TDK Corporation A supplementary data for the first half of fiscal year 2003 (April 1, 2002 - Sep. 30, 2002) Contents P1. Note FY2002 P2. Consolidated results P3. Consolidated divisional sales P4. Consolidated field sales ratio (Electronic materials and components) P5. Sales by region (Geographic areas of the buyer) P6. Results and projections of Investment in facilities, Depreciation expenses, Research and development expenses P7. Consolidated results and projections P8. Projections of consolidated divisional sales P9. Managing index of inventory, fixed assets, trade receivables Forward-looking statements October 31, 2002 TDK Corporation Corporate Communications Dept. Note FY2002 Effective from the current fiscal year, TDK has adopted Emerging Issues Task Force (EITF) Issue 01-9, "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products)". Consequently, TDK has restated figures for the previous fiscal year. Please refer to the notes in TDK's earnings release for details of this standard. This change only affects the figures for net sale and selling, general and administrative expenses; there is no effect on operating income (loss). Figures before and after application of this standard are as follows: Restructuring costs are included in selling, general and administrative expenses. [Revised] FY2002 1Q 2Q 1st half 3Q 4Q 140,244 130,542 270,786 148,036 151,689 110,321 99,286 209,607 107,583 115,696 Electronic materials 43,900 37,467 81,367 39,384 41,095 Electronic devices 28,550 25,714 54,264 26,048 25,625 Recording devices 32,834 31,188 64,022 38,259 44,723 Semiconductors and others 5,037 4,917 9,954 3,892 4,253 Recording media and systems 29,923 31,256 61,179 40,453 35,993 Cost of sales 106,202 107,107 213,309 123,721 127,590 Gross profit 34,042 23,435 57,477 24,315 24,099 Forward-looking statem 31,453 28,835 60,288 38,486 50,839 Operating income (loss) 2,589 -5,400 -2,811 -14,171 -26,740 Net sales Electronic materials and components [Revised - Original] FY2002 Net sales Electronic materials and components Electronic materials Electronic devices Recording devices Semiconductors and others Recording media and systems Cost of sales Gross profit SG&A expenses Operating income (loss) Sales by Region [Revised] FY2002 Japan Americas Europe Asia and others Total [Revised - Original] FY2002 Japan Americas Europe Asia and others Total 1Q -756 -30 0 0 0 -30 -726 0 -756 -756 0 1Q 2Q -1,078 -13 0 0 0 -13 -1,065 0 -1,078 -1,078 0 2Q 1st half -1,834 -43 0 0 0 -43 -1,791 0 -1,834 -1,834 0 1st half 3Q 4Q -1,141 -9 0 0 0 -9 -1,132 0 -1,141 -1,141 0 -1,543 -13 0 0 0 -13 -1,530 0 -1,543 -1,543 0 3Q 4Q Unit:Yen millions 2nd half Full Year 299,725 223,279 80,479 51,673 82,982 8,145 76,446 251,311 48,414 89,325 -40,911 570,511 432,886 161,846 105,937 147,004 18,099 137,625 464,620 105,891 149,613 -43,722 -6 -662 -71 -17 -756 2Q -38 -894 -114 -32 -1,078 1st half -44 -1,556 -185 -49 -1,834 3Q 4Q -37 -978 -112 -14 -1,141 -27 -1,360 -91 -65 -1,543 Net sales Electronic materials and components Electronic materials Electronic devices Recording devices Semiconductors and others Recording media and systems Cost of sales Gross profit SG&A expenses Operating income (loss) 1Q 2Q 1st half 3Q 4Q Unit:Yen millions 2nd half Full