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Presentations & Events

FY2006

- ended March 2007 (For 168th Fiscal Period)

Presentation for FY2006 Q2 Results

For First 6 months and 2nd Quarter ended September, 2006   - October 31, 2006

Outline of the presentation

1. Consolidated results for the first half of FY2006

Net Sales 3,162.0 billion yen (+261.9 billion yen YoY)
Operating income 65.2 billion yen (+13.8 billion yen YoY)
Income before income taxes and minority interest 83.7 billion yen (+41.6 billion yen YoY)
Net income[1] 38.8 billion yen (+24.2 billion yen YoY)
  • All segments recorded higher sales; Electronic Devices, Social Infrastructure and Home Appliances achieved improved operating income against FY2005 first half.

2. Financial Position and Cash Flows

  • Total assets increased by 727.1 billion yen from the end of September 2005 to 5,292.9 billion yen
  • Shareholders' equity improved by 187.0 billion yen to 1,042.5 billion yen from the end of September 2005.
  • Total debt increased by 290.6 billion yen from the end of September 2005 to 1,287.1 billion yen.
  • Free cash flow was plus 41.9 billion yen, a 46.7 billion yen deterioration from the same period a year ago.
  • The debt-to-equity ratio was 123%, a 7-point deterioration compared with the year-earlier period.

3. Consolidated Forecast for FY2006

  • Toshiba Corporation has revised its original forecast for FY2006, announced on April 28, 2006, as below.

(billion yen)

Net Sales 6,750.0 (+150.0 to the original forecast)
Operating income 270.0 (+5.0 to the original forecast)
Income before income taxes and minority interest 270.0 (+5.0 to the original forecast)
Net income 110.0 (+20.0 to the original forecast)

Q & A Session

Q1. What is the first half sales breakdown by product in the Semiconductor business?
The sales composition is approximately 20% from the Discrete business, approximately 40% from the System LSI Business and almost 40% from the Memory Business.
Q2. What is your comment on the NAND Flash supply and demand situation?
Toshiba's sufficiency rate, the rate of supply against demand, was 90% in the second quarter. We anticipate a level of 80% in the third quarter, thanks to the demand expansion for year-end sales.
Q3. Tell us the rate of bit growth, the trend in the rate of unit price decrease of NAND flash memory.
We estimate the annual rate of bit growth at 2.8 times.
The trend in NAND flash unit price decreases does not necessarily mirror supply and demand sufficiency. However, in the first half, the average price decrease already reached 50%, and this had an influence on our results.
Q4. What is the operating rate of the semiconductor facilities?
We are operating at full capability at all facilities, except Kitakyushu Operations, our facility for bipolar and opto semiconductors, which is running at a little below 100%.
Q5. How will your PC business break even in the second half?
We will promote lower fixed costs, efforts to cut the cost of procurement and other measures.
Q6. What factors contributed to the surplus in the TV business in July - September? What are your objectives in the second half?
We have been bringing down the cost of procurement for LCD panels and promoting our strategy of differentiation of the “REGZA” brand. Overseas, we recorded a surplus throughout the first half. The burden of the cost of development remains in the domestic however. But out target is to get the TV business as a whole in surplus in the second half.
Q7. What is the situation in the Mobile Phone business, including profitability?
It was favorable in the first half. We took a share of over 12% and were in second position in the Japanese market. We will be making profit, though the situation will be severe, due to factors such as the start of number portability for mobile phones and the switch-over of models.

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