Toshiba Corp. Annual Report 2009

FY2009 Annual Report · Toshiba Corp.

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Toshiba Corporation
Annual Report 2009 • Operational Review

Financial Highlights • Toshiba Corporation and Subsidiaries
For the years ended March 31, 2009, 2008 and 2007

Net sales—Japan

—Overseas

Net sales (Total)
Operating income (loss) (Note 1)
Income (loss) from continuing operations,
before income taxes and minority interest

Net income (loss)
Total assets
Shareholders’ equity
Capital expenditures (property, plant and equipment)
Research and development expenditures
Return on equity (ROE) (%)
Return on total assets (ROA) (%)

2009
¥ 3,230,840
3,423,678
6,654,518
(250,186)

(279,252)

(343,559)
5,453,225
447,346
357,111
378,261
(46.8)
(6.0)

(Note3)

2008
¥ 3,702,474
3,962,858
7,665,332
246,393

265,049

127,413
5,935,637
1,022,265
465,044
393,293
12.0
2.1

(Millions of yen)

(Note3)

2007
¥ 3,599,385
3,516,965
7,116,350
258,364

327,131

137,429
5,931,962
1,108,321
375,335
393,987
13.0
2.6

Yen

Per share of common stock:
Net income (loss) (Note 2)

—basic
—diluted
Cash dividends
Number of employees (Thousands)

(106.18)
(106.18)
5.00
199

39.46
36.59
12.00
198

42.76
39.45
11.00
191

Notes: 1) Operating income (loss) has been determined under financial reporting practices generally accepted in Japan and is defined as net sales less cost of sales

and selling, general and administrative expenses.

2) Basic net income per share (EPS) is computed based on the weighted-average number of shares of common stock outstanding during each period. Diluted
EPS assumes the dilution that could occur if stock acquisition rights were exercised to issue common stock, unless their inclusion would have an antidilutive
effect.

3) Beginning with the fiscal year ended March 31, 2009, operating results of the Mobile Broadcasting business are accounted for in accordance with SFAS
No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” where the business is reclassified as a discontinued operation in the consolidated
financial statements. Prior-period data for the fiscal years up to March 31, 2008 has been reclassified to conform with the current classification.

Net sales (Billions of yen)

Operating income (loss) (Billions of yen)
Operating income ratio (%)

Net income (loss) (Billions of yen)

7,665.3

7,116.4

6,654.5

6,343.5

5,836.1

258.4

246.4

240.6

154.8

2.7

3.8

3.6

3.2

137.4 127.4

78.2

46.0

-3.8

-250.2

-343.6

The Toshiba Brand Statement

Toshiba delivers technology and products remarkable

for their innovation and artistry—contributing to a safer,

more comfortable, more productive life.

We bring together the spirit of innovation with our

passion and conviction to shape the future and help

protect the global environment—our shared heritage.

We foster close relationships, rooted in trust and respect,

with our customers, business partners and communities

around the world.

Contents

The Toshiba Brand Statement

To Our Shareholders

An Interview with the President

Action Programs to Improve
Profitability

Special Feature: Toshiba Group -
Leading the Way to the Future

Business Review

CSR Management

Research & Development and
Intellectual Property

Corporate Governance

Directors and Executive Officers

Basic Commitment of the
Toshiba Group

Data Section

To Our Shareholders

After the June 2009 annual shareholders’ meeting, Norio Sasaki succeeded Atsutoshi Nishida as

President & CEO. Under our new leadership, Toshiba Group will pursue an early recovery in

business performance through determined implementation of the “Action Programs to Improve

Profitability” that we announced at the end of January 2009. At the same time, we are positioning

ourselves today to successfully meet the challenges of tomorrow.

In fiscal year 2008, consolidated net sales were ¥6,654.5 billion, a decrease of ¥1,010.8 billion

from FY2007. Consolidated operating income (loss) declined by ¥496.6 billion to -¥250.2 billion,

and consolidated net income (loss) dropped by ¥471.0 billion to -¥343.6 billion. Our business

results became very severe due to such factors as the shrinkage of the overall market as a result of

the rapid worsening of the world economy and the steeper than expected decline in prices of

semiconductors, mainly of NAND flash memory. As a result, Toshiba, with regret, reduced its annual

dividend to ¥5 per share, a ¥7 decrease from FY2007. We can assure you it was a very difficult

decision for us to take.

Toshiba is making all-out Group-wide efforts to speedily and effectively carry out its “Action

Programs to Improve Profitability.” These “Action Programs” were set up with the key objectives of

transforming Toshiba Group into a Group with a strongly profitable business structure, one that

can generate profit in FY2009 even if the level of sales is not expanding, and building a strong

business foundation that will enable us to quickly seize business opportunities when the market

begins to recover.

Toshiba will continue to strive to enhance corporate value by promoting four basic

management policies: returning to the path of sustained growth with steadily higher profit; setting

up ambitious goals for innovation and speed its pace; continuing to accelerate our globalization;

and further strengthening CSR management.

We will make it our first priority to achieve the earliest possible business recovery and a return

to the path of sustained growth with steadily higher profit. We are confident that we will emerge

from the world economic crisis as an even stronger Group than before.

As we follow through on our plans of action, we would like to ask our shareholders for their

continued strong support and understanding.

Atsutoshi Nishida
Chairman of the Board and Director

Norio Sasaki
Director
President and CEO

An Interview with the President

“My first priority on becoming president is to improve the profitability of Toshiba

Group and return it to the path of sustained growth with steadily higher profit.”

Norio Sasaki Director, President and CEO

Q. On becoming President and CEO, what are your aspirations for Toshiba?
A. I am determined to work hard to fulfill everyone’s expectations for the growth and
development of Toshiba Group. The synchronized global economic downturn has created a
turbulent business environment. To overcome the adverse impacts of the present global
economic crisis, my first priority on becoming president is to improve the profitability of
Toshiba Group and return it to the path of sustained growth with steadily higher profit. To
accomplish these objectives, I will adopt three central strategic policy approaches. First, I will
vigorously promote the “Action Programs to Improve Profitability” that we introduced in
January 2009. Second, I intend to continue pursuing key basic strategic policy goals such as
accelerating the strategic allocation of resources to growth businesses, carrying out
management with Corporate Social Responsibility, and speeding up our globalization. Third, I
will strive to assure that we react with sensitivity and speed in responding to changes in the
business environment. I firmly believe that these three strategic approaches will result in the
enhancement of corporate value and lead us to take a giant leap ahead into the next
economic era, making Toshiba Group into an even more formidable global competitor. At the
same time, with regard to business strategy for the mid- to long-term, I will promote the
restructuring of our businesses based on an intensive analysis of the future directions of our
businesses and quickly respond to the changing business era by shifting management
resources so as to create a more highly profitable business structure.

Q. What is your assessment of the serious decline in Toshiba’s business

performance in FY2008 and what measures are you planning to carry out to
improve business results in FY2009?

A. The rapidly deteriorating world economy that developed into a deep global recession had
powerful adverse impacts on our FY2008 business results. During FY2008, we were hit by
major shrinkages in demand due to the rapid worsening of the world economy, steep price
declines and the significant strengthening of the Japanese yen.

With regard to our business segments, the Social Infrastructure business segment was
steady, though its profit declined. The Electronic Devices segment, particularly the
Semiconductor and LCD businesses, fell deeply into the red. The Digital Products segment and
the Home Appliances segment also moved into the red.

I expect the current tough business environment will continue into FY2009, so we have
to carry out management based on the assumption that rapid recovery of the economy
cannot be expected in the short-term. To achieve an early turnaround in the business
situation of Toshiba Group, we are currently aggressively implementing our “Action Programs
to Improve Profitability.”

Q. Could you explain the essential points about the “Action Programs”?
A. The core objective of the “Action Programs” is to bring about an early return to strong
profitability by carrying out a shift to a business structure that can generate high profit even if
the level of sales is not increasing. At the same time, we need to set up a business foundation
that will position us to immediately and effectively respond by taking advantage of business
opportunities when the market environment starts to recover.

Toward this end, we are promoting three key policies. The first of these policies is
fundamental restructuring of businesses adversely affected by the severe downturn,
particularly the Semiconductor and LCD businesses in the Electronic Devices segment. In the
Digital Products segment, we are reevaluating production systems for the TV and Mobile
Phone business, and in the Home Appliances segment, we are consolidating production and
development bases.

Second is the carrying out of Group-wide measures to strengthen our business structure.
To increase profitability, we are making deep cuts in fixed costs, and strengthening our cost
competitiveness through innovation and expanding global businesses outside of Japan.
Lastly, we are accelerating allocation of strategic resources to growth businesses.

We are strengthening our Social Infrastructure business segment, which is expected to
grow significantly in the coming years. The nuclear energy business is particularly promising,
and global demand is growing, spurred by awareness of how it contributes to energy security
and diversity while countering global warming.

As digital products evolve and diversify, the data storage market will greatly expand, so
we are bolstering our capabilities in the SSD (solid state drive) and HDD (hard disk drive)
businesses.

From the long-term perspective, we are shifting management resources to new

businesses that will create a new era of strong growth and profitability for Toshiba Group.

An Interview with the President

Q. Could you outline the details of the Semiconductor business restructuring?
A. Our Semiconductor business has been severely impacted by the sharp worldwide drop in
demand and also steep and continuing price declines. Based on a careful assessment of the
market situation, restructuring of the Semiconductor business will be implemented in line
with the characteristics of each business - discrete, system LSI and NAND flash memory. We
are also reducing fixed costs across the business, as well as greatly reducing capital
expenditures and improving the qualitative efficiency of R&D activities through expenditure
reduction and focusing more on rigorous selection of key R&D themes. In addition, we are
reorganizing production facilities, and we have implemented such personnel measures as
reassigning personnel to focus areas and making other necessary workforce adjustments.

In anticipation of future demand recovery in NAND flash memory, we acquired needed
production equipment from SanDisk Corporation. We are also promoting finer line-width
lithography technology. SSD is a highly promising data storage business area where strong
expansion in future demand is expected, and we are promoting the growth of our data
storage business by maximizing synergies with the HDD business.

In the discrete and system LSI businesses, to secure competitive leadership and improve
profitability, we are accelerating the shift of assembly operations to overseas facilities. We are
also studying more fundamental restructuring from the perspective of reorganization trends
in the industry.

Q. What measures have you taken to beef up Toshiba Group’s financial strength?
A. At the end of FY2008, our financial conditions had deteriorated, reflecting the significant
downturn in our performance, growth of interest-bearing debt and reduction in our capital
base. In addition to reinforcing the Group-wide efforts to shorten the cash-conversion cycle
which we started in FY2008, and aggressively implementing our “Action Programs,” in June
2009, we successfully improved our financial position and secured capital for investment in
future growth fields by means of a public offering that raised ¥319.2 billion. As a result of this
move and other factors, as of the end of June, 2009, the total equity ratio was 19.9%, a 6-point
improvement from the end of March 2009, and the debt-to-equity ratio was 133%, a 105-
point improvement from the end of March 2009. We further reinforced our financial base by
issuing subordinated bonds with a value of ¥180.0 billion.

All these measures will support us in establishing Toshiba Group's business base in the

medium- to long-term and achieving a good balance between growth capabilities and the
strengthening of our financial structure.

Q. What is your view of the role that Toshiba Group’s core competency in

promoting continuous innovation will play going forward?

A. We are continually seeking ways to promote and accelerate innovation, a pillar of Group
management and a key source of our growth. Our Group’s creative powers of imagination
backed up by our prowess in sensitively reading the trends affecting our businesses will allow
us to anticipate and clearly understand the coming changes in the global business
environment, and in turn, this thinking process will advance our ability to innovate.

We will passionately focus on the promotion of continuous innovations of great value to
society by mobilizing Toshiba’s powers of imagination to create the new technologies, products
and services that will help meet the central needs of tomorrow’s society. The use of our powers
of imagination to create continuous innovation will become an even more critical factor in
turning Toshiba Group into the most competitive global company in its business segments.

Q. What vision do you have for Toshiba Group’s CSR activities?
A. Toshiba Group promotes CSR-oriented
management motivated by its deep
convictions about its responsibilities as a
“corporate citizen of planet Earth.” We
place utmost importance on constantly
acting with complete integrity in all of our
business activities. As we reinforce our
global presence, I will ensure that the
worldwide Toshiba Group always acts to
place its highest priorities on human life,
safety and compliance.

The most urgent issues facing

mankind are stable energy supply and protecting the global environment. We aim to help
people achieve a better quality-of-life lived in harmony with planet Earth through promoting
“Toshiba Group Environmental Vision 2050,” which states our aggressive goal of raising the
eco-efficiency of our products and business processes 10 times by 2050, with 2000 as the
benchmark year. For Toshiba, developing sustainable products and technologies is the next
frontier of innovation. We aim to become one of the foremost eco-companies in the world.

As a significant step toward global CSR-oriented management in each region around the
world, Toshiba Group signed the United Nations Global Compact in 2004. At the same time, in
all our business activities, we are committed to a strong policy in support of cultural diversity.
We seek to understand and respect the different cultures and ways of thinking, histories and
customs as well as the laws and regulations in the communities around the world in which we
do business.

Action Programs to Improve Profitability

In FY2008, market deterioration of an unprecedented scope and
severity resulted in Toshiba Group recording very disappointing
business results. Market conditions will continue to remain tough in
FY2009, and we need to manage our business without anticipating
any fast turnaround.

Toshiba Group announced its “Action Programs to Improve
Profitability” in January, with the goals of developing a robust profit-
making structure that would allow the Group to generate profit even if
the level of sales in FY2009 is not increasing, and establishing a strong
foundation for making the most of opportunities offered when the
market moves towards recovery.

Reduction of capital expenditures and
R&D expenditures

Improvement in cash flow

Capital expenditures
(order basis)
(Billions of yen)

R&D expenditures
(Billions of yen)

Free cash flow
(Billions of yen)

393.3

378.3

425.2

Reduction

166.2

168.8

Reduction

320.0

247.1

250.0

118.3

102.2

-16.0

-75.6

Move into
the black

98.0

24.0

102.0

88.3

88.7

26.0
FY 09
( )
Plan as of
May 2009

20.5

FY 07
(Result)

18.6

FY 08
(Result)

FY 09
( )
Plan as of
May 2009

-322.7

-351.3

FY 07
(Result)

FY 08
(Result)

-335.3

FY 09
( )
Plan as of
May 2009

Cash flows from operating activities
Cash flows from investing activities
Free cash flow

618.9

436.5

48.3

86.6

47.5

FY 07
(Result)

248.5

39.7

90.4

46.6

FY 08
(Result)

Electronic Devices
Digital Products
Social Infrastructure
Home Appliances/Others

Business environment deteriorated rapidly in FY2008

Business environment remains severe in FY2009

Implement strategic policies to generate profit, even if the level of sales is not increasing
Build a strong business foundation that can quickly seize business opportunities when the market recovers

Complete Full Implementation of “Action Programs to Improve Profitability”

1. Restructuring of Businesses Most Affected by the Severe Downturn

Semiconductor business

Continue focused investment in our key NAND flash memory business
Promote a flexible production structure for discrete and system LSI products by reorganizing assembly facilities
in Japan and shifting production to overseas operations with lower operating costs

LCD business

Concentrate resources on high-value-added products

Home Appliances business

Reorganize manufacturing facilities and consolidate R&D functions in Japan

Digital Products business

Accelerate business expansion in emerging countries and enhance cost-competitiveness by reshaping manufacturing

2. Execute Toshiba Group-wide Actions to Strengthen Business Structure

Comprehensive reduction of fixed costs:
Original target: cut fixed costs to ¥300 billion below FY2008 level --- Stretch target is ¥330 billion plus
Comprehensive reduction of total fixed costs by more rigorous selection of R&D themes, prudently curtailing
capital expenditure, consolidation of facilities and adjusting personnel costs. Channel major resources into
developing promising growth businesses in such areas as environment, energy and data storage.

Measures to generate profit

Strengthen cost competitiveness through cost reduction
Expand businesses outside Japan

3. Accelerate Strategic Allocation of Resources to Growth Businesses

Shift managerial resources to Social Infrastructure business segment
Focus on new businesses for a new economic era

CCS (Carbon dioxide Capture and Storage)
Innovative SCiBTM rechargeable battery
Next-generation network devices
Vital public facilities and Healthcare

Solar photovoltaic systems
Direct methanol fuel cell
Storage

Smart grid
New lighting systems

Improve financial position by procuring funds

¥319.2 billion public offering for the purpose of capital expenditure, mainly for
strategic investments
Issue of ¥180.0 billion in unsecured, interest deferrable and early redeemable
subordinated bonds

Return to profitability

Special Feature:

Toshiba Group -
Leading the Way to the Future

As it strives to strengthen its global business presence,
Toshiba Group is developing new businesses that will
accelerate its future growth.

To further strengthen its core competency in generating continuous innovation, Toshiba Group is
aiming to build an organization that harnesses the full power potential of its business structure and
the creative power of its employees in order to reap the full benefits of the multiplier effects of
innovation and attain sustained growth with steadily higher profit.

Capitalizing on the many strengths of the Group, Toshiba Group is creating new businesses
based on innovative products developed at the right time to meet the emerging needs of society.
For this reason, in our innovation activities, while giving full consideration to market needs,
technology development, and manufacturing systems, we create new value for our customers by
bringing the multiplier effect of innovation to the key processes of research & development,
production & procurement, and sales & marketing.

Sales and Marketing
Process Innovation

Research and
Development Process
Innovation

Production and
Procurement Process
Innovation

Innovation Process and the Creation of New Businesses

Toshiba Group’s innovation processes allow us to transform ourselves so that we can agilely
respond to the constantly changing business environment.

The process of creating new businesses starts from imaginative acts of goal-setting, including
setting benchmarks and ambitious goals, which leads to a “sense of urgency” in seeking solutions
to business challenges.

After elaboration of new strategic business concepts, ones that take into consideration
various risk scenarios, business decisions leading to the commercialization of new products will be
made with speed and sensitivity in response to changes in the global business environment.

Toward this end, it is essential to recognize the need to overcome antinomy-the tension
between “cost and quality” or “growth and profit”-and to do this through using the powers of
imagination to create new ideas that lead to continuous innovation.

To create new businesses and achieve results that drive these new businesses forward, it is
necessary to simultaneously generate innovation in research & development, production &
procurement, and sales & marketing processes.

Process for creating new businesses

Creating
New Businesses

Multiplier Effect of
Innovation
Realize customer value by
generating innovation in research
and development, production and
procurement, and sales and marketing,
and by achieving the multiplier effect

Passion

Passionately work to take on
and overcome antinomy

Concept Creation

Use creative powers of imagination to
elaborate new business concepts in response
to changes in the global business environment,
and in turn, such conceptual thinking stimulates
our ability to innovate

Crisis Consciousness

Anticipate and solve future challenges
with a sense of urgency

Setting Clear Goals

Benchmarks, including intensive analysis of
information on future business prospects

Through innovation activities, new innovative products are continually created. This special
feature shines a spotlight on new businesses and new products generated as a result of Toshiba’s
innovation activities.

Special Feature: Toshiba Group - Leading the Way to the Future : Creating New Business

“REGZA” LCD TV with Super Resolution Technology, “Resolution+”

Towards Realizing “CELL REGZA”

With the innovative “REGZA” series, Toshiba became the first company to bring
super resolution technology, “Resolution+”* to LCD TVs, achieving market-
building, high-definition (HD) images highly appreciated by customers.

In order to further pursue real “surprise and sensation” with our TVs, we
have continued research and development toward bringing to market the
“CELL REGZA.” The top of the “REGZA” line, this integrates a high-performance
Cell platform, able to transfer huge amounts of data at high speed.
*Super resolution technology, “Resolution+” - technology to improve input image resolution by restoring picture signal data lost during
the digitization and compression process.

The “REGZA” series continues to evolve features to meet customers’ needs, such as “enjoy HD
images,” “enjoy viewing without time constraints,” and “use network functions.”

Toshiba takes HD seriously. Our “metabrain premium,” HD image processing system,
and our expert know-how in image creation, have all won excellent reputations in the market.
But we went beyond them to lead the industry in commercializing LCD TVs supporting super
resolution technology. Moving on, we freed viewers from “time constraints” with TVs
integrating high capacity HDD (Hard Disk Drive), and with a dedicated external HDD
connected via the TV’s USB port. In channeling “network” power, we led the industry in our
work on HD video-on-demand services.

As we pioneer network technologies and services that will realize the digital home of
tomorrow, we are also proposing new viewing experiences. At the cutting edge of our efforts
here is the “CELL REGZA,” scheduled for release in 2009. This breakthrough LCD TV integrates
a high-performance Cell platform. Combining this high-performance CPU with super
resolution technology realizes the most advanced image processing technology ever brought
to a TV, while support for high-speed processing opens up the way to exciting new services.

Toshiba wants to launch products that define the future of what TVs can do, and where
they can go. We will provide new TVs that convey a sense of excellence, of quality and of the
essence of reality, and put heart and soul into “REGZA.”

Super Resolution
Technology,
"Resolution+"
Built-in

Comment from product
development staff
“We created the “REGZA” brand
because we really wanted to show
‘true images.’ The super resolution
technology is the outcome of a long
time spent
researching basic
technology, digital broadcasting, and
image creation.”

Digital High-Definition LCD TVs
“REGZA ZX8000” Series

SSD (Solid State Drive)

Realizing a Storage Device for the New Generation

Expectations are high for SSD (Solid State Drive), the next-generation data
storage device based on NAND flash memory. And that’s not surprising, as
SSD offers high-speed data access and excellent shock resistance with low
power consumption.

Toshiba positions SSD alongside HDD (Hard Disk Drive) as a high growth

business, able to respond to diverse market needs for data storage.

With its high-speed data throughput, light weight, and excellent shock resistance, NAND
flash memory has established a leading position in the market for data storage devices.

Toshiba is advancing its SDD business by making best use of its NAND flash memory

technology and the extensive know-how accumulated in the PC and HDD business.

PCs with SSD offer a comfortable, reliable mobile computing environment delivering
high-speed start-up, high-speed data access, and long battery life. There’s also a much reduced
risk of accidental data losses from shock or vibration. Toshiba is now enhancing its PC line-up
by introducing SSD developed in-house to new product series. Toshiba’s 512GB SSD, one of
the industry’s largest models, was integrated into the “Portégé R600,” the world’s lightest mobile
notebook, while the “dynabook NX (Japanese model)” premium compact notebook PC sports
a 128GB SSD, and the “NB100/HF (Japanese model)” mini notebook can boast a 64GB SSD.

Toshiba expects to expand its SSD business into the server market, and will develop SSD

as a driving force for growth in the memory business.

High Speed, Light Weight
Low Power Consumption
Shock Resistance

(from left) 512GB, 256GB, 64GB SSD

Comment from product development staff!“Everybody with a portable PC wants ‘speedy

startup,’ ‘low power consumption and long
battery life,’ and ‘improved shock resistance
from no movable parts.’ We saw SSD as the
solution.”

Special Feature: Toshiba Group - Leading the Way to the Future : Creating New Business

Innovative SCiB™ Rechargeable Battery

Developing New Fields for Rechargeable Batteries

Toshiba’s SCiB™ is an innovative rechargeable battery* offering excellent
safety, a long lifecycle and a rapid charge capability.

The SCiB™ offers superior operating characteristics and contributes to

society as an environmentally conscious product.

*Rechargeable battery – a battery that stores electricity and that can be recharged and repeatedly used.

Toshiba has developed the SCiB™, an
innovative rechargeable battery that offers
higher levels of safety and performance
than
lithium-ion
conventional
rechargeable battery, and is now promoting
expansion of the business. SCiB™ achieves a
high level of safety by adopting lithium
titanate, a noncombustible material, for its
negative electrode (lower potential
electrode). This alone reduces the possibility
of rupture or combustion under tough conditions of use. SCiB™ also has a long lifecycle, and
can repeat the charge-discharge cycle over 6,000 times—while a rapid charge capability allows
the battery to fully recharge in only five minutes. Excellent low-temperature characteristics
enable use in cold climates, and output power performance is equivalent to that of a capacitor
(an electronic device that can charge and discharge high current).

Schwinn’s Tailwind, an electric bike equipped with the SCiB™

The lithium-ion battery market anticipates strong demand growth for industrial and
automobile applications. Given this, Toshiba positions the environmentally conscious SCiB™
as a high growth business able to meet various needs.

Toshiba is drawing on the many and excellent characteristics of the SCiB™ to advance
business development in various industrial fields, such as electric bicycles and forklifts, and also
aims for applications that include automobiles and solar power generation systems. In
anticipation of a future increase in demand, Toshiba plans to build a new mass production base
to complement Saku Operations in Nagano Prefecture, Japan, the current manufacturing base.

Comment from product
development staff

Excellent
Safety and
Long
Lifecycle

on safety, high power, a rapid charge
capability, and long lifecycle. We realized
these outstanding characteristics by
developing a high-level, thermally stable,
microparticulate electrode material.”

!“When developing SCiB™, we focused

SCiB™, an innovative rechargeable battery

New Lighting System

Lighting the Way to Warmth and Harmony with People and the Environment

Japan and Europe are expected to switch from standard incandescent lighting
to LED (Light Emitting Diode) lighting after 2010, as sales of incandescent
bulbs will be discontinued by 2012, in consideration of environmental
concerns. Toshiba Group will draw on its extensive capabilities to provide
homes, offices, streets and roads with lighting systems that use
environmentally conscious LEDs.

Since developing Japan’s very first incandescent lamps in
1890, Toshiba has constantly refined the meaning of “AKARI”
or lighting. It is now doing so again by discontinuing
production of standard incandescent lamps in 2010, to
promote reduction of CO2 with energy-saving products.

From now on, by shifting to LEDs and their higher
luminous efficiency, Toshiba will offer more
environmentally conscious products. And through those
products, Toshiba aims to offer the value of “AKARI” that
people truly need. Under the “E-CORE™” brand, Toshiba
released its first LED downlight, with an integrated power
unit equivalent to that of a 40W incandescent lamp, in
July 2007. Since then, Toshiba has extended and enriched
its lineup and improved luminance and efficiency.

Delivered about 2,300 LED lighting devices to
Lazona Kawasaki Plaza, a large commercial
facility (February 2009)

Building on these efforts, Toshiba now
positions a new lighting business based on
LEDs as a business to be promoted by the
Group as a whole, and in April 2008
established the New Lighting Systems
Division to take the initiative in management
and promotion.

Exhibiting at “Milano Salone,” the world’s largest design
exhibition, in Milan, Italy (April 2009)

In future, by drawing on the Group’s
power in such fields as semiconductors and
social systems as well as standard lighting
systems, Toshiba will develop new lighting
systems, and take the business to the global level.

Comment from product
development staff
““E-CORE™” LED downlight realizes a
brightness surpassing or equivalent to that of
an incandescent lamp. Its lifecycle is 20 times
that of an incandescent lamp, and power
consumption is cut to about one-seventh.”

High Efficiency
Low Environmental
Burdens

The standard-incandescent-lamp-
shaped “E-CORE™” LED 4.3W
model is interchangeable with
standard incandescent lamps.

Business Review

In FY2008, Toshiba Group addressed the need to secure profit on a com-
pany-wide basis. However, consolidated net sales in FY2008 were 6,654.5
billion yen, a decrease of 1,010.8 billion yen. This result was stongly influ-
enced by shrinkage of the overall market caused by the fast-spreading
global recession, steeper than expected declines in semiconductor prices,
and the yen’s sharp appreciation.

Consolidated operating income (loss) worsened by 496.6 billion yen
to -250.2 billion yen. Electronic Devices, particularly the Semiconductor
business, Digital Products and Home Appliances all saw significant income
deterioration, although Social Infrastructure maintained a high level of
profit.

Overseas sales decreased by 539.2 billion yen to 3,423.7 billion yen,

resulting in an overseas sales ratio of 51%.

President
and CEO

Corporate
Divisions

Digital Products Segment

Mobile Communications Company

Digital Media Network Company

Personal Computer & Network Company

Toshiba TEC Corporation

Electronic Devices Segment

Semiconductor Company

Digital Products
Segment

Display Devices & Components Control Center

Electronic Devices
Segment

Toshiba Mobile Display Co., Ltd

Social Infrastructure Segment

Power Systems Company

Transmission Distribution & Industrial Systems Company

Social Infrastructure Systems Company

Toshiba Elevator and Building Systems Corporation

Social
Infrastructure
Segment

Toshiba Solutions Corporation

Toshiba Medical Systems Corporation

Home Appliances Segment

Toshiba Consumer Electronics Holdings Corporation

Home Appliances
Segment

Sales by segment (Billions of yen)

Operating income (loss) by segment (Billions of yen)

7,665.3

2,951.2

1,738.5

7,116.4

2,805.5

1,657.3

6,654.5

2,467.5

1,324.9

2,067.7

2,419.0

2,396.2

748.9

FY 06

391.6

774.3

FY 07

381.9

674.3

FY 08

334.3

Eliminations of sales among segments were -554.6
billion yen in FY2006, -599.6 billion yen in FY2007
and -542.7 billion yen in FY2008.

Digital Products
Electronic Devices
Social Infrastructure

Home Appliances
Others

258.4

15.8

119.7

96.8

9.7

18.7

246.4

74.1

131.3

15.0

3.9

23.0

-250.2

113.2

-323.2

0.5
-14.2

-27.1

FY 06

FY 07

FY 08

Eliminations of operating income (loss) among
segments were -2.3 billion yen in FY2006, -0.9 billion
yen in FY2007 and +0.6 billion yen in FY2008.

Digital Products saw overall sales decline by 483.7 billion
yen to 2,467.5 billion yen. The Digital Media business saw a
significant sales decline, particularly in TVs and HDDs, the
result of demand declines due to rapid decline into global
recession and steeper than expected declines in market
prices. The Mobile Phone business also saw notably lower
sales due to fewer shipments. The PC business and the
Retail Information Systems and Office Equipment business
saw lower sales, due to the global recession.

Segment operating income (loss) declined by 29.2 billion
yen to -14.2 billion yen. The Mobile Phone business saw a
notable decline on lower sales. While the Digital Media
business saw an improvement in TVs due to reductions in
production costs and fixed costs, HDDs saw a significant
worsening of profit. The PC business and the Retail
Information Systems and Office Equipment business also
saw notably decreased profit.

Electronic Devices saw sales decline by 413.6 billion yen to
1,324.9 billion yen. The Semiconductor business, primarily
in memories and system LSIs, experienced a substantial
sales slump, the result of steeper than expected price
declines in NAND flash memory, yen appreciation, and
weakened demand triggered by the rapid decline into
global recession. The LCD business and the Materials &
Components business also saw lower sales.

Segment operating income (loss) deteriorated by 397.3
billion yen to -323.2 billion yen, as the Semiconductor
business fell substantially into the red on lower sales, and
the LCD business also saw notably worsening profit.

Social Infrastructure saw sales fall by 22.8 billion yen to
2,396.2 billion yen. While the Power Generation Systems
business, mainly in nuclear energy systems in overseas
markets, and the Transmission Distribution & Industrial
Systems businesses saw higher sales, the Social
Infrastructure Systems business, the Medical Systems
business and the IT Solution business all saw sales
decrease.

Segment operating income decreased by 18.1 billion yen
to 113.2 billion yen. The Power Generation Systems
business, the Transmission Distribution & Industrial
Systems business, the Medical Systems business and the
Elevator business maintained high profitability. However,
the IT Solutions business saw substantially lower profit
mainly on lower sales, influenced by rapid deterioration in
the market environment.

Home Appliances saw sales decrease by 100.0 billion yen
to 674.3 billion yen. The White Goods business, the
Lighting business and the Air-conditioning business saw
significantly lower sales, influenced by the rapid decline
into global recession.

Segment operating income (loss) saw sales deteriorate by
31.0 billion yen to -27.1 billion yen. The White Goods
business, the Lighting business and the Air-conditioning
business all saw significantly lower profit on lower sales.

Business Review

Digital Products Segment

Percentage of sales in FY2008

Sales (Billions of yen)

Operating income (loss) (Billions of yen)
Operating income ratio (%)

2,951.2

2,805.5

2,467.5

15.8

15.0

0.6

0.5

34.3%

FY 06

FY 07

FY 08

FY 06

FY 07

FY 08

-0.6

-14.2

Mobile Communications Company

Digital Media Network Company

In AV, we offer digital high-definition LCD TVs and
video recorders. In data storage, we lead the
world market with small form factor HDD. We
develop and release leading-edge products
offering unique technologies that differentiate
them from competing products and enhance
Toshiba’s strength in the digital AV industry.

In FY2008, unit sales of LCD TVs rose, but we
faced significant declines in sales prices. In the
storage business, demand for HDD for PCs and
portable music players weakened. As a result of
lower sales, the company’s operating income
(loss) fell into the red.

The “TG01” mobile terminal brings innovation to the mobile internet.

The “TG01” is an unprecedented convergence of information terminal
and mobile phone in a multifunctional product offering high-speed
communication. At approx. 9.9mm deep, the TG01 sports an approx.
4.1 inch touch screen, and a high-speed CPU that delivers an enjoyable
user experience and smooth moving images.

Technological strengths in such areas as high-
resolution imaging, wireless, and advanced
devices support rich communications and total
connectivity. The company fuses leading-edge
technologies in the multimedia mobile phone
terminals that it develops and brings to market.

In FY2008, concerted efforts to enhance
product differentiation could be seen in the
release of the small size, sport-oriented “Sportio”
mobile phone for au, and the “830T” mobile
phone, which allowed users to create original
designs, developed for Softbank. However, sales
fell in a contracting market, the result of a
changed handset sales system in Japan, and a
slump in global demand triggered by the
recession also contributed to the sales decline. As
a result, the company reported notably lower
sales and fell into the red.

We will continue to release high value-
added products that offer a fusion of our in-
house technological strengths. We will also
advance business restructuring by manufacturing
outside of Japan and making use of outsourcing,
as a means to reduce costs in the face of
shrinking demand for mobile terminals.

