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FY2015

- ended March 2016 (For 177th Fiscal Period)

Presentation for FY2015 Q3 Results

For First 9 months and 3rd Quarter ended December, 2015   - February 4, 2016

Major Q&A at Presentation for FY2015 3Q Business Results Announcement (Summary)

Q1. The loss increased compared with the forecast announced on December 21, 2015. What are the reasons and what is the background?
We announced the Toshiba Rebuilding Initiative on December 21, 2015, which consists of a series of management measures to overcome the current situation, and explained the need to implement measures to deal with problematic businesses within FY2015, including structural reform. Although the revision of the forecast does in part reflect a deterioration in operating conditions since December 21, the major factors necessitating the revision are provisions for unprofitable projects, inventory devaluation, additional asset devaluation, and incremental costs for structural reform, all of which are required in order to achieve a V-shaped recovery in FY2016.
The decision to revise the forecast made in December reflects our unswerving commitment to resolve the current issues, including unprofitable businesses and a poor financial position, to the extent possible within FY2015 so that we can have a clearer prospect for the future.
Q2. What is the current status of the impairment for the goodwill related to Westinghouse Group and what is the outlook?
Regarding impairment of the goodwill related to Westinghouse Group, as a result of Step 1 (*) of the impairment test, which must be performed at least once a year, it was found that no signs of impairment were detected.
However, if any matters arise indicating a decline in corporate value owing to change in the business environment etc., and the fair value of the business becomes less than the carrying value, impairment must be recognized. Therefore, there is a possibility of recording impairment depending on the change in the forecast of future cash flows of the business in question and/or in the discount rate for the weighted average capital cost.
In addition, in view of the possibility that Step 1 may identify signs of impairment and the test proceeds to Step 2 (*), re-evaluation of the fair value of the goodwill recorded at the time of acquisition and comparison with the carrying value are being conducted in parallel.
* A goodwill impairment test under the US GAAP comprises two steps. In Step 1, the fair value of the business evaluated according to the past results and a future business plan is compared with the carrying value and if the fair value is less than the carrying value, it is considered that there are indications of impairment and Step 2 will be conducted. In Step 2, if the carrying value of the goodwill exceeds the evaluated fair value of that goodwill (at the time of purchase), an impairment loss is recognized in an amount equal to such excess.
Q3. How is the current status of the structural reform of businesses that have already been announced, other than the sale of the medical system business?
Regarding the PC and home appliance businesses, we are executing the structural reform plans that we have already announced. At the same time, we are accelerating consideration of business reorganization with potential partners. We are not yet in a position to disclose any information but as soon as plans are fixed, we would like to give you an update. We appreciate your understanding.
Regarding the discrete semiconductor and system LSI businesses, we are implementing the measures that we have already announced, with a view to restoring profitability in FY2016. We are also considering examining means of raising the value of these businesses through cooperation with external parties in various ways. However, apart from the termination of the white LED business and the withdrawal from the CMOS image sensor business, which have already been announced, we have no plans to sell or withdraw from any businesses nor have we made any decisions to do so. Our intention to continue the discrete semiconductor business and the system LSI business for automotive and industrial applications remains unchanged.
We are committed to executing structural reform of these businesses and will do our utmost to rebuild them so that we can regain the trust of our customers and all other parties concerned.
Q4. Is Toshiba considering equity financing, such as a public offering, for capital reinforcement?
Toshiba considers that the first step toward capital reinforcement is the clarification of the approach for generating cash flows from FY2016 onward. Once the approach is determined, and if it is considered to be necessary, we may consider specific means for capital reinforcement, but nothing has been decided yet.
Q5. What is the outline for abolition of the Adviser to the Board system and reexamination of Adviser system?
Toshiba has decided to abolish the Adviser to the Board system and will submit a proposal to amend the Articles of Incorporation with regard to this matter to the General Meeting of Shareholders to be held in June this year. Regarding the current two Advisers to the Board, Mr. Nishimuro, whose term will expire in June this year, will resign three months early, in March this year, and Mr. Okamura, whose term will expire in June 2019, will resign three years early, in June this year. Mr. Okamura's resignation will take place upon approval of the amendment to the Articles of Incorporation at the General Meeting of Shareholders.
According to the current bylaw, Mr. Nishimuro and Mr. Okamura will assume the position of Executive Adviser. However, Toshiba intends to change the name of the position to Honorary Adviser to make it clear that they will not be involved in management. As the title indicates, the Honorary Adviser is an honorary position separate from management. In their capacity as Honorary Advisors, Mr. Nishimuro and Mr. Okamura will be requested to contribute to the maintenance and enhancement of Toshiba's presence in society through their activities outside Toshiba.

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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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