Year 141,000 131,620 272,620 149,177 153,232 302,409 575,029 110,351 99,299 209,650 107,592 115,709 223,301 432,951 43,900 37,467 81,367 39,384 41,095 80,479 161,846 28,550 25,714 54,264 26,048 25,625 51,673 105,937 32,834 31,188 64,022 38,259 44,723 82,982 147,004 5,067 4,930 9,997 3,901 4,266 8,167 18,164 30,649 32,321 62,970 41,585 37,523 79,108 142,078 106,202 107,107 213,309 123,721 127,590 251,311 464,620 34,798 24,513 59,311 25,456 25,642 51,098 110,409 32,209 29,913 62,122 39,627 52,382 92,009 154,131 2,589 -5,400 -2,811 -14,171 -26,740 -40,911 -43,722 Unit:Yen millions 2nd half Full Year -2,684 -22 0 0 0 -22 -2,662 0 -2,684 -2,684 0 -4,518 -65 0 0 0 -65 -4,453 0 -4,518 -4,518 0 Unit:Yen millions 2nd half Full Year 43,499 41,671 85,170 40,857 38,777 79,634 164,804 26,970 23,493 50,463 28,526 30,463 58,989 109,452 19,765 18,052 37,817 21,384 20,438 41,822 79,639 50,010 47,326 97,336 57,269 62,011 119,280 216,616 140,244 130,542 270,786 148,036 151,689 299,725 570,511 1Q [Original] FY2002 Unit:Yen millions 2nd half Full Year -64 -2,338 -203 -79 -2,684 -108 -3,894 -388 -128 -4,518 [Original] FY2002 Japan Americas Europe Asia and others Total 1Q 2Q 1st half 3Q 4Q Unit:Yen millions 2nd half Full Year 43,505 41,709 85,214 40,894 38,804 79,698 164,912 27,632 24,387 52,019 29,504 31,823 61,327 113,346 19,836 18,166 38,002 21,496 20,529 42,025 80,027 50,027 47,358 97,385 57,283 62,076 119,359 216,744 141,000 131,620 272,620 149,177 153,232 302,409 575,029 1. Consolidated results Quarterly trends Y on Y growth Net sales,Operating income/Net sales, Net income/Net sales FY2002 2Q FY2003 2Q (%) (Yen billions) 5 150 2.7 Net sales, Operating income/Net sales, Net income/Net sales FY2002 2Q (Yen billions) FY2002 3Q FY2002 4Q FY2003 1Q 0.5 3 2.7 1.7 1.5 -4.1 100 0 0.5 (%) 5 4.0 150 1.7 100 FY2003 2Q 0 -5 -6.6 50 -3 -10 -9.6 -11.8 50 -4.1 0 -5 -15 -17.6 Net sales 0 -20 Operating income/Net sales Net income/Net sales Net sales FY2002 FY2003 2Q 2Q Y on Y growth Net sales 130,542 147,672 17,130 Cost of sales 107,107 111,541 4,434 Unit:Yen millions Share of net sales (%) Selling,general and administrative expenses Restructuring cost * Operating income (loss) Operating income /Net sales(%) Net income Net income/Net sales(%) Diff. 82.0 75.5 27,721 29,483 1,762 1,114 2,615 1,501 -5,400 4,033 9,433 -4.1 2.7 625 2,484 0.5 1.7 Unit:Yen millions Change 13.1% Net sales 4.1% Cost of sales Share of net sales (%) 6.4% Selling,general and administrative expenses 134.7% Restructuring cost * - Operating income (loss) Operating income /Net sales(%) 1,859 297.4% Net income (loss) Net income/Net sales(%) Operating income/Net sales Net income/Net sales FY2002 FY2002 FY2002 FY2003 FY2003 2Q 3Q 4Q 1Q 2Q Q on Q growth 130,542 148,036 151,689 148,708 147,672 -1,036 -0.7% 107,107 123,721 127,590 112,197 111,541 -656 -0.6% Diff. Change 82.0 83.6 84.1 75.4 75.5 27,721 31,204 33,363 29,713 29,483 -230 -0.8% 1,114 7,282 17,476 812 2,615 1,803 222.0% -5,400 -14,171 -26,740 5,986 4,033 -1,953 -32.6% -17.6 4.0 2.7 -9,759 -17,844 2,161 2,484 323 14.9% 1.5 1.7 -4.1 625 0.5 -9.6 -6.6 -11.8 122 119 122 123 133 127 119 Exchange rate(U.S.$=Yen) Exchange rate(U.S.