ファConsolidated Financial Results for the year ended March 31, 2010
May 12, 2010
Note: The following report is an English translation of the Japanese-language original.
Company name

: INPEX CORPORATION

Stock Exchange on which the Company is listed

Code number: 1605

URL http://www.inpex.co.jp/

Representative: Naoki Kuroda, President

Contact person: Kazuhiko Itano, General Manager, Corporate Communications Unit

: Tokyo Stock Exchange

TEL+81-3-5572-0233
Scheduled date ofordinary general: June 23, 2010
meeting of shareholders

Scheduled date of payment of cash dividends: June 24, 2010

Scheduled date of filing : June 24, 2010
Financial report(Amounts less than one million yen are rounded off)
1. Consolidated Financial Results for the year ended March 31, 2010 (April 1, 2009-March 31, 2010)(1) Consolidated operating results(Figures in % represent the changes from the previous fiscal year)

Net sales
For the year ended
March 31, 2010
March 31, 2009

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

840,427
1,076,164(21.9)(10.5)

461,667
663,266(30.4)(7.1)

442,027
616,166(28.3)(10.2)

107,210145,062(26.1)(16.3)Net income pershare—basic
For the year ended
March 31, 2010
March 31, 2009

Net income per Net income as a percentage Ordinary income as a Operating income as aof net assets excluding
percentage of total assets percentage of net sales
share—diluted
minority interests

Yen

Yen

%

%

%

45,553.56
61,601.60

―
―

8.1
11.9

23.4
34.5

54.9
61.6

(Reference): Equity in earnings (losses) of affiliates: for the year ended March 31, 2010, ¥ (1,919)million
for the year ended March 31, 2009, ¥ 946 million(2) Consolidated financial position
Net assets excluding minority interests
Net assets excluding
as a percentage of total assets
minority interests per share
Millions of yen%
Yen

Total assets

Net assets

Millions of yen

As of March 31, 2010
As of March 31, 2009

2,013,778
1,768,044

1,490,603
1,362,060

68.9
71.9

589,548.88
540,100.10(Reference): Net assets excluding minority interests: As of March 31, 2010, ¥ 1,387,499 million
As of March 31, 2009, ¥ 1,271,122 million(3) Consolidated cash flows
Cash flows from
Cash flows from investing Cash flows from financing Cash and cash equivalents at
operating activities
activities
activities
end of the period
Millions of yen
Millions of yen
Millions of yen
Millions of yen

For the year ended
March 31, 2010
March 31, 2009

241,372
230,352(251,812)(240,167)

68,937(46,090)

216,395
162,844

2. Dividends
Cash dividends per share
At 1st
At 2ndAt 3rdquarter end quarter end quarter end
For the year ended
March 31, 2009
March 31, 2010
For the year ending
March 31, 2011
(estimated)

Yen

Yen

Yen

At fiscal
year end

Total cash
Payout ratio
dividends (Annual) (Consolidated)
Total

Cash dividends
as a percentageof net assets(Consolidated)

Yen

Yen

Millions of yen

%

%

―
―

4,000.00
2,500.00――

4,000.00
3,000.00

8,000.00
5,500.00

18,834
12,944

13.0
12.1

1.6
1.0

―

3,000.00―

3,000.00

6,000.00

1

13.8

ファ

3. Forecasted Consolidated Operating Results for the year ending March 31, 2011 (April 1, 2010-March 31, 2011)(Figures in % represent the changes from the corresponding period of the previous fiscal year)

Net sales
Millions of yen
For the six months ending
September 30, 2010
For the year ending
March 31, 2011

Operating income

Ordinary income

Net income pershare

Net income% Millions of yen% Millions of yen%

Millions of yen%

Yen

428,000

9.0

219,000

8.3

213,000

10.2

48,0000.7

20,395.21

863,000

2.7

451,000(2.3)

433,000(2.0)

102,000(4.9)

43,339.82

4. Others(1) Significant changes in scope of consolidation: None(2) Changes in accounting principles, procedures, presentations, etc., pertaining to preparation of consolidated financial statements(those to be stated as “Changes to the Basis of Presenting Consolidated Financial Statements”):
1. Changes due to changes in accounting standard: None2. Other changes: None(3) Number of shares issued (Common stock)
1. Number of shares issued at the end of the period (including treasury stocks):

as of March 31, 2010; 2,358,410 shares
as of March 31, 2009; 2,358,410 shares
as of March 31, 2010: 4,916 shares
as of March 31, 2009; 4,916 shares

2. Number of treasury shares at the end of the period:

Note: Since shareholder of the special class share is entitled to the same rights as that for shareholders of common stock regarding dividends andthe distribution of residual property, the special class share is classified as common stock equivalent share.
Refer to page 39 “ Per share information” for the basis of calculation of consolidated net income per share.

(Reference) Non-Consolidated Financial Results
1. Financial results for the year ended March 31, 2010 (April 1, 2009-March 31, 2010)(1) Operating results(Figures in % represent the changes from the previous fiscal year)

Operating revenues
For the year ended
March 31, 2010
March 31, 2009

Operating income

Millions of yen%

Millions of yen

347,770
163,502

112.7
788.9

182,269
89,389Net income pershare—basic
For the year ended
March 31, 2010
March 31, 2009

Ordinary income
%

103.9
472.1

Millions of yen

184,91378,623

Net income
%

135.2
399.6

Millions of yen%

96,461
323,672(70.2)―Net income pershare—diluted
Yen

Yen

40,986.63
137,449.27――(2) Financial position

As of March 31, 2010
As of March 31, 2009

Net assets as apercentage of total assets

Total assets

Net assets

Millions of yen

Millions of yen%

1,329,869
1,201,667

1,208,024
1,108,485

90.8
92.2

Net assets per shareYen

513,289.83
470,995.47(Reference): Net assets: as of March 31, 2010, ¥ 1,208,024 million
as of March 31, 2009, ¥ 1,108,485 million*Explanation regarding the appropriate use of estimated consolidated financial results
The aforementioned forecasts “3. Forecasted Consolidated Operating Results for the year ending March 31, 2011” are based on
currently available information and contain many uncertainties. The final results might be significantly different from theaforementioned forecasts due to change in business conditions including oil and gas price levels, production and sales plans, project
development schedules, government regulations and financial and tax schemes. For further information, please refer on page 3 to 4.

2

1 Results of Operations and Financial Position(1) Results for the year ended March 31, 2010
During this fiscal year, Japanese economy showed the sign to recover from severe conditions caused by worldwide recession, yen
appreciation to US dollar and so on having its roots in the global financial crisis. However, the Japanese economy has been
dependent on the exports to meet demand increase in the Asian region and the economic stimulus plans, and has not shown
self-sustaining recovery in the situation of severe employment conditions and low level of business earnings.
Under such business environment, global crude oil prices, an important factor that affects our group’s businesses, where WTIstarted from US$48.39 per bbl, and continued to climb up US$70 per bbl range by the end of June due to prospects for earlyrecovery of world economy, following upward adjustment in oil demand forecast and political uncertainty in some oil producing
countries in Africa etc. The oil prices remained the high US$70 per bbl range but sometimes climbed up to the US$80 range
following steady recovery of the US economy after late July and by escalation of international tensions on nuclear issues to theend of December. After turn of the year, the price remained in the US$80 per bbl range in the context of cold weather in Europe
and US as well as steady stock prices in US and weaker dollar, and closed at US$83.76 per bbl at the fiscal year end. Meanwhile,
domestic crude oil and petroleum products prices followed a similar pattern of global oil price movements. Reflecting thesesituation, our group’s average sales price for crude oil for the fiscal year was at US$68.40 per bbl which is US$14.30 lower
compared with the previous year.
The foreign exchange market, another important factor that affects our group’s businesses, began to trade at the ¥98 level to the
U.S. dollar. Depreciation of the yen once proceeded to the ¥101 level in the beginning of April, however, the yen appreciated backagainst the U.S. dollar in connection with the appreciation of relatively high-interest currency, owing to the rise of market’s risk
orientation from the filing of Chapter 11 bankruptcy in the U.S. by a major U.S. automobile company and the stress test to
financial institutions by FRB.
Since then, the yen continued to appreciate to over ¥90 against the U.S. dollar reflecting a statement by a government officialfrom a newly formed Japanese administration in September that could be interpreted as supporting the yen appreciation. In suchmarket tones, with a revival of aversion of risk assets owing to a concern regarding debt repayment by a real estate company inMiddle East, the yen appreciated to ¥84.82 against the U.S. dollar, which had not been recorded since 1995. However, the yen
appreciation gradually eased off from December due to an additional financial mitigation policy by the Bank of Japan and astatement by the Japanese government official making pledges to temper yen appreciation, which has led the yen to depreciateback against the U.S. dollar. As a result, TTM closed at ¥93.04 against the U.S. dollar which turned out to be ¥5.22 higher thanthat of the fiscal year end of March 31, 2009. The average exchange rate of the Japanese yen on consolidated net sales appreciatedby ¥10.31, or 10.0%, to ¥92.64 per the U.S. dollar from the previous fiscal year.
Consolidated net sales for the year ended March 31, 2010 decreased by ¥235,737 million, or 21.9%, to ¥840,427 million from theprevious fiscal year due to decrease in sales price of crude oil and overseas natural gas, and appreciation of Japanese yen against
U.S. dollar despite positive effect of increase in sales volume. Net sales of crude oil decreased by ¥163,431 million, or 25.1%, to¥486,920 million, and net sales of natural gas decreased by ¥71,854 million, or 18.0%, to ¥326,412 million. Sales volume ofcrude oil increased by 668 Mbbls, or 0.9 %, to 76,095 Mbbls due to increase in sales volume at ACG Oil Fields and Offshore
Mahakam Block despite decrease in sales volume at ADMA Block. Sales volume of natural gas increased by 15,609 MMcf, or
3.9%, to 416,684 MMcf. Sales volume of natural gas produced overseas increased by 14,778 MMcf, or 4.3%, to 355,225 MMcf
due to increase in sales volume in Offshore Mahakam Block, and sales volume of natural gas produced domestically increased by
22 MM ㎥, or 1.4%, to 1,647 MM ㎥ (61,459 MMcf). The average sales price of crude oil produced overseas decreased by
US$14.30 per bbl, or 17.3 %, to US$68.40 per bbl. Meanwhile, the average sales price of natural gas produced overseas decreased
by US$1.79 per Mcf, or 19.4%, to US$7.43 per Mcf. In addition, the average sales price of natural gas produced domesticallyincreased by ¥1.02, or 2.7%, to ¥38.41 per ㎥.
The decrease of ¥235.7 billion in net sales was derived mainly from the following factors: an increase in sales volume adversely
affected ¥29.8 billion, a decrease in unit sales price affected ¥182.0 billion, the appreciation of Japanese yen against U.S. dollar
for sales affected ¥83.0 billion and net sales excluding crude oil and natural gas decreased ¥0.4 billion.
Cost of sales for the year ended March 31, 2010 decreased by ¥20,870 million, or 6.5%, to ¥298,167 million due mainly to adecrease in royalty at ADMA Block owing to a decrease in sales. Exploration expenses decreased by ¥10,271 million, or 39.5%,
to ¥15,710 million, and selling, general and administrative expenses decreased by ¥2,997 million, or 4.4%, to ¥64,880 million.
As a result, operating income decreased by ¥201,598 million, or 30.4%, to ¥461,667 million.
Other income decreased by ¥10,561 million, or 33.0 %, to ¥21,473 million due to a decrease in interest income and dividend
income. Other expenses decreased by ¥38,020 million, or 48.0%, to ¥41,113 million due mainly to a decrease in loss on valuationof investment securities. As a result, ordinary income decreased by ¥174,139 million, or 28.3%, to ¥442,027 million.
Total amount of current income taxes and deferred income taxes decreased by ¥145,252 million, or 30.9%, to ¥325,125 million,
and minority interests were ¥9,691 million. As a result of above effects, net income for the year ended March 31, 2010 decreasedby ¥37,852 million, or 26.1%, to ¥107,210 million from the previous fiscal year.
Further, non-consolidated financial results for the year ended March 2009 were based on the joint holding company’s one from
April 1 to September 30, 2008 and the operating company’s one from October 1, 2008 to March 31, 2009, and is not comparedwith non-consolidated financial results for the year ended March 2010 since the Company recorded a ¥266,950 million "Gain on
extinguishment of tie-in shares" as Extraordinary income due to the merger.
With respect to segment information, the oil and natural gas business combined accounts for more than 90% of the aggregate
sales, operating income and total assets of all segments. Therefore, the business segment information has been omitted.
On a next fiscal year outlook, consolidated net sales for the six months ending September 30, 2010 are expected to be ¥428,000
million, to increase 9.0% compared with the six months ended September 30, 2009, and net sales for the year ending March 31,
2011 are expected to be ¥863,000 million, to increase 2.7% compared with the year ended March 31, 2010.
3