In the fast commoditizing LCD TV business,
expansion of business scale is essential to
improve profitability. We are also promoting
other measures: cutting costs, including a
reassessment of global production; and
enhancing the brand value of our “REGZA” LCD
TVs by maximizing application of our high-
resolution imaging technologies. In the storage
business, in April 2009, we entered into a
definitive agreement with Fujitsu Limited on
acquiring its HDD business. Moving forward, the
company will maintain high market share and
consolidate leadership in small form factor HDD
for notebook PCs, automotive applications,
mobile devices and other consumer electronics.
We will integrate Fujitsu’s enterprise HDD
business into the overall business, and so expand
market share in an area where continued growth
in demand is expected.

The company will draw on
the
differentiated technologies of Toshiba Group to
build a strong position and improve performance
in an intensely competitive market.

Personal Computer & Network Company

As ubiquitous connectivity makes its way into the
home, the office and the mobile domain, Toshiba
Group’s cutting-edge core technologies create
notebook PCs, servers, business telephone
systems, and other equipment that shape a
and network
computing
comfortable
environment.

In FY2008, unit sales of notebook PCs
initially rose in Japan and overseas, but growth
slowed significantly in the recession-hit second
half. The notebook PC business saw sales and
profits slide on price erosion and a weaker euro.
In these circumstances, we met diversifying user
needs with notebook PCs with sophisticated

designs and by entering the fast growing mini
notebook market. Product-line enhancement
supported the release of the “Qosmio” series of
AV notebook PCs equipped with the advanced
Toshiba QUAD Core HD processor*, and allowed
us to strengthen our notebook PC line-up with
solid state drive (SSD).

As we further cultivate the high-growth
notebook PC market, and promote further
globalization, we will carefully monitor market
needs and trends and use our leading-edge core
technologies to deliver unsurpassed products.

* Toshiba QUAD Core HD processor: Real-time, high-level image
processing in digital equipment requires a powerful coprocessor.
The processor is based on the multi-core technology of the high-
performance Cell and runs Toshiba’s advanced image processing
technology.

The “Qosmio G50 series” realizes clear, smooth full-screen
display of moving images on the Internet.

On-line video is poor by comparison with a standard DVD, as the
images have fewer frames, less pixels and much more noise.
“Qosmio G50” leads the industry in improving images with
original algorithms that optimize frames and up-convert pixels.

Business Review

Electronic Devices Segment

Percentage of sales in FY2008

Sales (Billions of yen)

Operating income (loss) (Billions of yen)
Operating income ratio (%)

1,738.5

1,657.3

1,324.9

119.7

7.2

74.1

4.3

18.4%

FY 06

FY 07

FY 08

FY 06

FY 07

FY 08

-24.4

-323.2

Semiconductor Company

The company operates in the memory, system LSI
and discrete semiconductor businesses. The main
focus is on NAND flash memory, system LSIs for
digital consumer products, and power devices for
electric power supply.

In FY2008, demand for semiconductors for
digital consumer electronics and automotive
applications was undermined by the global
recession. The company recorded significantly
lower sales, and fell substantially into the red, on
much steeper than anticipated declines in NAND
prices, yen appreciation and weakened demand.
In these circumstances, we postponed
construction of a memory production facility
scheduled to open in 2009. As medium- to long-
term demand expansion is expected, the
company acquired a part of the production
facilities for 300mm wafer production owned by
a joint venture between the company and US-
based SanDisk.

In an extremely

tough business
environment, the company is implementing
structural reforms in each business, to secure
survival and readiness for market recovery. The
discrete and the system LSI businesses are

reinforcing marketing and
reorganizing
production facilities as strategic moves to
strengthen cost competitiveness and enhance
efficiency within the wider Toshiba Group. The
memory business will continue to reduce costs
through finer lithography, and plans to start
shipment of products fabricated to the 32
nanometer (1/1,000 million meters) design rule in
2009. We will also intensify cross-functional
business synergies, including collaboration with
the HDD business to expand the SSD market.

Toshiba makes semiconductors to meet diversifying needs

Our wide line-up of semiconductors fabricated with fine technologies
and expertise meet diversifying market needs, including
semiconductors for digital consumer products and automotive
applications.

Display Devices &
Components Control Center

The Center supports society with key devices
developed by the electron tube, materials, and
solid-state device businesses. It also develops
direct methanol fuel cells (DMFC) for mobile
devices, DNA chips and photocatalysts.

In FY2008, the Center saw lower sales and
profit as demand declined. On the plus side were
commercialization of a DNA chip kit for
experimental animals and of a compact
automated DNA chip detection system. The DNA
chip kit has been co-developed with the Central
Institute for Experimental Animals. Another
advance was the development of X-ray tubes
supporting nano-level focus for next-generation
non-destructive inspection.

We will boost competitiveness in current
businesses and enlarge the scale of operations
with new businesses, including DMFC and
medical-use DNA chips.

Toshiba Mobile Display Co., Ltd.

The company develops low-temperature
polysilicon TFT technology and supplies small- to
medium-sized, high value-added displays for
applications that includes mobile phones, car
navigation systems and mobile PCs.

In FY2008, the company recorded a major
operating loss on significantly weakened demand
and lower prices in the LCD panel market, and
yen appreciation.

In this environment, we stopped or scaled
back unprofitable lines at Uozu Works and Fukaya
Operations in March 2009, toward improving
profitability in and beyond FY2009. We recognize
organic light-emitting diodes (OLED) as a
promising business. We are preparing to build a
mass production line for OLED panels at Ishikawa
Works, and will introduce products in tandem
with market growth.

In April 2009, Toshiba Mobile Display Co.,
Ltd. became a wholly owned subsidiary of
Toshiba Group, when Toshiba acquired all of
Panasonic Corporation’s interests in the
company. This will allow Toshiba to further
accelerate decision-making and to promote
comprehensive restructuring of the display
business.

Direct Methanol Fuel Cells (DMFC) for mobile devices

We exhibited a prototype of Toshiba’s “TG01” mobile terminal
integrating a DMFC at the “Mobile World Congress 2009” in
Barcelona, Spain, in February 2009.

Small-Molecule OLED Panels
for mobile devices

Toshiba Mobile Display and
Idemitsu Kosan Co., Ltd. have
together developed a small-
molecule OLED panel for mobile
equipment that achieves the
level of
world’s highest
performance for a 2.2-inch
OLED panel supporting the
QVGA format, with power
consumption of 100mW and a
luminosity half-life of 60,000
hours.

Business Review

Social Infrastructure Segment

Percentage of sales in FY2008

Sales (Billions of yen)

Operating income (loss) (Billions of yen)
Operating income ratio (%)

2,419.0

2,396.2

2,067.7

131.3

5.4

96.8

4.7

113.2

4.7

33.3%

FY 06

FY 07

FY 08

FY 06

FY 07

FY 08

We will bolster competitiveness toward
meeting
for plant
Japanese demand
refurbishment and overseas demand for power
generation equipment, and continue to develop
products that cut environmental loads, including
a CO2 capture and storage system.

Power Systems Company

Expertise in nuclear, thermal and hydroelectric
power generation supports comprehensive,
highly reliable electric power solutions, and drives
overseas expansion and a reinforced presence in
the power plant services business in Japan.

In FY2008, the company saw higher sales, led
by the nuclear energy business, mainly in services for
operating plants, and maintained profit at the level
of the previous year. The nuclear energy business
has received orders for six pressurized water reactors
and two advanced boiling water reactors in the U.S.
The thermal and hydroelectric power
business established a
joint venture to
manufacture and market steam turbines and
generators for thermal power plants in India, and
also enhanced production capacity at a
hydroelectric power manufacturing and
marketing operation in China.

Steam Turbines for AP1000™ Pressurized Water Reactor (PWR)

Nuclear power offers a solution to global warming and growing global
electricity demand. We have already won orders for six PWRs in the
U.S., and are developing highly efficient steam turbines for
Westinghouse’s AP1000™ PWR, which is expected to see adoption
around the world.

A P 1 0 0 0 ™ t y p e N u c l e a r P o w e r G e n e r a t i o n
System (artist’s image)

Transmission Distribution &
Industrial Systems Company

The company provides power transmission and
distribution systems, transportation systems and
industrial systems in Japan and the world market.
In FY2008, higher sales and profit from
strong performances in the transmission and
distribution (T&D) and the transportation systems
businesses, in Japan and overseas, compensated
for lower demand in the industrial systems
business due to yen appreciation and the
recession.

The T&D business promoted globalization
by acquiring a Brazilian switchgear company and
establishing a protection relays manufacturing
and marketing operation in Vietnam. The
industrial systems business, anticipating demand
expansion, established a manufacturing and
marketing company for high-efficiency industrial
motors in Vietnam.

In enhancing its environmental businesses,
the company is promoting the SCiB™, an
innovative rechargeable battery, and will boost
production with a second factory to complement
the current Saku Operations. A dedicated division,
established in January 2009, now controls all
aspects of the photovoltaic systems business,
drawing on the company’s expertise in power
electronics, power control systems, and system
engineering.

The company will boost demand in Japan,
strengthen overseas business and promote and
expand new ventures.

Social Infrastructure Systems Company

The company delivers essential social
infrastructure, and facilities management systems
for buildings, airports, roads and rivers. It also
provides water and sewer services and
environmental systems, broadcasting and
network systems, radio application systems, and
security and automation systems.

FY2008 saw lower sales and profits in a
tough environment for broadcasting and
network systems, despite steady progress in the
infrastructure systems business.

Moving forward, the company will promote
its facility solutions business, which delivers total
systems supporting energy saving and high-level
functionality. Expansion in the environmental
reinforcing
systems business
remediation technology for the purification of
PCB-contaminated soil and a Clean Development
Mechanism (CDM) business in Vietnam for
emission trading.

includes

We will contribute to society with high-quality
infrastructure and diverse solutions and develop
new growth businesses that increase profit.

Toshiba Elevator and
Building Systems Corporation

We develop, produce and maintain highly
efficient, safe, state-of-the-art elevators and
escalators, offer upgrades to replace installed
equipment, and deliver integrated building
management services.

FY2008 saw steady progress in the
maintenance and renewal businesses in Japan,
with operating income at approximately the
same level as in the previous fiscal year, but
overall sales decreased on fewer new building
starts in Japan and slower sales growth in the

Business Review

Chinese market.

In October 2008, we received an order from
“Tokyo Sky Tree,” a 610m high digital
broadcasting tower, for the installation of
elevators that will be Japan’s fastest, large-
capacity cars, with the longest travel distance. A
December 2008 equity partnership with Hong
Kong’s Chevalier International Holdings Ltd. is
allowing us to strengthen marketing and further
expand the elevator business, especially in China
and Southeast Asia.

Going forward, we will reinforce business in
Japan and expand overseas, with a primary focus
on China and Asia.

Japan. We

and embedded software from manufacturers and
distributors
launched
‘Manufacturing Solution Template’ in November
2008, a tool created by analysing common
functions and procedures at manufacturing
companies introducing new systems. We will
continue to bring competitive products to
market.

We will improve our sales promotion
system from the customer’s standpoint, create
new growth businesses and
reinforce
manufacturing as means to provide high-quality
solutions for customers in the IT market. This
approach will support us in growing sales and
strengthening our operating base.

Inside a double-deck elevator

Toshiba Medical Systems Corporation

Advanced diagnostic imaging modalities,
including CT systems, MRI, ultrasound and X-ray,
and medical information systems contribute to
global healthcare.

In FY2008, new products, such as the 320
slice Area Detector CT (Aquilion ONE™), recorded
sales growth, but overall sales and profit were
pulled down by initiatives to control medical costs
in advanced countries, the recession, and yen
appreciation. The November 2008 acquisition of
the 3D imaging processing business from Barco
reinforced our R&D activities and global
expansion. The January 2009 opening of a
‘Customer Support & Training Center’
strengthened our global service operations.

Looking ahead, we will provide medical
institutions worldwide with high-quality, reliable
products and all required services, and continue
to strengthen our competitiveness by developing
new technologies.

High-Speed Elevator for ‘the Shanghai World Financial Center’
In August 2008, an ultra high-speed elevator, top speed 600m/minute,
and a high-speed double-deck elevator with a floor-height adjustment
function, started operation in the 492m high Shanghai World Financial
Center in Shanghai, China. (Photo credit: Mori Building Co., Ltd.)

Toshiba Solutions Corporation

From consulting to outsourcing, for industry and
for business, we offer clients a full range of
optimized solutions.

FY2008 saw lower sales and operating
income, on lower demand for business solutions

Business Review

Home Appliances Segment

Percentage of sales in FY2008

Sales (Billions of yen)

Operating income (loss) (Billions of yen)
Operating income ratio (%)

9.4%

748.9

774.3

674.3

9.7

1.3

3.9

0.5

FY 06

FY 07

FY 08

FY 06

FY 07

FY 08

-4.0

-27.1

Toshiba Consumer Electronics
Holdings Corporation

We promote the White Goods, Lighting and Air-
conditioning businesses.

Sales in the White Goods and Air-
conditioning businesses were undermined by
lower consumer spending, while a fall-off in new
housing starts and demand for industrial light
sources brought down sales in the lighting
business. As a result, FY2008 results saw a
significant operating loss.

We are now promoting all-out reduction of
fixed cost and structural reform,
reinforcing
manufacturing and expanding overseas. With “eco
style” concept, we are creating
eco-products that contribute to
environmental preservation.

White Goods Business
In FY2008, we continued to
market energy-saving white
goods with enhanced basic
functions. To reinforce global
competitiveness we
are
promoting structural reform.
Facility reorganization in Japan will
consolidate two manufacturing

bases into one and three development centers
into two by the end of December 2009. These
moves will reinforce our global competitiveness.

Lighting Business
In FY2008 we expanded our ‘E-CORE™’ series of
LED lights that use less power and offer a much
longer life. High value-added products include
Neoball-Z Real Pride, a compact self-ballasted
fluorescent lamp that offers enhanced energy
saving performance.

Air-conditioning Business
In FY2008’s tough business environment, we
promoted innovation and environmental
preservation by developing power-conscious
products. Our efforts won Japan’s Energy
industrial air-
Conservation Awards
conditioners and home-use
room air-
conditioners.

for

Daiseikai RAS-PDR series – a high value-added, high-
performance air-conditioner, and winner of the Energy
Conservation Award

M a r u g o t o S e n d o M e i j i n – a h i g h c a p a c i t y
refrigerator that keeps food fresh

CSR Management

Toshiba Group positions CSR (Corporate Social Responsibility) as a
cornerstone of management policy, and addresses issues related to the
environment, customer satisfaction, human rights, corporate citizenship,
and CSR-related requests to suppliers. We place particular emphasis on
the following items.

1) We accord the highest priority to human life and safety and to compliance.
2) As a corporate citizen of planet Earth, we strive to play a significant role in contributing to a
better global environment and respect the different cultures, histories, and customs of the
communities where we operate around the world.

3) We recognize the importance of communication with stakeholders, including shareholders.

Major Evaluations of Toshiba Group’s CSR Activities in FY2008
Ministry of the Environment, Japan
Center for Public Resources Development (Japan)
Integrex (Japan)
SAM (Switzerland)
Dow Jones (US)
Nihon Keizai Shimbun

: Environmental Communication Awards
: Survey of Corporate Social Performance
: Corporate Integrity and Transparency
: Corporate Sustainability Assessment
: Dow Jones Sustainability Index (DJSI)
: Environmental Management Level Survey

Environment Minister’s Prize
A (Highest rating)
1st Place
Gold Class
Selected for 9 consecutive years
2nd Place

energy-saving electronic devices such as LED
lighting (with long life), air-conditioners, LCD TVs,
etc. Through new innovative products, we aim to
reduce CO2 emissions by 35.7 million tons by

Contributing to a better global environment
with energy and eco-products

“Environmental Vision 2050” guides Toshiba
Group’s efforts to ensure that “people lead richer
lifestyles in harmony with the Earth” and
promotes various measures for reducing CO2
emissions.

In order to secure further
Energy:
in manufacturing power
development
generation equipment, Toshiba’s core business,
we are promoting safe, efficient nuclear power
generation and enhancing the efficiency of
thermal power generation with ultra-high
temperature steam turbines. We are also
promoting CO2 capture and fixation, dispersed
power generation, including fuel cells, and
renewable energy, such as hydro, geothermal
and photovoltaic power generation. By 2025 we
aim to cut CO2 emissions by 82 million tons.

Eco-products: Our target is high-end,

2025.

Our target is to cut total CO2 emissions by
about 120 million tons-around twice the annual
emissions of a mega-city like Tokyo or Greater
London.

higher productivity. Toward this, by 2012, we are
working to control the rate of increase in
greenhouse gas emissions. Beyond that, we seek
to achieve a reduction of nearly 40% by 2025, as
compared to emissions in 1990.

Toward a significant reduction in total
greenhouse gas emissions

Realizing the United Nations Global
Compact

Toshiba Group reduced greenhouse gas
emissions from manufacturing and other
activities by 50% between 1990 and 2000.
However, subsequent expansion of the
semiconductor business sent emissions up again,
a trend that is expected to continue with
construction of new semiconductor factories.

Our past approach was to try to reduce
emissions relative to production. However, we
aim to increase our efforts to cut emissions based
on absolute targets. Priority goes to measures
that mitigate global warming, such as building
energy-efficient clean rooms and installing
greenhouse gas processing equipment. Our goal
is to significantly reduce emissions and achieve

Toshiba Group signed the United Nations Global
Compact (GC) in 2004 and adheres to universal
labor, the
principles on human rights,
environment, and anti-corruption. We educate
Toshiba Group employees worldwide on GC, and
provide them with copies of the “Toshiba Group
Standards of Conduct,” now translated into 15
languages, and which reflects the contents of the
GC. Further, Toshiba Group Procurement Policy,
based on the GC, requires our suppliers to
promote CSR. We regularly monitor our suppliers,
and in November 2008 conducted CSR audits of
suppliers in Thailand.

Going forward, as a “corporate citizen of
planet Earth,” we will seek to maintain the trust of
the wider community.

Changes in total greenhouse gas emissions

(thousand tons – CO2)
800

600

400

200

1990

Greenhouses gases
other than CO2

Emission reductions
obtainable from usual emission quantity

CO2 originating from energy

1995

2000

2005

2010

2015

2020

2025
FY

* The report covers Toshiba Group companies in Japan and overseas, and business processes at production and non-production facilities. Values are
actual up to FY2008 and projections for subsequent fiscal years. CO2 emission coefficients of electricity up to 2020 are expected to decrease. (Based
on the Japanese government’s plan to increase the zero-emission power source rate, announced in the July 2008 “Action plan to achieve a low-
carbon society.”) Business as usual values represent levels of emissions where no reduction measures are deployed. Greenhouse gases excluding
CO2 include methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.

Research & Development and Intellectual Property

Policies for enhancing global competitiveness focus on process innovation
and value innovation, and we aim to provide environmentally conscious
technologies and products that capture and convey ‘surprise and sensa-
tion.’ Corporate labs and the development centers of in-house companies
collaborate in R&D ranging from fundamental research to product com-
mercialization. Through this approach, we promote a Toshiba Group intel-
lectual property strategy tightly interwoven with business strategy.

Research & Development

Activities in FY2008
“Toshiba Group Environmental Vision 2050”
promotes various activities in environmental
management. Eco Products Approach focuses on
environmentally conscious products, such as
RoHS-compliant PCs and the new SCiB™
rechargeable battery. Eco Process Approach
promotes energy saving clean rooms. Energy
Approach supports nuclear power plants free of
CO2 emissions during power generation and
environmentally conscious thermal power
generation.

We are responding to the recession by
channeling investments into such areas as the
environment, energy and data storage, through
the “Action Programs to Improve Profitability”
announced in January 2009. By being more
selective in development themes, we are reducing
overall R&D costs. We will also enhance R&D
efficiency by Group-wide sharing of intellectual
property, promoting common platforms, and

using overseas resources in system development.
Toshiba Group will create new value by
promoting constant innovation, and continue to
contribute to society with cutting-edge
technologies.
Major achievements in Research & Development

Commercialized the world’s lightest personal computer,
“dynabook SS RX2/WAJ,” integrating a state-of-the-art CPU
Development of one-segment receiver LSI offering excellent
reception and 48% lower power than its predecessor
Construction of pilot plant for carbon dioxide separation
and capture technology
Development of non-volatile RAM with the world‘s largest
capacity and highest speed
Development of mercury-free ceramic metal halide lamp

Research & development costs (Billions of yen)

394.0

118.5

393.3

118.3

378.3

102.2

Digital Products

174.2

166.2

168.8

Electronic Devices

19.1

82.2

FY 06

88.3

88.7

Social Infrastructure

20.5

18.6

Home Appliances/Others

FY 07

FY 08

Intellectual Property

Intellectual Property Strategy
Toshiba Group’s intellectual property (IP) strategy
interweaves with business growth and supports
research & development, binding the three into

one. It promotes sustained growth with high
profit through measures resting on three pillars:
patent applications, patent enforcement and IP
management.

Technology/product development
Creation of "Wisdom"

Achievement

Core/Differentiated Technologies

(cid:2)D(cid:2)i(cid:2)f(cid:2)f(cid:2)e(cid:2)r(cid:2)e(cid:2)n(cid:2)t(cid:2)i(cid:2)a(cid:2)t(cid:2)i(cid:2)o(cid:2)n(cid:2)

Intellectual property rights (patents, etc.)

Application in
licensing

Application in marketing
and order receipt

Business expansion

Collaboration
with
businesses

Cross licensing

Alliances

Standardization

Fair-Payment Licensing

A strategy of selective patent application
supports globalization by maintaining Japanese
patent registrations, supporting efficiency, while
increasing overseas registrations, reinforcing
protection. In future, more applications in Asia
will reflect accelerated global business
development.

Our patent enforcement strategy secures
our pioneering advantage in IP rights by
enclosing our expertise in core and differentiated
technologies, and generates operating income.

We will also enforce IP rights in marketing and
order receipt, as well as in licensing, depending
on the business.

Toshiba’s high-tech capabilities consistently
earn positive evaluations. In FY2008, the Japan
Institute of Invention and Innovation recognized
the Group’s achievements in contributing to the
progress of science and technology and the
development of industry with the following
awards at the National Commendation for
Invention.

The Prime Minister Prize

Patent No. 3281266

The Prize of the Chairman of the Japan
Chamber of Commerce and Industry
The Invention Prize

Patent No. 2916780

Design Registration No. 1293616

“High Quality and Small Footprint Speech
Synthesis Method”
“High-resolution Measuring Device for Time
Difference”
“Design for Built-in Induction-Heating (IH) Stove”

Japanese patent registrations
(2008)

U.S. patent registrations
(2008)

Chinese patent applications
(foreign enterprises: 2008)

Ranking

Name

No. of
registrations
4,776
3,255
3,168
3,126
3,049
2,703
2,625
2,573
2,550
2,542

Panasonic
Toshiba
Ricoh
Sony
Toyota Motor
Denso
Seiko Epson
Sharp
Canon
Mitsubishi Electric

1
2
3
4
5
6
7
8
9
10
Results shown above are based on survey
made using PATOLIS

Ranking

Name

1
2
3
4
5
6
7
8
9
10

IBM
Samsung Electronics
Canon
Microsoft
Intel
Panasonic
Toshiba
Fujitsu
Sony
Hewlett-Packard

No. of
registrations
4,186
3,515
2,114
2,030
1,776
1,745
1,609
1,494
1,485
1,424

Ranking

Name

1
2
3
4
5
6
7
8
9
10

Samsung Electronics
Panasonic
Philips
Sony
IBM
Toshiba
LG Electronics
Toyota Motor
GM Global Technology
Qualcomm

No. of
registrations
2,404
1,937
1,569
1,537
1,112
1,041
994
978
959
948

Source: U.S. IFI Co., Inc.

Source: State Intellectual Property Office of the
People’s Republic of China, 2008 Annual Report

Number of Patent Applications by Business Segment (FY2008)

Corporate Laboratories Digital Products

Number of
Patent
Applications

Japan
U.S.
China

1,603
896
312

1,637
1,130
357

Electronic Devices
2,090
1,080
51

Social Infrastructure Home Appliances

2,620
385
238

366
4
47

Total
8,316
3,495
1,005

Corporate Governance

Toshiba promotes corporate governance based on the fundamental
policy and objectives of enhancing management efficiency, increasing
transparency, and seeking to maximize corporate value from the share-
holders’ perspective.

Toshiba’s Governance System

For the purpose of improving management
the management
mobility, enhancing
increasing
supervisory
transparency, Toshiba made the transition to a
Company with Committees system in June 2003.
The board now has 14 directors, seven of them

function,

and

Corporate Governance Structure

President
& CEO

Executive
Officers

Divisions

Audit

Appointment and Dismissal

Supervision

non-executive officers. Each of the three
committees has a majority of outside directors,
the Nomination Committee and
and
Compensation Committee are both chaired by
outside directors.

General Meeting of Shareholders

Appointment/Dismissal

Directors

Board of
Directors

Audit

Nomination
Committee
1 internal director,
2 outside directors

(

Audit
Committee
(
2 internal directors,
3 outside directors

(

Compensation
Committee
(
2 internal directors,
3 outside directors

(

Corporate Audit Division

Cooperation

TOSHIBA’S CORPORATE GOVERNANCE INITIATIVES

Q. Please explain Toshiba’s attitude toward corporate governance, and areas where you think you can make

a contribution as an outside director.

A. Toshiba focuses on CSR management, including environmental measures, and
has earned high evaluations from many independent organizations.
Compliance forms the foundations of the Company’s CSR management, and
from what I have seen they make constant efforts to assure proper operation of
its internal control systems, and to make sure that a law-abiding spirit
permeates the Group. Through my work at the Ministry of Foreign Affairs and
overseas missions, I have long experience in diplomacy, and I was always aware
of compliance when I carried out my work. As an outside director, I consider the
recent growth in overseas business, and express opinions towards ensuring
that all employees understand Toshiba as a global corporation, and thoroughly
understand and observe compliance. I make proposals to assure that everyone
in the group gives first priority to compliance in promoting business.

Outside Director
Hiroshi Hirabayashi

Toshiba’s Internal Control Systems

Toshiba established the Toshiba Group Standards
of Conduct in May 1990, based on the Basic
Commitment of the Toshiba Group. Toshiba
prioritizes respect for life and safety and
compliance with laws and regulations. Education
programs assure that all employees thoroughly
understand and observe the Standards.

Toshiba’s board resolved basic policies on
internal control systems in April 2006, in
accordance with Companies Act of Japan, effective
May 2006. Subsequently, Toshiba requested Group
companies in Japan to adopt their own policies on
internal control, and asked overseas group
companies to adopt the Toshiba Group Standards
of Conduct and to establish internal control
systems, including introduction of their own audit
and improvement programs, while taking into
consideration the local circumstances and legal
requirements faced by each company.

Most recently, Toshiba introduced a
corporate-level organization to assess the
effectiveness of internal controls on financial
reporting, as required by the Financial Instruments
and Exchange Law of Japan. Responding to this
initiative, the in-house companies and their
affiliates around the world established parallel
systems. Toshiba will continue to operate
appropriate internal control over financial
reporting.

Compensation for Directors
and Executive Officers

The compensation system for directors and
executive officers is designed to assure the
efficient execution of their duties.

Directors’ compensation is based on their

duties and full-time or part-time status.

Executive officers receive grade-based basic
compensation, plus service compensation
calculated according to their duties. 40% to 50%
of service compensation is variable, from zero to
double, depending on the year-end performance
of the business for which the executive officer is
responsible.
In

the Compensation
Committee abolished the system for granting
retirement benefits to directors and executive
officers.

June 2006,

Takeover Defensive Measures

Toshiba’s original countermeasures against large-
scale acquisitions of shares in the Company
expired in June 2009, and a partially revised
three-year plan was approved at the June 24,
2009 ordinary general meeting of shareholders.

The plan protects the Company’s corporate
value and the common interests of its
shareholders by defining procedures to be
followed in the event of any large-scale
acquisition of the Company’s shares. It ensures
that shareholders receive all necessary
information and the time required to make
appropriate decisions, and also secures for the
Company the opportunity to negotiate with the
acquirer. For more information visit:
www.toshiba.co.jp/about/ir/en/news/20090508_1.pdf

Directors and Executive Officers

Directors

Atsutoshi Nishida
Chairman of the Board and
Director

Norio Sasaki
Director

Masashi Muromachi
Director

Fumio Muraoka
Director

Masao Namiki
Director

Ichiro Tai
Director

Executive
Officers

Representative Executive Officer
President and Chief Executive Officer
Norio Sasaki

Representative Executive Officers
Corporate Senior Executive Vice Presidents
Masashi Muromachi
Fumio Muraoka
Masao Namiki
Ichiro Tai
Yoshihiro Maeda

Executive Officers
Corporate Executive Vice Presidents
Kazuo Tanigawa
Yoshihide Fujii
Toshinori Moriyasu
Hidejiro Shimomitsu
Hisao Tanaka
Hideo Kitamura

Yoshihiro Maeda
Director

Kazuo Tanigawa
Director

Shigeo Koguchi
Director

Hiroshi Horioka
Director

Kiichiro Furusawa
Outside Director

Hiroshi Hirabayashi
Outside Director

Takeshi Sasaki
Outside Director

Takeo Kosugi
Outside Director

Executive Officers
Corporate Senior Vice Presidents
Shozo Saito
Toshiharu Watanabe
Ryuichi Nakata
Yasuharu Igarashi
Masahiko Fukakushi

Executive Officers
Corporate Vice Presidents
Koji Iwama
Satoshi Niikura
Keizo Tani
Hidemi Miura
Shoji Yoshioka
Kosei Okamoto
Kazuyoshi Yamamori
Shiro Kawashita
Tsutomu Sanada
Akira Sudo

Makoto Kubo
Hiroshi Saito
Atsuhiko Izumi
Kiyoshi Kobayashi
Masakazu Kakumu
Takaaki Tanaka
Toshio Masaki
Yasuhiro Shimura
Munehiko Tsuchiya
Masaaki Oosumi

(As of June 24, 2009)

Basic Commitment of the Toshiba Group

BASIC COMMITMENT
OF THE
TOSHIBA GROUP

COMMITMENT TO PEOPLE

COMMITMENT TO THE FUTURE

Data Section

Consolidated Financial Summary

Consolidated Balance Sheets

Consolidated Statements of Operations

Quarterly Performance Highlights

Consolidated Statements of Cash Flows

Industry Segment Performance

Geographic Segment Performance

Long-term Debt

Organization Chart

Consolidated Subsidiaries/
Affiliated Companies Accounted
for by the Equity Method

Stock/Shareholders Information

Corporate History

4 1

Major indices of the Data Section have been compiled
chronologically based on the fiscal years. For the details of
financial information for the year ended March 31, 2009, please
refer to the “Financial Review 2009.”

Consolidated Financial Summary

Year ended March 31
Net Sales, Operating Income (Loss) and Net Income (Loss)

Net sales
Cost of sales
Selling, general and administrative expenses
Operating income (loss)
Income (loss) from continuing operations,

before income taxes and minority interest

Income taxes
Net income (loss)
EBITDA*1

Profitability Ratios

Operating income ratio (%)
Return on sales (%)
Cost of sales ratio (%)
Selling, general and administrative expenses ratio (%)

Total Assets, Total Shareholders’ Equity and Interest-bearing Debt

Total assets
Total shareholders’ equity
Interest-bearing debt
Long-term debt
Short-term debt
Shareholders’ equity ratio (%)*2
Debt/equity ratio (Times)*3

R&D, Capital Expenditures, Depreciation

R&D expenditures
Capital expenditures (Property, plant and equipment)
Depreciation (Property, plant and equipment)

Return Indicators

Return on equity (ROE) (%)*4
Return on total assets (ROA) (%)*5

Efficiency Indicators

Inventory turnover (Times)*6
Total assets turnover (Times)*7
Inventory turnover (Days)*8

Cash Flows

Net cash provided by (used in) operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at end of year

Liquidity Indicators

Debt/cash flow ratio (%)*9
Interest coverage ratio (Times)*10

Corporate Value

Free cash flow*11
Market capitalization*12

Other Data

13.2
20.9
(9.1)

378.3

0.6
(0.2)
73.4
26.0

6,101.9
1,128.8
2,181.7
1,178.4
1,003.3
18.5
1.9

316.7
375.5
309.8

(0.7)
(0.1)

5.30
0.86
66.85

264.9
(280.1)
(94.3)
(8.7)
(118.2)
497.8

13.68
1.0

(15.1)
2,604.2

1999

2000

2001

2002

¥5,300.9
3,890.6
1,379.8
30.5

¥5,749.4
4,254.4
1,394.0
101.0

¥5,951.4
4,323.5
1,395.7
232.1

197.5
96.1
96.2

578.4

3.9
1.6
72.6
23.5

5,724.6
1,047.9
1,787.6
990.3
797.3
18.3
1.7

327.9
269.5
308.3

9.1
1.7

7.18
1.03
50.81

453.6
(176.7)
(285.6)
31.1
22.4
487.6

23.22
6.1

276.9
2,356.3

188
53
1.6

¥5,394.0
4,070.1
1,437.5
(113.6)

(374.2)
(113.9)
(254.0)

(18.1)

(2.1)
(4.7)
75.5
26.6

5,407.8
705.3
1,818.5
888.7
929.8
13.0
2.6

326.2
348.2
311.2

(29.0)
(4.6)

7.13
0.97
51.19

149.2
(325.6)
53.5
5.8
(117.2)
370.4

4.01
(3.3)

(176.4)
1,815.5

176
46
1.7

(39.2)
(4.5)
(32.9)

352.9

1.8
(0.6)
74.0
24.2

5,780.0
1,060.1
1,967.3
1,121.9
845.4
18.3
1.9

334.4
298.5
329.6

(3.0)
(0.6)

6.27
0.97
58.25

435.9
(293.2)
(158.7)
(16.6)
(32.5)
465.2

15.23
2.8

142.8
3,367.1

191
58
1.6

Number of employees (Consolidated) (Thousands)
Number of employees (Non-Consolidated) (Thousands)
Ratios of Consolidated to Non-Consolidated Performance (Times) (Net sales)

198
63
1.6

• ¥48.9 billion, ¥4.8 billion and ¥4.1 billion of “Subsidy received on return of substitutional
portion of Employees’ Pension Fund Plan, net of settlement loss of ¥188.1 billion in 2004, ¥8.0
billion in 2005, ¥5.0 billion in 2006” are classified as a reduction of selling, general and
administrative expenses for the years ended March 31, 2004, 2005 and 2006, respectively.
• Operating income (loss) has been determined under financial reporting practices generally
accepted in Japan and is defined as net sales less cost of sales and selling, general and
administrative expenses.
• Beginning with the fiscal year ended March 31, 2001, Toshiba has adopted Statement of
Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain Investments in Debt
and Equity Securities.” Prior-period data for the fiscal years ended March 31, 1999 and 2000,
has been restated to conform with SFAS No. 115.

