Consolidated Results TDK Corporation 3rd Quarter FY March 2008 (October 1, 2007 – December 31, 2007) January 31, 2008 Mr. Seiji Enami Director & Senior Vice President General Manager Finance & Accounting Department 3Q of FY March 2008(Jan. 31, 2008) 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 managementstrategies, strategies,targets, targets,schedules, schedules,understandings understandingsand andevaluations, evaluations,about 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. TDK Group therefore wishes to caution readers that, being subject to risks, uncertainties factors. TDK Group therefore wishes to caution readers that, being subject to risks, 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 undertakes no noobligation obligationtotopublicly publiclyupdate updateororrevise reviseany anyforward-looking forward-lookingstatements statementsafter afterthe theissue issueofofthis this material except as provided for in laws and ordinances. material except as provided for in laws and 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. 3Q of FY March 2008(Jan. 31, 2008) 2 Consolidated results (JPY billion) Net sales FY Mar 07 FY Mar 08 3rd Q 3rd Q Change (%) Change 223.3 225.3 2.1 0.9 Operating income 23.1 26.7 3.6 15.5 Income before income taxes 26.0 28.6 2.6 10.0 Net income 19.7 21.7 2.0 10.4 10.4% 11.9% Op. Income Ratio 3Q of FY March 2008(Jan. 31, 2008) 3 Forex Impact Average exchange rates Prev. FY Current FY 3Q 3Q JPY/USD ¥117.83 ¥113.26 Appreciation by 3.9% JPY/EURO ¥151.95 ¥163.90 Depreciation by 7.9% Forex Impact on Revenue Negative JPY 5.3 billion Operating Income Negative JPY 2.8 billion 3Q of FY March 2008(Jan. 31, 2008) 4 Main features in 3Q FY Mar. 08 Recording Devices Increase in volumes & Product mix improvement i.e. (Increase in vertical recording heads) Components other than Recording Devices Significant increase in Energy devices Recording Media Segment Sharp decrease in revenue due to the business transfer Little impact on operating income 3Q of FY March 2008(Jan. 31, 2008) 5 Sales Breakdown (JPY billion) Electronic materials and components segment FY Mar 07 FY Mar 08 3rd Q 3rd Q Change (%) Change 194.5 217.7 23.2 11.9 Electronic materials 50.3 51.4 1.1 2.2 Electronic devices 50.5 53.3 2.7 5.4 Recording devices 76.8 89.9 13.1 17.1 Other eletronic components 16.9 23.1 6.2 36.8 Recording media segment 28.7 7.6 (21.1) (73.6) 223.3 225.3 Total sales 3Q of FY March 2008(Jan. 31, 2008) 2.1 0.9 6 Breakdown of Operating Income Changes (Unit: JPY billion) [Changes in operating income 3rd Quarter] (Positive) Changes in sales and product mix 12.5 Rationalization 4.9 Decrease in SG & A 2.8 (Negative) Exchange fluctuations(1U.S.$=Yen 117.83 -> 113.26) (2.8) Materials costs increase (0.1) (13.7) Sales price discounts (5.7%) T o t a l 20.2 3Q of FY March 2008(Jan. 31, 2008) (16.6) 3.6 7 P/L Analysis Term Item Net sales Cost of sales Gross profit Selling, general and administrative expenses Gain on business transfer to Imation Corp. Restructuring cost Operating income Other income (deductions): Interest and dividend income Interest expense Foreign exchange gain (loss) Other-net Total other income (deductions) Income before income taxes Income taxes Income before minority interests Minority interests Net income The 3rd quarter of FY2007 (Oct. 1, 2006 Dec. 31, 2006) (Yen millions) 223,253 159,146 64,107 40,922 44 23,141 1,923 (49) 406 627 2,907 26,048 6,024 20,024 355 19,669 % The 3rd quarter of FY2008 Change (October 1, 2007 December 31, 2007) (Yen millions) % (U.S.$ thousands) (Yen millions) Change(%) 100.0 71.3 28.7 18.3 0.0 10.4 225,342 160,986 64,356 37,639 26,717 100.0 1,976,684 71.4 1,412,158 28.6 564,526 16.7 330,166 11.9 234,360 2,089 1,840 249 (3,283) (44) 3,576 0.9 1.2 0.4 -8.0 15.5 1.3 11.7 2.7 9.0 0.2 8.8 2,190 (30) (190) (47) 1,923 28,640 7,025 21,615 (98) 21,713 19,210 (263) (1,667) (412) 16,868 251,228 61,623 189,605 (860) 190,465 267 19 (596) (674) (984) 2,592 1,001 1,591 (453) 2,044 -33.8 10.0 16.6 7.9 10.4 0.8 12.7 3.1 9.6 -0.0 9.6 3Q of FY March 2008(Jan. 31, 2008) negative Forex impact loss from securities revaluation DLKK TOB 8 Comparison of 2Q & 3Q Electronic materials and components segment E lectronic Materials & Components - Sales - 250 Others Others 150 Rec. Devices Rec. Devices E lec. Devices E lec. Devices E lec. Materials E lec. Materials 2Q 3Q JPY Billion 200 100 Electronic Materials & Components Segment Sales & Op. Income JPY Billion 2Q 3Q Balance Elec. Materials 53.1 51.4 (1.6) Elec. Devices 54.5 53.3 (1.2) Rec. Devices 86.5 89.9 3.4 Others 19.0 23.1 4.2 Total 213.0 217.8 4.8 OP 18.4 26.9 8.5 Revenue increase by 4.8 billion 50 0 Increases in Rec. Devices and others absorbed Decreases in Elec. Materials and Elec. Devices OP increase by 8.5 billion 3Q of FY March 2008(Jan. 31, 2008) 9 Balance Sheet ASSETS Term Item As of Sep. 30, 2007 (Yen millions) % As of December 31, 2007 (Yen millions) (U.S.