FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Three Months Ended June 30,
2016
Tokyo, Japan, July 29, 2016—Kurita Water Industries Ltd. (TSE Securities Code 6370)
announced net sales of 46,386 million yen and profit attributable to owners of parent of
2,645 million yen, or 22.77 yen per share, for the three months ended June 30, 2016
(April 1, 2016 – June 30, 2016).
Results of Operations
Total consolidated orders for the Kurita Group (Kurita Water Industries Ltd. and its
consolidated subsidiaries and equity method affiliates) in the three months ended June30, 2016 rose 4.3% from the level of the same period of the previous fiscal year, to56,326 million yen, and net sales increased 9.2%, to 46,386 million yen. Operating
income was 3,748 million yen, up 19.6% versus the same period of the previous fiscalyear, and ordinary income was 3,804 million yen, up 7.6%. Profit attributable to ownersof parent amounted to 2,645 million yen, up 12.6%. With the completion of theprovisional accounting associated with the business combination concerned with theacquisition of the European business that took place in the first half of the previous
consolidated fiscal year, the results in the first three months in the previous fiscal year
have been corrected retroactively. The retroactive correction resulted in a decline of 435
million yen in the consolidated operating income of the Group and the Water Treatment
Chemicals segment in the first three months in the previous fiscal year and a decrease of
429 million yen in the ordinary income and income before income taxes of the Group.
Looking at the market environment surrounding the Kurita Group, in Japan,
production in the manufacturing industry remained flat due to sluggish growth inconsumer spending and exports, and the recovery of capital expenditure was slowed bya decline in corporate earnings associated with the stronger yen. Overseas, uncertainty
increased, reflecting the United Kingdom’s decision to exit the EU and a slowdown ingrowth in China and other emerging economies, but the U.S. and European economies
continued to recover. Overall, overseas economies recovered moderately.
In this environment, the Kurita Group worked to develop and market competitive
products, technologies, and services. The Group also endeavored to propose solutions tocustomers’ challenges, including the reduction of the environmental burden, energy
saving, and the improvement of productivity, using IT and sensing technologies.
Segment Information
The Group consists of two reportable segments in its segment information: Water
Treatment Chemicals and Water Treatment Facilities
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 21,016 million
yen, up 8.6% versus the same period of the fiscal year ended March 31, 2016, whilesales rose 9.7%, to 20,137 million yen. Operating income was up 39.9% to 1,867
million yen, reflecting the increase in sales and the elimination of temporary expenses inassociation with a revision of the initial allocation of the cost of the acquisition ofbusinesses in Europe in the previous fiscal year.
In Japan, the Group worked to gain new customers by proposing solutions using new1

products and services, and both orders and sales rose slightly. Overseas, both orders andsales increased, reflecting strong performance in China and the consolidation of theoperating results of the business in Europe, which have been consolidated from theprevious consolidated fiscal year, for a month longer than in the previous fiscal year.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 35,309 million yen,up 1.8% versus the same period of the previous fiscal year. Sales rose 8.8%, to 26,249
million yen. Operating income climbed 4.9%, to 1,884 million yen due to the increasein sales.
In Japan, in the electronics industry, orders in the water treatment facilities businessincreased due to orders for large-scale projects, but orders in maintenance services
declined. Sales in both water treatment facilities and maintenance services increased.
In general industries, orders in the water treatment facilities remained flat, but orders,primarily from public offices, in maintenance services rose. Sales climbed both in thewater treatment facilities business and in maintenance services as sales from projects forwhich orders were received in the previous fiscal year were posted. Although orders andsales in water treatment facilities for electric power declined, orders for and sales of soil
remediation services increased significantly, reflecting orders for large-scale projects
and associated progress in construction in progress.
Overseas, orders fell, reflecting orders for large-scale projects in China and Taiwan
in the same period of the previous fiscal year, but sales climbed due to progress inconstruction in progress in large-scale projects in China and South Korea.
Sales in the ultrapure water supply business remained flat, reflecting a decline due tothe expiration of contracts and the posting of sales from new contracts.
Financial Condition
Current assets totaled 147,182 million yen at the end of the first quarter (June 30, 2016),
a decrease of 3,364 million yen versus the end of the previous fiscal year (March 31,2016). This was mainly a result of declines of 11,814 million yen in trade accounts
receivable and 5,045 million yen in marketable securities, which outweighed increases
of 9,605 million yen in cash and deposits and 2,577 million yen in work in process. The
increase in cash and deposits was mainly the result of liquidating negotiable certificatesof deposit, which are treated as marketable securities. The increase in work in process
was chiefly the result of progress in construction in the water treatment facilities
business. The decline in trade accounts receivable was primarily the result of progress incollecting receivables and weaker sales in the first quarter under review than in thefourth quarter of the previous fiscal year.
Non-current assets totaled 143,657 million yen at the end of the three-month period(June 30, 2016), a decline of 3,904 million yen versus the end of the previous fiscal year.
The decline was attributable to decreases of 2,155 million yen in property, plant andequipment, 1,120 million yen in intangible fixed assets, and 629 million yen in
investments and other assets. The decrease in property, plant and equipment was chiefly
due to depreciation mainly on facilities for the ultrapure water supply business in excessof capital expenditure. The decline in intangible fixed assets was mainly attributable tothe amortization of goodwill and technology-related assets and a decrease in the valueof assets in foreign currencies because of the stronger yen. The decrease in investments
and other assets was primarily due to a decrease in unrealized gains on investment2