• Beginning with the fiscal year ended March 31, 2006, equity in earnings (losses) of affiliates
has been included in income (loss) from continuing operations, before income taxes and
minority interest. Prior-period data for the fiscal years ended March 31, 1999 through 2005
has been reclassified to conform with the current classification.
• Beginning with the fiscal year ended March 31, 2009, operating results of The Mobile
Broadcasting business are accounted for in accordance with SFAS No.144 “Accounting for
the Impairment or Disposal of Long-Lived Assets” where the business is reclassified as a
discontinued operation in the consolidated financial statements. Prior-period data for the
fiscal years up to March 31, 2008 has been reclassified to conform with the current
classification.

2003

¥5,655.8
4,146.5
1,393.8
115.5

56.6
48.9
18.5

341.7

2.0
0.3
73.3
24.6

5,238.9
571.1
1,653.4
882.0
771.4
10.9
2.9

331.5
230.5
237.9

2.9
0.3

8.55
1.06
42.69

271.6
(148.0)
(159.8)
(7.2)
(43.3)
327.1

16.09
5.3

123.6
1,007.6

166
40

1.7

2004

¥5,579.5
4,075.3
1,329.6
174.6

137.3
102.8
28.8

406.9

3.1
0.5
73.0
24.6

4,462.2
755.0
1,199.5
701.9
497.6
16.9
1.6

336.7
227.3
223.9

4.3
0.6

8.87
1.15
41.17

322.7
(189.5)
(132.7)
(8.3)
(7.8)
319.3

19.47
8.9

133.2
1,519.4

161
32

1.9

2005

¥5,836.1
4,296.6
1,384.8
154.8

115.0
57.5
46.0

378.1

2.7
0.8
73.6
23.7

4,571.4
815.5
1,111.4
683.4
428.0
17.8
1.4

348.0
318.4
215.8

5.9
1.0

9.13
1.29
40.00

305.5
(243.1)
(92.3)
5.6
(24.2)
295.0

24.87
7.6

62.4
1,442.1

165
31

2.1

2006

2007

¥6,343.5
4,659.8
1,443.1
240.6

182.3
91.8
78.2

461.1

3.8
1.2
73.5
22.7

4,727.1
1,002.2
917.5
611.4
306.1
21.2
0.9

372.4
338.8
228.6

8.6
1.7

9.65
1.36
37.83

501.4
(303.4)
(235.3)
13.2
(24.1)
270.9

32.77
10.3

198.0
2,201.8

172
32

1.9

¥7,116.4
5,312.2
1,545.8
258.4

327.1
157.0
137.4

651.9

3.6
1.9
74.6
21.7

5,932.0
1,108.3
1,158.5
956.2
202.3
18.7
1.0

394.0
375.3
259.9

13.0
2.6

9.71
1.34
37.61

561.5
(712.8)
154.8
34.9
38.4
309.3

41.46
8.9

(151.3)
2,533.4

191
32

2.0

2008

¥7,665.3
5,756.6
1,662.3
246.4

265.0
113.4
127.4

685.0

3.2
1.7
75.1
21.7

5,935.6
1,022.3
1,261.0
740.7
520.3
17.2
1.2

393.3
465.0
340.9

12.0
2.1

9.28
1.29
39.35

247.1
(322.7)
46.6
(31.7)
(60.7)
248.6

41.96
6.9

(75.6)
2,155.9

198
33

2.1

(Billions of yen)
2009

¥6,654.5
5,366.1
1,538.6
(250.2)

(279.3)
54.3
(343.6)

104.2

(3.8)
(5.2)
80.6
23.1

5,453.2
447.3
1,810.7
776.8
1,033.9
8.2
4.0

378.3
357.1
308.7

(46.8)
(6.0)

8.27
1.17
44.15

(16.0)
(335.3)
478.5
(32.0)
95.2
343.8

0.40
(6.8)

(351.3)
822.4

199
34

2.1

*1. EBITDA = Income (loss) from continuing operations, before income taxes and minority
interest + Interest + Depreciation
*2. Shareholders’ equity ratio (%) = Total shareholders’ equity / Total assets X 100
*3. Debt/equity ratio (Times) = Interest-bearing debt / Total shareholders’ equity
*4. Return on equity (ROE) (%) = Net income (loss) / Average total shareholders’ equity X 100
*5. Return on total assets (ROA) (%) = Net income (loss) / Average total assets X 100
*6. Inventory turnover (Times) = Net sales / Average inventory
*7. Total assets turnover (Times) = Net sales / Average total assets

*8. Inventory turnover (Days) = 365 / Inventory turnover
*9. Debt/cash flow ratio (%) = (Net income (loss) + Depreciation and amortization) / Average

interest-bearing debt X 100

*10. Interest coverage ratio (Times) = (Operating income (loss) + Interest and dividends) /

Interest expense

*11. Free cash flow = Net cash provided by operating activities + Net cash used in investing

activities

*12. Market capitalization = Common stock price [Year-end/Yen/Close] X Total issued shares

Consolidated Balance Sheets

March 31
ASSETS

Current Assets:

2005

2006

2007

2008

(Millions of yen)
2009

Cash and cash equivalents

¥ 295,003

¥ 270,921

¥ 309,312

¥ 248,649

¥ 343,793

Notes and accounts receivable, trade

Notes

Accounts

Allowance for doubtful notes

and accounts

Inventories

Deferred tax assets

Prepaid expenses and other

95,207

101,208

106,395

80,312

64,260

1,052,288

1,181,943

1,295,808

1,253,108

1,038,396

(26,599)

649,998

131,144

(28,671)

664,922

146,655

(30,599)

801,513

138,714

(21,417)

851,452

148,531

(19,270)

758,305

141,008

current assets

277,278

309,638

370,064

368,747

394,139

2,474,319

2,646,616

2,991,207

2,929,382

2,720,631

Long-term Receivables and Investments:

Long-term receivables

Investments in and advances

to affiliates

Marketable securities and

other investments

19,090

18,883

19,329

7,423

3,987

193,266

228,402

240,249

321,166

340,756

194,191

406,547

240,456

487,741

250,536

510,114

264,149

592,738

190,110

534,853

Property, Plant and Equipment:

Land

Buildings

Machinery and equipment

Construction in progress

169,464

1,064,760

2,349,258

60,547

161,503

1,084,433

2,402,752

64,345

156,445

1,146,350

2,594,284

104,612

128,210

1,160,549

2,598,042

215,937

98,116

996,709

2,698,626

114,617

3,644,029

3,713,033

4,001,691

4,102,738

3,908,068

Less—Accumulated depreciation

(2,479,846)

(2,536,483)

(2,681,489)

(2,770,560)

(2,818,489)

1,164,183

1,176,550

1,320,202

1,332,178

1,089,579

Other Assets:

Deferred tax assets

Other

348,713

177,650

526,363

237,334

178,872

416,206

211,336

899,103

285,757

795,582

352,948

755,214

1,110,439

1,081,339

1,108,162

¥4,571,412

¥4,727,113

¥5,931,962

¥5,935,637

¥5,453,225

For more information, please visit our IR web site at http://www.toshiba.co.jp/about/ir/en/finance/index.htm

March 31
LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

2005

2006

2007

2008

(Millions of yen)
2009

Short-term borrowings

¥ 197,765

¥ 142,530

¥ 71,626

¥ 257,831

¥ 747,971

Current portion of long-term debt

Notes payable, trade

Accounts payable, trade

Accounts payable, other and

accrued expenses

Accrued income and other taxes

Advance payments received

Other current liabilities

230,285

67,291

906,248

349,009

46,561

134,326

335,358

163,558

63,574

130,703

59,592

262,422

55,870

1,037,048

1,305,639

1,168,389

411,220

48,725

144,362

397,953

508,888

77,625

229,635

427,583

516,046

89,763

248,280

387,386

285,913

40,291

963,573

366,219

38,418

268,083

357,305

2,266,843

2,408,970

2,811,291

2,985,987

3,067,773

Long-Term Liabilities:

Long-term debt

Accrued pension and severance costs

Other liabilities

683,396

581,598

79,361

611,430

474,198

72,025

956,156

540,216

191,263

740,710

634,589

182,175

776,768

719,396

130,007

1,344,355

1,157,653

1,687,635

1,557,474

1,626,171

Minority Interest in Consolidated

Subsidiaries

144,707

158,325

324,715

369,911

311,935

Shareholders’ Equity:

Common stock

Additional paid-in capital

Retained earnings

274,926

285,736

511,185

274,926

285,743

570,080

274,926

285,765

681,795

280,126

290,936

774,461

280,281

291,137

395,134

Accumulated other comprehensive loss

(254,753)

(126,509)

(131,228)

(322,214)

(517,996)

Treasury stock, at cost

(1,587)

(2,075)

(2,937)

(1,044)

815,507

1,002,165

1,108,321

1,022,265

(1,210)

447,346

Commitments and contingent liabilities

¥4,571,412

¥4,727,113

¥5,931,962

¥5,935,637

¥5,453,225

March 31

2005

2006

2007

2008

Accumulated Other Comprehensive Loss:

(Millions of yen)
2009

Unrealized gains on securities

¥ 33,479

¥ 57,246

¥ 80,801

¥ 53,461

21,639

Foreign currency translation adjustments

(68,849)

Minimum pension liability adjustment

(219,315)

(32,019)

(151,351)

(21,938)

(117,552)

(222,773)

—

Pension liability adjustment

Unrealized gains (losses) on derivative

instruments

—

(68)

—

(190,118)

(256,839)

(314,578)

(385)

(1,284)

(2,284)

Consolidated Statements of Operations

Year ended March 31

Sales and Other Income:

Net sales

Subsidy received on return of substitutional

portion of Employees’ Pension Fund Plan,

(net of settlement loss of ¥7,992 million

in 2005 and ¥5,045 million in 2006)

Interest and dividends

Equity in earnings of affiliates

Other income

Costs and Expenses:

Cost of sales

Selling, general and administrative

Interest

Equity in losses of affiliates

Other expense

2005

2006

2007

2008

(Millions of yen)
2009

¥5,836,139
4,836

¥6,343,506
4,085

¥7,116,350
—

¥7,665,332
—

¥6,654,518

—

10,564

4,440

58,156

13,485

—

49,605

24,375

39,300

155,270

26,863

28,023

212,827

19,432

9,596

146,923

5,914,135

6,410,681

7,335,295

7,933,045

6,830,469

4,296,572

1,389,596

4,659,795

1,447,186

21,749

—

91,211

24,601

300

96,470

5,312,179

1,545,807

31,934

—

118,244

5,756,603

1,662,336

39,825

—

5,366,087

1,538,617

33,693

—

209,232

171,324

5,799,128

6,228,352

7,008,164

7,667,996

7,109,721

Income (loss) from continuing operations,

before income taxes and minority interest 115,007

182,329

327,131

265,049

(279,252)

Income Taxes:

Current

Deferred

Income (loss) from continuing operations,

50,419

7,061

57,051

34,781

88,911

68,113

102,740

10,635

52,308

2,015

before minority interest

57,527

90,497

170,107

151,674

(333,575)

Minority interest in income (loss)

of consolidated subsidiaries

Income (loss) from continuing operations
Loss from discontinued operations, net of taxes
Net income (loss)

Quarterly Performance Highlights

9,247
48,280
(2,239)
¥ 46,041

9,849
80,648
(2,462)
¥ 78,186

15,676
154,431
(17,002)
¥ 137,429

14,765
136,909
(9,496)
¥ 127,413

(3,795)

(329,780)

(13,779)

¥ (343,559)

1st quarter

2nd quarter

3rd quarter

4th quarter

Year ended March 31
Net sales

2008
¥1,663,839

2009
¥1,618,101

2008
¥2,024,699

2009
¥1,876,601

2008
¥1,877,862

2009
¥1,488,305

2008
¥2,098,932

2009
¥1,671,511

Operating income (loss)

Net income (loss)

23,144

20,632

(22,875)

(11,605)

63,842

25,025

4,384

(26,849)

43,694

80,505

(157,676)

115,713

(74,019)

(121,143)

1,251

(183,962)

Earnings

per share (Basic) (¥)

6.42

(3.59)

7.75

(8.30)

24.88

(37.44)

0.39

(56.85)

For more information, please visit our IR web site at http://www.toshiba.co.jp/about/ir/en/finance/index.htm

(Millions of yen)

Consolidated Statements of Cash Flows

Year ended March 31

2005

2006

2007

2008

(Millions of yen)
2009

Cash Flows from Operating Activities:

Net income (loss)
Adjustments to reconcile net income (loss) to net cash

provided by (used in) operating activities

Depreciation and amortization
Provisions for pension and

severance costs, less payments

Deferred income tax provision (benefit)
Equity in (earnings) losses of affiliates
(Gain) loss from sales, disposal and

impairment of property and securities, net

Minority interest in income (loss) of

consolidated subsidiaries
(Increase) decrease in notes and
accounts receivable, trade

(Increase) decrease in finance receivables, net
(Increase) decrease in inventories
Increase (decrease) in notes and

accounts payable, trade

Increase (decrease) in accrued income and

other taxes

Increase (decrease) in advance payments received
Other

Cash Flows from Investing Activities:

Proceeds from sale of property, plant and equipment
Proceeds from sale of securities
Acquisition of property, plant and equipment
Purchase of securities
(Increase) decrease in investments in affiliates
Other

Net cash used in investing activities

Cash Flows from Financing Activities:

Proceeds from long-term debt
Repayment of long-term debt
Increase (decrease) in short-term borrowings, net
Dividends paid
Repurchase of subsidiary common stock
Purchase of treasury stock, net
Other

Net cash provided by (used in)

financing activities

Effect of Exchange Rate Changes on Cash and

Cash Equivalents

¥ 46,041

¥ 78,186

¥137,429

¥127,413

¥(343,559)

241,362

254,217

292,875

380,160

349,764

2,641
5,525
5,816

3,351

9,247

4,809
33,091
20,023

(22,720)
56,444
(12,579)

(19,035)
10,635
(13,340)

(13,733)
(7,843)
1,215

18,070

(79,416)

(146,369)

(34,587)

9,849

15,676

14,765

(3,795)

(63,750)
(3,927)
(10,107)

(86,420)
0
31,927

(51,620)
0
(82,926)

29,138
0
(64,688)

186,676
0
60,517

82,427

90,482

220,619

(115,047)

(182,501)

9,722
(51,263)
28,448

816
(7,121)
53,497

23,353
29,459
34,880

42,094
34,138
(271,635)
(12,397)
(7,051)
(28,255)

(243,106)

251,563
(211,280)
(105,416)
(17,104)
(634)
(586)
(8,867)

81,503
12,379
(316,702)
(14,940)
(20,872)
(44,753)

(303,385)

108,393
(250,884)
(60,638)
(22,808)
(86)
(481)
(8,794)

112,015
9,586
(376,707)
(13,508)
51,044
(495,212)

(712,782)

467,717
(199,570)
(81,305)
(30,431)
(829)
(841)
55

18,283
47,617
(22,404)

247,128

212,064
2,805
(407,692)
(82,898)
(41,367)
(5,614)

(322,702)

190,524
(283,013)
187,321
(46,406)
(715)
(1,138)
—

(51,647)
27,018
(3,536)

(16,011)

210,653
4,035
(477,720)
(29,609)
(43,399)
732

(335,308)

337,415
(275,976)
469,026
(50,350)
(1,318)
(345)
—

(92,324)

(235,298)

154,796

46,573

478,452

5,623

13,175

34,903

(31,662)

(31,989)

Net cash provided by (used in) operating activities

305,533

501,426

561,474

Net Increase (Decrease) in Cash and

Cash Equivalents

(24,274)

Cash and Cash Equivalents at Beginning of Year

319,277

(24,082)

295,003

38,391

270,921

(60,663)

309,312

95,144

248,649

Cash and Cash Equivalents at End of Year

¥295,003

¥270,921

¥309,312

¥248,649

¥343,793

Supplemental Disclosure of Cash Flow Information:

Cash paid during the year for—

Interest
Income taxes

¥ 21,761
¥ 38,539

¥ 24,538
¥ 62,925

¥ 30,892
¥ 59,272

¥ 40,356
¥107,431

¥ 35,004
¥140,923

*Includes the acquisition of Westinghouse Group in the amount of ¥461,338 million.

Industry Segment Performance

Year ended March 31
Digital Products

2005 Change (%)

2006 Change (%)

2007 Change (%)

2008 Change (%)

2009 Change (%)

(Billions of yen)

Net sales
Share of net sales (%)
Operating income (loss)
Operating income ratio (%)

¥2,224.2
35.1
7.3
0.3

Number of employees (Thousands)
R&D expenditures
Depreciation
Capital expenditures
Total assets

Electronic Devices

Net sales
Share of net sales (%)
Operating income (loss)
Operating income ratio (%)

Number of employees (Thousands)
R&D expenditures
Depreciation
Capital expenditures
Total assets

Social Infrastructure

Net sales
Share of net sales (%)
Operating income
Operating income ratio (%)

Number of employees (Thousands)
R&D expenditures
Depreciation
Capital expenditures
Total assets

Home Appliances

Net sales
Share of net sales (%)
Operating income (loss)
Operating income ratio (%)

Number of employees (Thousands)
R&D expenditures
Depreciation
Capital expenditures
Total assets

Others

Net sales
Share of net sales (%)
Operating income
Operating income ratio (%)

Number of employees (Thousands)
R&D expenditures
Depreciation
Capital expenditures
Total assets

43
101.7
32.6
36.5
966.1

1,307.2
20.7
92.5
7.1

33
164.5
132.7
239.3
1,271.0

1,765.3
27.9
48.6
2.8

54
61.7
34.6
36.6
1,493.2

661.0
10.4
(3.3)
(0.5)

22
19.0
18.0
22.0
390.2

371.6
5.9
9.8
2.7

13
1.1
23.5
8.1
515.4

10.7
—
—
—

2.4
7.4
(8.3)
(24.9)
10.7

1.8
—
(20.9)
—

(5.7)
4.9
18.0
75.8
2.4

3.0
—
(17.1)
—

50.0
(0.8)
(8.1)
32.4
(2.4)

3.7
—
—
—

22.2
3.0
(3.9)
13.9
4.9

(21.4)
—
(47.7)
—

(56.7)
(75.0)
(47.1)
(64.9)
7.5

¥2,536.5
36.9
20.9
0.8

14.0
—
187.1
—

¥2,805.5
36.6
15.8
0.6

45
108.3
32.1
44.2
1,092.1

1,388.1
20.2
123.3
8.9

33
174.5
148.0
239.5
1,323.7

1,882.3
27.4
76.5
4.1

57
70.9
35.0
44.1
1,578.0

687.5
10.0
2.7
0.4

25
17.7
16.6
27.4
400.8

379.8
5.5
18.0
4.7

12
1.0
22.5
7.7
442.4

4.7
6.5
(1.5)
21.2
13.0

6.2
—
33.3
—

0.0
6.1
11.6
0.0
4.1

6.6
—
57.6
—

5.6
14.9
1.1
20.4
5.7

4.0
—
—
—

13.6
(6.5)
(7.8)
24.5
2.7

2.2
—
82.1
—

(7.7)
(12.2)
(4.3)
(4.2)
(14.2)

46
118.5
42.5
40.5
1,242.6

1,657.3
21.6
119.7
7.2

35
174.2
169.1
269.7
1,449.8

2,067.7
27.0
96.8
4.7

67
82.2
41.8
58.8
2,385.3

748.9
9.8
9.7
1.3

27
18.7
18.3
24.7
438.8

391.6
5.1
18.7
4.8

16
0.4
21.2
16.1
479.2

10.6
—
(24.3)
—

2.2
9.4
32.5
(8.3)
13.8

19.4
—
(2.9)
—

6.1
(0.2)
14.3
12.6
9.5

9.9
—
26.4
—

17.5
16.0
19.4
33.4
51.2

8.9
—
257.0
—

8.0
5.5
9.9
(9.8)
9.5

3.1
—
4.2
—

33.3
(66.1)
(5.8)
108.5
8.3

¥2,951.2
35.7
15.0
0.5

49
118.3
38.5
37.5
1,290.4

1,738.5
21.0
74.1
4.3

35
166.2
229.5
367.4
1,552.8

2,419.0
29.3
131.3
5.4

70
88.3
59.9
67.7
2,338.0

774.3
9.4
3.9
0.5

28
19.2
22.7
20.0
439.0

381.9
4.6
23.0
6.0

16
1.3
29.6
9.4
379.3

5.2
—
(4.6)
—

6.5
(0.2)
(9.5)
(7.4)
3.9

4.9
—
(38.1)
—

0.0
(4.6)
35.7
36.2
7.1

17.0
—
35.7
—

4.5
7.4
43.3
15.2
(2.0)

3.4
—
(59.6)
—

3.7
2.7
24.1
(19.1)
0.0

(2.5)
—
22.7
—

0.0
370.1
39.7
(41.5)
(20.8)

¥2,467.5
34.3
(14.2)
(0.6)

48
102.2
33.3
39.4
954.9

1,324.9
18.4
(323.2)
(24.4)

35
168.8
210.0
266.9
1,437.9

2,396.2
33.3
113.2
4.7

74
88.7
62.6
105.8
2,427.5

674.3
9.4
(27.1)
(4.0)

27
18.2
28.7
18.5
385.2

(16.4)
—
—
—

(2.0)
(13.6)
(13.5)
5.0
(26.0)

(23.8)
—
—
—

0.0
1.6
(8.5)
(27.3)
(7.4)

(0.9)
—
(13.7)
—

5.7
0.4
4.5
56.3
3.8

(12.9)
—
—
—

(3.6)
(5.4)
26.5
(7.6)
(12.2)

334.3
4.6
0.5
0.2

15
0.4
15.2
22.2
321.6

(12.5)
—
(97.7)
—

(6.3)
(70.2)
(48.7)
135.0
(15.2)

Geographic Segment Performance

2005

2006

2007

2008

¥5,015.3
2,783.6
1,355.2
765.3
596.9
66.2
(1,962.8)
5,836.1

112.8
42.1
20.5
15.6
5.1
0.9
(0.1)
154.8

¥5,464.4
3,147.9
1,521.4
888.5
658.7
79.3
(2,268.8)
6,343.5

191.9
48.4
22.1
18.1
6.1
2.1
0.3
240.6

¥5,993.1
3,680.0
1,724.1
1,028.4
830.2
97.3
(2,556.7)
7,116.4

204.1
44.4
26.1
7.8
7.2
3.3
9.9
258.4

¥6,141.8
4,216.5
1,855.3
1,208.2
1,039.5
113.5
(2,693.0)
7,665.3

161.2
74.6
37.6
7.6
25.6
3.8
10.6
246.4

(Billions of yen)
2009

¥5,346.3
3,703.6
1,582.0
1,112.0
894.1
115.5
(2,395.4)
6,654.5

(315.5)
49.7
21.3
17.8
6.1
4.5
15.6
(250.2)

Year ended March 31
Net Sales
Japan
Overseas
Asia
North America
Europe
Other
Eliminations
Consolidated

Operating Income (Loss)

Japan
Overseas
Asia
North America
Europe
Other
Eliminations
Consolidated

Long-term Debt

March 31
Loans, principally from banks and insurance companies,

due 2008 to 2029 with weighted-average interest rate of 1.29% at March 31, 2008 and
due 2009 to 2029 with weighted-average interest rate of 1.40% at March 31, 2009

Unsecured yen bonds, due 2008 to 2016 with interest ranging

from 1.08% to 2.30% at March 31, 2008 and due 2010 to 2016
with interest ranging from 1.20% to 2.20% at March 31, 2009
Zero Coupon Convertible Bonds with stock acquisition rights:
Due 2009 convertible at ¥587 per share at March 31, 2009
Due 2011 convertible at ¥542 per share at March 31, 2009

Euro yen medium-term notes, due 2008 with interest

rate of 2.34% at March 31, 2008

Euro yen medium-term notes of subsidiaries, due 2008 to 2015 with interest ranging
from 0.77% to 2.60% at March 31, 2008 and due 2009 to 2014 with interest ranging
from 0.60% to 2.60% at March 31, 2009

Euro medium-term note of a subsidiary, due 2008 with interest rate

of 4.41% at March 31, 2008

Capital lease obligations

Less-Portion due within one year

(Millions of yen)

2008
¥ 4,268
¥532,352

2009
254
¥
¥715,577

Secured
Unsecured

213,307

130,000

41,430
95,310
1,000

58,881

7,938

48,646
1,003,132
(262,422)
¥740,710

41,420
95,010
—

23,586

—

56,834
1,062,681
(285,913)
¥776,768

The aggregate annual maturities of long-term debt, excluding those of capital lease obligations, are as follows:

(As of March 31) (Millions of yen)

Year ending March 31
2009
2010
2011
2012
2013
2014 and thereafter
2014
2015 and thereafter
Total

2008
¥ 246,675
227,674
177,452
116,731
126,051
59,903
—
—
¥ 954,486

2009
—
273,189
187,114
193,210
127,390
—
133,379
91,565
¥1,005,847

For more information on corporate bonds and ratings, please visit our IR web site at
http://www.toshiba.co.jp/about/ir/en/stock/bond.htm

Organization Chart

Board of Directors

Nomination
Committee

Audit
Committee

Compensation
Committee

President & Chief Executive Officer

Audit Committee
Office

> Innovation Div.

> Information &

> Legal Affairs

> Export

Security Group

Group

Control Group

> Legal Affairs

> Export Control

Div.

> Corporate
Alliances &
Legal Div.

> Quality Div.

> Quality

> Information

Systems Center

Promotion Office

> Information

Security Center

> Corporate Social
Responsibility Div.

> CSR

Implementation
Office

> External Relations

Div.

> Human

Resources
Group

> Finance &

Accounting
Group

> Finance &

Accounting
Div.
> Internal
Control
Promotion Div.

> Human

Resources &
Administration
Div.

> Employee

Wellness Div.

> Diversity

Development
Div.
> Toshiba
General
Hospital

(In-house Companies)
Digital Products Group

Electronic Devices & Components Group

> Digital Media
Network
Company

> Personal

Computer &
Network Company

> Semiconductor

Company

> Display Devices
& Components
Control Center

> Storage Device Div.
> TV & Visual Media
Equipment Div.
> Optical Imaging

System Div.
> Digital AV Div.
> Core Technology

Center

> Ome Operations
- Digital Media

Network

> Fukaya Operations

> Personal

Computer Div.
- Japan & Asia
Operations

> Personal

Computer Div.
- America, EMEA &

Oceania
Operations
> Server & Network

Div.

> PC Development

Center

> Global Production

& Logistics
Management
Center

> Ome Complex

> Discrete

Semiconductor
Div.
> Himeji Operations
- Semiconductor

> Kitakyushu Operations

> System LSI Div.

> Oita Operations
> Microelectronics Center

> Memory Div.

> Yokkaichi Operations
> Electronic Devices Sales &

Marketing Div.

> Process & Manufacturing

Engineering Center

> Center For Semiconductor
Research & Development

> Mobile

Communications
Company

> Hino Operations

> Corporate Audit Div.

> Strategic Planning &

Communications Group

> Corporate Representatives

> Corporate Strategic Planning Div.

America, Europe, Asia, China

> Regional Business Strategy Div.

> Corporate Communications Office

> Procurement &

Logistics
Group

> Corporate

Procurement
Div.

> Logistics
Planning
Office

> Productivity &
Environment
Group

> Technology &
Intellectual
Property Group

> Corporate

Productivity
Planning Div.

> Corporate

Environment
Management Div.

> Corporate

Manufacturing
Engineering
Center
> Yokohama
Complex

> Himeji

Operations

> Technology
Planning Div.

> Intellectual
Property Div.

> Corporate
Research &
Development
Center
> Corporate
Software
Engineering
Center

> Marketing
Group

> Marketing

Planning Div.

> Customer

Satisfaction Div.
> Corporate Sales &
Marketing Div.

> Global Marketing Div.
[Overseas Offices]
> Moscow
> Johannesburg
> Baghdad
> Advertising Div.
> Design Center

Infrastructure Systems Group

> Automotive

Systems Div.

> Network

Services Div.

> New Lighting
Systems Div.

> Power Systems

Company

> Transmission
Distribution &
Industrial
Systems
Company

> Transmission &
Distribution
Systems Div.

> Industrial

Systems Div.
> Transportation
Systems Div.

> Fuchu

Complex

> Nuclear Energy

Systems &
Services Div.
> Isogo Nuclear

Engineering Center
> WEC Coordination Div.
> Thermal & Hydro
Power Systems &
Services Div.

> Power and Industrial
Systems Research and
Development Center

> Keihin Product
Operations

> Hamakawasaki
Operations

> Mie

Operations

> Social

Infrastructure
Systems
Company

> Infrastructure
Systems Div.
> Environmental
Systems Div.
> Broadcasting &

Network
Systems Div.

> Defense &
Electronic
Systems Div.

> Security &

Automation
Systems Div.

> Komukai

Operations

(As of July 1, 2009)

Consolidated Subsidiaries/Affiliated Companies Accounted for by the Equity Method

Consolidated Subsidiaries

D O M E S T I C
• Harison Toshiba Lighting Corporation
• Iwate Toshiba Electronics Co., Ltd.
• Joint Fuel Co., Ltd.
• Kaga Toshiba Electronics Corporation
• Mobile Broadcasting Corporation
• Nishishiba Electric Co., Ltd.*
• NuFlare Technology, Inc.*
• Toshiba Capital Corporation
• Toshiba Carrier Corporation
• Toshiba Consumer Electronics Holdings
Corporation
• Toshiba Consumer Marketing Corporation
• Toshiba Denzai Marketing Co., Ltd.
• Toshiba Device Corporation
• Toshiba Elevator and Building Systems Corporation
• Toshiba Home Appliances Corporation
• Toshiba Home Technology Corporation
• Toshiba Industrial Products Sales Corporation
• Toshiba Information Equipments Co., Ltd.
• Toshiba Lighting & Technology Corporation
• Toshiba Logistics Corporation
• Toshiba Matsushita Display Technology Co., Ltd.
• Toshiba Medical Systems Corporation
• Toshiba Plant Systems & Services Corporation*
• Toshiba Solutions Corporation
• Toshiba TEC Corporation*
• Toshiba Trading Inc.
• A&T Battery Corporation
239 companies in total including the above 27.

*Listed company in stock markets

O V E R S E A S

D O M E S T I C

Affiliated Companies Accounted
for by the Equity Method

• Flash Alliance, Ltd.
• Flash Partners, Ltd.
• Ikegami Tsushinki Co., Ltd.*
• NEC Toshiba Space Systems, Ltd.
• NREG Toshiba Building Co., Ltd.
• Shibaura Mechatronics Corporation*
• Topcon Corporation*
• Toshiba Finance Corporation
• Toshiba Housing Loan Service Corporation
• Toshiba Machine Co., Ltd. *
• Toshiba Medical Finance Co., Ltd.
• Toshiba Mitsubishi-Electric Industrial Systems
Corporation
79 companies in total including the above 12.

*Listed company in stock markets

O V E R S E A S
• Guangdong Midea Air-Conditioning Equipment
Co., Ltd.
• Guangdong Midea Group Wuhu Air-Conditioning
Epuipment Co., Ltd
• Guangdong Meizhi Compressor Ltd.
• Henan Pinggao Toshiba High-voltage Switchgear
Co., Ltd.
• MOD Systems Incorporated
• Semp Toshiba Amazonas S.A.
• TM GE Automation Systems L.L.C.
• Toshiba Carrier (Thailand) Co., Ltd.
120 companies in total including the above 8.

(As of March 31, 2009)

• AFPD Pte., Ltd.
• Changzhou Toshiba Transformer Co., Ltd.
• Dalian Toshiba Television Co., Ltd.
• Harison Toshiba Lighting (Kunshan) Co., Ltd.
• Northern Virginia Semiconductor L.L.C.
• Taiwan Toshiba International Procurement
Corporation
• TBR
• Toshiba (China) Co., Ltd.
• Toshiba America Business Solutions, Inc.
• Toshiba America Capital Corporation
• Toshiba America Consumer Products, L.L.C.
• Toshiba America Electronic Components, Inc.
• Toshiba America Information Systems, Inc.
• Toshiba America Medical Systems, Inc.
• Toshiba America MRI, Inc.
• Toshiba America Nuclear Energy Corp
• Toshiba America, Inc.
• Toshiba Capital (Asia) Ltd.
• Toshiba Consumer Products (Thailand) Co., Ltd.
• Toshiba Dalian Co., Ltd.
• Toshiba Electronics Asia, Ltd.
• Toshiba Europe GmbH
• Toshiba HA Manufacturing (Nanhai) Co., Ltd.
• Toshiba Hydro Power (Hangzhou) Co., Ltd.
• Toshiba Information Equipment (Philippines), Inc.
• Toshiba Information Systems (UK) Ltd.
• Toshiba Information, Industrial and Power Systems
Taiwan Corporation
• Toshiba International Corporation
• Toshiba International Finance (UK) Plc.
• Toshiba JSW Turbine and Generator Private Ltd.
• Toshiba Medical Systems Europe B.V.
• Toshiba Nuclear Energy Holdings (UK) Ltd.
• Toshiba Nuclear Energy Holdings (US) Inc.
• Toshiba Samsung Storage Technology Korea
Corporation
• Toshiba Semiconductor (Wuxi) Co., Ltd.
• Toshiba Systèmes (France) S.A.
• Toshiba TEC Europe Imaging Systems S.A.
• Toshiba TEC France Imaging Systems S.A.
• Toshiba TEC U.K. Imaging Systems Ltd.
• Toshiba Television Central Europe Sp. z o. o.
• Toshiba Transmission and Distribution Brazil Ltd.
• TSB Nuclear Energy Investment UK Ltd.
• TSB Nuclear Energy Investment US Inc.
• Westinghouse Electric Company L.L.C.
298 companies in total including the above 44.

