TDK Corporation
1-13-1, Nihonbashi
Chuo-ku, Tokyo
103-8272 Japan
Contacts;
TDK Corporation(Tokyo)
Corporate Communications Department
+81(3)5201-7102
Michinori Katayama
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 - January 30, 2007 TDK Corporation today announced its Consolidated business results
prepared in conformity with U.S. generally accepted accounting principles (the "U.S. GAAP")
for the 3rd quarter ("Qtr.") of fiscal year ("FY") 2007, the three months ended December 31, 2006,
and for the nine-month-period from April 1, 2006 through December 31, 2006.
1) Summary
Consolidated results (October 1, 2006 - December 31, 2006)
Term
Item
Net sales
Operating income
Income from
continuing operations
before income taxes
Income from
continuing operations
Net income
Per common share:
Net income / Basic
Net income / Diluted
The 3rd Qtr. of FY2006
The 3rd Qtr. of FY2007
Change
(October 1, 2006 - December 31, 2006) (Oct. 1, 2005 - Dec. 31, 2005)
(Yen millions)
% (U.S.$ thousands) (Yen millions)
% (Yen millions) Change(%)
223,253
23,141
100.0
10.4
1,876,076
194,462
222,654
21,291
100.0
9.6
599
1,850
0.3
8.7
26,048
11.7
218,891
22,011
9.9
4,037
18.3
19,669
8.8
165,286
16,568
7.4
3,101
18.7
19,669
8.8
165,286
16,568
7.4
3,101
18.7
Yen 148.69
Yen 148.52
U.S.$ 1.25
U.S.$ 1.25
Yen 125.31
Yen 125.16
(Sales breakdown)
Term
Product
Electronic materials
and components
Electronic materials
Electronic devices
Recording devices
Other electronic
components
Recording media
Total sales
Overseas sales
The 3rd Qtr. of FY2006
The 3rd Qtr. of FY2007
Change
(October 1, 2006 - December 31, 2006) (Oct. 1, 2005 - Dec. 31, 2005)
(Yen millions)
% (U.S.$ thousands) (Yen millions)
% (Yen millions) Change(%)
194,541
87.1
1,634,799
192,091
86.3
2,450
50,295
50,548
76,784
22.5
22.6
34.4
422,647
424,773
645,244
47,613
46,979
85,736
21.4
21.1
38.5
2,682
3,569
(8,952)
5.6
7.6
-10.4
16,914
7.6
142,135
11,763
5.3
5,151
43.8
28,712
223,253
178,504
12.9
100.0
80.0
241,277
1,876,076
1,500,034
30,563
222,654
179,139
13.7
100.0
80.5
(1,851)
599
(635)
-6.1
0.3
-0.4
Notes:
1. Consolidated results are unaudited by independent auditors.
2. U.S.$1 = Yen 119, for convenience only.
1 / 18
1.3
Consolidated
9 months Consolidated results
Consolidated results (April 1, 2006 - December 31, 2006)
Term
Item
Net sales
Operating income
Income from
continuing operations
before income taxes
Income from
continuing operations
Net income
Per common share:
Net income / Basic
Net income / Diluted
The nine-month-period of FY2007
(April 1, 2006 - December 31, 2006)
(Yen millions)
%
(U.S.$ thousands)
The nine-monthperiod of FY2006
Change
(Apr. 1, 2005 - Dec. 31, 2005)
(Yen millions)
% (Yen millions) Change(%)
100.0
13.1
75,050
8.6
24.5
12,064
648,091
61,405
100.0
9.5
5,446,143
516,008
573,041
49,341
67,377
10.4
566,193
53,609
9.4
13,768
25.7
49,291
7.6
414,210
38,218
6.7
11,073
29.0
49,291
7.6
414,210
38,234
6.7
11,057
28.9
Yen 372.58
Yen 372.18
U.S.$ 3.13
U.S.$ 3.13
Yen 289.14
Yen 288.88
(Sales breakdown)
Term
Product
Electronic materials
and components
Electronic materials
Electronic devices
Recording devices
Other electronic
components
Recording media
Total sales
Overseas sales
The nine-month-period of FY2007
(April 1, 2006 - December 31, 2006)
(Yen millions)
%
571,248
88.1
149,008
147,130
230,839
The nine-monthperiod of FY2006
Change
(Apr. 1, 2005 - Dec. 31, 2005)
(Yen millions) Change(%)
(Yen millions)
%
4,800,404
492,811
86.0
78,437
15.9
23.0
22.7
35.6
1,252,168
1,236,387
1,939,824
133,702
107,931
226,024
23.3
18.8
39.5
15,306
39,199
4,815
11.4
36.3
2.1
44,271
6.8
372,025
25,154
4.4
19,117
76.0
76,843
648,091
520,405
11.9
100.0
80.3
645,739
5,446,143
4,373,151
80,230
573,041
443,444
14.0
100.0
77.4
(3,387)
75,050
76,961
-4.2
13.1
17.4
(U.S.$ thousands)
Notes:
1. Consolidated results are unaudited by independent auditors.
2. U.S.$1 = Yen 119, for convenience only.
2 / 18
2) Business Results and Financial Position
1. Summary
Consolidated results for the third quarter of fiscal 2007, the three-month period from
October 1, 2006 to December 31, 2006, were as follows:
TDK posted net sales of ¥223,253 million (U.S.$1,876,076 thousand), up 0.3% year
on year from ¥222,654 million. Operating income increased 8.7% from ¥21,291 million
to ¥23,141 million (U.S.$194,462 thousand). Income from continuing operations
before income taxes increased 18.3% from ¥22,011 million to ¥26,048 million
(U.S.$218,891 thousand). Net income increased 18.7% from ¥16,568 million to
¥19,669 million (U.S.$165,286 thousand). Basic net income per common share was
¥148.69 (U.S.$1.25), compared with ¥125.31 for the corresponding period of fiscal
2006.
