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Presentations & Events

FY2006

- ended March 2007 (For 168th Fiscal Period)

Presentation for FY2006 Results

For Fiscal Year ended March, 2007   - April 26, 2007

Outline of the presentation

1. Consolidated Results of FY2006

Net Sales 7,116.4 billion yen (+772.9 billion yen YoY)
Operating income 258.4 billion yen (+17.8 billion yen YoY)
Income before income taxes and minority interest 298.5 billion yen (+120.3 billion yen YoY)
Net income 137.4 billion yen (+59.2 billion yen YoY)
  • Toshiba's overall consolidated sales in FY 2006 were 7,116.4 billion yen, 772.9 billion yen higher than in the previous fiscal year. Digital Products, Electronic Devices, Social Infrastructure and Home Appliances all saw sales increase against the year-earlier period.
  • Consolidated operating income increased by 17.8 billion yen from the same period a year earlier to 258.4 billion yen. Social Infrastructure and Home Appliances achieved increased operating income against the previous year, while Digital Products and Electronic Devices saw a decrease in operating income.

2. Financial Position and Cash Flows for FY2006

  • Total assets increased by 1,204.9 billion yen from the end of March 2006 to 5,932.0 billion yen.
  • Shareholders' equity improved by 106.1 billion yen from the end of March 2006 to 1,108.3 billion yen.
  • Total debt increased by 241.0 billion yen from the end of March 2006 to 1,158.5 billion yen.
  • As a result of the foregoing, the debt-to-equity ratio as of the end of March 2007 was 105%, a 13-point deterioration from the end of March 2006.
  • Free cash flow was minus 151.3 billion yen, a 349.3 billion yen deterioration from the year-earlier period.

3. Consolidated Forecast for FY2007

Net Sales 7,500.0 billion yen (+5% YoY)
Operating income 260.0 billion yen (+1.6 billion yen YoY)
Income before income taxes and minority interest 240.0 billion yen (-58.5 billion yen YoY)
Net income 120.0 billion yen (-17.4 billion yen YoY)

Q & A Session

Q1. Please tell us about the impact of change of Japanese tax law on your FY07 Income Statement.
Our estimation is 260 billion in FY07 by assuming that total 35 billion additional depreciation cost will be incurred in accordance with new tax law in FY07. The breakdown of 35 billion additional cost is 13 billion from exiting fully depreciated PPE (property, plant, and equipment) pursuant to old tax law. Old tax law allowed us to depreciate only 95% of value. The rest (22 billion) is another additional cost from new PPE, which we will apply 250% declining-balance method.
Q2. What is the ratio of Net Income estimation to Income before Income Taxes and Minority Interest in FY07?
Net Income will be 50% of Income before Income Taxes and Minority Interest. The difference between Net Income and Income before Income Taxes and Minority Interest includes both of Income Taxes and Minority Interests.
Q3. What is your NAND Flash Memory bit growth rate?
In FY06, the annual bit growth rate was 3.3 times. In FY07, we assume 2.3 times.
Q4. What is your assumption for price drop ratio of NAND Flash Memory?
We assume a 50% annual rate of price drop ratio in FY07. Our average price drop ratio for the first half of FY07 will be 20% (against the average for the second half of FY06). We will maintain our Gross Margin with applying leading-edge silicon process, increasing production volume, and improving throughput.
Q5. Please tell us about capacity utilization at your semiconductor plants.
Yokkaichi Operations: Operating at full capacity to meet excellent demand for NAND Flash memory. Oita Operations: The 200mm line that produces CMOS sensors, SoC and the like is running at full capacity. The 300mm line for advanced products is operating at over 90% of capacity. Himeji Operations produces discrete devices for plasma displays, PCs and power supplies, all product areas where the market is now undergoing adjustment. We are responding by adjusting production, particularly of power supply devices. Utilization in Himeji is 90%. Kita Kyushu Operations: Bipolar device production is at 95% of capacity.
Q6. What is your operating income estimation in Semiconductor business in FY07?
We assume that additional 20 billion depreciation cost will be incurred related to Semiconductor business. Our Operating Income estimation is 110 billion in accordance with new deprecation method.
Q7. What is your perspective on the storage device business in FY07?
In the market for 1.8-inch HDD, which might be used in PCs and camcorders as well as portable music players, we can look forward to volume growth. However, this will be accompanied by price decline, and we expect sales and operating profit to remain flat.

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