securities due to falls in the market prices of the shares held by the Group.
Current liabilities totaled 39,632 million yen at the end of the period, a decline of
4,775 million yen versus the end of the previous fiscal year. This was mainly a result of
declines of 3,756 million yen in trade accounts payable, 2,342 million yen in income
taxes payable, and 1,054 million yen in provision.
Non-current liabilities totaled 24,085 million yen at the end of the period, a decreaseof 650 million yen versus the end of the previous fiscal year.
Net assets totaled 227,121 million yen at the end of the period, a decrease of 1,843
million yen versus the end of the previous fiscal year primarily due to falls of 144
million yen in shareholders’ equity and 1,679 million yen in accumulated othercomprehensive income. The decrease in accumulated other comprehensive income
resulted mainly from a decline of 1,493 million yen in foreign currency translation
adjustments given the strengthening of the yen against foreign currencies.
Outlook for the Fiscal Year Ending March 31, 2017
The Group’s current outlook for the six months ending September 30, 2016, and the fullyear ending March 31, 2017 is consistent with the targets disclosed in “Earnings Reportfor the Full Year Ended March 31, 2016,” which was announced on April 28, 2016.

3Financial Statements — Consolidated
Balance Sheet — Consolidated(Million yen)

AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipmentBuildings (net)
Machinery and equipment (net)Other (net)Total property, plant and equipment
Intangible fixed assets
Goodwill
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

As ofMarch 31, 2016
AmountAs ofJune 30, 2016
Amount58,374
7,463
63,552
7,566
3,130
3,690
2,433
4,518
(185)
150,546

67,9797,661
51,738
2,521
3,235
6,267
2,228
5,711
(162)
147,182

15,09332,30430,99078,38814,904
36,67024,65876,233

15,114
9,088
24,202

14,352
8,730
23,08237,0638,111(204)
44,970147,561
298,10735,4689,065(193)
44,341
143,657
290,8404

(Million yen)

As ofMarch 31, 2016
Amount

As ofJune 30, 2016
Amount1,719
21,0603,705
3,418
14,50344,4071,512
17,3041,363
2,364
17,087
39,632

15,46757
9,210
24,735
69,142

15,611
25
8,448
24,08563,71813,45010,993
196,788(8,695)
212,536

13,45010,993
196,645(8,697)
212,392

16,061

14,943398(380)(618)(101)15,3601,067
228,964
298,107

1,311
(380)
(2,111)(80)
13,681
1,047
227,121290,840

Liabilities
Current liabilities
Notes payable – trade
Accounts payable – trade
Income taxes payable
Provision
Other
Total current liabilities
Non-current liabilities
Net defined benefit liability
Provision
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5Statements of Income and Comprehensive Income — Consolidated
Statement of Income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on liquidation of businessTotal extraordinary losses
Income before income taxes
Income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent

