MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEET
September 30, 2016
ASSETS
Millions ofJapanese yen
CURRENT ASSETS:
Cash and time deposits
Accounts receivable - trade
Inventories
Short-term loans receivable
Other current assets
Less - Allowance for bad debts
Total current assets¥42,962
85,335
3,635
15,751
21,508(1,043)
168,149

PROPERTY AND EQUIPMENT:
Machinery and equipment
Other property and equipment
Total property and equipment

11,2491,903
13,152INTANGIBLE ASSETS:

6,676

INVESTMENTS AND OTHER ASSETS:
Investment securities
Long-term loans receivable from unconsolidated subsidiaries and affiliates
Collateralized deposits
Other investments
Less - Allowance for bad debts
Total investments and other assets

48,49325,515
4,031
13,438(1,528)89,950Total assets¥277,929* The figures are rounded down to the nearest million yen.

LIABILITIES AND NET ASSETS

Millions ofJapanese yen
CURRENT LIABILITIES:
Accounts payable - trade
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Advances received
Accrued employees’ bonusesAccrued directors’ bonuses
Provision for product warranty
Provision for repairs
Other provisions
Other current liabilities
Total current liabilities¥84,934
6,577
10,171
5,642
6,071
103
96,381100
5
1,841
121,837

LONG-TERM LIABILITIES:Long-term loans payable
Net defined benefit liabilities
Other long-term liabilities
Total long-term liabilities

40,302258
15,00255,562

Total liabilities

177,400

NET ASSETS:SHAREHOLDERS' EQUITY:
Common stock;
Authorized - 102,868,000 shares
Issued and outstanding - 56,408,000 sharesCapital surplus
Retained earnings
Treasury stock at cost
Total shareholders' equity

30,12230,852
44,241(1)
105,214

ACCUMULATED OTHER COMPREHENSIVE INCOME:
Unrealized holding gains/(losses) on securities, net of tax
Unrealized gains/(losses) on hedging derivatives, net of tax
Foreign currency translation adjustments
Retirement liability adjustments for foreign consolidated subsidiaries
Total accumulated other comprehensive income(30)(17,977)
1,609
(151)
(16,550)

NON-CONTROLLING INTERESTS

11,864

Total net assets
Total liabilities and net assets* The figures are rounded down to the nearest million yen.

100,529¥277,929

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENT OF INCOME
For the nine months ended September 30, 2016SALESCOST OF SALES
Gross profit (loss)

Millions ofJapanese yen¥149,372
136,144
13,227SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating profit (loss)

8,383
4,844

OTHER INCOME (EXPENSES):Interest income and dividend income
Interest expense
Equity in earnings of unconsolidated subsidiaries and affiliates, net
Gain on revaluation of derivatives
Foreign exchange gain (loss), netOthers, net
Total other income (expenses)

2,791(1,026)
5,592
3,030(5,193)582
5,776

INCOME (LOSS) BEFORE INCOME TAXES

10,620

INCOME TAXES:Current
Deferred

4,471(2,568)PROFIT (LOSS)¥8,717

PROFIT (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTSPROFIT (LOSS) ATTRIBUTABLE TO OWNERS of PARENT¥690¥8,026* The figures are rounded down to the nearest million yen.

Net income (loss) per share¥142.30

MODEC, INC. and Consolidated Subsidiaries
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the nine months ended September 30, 2016

Millions ofJapanese yen
Profit (Loss)
Other comprehensive income/(loss):
Unrealized holding gains/(losses) on securities, net of tax
Unrealized gains/(losses) hedging derivatives, net of tax
Foreign currency translation adjustments
Retirement liability adjustments for foreign consolidated subsidiaries
Share of other comprehensive income/(loss) of unconsolidated subsidiaries
and affiliates accounted for using equity method¥8,717(38)
2,090(8,655)42(14,566)

Total other comprehensive income/(loss)
Comprehensive income/(loss)(21,126)(¥12,409)

Comprehensive income/(loss) attributable to owners of parent
Comprehensive income/(loss) attributable to non-controlling interests(¥10,846)(¥1,563)* The figures are rounded down to the nearest million yen.

MODEC, Inc.
2016 Third Quarter Financial Results
Supplementary Presentation

November 4, 2016

2016 Third Quarter : Highlight
Revenue
3Q

3Q Operating Profit

Full year

Billion JPY
400Billion JPY
5378.54.8
4.04295.5300
254.4 258.3
226.5
186.8

200

2.8

32.3
166.0

149.3

2128.2100

1.01002012



2013

2014

2015

2016

Revenue totaled 149.3 billion yen
EPC(I) of 3 FPSOs, 1 FSO and 1 TLP
progressed on track

2012

2013

2014

2015

2016

Operating profit was 4.8 billion yen
Profitability of EPC(I) improved

2.4 billion yen of profit relating to FPSO
construction was deferred22016 Third Quarter : Highlight
3Q Profit Attributable toOwners of Parent

3Q Ordinary Profit

Exchange Rate on
Closing Dates ($/¥)

Consolidated
After equity method portion adjustment
After deferred profit adjustment

Billion JPY15

14.7
13.8

13.4

Billion JPY9JPY130.00
2015 year end
120.53 yen

8.012.5
7.0

120.006.6106110.00

5.6

100.0052016 3Q
101.05 yen

31.9
90.00
0.0002012

2013

2014

2015

2016

80.00
2012

2013

2014

2015

2016

2012 2013 2014 2015 20163Q

Ordinary profit and profit attributable to owners parent increased respectively in accordancewith increase in operating profit

Due to the appreciation of yen, approximately 2 billion yen of foreign exchange evaluation
loss was recognized for foreign currency denominated assets
3

FY2016 : Outlook
Revenue
Billion JPY
400

Operating Profit

Billion JPY20Billion JPY
10378.5

Ordinary ProfitProfit Attributable toOwners of Parent
Billion JPY
1018.3

9.0

8.5
15.8
295.5

15.0

7.0
12.8

254.4
230.0
5.0

200 186.8

510
3.4

55.1 4.9

5.8

3.7

00

9.2

5.4

00

Exchange Rate on Closing Dates ($/¥)
JPY 130.00

120.56120.53The assumed year-end exchange rate
was revised from 110 yen/$ to 105 yen/$Year-end guidance remains unchanged

120.00105.37110.00100.0090.00

105.00

86.56

80.00
2012

2013

2014

2015

2016(F)4