$=Yen) * The Yen 1,114 million in restructuring cost shown in the second quarter of the previous fiscal year above was included in the first-half figure for fiscal 2002. 2. Consolidated divisional sales Y on Y growth Quarterly trends Consolidated divisional sales Consolidated divisional sales (Yen billions) (Yen billions) 150 150 Electronic materials Electronic materials 100 100 Electronic devices Electronic devices Recording devices 50 50 Recording devices 0 Recording media & systems Recording media & systems 0 FY2002 2Q FY2003 2Q FY2002 2Q Recording media & systems Semiconductors & others Recording devices Electronic devices Electronic materials Unit:Yen millions Electronic materials and components FY2002 FY2003 2Q 2Q 99,286 116,102 Y on Y growth Diff. 16,816 FY2002 3Q FY2002 4Q Recording media & systems Semiconductors & others Electronic devices Electronic materials Unit:Yen millions Change FY2003 1Q FY2003 2Q Recording devices FY2002 FY2002 FY2002 FY2003 FY2003 2Q 3Q 4Q 1Q 2Q Q on Q growth Diff. Change Electronic materials and 16.9% components 99,286 107,583 115,696 118,170 116,102 -2,068 -1.8% Electronic materials 37,467 43,058 5,591 14.9% Electronic materials 37,467 39,384 41,095 45,860 43,058 -2,802 -6.1% Electronic devices 25,714 29,449 3,735 14.5% Electronic devices 25,714 26,048 25,625 29,844 29,449 -395 -1.3% Recording devices 31,188 39,832 8,644 27.7% Recording devices 31,188 38,259 44,723 38,341 39,832 1,491 3.9% Semiconductors & others 4,917 3,763 -1,154 -23.5% Semiconductors & others 4,917 3,892 4,253 4,125 3,763 -362 -8.8% Recording media & systems 31,256 31,570 314 1.0% Recording media & systems 31,256 40,453 35,993 30,538 31,570 1,032 3.4% 130,542 147,672 17,130 130,542 148,036 151,689 148,708 147,672 -1,036 -0.7% Total 13.1% Total 3. Consolidated field sales ratio (Electronic materials and components) Y on Y growth Quarterly trends Consolidated field sales ratio (Electronic materials and components) Consolidated field sales ratio (Electronic materials and components) AV AV Automobile Automobile Office equip. Office equip. Communication equip. Parts FY2002 2Q Others Industrial machinery Office equip. Home appliance Unit: % Communication equip. FY2003 2Q Parts Parts Communication equip. Automobile AV FY2002 2Q FY2002 FY2003 Y on Y growth 2Q 2Q Change FY2002 3Q FY2002 4Q FY2003 1Q FY2003 2Q Others Parts Industrial machinery Communication equip. Office equip. Automobile Home appliance AV Unit: % FY2002 FY2002 FY2002 FY2003 FY2003 Q on Q growth 2Q 3Q 4Q 1Q 2Q Change AV 18% 16% 6.4% AV 18% 17% 15% 17% 16% -5.7% Home appliance 3% 2% -6.4% Home appliance 3% 3% 2% 3% 2% -7.8% Automobile 9% 10% 28.2% Automobile 9% 8% 9% 10% 10% -2.0% Office equip. 48% 49% 21.2% Office equip. 48% 50% 52% 47% 49% 2.8% 11% 9% -6.3% 11% 10% 8% 9% 9% -2.9% Industrial machinery 1% 1% 7.6% Industrial machinery 1% 1% 1% 1% 1% -2.5% Parts 6% 7% 49.5% Parts 6% 5% 5% 7% 7% -2.2% Others 4% 6% 24.9% Others 4% 6% 8% 6% 6% -19.3% Communication equip. Communication equip. 