Operating income for the six months ending September 30, 2010 are expected to be ¥219,000 million, to increase 8.3% comparedwith the six months ended September 30, 2009, and operating income for the year ending March 31, 2011 is expected to be¥451,000 million, to decrease 2.3% compared with the year ended March 31, 2010.
Ordinary income for the six months ending September 30, 2010 are expected to be ¥213,000 million, to increase 10.2% comparedwith the six months ended September 30, 2009, and ordinary income for the year ending March 31, 2011 is expected to be¥433,000 million, to decrease 2.0% compared with the year ended March 31, 2010. Net income for the six months ending
September 30, 2010 is expected to be ¥48,000 million, to increase 0.7% compared with the six months ended September 30, 2009,
and net income for the year ending March 31, 2011 is expected to be ¥102,000 million, to decrease 4.9% compared with the year
ended March 31, 2010.
Net sales for the year ending March 31, 2011 are expected to increase due to forecasted the increase in crude oil price comparedwith this fiscal year, whereas net income for the year ending March 31, 2011 is expected to decrease due to an increase in cost of
sales and exploration expenses.
In these estimates, the crude oil price is assumed to be US$77.5 per barrel (for Brent crude) with the exchange rate of theJapanese yen against the U.S. dollar at ¥90 through the year ending March 31, 2011.

(2) Financial position
Consolidated total assets as of March 31, 2010 increased by ¥245,733 million to ¥2,013,778 million from ¥1,768,044 million asof March 31, 2009. Current assets increased by ¥81,744 million to ¥492,854 million due to increase in accounts receivable-tradeand marketable securities and others. Fixed assets increased by ¥163,989 million to ¥1,520,923 million due mainly to an increasein tangible fixed assets, recoverable accounts under production sharing and investment securities.
Meanwhile, total liabilities increased by ¥117,190 million to ¥523,175 million from ¥405,984 million as of March 31, 2009.
Current liabilities increased by ¥21,845 million to ¥227,905 million due to an increase in income taxes payable and accounts
payable-other despite repayments of short-term debt. Long-term liabilities increased by ¥95,344 million to ¥295,269 million due
to an increase in long-term debt.
Net assets increased by ¥128,542 million, to ¥1,490,603 million. Total shareholders’ equity increased by ¥91,912 million, to¥1,379,974 million, total valuation, translation adjustment and others increased by ¥24,465 million to ¥ 7,525 million andminority interests increased by ¥12,165 million to ¥103,103 million.
As for cash flows for the year ended March 31, 2010, net cash provided by operating activities increased by ¥11,020 million to¥241,372 million from the previous fiscal year due to a decrease in income taxes despite a decrease in income before income
taxes and minority interests due to a decrease in unit sales price of crude oil and overseas natural gas, and appreciation of the yen
against the U.S. dollar. Meanwhile, net cash used in investing activities increased by ¥11,644 million to ¥251,812 million due toa decrease in proceeds from sales of marketable securities and investment securities despite a decrease in investment inrecoverable accounts under production sharing (capital expenditures). Net cash provided by financial activities increased by¥115,027 million to ¥68,937 million deducting ¥46,090 million used in financial activities for the previous fiscal year, due mainly
to proceeds of long-term debt. After deducting ¥4,947 million of the effect of exchange rate changes on cash and cash equivalents,
the increase in cash and cash equivalents at the end of the year ended March 31, 2010 amounted to ¥53,550 million. Cash andcash equivalents at the end of the year ended March 31, 2010 totaled ¥216,395 million reflecting above the net increase of¥53,550 million from ¥162,844 million at the end of the previous fiscal year.

(3) Dividend policy and dividends for the year ended March 31, 2010 and for the year ending March 31, 2011
In order to secure a stable supply of oil and natural gas resources efficiently, INPEX CORPORATION Group aims to expand its
operating base. To this end, we are reinforcing investments in exploration and development in Japan and overseas, as well as inmaintenance and expansion of the supply infrastructure. The robust financial base of INPEX CORPORATION Group is crucial
for maintaining this level of investment. Therefore, our basic policy is to maximize corporate value through ongoing maintenanceand enlargement of our reserves and production of petroleum and natural gas by affirmative investments, while paying out cash
dividends as direct compensation to shareholders, in light of the medium- to long-term prospects for INPEX CORPORATIONGroup.
We decided year-end dividend to be ¥3,000 per share for the year ended March 31, 2010 based on the policy above. With the
mid-term dividend of ¥2,500 per share, thus total dividend for the year is to be ¥5,500 per share.
We plan a mid-term dividend to be ¥3,000 per share and a year-end dividend to be ¥3,000 per share for the year ending March 31,
2011, and thus a total dividend for the year is to be ¥6,000 per share.
As to the use of retained earnings, we plan to apply the earnings to investments for the purpose of maintenance and enlargementof our reserves and production of oil and natural gas.

4

2. Overview of the INPEX CORPORATION GroupThe INPEX CORPORATION Group consists of INPEX CORPORATION, 65 subsidiaries (including 54 consolidated
subsidiaries), 19 affiliates (including 12 equity method affiliates) and their two subsidiaries (as of March 31, 2010). The groupprimarily engages in the exploration, development, production and sales of crude oil and natural gas in Japan as well as in the Asia,
Oceania, Middle East, the coastal states around the Caspian Sea and Latin America, Africa. In addition, we provide loans andinvestments to companies engaged in the aforementioned activities. Our business segments are crude oil and natural-gas-related
products and other business.
The following diagram shows our group’s business flow.
Crude oil and Natural-gas-related products business(52 consolidated subsidiaries, 12 equity method affiliates)

Crude Oil SalesINPEX CORPORATION＜Exploration, Development, Production＞●Consolidated subsidiaries
INPEX Natuna, Ltd.
INPEX Sahul, Ltd.
INPEX Alpha, Ltd.
INPEX Browse, Ltd.
INPEX Masela, Ltd.
INPEX Southwest Caspian Sea, Ltd.
INPEX North Caspian Sea, Ltd.
Japan Oil Development Co., Ltd.
Teikoku Oil (D.R. Congo) Co., Ltd.
The Egyptian Petroleum Development
Co., Ltd.
Teikoku Oil (Venezuela) Co., Ltd.
Other 32 consolidated subsidiaries●Equity method affiliates
MI Berau B.V.
Angola Japan Oil Co., Ltd.
Japan Ohanet Oil & Gas Co., Ltd.
INPEX Offshore North Campos, Ltd.
Other 7 equity method affiliates

Crude Oil
Sales

Crude Oil
Sales

Crude Oil Sales

Pipeline, Liquefaction etc.

Pipeline, Liquefaction
Refining etc.

＜Pipeline, Liquefaction, Refining Marketing etc.＞●Consolidated subsidiaries
INPEX BTC Pipeline, Ltd.
INPEX DLNGPL Pty Ltd
Teiseki Pipeline Co., Ltd.
Teiseki Propane Co., Ltd.
Teiseki Topping Plant Co., Ltd.
Other 3 consolidated subsidiaries●1 equity method affiliates

Drilling, Civil work etc.

●Consolidated subsidiaries
Teiseki Drilling Co., Ltd.
And one consolidated subsidiary

Natural Gas andother Sales

Natural Gas andother Sales

Drilling, Civil work etc.

Other business(2 consolidated subsidiaries）
Note : １ symbol “→” indicates capital investment（including indirect holdings）
２ symbol “⇒” indicates products and service flow

5

Customers〈Oversea’s Crude oil Sales〉
INPEX Trading , Ltd.
(Consolidated Subsidiary)

Crude Oil/ Natural GasSales3. Management Policy
1.
Management Strategy
In pursuit of development of petroleum and natural gas which is the fundamental business of the Company, we seek toimprove the productivity and profitability of our existing oil and gas fields in Japan and overseas. At the same time, we areworking steadily and proactively to commercialize undeveloped oil and gas projects, especially our operator projects.
Furthermore, to ensure sustainable growth from the medium to long-term perspective, we are leveraging to maximize oursubstantially strengthened ability to obtain upstream interests as a consequence of the business integration by building a morebalanced asset portfolio, further strengthening our solid financial base, and mobilizing our practical operational and technicalcapabilities. By maintaining and increasing our reserves and production of petroleum and natural gas, we will endeavor tosecure stable profits over the medium to long term and to achieve enhanced corporate value over time.
2.

Mid-to Long Term Management Key Initiatives
The key management initiatives for the Company in developing petroleum and natural gas resources are achieving
sustainable growth by maintaining and expanding reserves through reinvesting the cash flow obtained from existing oil andgas fields. By combining overseas projects that promise high growth potential due to expansion of reserves with domestic
projects without the attendant country risk and foreign currency risk, we are seeking qualitative improvements in our asset
portfolio. At the same time, by leveraging our business resources more effectively through an organic linkage of our overseas
assets and domestic infrastructure, we aim to further enhance corporate value.
As our immediate business challenges, we will continue to move forward with exploration and development in new andexisting projects such as the Masela Block (Abadi) gas project in Indonesia and the WA-285-P (Ichthys) gas and condensate
project in Australia, the Abu Dhabi offshore oil fields in the UAE and Kashagan and ACG fields in the Caspian Sea.
Domestically, we are working to increase the scale of our natural gas business permanently by optimal application fromnatural gas assets in overseas to domestic supply infrastructure including the planed LNG receiving terminal in the Naoetsu
Port. Since we anticipate continuous substantial investment in order to achieve the growth strategy of the Company, we musttake all possible measures to raise the capital required.