Average third-quarter yen exchange rates for the U.S. dollar and euro were ¥117.83
(previous year ¥117.37) and ¥151.95 (previous year ¥139.46) as the yen depreciated
0.4% and 9.0% against the dollar and euro, respectively. This had the effect of raising
net sales by approximately ¥2.4 billion and operating income by approximately ¥0.2
billion.
(Sales by Segment)
TDK’s businesses are broadly classified into two business segments: electronic
materials and components segment and recording media segment. The following is
an explanation of sales by 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) other electronic components.
Segment net sales rose 1.3% from ¥192,091 million to ¥194,541 million
(U.S.$1,634,799 thousand), while segment operating income increased 3.6% from
¥22,199 million to ¥23,008 million (U.S.$193,345 thousand). In the electronics market
in the third quarter of fiscal 2007, there was strong production of flat-screen TVs,
notebook PCs and digital audio players in what is traditionally a period of high demand.
Other trends included a steady increase in new demand for mobile phones,
particularly from the so-called BRICs nations of Brazil, Russia, India and China, as
well as the steadily increasing use of electronics in automobiles. These trends fueled
strong demand for electronic components used in these applications. Sector sales of
TDK’s electronic materials and components framed against this market backdrop
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 5.6% from ¥47,613 million to ¥50,295
million (U.S.$422,647 thousand).
3 / 18
[Capacitors] Sales increased year on year. The main contributor was strong sales of
multilayer ceramic chip capacitors, the main products in the capacitors category,
primarily for use in PCs.
[Ferrite cores and magnets] Overall, sales of ferrite cores and magnets rose year on
year. Sales of ferrite cores decreased as TDK terminated some products. In magnets,
sales of both ferrite magnets and rare-earth magnets increased.
(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 7.6% from ¥46,979 million to ¥50,548
million (U.S.$424,773 thousand).
[Inductive devices] Sales of inductive devices increased year on year, mainly as a
result of higher sales of power line coils and multilayer products used in mobile
phones.
[High-frequency components] Sales of high-frequency components declined year
on year, resulting mainly from lower sales volumes and falling sales prices.
[Other products] Sales of other products rose year on year mainly due to higher
sales of power systems. On the other hand, sales of sensors and actuators declined
as sales prices fell.
(1-3) Recording devices
This sector has two product categories: HDD heads and other heads.
Sector sales dropped 10.4% from ¥85,736 million to ¥76,784 million (U.S.$645,244
thousand).
[HDD heads] Sales decreased year on year. TDK’s HDD head sales volume
increased as growing demand not only for HDDs used in PCs but also for applications
such as consumer electronics countered the detrimental effects of HDD industry
restructuring. However, a fall in sales prices due to a competition for market share
among HDD manufacturers outweighed the benefits of the higher sales volume,
leading to the overall drop in HDD head sales.
[Other heads] Sales of other heads declined.
(1-4) Other electronic components
Sector sales climbed 43.8% from ¥11,763 million to ¥16,914 million (U.S.$142,135
thousand), reflecting higher sales of new products such as semiconductor production
equipment.
(2)Recording media segment
This segment has three product categories: audiotapes and videotapes, optical media
and other products.
Segment sales decreased 6.1% from ¥30,563 million to ¥28,712 million
(U.S.$241,277 thousand). The segment recorded operating income of ¥133 million
(U.S.$1,117 thousand), compared with an operating loss of ¥908 million in the same
period of the previous fiscal year, a year-on-year improvement of ¥1,041 million.
4 / 18
[Audiotapes and videotapes] Sales of audiotapes and videotapes declined year on
year. The main reason is that while TDK maintained a high market share, demand is
falling for these products as a whole.
[Optical media] Sales of optical media rose year on year as higher sales volumes of
these products outweighed a continued fall in prices of CD-Rs and DVDs.
[Other products] Sales of other products decreased year on year. Sales of
LTO-standard* (Linear Tape-Open) tape-based data storage media for computers
increased, but the termination of some products brought sales as a whole down.
*Linear Tape-Open, LTO, the LTO Logo, Ultrium and the Ultrium Logo are trademarks of HP, IBM and Quantum in
the US and other countries.
(Sales by Region)
Detailed geographic segment information can be found in the segment information on
page 16 of the consolidated results.
[Japan] Sales increased overall, with only the recording devices sector and recording
media segment not achieving an increase.
[Americas] Sales increased overall, with only the electronic materials sector and
recording media segment not achieving an increase.
[Europe] Sales decreased overall due to falls in the other electronic components
sector and recording media segment.
[Asia (excluding Japan) and other areas] Sales decreased overall due to falls in the
recording devices sector and recording media segment.
The overall result was a 0.4% decline in overseas sales year on year from ¥179,139
million to ¥178,504 million (U.S.$1,500,034 thousand). Overseas sales accounted for
80.0% of consolidated net sales, a 0.5 percentage point decrease from 80.5% one
year earlier.
2. Financial Position
(2-1) The following table summarizes TDK’s balance sheet at December 31, 2006,
compared with September 30, 2006.
Total assets
Total stockholders’ equity
Equity ratio
¥ 975,996 million
¥ 744,396 million
76.3%
(1.7% increase)
(2.7% increase)
0.7 percentage point increase
At December 31, 2006, cash and cash equivalents were ¥3,233 million higher than at
September 30, 2006, short-term investments were ¥6,776 million higher, net trade
receivables were ¥1,848 million higher and inventories were ¥2,921 million higher. As
a result of these and other changes, total assets increased ¥16,584 million from
September 30, 2006.
Total liabilities decreased ¥3,200 million from September 30, 2006, with the main
changes being a ¥5,612 million decrease in trade payables and a ¥2,061 million
increase in income taxes payables.
Total stockholders’ equity increased ¥19,239 million, reflecting a ¥13,466 million
increase in retained earnings and a ¥5,890 million decrease in accumulated other
comprehensive loss.
