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FY2012

- ended March 2013 (For 174th Fiscal Period)

Presentation for FY2012 Results

For Fiscal Year ended March, 2013   - May 8, 2013

Disclaimer: The contents of these presentation materials, key points of presentation and QA and audio data of presentation have not reflected on the restatement publicly announced in September 2015. As a result, because these information therefore contains inappropriate information to be used for investment decision, please do not rely on this information if you actually intended to trade stock. Toshiba Corporation assumes no responsibility for problems resulting from or in connection with use of the information.

Key Points of the presentation

Social Infrastructure saw higher sales on healthy performances in Thermal Power Systems, overseas Nuclear Power Systems and Elevators and Medical Systems, and a solid performance by Social Infrastructure Systems including Landis+Gyr. However, net sales decreased YoY*, mainly due to lower sales in Digital Products and Electronic Devices and the transfer of the LCD business.

Net Sales: 5,800.3 billion yen (YoY: -300.0 billion yen)

All segments saw higher operating income YoY. Social Infrastructure recorded its highest ever operating income. However, the transfer of LCD business resulted in a slight decrease in overall operating income.
Income before income taxes and noncontrolling interests and Net income increased YoY, supported by the effect of improved currency exchange and asset reduction, despite the acceleration of structural reform for long term profitability.

Operating Income: 194.3 billion yen (YoY: -8.4 billion yen)
Income before income taxes and noncontrolling interests: 155.6 billion yen (YoY: +10.0 billion yen)
Net Income: 77.5 billion yen (YoY: +7.4 billion yen)

The D/E ratio decreased to 142%, reflecting an increase in shareholder's equity due to the effect of yen depreciation, despite strategic acquisitions of IBM's retail store business and additional shares in Westinghouse. (YoY: -1%)

*YoY: year-on-year comparison

Q & A Session

Q1. Could you please explain the main points of the FY2012 consolidated results?
The Social Infrastructure segment saw higher sales on healthy performances in Thermal Power Systems, overseas Nuclear Power Systems, Elevators, and Medical Systems, and a solid performance by Social Infrastructure Systems, including Landis+Gyr, the world's leading Smart Meter company. However, net sales decreased on a year-on-year basis, mainly due to lower sales in the Digital Products and Electronic Devices segments and the transfer of the LCD business. This resulted in a year-on-year decrease in overall net sales to 5,800.3 billion yen (YoY: -300 billion yen). All segments saw higher operating income on a year-on-year basis and the Social Infrastructure segment recorded its highest ever operating income. However, the transfer of the LCD business resulted in a slight decrease in overall operating income. The final result was operating income of 194.3 billion yen.
Q2. Please tell us about the overall forecast for the FY2013.
In the Electronic Devices segment, Memories are expected to maintain a healthy performance, and in the Social Infrastructure segment the Power Systems and Industrial Systems businesses are expected to deliver solid performances. The Digital Products segment aims to move into the black by cutting costs, enhancing product value, expanding sales in emerging countries and focusing on BtoB businesses. We also expect to see increases in sales and operating income derived from past M&A. Our foreign exchange rate assumptions for FY2013 are $1 = 90 yen and 1 euro = 115 yen.
Our FY2013 forecasts are as follow: net sales of 6,100.0 billion yen (YoY +299.7 billion yen), operating income of 260.0 billion yen (YoY +65.7 billion yen), and net income (loss) attributable to shareholders of the Company of 100.0 billion yen (YoY +22.5 billion yen).
Q3. Could you please tell us about the FY2012 business results in the Semiconductor and Storage businesses?
The Semiconductor business saw lower sales. In Memories, sales volume increased considerably in the second half, but lower overall sales for the full-year period reflected price declines in the first half and the impact of production cutbacks due to an adjustment in production. Discretes and System LSIs also recorded lower sales on declines in demand. Memories secured positive operating income, as a result of a significant increase in operating income in the second half from a better balance in supply and demand, achieved by the production adjustment and expanded sales of high value-added products. System LSIs also saw a considerable improvement in operating income on business restructuring. The Storage Products business secured operating income.
Q4. Could you please tell us about the FY2012 business results in the Social Infrastructure segment?
The Social Infrastructure segment saw overall sales increase. Positive results came from expanded sales in Thermal Power Systems in Japan and overseas and in Nuclear Power Systems overseas. Solid performances in Photovoltaic Systems, Social Infrastructure Systems, including Landis+Gyr, Elevators, and Medical Systems also resulted in positive contributions. The segment's highest ever operating income reflected a healthy performance in Thermal Power Systems, and higher operating income from Photovoltaic Systems, Landis+Gyr, Transmission and Distribution Systems, Elevators, and Medical Systems, despite lower sales in Nuclear Power Systems in Japan.
Q5. How did the Digital Products segment and Home Appliances segment perform?
The Digital Products segment saw overall sales decrease, reflecting lower demand for PCs and a fall-off in demand for LCD TVs in Japan. Overall segment operating income (loss) improved. LCD TVs recorded a loss due to a further fall-off in demand, despite structural reform. PCs secured profit but also saw lower operating income. Retail Information and Office Equipment recorded higher operating income reflecting positive effects from the acquisition of IBM's Retail Store Solution business.

The Home Appliances segment saw overall sales increase. Higher sales reflected a continuing solid performance in LED Lighting and Industrial Air-conditioning. Higher sales in White Goods, including washing machines and refrigerators, also contributed. Overall segment operating income increased as a result of higher operating income in LED Lighting, despite lower operating income in White Goods, which felt the impact of currency exchange shifts.
Q6. Free cash flow for FY2012 was minus 64 billion yen. Why was that?
The main cause was an increased demand for working capital, notably in the Digital Products segment and Social Infrastructure segment. In the Digital Products segment, inventory increased on lower unit sales, and in the Social Infrastructure segment we increased inventory in an appropriate manner, along with an increase in the order backlog. The cash used to acquire additional shares in Westinghouse is included in financial cash flow. We are going to improve free cash flow in FY2013 by securing higher sales and operating income and continuing efforts to accelerate collection of receivables and to enhance inventory management.

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This Web site contains projections of business results, statements regarding business plans and other forward-looking statements. This information is based on certain assumptions, such as the economic environment, business policies and other factors, as of the date when each document was posted. Actual results may differ significantly from the estimates listed here.

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