4. Sales by region (Geographic areas of the buyer) Y on Y growth Quarterly trends Sales by region and share of overseas sales (Yen billions) FY2002 2Q FY2003 2Q 200 150 FY2002 2Q (Yen billions) 80% Sales by region and share of overseas sales FY2002 3Q FY2003 1Q FY2003 2Q 80% 71.7% 68.1% FY2002 4Q 200 60% 68.1% 150 74.4% 72.4% 71.7% 71.4% 60% Japan 100 50 Japan 40% Americas Europe 100 Europe Asia 0 50 0% 20% Asia Japan Americas 0 Europe Share of overseas sales FY2002 FY2003 2Q 2Q Y on Y growth Diff. Japan 41,671 41,772 101 Americas 23,493 27,097 3,604 Europe 18,052 17,734 -318 Asia (excluding Japan) and others 47,326 61,069 130,542 147,672 Total Share of overseas sales 68.1% 71.7% 0% Asia (excluding Japan) and others Americas Share of overseas sales Asia (excluding Japan) and others Unit:Yen millions 40% Americas 20% Unit:Yen millions Change 0.2% Japan Europe Japan FY2002 FY2002 FY2002 FY2003 FY2003 2Q 3Q 4Q 1Q 2Q Q on Q growth Diff. Change 41,671 40,857 38,777 42,517 41,772 -745 -1.8% 15.3% Americas 23,493 28,526 30,463 29,197 27,097 -2,100 -7.2% -1.8% Europe 18,052 21,384 20,438 16,634 17,734 1,100 6.6% 13,743 29.0% Asia (excluding Japan) and others 47,326 57,269 62,011 60,360 61,069 709 1.2% 17,130 13.1% Total 130,542 148,036 151,689 148,708 147,672 -1,036 -0.7% Share of overseas sales 68.1% 72.4% 74.4% 71.4% 71.7% 5. Results and projections of Investment in facilities, Depreciation expenses, Research and development expenses October 31, 2002 Unit:Yen millions FY 2001 [Results] FY 2002 [Results] FY 2003 Projections on Aug. 1 Projections on Oct. 31 Investment in facilities 99,452 58,777 50,000 50,000 Depreciation expenses 63,579 61,920 60,000 60,000 Research and development expenses 36,970 38,630 32,000 32,000 (Share of net sales) <Net sales> 5.4% 689,911 * 6.8% 570,511 5.5% 580,000 * Net sales for the year ended March 31, 2001 (FY2001) do not reflect application of EITF 01-9. 5.5% 585,000 6. Consolidated results and projections October 31, 2002 Unit:Yen millions,% (Yen mill.) Net sales Electronic materials and components Electronic materials Electronic devices Recording devices Semiconductors and others Recording media and systems FY 2003 FY 2002 [Results] Projections on Aug. 1 Projections on Oct. 31 Y on Y growth (%) (Yen mill.) (%) (Yen mill.) (%) 570,511 100.0% 580,000 100.0% 585,000 100.0% 2.5% 432,886 75.9% 447,300 77.1% 455,400 77.8% 5.2% 161,846 105,937 147,004 18,099 28.4% 29.6% 2.2% 169,500 114,700 157,300 13,900 29.0% 3.2% 171,700 113,000 150,000 12,600 2.4% 4.7% 8.3% 7.0% -23.2% 137,625 24.1% 132,700 22.9% 129,600 22.2% -5.8% 18.6% 25.8% 19.5% 25.9% 19.6% 26.9% Operating income (loss) -43,722 -7.7% 20,000 3.4% 20,000 3.4% Income (loss) before income taxes -43,697 -7.7% 17,000 2.9% 18,300 3.1% Net income (loss) -25,771 -4.5% 13,000 2.2% 13,000 2.2% Exchange rate (U.S.$=Yen) (%) 125 122 122 * * The exchange rate is the average rate for the full fiscal year. As of October 31, 2002, the average yen-U.S. dollar exchange rate for the second half of fiscal 2003 is estimated at Yen120. 7. Projections of consolidated divisional sales October 31, 2002 FY 2003 Unit:Yen 0.1billions , % Electronic materials and components 1st half 3Q 4Q 2nd half Full year Results Y on Y growth Change Projections Y on Y growth Change Projections Y on Y growth Change Projections Y on Y growth Change Projections Y on Y growth Change (Yen 0.1bill.) (%) (Yen 0.1bill.) (%) (Yen 0.1bill.) (%) (Yen 0.1bill.) (%) (Yen 0.1bill.) (%) 2,343 11.8% 1,148 6.7% 1,063 -8.1% 2,211 -1.0% 4,554 5.2% Electronic materials 889 9.3% 407 3.4% 398 -3.0% 806 0.1% 