5 / 18
(2-2) Cash Flows
FY 2007 3Q
28,970
(21,747)
(6,445)
-
FY 2006 3Q
20,058
(44,542)
(4,310)
-
(¥ millions)
Change
8,912
22,795
(2,135)
-
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Net cash used in discontinued operations
Effect of exchange rate changes on cash and
2,455
4,978
(2,523)
cash equivalents
Net increase (decrease) in cash and cash
3,233
(23,816)
27,049
equivalents
Cash and cash equivalents at beginning of period
264,833
224,645
40,188
Cash and cash equivalents at end of period
268,066
200,829
67,237
Operating activities provided net cash of ¥28,970 million (U.S.$243,445 thousand), a
year-on-year increase of ¥8,912 million. Income from continuing operations increased
¥3,101 million to ¥19,669 million (U.S.$165,286 thousand) and depreciation and
amortization rose ¥1,642 million to ¥16,780 million (U.S.$141,008 thousand). In
changes in assets and liabilities, trade receivables declined ¥18,892 million, while
inventories increased ¥2,291 million, and trade payables and accrued expenses
decreased ¥7,142 million and ¥5,984 million, respectively.
Investing activities used net cash of ¥21,747 million (U.S.$182,748 thousand),
¥22,795 million less than a year earlier. Capital expenditures decreased ¥6,231
million to ¥15,122 million (U.S.$127,076 thousand). In addition, there was a decline of
¥24,202 million for acquisition of businesses, net of cash acquired, paid in the
previous fiscal year and a cash inflow of ¥5,016 million from proceeds from sale of
short-term investments. On the other hand, there was an outflow of ¥11,704 million for
payment for purchase of short-term investments.
Financing activities used net cash of ¥6,445 million (U.S.$54,159 thousand), ¥2,135
million more than a year earlier. This was mainly the result of a ¥502 million increase
in repayment of long-term debt and a ¥1,329 million increase in dividends paid due to
a ¥10 increase in dividend per common share.
6 / 18
3. Fiscal 2007 Projections
TDK’s consolidated projections for fiscal 2007, the year ending March 31, 2007, are
as follows:
[Consolidated Projections for Fiscal 2007]
Announced
Change from FY2006
Announced
January 2007
Oct. 2006
(¥ millions, %)
FY2007
FY2006
Amount
%
FY2007
(Forecasts)
(Actual)
(Forecasts)
Net sales
853,000
795,180
57,820
7.3
820,000
Operating income
82,000
60,523
21,477
35.5
82,000
Income from continuing
operations before income
taxes
88,000
66,103
21,897
33.1
88,000
Net income
63,000
44,101
18,899
42.9
61,000
Note:
The reasons for the revised forecasts are as follows:
Business Environment
Demand was strong for passive components (electronic materials and electronic
devices) in the third quarter, a reflection of demand during the year-end holiday sales
period. Since the beginning of January 2007, data suggests post-New Year industry
inventory levels of main products such as digital home appliances and mobile phones,
which influence orders for TDK’s components, are generally at suitable levels.
Accordingly, we believe the possibility of a major reduction in inventories at our
customers in the fourth quarter is low and that demand for components will hold up,
reflecting demand for finished products. As a result, we have raised our previous
full-year net sales forecast.
We have not revised our previous forecast for operating income, however, due to
continued strong discounting pressure on main components and in consideration of
other factors.
Exchange Rate Forecast
An average exchange rate of ¥118=U.S.$1 is assumed for the fourth quarter of fiscal
2007.
Projections for main products are as follows:
Electronic Materials and Electronic Devices
TDK is projecting a year-on-year increase in sales, supported by higher demand for
components mainly from manufacturers of digital home appliances and mobile
phones, the main customers for these products.
Recording Devices
Regarding HDD heads, the major product in the recording devices sector, TDK
expects to overcome the effects of HDD industry restructuring and post higher volume
year on year. However, TDK anticipates that it will be difficult to completely offset the
effects of price declines with the higher volume and is therefore forecasting a
year-on-year drop in sales in this product sector.
Recording Media
Lower sales of audiotapes and videotapes due to falling demand, as well as sales
declines in other products, are expected to result in lower sales year on year in this
segment.
7 / 18
4. 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 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; intense price competition and diversifying demands
from customers; product quality issues; competition to secure human resources;
government regulation; the infringement of intellectual property rights; procure main
raw materials; increasingly stringent environmental regulations internationally; and
natural disasters.
Cautionary Statements with Respect to Forward-Looking Statements
This material contains forward-looking statements, including projections, plans, policies, management
strategies, targets, schedules, understandings and evaluations, about TDK and its group companies (TDK Group).
These forward-looking statements are based on the current forecasts, estimates, assumptions, plans, beliefs and
evaluations of TDK Group in light of information currently available to it, and contain known and unknown risks,
uncertainties and other factors. TDK Group therefore wishes to caution readers that, being subject to risks,
uncertainties and other factors, TDK Group’s actual results, performance, achievements or financial position could
be materially different from any future results, performance, achievements or financial position expressed or
implied by these forward-looking statements, and TDK Group undertakes no obligation to publicly update or revise
any forward-looking statements after the issue of this material except as provided for in laws and ordinances.
The electronics markets in which TDK Group operates are highly susceptible to rapid changes. Risks,
uncertainties and other factors that can have significant effects on TDK Group include, but are not limited to, shifts
in technology, fluctuations in demand, prices, interest and foreign exchange rates, and changes in economic
environments, conditions of competition, laws and regulations.
