Business Separation

RNS Number:2858P
Toshiba Corporation
02 September 2003



September 2, 2003

                                                Tadashi Okamura, President & CEO
                                                             Toshiba Corporation
                                          Shibaura 1-1-1, Minato-ku, Tokyo Japan
                                        Contact: Hideo Kitamura, General Manager
                                                  Corporate Communication Office
                                                             Tel: [phone]


                         Notice of Business Separation



This document offers notice that Toshiba Corporation (hereafter called
"Separation Company") has decided to separate its telecommunication system
business serving the private sector, as conducted by the Telecommunication
Systems Division, a division of Separation Company's Social Network &
Infrastructure Systems Company (hereinafter called "Separation Business"), one
of its in-house companies, on January 1st, 2004. The Separation Business
includes development, design, manufacture and sales of telecommunications
systems business serving the private sector, with the exception of those of
optical fiber submarine cable systems and FWA (Fixed Wireless Access). On the
same date, the Separation Business is to be succeeded by Toshiba Communication
Systems Corporation (hereafter called the "Successor Company").





1. Purpose of separation

By making the Separation Business independent and transferring it to
the Successor Company, Separation Company aims to pursue more efficient and
speedy management, as well as establishing comprehensive management through all
business processes, from product planning, development, design, manufacture,
sales and installation, to maintenance services. Therefore, this separation will
enable the Separation Business to further pursue enlarged scale and
profitability, becoming more market-oriented and able to achieve the early
launch of more cost competitive, higher quality products, based on technological
core competence in IP-based visual communications networks, radio communications
and voice switching know-how.




2. Outline of the Separation

(1) Schedule

  September 2, 2003           Approval of signing of separation agreement
  September 8, 2003           Signature of separation agreement:
  January 1, 2004             Date of separation (plan)
  January 5, 2004             Registration of Corporate Separation (Plan)


(2) Method of separation

    1) Method of separation

   Corporate Separation ("Kaisha-Bunkatsu" under the term of the Japanese
Commercial Code) is applied. Separation Company separates the Separation
Business and transfers it to the Successor Company, in accordance with the
process for Corporate Separation admitted under the Japanese Commercial Code.
Separation Company follows "Simplified Corporate Separation" method, which does
not necessitate any resolution at the shareholders' meeting.



   2) Reason for selecting this method

   This method was chosen to transfer the relevant businesses efficiently.



(3) Allocation of shares

   -Share allocation rate

    Successor Company will allocate 200 shares to the Separation Company.


   -Successor Company is a wholly owned subsidiary of the Separation Company and
this separation method is of the type in which shares are issued by the
Successor Company following the Corporate Separation, and allocated to the
Separation Company. The allocation was agreed by the parties concerned in light
of the assets and liabilities to which Successor Company will succeed, and its
corporate value.



(4) Cash subsidy

There will be no cash distribution.



(5) Legal rights and obligation to be succeeded (Plan)

All assets, liabilities, rights and obligations relating to the Separation
Business as of the date of separation, except assets specified and agreed by the
parties, will be transferred.



(6) Forecast of fulfillment of obligation

Separation Company and Successor Company will be able to meet all their
obligations.



(7) Newly appointed directors and corporate auditors of Successor Company

 None.





3. Outline of the relevant companies

As of March 31, 2003 for Separation Company

As of December 31, 2003 for Successor Company  (forecast)


Company name                 Toshiba                              Toshiba Communication Systems
                                                                  Corporation
                             (Separation Company)                 (Successor Company)

Business                     Development, manufacturing, sales,   Design, manufacture, installation and
                             and service of digital products,     sales of telecommunication system
                             electronic devices and components,   products
                             social infrastructure equipment and
                             systems, home appliances, and other
                             products.