Stock/Shareholders Information

Common Stock Price Trends

Year ended March 31
Common stock price (¥, fiscal year)

High

Low

Nikkei average (¥)

Number of shares issued (Millions of shares)

Market capitalization (¥ Billion)

Earnings per share—Basic (EPS) (¥)

Earnings per share—Diluted (EPS) (¥)

Annual dividends per share (¥)

Payout ratio (%) (Consolidated)

Number of shareholders

Price-to-earnings ratio (PER) (Times)

Price-to-cash flows ratio (PCFR) (Times)

Price-to-book value ratio (PBR) (Times)

2005

2006

2007

2008

2009

576

379

815

416

842

652

1,185

649

953

204

11,668.95

17,059.66

17,287.65

12,525.54

8,109.53

3,219

1,442.1

14.32

13.52

34.9

479,808

31.3

5.0

1.8

3,219

2,201.8

24.32

22.44

6.5

26.7

454,849

28.13

6.6

2.2

3,219

2,533.4

42.76

39.45

25.7

411,723

18.41

5.9

2.3

3,237

2,155.9

39.46

36.59

30.4

375,115

16.88

4.2

2.1

3,238

822.4

(106.18)

—

462,649

—

132.5

1.8

Note: Common stock price is based on the Tokyo Stock Exchange, Inc. market quotation.

Distribution of Shareholders

(Percentage of total voting rights)

March 31

2005

2006

2007

2008

2009

Individuals and others in Japan 39.2% 35.9% 31.2% 27.3%

39.4%

Overseas investors

Companies in Japan

18.1

2.9

Securities companies in Japan 0.7

22.3

25.0

24.6

14.9

2.7

1.4

2.7

1.7

4.1

1.0

4.9

1.2

Financial institutions in Japan 39.1

37.7

39.4

43.0

39.6

(%)
100

39.2

35.9

31.2

27.3

18.1
2.9
0.7

39.1

22.3

2.7
1.4

37.7

25.0

2.7
1.7

39.4

24.6

4.1
1.0

43.0

39.4

14.9
4.9
1.2

39.6

2005

2006

2007

2008

2009

Major Shareholders

Japan Trustee Service Bank, Limited (trust accounts No. 4G)

The Master Trust Bank of Japan, Limited (trust accounts)

The Dai-ichi Mutual Life Insurance Company

Nippon Life Insurance Company

Japan Trustee Service Bank, Limited (trust accounts)

Toshiba Employees Stocks Ownership Plan

NIPPONKOA Insurance Company, Limited

Japan Trustee Service Bank, Limited (trust accounts 4)

Sumitomo Mitsui Banking Corporation

Mizuho Corporate Bank, Limited

(As of March 31, 2009)

Percentage of
total voting rights
5.5%

5.5

3.6

3.4

3.1

1.7

1.6

Corporate History

Governance structure

Significant events

1875

Hisashige Tanaka opened a telegraph equipment factory
(later Shibaura Engineering Works Co., Ltd.) in Shinbashi, Tokyo.

1890 Ichisuke Fujioka and Shoichi Miyoshi established Hakunetsusha & Co.,

Ltd. (later Tokyo Electric Company), in Kyobashi, Tokyo.

1939

Tokyo Electric Company merged with Shibaura Engineering Works
Co., Ltd. and established Tokyo Shibaura Electric Co., Ltd.

1978

Released the first Japanese word processor.

Changed name to Toshiba Corporation.

1985

Developed 1Mb DRAM.

Introduced the world’s first laptop PC.

1991

Developed 4Mb NAND flash EEPROM.

1995

Developed the DVD high-density optical disc.

1998

1999

2000 Released SD Card and 1.8-inch HDD.

2001

Released “01 Action Plan. ”

Commercialized the world’s first HDD/DVD video recorder.

Commenced joint development of Cell, the next-generation
processor, with Sony Computer Entertainment Inc. and IBM
Corporation.

2002 Withdrew from commodity DRAM business.

Formed a company for LCDs.

2003 Home Appliances, IT-Solutions and Medical Systems businesses

transferred and integrated with subsidiaries.

2004 Joined the United Nations’ Global Compact.

Developed the world’s smallest direct methanol fuel cell (DMFC).

Released a 64 multi-slice CT system.

2006 Westinghouse Group joined the Toshiba Group.

2007 Shipped steam turbines with cumulative total output of 150GW.

Developed 320 slices Dynamic Volume CT system which can capture
complete image of the heart or brain in only one rotation.

Achieved cumulative output of 200 million HDDs.

2008 Developed 32Gb NAND flash memory.

Achieved cumulative sales of 70 million notebook PCs.

Announced “Action Programs to Improve Profitability.”

Introduced corporate
executive officer system.

Introduced in-house
company system.

Adopted the Company
with Committees system
and introduced Corporate
Social Responsibility
Division.

Introduced Takeover
Defensive Measures.

Corporate Data

As of March 31, 2009

Headquarters: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1, Shibaura 1-chome, Minato-ku, Tokyo, Japan

Founded:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 1875

Number of Employees:

. . . . . . . . . . . . . . . . . . . . . . Approx. 199,000 (consolidated)

Fiscal Year: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 1 to March 31

Authorized Number of Shares: . . . . . . . . . . . . . . . 10 billion shares

Number of Shares Issued: . . . . . . . . . . . . . . . . . . . . 3,237,602,026 shares

Number of Shareholders: . . . . . . . . . . . . . . . . . . . . 462,649

Stock Exchange Listings: . . . . . . . . . . . . . . . . . . . . . Tokyo, Osaka, Nagoya, London

ISIN: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JP359 2200004

Ticker Code on the Tokyo Stock Exchange: . . 6502
Shareholder Registration Agent: . . . . . . . . . . . . . The Chuo Mitsui Trust and Banking Company, Limited

For further information, please contact: . . . . . . Investor Relations Group

Corporate Communications Office

Toshiba Corporation

1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan

Phone: +81-3-3457-2096

Facsimile: +81-3-5444-9202

E-mail: ir@toshiba.co.jp

http://www.toshiba.co.jp/about/ir/index.htm

INVESTOR RELATIONS

http://www.toshiba.co.jp/about/ir/index.htm

Toshiba Corporation makes every effort to provide shareholders and investors with
reliable information in a timely manner, and toward this we make full and proactive
use of the Internet in our IR activities. On our investor relations site we publish a
wide range of resources, including news releases, information for shareholders, our
statements of accounts, and explanations of our business results, as well as videos
and other materials related to business information meetings. The site also supports
interactive communication, allowing investors to ask questions and offer opinions
that will help us to improve the quality of our IR activities.

FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements concerning Toshiba’s future plans, strategies, and performance. These forward-
looking statements are not historical facts, rather they represent assumptions and beliefs based on economic, financial, and
competitive data currently available. Furthermore, they are subject to a number of risks and uncertainties that, without limitation, relate
to economic conditions, worldwide megacompetition in the electronics business, customer demand, foreign currency exchange rates,
tax rules, regulations, and other factors. Toshiba therefore wishes to caution readers that actual results may differ materially from our
expectations.
Product names may be trademarks of their respective companies.

TOSHIBA CORPORATION

2009

FINANCIAL REVIEW

Annual Report 2009 • Financial Review

Management’s Discussion and Analysis

Five-year Summary

Toshiba Corporation and Subsidiaries
Years ended March 31

Net sales
Cost of sales
Selling, general and administrative expenses (Note 1)
Operating income (loss) (Note 2)
Income (loss) from continuing operations, before income
taxes and minority interest
Income taxes
Net income (loss)

Millions of yen,
except per share amounts

2009
¥6,654,518
5,366,087
1,538,617
(250,186)

2008
¥7,665,332
5,756,603
1,662,336
246,393

2007
¥7,116,350
5,312,179
1,545,807
258,364

2006
¥6,343,506
4,659,795
1,443,101
240,610

2005
¥5,836,139
4,296,572
1,384,760
154,807

(279,252)
54,323
(343,559)

265,049
113,375
127,413

327,131
157,024
137,429

182,329
91,832
78,186

115,007
57,480
46,041

Per share of common stock:
Net income (loss) (Note 3)

—Basic
—Diluted
Cash dividends

¥ (106.18)
(106.18)
5.00

39.46
36.59
12.00

42.76
39.45
11.00

24.32
22.44
6.50

14.32
13.53
5.00

Total assets
Shareholders’ equity
Capital expenditures (Property, plant and equipment)
Depreciation (Property, plant and equipment)
R&D expenditures
Number of employees

¥5,453,225
447,346
357,111
308,737
378,261
199,000

¥5,935,637
1,022,265
465,044
340,852
393,293
198,000

¥5,931,962
1,108,321
375,335
259,882
393,987
191,000

¥4,727,113
1,002,165
338,800
228,637
372,447
172,000

¥4,571,412
815,507
318,394
215,844
348,010
165,000

Notes: 1) ¥4,085 million and ¥4,836 million of “Subsidy received on return of substitutional portion of Employees' Pension Fund Plan, net of settlement loss of ¥5,045 million in 2006 and ¥7,992

million in 2005” are classified as a reduction of selling, general and administrative expenses for the fiscal years ended March 31, 2006 and 2005, respectively.

2) Operating income (loss) presented hereinafter is, in accordance with accounting practices in Japan, derived from a value that deducts the cost of sales and selling, general and adminis-

trative from net sales, allowing comparison with that of other companies in Japan. Some items which are classified as operating income (loss) under U.S.GAAP may be presented as non-
operating income (loss).

3) Basic net income (loss) per share (EPS) is computed based on the weighted-average number of shares of common stock outstanding during each period.

Diluted EPS assumes the dilution that could occur if convertible bonds were converted or stock acquisition rights were exercised to issue common stock, unless their inclusion would
have an antidilutive effect.

4) Beginning with the fiscal year ended March 31, 2006, equity in earnings (losses) of affiliates has been included in income (loss) before income taxes and minority interest. Prior-period

data for the fiscal years ended March 31, 2005 has been reclassified to conform with the current classification.

5) Beginning with the fiscal year ended March 31, 2009, operating results of The Mobile Broadcasting business are accounted for in accordance with SFAS No.144 “Accounting for the

Impairment or Disposal of Long-Lived Assets” where the business is reclassified as discontinued operation in the consolidated financial statements. Prior-period data for the fiscal years
ended from March 31, 2005 through 2008 has been reclassified to conform with the current classification.

2. Management’s Discussion and Analysis 20. Consolidated Balance Sheets 22. Consolidated Statements of Income

23. Consolidated Statements of Shareholders’ Equity 24. Consolidated Statements of Cash Flows

25. Notes to Consolidated Financial Statements 55. Report of Independent Auditors

SCOPE OF CONSOLIDATION

As of the end of March 2009, Toshiba Group comprised Toshiba Corporation and 537 consolidated subsidiaries and its
operating segments were in the Digital Products, Electronic Devices, Social Infrastructure, Home Appliances and Others.

122 consolidated subsidiaries were involved in Digital Products, 59 in Electronic Devices, 217 in Social Infrastructure, 71

in Home Appliances and 68 in Others.

The number of consolidated subsidiaries was 13 less than at the end of March 2008.
199 affiliates were accounted for by the equity method as of the end of March 2009.

RESULTS OF OPERATIONS

NET SALES AND NET INCOME (LOSS)
In the latter half of FY2008, the global economy worsened rapidly as the subprime loan crisis in the United States became a
full-blown global financial crisis that started to impact significantly on the real economy from the third quarter. Europe,
which had been relatively healthy, joined the United States by falling into recession, and the economies of China and other
parts of Asia, which had enjoyed continuing expansion, also slowed dramatically. As a result, the global economy is caught in
an extensive recession.

The Japanese economy also went into recession, and is in an extremely severe condition characterized by substantial
declines in exports and capital spending, a sharp downturn incorporate profits, rapidly worsening employment and shrunken
consumer spending.

In these circumstances, Toshiba Group addressed the need to secure profit on acompany-wide basis. However, consoli-
dated sales in FY2008 were 6,654.5 billion yen, a decrease of 1,010.8 billion yen. This result was strongly influenced by the
shrinkage of the overall market caused by the fast-spreading global recession, steeper than expected declines in semiconduc-
tor prices, and by yen’s sharp appreciation.

Consolidated operating income (loss) worsened by 496.6 billion yen to -250.2 billion yen. Electronic Devices, particularly
in the Semiconductor business, Digital Products, Home Appliances and Others, all saw significant income deterioration,
although Social Infrastructure maintained a high level of profit. Income (loss) from continuing operations, before income
taxes and minority interest worsened by 544.3 billion yen to -279.3 billion yen. This difference resulted mainly from a
decrease in non-operating profit plus a loss from a write-down of securities. Net income (loss) worsened by 471.0 billion yen
to -343.6 billion yen, which reflected such factors as a drawdown in deferred tax assets.

Taking these situations into consideration, we have raised 319.2 billion yen through issuance of new shares by way of pub-
lic offering and third-party allotment accompanying secondary offering for over-allotment and issued 180.0 billion yen unse-
cured subordinated bonds in order to raise funds for future capital expenditures and improve our financial position.

KEY PERFORMANCE INDICATORS
Following are the key performance indicators (“KPIs”) that the Management of the Group uses in managing its business.

The Company executes proactive managements, including strategic allocation of resources grounded in the Group strategy
of achieving sustained growth with profit. For such perspective, growth of sales is indispensable and accordingly net sales is
one such KPI. Another KPI is operating income ratio (ratio of operating income to net sales) because growth is not sustain-
able without adequate profit. Also, return on equity (ROE) is KPI.

Active capital investment and R&D activity is indispensable for growth of the Group and accordingly capital expenditure
and R&D expenditure are KPIs. Also, it is important to maintain a stable financial base for active capital expenditure and
R&D, and accordingly shareholders’ equity ratio (ratio of total shareholders’ equity to total assets) and debt-to-equity ratio
are other KPIs for the Company.

Year ended March 31
Net sales
Operating income ratio (%)
Return on equity (ROE) (%)
Shareholders’ equity ratio (%)
Debt/equity ratio (%)
Capital expenditures (Note)
R&D expenditures

(Note) Capital expenditure is on an ordering amount basis.

2009
6,654.5
(3.8)
(46.8)
8.2
405
425.2
378.3

Billions of yen

2008
7,665.3
3.2
12.0
17.2
123
618.9
393.3

Management’s Discussion and Analysis

As described in NET SALES AND NET INCOME (LOSS) above, consolidated sales, consolidated operating income
(loss) and Net income (loss) worsened, and this resulted in negative operating income ratio and ROE, -3.8% and -46.8%
respectively.

Total assets decreased by ¥482.4 billion from the end of March 2008 to ¥5,453.2 billion. Shareholders’ equity decreased by
¥575.0 billion to ¥447.3 billion from the end of March 2008, largely reflecting the net loss of ¥343.6 billion, and the ¥195.8
billion decrease in accumulated other comprehensive income (loss) resulting from a reduction in the pension liability adjust-
ment in a sluggish stock market, and foreign currency translation adjustment due to appreciation of the yen, etc. As a result,
shareholders’ equity ratio decreased by 9-points to 8.2%. Total debt increased by ¥549.7 billion from the end of March 2008
to ¥1,810.7 billion, mainly as a result of negative free cash flow. As a result of the foregoing, the debt-to-equity ratio as of the
end of March 2009 was 405%, a 282-point worsening from the end of March 2008.

In June 2009, Toshiba increases its capital through a public offering of one billion shares. Mainly as a result of forgoing,

total equity ratio at the end of June 2009 is 19.9% and the debt-to-equity ratio at the end of June 2009 is 133%.

Total equity ratio (%)
Debt/equity ratio (%)

June 30, 2009
19.9
133

(Note) Following the adoption of SFAS No. 160, “Noncontrolling Interests in Consolidated Financial

Statements, an amendment of ARB No. 51” effective April 1, 2009, total equity presents the

aggregate sum of equity attributable to shareholders of the Company and equity attributable

to noncontrolling interests (previously presented as “minority interest in consolidated sub-

sidiaries”). Total equity ratio and the debt-to-equity ratio at the end of June 2009 are derived

from the abovementioned aggregate sum of total equity. If same method is applied, total

equity ratio and the debt-to-equity ratio at the end of March 2009 will be 13.9% and 238%,

respectively.

Shareholders’ equity ratio at the end of June 2009 is 13.8%.

Due to rapid global economic recession, initial plan of capital investments were reduced by more rigorous selection of
investments projects. As a result, capital investments in FY2008 were ¥425.2 billion, which was reduced by ¥230.8 billion
from initial plan. In the Electronic Devices segment, capital investments were reduced by ¥164.5 billion as investment plans
for manufacturing facilities and new manufacture’s building for NAND flash memories and manufacturing facilities for
LCDs were partly revised. The above capital expenditure amount is on an ordering amount basis and includes ¥26.7 billion,
representing the Group’s portion in the investments made by Flash Alliance, Ltd. etc., which are companies accounted for by
the equity method. R&D expenditure also has been reduced by about ¥50.0 billion to ¥378.3 billion against initial budget.

NET SALES BY REGION

Year ended March 31
Japan
Asia
North America
Europe
Others
Net Sales

2009
¥3,230,840
1,188,048
1,082,798
921,097
231,735
¥6,654,518

Millions of yen
2008
¥3,702,474
1,498,045
1,151,932
1,079,485
233,396
¥7,665,332

2007
¥3,599,385
1,412,446
1,057,810
863,224
183,485
¥7,116,350

(Note) These figures are based on geographic location of the market in which sales were recorded, and therefore differ from the segment sales reported on p8, which are based on the location of the distribution

source.

DIVIDEND
The Company, while giving full consideration to such factors as the strategic investments necessary to secure medium- to
long-term growth, seeks to achieve continuous increases in its actual dividend payments, in line with a payout ratio in the
region of 30 percent, on a consolidated basis.

The Company paid a dividend of 5.0 yen per share to shareholders recorded in the shareholders register as of September

30, 2008. However, in light of the current business environment, the company will forgo payment of a year-end dividend.

Projections indicate that the business environment will remain in severe condition throughout FY2009. Toshiba will
announce the dividend for FY2009 as soon as it is determined, in light of various factors, including the recovery trend in
business performance during FY2009.

RESULTS BY INDUSTRY SEGMENT

Year ended March 31
Digital Products
Electronic Devices
Social Infrastructure
Home Appliances
Others
Eliminations
Total

Net Sales

Billions of yen

—
2,467.5
1,324.9
2,396.2
674.3
334.3
–542.7
6,654.5

Change (%)
–16%
–24%
–1%
–13%
–12%
—
–13%

Operating Income (loss)
—
(14.2)
(323.2)
113.2
(27.1)
0.5
0.6
(250.2)

Change
–29.2
–397.3
–18.1
–31.0
–22.5
—
–496.6

DIGITAL PRODUCTS
Digital Products saw overall sales decline by 483.7 billion yen to 2,467.5 billion yen. The Digital Media business saw a signif-
icant sales decline, mainly in TVs, HDDs and optical disc devices, the result of demand declines due to the rapid decline into
global recession and steeper than expected declines in market prices. The Mobile Phone business also saw notably lower sales
due to fewer shipments, the result of the changed handset sales system in Japan. The PC business and the Retail Information
Systems and Office Equipment business also saw lower sales, due to the global recession.

The segment’s operating income (loss) declined by 29.2 billion yen to -14.2 billion yen. While HDDs saw a significant
worsening of profit on lower sales, the Digital Media business saw an improvement in TVs due to reductions in production
costs and fixed costs. The Mobile Phone business saw a notable decline on lower sales. The PC business and the Retail
Information Systems and Office Equipment business also saw notably decreased profit on lower sales.

ELECTRONIC DEVICES
Electronic Devices saw sales decline by 413.6 billion yen to 1,324.9 billion yen. The Semiconductor business, primarily in
memories and system LSIs, experienced a substantial sales slump, the result of steeper than expected price declines in
NAND flash memory, yen appreciation, and weakened demand triggered by the rapid decline into global recession. The
LCD business and the Materials & Components business also saw lower sales.

Segment operating income (loss) deteriorated by 397.3 billion yen to -323.2 billion yen, as the Semiconductor business fell
substantially into the red on lower sales, and the LCD business also saw notably worsening profit from the third quarter on
lower sales.

SOCIAL INFRASTRUCTURE
Social Infrastructure saw sales fall back by 22.8 billion yen to 2,396.2 billion yen. While the Power Systems & Industrial
Systems business increased sales, mainly in nuclear energy systems in overseas markets and in transmission & distribution
systems, the Social Infrastructure Systems business, the Medical Systems business and the IT Solution business all saw sales
decline.

Segment operating income decreased by 18.1 billion yen to 113.2 billion yen. The Power Systems & Industrial Systems
business, the Medical Systems business and the Elevator business maintained high profitability. However, the IT Solutions
business saw substantially lower profit mainly on lower sales, influenced by rapid deterioration in the market environment.

Management’s Discussion and Analysis

HOME APPLIANCES
Home Appliances saw sales decrease by 100.0 billion yen to 674.3 billion yen. The White Goods business, the Lighting busi-
ness and the Air-conditioning business saw significantly lower sales, influenced by the rapid decline into global recession.

Segment operating income (loss) saw sales deteriorate by 31.0 billion yen to -27.1 billion yen. The White Goods business,

the Lighting business and the Air-conditioning business all saw significantly lower profit on lower sales.

OTHERS
Others saw sales fall by 47.6 billion yen to 334.3 billion yen, and operating income fell by 22.5 billion yen to 0.5 billion yen.

The consolidated segment information has been prepared based on Article 15-2 of the Regulations for Consolidated
Financial Statements instead of Statement of Financial Accounting Standards (“SFAS”) No. 131.

Beginning with the fiscal year ended March 31, 2009, operating results of The Mobile Broadcasting business are account-
ed for in accordance with SFAS No.144 “Accounting for the Impairment or Disposal of Long-Lived Assets” where the busi-
ness is reclassified as discontinued operation in the consolidated financial statements. Prior-period data for the fiscal years
ended from March 31, 2008 and 2007 has been reclassified to conform with the current classification.

2009

Millions of yen
2008

2007

Thousands of
U.S. dollars
2009

¥2,376,084
91,440
2,467,524

¥2,845,843
105,343
2,951,186

¥2,720,522
84,968
2,805,490

$24,245,755
933,061
25,178,816

1,264,675
60,239
1,324,914

2,285,596
110,613
2,396,209

651,411
22,834
674,245

76,752
257,546
334,298
(542,672)
¥6,654,518

1,654,842
83,704
1,738,546

2,305,984
113,007
2,418,991

754,091
20,203
774,294

104,572
277,314
381,886
(599,571)
¥7,665,332

1,572,967
84,334
1,657,301

1,991,083
76,583
2,067,666

726,878
22,052
748,930

12,904,847
614,684
13,519,531

23,322,408
1,128,704
24,451,112

6,647,051
233,000
6,880,051

104,900
286,736
391,636
(554,673)
¥7,116,350

783,184
2,628,020
3,411,204
(5,537,469)
$67,903,245

INDUSTRY SEGMENTS

Year ended March 31
Sales:

Digital Products

Unaffiliated customers
Intersegment

Total

Electronic Devices

Unaffiliated customers
Intersegment

Total

Social Infrastructure

Unaffiliated customers
Intersegment

Total

Home Appliances

Unaffiliated customers
Intersegment

Total

Others

Unaffiliated customers
Intersegment

Total
Eliminations
Consolidated

Year ended March 31
Operating income (loss):

Digital Products
Electronic Devices
Social Infrastructure
Home Appliances
Others
Eliminations
Consolidated

Identifiable assets:
Digital Products
Electronic Devices
Social Infrastructure
Home Appliances
Others
Corporate and Eliminations
Consolidated

Depreciation and amortization:

Digital Products
Electronic Devices
Social Infrastructure
Home Appliances
Others
Corporate
Consolidated

Impairment of long-lived assets:

Digital Products
Electronic Devices
Social Infrastructure
Home Appliances
Others
Corporate
Consolidated

Capital expenditures:

Digital Products
Electronic Devices
Social Infrastructure
Home Appliances
Others
Corporate
Consolidated

2009

Millions of yen
2008

¥ (14,202)
(323,216)
113,247
(27,144)
528
601

¥ (250,186)

¥ 954,909
1,437,943
2,427,465
385,240
321,551
(73,883)
¥5,453,225

33,249
210,016
62,575
28,748
15,176
—
¥ 349,764

—
385
17
165
167
—
734

39,387
266,904
105,822
18,497
22,169
—
¥ 452,779

15,059
74,130
131,274
3,912
22,963
(945)
¥ 246,393

¥1,290,442
1,552,752
2,337,972
438,989
379,305
(63,823)
¥5,935,637

38,459
229,539
59,864
22,717
29,581
—
¥ 380,160

16,708
63
134
—
54
—
16,959

37,513
367,368
67,696
20,019
9,432
—
¥ 502,028

2007

15,784
119,750
96,760
9,676
18,721
(2,327)
¥ 258,364

¥1,242,567
1,449,764
2,385,297
438,793
479,155
(63,614)
¥5,931,962

42,493
169,113
41,782
18,307
21,180
—
¥ 292,875

7,921
1
6
216
472
—
8,616

40,526
269,654
58,750
24,744
16,123
—
¥ 409,797

Thousands of
U.S. dollars
2009

$ (144,918)
(3,298,123)
1,155,582
(276,980)
5,388
6,133
$ (2,552,918)

$ 9,743,969
14,672,888
24,770,051
3,931,020
3,281,133
(753,908)
$55,645,153

339,276
2,143,020
638,520
293,347
154,857
—
$ 3,569,020

—
3,929
173
1,684
1,704
—
7,490

401,908
2,723,510
1,079,817
188,745
226,214
—
$ 4,620,194

Management’s Discussion and Analysis

GEOGRAPHIC SEGMENTS

Year ended March 31
Sales:

Japan

Unaffiliated customers
Intersegment

Total

Asia

Unaffiliated customers
Intersegment

Total

North America

Unaffiliated customers
Intersegment

Total

Europe

Unaffiliated customers
Intersegment

Total

Others

Unaffiliated customers
Intersegment

Total
Eliminations
Consolidated

Operating income (loss):

Japan
Asia
North America
Europe
Others
Eliminations
Consolidated

Identifiable assets:

Japan
Asia
North America
Europe
Others
Corporate and Eliminations
Consolidated

2009

Millions of yen
2008

2007

Thousands of
U.S. dollars
2009

¥3,582,690
1,763,589
5,346,279

¥4,100,557
2,041,284
6,141,841

¥4,070,662
1,922,480
5,993,142

$36,558,061
17,995,806
54,553,867

1,004,980
577,003
1,581,983

1,088,520
23,534
1,112,054

879,464
14,595
894,059

98,864
16,637
115,501
(2,395,358)
¥6,654,518

¥ (315,500)
21,267
17,761
6,137
4,549
15,600
¥ (250,186)

¥3,906,116
699,372
751,503
478,574
49,724
(432,064)
¥5,453,225

1,260,522
594,820
1,855,342

1,187,279
20,958
1,208,237

1,016,175
23,297
1,039,472

100,799
12,654
113,453
(2,693,013)
¥7,665,332

¥ 161,186
37,579
7,619
25,625
3,799
10,585
¥ 246,393

¥4,263,120
762,011
737,911
589,932
42,621
(459,958)
¥5,935,637

1,143,500
580,604
1,724,104

1,002,117
26,230
1,028,347

809,031
21,200
830,231

10,254,898
5,887,786
16,142,684

11,107,347
240,143
11,347,490

8,974,122
148,929
9,123,051

91,040
6,203
97,243
(2,556,717)
¥7,116,350

1,008,817
169,765
1,178,582
(24,442,429)
$67,903,245

¥ 204,089
26,080
7,816
7,248
3,304
9,827
¥ 258,364

$ (3,219,388)
217,010
181,235
62,623
46,418
159,184
$ (2,552,918)

¥4,010,563
835,668
789,392
661,853
77,116
(442,630)
¥5,931,962

$39,858,326
7,136,449
7,668,398
4,883,408
507,388
(4,408,816)
$55,645,153

RESEARCH AND DEVELOPMENT

The Group, based on the policy of enhancing its competitive advantage in the global market through “Process Innovation”
and “Value Innovation,” aims to provide eco-friendly technologies and products that deliver surprises and sensations, and to
promote R&D activities, from fundamental research to product commercialization, through collaboration between
Company-wide staff division for R&D and the R&D facilities of the in-house companies and Group companies. In the fiscal
year ended March 31, 2009, the Group promoted R&D activities for environmental management, based on “Toshiba Group
Environmental Vision 2050.”

Following the rapid deterioration of the business environment triggered by the subprime loan crisis in the United States,
the Group is implementing the “Action Programs to Improve Profitability” that were publicly announced on January 29,
2009. Under the Programs, the Group will restrain R&D expenditure by promoting more rigorous selection of R&D themes
and strategic resource allocation, in order to develop promising growth businesses in such areas as the environment, energy
and data storage. Furthermore, in order to enhance the efficiency of R&D activities, the Group will share intellectual proper-
ty by promoting common platforms and use overseas resources in system development. The Group will create new value
through continuous innovation and contribute to society with cutting-edge technologies.

The Group’s overall R&D expenditure reached ¥378.3 billion in the fiscal year ended March 31, 2009, a reduction of

approximately ¥50.0 billion from the initial plan. Expenditures for each business segment were as follows:

Digital Products
Electronic Devices
Social Infrastructure
Home Appliances
Others

CAPITAL EXPENDITURES

Billions of yen
102.2
168.8
88.7
18.2
0.4

CAPITAL EXPENDITURE OVERVIEW
The Group’s basis strategy stresses proactive managements including the strategic allocation of resources in growing fields
grounded in achieving sustained growth with profit, one pillar of corporate management of the Group. In the term under
review, initial plan of overall capital investments (based on the value of orders placed and including intangible assets; the same
hereafter) were ¥656.0 billion, mainly for the Electronic Devices segment. But due to the rapid global economic recession,
capital investments were reduced by more rigorous selection of investment projects. As a result, capital investments in FY
2008 are ¥425.2 billion, which was reduced by ¥230.8 billion from the initial plan. In the Electronic Devices segment, capital
investments were reduced by ¥164.5 billion as investments plan of manufacturing facilities and new manufacture’s building
for NAND flash memories and manufacturing facilities for LCDs were partly revised.

This capital investment amount includes ¥26.7 billion, which is the Group’s portion of the investments made by Flash
Alliance, Ltd., etc., which are companies accounted for by the equity method. The Group’s capital investments (consolidated
basis) excluding abovementioned investment by Flash Alliance, Ltd., etc., are ¥398.5 billion.

In the Digital Products segment, capital investments totaling ¥39.7 billion were channeled into development and manufac-
turing for PCs, imaging products and HDDs. Major projects completed by the Group in this fiscal year included manufac-
turing facilities for HDDs (at the Ome Complex).

In the Electronic Devices segment, capital investments of ¥248.5 billion (including ¥26.7 billion, which is the Group’s por-
tion of the investments made by Flash Alliance, Ltd., etc., which are companies accounted for by the equity method) were
mainly directed at manufacturing and development of semiconductor products and manufacturing of LCDs. Major projects
completed by the Group in this fiscal year included manufacturing building equipment and power equipment for NAND
flash memories (at the Yokkaichi Operations). Major facilities acquired by the Group in this fiscal year included manufactur-
ing facilities for system LSI (acquired from Sony Corporation, etc.,) and manufacturing facilities for NAND flash memories
(acquired from Flash Alliance Ltd., etc.,).

In the Social Infrastructure segment, capital investments of ¥90.4 billion were made in areas that included enhancement
and renewal of infrastructure for manufacturing. Major projects completed by the Group in this fiscal year included manu-
facturing for innovative rechargeable battery (SCiB™) (at the Saku Sub-Operations of Fuchu Complex).

In the Home Appliances segment, ¥21.4 billion was invested for to development of new models and manufacturing.
Capital expenditures in the Others segment totaled ¥25.2 billion.
In the LCD business, due to stopping or reducing operations of unprofitable lines of Uodu Operations and Fukaya

Management’s Discussion and Analysis

Operations (Toshiba Matsushita Display Technology Co., Ltd., whose trade name was changed to Toshiba Mobile Display
Co., Ltd. on May 25, 2009), parts of its manufacturing facilities were retired and/or sold.

PLANS FOR CONSTRUCTING NEW FACILITIES AND RETIRING EXISTING FACILITIES
At the end of this fiscal year ending March 31, 2009, investment in new facilities and equipment upgrades, including intangi-
ble assets, in FY 2009 and FY 2010 are projected to total 250.0 billion yen and 450.0 billion yen, respectively (based on the
value of orders placed and including intangible assets; hereinafter the same). This figure includes 32.8 billion yen (FY 2009)
and 117.0 billion yen (FY 2010), which is the Toshiba’s portion of the investment made by Flash Alliance, Ltd. and others,
which are companies accounted for by the equity method. The funds for capital expenditures will be financed by the equity
finance, internal funds and borrowings. The funds raised by the equity finance are the proceeds from the public offering on
June 3, 2009 (including the sale of shares to international investors) and the capital increase by way of third-party allotment
on June 23, 2009.

