .5 1 0 0 .0 2 ,1 8 9 4 0 ,3 7 9 15.2 O th e rs T o tal Ne t Sale s Segm ent profit(loss) by industry segm ent 1Q FY2010 1Q FY2011 ( A pr il 1 .2 0 0 9 - Ju n e 3 0 .2 0 0 9 ) (A pr il 1 .2 0 1 0 - Ju n e 3 0 .2 0 1 0 ) Ye n m illio n s P assive c om p on e n ts ％ Ye n m illio n s ％ 22.2 C h ange Ye n m illio n s ％ △ 9 ,1 5 1 △ 1 1 .4 6 ,1 8 3 5 .9 1 5 ,3 3 4 - 5 ,8 9 8 6 .8 1 6 ,0 7 7 1 6 .0 1 0 ,1 7 9 173 O th e rs su b to tal (L o ss) 805 △ 2 ,4 4 8 5 .6 △ 1 .3 1 ,0 5 1 2 3 ,3 1 1 6 .3 1 0 .5 246 2 5 ,7 5 9 31 - C o rpo ra te a n d E lim in a tio n s △ 1 ,1 9 7 0 .0 △ 3 ,1 0 2 0 .0 △ 1 ,9 0 5 0 △ 3 ,6 4 5 △ 2 .0 2 0 ,2 0 9 9 .1 2 3 ,8 5 4 - (Lo ss) M a g n e tic A pplic a tio n P ro dc u ts To ta l O pe ra tin g in c o m e (lo s s ) FY March, 2011(July 29, 2010) 10 Projection for FY2011 Term Item FY2011 FY2011 FY2010 (April 1, 2010 March 31, 2011) (April 1, 2010 March 31, 2011) (April 1, 2009 March 31, 2010) Forecast in July'10 Forecast in April'10 Actual (Yen millions) (Yen millions) (Yen millions) (Yen millions) vs FY2010 Changes % 880,000 880,000 808,858 71,142 8.8 Operating Income 62,000 62,000 25,774 36,226 140.6 Income before income taxes 60,000 60,000 21,907 38,093 173.9 Net income attributable to TDK 45,000 45,000 13,520 31,480 232.8 Capital expenditures 75,000 75,000 64,370 10,630 16.5 Depreciation and amortization 82,000 82,000 83,788 (1,788) -2.1 Research and development 53,000 53,000 53,942 (942) -1.7 Net Sales Exchange rate for the projection vs US$ ： Yen 87 vs Euro： Yen 113 FY March, 2011(July 29, 2010) 11 Passive components business Mr. Shinichi Araya Director, Senior Vice President FY March, 2011(July 29, 2010) 12 Passive components business Demand Demandincrease increasein inConsumer, Consumer,as aswell wellas as automobile, automobile,Industrial Industrialequipment equipment 1Q of FY2010 1Q of FY2011 Change (April 1.2009 - June 30.2009) (April 1.2010 - June 30.2010) Yen millions Capacitors Inductive devices Other passive components Total Passive components Overview: main business 28,229 24,713 27,281 80,223 ％ 35.2% 30.8% 34.0% Yen millions 37,986 32,513 34,582 105,081 ％ Yen millions 9,757 7,800 7,301 24,858 36.1% 30.9% 32.9% ¾ Ceramic capacitors：Increased mainly in automobile, communication equipmet ¾ Aluminum and Film capacitors：Increased mainly in industrial equipment ¾ Inductive devices ：Increased mainly in automobile, communication equipment, IT home electronics equipment ¾ Other passive components 9 High-frequency components：Increased mainly in communication equipment 9 Piezoelectric material products 、Protection devices、sensors： Increased mainly in automobile and industrial equipment FY March, 2011(July 29, 2010) 13 ％ 34.6% 31.6% 26.8% 31.0% Ceramic capacitors business Overview for 1Q’FY11 1Q FY’11, status up date of improvement actions 9 Rationalize effect by facility consolidation 9 Variable cost reduction by productivity improvement 9 Scale economy effect by higher equipment utilization 9 Improvement in products mix Improvement Improvement in in profitability profitability FY March, 2011(July 29, 2010) 14 Ceramic capacitors business, Actions to proceed FY2011 ¾ Production location strategy 9 Consolidation of overseas packaging facilities：8 →4 facilities (completed 2 facilities in 1Q, Consolidation of 2 facilities will be completed in 2Q） 9 Chang An/China, Back-end process ¾ Production strategy 9 Out-put increase and cost reduction by introducing new processes. 9 Cost reduction by increasing In-house materials ratio ¾ Products strategy 9 Expand products line-up Strengthen growth strategy Further improvement in total cost FY March, 2011(July 29, 2010) 15 Cautionary Statements with Respect to Forward-Looking Statements This Thismaterial materialcontains containsforward-looking forward-lookingstatements, statements,including includingprojections, projections,plans, plans,policies, policies, management managementstrategies, strategies,targets, targets,schedules, schedules,understandings understandingsand andevaluations, evaluations,about aboutTDK TDKororitsits group groupcompanies companies(TDK (TDKGroup). Group). These Theseforward-looking forward-lookingstatements statementsare arebased basedon onthe thecurrent current forecasts, forecasts,estimates, estimates,assumptions, assumptions,plans, plans,beliefs beliefsand andevaluations evaluationsofofTDK TDKGroup Groupininlight lightofof information informationcurrently currentlyavailable availabletotoit,it,and andcontain containknown knownand andunknown unknownrisks, risks,uncertainties uncertaintiesand andother other factors. factors.TDK TDKGroup Grouptherefore thereforewishes wishestotocaution cautionreaders readersthat, that,being beingsubject subjecttotorisks, risks,uncertainties uncertainties and andother otherfactors, factors,TDK TDKGroup’s Group’sactual actualresults, results,performance, performance,achievements achievementsororfinancial financialposition position could couldbe bematerially materiallydifferent differentfrom fromany anyfuture futureresults, results,performance, performance,achievements achievementsororfinancial financial position positionexpressed expressedororimplied impliedby bythese theseforward-looking forward-lookingstatements, statements,and andTDK TDKGroup Groupundertakes undertakesno no obligation obligationtotopublicly publiclyupdate updateororrevise reviseany anyforward-looking forward-lookingstatements statementsafter afterthe theissue issueofofthis this material materialexcept exceptas asprovided providedfor forininlaws lawsand andordinances. ordinances. The Theelectronics electronicsmarkets marketsininwhich whichTDK TDKGroup Groupoperates operatesare arehighly highlysusceptible susceptibletotorapid rapidchanges. changes. Risks, Risks,uncertainties uncertaintiesand andother otherfactors factorsthat thatcan canhave havesignificant significanteffects effectson onTDK TDKGroup Groupinclude, include,but but are arenot notlimited limitedto, to,shifts shiftsinintechnology, technology,fluctuations fluctuationsinindemand, demand,prices, prices,interest interestand andforeign foreign exchange exchangerates, rates,and andchanges changesinineconomic economicenvironments, environments,conditions conditionsofofcompetition, competition,laws lawsand and regulations. regulations. FY March, 2011(July 29, 2010) 16 FY March, 2011(July 29, 2010) 17