TDK Corporation • Annual Report 2005 CONSOLIDATED STATEMENTS OF INCOME TDK Corporation and Subsidiaries years ended March 31, 2005, 2004 and 2003 U.S. Dollars (Thousands) (Note 2) Yen (Millions) 2005 2004 2003 2005 Net sales (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥657,853 484,323 655,792 476,407 604,865 459,552 $6,148,159 4,526,383 Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Selling, general and administrative expenses . . . . . . . . . . . . . . . Transfer to the government of the substitutional portion of Employees’ Pension Fund (Note 8): Subsidy from the government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restructuring cost (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173,530 119,886 179,385 122,875 145,313 115,569 1,621,776 1,120,430 – – – – – 5,197 (313,392) 255,579 – Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other income (deductions): Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity in earnings of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on securities, net (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign exchange gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other – net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,830 56,510 24,547 559,159 1,189 (323) 1,639 (1,093) (3,064) 989 1,379 (577) 361 (3,298) (1,479) (381) 15,813 (9,037) 16,495 (1,327) (8,000) (5,552) (663) (3,995) 8,392 (33,533) 27,347 – 1,692 (967) 1,765 (142) (856) (594) 898 Income from continuing operations before income taxes . . . . . Income taxes (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,728 23,284 55,847 12,133 20,552 6,193 567,551 217,607 Income from continuing operations before minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minority interests, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,444 479 43,714 359 14,359 766 349,944 4,477 Income from continuing operations . . . . . . . . . . . . . . . . . . . . Discontinued operations (Note 20): Loss from operations of discontinued TSC (including loss on disposal of ¥454 million in 2005) . . . . . . . . . . . . Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,965 43,355 13,593 345,467 3,509 156 244 1,010 2,471 (897) 32,794 1,458 Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . 3,665 1,254 1,574 34,252 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 33,300 42,101 12,019 $ 311,215 Yen (except number of common shares outstanding) Amounts per share: Income from continuing operations per share (Note 18): Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss from discontinued operations per share (Note 18): Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income per share (Note 18): Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average basic common shares outstanding (in thousands) (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weighted average diluted common shares outstanding (in thousands) (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash dividends paid during the year (Note 9) . . . . . . . . . . . . . . . . See accompanying notes to consolidated financial statements. ¥ 279.41 279.25 ¥ (27.70) (27.69) 327.27 327.15 (9.47) (9.46) U.S. Dollars 102.42 102.42 $ 2.61 2.61 (11.86) (11.86) $(0.26) (0.26) $ 2.35 2.35 ¥ 251.71 251.56 317.80 317.69 90.56 90.56 132,293 132,475 132,716 132,376 ¥ 60.00 132,523 50.00 132,716 45.00 $ 0.56 45