Consolidated Results 1st Half FY March 2008 October 31, 2007 Mr. Seiji Enami Director & Senior Vice President General Manager Finance & Accounting Department 1H of FY March 2008(Oct. 31, 2007) 1 Cautionary Statements with Respect to Forward-Looking Statements This Thismaterial materialcontains containsforward-looking forward-lookingstatements, statements,including includingprojections, projections,plans, plans,policies, policies, management strategies, targets, schedules, understandings and evaluations, about management strategies, targets, schedules, understandings and evaluations, aboutTDK TDKand anditsits 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 to publicly update or revise any forward-looking statements after the issue of this material obligation to publicly update or revise any forward-looking statements after the issue of this material except exceptas asprovided providedfor forininlaws lawsand andordinances. ordinances. The electronics markets in which TDK The electronics markets in which TDKGroup Groupoperates operatesare arehighly highlysusceptible susceptibletotorapid rapidchanges. changes. Risks, uncertainties and other factors that can have significant effects on TDK Group include, Risks, uncertainties and other factors that can have significant effects on TDK Group include,but but are arenot notlimited limitedto, to,shifts shiftsinintechnology, technology,fluctuations fluctuationsinindemand, demand,prices, prices,interest interestand andforeign foreignexchange exchange rates, rates,and andchanges changesinineconomic economicenvironments, environments,conditions conditionsofofcompetition, competition,laws lawsand andregulations. regulations. 1H of FY March 2008(Oct. 31, 2007) 2 Breakdown of Operating Income Changes (Comparison with FY Mar 07) 1st Half, FY March 2008 [Changes in operating income] (Unit: JPY billion) 8.9 Changes in sales and product mix 10.3 Rationalization and cost reductions 9.9 Exchange fluctuations(1U.S.$=Yen 115.38 -> 119.40) 4.9 Sales price discounts (6.6%) (30.6) Increase in SGA expenses (0.5) Gain on sales business transfer 14.9 1H of FY March 2008(Oct. 31, 2007) 3 P/L Analysis JPY Billion Other income Interest & Dividends Interest Expense Forex Loss Other-net FY 07 1H 3.0 3.0 (0.1) (0.3) 0.4 1H of FY March 2008(Oct. 31, 2007) FY 08 1H 1.2 4.7 (0.1) (2.0) (1.4) Change (1.8) 1.7 0.0 (1.7) (1.8) 4 Breakdown of Operating Income Changes (by business segment) (JPY billion) 1H/Mar 07 1H/Mar 08 Change (%) Change Electronic materials and components segment 376.7 40.6 10.8 Net sales Operating income Ratio (%) 398.4 36.0 9.0 5.8 21.7 (4.5) (11.2) 34.7 11.1 32.0 (13.5) (28.0) 13.4 Recording media segment Net sales Operating income Ratio (%) 48.1 (2.3) (4.8) Total Net sales Operating income Ratio (%) 424.8 38.3 9.0 433.1 47.1 10.9 1H of FY March 2008(Oct. 31, 2007) 8.3 8.9 1.9 23.2 5 Comparison of Q1 & Q2 Electronic materials and components segment JPY Billion Electronic Materials & Components - Sales 250 (Major factors) Others 200 Sales increases in all 4 sectors. Others JPY Billion Sales Increase:+27.5 Rec. Devices 150 Rec. Devices Recording devices: +16.1 100 Elec. Devices Elec. Devices Elec. Materials Elec. Materials Q1 Q2 50 0 Operating Profit:+0.8 (Major factors) Majority of OP from Rec. Devices was negated by increases in fixed costs. 1H of FY March 2008(Oct. 31, 2007) 6 Analysis of OP in 1H Recording Media Segment JPY Billion ① Gain on Business Transfer on consolidated basis 14.9 Gain on Business Transfer on Parent Basis 15.1 Consolidation adjustment 0.8 Related expenses (1.0) ② Expenses for Business Transfer 1.9 ③ Net Gain 13.0 ①－② ④ Indirect impact due to Transfer (1.1) ⑤ Actual Operating income (0.8) ⑥ Segment Operating Profit 11.1 ③＋④＋⑤ 1H of FY March 2008(Oct. 31, 2007) 7 Balance Sheet JPY Billion FY Mar 2007 Mar 31, 2007 Total Assets Cash & Cash equivalents Inventories Shareholders' equity FY Mar 2008 Sept. 31, 2007 Change 989.3 987.7 (1.6) Negative Forex impact on overseas assets (8.2) 289.2 229.5 89.8 90.0 0.2 762.7 743.9 (18.8) (59.7) Share buy-back (cancellation) (39.2) 1H of FY March 2008(Oct. 31, 2007) 8 Comparison of 1H & 2H Electronic materials and components segment JPY Billion Electronic Materials & Componnets - Sales - Sales Increase: ca. +20 450.0 400.0 Others Others (Major factors) 350.0 JPY Billion 300.0 Rec. Devices Rec. Devices 250.0 200.0 150.0 Sales increases in all 4 sectors. Elec. Devices Elec. Devices Operating Profit: ca. +7.0 Elec. Materials Elec. Materials (Major factors) 1H 2H 100.0 50.0 0.0 OP increases in Elec. Devices & Elec. materials 1H of FY March 2008(Oct. 31, 2007) 9