Performance Briefings 2Q of Fiscal Year March, 2012 TDK Corporation October. 31, 2011 1 ◆Consolidated First Half Results of FY March, 2012 Consolidated Full Year Projections of FY March, 2012 President and CEO Takehiro Kamigama ◆Consolidated 2Q Results of FY March, 2012 Takakazu Momozuka Corporate Officer, General Manger of Finance & Accounting Department ◆Passive Components Business Hiroyuki Uemura, Senior Vice President ◆Recording Device Business Atsuo Kobayashi, General Manager, Senior Vice President 2 Consolidated First Half Results of FY March, 2012 Consolidated Full Year Projections of FY March, 2012 President and CEO, TDK Corporation Takehiro Kamigama 3 Consolidated First Half Results of FY March, 2012 (Yen billions） Net Sales FY March 2011 Results through 2Q FY March 2012 Results through 2Q (2010.4.1-2010.9.30) (2011.4.1-2011.9.30) Change Yen billions % 442.2 417.2 (25.1) -5.7 37.2 13.8 (23.4) -62.9 8.4% 3.3% -5.1pt - Income before Income Taxes 34.6 10.7 (24.0) -69.2 Net Income 26.1 6.7 (19.4) -74.3 202.46 52.09 (150.37) - Operating Income Operating Income Margin Earning Per Share (JPY) Ex-rate US$ Yen 88.89 Yen 79.84 EURO Yen 113.80 Yen 114.00 Ex-rate impact to Net sales & Operating Income Earthquake impact to Net sales & Operating Income Appreciation by 10.2% Depreciation by 0.2% Net sales：Lowered about 33.2 billion Yen Operating income：Lowered about 10.9 billion Yen Net sales：Lowered about 5.7 billion Yen Operating income：Lowered about 3.6 billion Yen A one-off charge of approximately ¥3.1 billion at the operating income level associated with the change of the pension plan is incurred in the first quarter. 4 Features in First Half Results of FY March, 2012 ◆Electronics Market Trend ●A gradual auto market recovery centered on Japanese market was evident ●Production of smartphones and tablet devices rose year on year ●Production of flat-screen TVs, notebook PCs and HDDs was around the same level as the corresponding period of the previous fiscal year ◆TDK’s Business Overview ●“Passive Components”Net sales：¥201.6 billion (decreased by 5.6% year on year) ・Sales of aluminum electrolytic capacitors and film capacitors increased for industrial equipment applications ・Sales of ceramic capacitors and inductive devices decreased for home information appliance applications ・Sales of high-frequency components declined for communications equipment market ●“Magnetic Application Products” Net Sales：¥167.2 billion (decreased by 13.2% year on year) ・Sales of recording devices declined, affected by the yen’s appreciation and the sales price decline (decreased 20.8% year on year) ●“Other”Net Sales：¥48.4 billion (increased by 33.4% year on year) ・Sales of secondary batteries increased sharply for tablet device application 5 Current state of damage by the flood in Thailand Company Name TDK Thailand Co., Ltd Area Rojana Products Rare-earth magnet recording media ,and sensors Current status Plant is inundated and operation is suspended To start alternative production another countries excluding Thailand Rare-earth magnets applied products Operation is suspended No damage to the facility or equipment To start alternative production another countries excluding Thailand and plan to resume production as soon as the company can secure the safety of employees HDD suspensions (Main plant) Operation is suspended No damage to the facility or equipment Plan to resume production as soon as the company can secure the safety of employees Magnecomp