We will undertake operations according to the following policies in order to implement the business strategy of theCompany.
(1) Achieve Well Balanced Asset Portfolio① Regional Diversification
Through business integration, the operating area of the Company has diversified to include Asia, Oceania, the Middle
East, the Caspian Sea, Central and South America, and Africa, besides Japan, and the regional balance of our asset
portfolio has improved significantly. However, we recognize the need to reduce our dependence on specific regions fromthe viewpoint of country and operating risks, and we will continue to be proactive in considering investment in other new
promising areas.
② Output ratio between Crude Oil and Gas
According to the outputs by products, the share of crude oil is more than 50% while the share of natural gas is less than50%.
As crude oil is a rather sensitive commodity, the selling price is easily influenced by the condition of the market.
However the customers are not fixed in long terms, and the amount of the investment for production and transportation
facilities is small in comparison with that of natural gas. Furthermore, the time required for the development stage isrelatively short so that the company can gain profit comparatively quickly after the oil fields are discovered.
Commercial production of natural gas requires substantial investments and a long lead time of preparation for
constructing liquefaction plants and pipelines. Since the buyer also must make large investments in LNG receiving
facilities, stable and long-term sales contracts are essential. With an assurance of long term LNG supply to the customers,
relatively stable profitability is remained while it is sensitive to oil price fluctuation.
Regarding acquisition of new projects, we focus on a balance between crude oil and natural gas to ensure efficientinvestment with a view to long-term cash flow.
③ Balancing the Project Phases among Exploration, Development and Production
Because crude oil and gas reserves are limited, we continuously seek to acquire new reserves in order to ensure stableprofitability. Therefore, we reinvest in exploration to discover new reserves while maintaining our cash flow fromproduction. Projects must be carried out continuously in order to allocate and balance our assets among exploration,
development and production stages. To achieve this balance, we invest in exploration and undeveloped oil and gas assets.
④ Enhance Activities and Capabilities as an Operator
In acting as an operator, we face managerial issues such as the difficulty in securing manpower and the heavy burden offinancing. However, involvement as an operator also increases our opportunities to obtain new working interests byimproving our technological capabilities and winning recognition from oil and gas producing countries and internationaloil companies. The Company is pursuing opportunities to act as operator with the substantially enhanced technologicalcapabilities resulting from business integration, while addressing the effective utilization of management resources.
⑤ Balancing Contractual Arrangements
We intend to diversify the risk of oil price volatility by balancing contractual arrangements among production sharing
contracts, or concession contracts, for which profit is linked to the price of oil, with service contracts, such as buyback or
6

fixed margin contracts, for which profitability is less influenced by oil prices and amounts are fixed.
(2) Investments through Acquisition relative to the Expiration of Working Interests
The production sharing contract for the offshore Mahakam area, which is the Company’s major gas production project,
expires in 2017. Although we will negotiate to extend the contract, production is expected to decline in the long term as theremaining reserves decline even if the contract is renewed. We intend to maintain and increase production beyond 2017 byacquiring working interests from other companies or participating in new projects or taking over companies that havesubstantial production and stable cash flow.
(3) Enlarging the Company’s Business Domain through Organic Linkage of Domestic and Foreign Assets
The Company aims to expand operations in the domestic natural gas market, which represents a stable base of earnings
that is expected to grow. As well as building a natural gas pipeline network to supply the promising market in the
Kanto-Koshinetsu region, we plan to expand production in the key Minami Nagaoka gas field. We also own promising
undeveloped assets, primarily natural gas, in Indonesia and Australia, and to ensure their long-term growth, we will consider
the possibilities of gas business integration that organically links these overseas gas assets with our domestic infrastructure(gas supply chain), in aggressive pursuit of an enlarged business domain.
(4) Strengthening Relationships with Leading Domestic and International Oil and Gas Companies
Developing petroleum and gas involves considerable risks. Large-scale projects in particular require huge investments,
presenting an insuperable obstacle for a single company. Typically, several companies form a consortium to share the risk,
and this is the case internationally too. The Company plans to expand its business and to diversify risks by increasing
opportunities to participate in projects through enhanced cooperation with the major international oil companies, the nationaloil companies in oil and gas producing countries as well as leading private oil resource developers, trading companies andother energy-related companies.
(5) Promote an Efficient and Transparent Corporate Management
The Company bears the heavy responsibility of assuring a stable supply of energy to Japan in an efficient manner.
Consequently, we recognize not only that our corporate social responsibility is increasing but also that it is essential that we
exercise sensitivity in conducting business in communities in Japan and around the world. Therefore, we intend to manage
our business efficiently and transparently in line with global standards.
(6) Environmental Efforts
Environmental issues, particularly global warming, are a matter of worldwide concern. We make every effort to minimize
the effects on surrounding areas when we explore, develop, produce and sell energy resources. Also we are working to reduce
our greenhouse gas emission reduction unit, reduce emissions of chemical substances, suppress emissions into theatmosphere and river systems, and to take measures to prevent soil pollution and reduce waste. Combustion of natural gas
involves relatively small emissions of CO2 and NOx compared with combustion of other fossil fuels. Positioning natural gas
as our core business, we intend to further promote the use of this clean fuel.
(7) Development of New BusinessOur mid-to-long term goal is to live with global community and to contribute to the sustainable social development by
growing ourselves to be an energy company, who is capable of supplying varieties of environmentally friendly energies in
addition to oil and natural gas. In particular, we pursue opportunities to participate in new business or develop new businessfor new energy such as GTL (Gas to Liquids) and DME (Dimethyl Ether) that are produced as oil substitutes by reforming
natural gas at a normal temperature, renewable energy such as solar photovoltaic and power generation, wind power orgeothermal power generation and biomass fuel etc. and technologies for expansion of access to renewable energy including
reserve cell and fuel battery.

In order to supply energy in a stable and efficient manner and thereby contribute to the good of society, the Company aims
to maintain and expand its reserves and production by rapidly achieving synergy through business integration between
INPEX and Teikoku Oil. We will seek to allocate our business resources optimally and maintain the soundness of our
financial position with a view to securing steady growth.
In addition, to fulfill our corporate social responsibility, we will strengthen corporate governance and compliance, andcarry out strict safety management throughout our operations. Recognizing our obligation to protect the environment and to
become an integral part of the communities where we operate, we aim to improve our corporate value over the long term.

7

更新日時:2010/05/12 14:14:00

ァイル名:③-1H22.3_aBS【済】.DOC

印刷日時:10/05/12 14:14

4 Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)Accounts(Assets)
Current assets
Cash and deposits
Accounts receivable-tradeMarketable securities
Inventories
Deferred tax assets
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures, net
Wells, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total tangible fixed assets
Intangible assets
Goodwill
Exploration and development rights
Mining rights
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable

As of March 31, 2009

As of March 31, 2010

117,393
73,540149,507*1
18,205
6,144
37,8718,474(28)411,110

119,80988,364
213,040*1 12,322
5,355
43,16010,824(22)
492,854*2,4,5,6

101,732
22,00847,352
20,752
76,81828,971
297,635*2,4,5

127,599
18,19345,72820,78991,44754,335358,094*5

114,883
115,566
18,592
4,638
253,680*5

108,122
107,856
18,154
5,070
239,205*3,4

Recoverable accounts under production
sharing344,698
14,195*3,4453,922

Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for recoverable accounts
under production sharing
Allowance for investments in exploration
Total investments and other assets
Total fixed assets
Total assets*3

8

26,14065,926(528)

403,978
18,641
514,645*3,4

24,56372,576(640)(87,828)(94,891)(10,907)805,618
1,356,934
1,768,044(15,248)
923,624
1,520,923
2,013,778

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ァイル名:③-1H22.3_aBS【済】.DOC

印刷日時:10/05/12 14:14(Millions of yen)Accounts

As of March 31, 2009

(Liabilities)
Current liabilities
Accounts payable-trade
Short-term loans
Income taxes payable
Accounts payable-other
Provision for exploration projects
Accrued bonuses to officers
Other
Total current liabilities
Long-term liabilities
Long-term debt
Deferred tax liabilities
Accrued retirement benefits to employees
Liabilities for site restoration anddecommissioning costs
Liabilities for losses on development
activities
Accrued special repair and maintenance
Other
Total long-term liabilities
Total liabilities

As of March 31, 2010

11,87327,81670,419*4
65,4407,948
134
22,427206,059*4*4*4(Net assets)
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation, translation adjustments andothers
Unrealized holding gain (loss) on
securities
Unrealized loss from hedging
instruments
Translation adjustments
Total valuation, translation adjustments
and others
Minority interests
Total net assets
Total liabilities and net assets

9136,430
28,171
8,545

16,601
4,872
86,534*4
81,211
15,324132
23,228
227,905*4

235,510
27,1397,585*414,192

14,257

1,964

1,964

404
10,216
199,924
405,984

*4

442
8,369
295,269
523,175

30,000418,477
844,832(5,248)1,288,062

30,000418,477
936,744(5,248)1,379,974(6,817)

12,351(0)―(10,121)(4,826)(16,939)

7,525

90,9381,362,060
1,768,044

103,1031,490,603
2,013,778

10ァイル名:③-2H22.3_bPL【済】.DOC

更新日時(2) Consolidated Statements of Income(Millions of yen)
For the year ended March 31, 2009

For the year ended March 31, 2010

1,076,164

840,427

Cost of sales

319,038

298,167

Gross profit

757,126
25,982542,259
15,710Accounts

Net sales

Exploration expenses
Selling, general andadministrative expenses
Operating income*1,2

67,877*1,2

64,880663,266

461,667Interest income

9,535

4,353

Dividend income

12,338Equity in earnings of affiliates
Other

946
9,214

9,476
―
7,643

Total other income

32,034

21,473

3,934

1,274

―

1,919

16,642

6,028

3,386

8,594

―

5,408

31,798―

14,5708,801

13,263
4,624

Other income

Other expenses
Interest expense
Equity in losses of affiliates
Provision for allowance forrecoverable accounts under
production sharing
Provision for exploration
projects
Provision for investments in
exploration
Loss on valuation of investment
securities
Foreign exchange loss
Other
Total other expenses

79,134

41,113

Ordinary income
Income before income taxes andminority interests
Income taxes-current
Income taxes-deferred

616,166

442,027

616,166

442,027

488,262(17,883)

322,993
2,132

Total income taxes
Minority interests

470,378725

325,125
9,691

Net income

145,062

107,21010

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ファイル名:③-3H22.3_連結変動計算書【済】.doc

印刷日時:10/05/12 14:16(3) Consolidated Statements of Changes in Net Assets(Millions of yen)Accounts

