Reorganization:Solution

RNS Number:3931M
Toshiba Corporation
16 June 2003

                                                                   June 12, 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 Reorganization of Solution Business

The board of Toshiba Corporation (hereinafter called ("Toshiba") met today and
approved that it will make independent the solutions businesses of its IS Center
Group Sales Promotion Division and e-Solution Company (hereinafter called "the
Separation Businesses"), and their integration into Toshiba IT Solutions
Corporation (hereafter called "Toshiba IT Solutions"). Following this separation
and integration, Toshiba IT Solutions will change its name to become Toshiba
Solutions Corporation.

 1. Purpose of separation and integration

To accelerate the speed of management decisions and actions and to realize
flexible management systems appropriate for the solutions business, the
Separation Businesses will be integrated into Toshiba IT Solutions, a wholly
owned subsidiary of Toshiba.

 2. Outline of Corporate Separation

To implement this reorganization establishing a new independent group company, a
Japanese reorganization method of "Kaisha-Bunkatsu" (literally translated as and
hereinafter called "Corporate Separation") defined under the Commercial Code of
Japan is used.

 1. Schedule

June 12, 2003   Approval by board of directors for Corporate Separation contract

June 12, 2003   Conclusion of Corporate Separation contract

October 1, 2003 Date of Corporate Separation

October 1, 2003 Registration of Corporate Separation

 2. Method

-Corporate Separation

"Simplified separation method," which dose not necessitate the special
resolution at the share holders' meeting will be adopted. Toshiba will separate
the Separation Businesses and make Toshiba IT Solutions Corporation a successor
company.

- Reason for selecting this method

  This method was chosen to transfer the relevant businesses more efficiently.

(3) Allocation of shares

- Toshiba IT Solutions Corporation will issue 87,500 shares to Toshiba.

-Calculation of share allocation rate

Allocation of the shares was determined in comparison of the Separation
Business' shareholder's equity and that of Toshiba IT Solutions', and in
consideration of Toshiba IT Solutions' outstanding number of share.

(4) Cash subsidy

There will be no cash distribution.

(5) Legal rights and obligation to be assumed

Toshiba IT Solutions will assume all assets, liabilities, rights and obligations
involved in the Separation Business.

(6) Forecast of fulfillment of obligation

Toshiba and Toshiba IT Solutions will be able to meet all their obligations.

(7) Newly appointed directors and corporate auditors of a new company

To be decided.

 2. Outline of the relevant companies

As of March 31, 2003 for Separation Company

As of September 30, 2003 for Successor Company

Company name                            Toshiba                           Toshiba IT Solutions
                                  (Separation Company)                     (Successor Company)

Business                     Digital Products, Electronic Devices,    System Solutions business,
                             Social Infrastructure, Home Appliances,  Packaged Solutions business
                             and other products' development,
                             manufacturing, sales, and services
Established                  June 25, 1904                            March 30, 1999
Head Office Location         Shibaura 1-1-1, Minato-ku, Tokyo         Horikawa-cho 66-2, Saiwai-ku, Kawasaki,
                                                                      Kanagawa, Japan
Representative               Tadashi Okamura, President and CEO       Kunitaka Sato, President
Capital                      274,926 million yen                      2,500 million yen
Number of outstanding shares 3,219,027,165                            46,070
Shareholders equity          708,583 million yen                      6,955 million yen
Total Assets                 2,877,805 million yen                    47,018 million yen
Financial closing date       March 31                                 March 31
Number of employee           Nearly 40,000                            3,165
                             Government,                              
Major sales                  Local government,                        Toshiba Corporation
                             Corporations
                             Individual Consumers
Major banks                  Sumitomo Mitsui Banking Corporation,     Sumitomo Mitsui Banking Corporation,
                             UFJ Bank
                             Mizuho Corporate Bank
Principal shareholders and   The Master Trust Bank of Japan         
shareholdings                                               5.32%
                                                                      Toshiba Corporation 100%
                             The Dai-ichi Mutural Life Insurance
                             Company                        3.63%

                             Japan Trustee Service Bank, Ltd
                                                            3.61%
                             Capital             Toshiba owns all of the successor company' shares.
Relations                    Human Resources     Employees at the Separation Businesses will be, in principle,
                                                 transfer to, or be seconded as management of the successor company.
                             Business            Both companies offer products, components, and services to each
                                                 other.


Recent three-year business results                   Unit: Million yen

                                                   Toshiba Corporation
Financial closing date                   March 2001    March 2002  March 2003
Sales                                        3,678,977   3,196,896   3,408,251
Operating Income (loss)                        125,880    -196,752      35,188
Recurring Income (loss)                         95,327    -231,816      43,378
Net Income (loss)                               26,411    -260,332      83,364
Net Income (loss) per share                       8.20      -80.87       25.90
Annual dividend                                  10.00        0.00        3.00
per share (yen)
Shareholders equity (yen)                       286.42      198.58      220.14

                                                    Toshiba IT Solutions

Financial closing date                      March 2002              March 2003
Sales                                           66,018                 103,566
Operating Income (loss)                          3,652                   1,869
Recurring Income (loss)                          3,579                   1,995
Net Income (loss)                                1,530                     987
Net Income (loss) per share                  33,215.05               21,421.14
Annual dividend per share (yen)              61,527.00                2,533.70
Shareholders equity (yen)                   293,346.23              199,657.28

4.Business to be separated

(1) Business to be separated

The Separation Business includes services to extend the overall life cycle of
system and supporting platforms and solutions that provide integration services

(2) Business results, March 2002

                   Division (a)                  Toshiba                              rate (a/b)

Sales              179,164 million yen           3,408,251 million yen                5.3%



(3) Assets and liabilities of business to be separated

Forecast to September 30, 2003
Unit: million yen
Assets                                               Liabilities              
Item                              Book Value          I tem                           Book Value
Assets                              59,400            Liabilities                         41,900
Total                               59,400            Total                             41,900

 5. Effects of business separation on Toshiba's financial results

(1)   There is 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 Toshiba's consolidated operating
results or financial position is forecasted. The fiscal year 2003 forecast  on
non-consolidated basis announced on April 25 included this separation.

 

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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