Precision Technology Public Co.,Ltd Plant is inundated and operation is suspended Moved some of the productions to Wangnoi Plant TDK Thailand Co., Ltd Magnecomp Precision Technology Public Co.,Ltd Wangnoi Wangnoi Rojana HDD suspensions (Branch plant) 6 Full year projections of FY March, 2012 Term Item Net Sales Operating Income Income before income taxes Net income attributable to TDK Capital expenditures Depreciation and amortization Research and development FY2012 FY2012 FY2011 (April 1, 2011 March 31, 2012) (April 1, 2011 March 31, 2012) (April 1, 2010 March 31, 2011) Forecast in October'11 Forecast in June'11and July'11 Actual (Yen billions) (Yen billions) (Yen billions) (Yen billions) 875.7 63.8 60.1 45.3 78.6 77.6 53.0 (55.7) (28.8) (30.1) (25.3) 1.4 2.4 (1.0) 820.0 35.0 30.0 20.0 80.0 80.0 52.0 890.0 67.0 65.0 50.0 85.0 85.0 53.0 vs. FY2011 Changes +/-(%) -6.4 -45.1 -50.1 -55.8 1.8 3.1 -1.9 Average Ex-rate projections from 3Q of FY March 2012 onward US$=76 yen (Previous assumption : 80 yen) EURO=105 yen (Previous assumption : 110 yen) TDK revised full year projections announced previously, after reviewing current electronic market, demand for finished product, impact due to appreciated yen and impact caused by the flood in Thailand. 7 Dividends Forecast of FY March 2012 Dividend forecast per a common share Interim dividend 40 yen Year-end dividend 40 yen (forecast) Annual dividend 80 yen (forecast) TDK has revised the year-end dividend forecast to 40 yen from 50 yen, based on the revision of the consolidated projections for the Fiscal Year March 2012 as well as on the fundamental policy for distribution of earnings. 8 Initiatives for Second Half of FY March, 2012 Implement initiatives for strengthening manufacturing capability and improving earning power ¾Optimize production sites ¾Reduce approx. 11,000 jobs in the TDK Group worldwide ¾Implement measures targeting unprofitable businesses and products 9Sale of organic EL display business, etc ¾Reduce fixed costs ¾Divest unutilized assets globally 9 Consolidated 2Q Results of FY March, 2012 Takakazu Momozuka Corporate Officer, General Manager of Finance & Accounting Department 10 Consolidated 2Q Results of FY March, 2012 2Q results of FY 2011 2Q results of FY 2012 (Yen billions） Net Sales (2010.7.1-2010.9.30) (2011.7.1-2011.9.30) Change Yen billions % 220.3 210.4 (9.9) -4.5 17.0 8.1 (8.8) -52.0 7.7% 3.9% -3.8 pt - Income before Income Taxes 15.8 7.4 (8.5) -53.5 Net Income 11.6 4.3 (7.3) -62.9 Earning Per Share (JPY) 89.87 33.30 (56.57) - Operating Income Operating Income Margin Ex-rate US$ Yen 85.88 Yen 77.96 Appreciation by 9.2% EURO Yen 110.67 Yen 110.42 Appreciation by 0.2% Ex-rate impact to Net sales & Operating Income Net sales：Lowered about 14.7 billion Yen Operating income：Lowered about 5.0 billion Yen Earthquake impact to Net sales & Operating Income Net sales：Lowered about 1.1billion Yen Operating income：Lowered about 0.6 billion Yen 11 Net Sales Comparison 2Q of FY 2011 vs. 2Q of FY 2012 2Q results of FY 2011 2Q results of FY 2012 (2010.7.1-2010.9.30) Yen billions ％ (2011.7.1-2011.9.30) Yen billions ％ Change Yen billions % Net Sales Capacitors 37.7 17.1 34.2 16.2 (3.5) -9.5 Inductive devices 33.6 15.2 31.4 14.9 (2.2) -6.5 Other Passive Components 37.5 17.0 34.4 16.4 (3.1) -8.3 (8.8) -8.1 (12.0) -18.4 Passive Components 108.7 49.3 99.9 47.5 Recording devices 65.3 29.7 53.3 25.4 Other Magnetic Application Products 26.9 12.2 31.2 14.8 Magnetic Application