For the year ended
March 31, 2009

Shareholders’ equity
Common stock
Balance at beginning of the period
Balance at end of the period
Capital surplus
Balance at beginning of the period
Changes during the period
Disposal of treasury stock
Total changes during the period
Balance at end of the period
Retained earnings
Balance at beginning of the period
Changes during the period
Cash dividends paid
Net income
Total changes during the period
Balance at end of the period
Treasury stock
Balance at beginning of the period
Changes during the period
Purchase of treasury stock
Disposal of treasury stock
Total changes during the period
Balance at end of the period
Total shareholders’ equity
Balance at beginning of the period
Changes during the period
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes during the period
Balance at end of the period

11

For the year ended
March 31, 2010

30,00030,00030,00030,000418,493

418,477(15)(15)
418,477――
418,477

718,616

844,832(18,846)
145,062
126,216
844,832(15,297)
107,21091,912936,744(2,215)(5,248)(3,563)530(3,032)(5,248)―――(5,248)1,164,894

1,288,062(18,846)
145,062(3,563)514
123,167(15,297)
107,210――91,912

1,288,062

1,379,974

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印刷日時:10/05/12 14:16(Millions of yen)Accounts

For the year ended
March 31, 2009

Valuation, translation adjustments and others
Unrealized holding gain (loss) on securities
Balance at beginning of the period
Changes during the period
Other changes in items other than thosein shareholders’ equity, net
Total changes during the period
Balance at end of the period
Unrealized gain (loss) from hedging
instruments
Balance at beginning of the period
Changes during the period
Other changes in items other than thosein shareholders’ equity, net
Total changes during the period
Balance at end of the period
Translation adjustments
Balance at beginning of the period
Changes during the period
Other changes in items other than thosein shareholders’ equity, net
Total changes during the period
Balance at end of the period
Total valuation, translation adjustments andothersBalance at beginning of the period
Changes during the period
Other changes in items other than thosein shareholders’ equity, net
Total changes during the period
Balance at end of the period
Minority interests
Balance at beginning of the period
Changes during the period
Other changes in items other than thosein shareholders’ equity, net
Total changes during the period
Balance at end of the period
Total net assets
Balance at beginning of the period
Changes during the period
Cash dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Other changes in items other than thosein shareholders’ equity, net
Total changes during the period
Balance at end of the period

12

For the year ended
March 31, 2010

(7,468)(6,817)650

19,169650(6,817)

19,16912,351

3

(0)

(4)

0

(4)
(0)

0
―

(60)

(10,121)(10,061)

5,295(10,061)(10,121)5,295(4,826)(7,524)(16,939)(9,415)24,465(9,415)(16,939)

24,465
7,525

81,44290,938

9,496

12,165

9,496

12,16590,938103,1031,238,812

1,362,060(18,846)
145,062(3,563)514(15,297)
107,210――80

36,630123,248
1,362,060

128,542
1,490,603

- 13 - - 13 -ファイル名:③(4) Consolidated Statements of Cash Flows(Millions of yen)
For the year ended
March 31, 2009

Accounts

For the year ended
March 31, 2010

Cash flows from operating activities
Income before income taxes and minority interests

616,166

442,027

Depreciation and amortization

42,96640,354

Amortization of goodwill
Provision for allowance for recoverable accounts
under production sharing
Provision for exploration projects

6,760

6,759

20,3107,430(2,319)

7,360

Provision for accrued retirement benefits to employee

(96)

(902)

Provision for site restoration and decommissioning costs

1,597

59

3,468

4,484

(21,873)(13,829)

Interest expense

3,934

1,274

Foreign exchange loss

10,0862,379

Equity in (earnings) losses of affiliates

(946)

1,919

Gain on the sales of investment securities

(81)

―

31,798―45,72445,653(27,020)(14,996)

44,199(14,638)

Inventories

2,347

5,844

Accounts payable-trade(9,824)

4,718

Accounts receivable-other

27,557(9,670)Accounts payable-other(47,812)

13,6694,229(1,120)

Other provisions
Interest and dividend income

Loss on the valuation of investment securities
Recovery of recoverable accounts under
production sharing (capital expenditures)
Recoverable accounts under production
sharing (operating expenditures)
Accounts receivable-trade

Advances received
Other(6,489)3,357

Subtotal

744,683

532,135

Interest and dividends received

21,257

16,169(4,800)(1,734)

Income taxes paid

(530,789)(305,198)

Net cash provided by operating activities

230,352

241,372

Interest paid13

- 14 - - 14 -ファイル名:③(Millions of yen)
For the year ended
March 31, 2009

Accounts

For the year ended
March 31, 2010

Cash flows from investing activities
Increase in time deposits(6,463)(9,925)Decrease in time deposits

4,497

8,430

(88,611)(87,549)

246

86

Payments for purchases of intangible assets(2,864)(991)

Payments for purchases of marketable securities(19,082)―

Payments for purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets

Proceeds from sales of marketable securities

111,451

101,320

Payments for purchases of investment securities(137,447)(156,264)

16,530―(108,294)(91,650)70

77(5,895)(7,521)762

34(5,068)(7,860)(240,167)(251,812)

Increase (decrease) in short-term loans

20,933(20,121)

Proceeds from long-term debt
Repayments of long-term debt

12,040108,062(66,364)(5,283)

Proceeds from minority interests for additional shares

9,369

4,704

Purchase of treasury stock(3,048)―Cash dividends paid

(18,833)(15,306)(81)(2,972)

Proceeds from sales of investment securities
Investment in recoverable accounts under
production sharing (capital expenditures)
Decrease in short-term loans receivable
Long-term loans madeCollection of long-term loans receivable
Other
Net cash used in investing activities
Cash flows from financing activities

Dividends paid to minority shareholders
Other

(106)

(145)

(46,090)

68,937

Effect of exchange rate changes on cash and cash equivalents(3,519)(4,947)

Net increase (decrease) in cash and cash equivalents(59,425)

53,550Net cash provided by (used in) financing activities

Cash and cash equivalents at beginning of the period

222,269

Cash and cash equivalents at end of the period*114

162,844

162,844*1

216,395

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ファイル名:④-1H22.3a連結会計方針【済】.doc

印刷日時:10/05/12 14:20(5) Conditions or events that indicate there could be substantial doubt about the Company’s ability to continue as a going concern
None(6) Basis of Presenting Consolidated Financial Statements
For the year ended
March 31, 2009
1.Scope of consolidation
Number of consolidated subsidiaries: 54

For the year ended
March 31, 2010
1.Scope of consolidation
Number of consolidated subsidiaries: 54

Names of major subsidiaries;
Japan Oil Development Co., Ltd., INPEX Natuna,
Ltd., INPEX Sahul, Ltd., Teikoku Oil D.R. Congo,
Co., Ltd., INPEX Southwest Caspian Sea, Ltd.,INPEX North Caspian Sea, Ltd., INPEX Browse,
Ltd., INPEX Masela, Ltd.

Names of major subsidiaries;
Japan Oil Development Co., Ltd., INPEX Natuna,
Ltd., INPEX Sahul, Ltd., Teikoku Oil D.R. Congo,
Co., Ltd., INPEX Southwest Caspian Sea, Ltd.,INPEX North Caspian Sea, Ltd., INPEX Browse,
Ltd., INPEX Masela, Ltd.

During this period:
Number of new companies included in consolidated
subsidiaries:
2
Number of companies excluded from consolidated
subsidiaries:
8

During this period:
Number of new companies included in consolidated
subsidiaries:
1
Number of companies excluded from consolidated
subsidiaries:
1

Details for the above changes:(1) INPEX Petroleo Santos Ltda. and INPEX Seram,Ltd. have been included due to establishment of the companies.

Details for the above changes:(1) INPEX Offshore Northeast Brazil has been included due to establishment of the company.
(2)(2) INPEX CORPORATION and Teikoku Oil Co.,
Ltd. have been excluded due to merger.

Daiichi Warehouse Co., Ltd. has been excluded due to share transfer.

(3) TEIKOKU OIL SUEZ SEJ CO.,Ltd., Teikoku
Oil Algeria Co,Ltd., Teikoku Gas Venezuela C.
A., INPEX North Makassar, Ltd., INPEX North
Natuna,Ltd., and Teikoku Oil SCT Exploration
B.V. have been excluded due to completion ofliquidation.

Names of major unconsolidated subsidiaries:
Sakata Natural Gas, Co., Ltd., Teikoku Oil de Burgos, S.A. de C. V., TELNITE CO.,LTD.

Names of major unconsolidated subsidiaries:
Sakata Natural Gas, Co., Ltd., Teikoku Oil de Burgos, S.A. de C. V., TELNITE CO.,LTD.

(Reason for exclusion from consolidation)
Those companies are not consolidated because their
total assets, total net sales, total net income (the equity portion) and total retained earnings (the equity
portion) do not have significant impact on the consolidated financial statements.

(Reason for exclusion from consolidation)
Same as on the left

2. Application of equity method
Unconsolidated subsidiary accounted for by the equity method: None

2. Application of equity method
Same as on the left

Number of affiliates accounted for by the equity method:
13

Number of affiliates accounted for by the equity method:
12

Names of major affiliates:
MI Berau B.V., Angola Japan Oil Co., Ltd., Japan
Ohanet Oil & Gas Co., Ltd., ALBACORA JAPAOPETROLEO LTDA, INPEX Offshore North Campos, Ltd.

Names of major affiliates:
MI Berau B.V., Angola Japan Oil Co., Ltd., Japan
Ohanet Oil & Gas Co., Ltd., ALBACORA JAPAOPETROLEO LTDA, INPEX Offshore North Campos, Ltd.

15

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For the year ended
March 31, 2009
During this fiscal year:
Number of companies excluded from affiliates accounted for by the equity method:1

For the year ended
March 31, 2010
During this fiscal year:
Number of companies excluded from affiliates accounted for by the equity method:
1

Detail for the above change:
BONTANG TRAIN-G PROJECT FINANCE CO.,LTD. has been excluded due to completion of liquidation.

Detail for the above change:
Project Finance BLRE, Ltd. has been excluded due
to completion of liquidation.

Names of major affiliates not accounted for by theequity method:
Sakata Natural Gas, Co., Ltd., Teikoku Oil de Burgos, S.A. de C.V., Telnite Co., Ltd., Tangguh project
management Co., Ltd.

Names of major affiliates not accounted for by theequity method:
Sakata Natural Gas, Co., Ltd., Teikoku Oil de Burgos, S.A. de C.V., Telnite Co., Ltd., Tangguh project
management Co., Ltd.

(Reason for not applying the equity method)
Subsidiaries and affiliates are not accounted for by
the equity method because their total net income (theequity portion) and total retained earnings (the equity portion) do not have significant impact on the
consolidated financial statements.

(Reason for not applying the equity method)Same as on the left

Procedures for application of the equity method:

Procedures for application of the equity method:

Regarding affiliates accounted for by the equity method having a different closing date from the consolidated closing date, the Company used the financial
statements of each affiliate prepared as of their closing date. For certain affiliates, however, the Company used financial statements prepared forconsolidation purposes as of the consolidated closing date.