$ % thousands) Change (Yen millions) Current assets Cash and cash equivalents Short-term investments Marketable securities Net trade receivables Inventories Other current assets 577,477 229,466 23,483 1,005 184,070 90,009 49,444 58.5 540,821 198,855 12,018 5 181,977 93,286 54,680 55.0 4,744,044 1,744,342 105,421 44 1,596,290 818,298 479,649 (36,656) (30,611) (11,465) (1,000) (2,093) 3,277 5,236 Noncurrent assets Investments in securities 410,223 53,450 253,207 103,566 987,700 41.5 441,735 84,434 253,839 103,462 982,556 45.0 3,874,868 740,649 2,226,658 907,561 100.0 8,618,912 31,512 30,984 632 (104) (5,144) Net property, plant and equipment Other assets TOTAL 100.0 3Q of FY March 2008(Jan. 31, 2008) JPY Billion M&A 17.9 DLKK TOB 14.1 Investment in Imation 2.0 and so forth 10 Balance Sheet LIABILITIES AND STOCKHOLDERS' EQUITY Term As of Sep. 30, 2007 (Yen millions) Item Current liabilities Noncurrent liabilities Total liabilities Minority interests % As of December 31, 2007 (Yen millions) 182,065 18.4 176,364 47,749 4.9 48,321 229,814 23.3 224,685 13,968 1.4 2,629 (U.S.$ % thousands) 18.0 1,547,053 4.9 (5,701) 423,868 22.9 1,970,921 0.2 Change (Yen millions) 572 (5,129) 23,061 (11,339) 286,325 561,175 165,711 5,914,246 49 (349) 14,320 Common stock Additional paid-in capital Legal reserve Retained earnings 32,641 63,925 19,240 659,904 32,641 63,974 18,891 674,224 Accumulated other comprehensive income (loss) (25,171) (27,874) (244,509) (2,703) Treasury stock Total stockholders' equity TOTAL (6,621) 743,918 75.3 987,700 100.0 (6,614) 755,242 982,556 (58,018) 76.9 6,624,930 100.0 8,618,912 7 11,324 (5,144) 3Q of FY March 2008(Jan. 31, 2008) Foreign currency translation adjustments (2.3 billion) Minimum pension liability adjustment (4.9 billion) Affiliation of Imation +4.5 billion 11 Breakdown of Operating Income Changes (by business segment) FY Mar 07 FY Mar 08 3rd Q 3rd Q (JPY billion) Change (%) Change Electronic materials and components 194.5 23.0 11.8 Net sales Operating income Ratio (%) 217.7 26.9 12.4 23.2 3.9 11.9 17.1 (21.1) (0.3) (73.6) 2.0 3.6 0.9 15.5 Recording media segment Net sales Operating income Ratio (%) 28.7 0.1 0.5 7.6 (0.2) (2.9) Total Net sales Operating income Ratio (%) 223.3 23.1 10.4 225.3 26.7 11.9 3Q of FY March 2008(Jan. 31, 2008) 12 Sales by Region (JPY billion) FY Mar 07 FY Mar 08 3rd Q 3rd Q Change (%) Change Japan 44.7 38.8 (5.9) (13.2) Americas 26.9 24.1 (2.7) (10.2) Europe 22.3 13.3 (8.9) (40.1) Asia and others 129.4 149.0 19.7 15.2 Total sales 223.3 225.3 2.1 0.9 80.0 82.8 Share of overseas sales (%) 3Q of FY March 2008(Jan. 31, 2008) 13 Sales by major customer industry (Electronic materials and components segment) YoY + High-Speed, Large Capacity Networks + Car Electronics + Others IT Home Electronics Sales Weight 14% 65 ％ 19% 10 ％ 15% 8 ％ 1% 17 ％ 1. IT Home Electronics Growth in storage device 2 .High-Speed, L-C Network Growth in Telecommunication 3. Car Electronics Growth in automobile industry 3Q of FY March 2008(Jan. 31, 2008) 14 Projections for FY March 2008 Consolidated 31-Jan-08 FY Mar 2007 FY Mar 2008 Projections Change (%) Change 862.0 865.0 3.0 0.3 Operating income 79.6 90.0 10.4 13.1 Income before income taxes 88.7 96.0 7.3 8.3 Net income 70.1 72.0 1.9 2.7 (JPY billion) Net Sales Exchange rate (U.S.$=Yen) Results 117 * 115 * 1Q～３Q:JPY117.35/USD 3Q of FY March 2008(Jan. 31, 2008) ４Q:JPY110/USD 15 Projections for FY March 2008 Consolidated (JPY billion) Electronic materials and components segment Electronic materials (Results) (Projections) 31-Jan-08 (Projections) FY Mar. 08 FY Mar. 08 FY Mar. 08 1Q～3Q 4Q Total Year 616.2 199.8 816.0 154.2 48.8 203.0 Electronic devices 157.7 55.3 213.0 Recording devices 246.8 73.2 320.0 Other eletronic components 57.4 22.6 80.0 42.2 6.8 49.0 658.4 206.6 865.0 73.9 16.1 90.0 Recording media segment Total sales Operating Imcome 3Q of FY March 2008(Jan. 31, 2008) 16