Products 92.2 41.9 84.5 40.2 (7.7) -8.4 Other 19.3 8.8 26.0 12.3 6.7 34.7 Total 220.3 210.4 100.0 (9.9) -4.5 100.0 4.3 16.0 12 Quarterly Results by segment (2Q of FY 2011 vs. 2Q of FY 2012) 2Q results of FY 2011 2Q results of FY 2012 （2010.7.1～2010.9.30） （2011.7.1～2011.9.30） Yen billions ％ Yen billions ％ Q on Q change Yen billions % 108.7 49.3 99.9 47.5 (8.9) -8.1 Magnetic Applicatons Products 92.2 41.9 84.5 40.2 (7.7) -8.4 Other 19.3 8.8 26.0 12.3 6.7 34.5 220.3 100.0 210.4 100.0 (9.9) -4.5 Passive Components Net sales Total 2Q results of FY 2011 2Q results of FY 2012 （2010.7.1～2010.9.30） （2011.7.1～2011.9.30） Yen billions Operating Income Passive Components Magnetic Application Products Other Corporate and eliminations Total % of sales Yen billions % of sales Q on Q change Yen billions % 7.3 6.7 1.3 1.3 (6.0) -82.5 12.5 13.6 8.8 10.4 (3.7) -29.8 1.7 8.8 1.7 6.7 0.0 2.9 0.8 - (4.5) 17.0 (3.7) 7.7 8.1 3.9 (8.8) -52.0 13 Breakdown of Operating Income Changes Operating Income : - 23.4 billion yen Rationalization, Cost reduction・ Purchased materials savings +5.3 billion yen Changes in sales and Products mix +13.3 billion yen SG&A expenses increase （including decrease in restructuring cost by 800 million yen) -3.0 billion yen 37.2 billion yen Sales price reduction （-4.9%) -21.4 billion yen Impact by big earthquake -3.6 billion yen Impact by change of pension plan -3.1 billion yen 13.8 billion yen Exchange fluctuation （US$=Yen 79.84) -10.9 billion yen First Half of FY 2011 First half of FY 2012 14 Quarterly Results by segment (1Q of FY 2012 vs. 2Q of FY 2012) 1Q results of FY 2012 2Q results of FY 2012 （2011.4.1～2011.6.30） （2011.7.1～2011.9.30） Yen billions ％ Yen billions ％ Q on Q change Yen billions % 101.7 49.2 99.9 47.5 (1.8) -1.8 Magnetic Applicatons Products 82.7 40.0 84.5 40.2 1.8 2.2 Other 22.4 10.8 26.0 12.3 3.6 16.1 206.8 100.0 210.4 100.0 3.6 1.7 Passive Components Net sales Total 1Q results of FY 2012 2Q results of FY 2012 （2011.4.1～2011.6.30） （2011.7.1～2011.9.30） Yen billions % of sales Yen billions % of sales Q on Q change Yen billions % Operating Income Passive Components 3.8 3.7 1.3 1.3 (2.5) -65.8 Magnetic Application Products 7.6 9.1 8.8 10.4 1.2 15.8 Other 1.5 6.7 1.7 6.7 0.2 13.3 3.5 - 2.5 44.6 Corporate and eliminations Total (7.2) 5.6 (3.7) 2.7 8.1 3.9 15 Financial Position （JPY billion） Mar End, 2010 Jun End, 2011 Sep End, 2011 Q on Q Change 1,060.9 1,065.7 1,049.8 -15.9 Total Liability 521.1 533.3 537.5 4.2 Interest-bearing Debt 245.0 250.8 268.0 17.2 Stockholders's Equity 534.3 527.0 499.2 -27.8 (comprehensive income) -218.0 -222.7 -258.2 -35.5 Stockholders' Equity ratio 50.4% 49.4% 47.6% -1.8% Total Asset 16 Full year projections of FY March, 2012 (the latest projections vs. projections in July) Term Item Net Sales Operating Income Income before income taxes Net income attributable to TDK FY2012 FY2012 (April 1, 2011 March 31, 2012) (April 1, 2011 March 31, 2012) Forecast in October'11 (Yen billions) Forecast in June'11and July'11 (Yen billions) 820.0 35.0 30.0 20.0 vs. projections announced in July Changes (Yen billions) 890.0 67.0 65.0 50.0 -70.0 -32.0 -35.0 -30.0 Production adjustment in flat TV, PC, and PC related device market Production adjustment at main customers in mobile phone market Negative impact caused by flooding in Thailand Change of forex assumption Profit increase by activities to improve earning structure in second half +/-(%) -7.9 -47.8 -53.8 -60.0 Average Ex-rate projections from 