8 / 18
Consolidated
3) Statements of income
[ 3rd Qtr. results ]
Term
Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Restructuring cost
Operating income
Other income (deductions):
Interest and dividend income
Interest expense
Foreign exchange gain (loss)
Other-net
Total other income (deductions)
Income from continuing operations
before income taxes
Income taxes
Income from continuing operations
before minority interests
Minority interests
Income from continuing operations
Loss (income) from discontinued operations, net of tax
Net income
The 3rd Qtr. of FY2007
The 3rd Qtr. of FY2006
(October 1, 2006 - December 31, 2006) (Oct. 1,2005 - Dec. 31,2005)
(Yen
(Yen
(U.S.$
%
%
millions)
millions)
thousands)
223,253 100.0 1,876,076
159,146
71.3 1,337,362
64,107
28.7
538,714
40,922
18.3
343,882
44
0.0
370
23,141
10.4
194,462
1,923
(49)
406
627
2,907
26,048
1.3
11.7
16,160
(412)
3,412
5,269
24,429
218,891
222,654 100.0
73.8
164,387
26.2
58,267
16.6
36,976
9.6
21,291
Change
(Yen
millions)
Change(%)
599
(5,241)
5,840
3,946
44
1,850
0.3
-3.2
10.0
10.7
8.7
1,065
(41)
741
(1,045)
720
0.3
858
(8)
(335)
1,672
2,187 303.8
22,011
9.9
4,037
18.3
6,024
2.7
50,622
5,082
2.3
942
18.5
20,024
9.0
168,269
16,929
7.6
3,095
18.3
355
19,669
19,669
0.2
8.8
8.8
2,983
165,286
165,286
361
16,568
16,568
0.2
7.4
7.4
(6)
3,101
3,101
-1.7
18.7
18.7
[ 9 months period results ]
Term
The nine-month-period of FY2007
(April 1, 2006 - December 31, 2006)
Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Restructuring cost
Operating income
Other income (deductions):
Interest and dividend income
Interest expense
Foreign exchange gain (loss)
Other-net
Total other income (deductions)
Income from continuing operations
before income taxes
Income taxes
Income from continuing operations
before minority interests
Minority interests
Income from continuing operations
Loss (income) from discontinued operations, net of tax
Net income
(Yen
millions)
%
(U.S.$
thousands)
648,091 100.0 5,446,143
466,238
71.9 3,917,967
181,853
28.1 1,528,176
120,323
18.6 1,011,118
125
0.0
1,050
61,405
9.5
516,008
The nine-monthperiod of FY2006
FY2006
Change
(Apr. 1,2005 - Dec. 31,2005)
(Yen
millions)
%
573,041 100.0
425,986
74.3
25.7
147,055
97,714
17.1
49,341
8.6
(Apr. 1,2005 - Mar. 31,2006)
(Yen
millions)
75,050
40,252
34,798
22,609
125
12,064
Change(%)
13.1
9.4
23.7
23.1
24.5
(Yen
millions)
795,180
585,780
209,400
142,052
6,825
60,523
%
100.0
73.7
26.3
17.9
0.8
7.6
0.8
2,370
(66)
(1,183)
583
1,704
67,377
10.4
566,193
53,609
9.4
13,768
25.7
66,103
8.3
17,282
2.7
145,227
14,902
2.6
2,380
16.0
21,057
2.6
50,095
7.7
420,966
38,707
6.8
11,388
29.4
45,046
5.7
804
49,291
49,291
0.1
7.6
7.6
6,756
414,210
414,210
489
38,218
(16)
38,234
0.1
6.7
(0.0)
6.7
315
11,073
16
11,057
64.4
29.0
28.9
635
44,411
310
44,101
0.1
5.6
0.1
5.5
4,951
(158)
156
1,023
5,972
0.9
41,605
(1,328)
1,311
8,597
50,185
Notes:
1. Statements of income are unaudited by independent auditors, FY2006 excepted.
2. U.S.$1 = Yen 119, for convenience only.
9 / 18
2,581
(92)
1,339
440
4,268
39.9
3,605
(149)
948
1,176
5,580
0.7
Consolidated
4) Balance sheets
ASSETS
Term
As of December 31, 2006
(Yen
millions)
Item
%
(U.S.$
thousands)
As of Sep. 30, 2006
(Yen
millions)
%
Change
(Yen
millions)
As of Mar. 31, 2006
(Yen
millions)
%
Current assets
Cash and cash equivalents
Short-term investments
Marketable securities
Net trade receivables
Inventories
Other current assets
612,467
268,066
16,792
1,052
183,918
95,160
47,479
62.8 5,146,781
2,252,655
141,109
8,840
1,545,530
799,664
398,983
596,102
264,833
10,016
56
182,070
92,239
46,888
62.1
16,365
3,233
6,776
996
1,848
2,921
591
566,753
239,017
56
189,059
88,968
49,653
61.4
Noncurrent assets
Investments in securities
Net property, plant and equipment
Other assets
TOTAL
363,529
28,970
248,353
86,206
975,996
37.2 3,054,866
243,446
2,087,000
724,420
100.0 8,201,647
363,310
29,583
248,060
85,667
959,412
37.9
219
(613)
293
539
16,584
356,750
28,757
243,665
84,328
923,503
38.6
100.0
100.0
LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS' EQUITY
Term
As of December 31, 2006
(Yen
millions)
Item
Current liabilities
Short-term debt
Current installments of long-term debt
Trade payables
Accrued expenses
Income taxes payables
Other current liabilities
Noncurrent liabilities
Long-term debt,
excluding current installments
Retirement and severance benefits
Deferred income taxes
Other noncurrent liabilities
Total liabilities
Minority interests
Common stock
Additional paid-in capital
Legal reserve
Retained earnings
Accumulated
other comprehensive income (loss)
Treasury stock
Total stockholders' equity
TOTAL
%
(U.S.$
thousands)
As of Sep. 30, 2006
(Yen
millions)
%
Change
(Yen
millions)
As of Mar. 31, 2006
(Yen
millions)
%
181,432
1,698
1,977
94,272
65,119
11,844
6,522
18.9
(2,641)
498
(511)
(5,612)
(614)
2,061
1,537
169,622
4,469
1,958
84,689
62,534
9,155
6,817
18.4
330,748
39,918
4.2
(559)
37,488
4.0
372
3,126
382
(10)
405
27,010
5,758
6,219
226,975
48,387
52,260
27,501
6,213
5,822
(491)
(455)
397
26,790
5,314
4,979
218,150
22.3 1,833,193
221,350
23.1
(3,200)
207,110
22.4
113,025
12,905
1.3
13,974
1.5
274,294
534,504
149,773
5,475,622
32,641
63,556
18,276
638,133
50
(453)
13,466
32,641
63,237
17,517
618,259
(124,739)
(20,734)
5,890
(21,946)
(6,429)
(54,025)
744,396
76.3 6,255,429
975,996 100.0 8,201,647
(6,715)
725,157
959,412
286
19,239
16,584
(7,289)
702,419
923,503
178,791
2,196
1,466
88,660
64,505
13,905
8,059
39,359
13,450
32,641
63,606
17,823
651,599
(14,844)
18.3 1,502,445
18,454
12,319
745,042
542,059
116,849
67,722
4.0
1.4
75.6
100.0
Notes:
1. Balance sheets as of December 31, 2006 is unaudited by independent auditors.
2. U.S.$1 = Yen 119, for convenience only.
10 / 18
545
76.1
100.0
Consolidated
5) Statements of stockholders' equity
(Yen millions)
Additional
paid-in
capital
Common
stock
Legal
reserve
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Total
stockholders'
equity
Treasury
stock
The nine-month-period of FY2007
(April 1, 2006 - Dec. 31, 2006)
Balance at beginning of period
(as previously reported)
Adjustment for the cumulative effect on
prior years of the adoption of SAB No. 108
Balance at beginning of period
(after adjustment)
Non-cash compensation charges
under a stock option plan
Cash dividends
Losses on sales of treasury stock
Transferred to legal reserve
Comprehensive income:
Net income
Foreign currency translation adjustments
Minimum pension liability adjustments
Net unrealized gains (losses) on securities
Total comprehensive income
Acquisition of treasury stock
Exercise of stock option
Balance at end of period
32,641
63,237
17,517
-
-
-
32,641
63,237
17,517
618,259
(2,287)
615,972
(21,946)
(7,289)
-
-
(21,946)
(7,289)
369
702,419
(2,287)
700,132
369
306
(13,230)
(128)
(306)
(13,230)
(128)
-
49,291
7,589
0
(487)
32,641
63,606
17,823
651,599
(14,844)
(22)
882
(6,429)
32,641
63,051
16,918
585,557
(51,657)
(7,443)
49,291
7,589
0
(487)
56,393
(22)
882
744,396
639,067
The nine-month-period of FY2006
(April 1, 2005 - Dec. 31, 2005)
Balance at beginning of period
Non-cash compensation charges
under a stock option plan
Cash dividends
Losses on sales of treasury stock
Transferred to legal reserve
Comprehensive income:
Net income
Foreign currency translation adjustments
Minimum pension liability adjustments
Net unrealized gains (losses) on securities
Total comprehensive income
Acquisition of treasury stock
Exercise of stock option
Balance at end of period
186
186
554
(10,578)
(193)
(554)
(10,578)
(193)
-
38,234
26,961
2,112
25
32,641
63,237
17,472
612,466
(22,559)
(948)
971
(7,420)
32,641
63,051
16,918
585,557
(51,657)
(7,443)
38,234
26,961
2,112
25
67,332
(948)
971
695,837
639,067
FY2006
(April 1, 2005 - Mar. 31, 2006)
Balance at beginning of period
Non-cash compensation charges
under a stock option plan
Cash dividends
Losses on sales of treasury stock
Transferred to legal reserve
Comprehensive income:
Net income
Foreign currency translation adjustments
Minimum pension liability adjustments
Net unrealized gains (losses) on securities
Total comprehensive income
Acquisition of treasury stock
Exercise of stock option
Balance at end of period
186
186
599
(10,578)
(222)
-
(10,578)
(222)
(599)
44,101
26,100
2,719
892
32,641
63,237
11 / 18
17,517
618,259
(21,946)
(955)
1,109
(7,289)
44,101
26,100
2,719
892
73,812
(955)
1,109
702,419
Consolidated
(U.S.$ thousands)
Additional
paid-in
capital
Common
stock
Legal
reserve
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Total
stockholders'
equity
Treasury
stock
The nine-month-period of FY2007
(April 1, 2006 - Dec. 31, 2006)
Balance at beginning of period
(as previously reported)
Adjustment for the cumulative effect on
prior years of the adoption of SAB No. 108
Balance at beginning of period
(after adjustment)
Non-cash compensation charges
under a stock option plan
Cash dividends
Losses on sales of treasury stock
Transferred to legal reserve
Comprehensive income:
Net income
Foreign currency translation adjustments
Minimum pension liability adjustments
Net unrealized gains (losses) on securities
Total comprehensive income
Acquisition of treasury stock
Exercise of stock option
Balance at end of period
274,294
531,403
147,202
-
-
-
274,294
531,403
147,202
5,195,454
(184,420)
(61,252)
-
-
(184,420)
(61,252)
(19,219)
5,176,235
2,571
(111,176)
(1,076)
(2,571)
5,883,462
(111,176)
(1,076)
-
414,210
63,773
0
(4,092)
534,504
(19,219)
3,101
3,101
274,294
5,902,681
149,773
5,475,622
(124,739)
Notes:
1. Statements of stockholders' equity are unaudited by independent auditors, FY2006 excepted.
2. U.S.$1=Yen 119, for convenience only.
12 / 18
(185)
7,412
(54,025)
414,210
63,773
0
(4,092)
473,891
(185)
7,412
6,255,429
Consolidated
6) Statements of cash flows
[3rd Qtr. results]
Term
The 3rd Qtr.