(As of March 31, 2009)

Business Segment

Digital Products
Electronic Devices

Social
Infrastructures

Planned Capital
Investments for
FY 2009
(billion yen)
24.0
98.0

Planned Capital
Investments for
FY 2010
(billion yen)
39.0
240.0

102.0

Home Appliances
Others
Total
(Notes) 1) Consumption taxes are not included in these capital investments.

11.0
15.0
250.0

105.0

25.0
41.0
450.0

Major Contents and Purposes

Manufacturing facilities for HDDs, etc.
Manufacturing facilities for NAND flash memories, etc.
Expansion of investment for nuclear power business, enhance-
ment of overseas manufacturing bases of thermal power busi-
ness and manufacturing facilities for new type rechargeable
battery, etc.
Manufacturing facilities for new lighting, etc.
—
—

2) Retiring material facilities is not planned except for routine renewal of facilities.
3) The major planned new facilities and equipment upgrades in FY 2009 are as follows:

Name of
Company and
Office

Place

Business
Segment

Type of
Facility

Planned
Capital
Investments
(billion yen)

Planned Beginning and
Completion of
Construction
Beginning Completion

Yokkaichi
Operations of
Toshiba

Flash Alliance,
Ltd., etc.

Yokkaichi, Mie

Electronic
Devices

Keihin Product
Operations of
Toshiba

Tsurumi,
Yokohama

Social
Infrastructures

Westinghouse
Electric
Company, etc.

Pennsylvania,
United States,
etc.

Social
Infrastructures

New offices of
Toshiba
(undetermined)

—

Social
Infrastructures

Manufacturing
facilities for
semiconductors

Manufacturing
facilities for
devices for
nuclear,
thermal and
hydroelectric
power

Manufacturing
facilities for
nuclear power
plants and fuel

Manufacturing
facilities for
new type
rechargeable
battery

22.0

April 2009

August 2010

32.8

April 2009

October 2010

12.7

July 2009

March 2012

14.2

April 2009

March 2010

10.4

September
2009

September
2010

(As of March 31, 2009)
Capacity
Improvement
after
Completion
of
Construction

300mm finer
lithography,
etc.

Improvement of
manufacturing
capacity of
devices for
nuclear, thermal
and hydroelec-
tric power, etc.

Improvement of
manufacturing
capacity of
nuclear power
plants and fuel,
etc.

Manufacturing
facilities for new
type recharge-
able battery, etc.

FINANCIAL POSITION AND CASH FLOWS

Total assets decreased by 482.4 billion yen from the end of March 2008 to 5,453.2 billion yen.

Shareholders’ equity decreased by 575.0 billion yen to 447.3 billion yen from the end of March 2008, largely reflecting the
net loss of 343.6 billion yen, and the 195.8 billion yen decrease in accumulated other comprehensive income (loss) resulting
from a reduction in the pension liability adjustment in a sluggish stock market, and foreign currency translation adjustment
due to appreciation of the yen, etc.

Total debt increased by 549.7 billion yen from the end of March 2008 to 1,810.7 billion yen, mainly as a result of negative

free cash flow.

As a result of the foregoing, the debt-to-equity ratio as of the end of March 2009 was 405%, a 282-point worsening from

the end of March 2008.

Free cash flow was minus 351.3 billion yen, a 275.7 billion yen worsening from the same period of the previous year,

reflecting worsened cash flows from operating activities, mainly due to a deterioration in net income (loss).
CASH FLOWS

Cash flows from operating activities decreased by ¥263.1 billion from net cash provided by operating activities of ¥247.1 bil-
lion the previous fiscal year to net cash used in operating activities to ¥16.0 billion in the fiscal year under review.

Cash flows from investing activities increased by ¥12.6 billion from net cash used in investing activities of ¥322.7 billion

the previous fiscal year to net cash used in investing activities of ¥335.3 billion.

Cash flows from financing activities increased by ¥431.9 billion from net cash provided by financing activities of ¥46.6 bil-

lion the previous fiscal year to net cash provided by financing activities of ¥478.5 billion.

The effect of exchange rate movements decreased cash by ¥32.0 billion. After accounting for the aforementioned and other

factors, cash and cash equivalents at the fiscal year-end increased by ¥95.2 billion to ¥343.8 billion.

TREASURY STOCK

Shares held as of the closing
date of last period:
Shares acquired during the
period:

Demand for purchase of shares
less than one unit from
shareholders

Shares disposed during the
period:

Demand for sale of shares
less than one unit from
shareholders

Shares held as of the closing
date of this period:

Aggregate amount of
acquisition costs:

Aggregate amount of
sales value:

1,442,645
(common stock)
1,104,915
(common stock)

610
(million yen)
636,708
(common stock)

265
(million yen)
1,910,852
(common stock)

Management’s Discussion and Analysis

MAJOR SUBSIDIARIES AND AFFILIATED COMPANIES

As of March 31, 2009

Name of Company

Toshiba TEC Corporation
Toshiba America Business Solutions, Inc.
Toshiba Matsushita Display Technology Co., Ltd.
AFPD Pte., Ltd.
Toshiba Plant Systems & Services Corporation
Toshiba Elevator and Building Systems Corporation
Toshiba Solutions Corporation
Toshiba Medical Systems Corporation
Toshiba Nuclear Energy Holdings (US) Inc.
Toshiba Nuclear Energy Holdings (UK) Ltd.
Toshiba America Medical Systems, Inc.
Toshiba Consumer Electronics Holdings Corporation
Toshiba America, Inc.
Toshiba International Finance (UK) Plc.
Toshiba Capital (Asia) Ltd.
Taiwan Toshiba International Procurement Corporation

Voting Rights Ratio (Percentage)
52.9
100.0
60.0
100.0
61.6
80.0
100.0
100.0
67.0
67.0
100.0
100.0
100.0
100.0
100.0
100.0

Location
Shinagawa-ku, Tokyo
U.S.
Minato-ku, Tokyo
Singapore
Ota-ku, Tokyo
Shinagawa-ku, Tokyo
Minato-ku, Tokyo
Otawara
U.S.
U.K.
U.S.
Chiyoda-ku, Tokyo
U.S.
U.K.
Singapore
Taiwan

(Notes) 1. The Company has 537 consolidated subsidiaries (including the above 16 companies) in accordance with Generally Accepted Accounting Standards in the U.S., and 199 affiliated com-

panies accounted for by the equity method. The main affiliated companies accounted for by the equity method are Ikegami Tsushinki Co., Ltd., Shibaura Mechatronics Corporation,
Toshiba Machine Co., Ltd., and Topcon Corporation.

2. On 28 April, 2009, the Company acquired all of shares in Toshiba Matsushita Display Technology Co., Ltd. which was held by Panasonic Corporation and its trade name was changed to

“Toshiba Mobile Display Co., Ltd.”

3. Toshiba Nuclear Energy Holdings (US) Inc. substantially owns all of the equity of Westinghouse Electric Company L.L.C.

Main Places of Business and Facilities of the Company

Segment

Company-wide

Offices

Laboratories
and others

As of March 31, 2009

Major Distribution

Principal Office (Minato-ku, Tokyo), Hokkaido Branch Office (Sapporo), Tohoku
Branch Office (Sendai), Shutoken Branch Office (Saitama), South-Shutoken
Branch Office (Yokohama), Hokuriku Branch Office (Toyama), Chubu Branch
Office (Nagoya), Kansai Branch Office (Osaka), Chugoku Branch Office
(Hiroshima), Shikoku Branch Office (Takamatsu), Kyushu Branch Office (Fukuoka)

Corporate Research & Development Center (Kawasaki), Software Engineering
Center (Kawasaki), Corporate Manufacturing Engineering Center (Yokohama),
Yokohama Complex (Yokohama), Himeji Operations (Himeji)

Digital Products

Laboratories

Core Technology Center (Ome), PC Development Center (Ome)

Production Facilities

Fukaya Operations (Fukaya), Ome Complex (Ome), Hino Operations (Hino)

Electronic Devices

Laboratories

Center For Semiconductor Research & Development (Kawasaki), Process &
Manufacturing Engineering Center (Yokohama)

Production Facilities

Microelectronics Center (Kawasaki), Yokkaichi Operations (Yokkaichi),
Kitakyushu Operations (Kitakyushu), Oita Operations (Oita)

Social Infrastructure

Laboratories

Production Facilities

Power and Industrial Systems Research and Development Center (Yokohama),
Isogo Nuclear Engineering Center (Yokohama)

Fuchu Complex (Fuchu, Tokyo), Komukai Operations (Kawasaki), Hamakawasaki
Operations (Kawasaki), Keihin Product Operations (Yokohama), Mie Operations
(Asahi-Cho, Mie)

RISK FACTORS RELATING TO THE TOSHIBA GROUP AND ITS BUSINESS

The business areas of energy and electronics, the Group’s main business areas, require highly advanced technology for their
operation. At the same time, the Group faces fierce global competition. Therefore, appropriate risk management is indis-
pensable. Major risk factors related to the Group recognized by the Company are described below. The actual occurrence of
any of those risk factors may materially adversely affect the Group’s results of operation and financial condition.

The risks described below are identified by the Group based on information available to the Group as of the date of filing
this document and involve uncertainties. Therefore the actual effects of such risks upon the Group’s business may differ.
Please note that the risk factors discussed below should not be regarded as a complete and comprehensive statement of risks
relating to the Group’s business. The Group recognizes these risks and makes effort to minimize any impact from them by
maintaining the proper risk management and implementing various measures.

(1) Business environment of Digital Products business
The market for the Digital Products business is intensely competitive with many companies manufacturing and selling prod-
ucts similar to those offered by the Group. Additionally, this business is heavily affected by economic fluctuations and
demand for these products is volatile. In times of decreases in demand for the Group’s products in a market that is experi-
encing a downturn, prices may decline, while in times of rapid increases in demand, the Group’s profit may be reduced due to
the need to purchase costly parts and components, and a shortage of these parts and components may hinder the Group’s
ability to supply products to the market in a timely manner. While the Group makes effort to monitor demand as well as
implement strategic allocation of resources in response to changes in the market situation and introduce products that meet
market trends based on the forecast of future market trends, any rapid fluctuation in demand may result in price erosion or
increases in component prices, which may adversely affect the Group’s financial results with respect to this business.

Sales in the mobile phone business are decreasing as the entire domestic market shrinks due to changes in the marketing

method adopted by the mobile network operators.

(2) Business environment of Electronic Devices business
The market for the Electronic Devices business is highly cyclical depending on demand and intensely competitive with com-
panies manufacturing and selling products similar to those offered by the Group mainly in overseas markets. The Group
makes effort to monitor shifts in the market, concentrate on areas in which the Group has competitive advantages by imple-
menting drastic strategic allocation of resources as well as enhance its cost competitiveness and rebuild its profit base through
restructuring. However, if the market faces a downturn, or if the Group fails to market new products in a timely manner, or
if there is a rapid introduction of new technology, the Group’s current products may become obsolete. Although the results
of this business for the three months ended June 30, 2009 improved compared with the preceding three months mainly as a
result of the implementation of “Action Programs to Improve Profitability”, including the reduction of the fixed costs, the
results of this business tend to be heavily affected by economic fluctuations. A rapid and large decline in product prices and
sales volume may be caused by a decrease in demand. This, in turn, may materially affect the Group’s operating income. In
addition, Toshiba Mobile Display Co., Ltd., which engages in the LCD business, is in a situation in which its liabilities
exceed its assets while its business results for the three months ended June 30, 2009 improved compared with the preceding
three months mainly due to implementetion of “Action Programs to Improve Profitability”. Furthermore, results of this
business tend to be substantially affected by exchange rate fluctuations.

Economies of scale with respect to the manufacture of many products of this business are significant and there is intense
competition to develop and market new products. Therefore, significant levels of capital expenditures are required to main-
tain and improve the competitiveness in prices and quality of products. In the year ending March 31, 2010, the Group plans
to reinforce its competitiveness in the semiconductor business by focusing carefully on selected investments, namely invest-
ment in finer lithography for NAND flash memories, and to curb investments in new production facilities. In the LCD
business, the Group will curb its investments for capacity increase. While, the Group makes effort to carefully monitor
demand and invest in stages, however, unforeseen market changes and corresponding changes in demand may result in the
mismatch between the production of particular products based on the sales volume expected at a time when production com-
menced and the actual demand for such products, or cause this business to be adversely affected by a decrease in product
price due to oversupply.

As a strategic alliance concerning production of NAND flash memories, the Group has formed two production joint ven-
tures (equity method affiliates) with a US company SanDisk Corporation (“SanDisk”). Under the joint venture agreement
related to one of these production joint ventures, Flash Alliance, Ltd., SanDisk has an option to request the Company to
purchase its ownership interests in such production joint venture at book value. In addition, the Company and SanDisk

Management’s Discussion and Analysis

each provide a 50 percent guaranty in respect of the lease agreements of production facilities held by each production joint
venture. Such lease agreements contain financial covenants of SanDisk. Noncompliance by SanDisk of any such covenant
will constitute a cancellation event with respect to the relevant lease agreement unless SanDisk and the lessors agree other-
wise. Upon the occurrence of such cancellation event, the Company may succeed to SanDisk’s guaranty obligations or pur-
chase SanDisk’s ownership interests in the relevant production joint venture, in which case the relevant production joint ven-
ture may be treated as a consolidated subsidiary of the Company.

(3) Business environment of Social Infrastructure business
A significant portion of net sales in the Social Infrastructure business is attributable to governmental and local municipality
expenditures on public works and to capital expenditures by the private sector. The Group monitors trends in such capital
expenditures, and also makes best efforts to cultivate new business and customers, in order to avoid undue impact from any
fluctuations. However, reductions and delays in public works spending, as well as low levels of private capital expenditures
due to the economic recession may have a negative impact on this business.

Furthermore, this business involves the supply of products and services for large-scale projects on a worldwide basis. Post-
order changes in specifications or other terms of a project, delays, changes in plans, stoppages, natural and other disasters,
and other factors may adversely affect the progress of such projects in a substantial way. “The percentage of completion
method” is applied for revenue recognition for long term construction work contracts. The Company reassesses expected
costs and profits accordingly, and if the expected profits from such projects do not meet original expectations or if a project is
delayed or cancelled, a loss may be recognized against prior accrued profits. While orders in the nuclear power systems busi-
ness materially affect sales in this area, even if an order has been successfully received, profit from the relevant project may be
affected by the above factors. To reduce such risk, the Group makes effort to ensure adequate and appropriate risk manage-
ment in accepting and fulfilling orders for large-scale projects.

(4) Business environment of Home Appliances business
The Home Appliances business faces intense competition with many companies manufacturing and selling products similar
to those offered by the Group. In addition, the results of this business tend to be strongly affected by consumer spending,
demand for LCD displays using industrial light sources, one of the major products of this business, and trends in building
and housing construction starts. Accordingly the impact of the current recession may lead to the deterioration of the results
of this business.

(5) Action program to improve profitability
The Group is currently implementing “Action Programs to Improve Profitability” that was publicly announced on January
29, 2009. The program aims to develop the profit making system that enables the Group to generate profit without an
increase in sales and to establish a strong business foundation that enables quick seizure of business opportunities during the
future market recovery. The whole Group is taking measures to accelerate strategic allocation of resources to select growth
businesses, to reform the structure of poorly performing businesses, and to strengthen the Group’s profitability. Although
these programs have successfully progressed and the Group has achieved an improvement more rapidly than initially
planned, if, in the future, such programs do not proceed as scheduled, fail to produce the expected results or result in unex-
pected negative results, the Group’s results of operation or financial condition may be affected. To reduce such risk, the
Group makes effort, including following-up with the progress of these programs in the monthly meetings of management, to
ensure steady implementation of these programs.

(6) Acquisitions and others
The Group acquired Westinghouse group in October 2006. The Company’s ownership interest in Westinghouse group
(including the holding company) is currently 67 percent. The remainder is held by The Shaw Group Inc. (“Shaw”), which
holds 20 percent, National Atomic Company Kazatomprom JSC (“Kazatomprom”), which holds ten percent, and IHI
Corporation (“IHI”), which holds three percent.

Under the shareholders’ agreements related to Westinghouse group, Shaw, IHI and Kazatomprom are restricted from
transferring their respective ownership interests in Westinghouse’s holding company until October 1, 2012. Each of Shaw,
IHI and Kazatomprom has been given an option to sell all or part of its ownership interests to the Company (“Put
Options”). The Put Options will, in principle, be exercisable from March 31, 2010. We currently have not received any
indications from Shaw, IHI or Kazatomprom with respect to a contemplated exercise of their Put Option. Shaw’s Put
Option may be exercised before the above date in certain circumstances which are beyond the control of Shaw, such as the
passing of a special resolution at a meeting of the holders of certain bonds which were issued by Shaw upon making its
investment in Westinghouse group. The terms of such bonds also provide that such Put Option will be exercised immedi-
ately prior to the maturity of such bonds in March 2013. Upon the exercise of the Put Option, the shareholders’ agreement

with Shaw will be terminated. However, such exercise may not occur if Shaw at its option took measures to redeem the
bonds with its own funds before such bonds mature.

The Group also has an option to purchase from Shaw, IHI or Kazatomprom all or part of their respective ownership
interests in Westinghouse’s holding companies under certain conditions. These options are in place for the purpose of pro-
tecting the interests of the minority shareholders and preventing equity participation by a third party which may put the
Group at disadvantage. In the event that Shaw, IHI or Kazatomprom exercise their respective Put Options, or the Group
exercises its purchase option, the Group will seek investments from a new strategic partner. Before such investment is made,
the Group may need to procure substantial funds in connection with the exercise of such Put Options or purchase option.

(7) Lawsuits and others
The Group undertakes global business operations and is involved from time to time in disputes, including lawsuits and other legal
proceedings and investigations by relevant authorities. There is a possibility that such cases may arise in the future. Due to the
differences in judicial systems and the uncertainties inherent in such proceedings, the Group may be subject to a ruling requiring
payment of amounts far exceeding its expectations. Any judgment or decision unfavorable to the Group could also have a materi-
al adverse effect on the Group’s business, results of operations or financial condition.

In January 2007, the European Commission (the “Commission”) adopted a decision imposing fines on 19 companies, including
the Company, for violating EU competition laws in the gas insulated switchgear market. The Company was individually fined
EUR86.25 million and was also fined EUR4.65 million jointly and severally with Mitsubishi Electric Corporation. The
Company contends that it did not violate EU competition laws and appealed the decision to the European Court of First
Instance in April 2007.

The Group is also under investigation by the Commission for violating EU competition laws in the power transformer market
and may be subject to an adverse ruling. However, the Group believes, according to its own investigations, that it did not violate
EU competition laws and intends to contest any adverse ruling.

Furthermore, with regard to alleged anti-competitive behavior, the Group is under investigation by the US Department of
Justice, the Commission, and other relevant authorities, for alleged violations of competition laws with respect to products, such
as semiconductors, LCD products, cathode ray tubes (CRT) and heavy electrical equipment; and class action lawsuits have been
filed in the United States against the Group and are currently pending with respect to alleged anti-competitive behavior.

The Group will continue to cooperate with the investigations by the relevant authorities, and make efforts to have its con-
tentions admitted in the relevant investigations or litigation. However, if any ruling or judgment is rendered against the Group in
such investigations or litigation, the Group’s business, results of operations or financial condition may be adversely affected
depending on the outcome of such ruling or judgment.

(8) Development of new products
It is critically important for the Group to offer the market viable and innovative new products and services. The Group
identifies strategic product areas, which include products that are expected to drive future profits, and makes its best efforts
to timely introduce new products in such areas. However, due to the rapid pace of technological innovation, the develop-
ment of new technologies, products that replace current ones, and changes in technology standards, the optimum introduc-
tion of new products to the market may not be accomplished, or new products may be accepted by the market for a shorter
period than anticipated. In addition, any failure on the part of the Group to obtain sufficient funding and resources for con-
tinuous product development may affect the Group’s ability to develop new products and services and to introduce them to
market.

From the viewpoint of enhancing concentration and selection of managerial resources, the Group selects development
themes more rigorously in the research and development process seeking reduction of the research and development costs of
the Group as compared with the year ended March 31, 2009. However, the Group’s research and development costs may
not decrease as anticipated. In addition, the reduction of research and development costs may impair the Group’s technolog-
ical superiority. In order to avoid these risks, the Group intends to enhance efficiency of research and development activities
by sharing intellectual property through the promotion of common platforms and using overseas resources more efficiently
in system development.

(9) Investments in new business
The Group invests in companies involved in new businesses, enters into alliances with other companies for new businesses,
or actively develops its own new businesses. The Company is now actively promoting new, strong and promising businesses,
including new rechargeable batteries (SciB™), direct methanol fuel cells (DMFC) (including fuel cell-packs for cellular
phones and fuel cells for personal computers), solar photovoltaic systems, separation and capture of carbon dioxide emitted
from thermal power plants and other facilities (CCS business), and new lighting systems, such as LEDs. The progress and

Management’s Discussion and Analysis

success of new businesses entails substantial uncertainty, and if any new business in which the Group invests in or which the
Group attempts to develop does not progress as planned, the Group may be adversely affected by the incurred investment
expenses that have not led to the anticipated results or otherwise. However, in order to avoid these risks, in the process of
developing new businesses, the Group makes efforts to resolve various technological issues, and develop and capture potential
demand effectively.

(10) Success of strategic business alliances and acquisitions
The Group is actively promoting the formation of joint ventures and business alliances for growing new and other businesses
in research, development, production, marketing and various other areas. If the Group faces any disagreement with its rele-
vant partner in a joint venture or business alliance in respect of financing, technological management, product development,
management strategies or otherwise, such joint venture or business alliance may be terminated. However, the Group will pay
careful attention to optimise the business formation so that it corresponds to the relevant business nature.

(11) Global environment
The Group undertakes global business operations. Any changes in political, economic and social conditions, legal or regula-
tory changes and exchange rate fluctuations, in any region, may impact market demand and the Group’s business operations.

(12) Natural disasters
Most of the Group’s Japanese production facilities are located in the Keihin region of Japan, which includes Tokyo,
Kawasaki city, Yokohama city and its respective surrounding areas, while the key semiconductor production facilities are
located in Kyushu, Tokai, Hanshin and Tohoku. The Group is currently expanding its production facilities in Asia. As a
result, any occurrence of terrorism or epidemic illness, such as a new type of flu, in these areas could have a significant adverse
effect on the Group’s results.

While the Group takes precautionary measures, such as the construction of earthquake-resistant buildings at production
facilities, large-scale disasters, such as earthquakes or typhoons in regions where production sites are located, may damage or
destroy production capabilities, and cause operational and transportation interruptions or other similar disruptions, which
would affect production capabilities significantly.

In order to manage these risks, the Group established the “Business Continuity Plan (BCP)” in a continuing effort to

avoid any impact from such disasters.

(13) Measures against counterfeit products
While the Group protects and seeks to enhance the value of the Toshiba brand, lesser-quality counterfeit products created
by third parties are found worldwide, and may dilute the value of the Toshiba brand and decrease the Group’s net sales.

(14) Product quality claims
While the Group has implemented measures to manufacture its products in accordance with appropriate quality-control
standards, there can be no assurance that all products are free of defects that may result in a large-scale recall, lawsuits or
other claims relating to product quality.

(15) Information security
The Group maintains and manages various personal information obtained through business operations as well as various
trade secrets regarding the Group’s technology, marketing and other business operations. While the Group makes effort to
manage this information properly, an unanticipated leak of such information could occur, and such information could be
obtained and used illegally by a third party. In such circumstances, the Group’s business performance and financial situation
may be subject to negative influences.

Additionally, the role of information systems in the Group is critical to carrying out business activities. While the Group
makes effort to ensure stable operation of its information systems, it is possible that their functionality could be impaired or
destroyed by computer viruses, software or hardware failures, disaster, terrorism, and other factors.

(16) Procurement of components and materials
It is important for the Group’s business activities to procure materials, components and other goods in a timely and proper man-
ner. However, such materials, components and goods, may only be obtainable from limited number of suppliers due to the par-
ticularity of such materials, components and goods and therefore may not be easily replaced if the need arises to do so. In cases of
delay or other problems in receiving supply of such materials, components and other goods, shortages may occur or procurement
costs may rise. It is necessary to procure materials, components and other goods at competitive costs and to optimize the entire
supply chain, including suppliers, in order for the Group to bring competitive products to market. Any failure by the Group to
achieve proper cooperation with key suppliers may impact the Group’s competitiveness.

Furthermore, any case of defective materials, components or other goods, or any failure to meet required specifications with
respect to such materials, components or other goods may also have an adverse effect on the reliability and reputation of the
Group and Toshiba brand products.

(17) Securing human resources
A large part of the success of the Group’s businesses depends on securing excellent human resources in every business area and
process, including product development, production, marketing and business management. Competition to secure human
resources is intensifying, as the number of qualified personnel in each area and process is limited, while demand for such person-
nel is increasing. As a result, the Group may fail to retain existing employees or to obtain new human resources.

In order to reduce fixed costs, the Group is implementing personnel measures, including the reallocation of human resources
to focus on strong and promising businesses, reclaiming jobs that are outsourced to third parties or conducted by limited-term
employees, reducing the number of limited-term workers, implementation of a leave system, and reducing overtime by a review of
working systems. However, the fixed costs may not be reduced as anticipated and the implementation of such personnel mea-
sures may adversely affect the Group’s employee morale, production efficiency or the securing of human resources.

(18) Compliance and internal control
The Group is active in various businesses in regions worldwide, and its business activities are subject to laws and regulations
in each region. The Group has implemented, and operates appropriate internal control systems for a variety of purposes,
including compliance with laws and regulations and strict reporting of business and financial matters. However, there can be
no assurance that the Group will always be able to structure and operate effective internal control systems. Furthermore,
such internal control systems may themselves, by their nature, have limitations, and it is not possible to guarantee that they
will fully achieve their objectives. There is a possibility that the Group will unknowingly and unintentionally violate laws and
regulations in future. Changes in laws and regulations or changes in interpretations of laws and regulations by the relevant
authorities may also cause difficulty in achieving compliance with laws and regulations, or may result in increased compliance
costs.

(19) Strategic concentrated investment
The Group makes strategic investments that concentrate on specific business areas, including nuclear and other power and
industrial systems businesses, new, strong and promising businesses, such as a new type of rechargeable battery, compact fuel
cells and new lighting systems, and NAND flash memory. While it is essential to allocate limited management resources to
strategic, high growth areas and businesses in which the Group enjoys competitiveness in order to secure and maintain the
Group’s advantages, the businesses in which the Company has made concentrated investments may not grow as anticipated,
and the Group may not maintain or strengthen its competitive power in such areas, or the relevant investments may not gen-
erate the anticipated level of profit. The Group achieves a good balance between investments and strengthening its financial
basis by means of comprehensive selection and management toward investments that correspond to the relevant business
nature.

(20) Protection of intellectual property rights
The Group makes effort to secure intellectual property rights. However, in some regions, it may not be possible to secure
sufficient protection of such intellectual property rights.

The Group also uses the intellectual property of third parties pursuant to licenses to use. It is possible that the Group
may fail to receive the necessary third-party licenses for new technology, or is unable to obtain the renewal of existing licenses
or receives them on unfavourable terms.

It is also possible that any suit in respect of intellectual property rights may be brought against the Group or that the
Group may have to file suit in order to protect its intellectual property rights. Such lawsuits may require time, costs and
other management resources. As a result of the outcome of these rulings, the Group may not be able to use important tech-
nology, or the Group may be liable for significant damages.

(21) Environment
The Group is subject to various environmental laws, including laws on air pollution, water pollution, toxic substances, waste disposal,
product recycling, prevention of global warming and energy policies, in its global business activities. While the Group pays careful
attention to those laws and regulations, it may be possible that the Group will encounter legal or social liability for the environment,
regardless of whether it is at fault or not, with respect to its past, present or future business activities. In particular, the Group has
manufacturing and other bases throughout the world and may be held liable for the purification of land at such bases regardless of
whether it is at fault or not. It may also be possible that, in the future, the Group will face more stringent requirements to remove
environmental hazards, including toxic substances, or to further reduce emissions of greenhouse gases, as a result of the introduction

Management’s Discussion and Analysis

of more demanding environmental regulations or in accordance with societal requirements.

The Group’s operations involve use of various chemical compounds, radioactive materials, nuclear materials and other toxic mate-
rials. The Group operates with maximum attention to such matters, giving first priority to human life and safety. However, the
Group may incur damages, or the Group’s reputation may be affected, as a result of the occurrence or threatened occurrence of any
natural disaster, terrorism, accident or other contingency (including those beyond the Group’s control) that leads to environmental
pollution.

(22) Parent company’s guaranty
When a subsidiary of the Group, such as Westinghouse Electric Company, LLC or Toshiba International Corporation,
accepts orders for large projects, the Company, as its parent company, may provide guaranties with respect to performance
under the relevant contracts. Such guaranties of the Company are made, upon the request of the relevant customers, pur-
suant to business practice and in the ordinary course of business. If the relevant subsidiary fails to fulfil its obligations, the
Company may be obliged to bear the resulting loss.

(23) Financial covenants
Loan agreements entered into between the Company and financial institutions provide for financial covenants. Therefore, if
the Company records a consolidated operating loss in the year ending March 31, 2010 or if the Company’s consolidated net
assets or credit rating falls below the respective levels provided for in the financial covenants, the Company’s obligations with
respect to the relevant loan may be accelerated upon request from the relevant lending financial institutions. Furthermore,
any breach by the Company of such financial covenants may also trigger acceleration of the bonds or other borrowings of the
Company.

The Company intends to continuously take maximum measures to avoid breaches of the financial covenants in and after
the year ending March 31, 2010 and consequent acceleration by improving its earnings through implementation of the
Action Programs to Improve Profitability and making efforts to obtain understanding from the lending financial institutions.
However, any acceleration of the Company’s loan may materially affect the Company’s business operation.

(24) Financial risk
Apart from being affected by the business operations of the Company or the Group, the Company’s consolidated and non-
consolidated results and financial condition may be affected by the following major financial factors:
(i) Deferred tax assets
The Company accounted for a substantial amount of deferred tax assets. The Group reduces deferred tax assets by a valua-
tion allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Recording of valuation allowances includes estimates and therefore involves uncertainty.

The Group may also be required in FY2009 and thereafter to record further valuation allowances depending the judgment
about the realizability of the related deferred tax assets, and the Group’s future results and financial condition may be
adversely affected thereby.
(ii) Exchange rate fluctuations
The Group conducts business in various regions worldwide using a variety of foreign currencies and is therefore substantially
exposed to exchange rate fluctuations. Foreign currency denominated assets and liabilities held by the Group are translated
into yen as the currency for reporting consolidated financial results. The effects of currency translation adjustments are
included in “accumulated other comprehensive income (loss)” reported as a component of shareholders’ equity. As a result,
the Group’s shareholders’ equity may be materially affected by exchange rate fluctuations.
(iii) Accrued pension and severance costs
The Group recognizes the funded status (i.e., the difference between the fair value of plan assets and the benefit obligations)
of its pension plan in the consolidated statements of income with a corresponding adjustment, net of tax, included in “accu-
mulated other comprehensive income (loss)” reported as a component of shareholders’ equity. Such adjustment to “accumu-
lated other comprehensive income (loss)” represents the result of adjustment for the net unrecognized actuarial losses, unrec-
ognized prior service costs, and unrecognized transition obligations. These amounts will be subsequently recognized as net
periodic pension and severance costs pursuant to the applicable accounting standards. Funded status of the Group’s pension
plan may deteriorate due to declines in the fair value of plan assets caused by lower returns, increases of severance benefit
obligations caused by changes in the discount rate, salary increase rates or other actuarial assumptions. As a result, the
Group’s shareholders’ equity may be adversely affected, and the net periodic pension and severance costs to be recorded in
“cost of sales” or “selling, general and administrative expenses” may increase.

(iv) Impairment of long-lived assets and goodwill
If events or changes in circumstances indicate that the carrying amount of any long-lived asset will not be recovered by the
future undiscounted cash flow, the loss is recognized as an impairment, and impairment loss is recognized as the amount by
which carrying value of the assets exceeds its fair value. A substantial amount of goodwill has been recorded in the
Company’s consolidated balance sheet in accordance with US generally accepted accounting principles. Goodwill is required
to be tested for impairment annually. If an impairment test shows that the total of the carrying amounts, including goodwill,
in relation to the business related to such goodwill exceeds its fair value, the relevant goodwill must be recalculated, and the
balance of the current amount and the recalculated amount will be recognized as an impairment. Therefore, additional
impairments may be recorded, depending on the valuation of long-lived assets and the estimate of future cash flow from busi-
ness related to goodwill.

(25) Financing environment and others
The Group has substantial amounts of interest-bearing debt for financing that is highly susceptible to market environments,
including interest rate movements and fund supply and demand. Thus, changes in these factors may have an adverse effect
on the Group’s funding activities. The Group also has loans from financial institutions. There can be no assurance that the
Group will obtain refinancing loans or new loans in the future on similar terms. If the Group is unable to obtain loans for
the necessary amount in a timely manner, the Group’s financing may be materially adversely affected.

(26) Takeover defense measure
The Company introduced a plan for countermeasures to any large-scale acquisitions of the Company’s shares (the “Takeover
Defense Measure”). However, this Takeover Defense Measure ceased to be effective at the close of the ordinary general
shareholders’ meeting of the Company that was held in June 2009. In response to this situation, the Takeover Defense
Measure, after partial amendment, was renewed for three more years subject to the shareholders’ approval at the ordinary
general shareholders’ meeting. If a person making a large-scale acquisition of the Company’s shares does not comply with the
procedures under the Takeover Defense Measure, the Company will make a gratis allotment of stock acquisition rights
(shinkabu yoyakuken) as a countermeasure under the Takeover Defense Measure. Although such Takeover Defense Measure
was introduced for the purpose of protecting and enhancing the corporate value of the Company and the common interests
of its shareholders, it may limit the opportunities for the shareholders of the Company to sell their shares to hostile acquir-
ers.