3Q of FY March 2012 onward US$=76 yen (Previous assumption : 80 yen) EURO=105 yen (Previous assumption : 110 yen) 17 Passive Components Business Hiroyuki Uemura Senior Vice President 18 Passive Components Business Quarterly Overview（1Q vs. 2Q) Sector Net sales in 1Q Net sales in 2Q Change % Capacitors 1Q 36.1 billion yen 2Q 34.2 billion yen -5.3% Inductive devices 1Q 32.9 billion yen 2Q 31.4 billion yen -4.6% Other 1Q 32.8 billion yen 2Q 34.4 billion yen +4.9% Sales status ●Ceramic capacitors Increased sales for auto market Decreased sales for IT home electronics applications centered on flat-screen TVs and distributors ●Aluminum & Film capacitors Sales decreased due to forex impact mainly Higher sales for auto market Steady sales for communications equipment such as smartphones and mobile phones Lower sales of transformer and ferrite core used in power circuit ●High-frequency components Increased sales of high-frequency components for mobile phones centered on smartphones ●Piezoelectric materials products, circuit protection components Steady sales for auto market 19 Recording Device Business Atsuo Kobayashi General Manager, Senior Vice President 20 Recording Device Business ●HDD Head shipment index Index 1Q 100 FY March'11 2Q 3Q 100 102 4Q 1Q 95 95 FY March'12 2Q 3Q 99 73 4Q 106 Projections Results Index transition based on shipment volume in 1Q of FY March 2011 as 100 ●Sales projections in FY March 2012 Results in FY March 2011 Results and projections in FY March 2012 1Q 71.7 billion yen 1Q 55.2 billion yen (Results) 2Q 65.3 billion yen 2Q 53.3 billion yen (Results) First half total 137.0 billion yen First half total 108.5 billion yen (Results) Second half total 120.5 billion yen Second half total 89.9 billion yen (Projections) Full year total 257.5 billion yen Full year total 198.4 billion yen (Projections) 21 Supplementary Data 22 Expenses (Yen billions） FY March 2011 Results through 2Q FY March 2012 Results through 2Q (2010.4.1-2010.9.30) (2011.4.1-2011.9.30) Change Yen billions % Capital expenditures 33.8 53.5 19.7 58.3 Depreciation and amortization 37.8 37.3 (0.4) -1.1 Research and development 26.4 26.4 0.0 0.2 23 Quarterly Results (2Q vs. 2Q) Yen billions 2Q of FY 2011 Jul 1- Sep 30, 2010 （Ａ） (1Q vs. 2Q) 1Q of FY 2012 Apr 1- Jun 30, 2011 （B） 2Q of FY 2012 Jul 1- Sep 30, 2011 （C） YoY Change （Ｃ）－（Ａ） Yen billions QoQ Change （Ｃ）－（Ｂ） % Yen billions % 220.3 206.8 210.4 (9.9) -4.5 3.6 1.7 Passive Components 108.7 101.7 99.9 (8.9) -8.1 (1.8) -1.8 Magnetic Application Products 92.2 82.7 84.5 (7.7) -8.4 1.8 2.2 other 19.3 22.4 26.0 6.7 34.5 3.6 16.0 17.0 5.6 8.1 (8.8) -52.4 2.5 44.4 Passive Components 7.3 3.8 1.3 (6.0) -82.5 (2.5) -66.5 Magnetic Application Products 12.5 7.6 8.8 (3.7) -29.8 1.2 16.5 other 1.7 1.5 1.7 0.0 2.9 0.2 16.6 Corporate and eliminations (4.5) (7.2) (3.7) 0.8 - 3.5 - Operating Income Margin 7.7% 2.7% 3.9% Net Sales Breakdown Operating Income Breakdown Ex-rate US$ Yen 85.88 Yen 81.74 Yen 77.96 EURO Yen 110.67 Yen 117.62 Yen 110.42 - - 24 Quarterly Sales and Operating Income by Segment FY March 2011 Yen billions FY March 2012 1Q 2Q 3Q 4Q 1Q 2Q 221.9 220.3 219.9 213.6 875.7 206.8 210.4 104.7 108.7 107.1 105.5 425.6 101.7 99.9 38.0 37.7 35.2 34.5 145.4 36.1 34.2 Inductive Devices 32.1 33.6 32.6 31.9 130.2 32.9 31.4 Other Passive Components 34.6 37.5 39.3 38.6 150.0 32.8 34.4 100.3 92.2 90.8 85.2 368.5 82.7 84.5 Recording Devices 71.7 65.3 63.0 57.5 257.5 55.2 53.3 Other Magnetic Application Products 