of FY2006
The 3rd Qtr. of FY2007
(October 1, 2006 - December 31, 2006)
Item
(Yen millions)
Cash flows from operating activities:
Net income
Loss (income) from discontinued operations, net of tax
Income from continuing operations
(U.S.$ thousands)
(Oct. 1, 2005 Dec. 31, 2005)
(Yen millions)
19,669
19,669
165,286
165,286
16,568
16,568
16,780
273
(894)
141,008
2,294
(7,513)
15,138
640
(178)
1,842
(1,528)
630
(7,299)
(1,431)
1,866
348
(1,286)
28,970
15,479
(12,840)
5,294
(61,336)
(12,025)
15,681
2,924
(10,807)
243,445
(17,050)
763
(1,123)
(157)
4,553
(623)
267
1,260
20,058
(15,122)
5,016
(11,704)
(127,076)
42,151
(98,353)
(21,353)
-
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization
Loss on disposal of property and equipment
Deferred income taxes
Changes in assets and liabilities,
net of effects of acquisition of businesses:
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Decrease in trade payables
Increase (decrease) in accrued expenses
Increase (decrease) in income taxes payables, net
Increase (decrease) in retirement and severance benefits,net
Other-net
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
Proceeds from sale of short-term investments
Payment for purchase of short-term investments
Proceeds from sale and maturity of
investments in securities
-
Acquisition of businesses, net of cash acquired
Proceeds from sales of property, plant and equipment
Acquisition of minority interests
Other-net
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from long-term debt
Repayment of long-term debt
Increase (decrease) in short-term debt, net
Proceeds from exercise of stock options
Cash paid to acquire treasury stock
Dividends paid
Other-net
Net cash used in financing activities
Net cash used in discontinued operations
Effect of exchange rate changes
on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
-
600
99
(36)
(21,747)
832
(302)
(182,748)
(24,202)
300
(64)
177
(44,542)
12
(540)
498
254
(7)
(6,617)
(45)
(6,445)
-
101
(4,538)
4,185
2,135
(59)
(55,605)
(378)
(54,159)
-
107
(38)
605
358
(9)
(5,288)
(45)
(4,310)
-
2,455
20,630
4,978
3,233
264,833
268,066
27,168
2,225,487
2,252,655
Notes:
1. Statements of cash flows are unaudited by independent auditors.
2. U.S.$1=Yen 119, for convenience only.
13 / 18
(23,816)
224,645
200,829
Consolidated
9 months period results
Term
The nine-month-period of FY2007
(April 1, 2006 - December 31, 2006)
Item
Cash flows from operating activities:
Net income
Loss (income) from discontinued operations, net of tax
Income from continuing operations
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization
Loss on disposal of property and equipment
Deferred income taxes
Loss (gain) on securities, net
Changes in assets and liabilities,
net of effects of acquisition of businesses:
Decrease (increase) in trade receivables
Increase in inventories
Decrease (increase) in other current assets
Increase in trade payables
Increase (decrease) in accrued expenses
Increase (decrease) in income taxes payables, net
Increase (decrease) in retirement and severance benefits,net
Other-net
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
Proceeds from sale of short-term investments
Payment for purchase of short-term investments
(Yen millions)
(U.S.$ thousands)
The nine-monthperiod of FY2006
FY2006
(Apr. 1, 2005 Dec. 31, 2005)
(Yen millions)
(Apr. 1, 2005 Mar. 31, 2006)
(Yen millions)
49,291
49,291
414,210
414,210
38,234
(16)
38,218
44,101
310
44,411
47,664
1,284
(1,621)
195
400,538
10,790
(13,622)
1,639
41,675
1,606
1,138
(414)
58,540
3,220
(696)
286
6,982
(4,075)
4,456
1,253
(3,070)
3,445
650
1,234
107,688
58,672
(34,244)
37,445
10,529
(25,798)
28,950
5,462
10,370
904,941
(26,871)
(8,454)
(8,445)
8,660
7,985
(16,529)
640
(451)
38,758
(16,886)
(287)
(8,748)
7,101
12,347
(10,689)
981
(462)
89,118
(51,102)
10,032
(26,732)
(429,429)
84,303
(224,639)
(55,641)
-
(73,911)
-
2,656
4,263
Proceeds from sale and maturity of
investments in securities
7
59
Other-net
Net cash used in investing activities
(1,348)
2,123
(6)
(6)
(67,032)
(11,328)
17,840
(50)
(50)
(563,294)
(3,517)
(32,868)
928
(2,587)
1,538
(120)
(89,611)
(4,227)
(32,868)
3,373
(2,587)
1,538
(363)
(104,782)
Cash flows from financing activities:
Proceeds from long-term debt
Repayment of long-term debt
Increase (decrease) in short-term debt, net
Proceeds from exercise of stock options
Cash paid to acquire treasury stock
Dividends paid
Other-net
Net cash used in financing activities
Net cash used in discontinued operations
135
(670)
(2,273)
754
(22)
(13,230)
(160)
(15,466)
-
1,134
(5,630)
(19,101)
6,336
(185)
(111,176)
(1,344)
(129,966)
-
211
(96)
605
778
(948)
(10,578)
(218)
(10,246)
(88)
269
(218)
3,688
887
(955)
(10,578)
(218)
(7,125)
(414)
3,859
32,428
10,508
10,712
29,049
239,017
268,066
244,109
2,008,546
2,252,655
(50,679)
251,508
200,829
(12,491)
251,508
239,017
Payment for purchase of investments in securities
Acquisition of businesses, net of cash acquired
Proceeds from sales of property, plant and equipment
Acquisition of minority interests
Proceeds from sale of discontinued operations
Effect of exchange rate changes
on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Notes:
1. Statements of cash flows are unaudited by independent auditors, FY2006 excepted.
2. U.S.$1=Yen 119, for convenience only.
14 / 18
Consolidated
(Notes)
1.
2.
The consolidated financial statements are prepared in conformity with the U.S. GAAP.
As of December 31, 2006, TDK had 87 subsidiaries (19 in Japan and 68 overseas). TDK also had 6 affiliates
(4 in Japan and 2 overseas) whose financial statements are accounted for by the equity method.
15 / 18
Consolidated
7) Segment Information
[3rd Qtr. results]
The following industry and geographic segment information are required by the Japanese Securities Exchange Law.
1. Industry segment information
Term
The 3rd Qtr. of
FY2006
The 3rd Qtr. of FY2007
Change
(Oct. 1, 2005 - Dec. 31, 2005)
(Oct. 1, 2006 - Dec. 31, 2006)
(Yen millions)
% (U.S.$ thousands) (Yen millions)
%
Product
Electronic materials and components
194,541
Net sales
194,541
External sales
Intersegment
171,533
Operating expenses
23,008
Operating income
Recording media
28,712
Net sales
28,712
External sales
Intersegment
28,579
Operating expenses
133
Operating income (loss)
TOTAL
223,253
Net sales
223,253
External sales
Intersegment
200,112
Operating expenses
23,141
Operating income
Note: U.S.$1=Yen 119, for convenience only.