Same as on the left

16

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印刷日時:10/05/12 14:20

For the year ended
March 31, 2009
3. Closing dates for the fiscal year of consolidated
subsidiaries

For the year ended
March 31, 2010
3. Closing dates for the fiscal year of consolidated
subsidiaries

For the 36 companies for which the closing date differed from the consolidated closing date, including,but not limited to, INPEX Sahul, Ltd. and INPEX
Masela, Ltd., the Company used the financial statements for the year ended December 31. However, thenecessary adjustments have been made to the financial statements of those companies to reflect any significant transactions made between the Company’s
closing date and those of the consolidated subsidiaries.
For the 10 companies including, but not limited, Japan Oil Development, Co., Ltd., Teikoku Oil D.R.
Congo, Co., Ltd., INPEX Southwest Caspian Sea,
Ltd., and INPEX North Caspian Sea, Ltd., we usedfinancial statements for the year ended the consolidated closing date even though their closing date is
December 31.

For the 35 companies for which the closing date differ from the consolidated closing date, including, but
not limited to, INPEX Sahul, Ltd. and INPEX Masela, Ltd., the Company uses the financial statements
for the year ended December 31. However, the necessary adjustments have been made to the financial
statements of those companies to reflect any significant transactions made between the Company’s closing date and those of the consolidated subsidiaries.
For the 10 companies including, but not limited, Japan Oil Development, Co., Ltd., Teikoku Oil D.R.
Congo, Co., Ltd., INPEX Southwest Caspian Sea,
Ltd., and INPEX North Caspian Sea, Ltd., we use financial statements for the year ended the consolidated
closing date even though their closing date is December 31.
(Additional information)
Teiseki Real Estate Co., Ltd. has changed the closing
date from December 31 to March 31, since this fiscal
year.
Accordingly, the consolidated operating results forthe year ended March 31, 2010 included operating
results for 15 months from January 1, 2009 to March
31, 2010.
The effect of this change does not have a significant
impact on the consolidated financial statements.

4. Accounting policies
1) Valuation method for significant assets(a) Securities
Other securities
With a determinable market value

4. Accounting policies
1) Valuation method for significant assets(a) Securities
Other securities
With a determinable market value

Other securities with a determinable market
value are stated at fair value with any changes
in unrealized holding gain or loss, net of theapplicable income taxes, included directly in net
assets. Cost of securities sold is determined by
the moving-average method.
Without a determinable market value

Same as on the left

Without a determinable market value

Other securities without a determinable market
value are stated at cost determined by the moving-average method.

17

Same as on the left

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For the year ended
March 31, 2009

For the year ended
March 31, 2010(b) Inventories
Overseas inventories
Carried mainly at cost, determined by the average cost method (balance sheet value is carriedat the lower of cost or market)(b) Inventories
Overseas inventories
Carried mainly at cost, determined by the average cost method (balance sheet value is carriedat the lower of cost or market)

Domestic inventories
Carried mainly at cost, determined by the moving-average method (balance sheet value is carried at the lower of cost or market)

Domestic inventories
Carried mainly at cost, determined by the moving-average method (balance sheet value is carried at the lower of cost or market)(Change in accounting policy)
Effective the fiscal year ended March 31, 2009,
the Company applies "Accounting Standard for
Measurement of Inventories" (ASBJ Statement
No.9, issued on July 5, 2006). This does nothave significant impact on the consolidated financial statements.
2) Depreciation method of significant depreciable
assets(a) Tangible fixed assets (except leased assets)
Depreciation of mining facilities is mainly computed by the unit-of-production method. For othertangible fixed assets, straight-line method of depreciation is applied.
Useful lives of significant fixed assets are as follows:
Buildings and structures: 2-60 years
Wells: 3 years
Machinery, equipment and vehicles: 2-22 years2) Depreciation method of significant depreciable
assets(a) Tangible fixed assets (except leased assets)
Same as on the left(b) Intangible assets (except leased assets)
Exploration and development rights
Exploration and development rights at the exploration stage are fully amortized in the consolidated
fiscal year. Such rights which are at the production
stage are amortized by the unit-of-production method.
Mining rights
Mining rights are mainly amortized by the unit-ofproduction method.
Other
Other intangible assets are mainly amortized by thestraight-line method.
Software for internal use is being amortized over
five years.

(b) Intangible assets (except leased assets)
Exploration and development rights
Same as on the left(c) Leased assets
Leased assets for financing lease transactions
whose ownership are not to be transferred:
Depreciation of leased assets are calculated basedon the straight-line method over the lease period
assuming no residual value.

(c) Leased assets
Leased assets for financing lease transactions
whose ownership are not to be transferred:
Same as on the left

18

Mining rights
Same as on the left
Other
Same as on the left

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For the year ended
March 31, 20093) Basis for significant allowances(a) Allowance for doubtful accounts
Allowance for doubtful accounts is provided at an
amount determined based on the historical experience of bad debt with respect to ordinary receivables, plus an estimate of uncollectible amounts
determined by reference to specific doubtful receivables from customers which are experiencing
financial difficulties.
(b) Allowance for recoverable accounts under production sharing
Allowance for recoverable accounts under production sharing is provided for probable losses on
specific investments made under production sharing contracts.
(c) Allowance for investments in exploration
Allowance for investments in exploration is provided for future potential losses on investments in
exploration companies at an estimated amountbased on the net assets of the investees.
(d) Provision for exploration projects
Provision for exploration projects is provided for
future expenditures of consolidated subsidiaries at
exploration stage based on schedule of investments in exploration.
(e) Accrued bonuses to officers
Accrued bonuses to officers are provided at expected payment amount for the year ended March
31, 2009.
(f) Accrued retirement benefits to employees
Accrued retirement benefits to employees areprovided at the amount calculated based on the
expected retirement benefit obligation and the estimated value of pension plan assets at the end of
this period. Because certain subsidiaries are classified as small enterprises, we employ a simplified method (at the amount which would be
required to be paid if all active employees voluntarily terminated their employment as of the balance sheet date) for the calculation of theretirement benefit obligation of the subsidiaries.
Actuarial gains and losses are charged or credited
to income as incurred.
(g) Accrued retirement benefits to officers(Additional Information)
Until the previous fiscal year, retirement benefits
to officers had been accrued at the amount which
would have been required to be paid as if all officers voluntarily terminated their services as of thebalance sheet date based on their respective internal rules. However, in this fiscal year, the Company abolished its retirement benefit program to
officers and makes a payment at their retirements,
which is based on the amount to be paid at the
point of abolishment. Accrued retirement benefits
to officers up to point of abolishment are reversed
and unpaid amounts is recorded in Other longterm liabilities.

19

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For the year ended
March 31, 2010
3) Basis for significant allowances(a) Allowance for doubtful accounts
Same as on the left(b) Allowance for recoverable accounts under production sharing
Same as on the left(c) Allowance for investments in exploration
Same as on the left(d) Provision for exploration projects
Same as on the left(e) Accrued bonuses to officers
Accrued bonuses to officers are provided at expected payment amount for the year ended March
31, 2010.
(f) Accrued retirement benefits to employees
Accrued retirement benefits to employees areprovided at the amount calculated based on the
expected retirement benefit obligation and the estimated value of pension plan assets at the end of
this period. Because certain subsidiaries are classified as small enterprises, we employ a simplified method (at the amount which would be
required to be paid if all active employees voluntarily terminated their employment as of the balance sheet date) for the calculation of theretirement benefit obligation of the subsidiaries.
Actuarial gains and losses are charged or credited
to income as incurred.

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For the year ended
March 31, 2009

For the year ended
March 31, 2010(h) Liabilities for site restoration and decommissioning costs
Liabilities for site restoration and decommissioning costs are provided for expected future costs
for site restoration and decommissioning.
(i) Liabilities for losses on development activities
Liabilities for losses on development activities areprovided for provable losses on oil and natural
gas development activities individually estimatedfor each project.
(j) Accrued special repair and maintenanceAccrued special repair and maintenance are provided for planned major repair and maintenanceactivities on tanks in certain subsidiaries at theamount being accumulated through the next activity.

(g) Liabilities for site restoration and decommissioning costs
Same as on the left

4) Translation of consolidated subsidiaries’ significant assets and liabilities denominated in foreign
currencies into yen in preparation of the consolidated financial statements
Monetary assets and liabilities denominated inforeign currencies are translated into yen at theexchange rates prevailing at the balance sheet
date. The resulting exchange gain or loss is credited or charged to income.

4) Translation of consolidated subsidiaries’ significant assets and liabilities denominated in foreign
currencies into yen in preparation of the consolidated financial statements
Same as on the left(h) Liabilities for losses on development activities
Same as on the left(i) Accrued special repair and maintenanceSame as on the left

The revenue and expense accounts of theoverseas subsidiaries are translated into yen at
the average rates of exchange during the period. The balance sheet accounts are translated
into yen at the rates of exchange in effect atthe balance sheet date. Translation differences
are presented as a component of translation
adjustments and minority interests.
5) Accounting for major hedge transactions(a) Hedge accounting
Simplified accounting method is applied tointerest rate swaps. For certain equity accounted companies, deferred hedge accounting is adopted.
(b) Hedging instruments and hedged items
Hedge instruments: Interest rate swap transactions
Hedged items: Interest payments on borrowings(c) Hedging policy
The nominal amount of the derivative transaction is limited to within the scope of actual demand, and the Company does notengage in speculative derivative transactions.
(d) Hedge effectiveness assessment method
Since simplified accounting method is applied, the Company does not perform hedge
effectiveness assessment.

205) Accounting for major hedge transactions(a) Hedge accounting
Simplified accounting method is applied tointerest rate swaps.

(b) Hedging instruments and hedged items
Same as on the left(c) Hedging policy
Same as on the left(d) Hedge effectiveness assessment method
Same as on the left

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印刷日時:10/05/12 14:20

For the year ended
March 31, 2009

For the year ended
March 31, 20106) Other items important to the preparation of the consolidated financial statements(a) Consumption tax
Transactions subject to the consumption
tax are recorded at amounts exclusive of
the consumption tax.
(b) Recoverable accounts under production sharing
Cash investments made by the Company
during exploration, development and production phases under a production sharing
contract and a service contract (buybackarrangement) are recorded as “Recoverable accounts under production sharing” solong as they are recoverable under theterms of the relevant contract. When the
Company receives the natural gas andcrude oil in accordance with the contract,
an amount corresponding to the purchasecosts of the products (i.e., a cost recovery
portion of the investments) is released
from this account.

6) Other items important to the preparation of the consolidated financial statements(a) Consumption tax
Same as on the left

5. Valuation of assets and liabilities of consolidated
subsidiaries
The assets and liabilities of consolidated subsidiaries are valued at their fair values. However,those whose valuation difference is not material
are valued at their carrying amounts.

5. Valuation of assets and liabilities of consolidated
subsidiaries
Same as on the left

6. Amortization of Goodwill
Goodwill is amortized using a straight-line method over 20 years.

6. Amortization of Goodwill
Same as on the left

7. Scope of cash and cash equivalents in consolidated
statement of cash flow
Cash (cash and cash equivalents) in the consolidated statement of cash flow consisted of cashon hand, cash in banks which can be withdrawn
on demand, and short-term investments with amaturity of three months or less when purchased
which can easily be converted to cash and are
subject to little risk of change in value.

