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we must make a long-term commitment, and as an opportu- nity to innovate new solutions businesses for new markets. 

2. Consistent Growth Businesses: Social Infrastructure, Medi- cal Systems, Power Systems and Home Appliances 

As we promote advances in our growth industries, we are also undertaking structural reforms in businesses that pro- vide essential social infrastructure. Our goal here is to rein- force consistent growth by developing globally and enhancing competitiveness by entering new areas of business. We will take the following measures: 

1) In Japan, we will further promote alliances even with competitors in the market for better profitability. 

2) Overseas, we will accelerate business development by strengthening marketing capabilities. 

3) We will fortify our service and maintenance operations in these consistent growth businesses. 

We are acting vigorously to promote these measures. For instance, an alliance with AB Electrolux of Sweden is adding a new dimension to our home appliance business, while a com- prehensive business relationship with Finland’s Kone Corpo- ration in elevators and escalators is allowing us to strengthen our presence in Asia. Our medical systems business was origi- nally grounded in hardware, but we have now developed an extensive service capability, including a comprehensive hospi- tal information system to support hospital and clinic management. 

Management Forecast for Fiscal 2002 

In fiscal 2001, Toshiba recorded restructuring charges of ¥208.9 billion (US$1,571 million), a significant proportion of the loss before income taxes of ¥376.7 billion (US$2,832 million). 

However, these restructuring charges are expected to yield ¥182 billion (US$1,368 million) in cost reductions in the cur- rent fiscal year, supporting our return to the black in fiscal 2002. We will continue to implement the 01 Action Plan in fiscal 2002 and give top priority to achieving profitability in all business segments. Our aim is a V-shaped recovery in our business results. 

On a consolidated basis, Toshiba forecasts an 8% increase in net sales, to ¥5,850 billion (US$43,985 million). As a re- 

sult of further efforts to reduce procurement costs, the launch of new attractive products and strengthened marketing capa- bilities, we project a ¥243.6 billion (US$1,832 million) rise in operating income, to ¥130.0 billion (US$977 million). We an- ticipate income before income taxes of ¥40 billion (US$301 million) and net income of ¥23 billion (US$173 million). 

The First Year of “Regeneration of Toshiba” 

We foresee sharp and significant changes in the business en- vironment in coming years. As the IT revolution enters its sec- ond phase, the divergence between companies that succeed and those that flounder will become even more pronounced. 

In responding quickly and flexibly to this shifting landscape we are executing the reforms necessary to build a strong cor- porate group and restore profitability. Our market-driven busi- ness strategies, grounded in the “voice of customers (VOC),” allow us to develop innovative products that enhance our glo- bal competitiveness. Our goal is to add to the quality of life of all our customers by ensuring that, in all of Toshiba Group's diverse businesses, we use our extensive capabilities and ad- vanced know-how to provide products, services, and solutions that meet real needs and provide true satisfaction. We believe we can enhance brand identity through these activities. 

As we make 2002 the year of Toshiba’s regeneration, we hope we may continue to enjoy the trust and support of our shareholders, customers and employees. 

July 2002 

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