Millions of yen

2009

2008

Thousands of
U.S. dollars
(Note 3)
2009

¥ 343,793

¥ 248,649

$ 3,508,092

64,260
1,038,396
(19,270)
758,305
141,008
176,196
217,943
2,720,631

3,987
340,756
190,110
534,853

80,312
1,253,108

(21,417)
851,452
148,531
166,622
202,125
2,929,382

655,714
10,595,878
(196,633)
7,737,806
1,438,857
1,797,919
2,223,908
27,761,541

7,423
321,166
264,149
592,738

40,684
3,477,102
1,939,898
5,457,684

98,116
996,709
2,698,626
114,617
3,908,068
(2,818,489)
1,089,579

128,210
1,160,549
2,598,042
215,937
4,102,738
(2,770,560)
1,332,178

1,001,184
10,170,500
27,537,000
1,169,561
39,878,245
(28,760,092)
11,118,153

629,820
352,948
125,394
1,108,162

653,910
285,757
141,672
1,081,339

6,426,735
3,601,510
1,279,530
11,307,775

¥5,453,225

¥ 5,935,637

$55,645,153

Consolidated Balance Sheets

Toshiba Corporation and Subsidiaries
As of March 31, 2009 and 2008

Assets
Current assets:

Cash and cash equivalents
Notes and accounts receivable, trade:

Notes (Note 7)
Accounts (Note 7)
Allowance for doubtful notes and accounts

Inventories (Note 8)
Deferred tax assets (Note 18)
Other receivables
Prepaid expenses and other current assets (Note 21)
Total current assets

Long-term receivables and investments:

Long-term receivables (Note 7)
Investments in and advances to affiliates (Note 9)
Marketable securities and other investments (Note 6)
Total long-term receivables and investments

Property, plant and equipment (Notes 11, 17 and 22):

Land
Buildings
Machinery and equipment
Construction in progress

Less—Accumulated depreciation
Total property, plant and equipment

Other assets:

Goodwill and other intangible assets (Note 10)
Deferred tax assets (Note 18)
Other assets
Total other assets

Total assets

The accompanying notes are an integral part of these statements.

Liabilities and shareholders’ equity
Current liabilities:

Short-term borrowings (Note 11)
Current portion of long-term debt (Notes 11 and 21)
Notes payable, trade
Accounts payable, trade
Accounts payable, other and accrued expenses (Note 26)
Accrued income and other taxes
Advance payments received
Other current liabilities (Notes 18, 21 and 24)

Total current liabilities

Long-term liabilities:

Long-term debt (Notes 11, 12 and 21)
Accrued pension and severance costs (Note 13)
Other liabilities (Notes 18 and 21)
Total long-term liabilities

Millions of yen

2009

2008

¥ 747,971
285,913
40,291
963,573
366,219
38,418
268,083
357,305
3,067,773

¥ 257,831
262,422
55,870
1,168,389
516,046
89,763
248,280
387,386
2,985,987

Thousands of
U.S. dollars
(Note 3)
2009

$ 7,632,357
2,917,480
411,133
9,832,377
3,736,929
392,020
2,735,541
3,645,969
31,303,806

776,768
719,396
130,007
1,626,171

740,710
634,589
182,175
1,557,474

7,926,204
7,340,776
1,326,602
16,593,582

Minority interest in consolidated subsidiaries

311,935

369,911

3,183,010

Shareholders’ equity (Notes 12 and 19):

Common stock:

Authorized—10,000,000,000 shares
Issued:

2009—3,237,602,026 shares
2008—3,237,031,486 shares

Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Treasury stock, at cost:

2009—1,910,852 shares
2008—1,442,645 shares
Total shareholders’ equity

280,281
—
291,137
395,134
(517,996)

(1,210)
—
447,346

—
280,126
290,936
774,461
(322,214)

—
(1,044)
1,022,265

2,860,010
—
2,970,786
4,031,979
(5,285,673)

(12,347)
—
4,564,755

Commitments and contingent liabilities (Notes 23, 24 and 25)

Total liabilities and shareholders’ equity

¥5,453,225

¥ 5,935,637

$55,645,153

Consolidated Statements of Income

Toshiba Corporation and Subsidiaries
For the years ended March 31, 2009 and 2008

Sales and other income:

Net sales
Interest and dividends
Equity in earnings of affiliates (Note 9)
Other income (Notes 6, 7,16 and 21)

Costs and expenses:

Cost of sales (Notes 10, 14, 17, 22 and 26)
Selling, general and administrative (Notes 10, 14, 15 and 22)
Interest
Other expense (Notes 6, 7, 16, 17 and 21)

Millions of yen

2009

2008

¥6,654,518
19,432
9,596
146,923
6,830,469

5,366,087
1,538,617
33,693
171,324
7,109,721

¥ 7,665,332
26,863
28,023
212,827
7,933,045

5,756,603
1,662,336
39,825
209,232
7,667,996

Thousands of
U.S. dollars
(Note 3)
2009

$67,903,245
198,286
97,918
1,499,214
69,698,663

54,755,990
15,700,173
343,806
1,748,204
72,548,173

Income (loss) from continuing operations, before income taxes
and minority interest

(279,252)

265,049

(2,849,510)

Income taxes (Note 18):

Current
Deferred

52,308
2,015
54,323

102,740
10,635
113,375

533,755
20,561
554,316

Income (loss) from continuing operations, before minority interest

(333,575)

151,674

(3,403,826)

Minority interest in income (loss) of consolidated subsidiaries

(3,795)

14,765

(38,724)

Income (loss) from continuing operations

(329,780)

136,909

(3,365,102)

Loss from discontinued operations, net of tax

(13,779)

(9,496)

(140,602)

Net income (loss)

¥ (343,559)

¥ 127,413

$ (3,505,704)

Basic net income (loss) per share (Note 20)

Income (loss) from continuing oparations
Loss from discontinued operations
Net income (loss)

Diluted net income (loss) per share (Note 20)
Income (loss) from continuing oparations
Loss from discontinued operations
Net income (loss)

Cash dividends per share (Note 19)
The accompanying notes are an integral part of these statements.

Yen

U.S. dollars
(Note 3)

¥ (101.92)
¥
(4.26)
¥ (106.18)

5.00

¥
¥
¥

42.40
(2.94)
39.46

39.31
(2.94)
36.59

12.00

$
$
$

(1.04)
(0.04)
(1.08)

0.05

Consolidated Statements of Shareholders’ Equity

Toshiba Corporation and Subsidiaries
For the years ended March 31, 2009 and 2008

Millions of yen

Balance at March 31, 2007
Comprehensive income (loss):

Common
stock

Additional
paid-in
capital
¥ 274,926 ¥ 285,765 ¥ 681,795

Retained
earnings

Accumulated
other
comprehensive
loss

Treasury
stock
(131,228) ¥ (2,937) ¥ 1,108,321

Total

Net income
Other comprehensive income (loss),
net of tax (Note 19):
Net unrealized gains and losses on securities (Note 6)
Foreign currency translation adjustments
Pension liability adjustment (Note 13)
Net unrealized gains and losses
on derivative instruments (Note 21)

Comprehensive loss

Adjustment to initially apply FIN 48 (Note 18)
Dividends
Conversion of convertible bonds (Note 12)
Purchase of treasury stock, net, at cost
Balance at March 31, 2008
Comprehensive income (loss):

Net loss
Other comprehensive income (loss),
net of tax (Note 19):
Net unrealized gains and losses on securities (Note 6)
Foreign currency translation adjustments
Pension liability adjustment (Note 13)
Net unrealized gains and losses
on derivative instruments (Note 21)

Comprehensive loss

Dividends
Conversion of convertible bonds and others (Note 12)
Purchase of treasury stock, net, at cost
Balance at March 31, 2009

Balance at March 31, 2008
Comprehensive income (loss):

Comprehensive loss

Dividends
Conversion of convertible bonds and others (Note 12)
Purchase of treasury stock, net, at cost
Balance at March 31, 2009
The accompanying notes are an integral part of these statements.

127,413

5,555
(40,302)

(27,340)
(95,614)
(66,721)

(1,311)

127,413

(27,340)
(95,614)
(66,721)

(1,311)
(63,573)
5,555
(40,302)
10,400
1,864
1,022,265

(343,559)

(31,822)
(105,221)
(57,739)

(1,000)
(539,341)
(35,592)
356
(342)
447,346

5,200

280,126

5,200
(29)
290,936

774,461

(322,214)

1,893
(1,044)

(343,559)

(31,822)
(105,221)
(57,739)

(1,000)

155

201

(35,592)

(176)

(166)

¥ 280,281 ¥ 291,137 ¥ 395,134 ¥ (517,996) ¥ (1,210) ¥

Thousands of U.S. dollars (Note 3)

Common
stock

Additional
paid-in
capital
$2,858,428 $2,968,735 $7,902,663

Retained
earnings

Accumulated
other
comprehensive
loss

Treasury
stock

Total

$ (3,287,898) $ (10,653) $10,431,275

(3,505,704)

(324,714)
(1,073,684)
(589,173)

(10,204)

(10,204)
(5,503,479)
(363,184)
3,633
(3,490)
$2,860,010 $2,970,786 $4,031,979 $ (5,285,673) $(12,347) $ 4,564,755

(363,184)

(1,694)

(1,796)

2,051

1,582

Consolidated Statements of Cash Flows

Toshiba Corporation and Subsidiaries
For the years ended March 31, 2009 and 2008

Cash flows from operating activities

Net income (loss)
Adjustments to reconcile net income to net cash provided
by (used in) operating activities—
Depreciation and amortization
Provisions for pension and severance costs, less payments
Deferred income taxes
Equity in (earnings) losses of affiliates, net of dividends
(Gain) loss from sales, disposal and impairment of
property, plant and equipment, net
Gain from sales and impairment of securities and other
investments, net
Minority interest in income (loss) of consolidated subsidiaries
Decrease in notes and accounts receivable, trade
(Increase) decrease in inventories
Decrease in notes and accounts payable, trade
Increase (decrease) in accrued income and other taxes
Increase in advance payments received
Other

Net cash provided by (used in) operating activities

Cash flows from investing activities

Proceeds from sale of property, plant and equipment
Proceeds from sale of securities
Acquisition of property, plant and equipment
Purchase of securities
Increase in investments in affiliates
Proceeds from sale of Toshiba Building Co., Ltd. stock
Other

Net cash used in investing activities

Cash flows from financing activities

Proceeds from long-term debt
Repayment of long-term debt
Increase in short-term borrowings, net
Dividends paid
Repurchase of subsidiary common stock
Purchase of treasury stock, net

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosure of cash flow information

Cash paid during the year for—

Interest
Income taxes

Non-cash financing activities—

Conversion of convertible bonds

Sale of Toshiba building Co., Ltd. stock—

Assets sold
Liabilities relinquished

The accompanying notes are an integral part of these statements.

Millions of yen

2009

2008

Thousands of
U.S. dollars
(Note 3)
2009

¥(343,559)

¥ 127,413

$ (3,505,704)

349,764
(13,733)
(7,843)
1,215

380,160
(19,035)
10,635
(13,340)

3,569,020
(140,133)
(80,031)
12,398

3,291

(127,093)

33,582

(37,878)
(3,795)
186,676
60,517
(182,501)
(51,647)
27,018
(3,536)
(16,011)

210,653
4,035
(477,720)
(29,609)
(43,399)
79,800
(79,068)
(335,308)

337,415
(275,976)
469,026
(50,350)
(1,318)
(345)
478,452
(31,989)
95,144
248,649
¥ 343,793

(19,276)
14,765
29,138
(64,688)
(115,047)
18,283
47,617
(22,404)
247,128

212,064
2,805
(407,692)
(82,898)
(41,367)
—
(5,614)
(322,702)

190,524
(283,013)
187,321
(46,406)
(715)
(1,138)
46,573
(31,662)
(60,663)
309,312
¥ 248,649

(386,510)
(38,724)
1,904,857
617,520
(1,862,255)
(527,010)
275,694
(36,082)
(163,378)

2,149,520
41,174
(4,874,694)
(302,133)
(442,847)
814,286
(806,816)
(3,421,510)

3,443,010
(2,816,082)
4,785,980
(513,776)
(13,449)
(3,520)
4,882,163
(326,418)
970,857
2,537,235
$ 3,508,092

¥ 35,004
140,923

¥ 40,356
107,431

357,184
1,437,990

310

13,260

3,163

173,353
151,434

—
—

1,768,908
1,545,245

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

1. DESCRIPTION OF BUSINESS

Toshiba Corporation and its subsidiaries (hereinafter collectively, the “Company”) are engaged in research and development,
manufacturing and sales of high-technology electronic and energy products, which range (1)Digital Products, (2)Electronic
Devices, (3)Social Infrastructure, (4)Home Appliances, and (5)Others. For the year ended March 31, 2009, sales of Digital
Products represented the most significant portion of the Company’s total sales or approximately 34 percent. Social
Infrastructure represented approximately 33 percent, Electronic Devices approximately 19 percent, and Home Appliances
approximately 9 percent of the Company’s total sales. For the year ended March 31, 2008, sales of Digital Products represent-
ed the most significant portion of the Company's total sales or approximately 36 percent. Social Infrastructure represented
approximately 29 percent, Electronic Devices approximately 21 percent, and Home Appliances approximately 9 percent of the
Company's total sales. The Company’s products were manufactured and marketed throughout the world with approximately
49 percent and 48 percent of its sales in Japan and the remainder in Asia, North America, Europe and other parts of the
world, respectively.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PREPARATION OF FINANCIAL STATEMENTS
Toshiba Corporation and its domestic subsidiaries maintain their records and prepare their financial statements in accor-
dance with accounting principles generally accepted in Japan, and its foreign subsidiaries in conformity with those of the
countries of their domicile.

Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to
conform with accounting principles generally accepted in the United States. These adjustments were not recorded in the
statutory books of account.

BASIS OF CONSOLIDATION AND INVESTMENTS IN AFFILIATES
The consolidated financial statements of the Company include the accounts of Toshiba Corporation, its majority-owned sub-
sidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary under Financial Accounting
Standards Board (“FASB”) Interpretation No.46 as revised in December 2003, Consolidation of Variable Interest Entities, an
Interpretation of ARB No.51 (“FIN 46R”). All significant intercompany transactions and accounts are eliminated in consolidation.

Investments in affiliates in which the ability to exercise significant influence exists are accounted for under the equity method of
accounting. The Company eliminates unrealized intercompany profits in determining its equity in the current net earnings (losses)
of such companies.

USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabili-
ties, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting periods. The Company has identified significant areas where it
believes assumptions and estimates are particularly critical to the consolidated financial statements. These are determination
of impairment on long-lived tangible and intangible assets and goodwill, realization of deferred tax assets, uncertain tax posi-
tions, pension accounting assumptions, revenue recognition and other valuation allowances and reserves including contingen-
cies for litigations. Actual results could differ from those estimates.

CASH EQUIVALENTS
All highly liquid investments with original maturities of 3 months or less at the date of purchase are considered to be cash equivalents.

FOREIGN CURRENCY TRANSLATION
The assets and liabilities of foreign consolidated subsidiaries and affiliates that operate in a local currency environment are
translated into Japanese yen at applicable current exchange rates at year end. Income and expense items are translated at aver-
age exchange rates prevailing during the year. The effects of these translation adjustments are included in accumulated other
comprehensive income (loss) and reported as a component of shareholders’ equity. Exchange gains and losses resulting from
foreign currency transactions and translation of assets and liabilities denominated in foreign currencies are included in other
income or other expense in the consolidated statements of income.

ALLOWANCE FOR UNCOLLECTIBLE RECEIVABLES
An allowance for uncollectible trade receivables is recorded based on a combination of the write-off history, aging analysis, and
an evaluation of any specific known troubled accounts. When all collection options are exhausted including legal recourse, the
accounts or portions thereof are deemed to be uncollectible and charged against the allowance.

MARKETABLE SECURITIES AND OTHER INVESTMENTS
The Company classifies all of its marketable securities as available-for-sale which are reported at fair value, with unrealized gains and loss-
es included in accumulated other comprehensive income (loss), net of tax. Other investments without quoted market prices are stated at
cost. Realized gains or losses on the sale of securities are based on the average cost of a particular security held at the time of sale.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

Marketable securities and other investment securities are regularly reviewed for other-than-temporary declines in carrying amount
based on criteria that include the length of time and the extent to which the market value has been less than cost, the financial condition
and near-term prospects of the issuer and the Company's intent and ability to retain marketable securities and investment securities for a
period of time sufficient to allow for any anticipated recovery in market value. When such a decline exists, the Company recognizes an
impairment loss to the extent of such decline.

INVENTORIES
Raw materials, finished products and work in process for products are stated at the lower of cost or market, cost being deter-
mined principally by the average method. Finished products and work in process for contract items are stated at the lower of
cost or estimated realizable value, cost being determined by accumulated production costs.

In accordance with general industry practice, items with long manufacturing periods are included among inventories even

when not realizable within one year.

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, including significant renewals and additions, are carried at cost. Depreciation for property,
plant and equipment associated with domestic operations is computed generally by the 250% declining-balance method with
estimated residual value reduced to a nominal value. Depreciation for property, plant and equipment for foreign subsidiaries
is generally computed using the straight line method.

Effective April 1, 2007, Toshiba Corporation and its domestic subsidiaries changed the method of calculating depreciation
of machinery, equipment and other fixed assets to the 250% declining-balance method with estimated residual value of a
nominal value. Also effective April 1, 2008, the estimated useful lives of specific machinery, equipment and other fixed assets
associated with the Semiconductor business have been shortened due to the escalated international competition over our
products. This change is a change in accounting estimate in accordance with SFAS No.154, Accounting Changes and Error
Corrections - a replacement of APB Opinion No.20 and FASB Statement No.3. Therefore, this change impacts on financial results
on and after April 1, 2008. Loss from continuing operations before income taxes and minority interest and net loss increased
by ¥6,024 million ($61,469 thousand) and by ¥3,953 million ($40,337 thousand), respectively compared with the figures
under the previous estimated useful lives. Basic net loss per share also increased by ¥1.22 ($0.01).

The estimated useful lives of the buildings are 3 to 50 years, and those of the machinery and equipment are 2 to 20 years.

Maintenance and repairs, including minor renewals and betterments, are expensed as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS
Long-lived assets, other than goodwill and intangible assets with indefinite useful lives, are evaluated for impairment using an
estimate of undiscounted cash flows whenever events or changes in circumstances indicate that the carrying amount of such
asset may not be recoverable. If the estimate of undiscounted cash flow is less than the carrying amount of the asset, an impair-
ment loss is recorded based on the fair value of the asset. Fair value is determined primarily by using the anticipated cash flows
discounted at a rate commensurate with the risk involved. For assets held for sale, an impairment loss is further increased by
costs to sell. Long-lived assets to be disposed of other than by sale are considered held and used until disposed of.

GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and intangible assets with indefinite useful lives are not amortized, but instead are tested for impairment at least
annually. Intangible assets with finite useful lives, consisting primarily of core and current technology and software, are amor-
tized using the straight-line method over their respective contractual periods or estimated useful lives.

ENVIRONMENTAL LIABILITIES
Liabilities for environmental remediation and other environmental costs are accrued when environmental assessments or remedial
efforts are probable and the costs can be reasonably estimated, based on current law and existing technologies. Such liabilities are adjust-
ed as further information develops or circumstances change. Costs of future obligations are not discounted to their present values.

INCOME TAXES
The provision for income taxes is computed based on the pre-tax income (losses) included in the consolidated statements of income.
Deferred income taxes are recorded to reflect the expected future tax consequences of temporary differences between the tax basis of
assets and liabilities and their reported amounts in the financial statements, and are measured by applying currently enacted tax laws.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the change is enacted.
Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

The company recognizes the financial statement effects of tax positions when they are more likely than not, based on the technical
merits, that the tax positions will be sustained upon examination by the tax authorities. Benefits from tax positions that meet the
more-likely-than-not recognition threshold are measured at the largest amount of benefit that is greater than 50 percent likely of being
realized upon settlement.

ACCRUED PENSION AND SEVERANCE COSTS
The Company has various retirement benefit plans covering substantially all employees. The unrecognized net obligation
existing at initial application of Statement of Financial Accounting Standards (“SFAS”) No. 87, Employers’ Accounting for

Pensions, and prior service costs resulting from amendments to the plans are amortized over the average remaining service
period of employees expected to receive benefits. Unrecognized actuarial gains and losses that exceed 10 percent of the
greater of the projected benefit obligation or the fair value of plan assets are also amortized over the average remaining service
period of employees expected to receive benefits.

NET EARNINGS (LOSS) PER SHARE
Basic net earnings (loss) per share (“EPS”) is computed based on the weighted-average number of shares of common stock
outstanding during each period. Diluted EPS assumes the dilution that could occur if stock acquisition rights were exercised
to issue common stock, unless their inclusion would have an anti-dilutive effect.

REVENUE RECOGNITION
Revenue of mass-produced standard products, such as digital products and electronic devices, is recognized when there is
persuasive evidence of an arrangement, the product has been delivered, the sales price is fixed or determinable, and collectibil-
ity is reasonably assured. Mass-produced standard products are considered delivered to customers once they have been
shipped, and the title and risk of loss have transferred.

Revenue related to equipment that requires installation, such as social infrastructure business, is recognized when the
installation of the equipment is completed, the equipment is accepted by the customer and other specific criteria of the
equipment are demonstrated by the Company.

Revenue from services, such as maintenance service for plant and other systems, that are priced and sold separately from

the equipment is recognized ratably over the contract term or as the services are provided.

Revenue on long-term contracts is recorded under the percentage of completion method. To measure the extent of
progress toward completion, the Company generally compares the costs incurred to date to the estimated total costs to com-
plete based upon the most recent available information. When estimates of the extent of progress toward completion and
contract costs are reasonably dependable, revenue from the contract is recognized based on the percentage of completion. A
provision for contract losses is recorded in its entirety when the loss first becomes evident.

Revenue from arrangements with multiple elements, which may include any combination of products, equipment, install-
ment and maintenance, is allocated to each element based on its relative fair value if such element meets the criteria for treat-
ment as a separate unit of accounting as prescribed in the Emerging Issues Task Force Issue 00-21, Revenue Arrangements with
Multiple Deliverables. Otherwise, revenue is deferred until the undelivered elements are fulfilled as a single unit of accounting.

Revenue from the development of custom software products is recognized when there is persuasive evidence of an arrange-
ment, the sales price is fixed or determinable, collectibility is probable, and the software product has been delivered and
accepted by the customer.

SHIPPING AND HANDLING COSTS
The Company includes shipping and handling costs which totaled ¥89,405 million ($912,296 thousand) and ¥95,602 million
for the years ended March 31, 2009 and 2008, respectively in selling, general and administrative expenses.

DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses a variety of derivative financial instruments, which include forward exchange contracts, interest rate swap
agreements, currency swap agreements, and currency options for the purpose of currency exchange rate and interest rate risk
management. Refer to Note 21 for descriptions of these financial instruments.

The Company recognizes all derivative financial instruments, such as forward exchange contracts, interest rate swap agree-
ments, currency swap agreements, and currency options in the consolidated financial statements at fair value regardless of the
purpose or intent for holding the derivative financial instruments. Changes in the fair value of derivative financial instru-
ments are either recognized periodically in income or in shareholders' equity as a component of accumulated other compre-
hensive income (loss) depending on whether the derivative financial instruments qualify for hedge accounting, and if so,
whether they qualify as a fair value hedge or a cash flow hedge. Changes in fair value of derivative financial instruments
accounted for as fair value hedges are recorded in income along with the portion of the change in the fair value of the hedged
item that relates to the hedged risk. Changes in fair value of derivative financial instruments accounted for as cash flow
hedges, to the extent they are effective as a hedge, are recorded in accumulated other comprehensive income (loss), net of tax.
Changes in the fair value of derivative financial instruments not qualifying as a hedge are reported in income.

SALES OF RECEIVABLES
The Company enters into transactions to sell certain trade notes receivable and trade accounts receivable. The Company
may retain certain interests in these transactions. Gain or loss on the sale of receivables is computed based on the allocated
carrying amount of the receivables sold. Retained interests are recorded at the allocated carrying amount of the assets based
on their relative fair values at the date of sale. The Company estimates fair value based on the present value of future expect-
ed cash flows less credit losses.

GUARANTEES
The Company recognizes, at the inception of a guarantee, a liability for the fair value of the obligation it has undertaken in
issuing guarantees for guarantees issued or modified after December 31, 2002.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

ASSET RETIREMENT OBLIGATIONS
The Company records asset retirement obligations at fair value in the period incurred. The fair value of the liability is added
to the carrying amount of the associated asset. This additional carrying amount is then depreciated over the life of the asset.
The liability increases due to the passage of time based on the time value of money until the obligation is settled. Subsequent
to the initial recognition, the liability is adjusted for any revisions to the expected value of the retirement obligation, and for
accretion of the liability due to the passage of time.

RECENT PRONOUNCEMENTS
In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R establishes
principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired,
the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired in the business combination or a gain
from a bargain purchase. SFAS 141R also requires to disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS 141R is effective for fiscal years beginning on or after December 15, 2008, and
the Company will adopt SFAS 141R effective April 1, 2009. The Company is currently evaluating the impact of adoption of SFAS
141R on the Company’s financial position and results of operations.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of
ARB No. 51 (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by
parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest,
changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary, and to measure at
fair value of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also requires to disclose that
clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effec-
tive for fiscal years beginning on or after December 15, 2008, and the Company will adopt SFAS 160 effective April 1, 2009. The
Company is currently evaluating the impact of adoption of SFAS 160 on the Company’s financial position and results of operations.
In December 2008, the FASB issued Staff Position No. FAS132 (revised 2003)-1, Employers’ Disclosures about Postretirement Benefit
Plan Assets (“FSP FAS132R-1”). FSP FAS132R-1 provides companies with guidance on an disclosures about plan assets of a defined
benefit pension or other postretirement plan including (a) how investment allocation decisions are made, including the factors that
are pertinent to an understanding of investment policies and strategies, (b) the major categories of plan assets, (c) the inputs and valu-
ation techniques used to measure the fair value of plan assets, (d) the effect of fair value measurements using significant unobservable
inputs on changes in plan assets for the period and (e) significant concentrations of risk within plan assets. FSP FAS132R-1 shall be
effective for fiscal years ending after December 15, 2009, and the Company will adopt FSP FAS132R-1 effective April 1, 2009. The
Company is currently evaluating the impact of adoption of FSP FAS132R-1 on its footnote disclosures related to its combined
results of operations and financial condition of the Company.

In April 2009, the FASB issued Staff Position No. FAS141R-1, Accounting for Assets Acquired and Liabilities Assumed in a Business
Combination That Arise from Contingencies (“FSP FAS141R-1”). FSP FAS141R-1 amends and clarifies SFAS141R to address appli-
cation issues raised on initial recognition and measurement, subsequent measurement and accounting as well as disclosure of assets
and liabilities arising from contingencies in a business combination. FSP FAS141R-1 shall be effective for assets or liabilities arising
from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008, and the Company will adopt FSP FAS141R-1 effective April 1, 2009. The
Company is currently evaluating the impact of adoption of FSP FAS141R-1 on the Company’s financial position and results of
operations.

In April 2009, the FASB issued Staff Position No. FAS157-4, Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP FAS157-4”). FSP FAS157-4 pro-
vides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly
decreased including guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS157-4 shall be effective
for interim and annual reporting periods ending after June 15, 2009, and the Company will adopt FSP FAS157-4 effective April 1,
2009. The Company is currently evaluating the impact of adoption of FSP FAS157-4 on the Company’s financial position and
results of operations.

RECLASSIFICATIONS
Certain reclassifications to the prior year’s consolidated financial statements and related footnote amounts have been made to
conform to the presentation for the current year.
3. U.S. DOLLAR AMOUNTS

U.S. dollar amounts are included solely for convenience of readers. These translations should not be construed as a representation
that the yen could be converted into U.S. dollars at this rate or any other rates. The amounts shown in U.S. dollars are not
intended to be computed in accordance with generally accepted accounting principles in the United States for the translation of
foreign currency amounts. The rate of ¥98=U.S.$1, the approximate current rate of exchange at March 31, 2009, has been used
throughout for the purpose of presentation of the U.S. dollar amounts in the accompanying consolidated financial statements.

4. DISCONTINUED OPERATION

Since its establishment, Mobile Broadcasting Corporation (“MBCO”), a consolidated subsidiary of the Company, has strived
to gain and serve an increasing number of customers in an effort to expand its broadcasting business for mobile devices.
However, the number of subscribers has not reached a sufficient level to sustain operation and, following a thorough review
of operation, the Company has decided to cease broadcasting. MBCO ended all its broadcasting services by the end of March
2009. After completing certain required procedures, MBCO will be liquidated.

Discontinued operations of MBCO are accounted for in accordance with SFAS No.144, Accounting for the Impairment or
Disposal of Long-Lived Assets, where the business is reclassified as discontinued operation in the consolidated financial state-
ments. However, the amount of the assets and liabilities of MBCO are included in the consolidated financial statements
together with those from continuing operations, as the amount does not have a material impact on the consolidated financial
statements of the Company.

Thousands of
U.S. dollars
2009
$ 14,184
255,347

(241,163)
100,561
(140,602)

The principal financial information in relation to MBCO is as follows:

Millions of yen

Year ended March 31
Sales and other income
Costs and expenses
Loss from discontinued operations
before income taxes and minority interest
Income taxes
Loss from discontinued operations, net of tax

March 31
Cash and cash equivalents
Other receivables
Other
Total

March 31
Other payables
Other
Total

2009

1,390
25,024

(23,634)
9,855
(13,779)

Millions of yen
2009

143
470
289
902

Millions of yen
2009
¥ 10,631
91
¥ 10,722

2008

2,758
12,249

(9,491)
(5)
(9,496)

Thousands of
U.S. dollars
2009
1,459
4,796
2,949
9,204

Thousands of
U.S. dollars
2009
$108,480
928
$109,408

Impairment charges of ¥10,409 million ($106,214 thousand) are included in costs and expenses for the year ended March 31, 2009.
5.FAIR VALUE MEASUREMENTS

The Company adopted SFAS No.157, Fair Value Measurements (“SFAS 157”) effective April 1, 2008. The Company con-
forms to FASB Staff Position No.FAS157-1, Application of FASB Statement No.157 to FASB Statement No.13 and Other
Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement
13 and No. FAS157-2, Effective Date of FASB Statement No.157, which partially delay the effective date of SFAS 157 for one
year for certain nonfinancial assets and liabilities and remove certain leasing transactions from its scope.

SFAS157 defines that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation
techniques used to measure fair value into three broad levels below;

Level 1 - Quoted prices for identical assets or liabilities in active markets.
Level 2 - Quoted prices for similar assets or liabilities in active markets.

Quoted prices for identical or similar instruments in markets that are not active.
Inputs other than quoted prices that are observable.
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

Level 3 - Instruments whose significant inputs are unobservable.

Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities that are measured at fair value on a recurring basis at March 31, 2009 are as follows:

March 31, 2009
Assets:

Marketable securities
Derivative assets
Subordinated retained interests

Total assets
Liabilities:

Derivative liabilities

Total liabilities

March 31, 2009
Assets:

Marketable securities
Derivative assets
Subordinated retained interests

Total assets
Liabilities:

Derivative liabilities

Total liabilities

Level 1

Level 2

Level 3

Total

Millions of yen

¥ 135,283
—
—
¥ 135,283

¥
¥

—
—

1,499
1,015
—
2,514

¥ 12,947
¥ 12,947

¥ 3,045
—
10,762
¥ 13,807

¥ 139,827
1,015
10,762
¥ 151,604

¥
¥

—
—

¥
¥

12,947
12,947

Level 1

Level 2

Level 3

Total

Thousands of U.S. dollars

$ 1,380,439
—
—
$ 1,380,439

$
$

—
—

$ 15,296
10,357
—
$ 25,653

$ 132,113
$ 132,113

$ 31,071
—
109,816
$140,887

$ 1,426,806
10,357
109,816
$ 1,546,979

$
$

—
—

$ 132,113
$ 132,113

Marketable securities
Level 1 securities represent marketable equity securities listed in active markets, which are valued based on quoted market prices in
active markets with sufficient volume and frequency of transactions. Level 2 securities represent marketable equity securities listed
in less active markets, which are valued based on quoted market prices for identical assets in inactive markets. Level 3 securities rep-
resent corporate debt securities and valued based on unobservable inputs as the markets for the assets are not active at the measure-
ment date.

Derivative instruments
Derivative instruments principally represent forward currency exchange contracts and interest rate swap agreement, which are clas-
sified within Level 2. They are valued based on inputs that can be corroborated with the observable inputs such as foreign currency
exchange rate, LIBOR and others.

Subordinated retained interests
Subordinated retained interests are valued based on unobservable inputs and classified within Level 3. They are valued based on the
internal valuation models and the Company’s own assumptions.

An analysis of the changes in Level 3 assets measured at fair value on a recurring basis for the year ended March 31, 2009 is shown
below:

Year ended March 31, 2009
Balance at beginning of year
Total gain or losses (realized or unrealized):

Included in earnings (losses)
Included in other comprehensive income (loss)

Purchases, issuances and settlements
Balance at end of year

Marketable
securities

3,515

—
0
(470)
3,045

Millions of yen
Subordinated
retained
interests

9,888

—
—
874
¥ 10,762

Total
¥ 13,403

—
0
404
¥ 13,807

Year ended March 31, 2009
Balance at beginning of year
Total gain or losses (realized or unrealized):

Included in earnings (losses)
Included in other comprehensive income (loss)

Purchases, issuances and settlements
Balance at end of year

Marketable
securities
$ 35,867

—
0
(4,796)
$ 31,071

Thousands of U.S. dollars
Subordinated
retained
interests
$100,898

—
—
8,918
$109,816

Total
$136,765

—
0
4,122
$140,887

At March 31, 2009, Level 3 assets measured at fair value on a recurring basis consisted of corporate debt securities and subordinat-
ed retained interests.