2. Geographic segment information
Term
Region
Japan
Americas
Europe
Asia and
others
Intersegment
eliminations
Total
Net sales
Operating income
Net sales
Operating income
Net sales
Operating income
Net sales
Operating income
Net sales
Operating income
Net sales
Operating income
100.0
88.2
11.8
100.0
99.5
0.5
100.0
89.6
10.4
1,634,799
1,634,799
1,441,454
193,345
241,277
241,277
240,160
1,117
1,876,076
1,876,076
1,681,614
194,462
The 3rd Qtr. of FY2007
(Yen millions) Change(%)
88.4
11.6
2,450
2,450
1,641
809
1.3
1.3
1.0
3.6
30,563 100.0
30,563
31,471 103.0
(908)
-3.0
(1,851)
(1,851)
(2,892)
1,041
-6.1
-6.1
-9.2
-
599
599
(1,251)
1,850
0.3
0.3
-0.6
8.7
192,091
192,091
169,892
22,199
222,654
222,654
201,363
21,291
100.0
100.0
90.4
9.6
The 3rd Qtr. of
FY2006
Change
(Oct. 1, 2006 - Dec. 31, 2006) (Oct. 1, 2005 - Dec. 31, 2005)
(Yen millions)
% (U.S.$ thousands) (Yen millions)
%
102,397 100.0
860,479
99,593 100.0
9.4
7.6
9,584
80,538
7,546
27,109 100.0
28,267 100.0
237,538
6.7
3.2
7,697
916
1,816
22,465 100.0
188,782
22,579 100.0
2.2
503
4,227
16
0.1
148,968 100.0
146,392 100.0
1,230,185
8.9
108,908
12,297
12,960
8.3
75,595
640,908
76,268
6,908
384
822
222,654 100.0
223,253 100.0
1,876,076
23,141
10.4
194,462
9.6
21,291
(Yen millions) Change(%)
2.8
27.0
4.3
-49.6
-0.5
-1.7
5.4
2,804
2,038
1,158
(900)
(114)
487
(2,576)
663
673
438
599
1,850
0.3
8.7
Notes:
1. Net sales in each geographic area are based on the location of TDK entities where the sales are generated.
2. U.S.$1=Yen 119, for convenience only.
3. Sales by region
Term
The 3rd Qtr. of FY2007
(Oct. 1, 2006 - Dec. 31, 2006)
(Yen millions)
% (U.S.$ thousands)
26,872
225,815
12.0
22,279
187,219
10.0
129,353
58.0
1,087,000
178,504
1,500,034
80.0
44,749
376,042
20.0
223,253 100.0
1,876,076
Region
Americas
Europe
Asia and others
Overseas sales total
Japan
Net sales
Notes:
1. Overseas sales are based on the location of the customers.
2. U.S.$1=Yen 119, for convenience only.
16 / 18
The 3rd Qtr. of
FY2006
Change
(Oct. 1, 2005 - Dec. 31, 2005)
(Yen millions)
25,332
22,578
131,229
179,139
43,515
222,654
%
11.4
10.2
58.9
80.5
19.5
100.0
(Yen millions)
1,540
(299)
(1,876)
(635)
1,234
599
Change(%)
6.1
-1.3
-1.4
-0.4
2.8
0.3
Consolidated
9 months period results
The following industry and geographic segment information are required by the Japanese Securities Exchange Law.
1. Industry segment information
Term
The nine-month-period of FY2007
The nine-monthperiod of FY2006
Product
Electronic materials and components
571,248
Net sales
571,248
External sales
Intersegment
507,673
Operating expenses
63,575
Operating income
Recording media
76,843
Net sales
76,843
External sales
Intersegment
79,013
Operating expenses
(2,170)
Operating income (loss)
TOTAL
648,091
Net sales
648,091
External sales
Intersegment
586,686
Operating expenses
61,405
Operating income
Note: U.S.$1=Yen 119, for convenience only.
2. Geographic segment information
Term
Region
Japan
Americas
Europe
Asia and
others
Intersegment
eliminations
Total
Net sales
Operating income
Net sales
Operating income
Net sales
Operating income (loss)
Net sales
Operating income
Net sales
Operating income
Net sales
Operating income
100.0
88.9
11.1
100.0
102.8
-2.8
100.0
90.5
9.5
4,800,404
4,800,404
4,266,160
534,244
645,739
645,739
663,975
(18,236)
5,446,143
5,446,143
4,930,135
516,008
The nine-month-period of FY2007
FY2006
Change
(Apr. 1, 2005 - Dec. 31, 2005)
(Apr. 1, 2006 - Dec. 31, 2006)
(Yen millions)
% (U.S.$ thousands) (Yen millions)
%
(Apr. 1, 2005 - Mar. 31, 2006)
(Yen millions) Change(%)
(Yen millions)
%
88.9
11.1
78,437
78,437
69,330
9,107
15.9
15.9
15.8
16.7
687,750
687,750
613,417
74,333
80,230 100.0
80,230
85,357 106.4
-6.4
(5,127)
(3,387)
(3,387)
(6,344)
2,957
-4.2
-4.2
-7.4
57.7
107,430 100.0
107,430
121,240 112.9
(13,810) -12.9
100.0
75,050
75,050
62,986
12,064
13.1
13.1
12.0
24.5
795,180
795,180
734,657
60,523
492,811
492,811
438,343
54,468
573,041
573,041
523,700
49,341
100.0
91.4
8.6
The nine-monthperiod of FY2006
89.2
10.8
100.0
92.4
7.6
FY2006
Change
(Apr. 1, 2006 - Dec. 31, 2006) (Apr. 1, 2005 - Dec. 31, 2005)
(Yen millions)
% (U.S.$ thousands) (Yen millions)
%
266,440 100.0
296,205 100.0
2,489,118
24,713
207,672
8.3
17,924
6.7
85,422 100.0
717,832
73,935 100.0
5,697
6,716
47,874
9.1
6.7
517,134
61,539 100.0
55,082 100.0
(3,538)
(2,711)
(421)
-0.7
-4.9
3,645,185
433,777 100.0
382,630 100.0
32,128
269,983
7.5
28,632
7.4
228,852
1,923,126
205,046
712
5,983
1,220
648,091 100.0
5,446,143
573,041 100.0
49,341
9.5
61,405
516,008
8.6
100.0
(Apr. 1, 2005 - Mar. 31, 2006)
(Yen millions) Change(%)
29,765
6,789
11,487
(1,019)
6,457
2,290
51,147
3,496
23,806
(508)
75,050
12,064
11.2
37.9
15.5
-15.2
11.7
84.5
13.4
12.2
13.1
24.5
(Yen millions)
360,210
49,437
105,979
9,995
76,240
(9,996)
531,824
12,607
279,073
1,520
795,180
60,523
%
100.0
13.7
100.0
9.4
100.0
-13.1
100.0
2.4
100.0
7.6
Notes:
1. Net sales in each geographic area are based on the location of TDK entities where the sales are generated.
2. U.S.$1=Yen 119, for convenience only.
3. Sales by region
Term
The nine-month-period of FY2007
(Apr. 1, 2006 - Dec. 31, 2006)
(Yen millions)
% (U.S.$ thousands)
78,197
657,118
12.1
61,149
513,857
9.4
381,059
58.8
3,202,176
520,405
4,373,151
80.3
127,686
1,072,992
19.7
648,091 100.0
5,446,143
Region
Americas
Europe
Asia and others
Overseas sales total
Japan
Net sales
Notes:
1. Overseas sales are based on the location of the customers.
2. U.S.$1=Yen 119, for convenience only.
The nine-monthperiod of FY2006
FY2006
Change
(Apr. 1, 2005 - Dec. 31, 2005)
(Yen millions)
17 / 18
64,798
55,247
323,399
443,444
129,597
573,041
%
11.3
9.7
56.4
77.4
22.6
100.0
(Apr. 1, 2005 - Mar. 31, 2006)
(Yen millions)
13,399
5,902
57,660
76,961
(1,911)
75,050
Change(%)
20.7
10.7
17.8
17.4
-1.5
13.1
(Yen millions)
90,192
75,895
455,435
621,522
173,658
795,180
%
11.4
9.5
57.3
78.2
21.8
100.0
Consolidated
8) Supplementary Information
Exchange rates used for conversion
Term
Oct. 1, 2006 Oct. 1, 2005 Dec. 31, 2006
Dec. 31, 2005
Item
US$=Yen Euro=Yen US$=Yen Euro=Yen
Average rate for the period
139.46
117.83
151.95
117.37
139.83
119.11
156.50
118.07
The end of the period
Consolidated
Term
Item
Capital expenditures
Depreciation and amortization
Research and development
Result of financial income
Number of employees
(as at the end of the period)
Ratio of overseas production
Oct. 1, 2006 Dec. 31, 2006
Ratio to
Amount
(Yen millions) sales (%)
15,122
16,780
7.5
12,654
5.7
1,874
Oct. 1, 2005 Dec. 31, 2005
Ratio to
Amount
(Yen millions) sales (%)
21,353
6.8
15,138
11,788
5.3
1,024
53,000
Change
(%)
-29.2
10.8
7.3
83.0
52,330
61.4 %
61.5 %
Oct. 1, 2006 Dec. 31, 2006
Ratio to
Amount
(Yen millions) sales (%)
156,950
70.3
36,488
16.3
32,345
14.5
75,515
33.8
12,602
5.7
21,554
9.7
178,504
80.0
Oct. 1, 2005 Dec. 31, 2005
Ratio to
Amount
(Yen millions) sales (%)
156,246
70.2
35,161
15.8
29,511
13.3
83,146
37.3
8,428
3.8
22,893
10.3
179,139
80.5
Overseas sales by division
Term
Product
Electronic materials and components
Electronic materials
Electronic devices
Recording devices
Other electronic components
Recording media
Overseas sales
Change
(%)
0.5
3.8
9.6
-9.2
49.5
-5.8
-0.4
9 months period results
Consolidated
Term
Item
Capital expenditures
Depreciation and amortization
Research and development
Result of financial income
Number of employees
(as at the end of the period)
Ratio of overseas production
April 1, 2006 Dec. 31, 2006
Ratio to
Amount
(Yen millions) sales (%)
51,102
47,664
7.4
36,434
5.6
4,793
April 1, 2005 Dec. 31, 2005
Ratio to
Amount
(Yen millions) sales (%)
55,641
41,675
7.3
5.3
30,203
2,489
53,000
Change
(%)
-8.2
14.4
20.6
92.6
52,330
62.9 %
62.7 %
April 1, 2006 Dec. 31, 2006
Ratio to
Amount
(Yen millions) sales (%)
462,155
71.3
107,983
16.7
94,061
14.5
226,778
35.0
33,333
5.1
58,250
9.0
520,405
80.3
April 1, 2005 Dec. 31, 2005
Ratio to
Amount
(Yen millions) sales (%)
383,219
66.9
98,362
17.2
68,251
11.9
200,021
34.9
16,585
2.9
60,225
10.5
443,444
77.4
April 1, 2005 March 31, 2006
Ratio to
Amount
(Yen millions) sales (%)
73,911
58,540
7.4
45,528
5.7
3,456
53,923
61.7 %
Overseas sales by division
Term
Product
Electronic materials and components
Electronic materials
Electronic devices
Recording devices
Other electronic components
Recording media
Overseas sales
18 / 18
Change
(%)
20.6
9.8
37.8
13.4
101.0
-3.3
17.4
April 1, 2005 March 31, 2006
Ratio to
Amount
(Yen millions) sales (%)
539,907
67.9
132,481
16.7
96,445
12.1
286,801
36.1
24,180
3.0
81,615
10.3
621,522
78.2