7. Scope of cash and cash equivalents in consolidated
statement of cash flow
Same as on the left

21(b) Recoverable accounts under production sharing
Same as on the left

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印刷日時:10/05/12 14:20(7) Changes in the Basis of Presenting Consolidated Financial Statements
For the year ended
March 31, 2009
(Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements)
Effective the fiscal year ended March 31, 2009, theCompany applies "Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial
Statements" (ASBJ Practical Issues Task Force
No.18, May 17, 2006). This does not have significant impact on the consolidated financial statements.
(Accounting Standard for Lease Transactions)
Effective the fiscal year ended March 31, 2009, theCompany applies "Accounting Standard for Lease
Transactions" (ASBJ Statement No.13, revised on
March 30, 2007) and "Guidance on AccountingStandards for Lease Transactions" (ASBJ
Guidance No.16, revised on March 30, 2007) forthe lease transactions, entered into a contract on
and after April 1, 2008, other than the lease transactions which deem to transfer ownership of theleased assets to the lessee. This does not have significant impact on the consolidated financial statements.

22

For the year ended
March 31, 2010

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印刷日時:10/05/12 14:20(Changes in the Presentation)
For the year ended
March 31, 2009

For the year ended
March 31, 2010
(Consolidated Statements of Income)“Loss on valuation of investment securities”, previously presented separately in other expenses, isincluded in “Other” since its amount is below 10%of total other expenses. The amount of “Loss on
valuation of investment securities” for the year
ended March 31, 2010 is ¥14 million.
“Provision for investments in exploration”, previously included in “Other” in other expenses, isseparately presented in other expenses since its
amount exceeded 10% of total other expenses. The
amount of “Provision for investments in exploration” for the year ended March 31, 2009 is ¥3,631
million.
(Consolidated Cash Flows)“Loss (gain) on valuation of investment securities ”, previously presented separately in cash
flows from operating activities, is included in“Other” due to decrease in its materiality. The
amount of “Loss (gain) on valuation of investment
securities” for the year ended March 31,2010 is¥14 million.

23

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印刷日時:10/05/12 14:21(8) Notes to consolidated financial statements(Consolidated balance sheets)
As of March 31, 2009

As of March 31, 2010

*1 Major accounts included in inventories are as follows:*1 Major accounts included in inventories are as follows:

Millions of yen
10,703211
7,290

Millions of yen
Merchandise and finished goods
3,923Work in process127
Raw materials and supplies
8,271*2 Accumulated depreciation
Accumulated depreciation of tangible fixed assets is¥475,999 million.

*2 Accumulated depreciation
Accumulated depreciation of tangible fixed assets is¥505,499 million.

*3 The Company has the following investments in
subsidiaries and affiliates:*3 The Company has the following investments in
subsidiaries and affiliates:

Merchandise and finished goods
Work in process
Raw materials and supplies: ¥39,163 million
Investment securities (equities)
Other (investments and other assets) : ¥699 million: ¥ 36,713 million
Investment securities (equities)
Other (investments and other assets) : ¥ 128 million*4 Assets provided as collateral and collateral-backed debt
are as follows:(Collateralized Assets)
Millions of yen*4 Assets provided as collateral and collateral-backed debt
are as follows:(Collateralized Assets)
Millions of yen

Buildings and structures
Wells
Machinery, equipments
and vehicles
Land
Others (tangible fixed
assets)Investment securities
Total(Secured debt)
Short-term loans
Accounts payable-other
Long-term debt
Others (long-term
liabilities)
Total

2,614
6,919

(2,173)(6,919)9,390(9,390)

1,826

(660)

0

(0)

7,860

(－)

28,611(19,143)

Buildings and structures
Wells
Machinery, equipments
and vehicles
Land
Others (tangible fixed
assets)Investment securities
Others (investments andother assets)
Total

145
5,264
11,499(－)(4,779)(10,297)

16(―)

16,925(15,076)(Secured debt)
Short-term loans
Accounts payable-other
Long-term debt
Others (long-term
liabilities)

2,239
3,444

(2,239)(3,444)9,512(9,512)

660

(660)

0

(0)

9,385

(―)

246

(―)

25,487(15,856)

2,130
5,496
6,153

(2,114)(5,001)(6,069)16(―)

Amounts in parenthesis () above represent foundation
collateral and liabilities.
In addition, investment securities of ¥5,507 million arepledged as collateral for the BTC pipeline project
financing.

Total
13,797(13,184)
Amounts in parenthesis () above represent foundation
collateral and liabilities.
In addition, investment securities of ¥5,571 million arepledged as collateral for the BTC pipeline project
financing.

*5 Accumulated advanced depreciation deducted fromacquisition costs of fixed assets related to contribution
and others was ¥1,374 million for building andstructures, ¥291 million for machinery, equipment andvehicles, and ¥1 million for others (intangible assets).

*5 Accumulated advanced depreciation deducted fromacquisition costs of fixed assets related to contribution
and others was ¥1,374 million for building andstructures, ¥276 million for machinery, equipment andvehicles, and ¥1 million for others (intangible assets).

*6 Accumulated advanced depreciation deducted fromacquisition costs of tangible fixed assets related toapplication of land expropriation law was ¥4 million for
land.

24

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印刷日時:10/05/12 14:21

As of March 31, 2009

As of March 31, 2010

7 Contingent liabilities
The Company and its consolidated subsidiaries arecontingently liable as guarantors of indebtedness of thefollowing companies:

6 Contingent liabilities
The Company and its consolidated subsidiaries arecontingently liable as guarantors of indebtedness of thefollowing companies:

Millions of yen

Millions of yen

Tangguh Trustee*
18,076
Sakhalin Oil and Gas
4,626
Development Co., Ltd.
Fujian Tranche *4,041
INPEX Offshore North Campos,
3,296
Ltd.
Sakata Natural Gas Co., Ltd.
537
Japan Ohanet Oil & Gas Co.,
290
Ltd.
Employees (housing loans)
365
Total
31,234

Tangguh Trustee*
17,971
Fujian Tranche *6,402
INPEX Offshore North Campos,
3,290
Ltd.
Sakhalin Oil and Gas
3,213
Development Co., Ltd.
Sakata Natural Gas Co., Ltd.
305
Employees (housing loans)
319
Total
31,502*Debt for investment funds of Tangguh LNG projectthrough MI Berau B. V. and MI Berau Japan Ltd.

*Debt for investment funds of Tangguh LNG projectthrough MI Berau B. V. and MI Berau Japan Ltd.

25

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印刷日時:10/05/12 14:21(Consolidated statements of income)For the year ended March 31, 2009
*1. Major accounts included in selling, general andadministrative expenses are as follows:

For the year ended March 31, 2010
*1. Major accounts included in selling, general andadministrative expenses are as follows:

Millions of yen
Personnel expenses
13,582(Including provision for accrued
66)
retirement benefits to officers(Including provision for accrued
1,056)
retirement benefits to employees(Including provision for accrued
150)
bonuses to officers
Taxes
9,412
Freight expenses
6,590
Depreciation expenses
17,194
Amortization of goodwill
6,760
*2.

Millions of yen
Personnel expenses
13,645(Including provision for accrued
358)
retirement benefits to employees(Including provision for accrued
140)
bonuses to officers
Taxes
4,485
Freight expenses
8,733
Depreciation expenses
20,011
Amortization of goodwill
6,759*2. Research and development expenses included in generaland administrative expenses: ¥ 470 million

Research and development expenses included in generaland administrative expenses: ¥642 million

26

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印刷日時:10/05/12 14:21(Consolidated statements of changes in net assets)
For the year ended March 31, 2009
1. Type and number of shares issued and outstanding and treasury stock(Shares)

Balance as ofMarch 31, 2008

Balance as ofMarch 31, 2009

Increase

Decrease

Number of shares
Common stock
2,358,409
02,358,409―
Special class share
1
1
―
―
Total
2,358,410
02,358,410―
Treasury stock
Common stock
2,047
3,340
471
4,916
Total
2,047
3,340
471
4,916
Notes 1: Decrease in common stock is due to extinguishment of fractional part in treasury stock in accordance withabolition of fractional share system.
2: Increased in treasury stock of common stock by 3,340 is due to purchase of odd lot shares and others.
3: Decrease in treasury stock of common stock is due to sales of 471 odd lot shares.

2. Share subscription rights
None
3. Dividends(1) Cash dividends paid
Resolution
Ordinary general
meeting ofshareholders
June 25, 2008
Board of directors’
meetingNovember 11, 2008

Type ofshare
Commonstock
Specialclass share
Commonstock
Specialclass share

Cash dividends paid
(Millions of yen)

Dividends per
share
(Yen)

9,425

4,000

March 31, 2008

June 26, 2008

0

4,000

March 31, 2008

June 26, 2008

9,420

4,000

September 30, 2008

December 19, 2008

0

4,000

September 30, 2008

December 19, 2008

Entitlement date

Effective date(2) Dividends, of which the entitlement date was in the year ended March 31, 2009, and whose effective date will
be in the next fiscal year
Cash dividends
Dividends
Type of
Source of
Resolution
paid
per share
Entitlement date Effective dateshare
dividends(Millions of yen)
(Yen)
CommonRetained
Ordinary general
9,413
4,000 March 31, 2009
June 26, 2009stock
earnings
meeting ofshareholders
SpecialRetained
04,000 March 31, 2009
June 26, 2009
June 25, 2009class shareearnings27

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For the year ended March 31, 2010
1. Type and number of shares issued and outstanding and treasury stock
Balance as ofMarch 31, 2009
Number of shares
Common stockSpecial class share
Total
Treasury stock
Common stock
Total

Increase(Shares)
Balance as ofMarch 31, 2010

Decrease

2,358,409
1
2,358,410

―
―
―

―
―
―

2,358,409
1
2,358,410

4,916
4,916

―
―

―
―

4,916
4,916

2. Share subscription rights
None
3. Dividends(1) Cash dividends paid
Resolution
Ordinary general
meeting ofshareholders
June 25, 2009
Board of directors’
meetingNovember 4, 2009

Type ofshare
Commonstock
Specialclass share
Commonstock
Specialclass share

Cash dividends paid
(Millions of yen)

Dividends per
share
(Yen)

9,413

4,000

March 31, 2009

June 26, 2009

0

4,000

March 31, 2009

June 26, 2009

5,883

2,500

September 30, 2009

December 1, 2009

0

2,500

September 30, 2009

December 1, 2009

Entitlement date

Effective date(2) Dividends, of which the entitlement date was in the year ended March 31, 2010, and whose effective date will
be in the next fiscal year
Cash dividends
Dividends
Type of
Source of
Resolution
paid
per share
Entitlement date Effective dateshare
dividends(Millions of yen)
(Yen)
CommonRetained
Ordinary general
7,060
3,000 March 31, 2010
June 24, 2010stock
earnings
meeting ofshareholders
SpecialRetained
03,000 March 31, 2010
June 24, 2010
June 23, 2010class shareearnings28

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印刷日時:10/05/12 14:21(Consolidated statements of cash flows)

For the year ended
March 31, 2009

For the year ended
March 31, 2010

*1 Cash and cash equivalents at the end of the*1 Cash and cash equivalents at the end of theperiod are reconciled to the account reported in
the consolidated balance sheet as follows:
Millions of yen
Cash and deposits
Time deposits for more than
three months and others
Marketable securities(commercial paper)
Marketable securities(financial bill)
Marketable securities(MMF)
Marketable securities(certificate of deposit)
Cash and cash equivalents

1,969

period are reconciled to the account reported in
the consolidated balance sheet as follows:
Millions of yen
119,809
Cash and deposits
Time deposits for more than
(3,786)three months and others
Marketable securities
68,477(commercial paper)
Marketable securities
19,801(financial bill and others)Marketable securities
9,742(MMF and others)

2,000

Marketable securities(certificate of deposit)

117,393(2,513)38,994
4,999

Cash and cash equivalents

162,84429

2,350
216,395

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ファイル名:④-4H22.3cセグメント-海外売上高【済】.doc

印刷日時:10/05/12 14:22(Segment information)
1. Business segment information
For the year ended March 31, 2009
Segment information by business has been omitted because the crude oil and natural gas business accounts for more than
90% of total sales, operating income and asset.
For the year ended March 31, 2010
Segment information by business has been omitted because the crude oil and natural gas business accounts for more than
90% of total sales, operating income and asset.