Assets and liabilities measured at fair value on a non-recurring basis
Certain equity method investments were written down to their fair value of ¥8,364 million ($85,347 thousand), resulting in other-
than-temporary impairment charges of ¥2,618 million ($26,714 thousand), which was included in earnings for the year ended
March 31, 2009. The impaired investments were classified within Level 1 as they are valued based on quoted market prices in active
markets.

In addition, certain non-marketable equity securities accounted for under the cost method were written down to their fair value
of ¥701 million ($7,153 thousand), resulting in other-than-temporary impairment charges of ¥427 million ($4,357 thousand),
which was included in earnings for the year ended March 31, 2009. The impaired securities were classified within level 3 as they are
valued based on unobservable inputs.
6. MARKETABLE SECURITIES AND OTHER INVESTMENTS

The aggregate cost, gross unrealized holding gains and losses, and aggregate fair value for marketable equity securities and
debt securities classified as available-for-sale securities by security type at March 31, 2009 and 2008 are as follows:

March 31, 2009:

Equity securities
Debt securities

March 31, 2008:

Equity securities
Debt securities

March 31, 2009:

Equity securities
Debt securities

Cost

96,258
3,045
99,303

120,380
3,515
123,895

Cost

Millions of yen

Gross unrealized
holding gains

Gross unrealized
holding losses

Fair value

¥ 51,109
0
¥ 51,109

¥ 104,205
0
¥ 104,205

¥ 10,585
0
¥ 10,585

5,847
0
5,847

¥ 136,782
3,045
¥ 139,827

218,738
3,515
222,253

Thousands of U.S. dollars

Gross unrealized
holding gains

Gross unrealized
holding losses

Fair value

$ 982,225
31,071
$ 1,013,296

$ 521,520
0
$ 521,520

$ 108,010
0
$ 108,010

$ 1,395,735
31,071
$ 1,426,806

At March 31, 2009, debt securities mainly consisted of corporate debt securities.

Contractual maturities of debt securities classified as available-for-sale at March 31, 2009 are as follows:

March 31, 2009:
Due within one year
Due after one year within five years

Millions of yen

Thousands of U.S. dollars

Cost

100
2,945
3,045

Fair value

100
2,945
3,045

Cost
1,020
30,051
$ 31,071

Fair value

1,020
30,051
31,071

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

The proceeds from sales of available-for-sale securities for the years ended March 31, 2009 and 2008 were ¥1,995 million
($20,357 thousand) and ¥175 million, respectively. The gross realized gains on those sales for the years ended March 31,
2009 and 2008 were ¥1,017 million ($10,378 thousand) and ¥49 million, respectively. The gross realized losses on those sales
for the years ended March 31, 2009 and 2008 were ¥496 million ($5,061 thousand) and ¥217 million, respectively.

Included in other expense are charges of ¥42,399 million ($432,643 thousand) and ¥13,379 million related to other-than-
temporary declines in the marketable and non-marketable equity securities for the years ended March 31, 2009 and 2008,
respectively.

At March 31, 2009, the cost and fair value of available-for-sale securities in an unrealized loss position over 12 consecutive

months were not significant.

Aggregate cost of non-marketable equity securities accounted for under the cost method totaled ¥50,232 million ($512,571
thousand) and ¥41,075 million at March 31, 2009 and 2008, respectively. At March 31, 2009, investments with an aggregate
cost of ¥49,531 million ($505,418 thousand) were not evaluated for impairment because (a)the Company did not estimate
the fair values of those investments as it was not practicable to estimate the fair value of the investment and (b)the Company
did not identify any events or changes in circumstances that might have had significant adverse effects on the fair values of
those investments.
7. SECURITIZATIONS

The Company has transferred certain trade notes receivable and trade accounts receivable under several securitization pro-
grams. These securitization transactions are accounted for as a sale in accordance with SFAS No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement 125, because the
Company has relinquished control of the receivables. Accordingly, the receivables sold under these facilities are excluded
from the accompanying consolidated balance sheets.

Under the asset-backed securitization program entered into in Europe, the Company holds subordinated retained inter-
ests for certain trade notes receivable and trade accounts receivable. As of March 31, 2009 and 2008, the fair value of retained
interests were ¥10,762 million ($109,816 thousand) and ¥9,888 million, respectively.

The Company recognized losses of ¥2,590 million ($26,429 thousand) and ¥3,283 million on the securitizations of receiv-

ables for the years ended March 31, 2009 and 2008, respectively.

Subsequent to sale, the Company retains collection and administrative responsibilities for the receivables. Servicing fees
received by the Company approximate the prevailing market rate. Related servicing assets or liabilities are immaterial to the
Company’s financial position.

The table below summarizes certain cash flows received from and paid to special purpose entities (“SPEs”) on the above

securitization transactions.

Year ended March 31
Proceeds from new securitizations
Servicing fees received
Purchases of delinquent and foreclosed receivables

Millions of yen

2009
¥863,058
428
2,418

2008
¥956,759
474
972

Thousands of
U.S. dollars
2009
$8,806,714
4,367
24,673

Quantitative information about delinquencies, net credit losses, and components of securitized receivables as of and for the
years ended March 31, 2009 and 2008 are as follows:

Total principal amount
of receivables

March 31

2009
¥1,199,380
137,575
1,336,955
(230,312)
¥1,106,643

2008
¥1,475,252
167,567
1,642,819
(301,976)
¥1,340,843

Millions of yen
Amount 90 days
or more past due

Net credit losses
Year ended March 31

2009
¥22,412
36
¥22,448

2008
¥27,122
51
¥27,173

2009
¥4,454
486
¥4,940

2008
¥5,102
356
¥5,458

Accounts receivable
Notes receivable
Total managed portfolio
Securitized receivables
Total receivables

8. INVENTORIES

Inventories consist of the following:

March 31
Finished products
Work in process:

Long-term contracts
Other

Raw materials

Total principal amount
of receivables

March 31, 2009

Thousands of U.S. dollars
Amount 90 days
or more past due

$12,238,571
1,403,827
13,642,398
(2,350,122)
$11,292,276

$228,694
367
$229,061

Net credit losses
Year ended March 31, 2009
$45,449
4,959
$50,408

Millions of yen

2009
¥263,498

93,922
253,037
147,848
¥758,305

2008
¥306,601

94,251
274,739
175,861
¥851,452

Thousands of
U.S. dollars
2009
$2,688,755

958,388
2,582,010
1,508,653
$7,737,806

9. INVESTMENTS IN AND ADVANCES TO AFFILIATES

The Company’s significant investments in affiliated companies accounted for by the equity method together with the per-
centage of the Company’s ownership of voting shares at March 31, 2009 were: Topcon Corporation (35.5%); Toshiba
Machine Co., Ltd. (22.1%); Toshiba Finance Corporation (“TFC”) (35.0%); Toshiba Mitsubishi-Electric Industrial Systems
Corporation (50.0%); and Semp Toshiba Amazonas S.A. (40.0%).

Of the affiliates which were accounted for by the equity method, the investments in common stock of the listed companies
were carried at ¥36,779 million ($375,296 thousand) and ¥48,596 million at March 31, 2009 (4 companies) and 2008 (5 com-
panies), respectively. The Company’s investments in these companies had market values of ¥29,843 million ($304,520 thou-
sand) and ¥60,357 million at March 31, 2009 and 2008, respectively, based on quoted market prices at those dates.

Summarized financial information of the affiliates accounted for by the equity method is shown below:

March 31
Current assets
Other assets including property, plant and equipment

Total assets
Current liabilities
Long-term liabilities
Shareholders’ equity

Total liabilities and shareholders’ equity

Year ended March 31
Sales
Net income

Millions of yen

2009
¥1,215,888
1,184,261
¥2,400,149
¥1,038,800
769,043
592,306
¥2,400,149

2008
¥1,288,502
1,077,066
¥2,365,568
¥1,181,753
575,440
608,375
¥2,365,568

Millions of yen

2009
¥2,039,742
33,155

2008
¥2,220,466
71,407

Thousands of
U.S. dollars
2009
$12,407,020
12,084,296
$24,491,316
$10,600,000
7,847,377
6,043,939
$24,491,316

Thousands of
U.S. dollars
2009
$20,813,694
338,316

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

A summary of transactions and balances with the affiliates accounted for by the equity method is presented below:

Year ended March 31
Sales
Purchases
Dividends

March 31
Notes and accounts receivable, trade
Other receivables
Long-term loans receivable
Notes and accounts payable, trade
Other payables
Capital lease obligations

Millions of yen

2009
¥ 214,742
167,632
11,227

2008
¥ 190,154
184,823
13,977

Millions of yen

2009
36,252
8,127
105,150
95,275
31,980
44,246

2008
¥ 40,649
13,005
76,250
128,205
38,869
42,371

Thousands of
U.S. dollars
2009
$ 2,191,245
1,710,531
114,561

Thousands of
U.S. dollars
2009
369,918
82,929
1,072,959
972,194
326,327
451,490

10. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company tested goodwill for impairment under SFAS No.142, Goodwill and Other Intangible Assets, applying a fair value
based test and has concluded that there was no impairment as of March 31, 2009 and 2008.

The components of acquired intangible assets excluding goodwill at March 31, 2009 and 2008 are as follows:

March 31, 2009
Other intangible assets subject to amortization:

Software
Technical license fees
Core and current technology
Other
Total

Other intangible assets not subject to amortization:

Brand name
Other
Total

March 31, 2008
Other intangible assets subject to amortization:

Software
Technical license fees
Core and current technology
Other

Total

Other intangible assets not subject to amortization:

Brand name
Other
Total

Gross carrying
amount

¥ 181,530
62,996
141,549
87,826
¥ 473,901

Gross carrying
amount

¥ 164,152
57,154
144,374
70,172
¥ 435,852

Millions of yen
Accumulated
amortization

¥111,254
26,887
23,205
37,776
¥199,122

Millions of yen
Accumulated
amortization

¥ 102,561
23,123
9,760
28,089
¥ 163,533

Net carrying
amount

¥ 70,276
36,109
118,344
50,050
¥274,779

39,020
5,306
44,326
¥319,105

Net carrying
amount

¥ 61,591
34,031
134,614
42,083
¥ 272,319

42,080
10,959
53,039
¥ 325,358

March 31, 2009
Other intangible assets subject to amortization:

Software
Technical license fees
Core and current technology
Other
Total

Other intangible assets not subject to amortization:

Brand name
Other
Total

Gross carrying
amount

$1,852,347
642,816
1,444,378
896,183
$4,835,724

Thousands of U.S. dollars
Accumulated
amortization

Net carrying
amount

$1,135,245
274,357
236,786
385,469
$2,031,857

$ 717,102
368,459
1,207,592
510,714
$ 2,803,867

398,164
54,143
452,307
$ 3,256,174

Intangible assets acquired during the year ended March 31, 2009 primarily consisted of software of ¥39,680 million
($404,898 thousand) and goodwill of ¥6,709 million ($68,459 thousand). The weighted-average amortization period of soft-
ware for the year ended March 31, 2009 was approximately 4.9 years.

The weighted-average amortization periods for other intangible assets were approximately 11.9 years and 10.3 years for
the years ended March 31, 2009 and 2008, respectively. Amortization expenses of other intangible assets subject to amortiza-
tion for the years ended March 31, 2009 and 2008 were ¥48,584 million ($495,755 thousand) and ¥44,436 million, respec-
tively. The future amortization expense for each of the next 5 years relating to intangible assets currently recorded in the con-
solidated balance sheets at March 31, 2009 is estimated as follows:

Year ending March 31
2010
2011
2012
2013
2014

Millions of yen
¥44,906
39,346
33,437
25,892
17,642

Thousands of
U.S. dollars
$458,224
401,490
341,194
264,204
180,020

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The changes in the carrying
amount of goodwill for the years ended March 31, 2009 and 2008 are as follows:

Year ended March 31
Balance at beginning of year

Goodwill acquired during the year
Price adjustment and purchase price allocation
Foreign currency translation adjustments

Balance at end of year

Millions of yen

2009
¥328,552
6,709
—
(24,546)
¥310,715

2008
¥368,537
11,011
1,277
(52,273)
¥328,552

Thousands of
U.S. dollars
2009
$3,352,571
68,459
—
(250,469)
$3,170,561

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

11. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

Short-term borrowings at March 31, 2009 and 2008 consist of the following:

March 31
Loans, principally from banks, including bank
overdrafts, with weighted-average interest rate of
1.34% at March 31, 2009 and 2.68% at March 31, 2008:
Secured
Unsecured

Commercial paper with weighted-average interest rate of
1.26% at March 31, 2009 and 0.69% at March 31, 2008
Euro yen medium-term notes of a subsidiary, with
weighted-average interest rate of 0.93% at March 31,
2009 and 0.97% at March 31, 2008

Millions of yen

2009

2008

Thousands of
U.S. dollars
2009

29
485,054

¥
29
113,529

296
4,949,531

259,000

132,000

2,642,857

3,888
¥ 747,971

12,273
¥257,831

39,673
$ 7,632,357

Substantially all of the short-term borrowings are with banks which have written basic agreements with the Company to the
effect that, with respect to all present or future loans with such banks, the Company shall provide collateral (including sums
on deposit with such banks) or guarantors immediately upon the bank’s request and that any collateral furnished pursuant to
such agreements or otherwise will be applicable to all indebtedness to such banks.

At March 31, 2009, the Company had unused committed lines of credit from short-term financing arrangements aggregat-
ing ¥44,823 million ($457,378 thousand), of which ¥9,823 million ($100,235 thousand) was in support of the Company’s
commercial paper. The lines of credit expire on various dates from April 2009 through March 2010. Under the agreements,
the Company is required to pay commitment fees ranging from 0.080 percent to 0.300 percent on the unused portion of the
lines of credit.

Long-term debt at March 31, 2009 and 2008 consist of the following:

March 31
Loans, principally from banks and insurance companies,
due 2009 to 2029 with weighted-average interest rate
of 1.40% at March 31, 2009 and due 2008 to 2029 with
weighted-average interest rate of 1.29% at March 31, 2008:
Secured
Unsecured

Unsecured yen bonds, due 2010 to 2016 with interest
ranging from 1.20% to 2.20% at March 31, 2009 and due
2008 to 2016 with interest ranging from 1.08% to
2.30% at March 31, 2008
Zero Coupon Convertible Bonds with stock acquisition rights:
Due 2009 convertible at ¥587 per share at March 31, 2009
Due 2011 convertible at ¥542 per share at March 31, 2009

Euro yen medium-term notes, due 2008 with interest
rate of 2.34% at March 31, 2008
Euro yen medium-term notes of subsidiaries, due 2009 to
2014 with interest ranging from 0.60% to 2.60% at
March 31, 2009 and due 2008 to 2015 with interest
ranging from 0.77% to 2.60% at March 31, 2008
Euro medium-term note of a subsidiary, due 2008 with
interest rate of 4.41% at March 31, 2008
Capital lease obligations

Less-Portion due within one year

Millions of yen

2009

2008

Thousands of
U.S. dollars
2009

254
715,577

4,268
532,352

2,592
7,301,806

130,000

213,307

1,326,531

41,420
95,010

—

41,430
95,310

1,000

422,653
969,490

—

23,586

58,881

240,673

—
56,834
1,062,681
(285,913)
¥ 776,768

7,938
48,646
1,003,132
(262,422)
¥ 740,710

—
579,939
10,843,684
(2,917,480)
$ 7,926,204

Certain of the secured loan agreements contain provisions, which permit the lenders to require additional collateral.
Substantially all of the unsecured loan agreements permit the lenders to require collateral or guarantees for such loans.
Certain of the secured and unsecured loan agreements may require prior approval by the banks and trustees before any distri-
butions (including cash dividends) may be made from current or retained earnings.

Assets pledged as collateral for current portion of long-term debt at March 31, 2009 were property, plant, equipment,

long-term receivables and investments with a book value of ¥335 million ($3,418 thousand).

The aggregate annual maturities of long-term debt, excluding those of capital lease obligations are as follows:

Year ending March 31
2010
2011
2012
2013
2014
Thereafter

Millions of yen
¥ 273,189
187,114
193,210
127,390
133,379
91,565
¥1,005,847

Thousands of
U.S. dollars
$ 2,787,643
1,909,326
1,971,531
1,299,898
1,361,010
934,337
$10,263,745

Financial Covenants
While loan agreements entered into between the Company and financial institutions provide for financial covenants, and
there was a concern that the consolidated financial position for FY2008 would constitute a breach of such financial
covenants, the Company and the relevant financial institutions have, upon agreement, amended such financial covenants
prior to the finalization of such results, and any possible breach of financial covenants was avoided.
12. ISSUANCE OF CONVERTIBLE BOND

In July, 2004, Toshiba Corporation issued ¥50,000 million Zero Coupon Convertible Bonds due 2009 (the “2009 Bonds”)
and ¥100,000 million Zero Coupon Convertible Bonds due 2011 (the “2011 Bonds”).

The bonds include stock acquisition rights which entitle bondholders to acquire common stock under certain circum-
stances, and are exercisable on and after August 4, 2004 up to, and including, July 7, 2009 (in the case of the 2009 Bonds) and
up to, and including, July 7, 2011 (in the case of the 2011 Bonds).

The initial conversion prices are ¥587 per share (in the case of the 2009 Bonds) and ¥542 (in the case of the 2011 Bonds),
subject to adjustment for certain events such as a stock split, consolidation of stock or issuance of stock at a consideration per
share which is less than the current market price.

(Conditions allowing exercise of stock acquisition rights)

The period prior to (but not including)
July 21, 2008 (in the case of the 2009 Bonds)
or July 21, 2010 (in the case of the 2011
Bonds)

In the case that as of the last trading day of any calendar quarter, the closing
price of the shares for any 20 trading days in a period of 30 consecutive
trading days ending on the last trading day of such quarter is more than
120% of the conversion price in effect on each such trading day.

The period on or after July 21, 2008 (in the
case of the 2009 Bonds) or July 21, 2010 (in
the case of the 2011 Bonds)

At any time after the closing price of the shares on at least one trading
day is more than 120% of the conversion price in effect on each such
trading day.

The 2009 Bonds and the 2011 Bonds were converted into 17,035 shares and 553,505 shares of common stock for the year
ended March 31, 2009. In accordance with the Corporation Law of Japan, the issuance of common stock in connection with
the conversion of convertible bonds is accounted for by crediting one-half or more of the conversion price to the common
stock and the remainder to the additional paid-in capital.

The additional 70,562,186 shares and 175,295,212 shares relating to the potential conversion of the 2009 Bonds and the
2011 Bonds are excluded from the calculation of loss per share for the year ended March, 2009 as well as calculation of dilut-
ed net loss per share from discontinued operations for the year ended March 31, 2008 due to their anti-dilutive effect.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

13. ACCRUED PENSION AND SEVERANCE COSTS

All employees who retire or are terminated are usually entitled to lump-sum severance indemnities or pension benefits deter-
mined by reference to service credits allocated to employees each year according to the regulation of retirement benefit,
length of service and conditions under which their employment terminates. The obligation for the severance indemnity bene-
fit is provided for through accruals and funding of the defined benefit corporate pension plan.

Certain subsidiaries in Japan have tax-qualified non-contributory pension plans which cover all or a part of the indemnities
payable to qualified employees at the time of termination. The funding policy for the plans is to contribute amounts required
to maintain sufficient plan assets to provide for accrued benefits, subject to the limitation on deductibility imposed by
Japanese income tax laws.

On March 31, 2007, the Company adopted SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R) (“SFAS 158”). SFAS 158 required the Company to recog-
nize the funded status (i.e., the difference between the fair value of plan assets and the benefit obligations) of its pension plan
in the March 31, 2007 statement of financial position, with a corresponding adjustment to accumulated other comprehensive
income (loss), net of tax. The adjustment to accumulated other comprehensive income (loss) at adoption represents the net
unrecognized actuarial losses, unrecognized prior service costs, and unrecognized transition obligation remaining from the
initial adoption of SFAS 87, all of which were previously accounted for pursuant to the provisions of SFAS 87. These
amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical accounting policy
for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as
net periodic pension cost in the same periods will be recognized a component of other comprehensive income. Those
amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts rec-
ognized in accumulated other comprehensive income (loss) at adoption of SFAS 158.

The changes in the benefit obligation and plan assets for the years ended March 31, 2009 and 2008 and the funded status at
March 31, 2009 and 2008 are as follows:

Millions of yen

2009

2008

¥1,463,335
52,574
39,697
3,940
(1,694)
(99,518)
(73,622)
2,813
(6,734)

¥1,380,791

¥ 828,457
(187,207)
64,358
3,940
(46,165)
3,171
(5,855)
¥ 660,699
¥ (720,092)

¥ 1,453,820
53,038
38,190
4,221
9,760
(10,001)
(70,710)
—
(14,983)
¥ 1,463,335

¥ 911,649
(93,882)
60,918
4,221
(43,454)
—
(10,995)
¥ 828,457
¥ (634,878)

Thousands of
U.S. dollars
2009

$ 14,931,990
536,469
405,072
40,204
(17,286)
(1,015,490)
(751,245)
28,704
(68,714)
$ 14,089,704

$ 8,453,643
(1,910,276)
656,714
40,204
(471,071)
32,357
(59,745)
$ 6,741,826
$ (7,347,878)

March 31
Change in benefit obligation:

Benefit obligation at beginning of year
Service cost
Interest cost
Plan participants’ contributions
Plan amendments
Actuarial gain
Benefits paid
Acquisitions and divestitures
Foreign currency exchange impact
Benefit obligation at end of year

Change in plan assets:

Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Plan participants’ contributions
Benefits paid
Acquisitions and divestitures
Foreign currency exchange impact
Fair value of plan assets at end of year
Funded status

Amounts recognized in the consolidated balance sheet at March 31, 2009 and 2008 are as follows:

March 31
Other assets
Other current liabilities
Accrued pension and severance costs

Millions of yen

2009

—
(696)
(719,396)
¥ (720,092)

2008

1,042
(1,331)
(634,589)
¥ (634,878)

Amounts recognized in accumulated other comprehensive loss at March 31, 2009 and 2008 are as follows:

March 31
Unrecognized actuarial loss
Unrecognized prior service cost

Millions of yen

2009
¥ 572,120
(27,440)
¥ 544,680

2008
¥ 475,515
(28,179)
¥ 447,336

Thousands of
U.S. dollars
2009

—
(7,102)
(7,340,776)
$ (7,347,878)

Thousands of
U.S. dollars
2009
$ 5,837,959
(280,000)
$ 5,557,959

The accumulated benefit obligation at March 31, 2009 and 2008 are as follows:

March 31
Accumulated benefit obligation

Millions of yen

2009
¥1,299,807

2008
¥ 1,377,086

Thousands of
U.S. dollars
2009
$ 13,263,337

The components of the net periodic pension and severance cost for the years ended March 31, 2009 and 2008 are as follows:

Year ended March 31
Service cost
Interest cost on projected benefit obligation
Expected return on plan assets
Amortization of prior service cost
Recognized actuarial loss

Net periodic pension and severance cost

Millions of yen

2009
52,574
39,697
(31,708)
(2,210)
21,884
80,237

2008
53,038
38,190
(34,323)
(2,803)
16,089
70,191

Thousands of
U.S. dollars
2009
536,469
405,072
(323,551)
(22,551)
223,306
818,745

Other changes in plan assets and benefit obligation recognized in the other comprehensive loss for the years ended March 31,
2009 and 2008 are as follows:

Year ended March 31
Current year actuarial loss
Recognized actuarial loss
Prior service cost due to plan amendments
Amortization of prior service cost

Millions of yen

2009
¥ 119,397
(21,884)
(1,694)
2,210
98,029

2008
¥ 118,204
(16,089)
9,760
2,803
¥ 114,678

Thousands of
U.S. dollars
2009
$ 1,218,337
(223,306)
(17,286)
22,551
$ 1,000,296

The estimated prior service cost and actuarial loss that will be amortized from accumulated other comprehensive loss into net
periodic pension and severance cost over the next year are summarized as follows:

Year ending March 31
Prior service cost
Actuarial loss

Millions of yen
2010

(2,312)
32,635

Thousands of
U.S. dollars
2010
(23,592)
333,010

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

The Company expects to contribute ¥58,705 million ($599,031 thousand) to its defined benefit plans in the year ending
March 31, 2010.
The following benefit payments are expected to be paid:

Year ending March 31
2010
2011
2012
2013
2014
2015 - 2019

Millions of yen
¥ 80,934
82,282
87,708
86,902
83,986
459,072

Thousands of
U.S. dollars
$ 825,857
839,612
894,980
886,755
857,000
4,684,408

Weighted-average assumptions used to determine benefit obligations as of March 31, 2009 and 2008 and net periodic pen-
sion and severance cost for the years then ended are as follows:

March 31
Discount rate
Rate of compensation increase

Year ended March 31
Discount rate
Expected long-term rate of return on plan assets
Rate of compensation increase

2009
3.3%
3.1%

2009
2.8%
3.9%
3.0%

2008
2.8%
3.0%

2008
2.5%
3.9%
3.0%

The Company determines the expected long-term rate of return in consideration of the target allocation of the plan assets,
the current expectation of long-term returns on the assets and actual returns on plan assets.

The Company’s pension and severance plan asset allocations at March 31, 2009 and 2008, by asset category are as follows:

March 31
Asset category :

Equity securities
Debt securities
Life insurance company general accounts
Other

Total

2009

46%
32%
1%
21%
100%

2008

50%
31%
2%
17%
100%

The other category includes hedge funds and real estate.

The Company’s investment policies and strategies are to assure adequate plan assets to provide for future payments of
pension and severance benefits to participants, with reasonable risks. The Company designs the basic target allocation of the
plan assets to mirror the best portfolio based on estimation of mid-term and long-term return on the investments. The
Company periodically reviews the actual return on the investments and adjusts the portfolio to achieve the assumed long-
term rate of return on the investments. The Company targets its investments in equity securities at 40 percent or more of
total investments, and investments in equity and debt securities at 75 percent or more of total investments.

Certain of the Company’s subsidiaries provide certain health care and life insurance benefits to retired employees. Such

benefits have no material impact on the consolidated financial statements of the Company.

14. RESEARCH AND DEVELOPMENT COSTS

Research and development costs are expensed as incurred and amounted to ¥378,261 million ($3,859,806 thousand) and
¥393,293 million for the years ended March 31, 2009 and 2008, respectively.
15. ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising costs amounted to ¥46,632 million ($475,837 thousand) and ¥53,201
million for the years ended March 31, 2009 and 2008, respectively.
16. OTHER INCOME AND OTHER EXPENSE
FOREIGN EXCHANGE LOSSES
For the years ended March 31, 2009 and 2008, the net foreign exchange losses were ¥38,128 million ($389,061 thousand) and
¥16,861 million, respectively.

GAINS ON SALES OF SECURITIES
The gains on sales of securities for the years ended March 31, 2009 and 2008 were ¥76,436 million ($779,959 thousand) and
¥33,953 million, respectively. For the year ended March 31, 2009, the gains on sales of securities were related mainly to
Toshiba building Co., Ltd. (NREG Toshiba building Co., Ltd.). For the year ended March 31, 2008, the gains on sales of
securities were related mainly to Toshiba-EMI Limited and Toshiba Machine Co., Ltd..

GAINS AND LOSSES ON SALES OR DISPOSAL OF FIXED ASSETS
For the years ended March 31, 2009 and 2008, the sale and disposal of fixed assets resulted in net gains of ¥7,307 million
($74,561 thousand) and ¥132,725 million, respectively. Gains on sales of fixed assets were ¥22,685 million ($231,480 thou-
sand), and losses on disposal of fixed assets were ¥15,378 million ($156,918 thousand) for the year ended March 31, 2009.
Gains on sales of fixed assets were ¥144,716 million, and losses on disposal of fixed assets were ¥11,991 million for the year
ended March 31, 2008. The gains on sales of fixed assets were related mainly to the Ginza Toshiba Building and the land
sale.

WITHDRAWAL FROM HD DVD BUSINESS
In response to the major changes observed in the business environment during the year ended March 31, 2008, the Company
decided to withdraw from the HD DVD business after conducting an overall assessment of the future business strategy. The
Company will continue market conventional DVD players and recorders, and accordingly there was no separate financial
reporting for the HD DVD business.

The Company anticipates that substantially all of the liabilities associated with the withdrawal from HD DVD business

were paid during the year ended March 31, 2008.

The costs associated with the withdrawal from HD DVD business for the year ended March 31, 2008 were ¥48,328 mil-

lion.

CHANGE IN THE METHOD OF DEPRECIATION
Effective April 1, 2007, Toshiba Corporation and its domestic subsidiaries changed the method of calculating depreciation of
machinery, equipment and other fixed assets, from the fixed-percentage-on declining base application to the 250% declining-
balance method with estimated residual value reduced to a nominal value. For the year ended March 31, 2008, depreciation
expense increased ¥76,519 million, of which ¥46,648 million is included in other expense.
17. IMPAIRMENT OF LONG-LIVED ASSETS

The amount of impairment charges, except for Mobile Broadcasting Business, was not significant for the year ended March
31, 2009.

The Company recorded impairment charges of ¥16,959 million related primarily to the HD DVD business, which are
included mainly under other expense in the accompanying consolidated statements of income, for the year ended March 31,
2008.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

18. INCOME TAXES

The Company is subject to a number of different income taxes which, in the aggregate, result in an effective statutory tax rate
in Japan of approximately 40.7 percent for the years ended March 31, 2009 and 2008.

A reconciliation between the reported income tax expense and the amount computed by multiplying the income (loss)

from continuing operations, before income taxes and minority interest by the applicable statutory tax rate is as follows:

Year ended March 31
Expected income tax expense (benefit)
Increase (decrease) in taxes resulting from:

Tax credits
Non-deductible expenses for tax purposes
Dividends
Net changes in valuation allowance
Effect of income tax rate change
Net decrease in deferred tax liabilities due to the enacted change in tax law
Other

Income tax expense

Millions of yen

2009
¥(113,656)

(3,590)
2,255
19,985
159,965
3,023
(12,819)
(840)
¥ 54,323

2008
¥107,875

(15,209)
3,274
8,877
15,212
(2,376)
—
(4,278)
¥113,375

Thousands of
U.S. dollars
2009
$ (1,159,755)

(36,633)
23,010
203,928
1,632,296
30,847
(130,806)
(8,571)
554,316

The significant components of deferred tax assets and deferred tax liabilities as of March 31, 2009 and 2008 are as follows:

March 31
Gross deferred tax assets:

Inventories
Accrued pension and severance costs
Tax loss carryforwards
Pension liability adjustment
Accrued expenses
Depreciation and amortization
Other

Valuation allowance for deferred tax assets
Deferred tax assets

March 31
Gross deferred tax liabilities:

Inventories
Property, plant and equipment
Unrealized gains on securities
Gain on securities contributed to employee retirement benefit trusts
Undistributed earnings of foreign subsidiaries and affiliates
Goodwill and other intangible assets
Other
Deferred tax liabilities
Net deferred tax assets

Millions of yen

2009

2008

¥ 21,845
114,158
247,304
210,906
130,779
65,115
111,487
901,594
(275,427)
¥ 626,167

¥ 33,104
106,125
108,324
183,240
122,014
62,807
96,251
711,865
(113,869)
¥597,996

Millions of yen

2009

2008

(6,702)
(24,204)
(17,808)
(17,381)
(44,524)
(69,903)
(12,069)
(192,591)
¥ 433,576

¥ (22,793)
(38,175)
(36,827)
(17,381)
(61,688)
(53,325)
(14,240)
(244,429)
¥353,567

Thousands of
U.S. dollars
2009

222,908
1,164,878
2,523,510
2,152,102
1,334,480
664,439
1,137,622
9,199,939
(2,810,480)
$ 6,389,459

Thousands of
U.S. dollars
2009

(68,388)
(246,980)
(181,714)
(177,357)
(454,326)
(713,296)
(123,153)
(1,965,214)
$ 4,424,245

Deferred tax liabilities included in other current liabilities and other liabilities at March 31, 2009 and 2008 were ¥60,380 mil-
lion ($616,122 thousand) and ¥80,721 million, respectively.

The net changes in the total valuation allowance for the years ended March 31, 2009 and 2008 were an increase of

¥161,558 million ($1,648,551 thousand) and an increase of ¥16,026 million, respectively.

The Company’s tax loss carryforwards for each of the corporate and local taxes at March 31, 2009 amounted to ¥563,504
million ($5,750,041 thousand) and ¥612,669 million ($6,251,724 thousand), respectively, the majority of which will expire
during the period from 2010 through 2016. The Company utilized tax loss carryforwards of ¥956 million ($9,755 thousand)
and ¥1,521 million ($15,520 thousand) to reduce current corporate and local taxes, respectively, during the year ended
March 31, 2009.

Realization of tax loss carryforwards and other deferred tax assets is dependent on the Company generating sufficient tax-
able income prior to their expiration or the Company exercising certain available tax strategies. Although realization is not
assured, management believes it is more likely than not that all of the deferred tax assets, less the valuation allowance, will be
realized. The amount of such net deferred tax assets considered realizable, however, could be reduced in the near term if esti-
mates of future taxable income during the carryforward period are reduced.

The revised Japanese corporate tax bill was enacted in March 2009 and is effective from April 1, 2009. This new legislation
made the change in the tax treatment of dividends received from foreign subsidiaries that a certain percentage of such divi-
dends are excluded from taxable income of Japanese parent companies. The effect of the change in deferred tax liabilities
regarding undistributed earnings of foreign subsidiaries totaled ¥12,819 million ($130,806 thousand).