Three months ended
June 30, 2015
Amount42,493
27,574
14,918
11,784
3,134

Three months ended
June 30, 2016
Amount46,38630,296
16,09012,342
3,748

48
238
130

55
244–

41

44

61
521

81
425

57
–
62
119
3,535

49
218
100
369
3,804

135
135

–
–

140
140
3,530
1,154
2,376
27
2,348–
–
3,804
1,135
2,669
24
2,645

6

Statement of Comprehensive Income(Million yen)

Net income
Other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive incomeComponents:
Comprehensive income attributable to owners ofparent
Comprehensive income attributable tonon-controlling interests

Three months ended
June 30, 2015
Amount2,376

Three months ended
June 30, 2016
Amount2,669

266(1,119)(331)(1,721)(2)912(1,455)20(14)(63)(1,803)572(1,705)
964

558

968

13

(3)

7

Notes to Consolidated Financial Statements(Notes on the Going-concern Assumption)
Three months ended June 30, 2016 (April 1, 2016 – June 30, 2016)
Not applicable(Notes on Significant Changes in Shareholders’ Equity)
Three months ended June 30, 2016 (April 1, 2016 – June 30, 2016)
Not applicable(Segment Information)
1. Sales and income by reportable segment
Three months ended June 30, 2015 (April 1, 2015 – June 30, 2015)(Million yen)

Reportable Segments

Amounts
reported on
Adjustments the quarterly
statements of(note 1)
income(note 2)Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

Sales
Sales to outside customers
Inter-segment sales or transfers

18,356
69

24,13637

42,493106–(106)

42,493–

Total

18,42524,174

42,600(106)

42,493

Segment income

1,335

1,796

3,131

2

3,134

Three months ended June 30, 2016 (April 1, 2016 – June 30, 2016)(Million yen)

Reportable Segment

Sales
Sales to outside customers
Inter-segment sales or transfers
Total
Segment income

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

20,13747
20,185
1,867

26,24949
26,2981,884

46,386
97
46,484
3,751

Amounts
reported on
Adjustments the quarterly
statements of(note 1)
income(note 2)
–(97)
(97)
(3)

46,386–
46,386
3,748

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income adjustments.
2. Segment income is shown at the operating income level.

8

(Business Combination)
An important review of the initial allocation of acquisition cost in comparative information
The Company applied provisional accounting to the business combinations on January 31, 2015 with
Kurita Europe APW GmbH, Kurita Water Industries (Jiangyin) Co., Ltd., and seven other companies in
the fiscal year before last, and the provisional accounting was completed in the second quarter of theprevious fiscal year.
With the completion of the provisional accounting, an important review of the initial allocation of theacquisition cost was reflected in the comparative information included in the quarterly consolidated
financial statements for the first quarter under review.
In the consolidated statement of income for the consolidated first quarter of the previous fiscal year,
cost of sales, selling, general and administrative expenses, and equity in earnings of unconsolidated
subsidiaries and affiliates rose 414 million yen, 21 million yen, and 6 million yen, respectively. As aresult, operating income declined 435 million yen, and ordinary income and income before income taxes
fell 429 million yen.

9Supplementary Information — Consolidated(1) Order Intake(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2015
2016
%
AmountAmount19,34835.8
21,016%37.3

Water Treatment Facilities

34,67564.2

35,309

62.7

Total

54,023100.0

56,326100.0(2) Net Sales(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2015
2016
Amount%Amount18,35643.2
20,137%
43.4

Water Treatment Facilities

24,13656.8

26,249

56.6

Total

42,493100.0

46,386100.0(3) Capital Expenditures (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2015
2016
Amount%Amount
686
13.0
347

%
22.1

Water Treatment Facilities

4,581

87.0

1,224

77.9

Total

5,267

100.0

1,571

100.0

(4) Depreciation (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Three months ended June 30,
2015
2016
Amount%Amount
338
10.3
387

%
11.5

Water Treatment Facilities

2,955

89.7

2,98788.5

Total

3,293

100.0

3,374

100.010