Established                  June 25, 1904                        February 20, 1987

Head Office Location         Shibaura 1-1-1, Minato-ku, Tokyo     Asahigaoka, 3-1-1, Hino City,
                                                                  Tokyo

Representative               Tadashi Okamura,                     Shinichi Inoue,
                             President and CEO                    President and CEO

Capital                      274,926 million yen                  1,000 million yen

Number of outstanding shares 3,219,027,165                        30,000

Shareholders equity          708,583 million yen                  44 million yen

Total Assets                 2,877,805 million yen                6,900 million yen

Financial closing            March 31                             March 31
date                                                              

Number of employee           39,875                               400

Major sales                  Government,                          Toshiba Corporation,
                             Local Government                     Power companies,
                             Corporations                         Telecommunications carriers
                             Consumers                            Railway companies
                                                                  Manufacturing companies,
                                                                  Distribution companies and other
                                                                  companies

Principal shareholders and   The Master Trust Bank of Japan       Toshiba Corporation
shareholding                             5.32%                               100%

                             The Dai-ichi Mutual Life Insurance
                             Company     3.63%

                             Japan Trustee Service Bank, Ltd.
                                         3.61%

Major banks                  Sumitomo Mitsui Banking Corporation  Sumitomo Mitsui Banking Corporation
                             UFJ Bank
                             Mizuho Corporate Bank, etc

Relations                    Capital              Separation Company owns all of the shares of Successor
                                                  Company.
                             Human Resources      Employees in the Separation Business in the Separation
                                                  Company will be, in principle, dispatched to the
                                                  Successor Company on the date of separation as
                                                  management or seconded employees.
                             Business             Separation Company and Successor Company have mutual
                                                  transaction.




Recent three-year business results                                                   Unit: Million yen
                               Toshiba (Separation Company)      Toshiba Communication Systems Corporation

                                                                 (Successor Company)
Financial closing date      March 2001   March 2002   March 2003    March 2001    March 2002    March 2003
Sales                        3,678,977    3,196,896    3,408,251        12,098         8,562        20,854
Operating Income (loss)        125,880     -196,752       35,188           181           -32          -511
Recurring Income (loss)         95,327     -231,816       43,378           182           -32          -530
Net Income (loss)               26,411     -260,332       83,364            89            16          -312
Net Income (loss) per             8.20       -80.87        25.90     44,632.11      8,244.32    -78,048.93
share
Annual dividend per share        10.00         0.00         3.00        18,000         3,500          0.00
(yen)
Shareholders equity (yen)       286.42       198.58       220.14    329,543.65    310,669.98    145,496.18

Note: As Successor Company was integrated and merged on July 1, 2002, business
results for fiscal year ending March 2001 and March 2002 are not based on the
current business.



4. Business to be separated

(1) Business to be separated

The Separation Business includes manufacture and sales of system integration
business and its supporting equipment in telecommunications systems for
telecommunications carriers and power companies and other private sector
companies offering broadband network solutions integrating visual and voice data
information.



  (2) Business results, March 2003
                                                                       unit: million yen

                  Separation Business (a)                  Toshiba (b)              rate (a/b)
Sales                              8,963                     3,408,251                   0.26%


(3) Assets and liabilities of business to be separated (Forecast to December 31, 2003)

                                                                 unit: million yen
Assets                                            Liabilities

Item                 Book Value                   Item                 Book Value
Current Assets       2,712                        Current Liability    2,316
Property, Plant      1,113                        Long-term            1,499
and Equipment                                     Liability

Total                3,825                        Total                3,815


5.  Effects of business separation on Separation Company's financial results

(1) There will be no change in trade name, principal lines of business,
principal office, representative, capital stock, total assets, and financial
closing date.



(2) No significant effect on Separation Company's consolidated operating
results or financial position is forecast.



Forward looking statement:

 This notice 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 mega-competition in the electronics
business, customer demand, foreign currency exchange rates, tax rules,
regulations and other factors.  Toshiba therefore wishes to caution that actual
results may differ materially from our expectations.



                                      ###


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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