30

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2. Geographical segment information
For the year ended March 31, 2009 (April 1, 2008 through March 31, 2009)(Millions of yen)Japan

Asia Oceania

Eurasia(Europe NIS)

I Net sales and operating income
Net sales(1) Sales to third parties(2) Intercompany sales andtransfers between segments

93,423435,824

73,687463,150

10,079

1,076,164―

1,076,164

―

―

―

―

―

―

―

―

Total

93,423435,824

73,687463,150

10,079

1,076,164―

1,076,164

Operating expenses

59,540150,415

39,222

144,459

11,419405,058

7,839

412,898

Operating income (loss)

33,882

285,408

34,464

318,691(1,340)671,106(7,839)663,266

208,326

409,558

365,913

189,270

85,1681,258,236

509,808

1,768,044

II Assets
Notes:

MiddleEast Africa

Americas

Total

Eliminations
Consolidated
and other

1. Countries and areas are segmented based on their geographic proximity and their mutual operational relationships.
2. Major countries and areas that belong to segments other than Japan are as follows:(1) Asia - Oceania･･････････Indonesia, Australia, East Timor, Vietnam(2) Eurasia (Europe - NIS)･･･Azerbaijan, Kazakhstan, UK(3) Middle East - Africa･････UAE, D.R. Congo, Iran, Libya, Egypt, Algeria, Angola(4) Americas･･････････････Venezuela, Ecuador, USA, Canada, Surinam, Brazil
3. Unallocated operating expenses included in “Eliminations and other” of ¥11,129 million under the operating expenses are mainly amortization of goodwill and general administrative expenses.
4. Of the figure for assets, ¥513,129 million included in “Eliminations and other” are mainly goodwill, cash and deposit, marketable securities and investment securities concerned with the administrative divisions.

For the year ended March 31, 2010 (April 1, 2009 through March 31, 2010)(Millions of yen)Japan

Asia Oceania

Eurasia(Europe NIS)

I Net sales and operating income
Net sales(1) Sales to third parties(2) Intercompany sales andtransfers between segments

93,958352,383

73,574

303,818

16,692

840,427―

840,427

―

―

―

―

―

―

―

―

Total

93,958352,383

73,574

303,818

16,692

840,427―

840,427

Operating expenses

61,404

161,31333,80598,246

15,663

370,433

8,325

378,759

Operating income

32,554

191,069

39,769205,571

1,028

469,993(8,325)

461,667

240,879

451,167

446,848

229,842

85,241

1,453,980

559,797

2,013,778

II Assets
Notes:

MiddleEast Africa

Americas

Total

Eliminations
Consolidated
and other

1. Countries and areas are segmented based on their geographic proximity and their mutual operational relationships.
2. Major countries and areas that belong to segments other than Japan are as follows:(1) Asia - Oceania･･････････Indonesia, Australia, East Timor, Vietnam(2) Eurasia (Europe - NIS)･･･Azerbaijan, Kazakhstan, UK(3) Middle East - Africa･････UAE, D.R. Congo, Iran, Libya, Egypt, Algeria, Angola(4) Americas･･････････････Venezuela, Ecuador, USA, Canada, Surinam, Brazil
3. Unallocated operating expenses included in “Eliminations and other” of ¥8,766 million under the operating expenses are mainly amortization of goodwill and general administrative expenses.
4. Of the figure for assets, ¥562,927 million included in “Eliminations and other” are mainly goodwill, cash and deposit, marketable securities and investment securities concerned with the administrative divisions.

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3. Overseas sales
For the year ended March 31, 2009
Asia - Oceania
I.

Overseas sales (Millions of yen)Other371,102

Total
46,280II. Consolidated sales (Millions of yen)

1,076,164

III. Overseas sales as a percentage of consolidated sales (%)
Notes:

417,383

34.5

4.3

38.8

1. Countries and areas are segmented based on their geographic proximity.
2. Major countries and areas that belong to segments other than Japan are as follows:(1) Asia-Oceania･････････South Korea, Taiwan, Indonesia, Singapore, Thailand, China,
Philippines, Australia(2) Other･･･････････････USA
3. Overseas sales represent sales to countries and regions outside of Japan, which is determined based upon the final destination.

For the year ended March 31, 2010
Asia - Oceania
I.

Overseas sales (Millions of yen)271,231

Other

Total
53,424

II. Consolidated sales (Millions of yen)

840,427

III. Overseas sales as a percentage of consolidated sales (%)
Notes:

324,656

32.3

6.3

38.6

1. Countries and areas are segmented based on their geographic proximity.
2. Major countries and areas that belong to segments other than Japan are as follows:(1) Asia-Oceania･････････South Korea, Taiwan, Indonesia, Singapore, Thailand,
Philippines, Australia(2) Other･･･････････････USA, Italy
3. Overseas sales represent sales to countries and regions outside of Japan, which is determined based upon the final destination.

32

ファイル名:(Financial Instruments)
For the year ended March 31, 2010
(Supplementary information)
Beginning from the year ended March 31, 2010, the Company adopted the Accounting Standard for Financial Instruments(ASBJ Statement No.10 issued on March 10, 2008) and the Guidance on Disclosures about Fair Value of Financial Instruments(ASBJ Guidance No.19 issued on March 10, 2008).
1. Status of financial instruments(1) Policy regarding financial instruments
The Company raises funds for oil and gas exploration, development and production, construction or expansion of domestic
pipelines and LNG receiving terminal primarily from cash flow on hand and from bank loans. Oil and gas development
projects are primarily funded from long-term loans that the Company has secured from the Japan Bank of International Cooperation and Japanese commercial banks. Japan Oil, Gas and Metals National Corporation have provided guarantees for the
principal on certain outstanding amounts of the Company’s long-term loans. The Development Bank of Japan and Japanesecommercial banks have been providing long-term loans for the construction or expansion of domestic pipelines and LNG receiving terminal. The Company generally borrows with variable interest rates, while some loans are with fixed interest ratedepending on the nature of each project. Regarding the financing policy, the Company manages funds mainly from cash on
hand and government bonds, which are considered of low-risk and high-liquidity. The Company does not engage in speculative derivative transactions to prevent risks hereinafter described below.
(2) Details of financial instruments, associated risk and risk management(Credit risks related to trade receivables)
Trade receivables ―accounts receivable-trade and accounts receivable-other ― are comprised mainly from sales of oil andnatural gas. Main trading partners are national oil companies, major oil companies and others. In line with criteria for trading
and credit exposure management, the Company properly analyzes the status of trading partners for early detection and reduction of default risks.
(Market price fluctuation risk related to securities)
For marketable securities and investment securities exposed to market price fluctuation risk, analysis of market values isregularly reported to the Management Committee. For stocks, the Company holds the shares of trading partners and others toestablish close and smooth relationship for the purpose of medium- to long-term stable business. Of these shares, the Company partially holds for the purpose of investment. As for bonds, the Company mainly holds government bonds with shortterm maturities to reduce market price fluctuation risk.
(Interest rate fluctuation risk related to short-term loans and long-term debt)
Loans are mainly for fund for oil and natural gas exploration projects and construction or expansion of domestic pipelinesand LNG receiving terminal and others. The borrowing period is determined considering financial prospects of the projectand useful lives of facilities. Loans with variable interest rates are exposed to interest rate fluctuation risk, however, theCompany leverages in line with the above policy. Loans with fixed interest rate include fixed interest expenses under special
treatment of interest rate swaps.
(Exchange rates fluctuation risk related to assets and liabilities in foreign currencies)
As the most of the Company’s business consists of overseas business, the Company is exposed to exchange fluctuation risk
due to a large portion of monetary assets and liabilities held in foreign currencies such as cash and deposits, accounts receivables and loans required in overseas projects. As a result of fiscal year-end conversion, yen appreciation causes foreign exchange loss on assets and foreign exchange gain on liabilities while yen depreciation causes foreign exchange gain on assets
and foreign exchange loss on liabilities. For this reason, foreign exchange gain and loss are offset and maintains the position
between assets and liabilities in foreign currencies. At present, the Company is in the position of incurring foreign exchange
loss when foreign exchange rate proceeds to yen appreciation. The Company timely converts to the yen to avoid excess holding of foreign currency deposits on hand as well as engages in hedge transactions, based on the Company policy, partly using
foreign currency forward exchange contracts as necessary for expected foreign currency trading.
(Management of derivative transactions)
For the above derivative transactions such as interest rate swap transactions and forward exchange contracts, the Company
follows derivative transactions management outline. Further, the Company only transacts with financial institutions with highcredit ratings to reduce credit risks for the use of derivatives.
(Management of the liquidity risk related to financing)
The finance unit controls cash management based on monthly financing plan prepared by each project division and securesufficient liquidity on hand to be prepared for liquidity risks.
(3) Supplementary explanation of items related to the market value of financial instruments
For nominal amounts and others regarding derivative transactions on “2. Fair value of financial instruments”, its amounts do
not indicate market risks related to derivative transactions.

33

ファイル名:2.