The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB
Statement No. 109 (“FIN 48”) effective April 1, 2007. A reconciliation of the beginning and ending amount of unrecognized
tax benefits is as follows:

Balance at beginning of year
Additions for tax positions of the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Lapse of statute of limitations or closed audits
Foreign currency translation adjustments
Balance at end of year

Millions of yen

2009

5,103
378
1,263
(389)
(1,875)
(120)
4,360

2008

7,906
542
—
(2,009)
(313)
(1,023)
5,103

Thousands of
U.S. dollars
2009

52,071
3,857
12,888
(3,969)
(19,133)
(1,224)
44,490

The total amounts of unrecognized tax benefits that would reduce the effective tax rate, if recognized, are ¥922 million
($9,408 thousand) and ¥1,148 million at March 31, 2009 and 2008, respectively.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income taxes in the consol-
idated statements of income. Both interest and penalties accrued as of March 31, 2009 and 2008, and interest and penalties
included in income taxes for the years ended March 31, 2009 and 2008 are not material.

The Company believes its estimates and assumptions of unrecognized tax benefits are reasonable and based on each of the
items of which the Company is aware at March 31, 2009, no significant changes to the unrecognized tax benefits are expected
within the next twelve months.

The Company files income tax returns in Japan and various foreign tax jurisdictions. In Japan, the Company is no longer
subject to regular income tax examinations by the tax authority for years before the fiscal year ended March 31, 2008 with
few exceptions. In other major foreign tax jurisdictions, the Company is no longer subject to regular income tax examinations
by tax authorities for years before the fiscal year ended March 31, 2006 with few exceptions.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

19. SHAREHOLDERS’ EQUITY

COMMON STOCK
The total number of authorized shares of the Company is 10,000,000,000.

The change in the total number of shares issued for the years ended March 31,2009 and 2008 are as follows:

Year ended March 31
Shares issued at beginning of year
Increase due to conversion of convertible bonds
with stock acquisition rights
Shares at end of period

2009

2008

3,237,031,486

3,219,027,165

570,540
3,237,602,026

18,004,321
3,237,031,486

RETAINED EARNINGS
Retained earnings at March 31, 2009 and 2008 included a legal reserve of ¥22,429 million ($228,867 thousand) and ¥20,042
million, respectively. The Corporation Law of Japan provides that an amount equal to 10% of distributions from retained
earnings paid by Toshiba Corporation and its Japanese subsidiaries be appropriated as a legal reserve. No further appropria-
tions are required when the total amount of the additional paid-in capital and the legal reserve equals 25% of their respective
stated capital. The Corporation Law of Japan also provides that additional paid-in capital and legal reserve are available for
appropriations by the resolution of the stockholders.

The amount of retained earnings available for dividends is based on Toshiba Corporation’s retained earnings determined in

accordance with generally accepted accounting principles in Japan and the Corporation Law of Japan.

Retained earnings at March 31, 2009 included the Company’s equity in undistributed earnings of affiliated companies

accounted for by the equity method in the amount of ¥58,787 million ($599,867 thousand).

ACCUMULATED OTHER COMPREHENSIVE LOSS
An analysis of the changes in accumulated other comprehensive loss, net of tax, for the years ended March 31, 2009 and 2008
are shown below:

Year ended March 31
Net unrealized gains and losses on securities:

Balance at beginning of year
Current year change
Balance at end of year

Foreign currency translation adjustments:

Balance at beginning of year
Current year change
Balance at end of year

Pension liability adjustments:
Balance at beginning of year
Current year change
Balance at end of year

Net unrealized gains and losses on derivative instruments:

Balance at beginning of year
Current year change
Balance at end of year

Total accumulated other comprehensive loss:

Balance at beginning of year
Current year change
Balance at end of year

Millions of yen

2009

2008

53,461
(31,822)
21,639

¥ (117,552)
(105,221)
¥ (222,773)

80,801
(27,340)
53,461

¥ (21,938)
(95,614)
¥ (117,552)

Thousands of
U.S. dollars
2009

545,520
(324,714)
220,806

$ (1,199,510)
(1,073,684)
$ (2,273,194)

¥ (256,839)
(57,739)
¥ (314,578)

¥ (190,118)
(66,721)
¥ (256,839)

$ (2,620,806)
(589,173)
$ (3,209,979)

(1,284)
(1,000)
(2,284)

¥ (322,214)
(195,782)
¥ (517,996)

27
(1,311)
(1,284)

(13,102)
(10,204)
(23,306)

¥ (131,228)
(190,986)
¥ (322,214)

$ (3,287,898)
(1,997,775)
$ (5,285,673)

Tax effects allocated to each component of other comprehensive loss for the years ended March 31, 2009 and 2008 are shown
below:

Pre-tax
amount

Millions of yen
Tax benefit
(expense)

Net-of-tax
amount

For the year ended March 31, 2009:

Net unrealized gains and losses on securities:

Unrealized holding losses arising during year
Less: reclassification adjustment for losses included in net loss

¥ (96,887)
43,881

¥ 39,103
(17,919)

¥ (57,784)
25,962

Foreign currency translation adjustments:

Currency translation adjustments arising during year
Less: reclassification adjustment for losses included in net loss

Pension liability adjustments:

Pension liability adjustments arising during year
Less: reclassification adjustment for losses included in net loss

Net unrealized gains and losses on derivative instruments:

Unrealized gains arising during year
Less: reclassification adjustment for gains included in net loss

Other comprehensive loss
For the year ended March 31, 2008:

Net unrealized gains and losses on securities:

(107,197)
2

(117,018)
19,674

4,270
(5,930)
¥(259,205)

1,974
—

47,612
(8,007)

(105,223)
2

(69,406)
11,667

(1,754)
2,414
¥ 63,423

2,516
(3,516)
¥(195,782)

Unrealized holding losses arising during year
Less: reclassification adjustment for losses included in net income

¥ (59,136)
13,018

¥ 24,076
(5,298)

¥ (35,060)
7,720

Foreign currency translation adjustments:

Currency translation adjustments arising during year
Less: reclassification adjustment for losses included in net income

Pension liability adjustments:

Pension liability adjustments arising during year
Less: reclassification adjustment for losses included in net income

Net unrealized gains and losses on derivative instruments:

Unrealized losses arising during year
Less: reclassification adjustment for losses included in net income

Other comprehensive loss

(100,966)
802

(125,247)
13,286

4,550
—

50,647
(5,407)

(96,416)
802

(74,600)
7,879

(10,627)
8,408
¥ (260,462)

4,330
(3,422)
¥ 69,476

(6,297)
4,986
¥ (190,986)

Pre-tax
amount

Thousands of U.S. dollars
Tax benefit
(expense)

Net-of-tax
amount

For the year ended March 31, 2009:

Net unrealized gains and losses on securities:

Unrealized holding losses arising during year
Less: reclassification adjustment for losses included in net loss

$ (988,643)
447,766

$ 399,010
(182,847)

$ (589,633)
264,919

Foreign currency translation adjustments:

Currency translation adjustments arising during year
Less: reclassification adjustment for losses included in net loss

Pension liability adjustments:

Pension liability adjustments arising during year
Less: reclassification adjustment for losses included in net loss

Net unrealized gains and losses on derivative instruments:

Unrealized gains arising during year
Less: reclassification adjustment for gains included in net loss

Other comprehensive loss

(1,093,847)
20

(1,194,061)
200,755

20,143
—

(1,073,704)
20

485,837
(81,704)

(708,224)
119,051

43,571
(60,510)
$ (2,644,949)

(17,898)
24,633
$ 647,174

25,673
(35,877)
$ (1,997,775)

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

TAKEOVER DEFENSE MEASURE
The effective period of the plan for countermeasures to large-scale acquisitions of the shares in Toshiba Corporation (the
“Company”) (the “Former Plan”) expires at the conclusion of the ordinary general meeting of shareholders in June 2009 (the “170th
Shareholders Meeting”). Accordingly, the Company renews the plan for countermeasures to large-scale acquisitions of the shares in
the Company (that plan after renewal, the “Plan”) for a further three years by partially revising the Former Plan after the sharehold-
ers’ approval has been obtained at the 170th Shareholders Meeting. For the renewal of the Plan, the Company has made the neces-
sary revisions in accordance with changes based on practical experiences and discussions regarding takeover defense measures at the
related parties including legal community. However, there is no significant change to the substantive content of the Former Plan.

Specifically, if an acquirer commences or plans to commence an acquisition or a tender offer that would result in the acquirer hold-
ing 20% or more of the shares issued by the Company, the Company will require the acquirer to provide the necessary information to
its board of directors in advance. The Special Committee that solely consists of outside directors who are independent from the
Company’s management will, at its discretion, obtain advice from outside experts, evaluate and consider the details of the acquisition,
disclose to the Company’s shareholders the necessary information, evaluate, consider and disclose any alternative proposal presented
by the Company’s representative executive officers, and negotiate with the acquirer. If the acquirer does not comply with the proce-
dures under the Plan, or the acquisition would damage the corporate value of the Company or the common interests of its share-
holders, and if the acquisition satisfies the triggering requirements set out in the Plan, the Company will implement countermeasures
(allotment of stock acquisition rights with (a) an exercise condition whereby the acquirer etc. cannot exercise the rights (except where
any exception event occurs) and (b) an acquisition provision to the effect that the Company may acquire the stock acquisition rights
in exchange for the Company’s shares from persons other than the acquirer etc., by means of a gratis allotment of stock acquisition
rights (shinkabu yoyakuken no mushou wariate)) and ensure the corporate value of the Company and the common interests of its
shareholders.
20. NET EARNINGS (LOSS) PER SHARE

The following reconciliation table of the numerators and denominators sets forth the computation of basic and diluted net
earnings (loss) per share for the years ended March 31, 2009 and 2008.

Year ended March 31
Income (loss) from continuing operations available to common shareholders
Loss from discontinued operations available to common shareholders
Net income (loss) available to common shareholders

Millions of yen

2009
¥ (329,780)
(13,779)
¥ (343,559)

2008
¥ 136,909
(9,496)
¥ 127,413

Thousands of
U.S. dollars
2009
$ (3,365,102)
(140,602)
$ (3,505,704)

Year ended March 31
Weighted-average number of shares
of common stock outstanding for the year
Incremental shares from assumed conversions
of dilutive convertible debentures
Weighted-average number of shares of diluted common
stock outstanding for the year

Thousands of shares

2009

2008

3,235,763

3,229,055

—

253,398

3,235,763

3,482,453

Year ended March 31
Earnings (loss) from continuing operations per share of common stock:
—Basic
—Diluted
Loss from discontinued operations per share of common stock:
—Basic
—Diluted
Net earnings (loss) per share of common stock:
—Basic
—Diluted

Yen

2009

2008

U.S. dollars
2009

¥ (101.92)
(101.92)

(4.26)
(4.26)

¥ (106.18)
(106.18)

42.40
39.31

(2.94)
(2.94)

39.46
36.59

(1.04)
(1.04)

(0.04)
(0.04)

(1.08)
(1.08)

Due to their anti-dilutive effect, incremental shares from assumed conversions of dilutive convertible debentures are excluded
from the calculation of loss per share for the year ended March, 2009 as well as calculation of diluted net loss per share from
discontinued operations for the year ended March 31, 2008.

Net earnings (loss) per share amounts are computed independently for net earnings (loss) from continuing operations, net
loss from discontinued operations and net earnings (loss). Consequently, the sum of diluted per share amounts from continu-
ing operations and discontinued operations for the year ended March 31, 2008 may not equal the total per share amounts for
net earnings (loss).
21. FINANCIAL INSTRUMENTS

(1) DERIVATIVE FINANCIAL INSTRUMENTS
The Company operates internationally, giving rise to exposure to market risks from fluctuations in foreign currency exchange and
interest rates. In the normal course of its risk management efforts, the Company employs a variety of derivative financial instruments,
which are consisted principally of forward exchange contracts, interest rate swap agreements, currency swap agreements, and curren-
cy options to reduce its exposures. The Company has policies and procedures for risk management and the approval, reporting and
monitoring of derivative financial instruments. The Company’s policies prohibit holding or issuing derivative financial instruments
for trading purposes.

The Company is exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instru-
ments, but the Company does not anticipate any credit-related loss from nonperformance by the counterparties because the counter-
parties are financial institutions of high credit standing and contracts are diversified across a number of major financial institutions.

The Company has entered into forward exchange contracts with financial institutions as hedges against fluctuations in foreign
currency exchange rates on monetary assets and liabilities denominated in foreign currencies. The forward exchange contracts related
to accounts receivable and payable, and commitments on future trade transactions denominated in foreign currencies, mature pri-
marily within a few years of the balance sheet date.

Interest rate swap agreements, currency swap agreements and currency options are used to limit the Company’s exposure to losses
in relation to underlying debt instruments and accounts receivable and payable denominated in foreign currencies resulting from
adverse fluctuations in foreign currency exchange and interest rates. These agreements mature during the period 2009 to 2015.

Forward exchange contracts, interest rate swap agreements, currency swap agreements and currency options are designated as
either fair value hedges or cash flow hedges, except for some contracts, depending on accounts receivable and payable denominated in
foreign currencies or commitments on future trade transactions and the interest rate characteristics of the underlying debt as dis-
cussed below.

Fair Value Hedge Strategy
The forward exchange contracts and currency swap agreements utilized by the Company effectively reduce fluctuation in fair
value of accounts receivable and payable denominated in foreign currencies.

The interest rate swap agreements utilized by the Company effectively convert a portion of its fixed-rate debt to a floating-

rate basis.

The gain or loss on the derivative financial instruments designated as fair value hedges is offset by the loss or gain on the

hedged items in the same location of the consolidated statements of income.

Cash Flow Hedge Strategy
The forward exchange contracts and currency options utilized by the Company effectively reduce fluctuation in cash flow from
commitments on future trade transactions denominated in foreign currencies for the next 6 years.

The interest rate swap agreements utilized by the Company effectively convert a portion of its floating-rate debt to a fixed-

rate basis for the next 7 years.

The Company expects to reclassify ¥697 million ($7,112 thousand) of net losses on derivative financial instruments from
accumulated other comprehensive income (loss) to earnings during the next 12 months due to the collection of accounts
receivable denominated in foreign currencies and the payments of accounts payable denominated in foreign currencies and
variable interest associated with the floating-rate debts.

Derivatives Not Designated as Hedging Instruments Strategy
The Company has entered into certain forward exchange contracts and interest rate swap agreements to offset the earnings
impact related to fluctuations in foreign currency exchange rates on monetary assets and liabilities denominated in foreign cur-
rencies and in interest rates on debt instruments. Although some of these contracts have not been designated as hedges as
required in order to apply hedge accounting, the contracts are effective from an economic perspective. The changes in the fair
value of those contracts are recorded in earnings immediately.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

The Company’s forward exchange contract amounts, the aggregate notional principal amounts of interest rate swap agree-
ments, currency swap agreements, and currency options outstanding at March 31, 2009 and 2008 are summarized below:

March 31
Forward exchange contracts:
To sell foreign currencies
To buy foreign currencies
Interest rate swap agreements
Currency swap agreements
Currency options

Millions of yen

2009

2008

¥196,828
162,506
270,300
86,021
—

¥329,575
330,063
241,550
133,136
8,817

Thousands of
U.S. dollars
2009

$2,008,449
1,658,224
2,758,163
877,765
—

(2) FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company’s financial instruments and the location in the consolidated balance sheets at March
31, 2009 are summarized as follows:

Location

Carrying
amount

Estimated
fair value

Carrying
amount

Estimated
fair value

Millions of yen
2009

Thousands of U.S. dollars
2009

March 31
Nonderivatives:
Liabilities:

Long-term debt, including current portion
Derivatives designated as hedging instruments:
Assets:

Forward
exchange
contracts
Interest rate
swap agreements

Currency Swap
agreements

Liabilities:
Forward
exchange
contracts
Interest rate
swap agreements

Prepaid
expenses and
other current assets
Prepaid
expenses and
other current assets
Prepaid
expenses and
other current assets

Other current
liabilities

Other liabilities

Derivatives not designated as hedging instruments:
Assets:

Interest rate
swap agreements

Prepaid
expenses and
other current assets

Liabilities:
Forward
exchange
contracts

Other current
liabilities

¥ (1,005,847)

¥ (996,085)

$(10,263,745)

$ (10,164,133)

734

207

734

7,490

745

207

2,112

(6,081)

(62,051)

(2,541)

(25,929)

(4,325)

(44,133)

The estimated fair values of the Company’s financial instruments at March 31, 2008 are summarized as follows:

March 31
Nonderivatives:
Liabilities:

Millions of yen
2008

Carrying
amount

Estimated
fair value

Long-term debt, including current portion

(954,486)

(998,490)

Derivative financial instruments:
Forward exchange contracts
Interest rate swap agreements
Currency swap agreements
Currency options

(1,308)
(2,063)
2,275
458

The above table excludes the financial instruments for which fair values approximate their carrying amounts and those related
to leasing activities. The table also excludes marketable securities and other investments which are disclosed in Note 6.

In assessing the fair value of these financial instruments, the Company uses a variety of methods and assumptions, which are
based on estimates of market conditions and risks existing at that time. For certain instruments, including cash and cash equiv-
alents, notes and accounts receivable-trade, short-term borrowings, notes payable-trade, accounts payable-trade and accounts
payable-other and accrued expenses, it is assumed that the carrying amount approximated fair value for the majority of these
instruments because of their short maturities. Quoted market prices are used for a part of marketable securities and other
investments. For long-term debt, fair value is estimated using market quotes, or where market quotes are not available, using
estimated discounted future cash flows. Other techniques, such as estimated discounted value of future cash flows, and
replacement cost, are used to determine fair value for the remaining financial instruments. These estimated fair values are not
necessarily indicative of the amounts that could be realized in a current market exchange.

The effect of derivative instruments on the consolidated statements of income for the 3 months ended March 31, 2009 is as
follows:

Millions of yen

Amount of gain (loss)
reclassified from accumulated
OCI into income (loss)

Amount of gain (loss)
recognized in income (loss)
(Ineffective portion and amount excluded
from effectiveness testing)

Location

Amount
recognized

Location

Amount
recognized

Other expense

¥(281)

Other expense

¥(64)

Amount of gain (loss)
recognized in OCI
Amount
recognized

¥499

394

Millions of yen
Amount of gain (loss)
recognized in income (loss)

Location

Amount
recognized

Other expense

¥(1,106)

Other income

Cash Flow Hedge:

Forward exchange

contracts

Interest rate swap

agreements

Derivatives not designated
as hedging instruments:
Forward exchange

contracts

Interest rate swap

agreements

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

Amount of gain (loss)
recognized in OCI
Amount
recognized

Thousands of U.S. dollars

Amount of gain (loss)
reclassified from accumulated
OCI into income (loss)

Amount of gain (loss)
recognized in income (loss)
(Ineffective portion and amount excluded
from effectiveness testing)

Location

Amount
recognized

Location

Amount
recognized

$5,092

Other expense

$(2,867)

Other expense

$(653)

4,020

Thousands of U.S. dollars
Amount of gain (loss)
recognized in income (loss)

Location

Amount
recognized

Other expense

$(11,286)

Other income

Cash Flow Hedge:

Forward exchange

contracts

Interest rate swap

agreements

Derivatives not designated
as hedging instruments:
Forward exchange

contracts

Interest rate swap

agreements

22. LEASES

The Company leases manufacturing equipment, office and warehouse space, and certain other assets under operating leases.
Rent expenses under such leases for the years ended March 31, 2009 and 2008 were ¥128,010 million ($1,306,224 thousand)
and ¥91,130 million, respectively.

The Company also leases certain machinery and equipment which are accounted for as capital leases. As of March 31, 2009
and 2008, the costs under capital leases were approximately ¥78,100 million ($796,939 thousand) and ¥90,000 million, and the
related accumulated amortization were approximately ¥21,200 million ($216,327 thousand) and ¥41,200 million, respectively.
As of March 31, 2009 and 2008, the costs under capital leases from TFC and Toshiba Medical Finance Co., Ltd., affiliates
of the Company, were approximately ¥60,000 million ($612,245 thousand) and ¥81,200 million, and the related accumulated
amortization were approximately ¥15,700 million ($160,204 thousand) and ¥38,800 million, respectively.

Minimum lease payments for the Company’s capital and non-cancelable operating leases as of March 31, 2009 are as fol-

lows:

Year ending March 31

2010
2011
2012
2013
2014
Thereafter

Total minimum lease payments
Executory costs
Amounts representing interest
Present value of net minimum lease Payments
Less—current portion

Millions of yen

Thousands of U.S. dollars

Capital leases
¥ 20,330
14,230
9,337
5,179
3,254
13,016
65,346
(3,243)
(5,269)
56,834
(18,367)
¥ 38,467

Operating leases
¥ 88,050
84,261
61,833
44,572
15,647
27,617
¥321,980

Operating leases
$ 898,470
859,806
630,949
454,816
159,663
281,806
$3,285,510

Capital leases
$ 207,449
145,204
95,276
52,847
33,204
132,816
666,796
(33,092)
(53,765)
579,939
(187,419)
$ 392,520

23. COMMITMENTS AND CONTINGENT LIABILITIES
Commitments for the purchase of property, plant and equipment, and unconditional purchase obligation for license fee out-
standing at March 31, 2009 totaled approximately ¥51,967 million ($530,276 thousand).

At March 31, 2009, contingent liabilities, other than guarantees disclosed in Note 24, approximated ¥12,937 million
($132,010 thousand) principally for recourse obligations related to notes receivable transferred and for performance undertak-
ing.
24. GUARANTEES

GUARANTEES OF UNCONSOLIDATED AFFILIATES AND THIRD PARTY DEBT
The Company guarantees debt as well as certain financial obligations of unconsolidated affiliates and third parties to support
the sale of the Company’s products and services. Expiration dates vary from 2009 to 2017 or terminate on payment and/or
cancellation of the obligation. A payment by the Company would be triggered by the failure of the guaranteed party to fulfill
its obligation under the guarantee. The maximum potential payments under these guarantees were ¥130,837 million
($1,335,071 thousand) as of March 31, 2009.

GUARANTEES OF EMPLOYEES’ HOUSING LOANS
The Company guarantees housing loans of its employees. The term of the guarantees is equal to the term of the related loans which
range from 5 to 25 years. A payment would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guaran-
tee. The maximum potential payments under these guarantees were ¥11,914 million ($121,571 thousand) as of March 31, 2009.
However, the Company expects that the majority of such payments would be reimbursed through the Company’s insurance policy.

RESIDUAL VALUE GUARANTEES UNDER SALE AND LEASEBACK TRANSACTIONS
The Company has entered into several sale and leaseback transactions in which certain manufacturing equipment was sold and
leased back. The Company may be required to make payments for residual value guarantees in connection with these transac-
tions. The operating leases will expire on various dates through February 2014. The maximum potential payments by the
Company for such residual value guarantees were ¥184,492 million ($1,882,571 thousand) at March 31, 2009.

GUARANTEES OF DEFAULTED NOTES AND ACCOUNTS RECEIVABLE
The Company has transferred trade notes receivable and trade accounts receivable under several securitization programs.
Upon certain sales of trade notes and accounts receivable, the Company holds a repurchase obligation, which the Company is
required to perform upon default of the trade notes and accounts receivable. The trade notes and accounts receivable generally
mature within 3 months. The maximum potential payment for such repurchase obligation was ¥11,638 million ($118,755
thousand) as of March 31, 2009.

The carrying amounts of the liabilities for the Company's obligations under the guarantees described above at March 31, 2009
were not significant.

WARRANTY
Estimated warranty costs are accrued for at the time the product is sold to a customer. Estimates for warranty costs are made
based primarily on historical warranty claim experience. The following is a reconciliation of the product warranty accrual:

March 31
Balance at beginning of year

Warranties issued
Settlements made
Foreign currency translation adjustments

Balance at end of year

25. LEGAL PROCEEDINGS

Millions of yen

2009
¥ 43,578
35,827
(37,512)
(3,056)
¥ 38,837

2008
¥ 38,814
48,316
(39,578)
(3,974)
¥ 43,578

Thousands of
U.S. dollars
2009
$ 444,673
365,582
(382,775)
(31,184)
$ 396,296

In January 2007, the European Commission adopted a decision imposing fines on 19 companies, including Toshiba
Corporation, for violating EU competition laws in the gas insulated switchgear market. Toshiba Corporation was individually
fined
86.25 million and was also fined 4.65 million jointly and severally with Mitsubishi Electric Corporation. Following
its own investigation, Toshiba Corporation contends that it has not found any infringement of EU competition laws, and it is
bringing an action to the European Court of First Instance seeking annulment of the European Commission's decision.

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

The Company undertakes global business operations and is involved from time to time in disputes, including lawsuits and
other legal proceedings and investigations by relevant authorities. There is a possibility that such case may arise in the future.
Due to differences in judicial systems and the uncertainties inherent in such proceedings, the Company may be subject to a
ruling requiring payment of amounts far exceeding its expectations. Any judgement or decision unfavorable to the Company
could have a materially adverse effect on the Company’s business, results of operations or financial condition.

The Company’s Management believes that there are meritorious defenses to all of these legal procedures, including lawsuits
and investigations. Based on the information currently available to both the Company and its legal counsel, Management
believes that such legal procedures, if any, would not have a material adverse effect on the financial position or the results of
operations of the Company.
26. ENVIRONMENTAL LIABILITIES

The Japanese environmental regulation, “Law Concerning Special Measure against poly chlorinated biphenyl (“PCB”) waste”
requires PCB waste holders dispose of all PCB waste by July 2016. The Company accrued ¥10,426 million ($106,388 thou-
sand) and ¥10,643 million at March 31, 2009 and 2008, respectively, for environmental remediation and restoration costs for
products or equipment with PCB which some Toshiba operations in Japan have retained. The costs recorded during the year
are included as cost of sales in the accompanying consolidated statements of income.

The accrual will be adjusted as assessment and remediation efforts progress or as additional technical or legal information
available. Management is of opinion that the ultimate costs in excess of the amount accrued, if any, would not have a material
adverse effect on the financial position or the results of operations of the Company.
27. ASSET RETIREMENT OBLIGATIONS

The Company records asset retirement obligations in accordance with SFAS No. 143, Accounting for Asset Retirement Obligations
(“SFAS 143”), and FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an Interpretation of SFAS
143 (“FIN 47”).

Asset retirement obligation was related primarily to the decommissioning of nuclear power facilities. These obligations
address the decommissioning, clean up and release for acceptable alternate use of such facilities. The Company identified cer-
tain assets that have an indeterminate life, and thus the fair value of the retirement obligation is not reasonably estimable. A
liability for these asset retirement obligations will be recorded when a fair value is reasonably estimable.

The changes in the carrying amount of asset retirement obligations for the years ended March 31, 2009 and 2008 are as fol-

lows:

March 31
Balance at beginning of year

Accretion expense
Liabilities settled
Liabilities incurred
Foreign currency translation adjustments

Balance at end of year

28. SUBSEQUENT EVENT

Millions of yen

2009
¥ 28,555
1,176
(1,391)
9
(2,891)
¥ 25,458

2008
¥ 17,149
1,044
(1,422)
15,412
(3,628)
¥ 28,555

Thousands of
U.S. dollars
2009
$ 291,378
12,000
(14,194)
92
(29,500)
$ 259,776

(1) ISSUANCE OF NEW SHARES AND SECONDARY OFFERING OF SHARES
Pursuant to resolutions adopted at a meeting of the Board of Directors of Toshiba Corporation (“Toshiba”) held on May 8,
2009, Toshiba completed an issuance of new shares and a secondary offering of shares to raise the funds for capital expendi-
ture. The outline of the issuance of new shares and the secondary offering of shares is as follows:

1. Issuance of New Shares by Way of Public Offering (Public Offering)
(1) Class and Number of Shares Offered
(2) Offer Price
(3) Total Amount of Offer Price
(4)
(5) Total Amount of Issue Price

897,000,000 shares of common stock of Toshiba
333 yen per share
298,701,000,000 yen
319.24 yen per share
286,358,280,000 yen

Issue Price

(6) Amount by which Stated Capital

and Additional Paid-in Capital
has been Increased

(7) Method of Offering
(8) Payment Date

The amount by which stated capital has been increased:
143,179,140,000 yen
The amount by which additional paid-in capital has been increased:
143,179,140,000 yen
Public offering
June 3, 2009

2. Secondary Offering of Shares (Secondary Offering for Over-Allotment)
(1) Class and Number of Shares Sold
(2) Seller
(3) Selling Price
(4) Total Amount of Selling Price
(5) Method of Secondary Offering

103,000,000 shares of common stock of Toshiba.
Nomura Securities Co., Ltd.
333 yen per share
34,299,000,000 yen
Nomura Securities Co., Ltd. made a secondary offering of 103,000,000
shares that it borrows from certain shareholders of Toshiba.
June 4, 2009

(6) Delivery Date

3. Issuance of New Shares by Way of Third-Party Allotment
(1) Class and Number of Shares Offered
(2)
(3) Total Amount of Issue Price
(4) Amount by which Stated Capital

Issue Price

and Additional Paid-in Capital
has been Increased

(5) Allottee
(6) Payment Date

103,000,000 shares of common stock of Toshiba.
319.24 yen per share
32,881,720,000 yen
The amount by which stated capital has been increased:
16,440,860,000 yen
The amount by which additional paid-in capital has been increased:
16,440,860,000 yen
Nomura Securities Co., Ltd.
June 23, 2009

(2) ISSUANCE OF UNSECURED, INTEREST DEFERRABLE AND EARLY REDEEMABLE SUBORDINATED BONDS SOLE-

LY FOR QUALIFIED INSTITUTIONAL INVESTORS (TEKIKAKU KIKAN TOSHIKA GENTEI)

Pursuant to resolutions adopted at a meeting of the Board of Directors of Toshiba held on May 8, 2009, Toshiba issued unse-
cured, interest deferrable and early redeemable subordinated bonds solely for qualified institutional investors (tekikaku kikan
toshika gentei) (the “Bonds”) on June 10, 2009 to raise the funds for the repayment of interest-bearing debt. The outline of the
issuance of the Bonds is as follows:

Issuer
(1)
(2) Name

(3) Aggregate Amount of the Bonds
(4)
Issue Price
(5) Date of Payment
(6) Redemption Price
(7) Redemption Date

(8) Rate of Interest

Toshiba Corporation
Toshiba Corporation The 1st Series Unsecured, Interest Deferrable and
Early Redeemable Subordinated Bonds Solely For Qualified
Institutional Investors (Tekikaku Kikan Toshika Gentei)
180,000,000,000 yen
100 yen per 100 yen of the principal amount of each Bond
June 10, 2009
100 yen per 100 yen of the principal amount of each Bond
June 25, 2069 (approximately 60 years after the Date of Payment); pro-
vided, however, that on each interest payment date on and after June 25,
2014, Toshiba may, at its option, redeem all, but not some only, of the
principal of the Bonds.
Interest Rate with respect to any Interest Payment Date falling on and
before June 25, 2014:
7.5% per annum (fixed rate)
Interest Rate with respect to any Interest Payment Date falling on and
after December 25, 2014:
Interest rate obtained by adding 7.5041% to the Six-Month Yen LIBOR
(floating rate)

Notes to Consolidated Financial Statements

Toshiba Corporation and Subsidiaries
March 31, 2009

(9)

Interest Payment Date

(10) Interest Deferral Clause

(11) Replacement Restrictions

(12) Subordination Clause

(13) Equity Credit given to the

Bonds by the Rating Agencies

(14) Method of Issuance

December 25, 2009 as the first interest payment date and thereafter
semi-annually on June 25 and December 25 of each year (provided, how-
ever, that if an interest payment date falls on a bank holiday, the payment
date shall be brought forward to the immediately preceding bank busi-
ness day)
Optional suspension of interest payment

Toshiba may, at its option, defer the payment of all or part of the
interest on each Bond that would have been payable.

It is Toshiba’s intention not to redeem (excluding the redemption on the
Maturity Date) nor repurchase the Bonds, except to the extent that
Toshiba has raised funds through issuance or otherwise of common
stock of Toshiba or any securities or debt which have been approved by
the rating agents as having equity credit equal to or higher than that of
the Bonds within the period of 6 months preceding (and including) the
date of redemption or repurchase of the Bonds.
In liquidation proceedings, bankruptcy proceedings, corporate reorgani-
zation proceedings or civil rehabilitation proceedings of Toshiba or any
proceedings that are equivalent thereto in accordance with laws other
than Japanese law, the bondholders of the Bonds shall have the claim
against Toshiba subordinated to senior debt and only to the extent that
the Bonds are treated as substantially pari passu with preferred stock of
Toshiba ranking most senior in respect to the right to receive dividends
from surplus.
Class 3 : equity credit of 50% (Rating and Investment Information, Inc.)
Basket C : equity credit of 50% (Moody’s Investors Service, Inc.)
Private placement in Japan solely for qualified institutional investors
(tekikaku kikan toshika gentei)

Report of Independent Auditors

The Board of Directors and Shareholders of

Toshiba Corporation

We have audited the accompanying consolidated balance sheets of Toshiba Corporation and subsidiaries (the

“Company”) as of March 31, 2009 and 2008, and the related consolidated statements of income, shareholders’ equi-

ty, and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements

are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial

statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those stan-

dards require that we plan and perform the audit to obtain reasonable assurance about whether the financial state-

ments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the

amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used

and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audits provide a reasonable basis for our opinion.

The Company’s consolidated financial statements do not disclose segment information required by Statement of

Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information.”

In our opinion, disclosure of segment information is required by U.S. generally accepted accounting principles.

In our opinion, except for the omission of segment information discussed in the preceding paragraph, the financial

statements referred to above present fairly, in all material respects, the consolidated financial position of Toshiba

Corporation and subsidiaries at March 31, 2009 and 2008, and the consolidated results of their operations and their

cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

We also have reviewed the translation of the consolidated financial statements mentioned above into United States

dollars on the basis described in Note 3. In our opinion, such statements have been translated on such basis.

June 24, 2009

This report was printed on recycled paper with soy-based ink.
Printed in Japan