1,695 4.7% Electronic devices 593 9.3% 287 10.0% 267 4.4% 554 7.2% 1,147 8.3% Recording devices 782 22.1% 425 11.0% 367 -18.0% 791 -4.6% 1,573 7.0% 79 -20.8% 29 -25.1% 31 -27.2% 60 -26.2% 139 -23.2% 621 1.5% 359 -11.3% 316 -12.2% 675 -11.7% 1,296 -5.8% 2,964 9.5% 1,507 1.8% 1,379 -9.1% 2,886 -3.7% 5,850 2.5% Semiconductors & others Recording media & systems Total net sales 8. Managing index of inventory, fixed asset, trade receivables Unit:Yen millions 4Q 3Q 2Q 1Q 20 02 FY 4Q 3Q 2Q 1Q 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 1Q 2Q 3Q 4Q Total assets 820,177 790,946 748,935 768,230 749,910 Inventory 116,423 123,531 117,409 110,879 91,149 2.0 2.6 2.7 2.2 1.8 278,625 283,377 277,477 280,198 265,590 Fixed asset turnover 2.7 2.0 1.9 2.1 2.2 Trade receivables 156,585 132,123 129,004 143,054 142,827 2.7 2.8 3.0 2.9 2.8 689,911 140,244 130,542 148,036 151,689 Retain month of inventory 3.5 FY 2001 FY 2002 Fixed asset Fixed asset turnover Retain month FY 20 01 2002 FY 2003 Retain month ofFYinventory,Fixed asset turnover,Retain of trade receivables Retain month of inventory Retain month of trade receivables Fixed asset turnover Retain month of trade receivables Net sales Unit:Yen millions FY 2002 1Q 2Q 3Q FY 2003 Total assets 749,910 720,376 727,674 Inventory 91,149 83,734 83,714 1.9 1.7 1.7 Retain month of inventory Fixed asset 265,590 249,884 244,040 Fixed asset turnover 2.1 2.3 2.4 Quarter:Inventory in the end of each quarter / Average monthly sales in the quarter Trade receivables 142,827 134,155 137,796 Full Year:Inventory in the end of FY / Average monthly sales in the FY Retain month of trade receivables 3.0 2.7 2.8 570,511 148,708 147,672 # Retain month of inventory # Fixed asset turnover Net sales Quarter:(Sales in the each quarter) * 4 / Average fixed asset in the each quarter Full Year:Net sales / Average fixed asset # Retain month of trade receivable Quarter:Trade receivable in the end of each quarter / Average monthly sales in the quarter Full Year:Trade receivable in the end of FY / Average monthly sales in the FY 4Q Cautionary Statements with Respect of 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 that are not historical facts. These forward-looking statements are based on current forecasts, estimates, assumptions, plans, beliefs and evaluations in light of information currently available to management. In preparing forecasts and estimates, TDK and its group companies have used as their basis, certain assumptions as necessary, in addition to confirmed historical facts. However, due to their nature, there is no guarantee that these statements and assumptions will prove to be accurate in the future . TDK therefore wishes to caution readers that these statements, facts and certain assumptions are subject to a number of risks and uncertainties and may prove to be inaccurate. The electronics markets in which TDK and its group companies operate are highly susceptible to rapid changes. Furthermore, TDK and its group companies operate not only in Japan, but in many other countries. As such, factors that can have significant effects on its results include, but are not limited to, shifts in technology, demand, prices, competition, economic environments and foreign exchange rates.