TDK to Post Impairment Losses and
Loss on Sales of Shares of Subsidiaries and
Revise Full-year Consolidated Projections

March 25, 2020

TDK Corporation (“the Company”) expects to post the following impairment losses and loss on sales of shares of subsidiaries in the fourth quarter of the fiscal year ending March 31, 2020 (from April 1, 2019 to March 31, 2020). In addition, the Company has revised the full-year consolidated projections for the fiscal year ending March 31, 2020 that were announced on October 31, 2019 as described below, taking the recent trends in its business performance into account.

1. Posting of impairment losses and loss on sales of shares of subsidiaries

   The following lists the impairment losses and loss on sales of shares of subsidiaries that are expected to be incurred by the Company in the fourth quarter of the fiscal year ending March 31, 2020.

   * The monetary values in the table are approximate amounts.

   	Consolidated	Non-consolidated
   ⑴ Impairment losses	17.5 billion yen	11.5 billion yen
   ⑵ Loss on sales of shares of subsidiaries	－	8.8 billion yen

   1. ⑴ Impairment losses (impairment of long-lived assets)
      Due to the prolonged slowdown of demand in the automotive market and the industrial equipment market, the Company considers that a substantial recovery of profit within a short period of time will be difficult and plans to post an impairment loss of approximately 13.5 billion yen on magnet manufacturing and related facilities and an impairment loss of approximately 2.2 billion yen on aluminum capacitor manufacturing and related facilities. In addition, the Company intends to post an impairment loss of approximately 1.8 billion yen on surplus facilities by improving its development system.
   2. ⑵ Loss on sales of shares of subsidiaries
      The Company and its consolidated subsidiary, TDK Electronics AG, have agreed that the Company will sell the shares of another consolidated subsidiary, TDK Europe GmbH, to TDK Electronics AG, and plan to implement this transaction on March 30, 2020. The Company will post an extraordinary loss on this transaction.
      The Company plans to post a loss on sales of shares of subsidiaries of approximately 8.8 billion yen as an extraordinary loss in its non-consolidated statement of income for the fiscal year ending March 31, 2020.
      The loss on sales of shares of subsidiaries will be eliminated in the consolidated settlement of accounts, which will therefore have no impact on the Company’s consolidated statement of income for the fiscal year ending March 31, 2020.

2. Revision of full-year consolidated projections

   Revision of full-year consolidated projections for the fiscal year ending March 31, 2020 (from April 1, 2019 to March 31, 2020)

   	Net sales	Operating income	Income before income taxes	Net income attributable to TDK	Net income per common share attributable to TDK
   Previous projections (A)	(Million yen) 1,390,000	(Million yen) 120,000	(Million yen) 118,000	(Million yen) 84,000	(Yen) 665.06
   Revised projections (B)	1,360,000	95,000	93,000	58,000	459.21
   Change (B-A)	(30,000)	(25,000)	(25,000)	(26,000)	－
   % change	-2.2	-20.8	-21.2	-31.0	－
   Reference: Results for the previous period ( FY March 2019)	1,381,806	107,823	115,554	82,205	651.02

   *Previous projections: October 31, 2019

3. Reasons for the revision

   In the fourth quarter of the fiscal year ending March 31, 2020, the spread of COVID-19 coronavirus is affecting the Company’s consolidated results through a decrease in the operation levels of the Chinese plants of the Company’s group companies, which operate businesses such as passive components and energy application products, and a fall in sales in the Chinese market in a range of segments. The Company has therefore revised its forecasts of net sales, operating income, income before income taxes, and net income attributable to TDK. Furthermore, the Company has revised operating income, income before income taxes, and net income attributable to TDK by posting the impairment losses as stated in section 1-⑴ above.
   
   The year-end dividend for the fiscal year ending March 31, 2020 will not change from the initial plan.

   (Note)
   The above financial and dividend projections have been prepared based on information currently available to the Company. Due to various factors, actual results and dividends may differ from such projections.