28.6 26.9 27.7 27.7 111.0 27.4 31.2 17.0 19.3 22.0 23.4 81.7 22.4 26.0 20.2 17.0 17.2 9.4 63.8 5.6 8.1 Net Sales Passive Components Capacitors Breakdown Magnetic Application Products Other Operating Income Total 3Q 6.3 7.3 6.2 4.8 24.5 3.8 1.3 Magnetic Application Products 16.1 12.5 11.5 6.8 46.9 7.6 8.8 Other 1.0 1.7 2.0 1.0 5.7 1.5 1.7 Sub-total 23.3 21.5 19.7 12.6 77.1 12.8 11.8 Corporate and Eliminations (3.1) (4.5) (2.6) (3.2) (13.3) (7.2) (3.7) 92.01 85.88 82.65 82.31 85.73 81.74 77.96 117.03 110.67 112.20 112.66 113.12 117.62 110.42 Passive Components Breakdown Ex-rate ￥/USD ￥/EURO 4Q Total 25 26 27 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 TDKor orits its group groupcompanies companies(TDK (TDKGroup). Group). These Theseforward-looking forward-lookingstatements statementsare arebased basedon onthe thecurrent current forecasts, estimates, assumptions, plans, beliefs and evaluations of TDK Group in light forecasts, estimates, assumptions, plans, beliefs and evaluations of TDK Group in lightofof information informationcurrently currentlyavailable availabletotoit,it,and andcontain containknown knownand andunknown unknownrisks, risks,uncertainties uncertaintiesand and other factors. TDK Group therefore wishes to caution readers that, being subject to risks, other factors. TDK Group therefore wishes to caution readers that, being subject to risks, uncertainties uncertaintiesand andother otherfactors, factors,TDK TDKGroup’s Group’sactual actualresults, results,performance, performance,achievements achievementsor or financial financialposition positioncould couldbe bematerially materiallydifferent differentfrom fromany anyfuture futureresults, results,performance, performance, achievements or financial position expressed or implied by these forward-looking achievements or financial position expressed or implied by these forward-lookingstatements, statements, and TDK Group undertakes no obligation to publicly update or revise any forward-looking and TDK Group undertakes no obligation to publicly update or revise any forward-looking statements statementsafter afterthe theissue issueofofthis thismaterial materialexcept exceptas asprovided providedfor forininlaws lawsand andordinances. ordinances. The electronics markets in which TDK Group operates are highly susceptible to The electronics markets in which TDK Group operates are highly susceptible torapid 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 rates, and changes in economic environments, conditions of competition, exchange rates, and changes in economic environments, conditions of competition,laws lawsand and regulations. Also, since the purpose of these materials is only to give readers a general outline regulations. Also, since the purpose of these materials is only to give readers a general outlineofof business businessperformance, performance,many manynumerical numericalvalues valuesare areshown shownininunits unitsofofaabillion billionyen. yen.Because Because original originalvalues, values,which whichare aremanaged managedininunits unitsofofaamillion millionyen, yen,are arerounded roundedoff, off,the thetotals, totals, differences, differences,etc. etc.shown shownininthese thesematerials materialsmay mayappear appearinaccurate. inaccurate.IfIfdetailed detailedfigures figuresare are necessary, please refer to our financial statements and supplementary materials. necessary, please refer to our financial statements and supplementary materials. 28