Fair value of financial instruments
Carrying value on the consolidated balance sheet as of March 31, 2010, fair value and their unrealized loss are as shown
below. Items for which is extremely difficult to determine market value are not included in the following table (Please refer to Note 2).
(Millions of yen)
(1) Cash and deposits(2) Accounts receivable-trade(3) Marketable securities and investment
securities
Total assets(1) Short-term loans(2) Long-term debt
Total liabilities
Derivatives

Carrying value
119,80988,364
544,681

Fair value
119,80988,364
544,681752,855
4,872
235,510240,383－

752,855
4,935
237,023
241,958－

Unrealized loss
－
－
－
－
62
1,512
1,575
－

Note 1: Methods of calculating of the fair value of financial instruments
Assets(1) Cash and deposits, and (2) Accounts receivable-trade
Since these items are settled in a short period of time and their fair values are almost the same as their carrying values, therelevant carrying values are used.
(3) Marketable securities and investment securities
The fair value of shares are determined by the market prices of exchanges, and the fair value for bonds are determined bymarket prices of exchanges or the prices presented by financial institutions. For further information on investment securitiesof each holding purpose, please refer to “Securities” section of the notes to financial statements.
Liabilities(1) Short-term loans
The fair value of current portion of long-term debt included in short-term loans, is calculated by the same method as (2)Long-term debt. For the other short-term loans, the relevant carrying value is used since these items are settled in a short periods of time and its market value is almost the same as the carrying value.
(2)Long-term debt
The fair value of long-term debt is calculated by applying a discount rate to the total of principal and interest. The discountrate is based on the assumed interest rate if a similar new loan is entered into.
Derivatives
Please refer to “Derivative transactions” section of notes to financial statements.
Note 2: Financial instruments for which it is extremely difficult to determine market value(Millions of yen)
Carrying value
Unlisted securities
30,623Preferred securities
5,000
Stocks of subsidiaries and affiliates
36,713
These financial instruments are assumed to have no market value and require excessive costs to estimate future cash flows.
Accordingly, these financial instruments are not included in “Assets (3) Marketable securities and investment securities” as
it is to be financial instruments for which are extremely difficult to determine fair value. For shares of exploration companies among unlisted securities and stocks of subsidiaries and affiliates, the allowance is provided for investments in exploration at an estimated amount based on the financial position of the investees.

34

ファイル名:

Note 3: Redemption schedule for monetary assets securities with maturity dates subsequent to March 31, 2010 is as follows(Millions of yen)More than 1 year
More than 5More than 10
1 year or lessbut less than 5
years but less
years
years
than 10 years
Cash and deposits
119,809－－－
Accounts receivable-trade
88,364－－－Marketable securities and investment
securities
Other securities
202,654
210,545
37,0006,500
Total
410,828
210,545
37,0006,500
Note 4: Maturities for long-term loans payable and leased liabilities subsequent to March 31, 2010 is as follows(Millions of yen)
1 year or lessLong-term debt
Lease obligations
Total

4,712
88
4,801

35

More than 1 year
but less than 5
years
15,894
128
16,022More than 5
years but lessthan 10 years
139,7791
139,781More than 10
years
79,836－
79,836

ファイル名:(Securities)
For the year ended March 31, 2009
1 Other securities with determinable market value as of March 31, 2009
Type of securities

Acquisition costs

Carrying value(Millions of yen)
Unrealized gain
(loss)

Securities whose carrying value exceed their acquisition cost(1) Stocks
431
506
75
(2) Bonds
Public bonds
284,598
286,759
2,161
Corporate bonds
―
―
―
Other
23,99423,9972(3) Other
68
75
6
Subtotal
309,091
311,338
2,246
Securities whose acquisition costs exceed their carrying value(1) Stocks
55,29849,466(5,831)(2) Bonds
Public bonds
43,72340,883(2,839)Corporate bonds
―
―
―
Other
15,415
15,352(62)(3) Other
5,856
5,856
―
Subtotal
120,293
111,558(8,734)
Total
429,385
422,897(6,487)
Note: The Company recognized an impairment of ¥31,798 million on stocks in other securities with determinable market value
for the year ended March 31, 2009. Furthermore, securities with the market value dropped by more than 30 % in comparison to acquisition cost are treated as impaired unless the clear possibility of recovery exists.
2 Other securities sold during the year ended March 31, 2009
(Millions of yen)
Proceeds from sales
Gains on sales
Loss on sales
376,3891070Note: Proceeds from sales include redemption and cancellation of bonds, MMF, and others.
3 Other securities without a determinable market value as of March 31, 2009
(Millions of yen)Type of securities
Carrying value
Other securities
Beneficiary securities of bond in1,969
vestment trust
Certificate of deposit
2,000
Unlisted securities
28,176
Note: An allowance is provided for investments in exploration companies at an estimated amount based on the financial positionof the investees.
4 Redemption schedule for securities with maturity date classified as other securities as of March 31, 2009
(Millions of yen)More than 1 year but
More than 5 years but
Type of securities
1 year or lessMore than 10 years
less than 5 years
less than 10 years(1) Bonds
Public bonds
106,218
180,541
20,05820,825
Corporate bonds
―
―
―
―
Other
39,32029――(2) Other
2,000
―
―
―
Total
147,538
180,570
20,05820,82536

ファイル名:For the year ended March 31, 2010
1 Other securities as of March 31, 2010
Type of securities

Acquisition costs

Securities whose carrying value exceed their acquisition costs(1) Stocks(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Subtotal
Securities whose acquisition costs exceed their carrying value(1) Stocks(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Subtotal
Total(Millions of yen)
Unrealized gain
(loss)

Carrying value

28,825

43,77914,954

275,323―
18,562
6,732
329,443

276,952―
18,801
8,721
348,255

1,628
―
239
1,989
18,811

26,872

22,395(4,477)

104,506―
59,025
12,111
202,516
531,959

102,922―59,016
12,092
196,426
544,681(1,584)―(9)(18)(6,090)12,7212 Other securities sold during the year ended March 31, 2010
Type of securities(1) Stocks(2) Bonds
Public bonds
Corporate bonds
Other(3) Other

Proceeds from sales―

107,500―
266,653
31,130Total
405,283
Note: Proceeds from sales include redemption and cancellation of bonds, MMF, and others.

37―(Millions of yen)
Loss on sales
―

―
―
―
―
―

―
―
―
―
―

Gain on sales

ファイル名:(Derivatives Transactions)
For the year ended March 31, 2010
1 Derivatives not subject to hedge accountingNone
2 Derivatives subject to hedge accounting(1) Derivatives related to interest rate
(Millions of yen)
Hedge accounting
methodType of derivatives

Principal
items hedged

Contract
amounts

Due after one
year

Fair value

Interest rate swaps
Long-term
payment fixed,
10,340
8,300
(*)
debt
receipt fluctuated(*) Fair value of derivatives for which special treatment of interest rate swaps is applied is included to the fair value of longterm debt since it is a part of the long-term debt.

Special treatment ofinterest rate swaps

38

更新日時:2010/05/12 14:23:00

ファイル名:④-5H22.3e連結一株後発開示の省略【済】.DOC

印刷日時:10/05/12 14:23(Per share information)

For the year ended
March 31, 2009
Net assets excluding minority interests
per share
Net income per share
Notes:For the year ended
March 31, 2010
¥540,100.10¥61,601.60

Net assets excluding minority
interests per share
Net income per share¥45,553.56

1. Diluted net income per share is not presented because there are no dilutive potential of shares of common stock.
2. Net income per share is calculated based on the following:
For the year ended
March 31, 2009
Net income (Millions of yen)Note:¥589,548.88

145,062

For the year ended
March 31, 2010
107,210Amount not attributable to common――
stockholders (Millions of yen)
Net income attributable to common
145,062
107,210stockholders (Millions of yen)
Average number of shares (shares)
2,354,852
2,353,494
Common stock
2,354,851
2,353.493
Common stock equivalent share;
Special class share
1
1
Since a shareholder of the special class share is entitled to the same rights as that for shareholders of common stock
regarding dividends and the distribution of residual property, the special class share is classified as common stock
equivalent share.

39

更新日時:2010/05/12 14:23:00

ファイル名:④-5H22.3e連結一株後発開示の省略【済】.DOC

印刷日時:10/05/12 14:23(Significant subsequent events)
None(Omissions of disclosure)With respect to information for leases, related party transactions, tax accounting, and retirement benefits plan
respective disclosure has been omitted because it does not have significant impact on the consolidated financial
statements.

40

更新日時:2010/05/11 20:51:00 印刷日時:10/05/12 14:24

ファイル名:⑤-1.H22.3a個別BS【済】.DOC

5 Non-consolidated Financial Statements(1) Non-consolidated balance sheets(Millions of yen)Accounts(Assets)
Current assets
Cash and deposits
Accounts receivable-tradeMarketable securities
Finished goods
Work in process and partly-finished construction
Raw materials and supplies
Advance payments-trade
Prepaid expenses
Short-term loans receivable to subsidiaries andaffiliates
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings, net
Structures, net
Wells, net
Machinery and equipment, net
Vehicles, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Construction in progress
Total tangible fixed assets
Intangible assets
Goodwill
Mining right
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Investments in stock of subsidiaries andaffiliates
Investments in capital
Investments in capital of subsidiaries andaffiliates
Long-term loans receivable
Long-term loans receivable from employees
Long-term loans receivable from subsidiaries and affiliates
Long-term prepaid expenses
Real estate for investment, net
Recoverable accounts under production
sharing41

As of March 31, 2009

As of March 31, 2010

30,067
19,875
119,174
3,327
79
2,512
124
230

23,03927,130103,670
2,673
112
2,531
53
647

49,71135,893

13,3535,499(48)
243,908

13,6142,735(20)
212,083

9,426
85,544
8,156
22,82722
771
15,140207
29,021
171,117

9,687
111,519
4,530
24,49424
791
16,375163
35,301
202,888

118,200
0
2,888
1,056
122,144

111,247
0
2,705
1,883
115,836

212,190289,868

413,878

460,949

0

0

194

0

28

20

56

37

43,47365,89317
12,202

15
13,350136,795

136,964更新日時:2010/05/11 20:51:00 印刷日時:10/05/12 14:24

ファイル名:⑤-1.H22.3a個別BS【済】.DOC(Millions of yen)Accounts
Other
Allowance for doubtful accounts
Allowance for recoverable accounts
under production sharing
Allowance for investments in explorati
Total investments and other assets
Total fixed assets
Total assets

42

As of March 31, 2009

As of March 31, 2010

10,004(526)

14,543
(492)

(957)

(554)

(162,862)
664,496
957,759
1,201,667(181,534)
799,062
1,117,786
1,329,869

更新日時:2010/05/11 20:51:00 印刷日時:10/05/12 14:24

ファイル名:⑤-1.H22.3a個別BS【済】.DOC(Millions of yen)Accounts(Liabilities)
Current liabilities
Accounts payable-trade
Current portion of long-term loans payable
Lease obligations
Accounts payable-otherAccrued expenses
Income taxes payable
Deferred tax liabilities
Advances received
Deposits payable
Accrued bonuses to officers
Other
Total current liabilities
Long-term liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Accrued retirement benefits to employees
Liabilities for site restoration and decommissioning costs
Provision for loss on business of subsidiaries
and affiliates
Other
Total long-term liabilities
Total liabilities(Net assets)
Shareholders’ equity
Common stock
Capital surplus
Capital reserve
Total capital surplus
Retained earnings
Other retained earnings
Mine prospecting reserve
Unappropriated retained earnings
Total retained earnings
Treasury stock
Total shareholders’ equity
Valuation, translation adjustments and others
Unrealized holding gain on securities
Total valuation, translation adjustments andothersTotal net assets
Total liabilities and net assets

43

As of March 31, 2009

As of March 31, 2010

1,691

2,831

4,210

4,210

84

70

21,3382,101
26,730
207
131
806
113
84
57,49826,5682,279
24,614
423
1,611
628
110
53
63,402

18,123
121
6,203
7,990

43,313
90
4,203
7,075

228

631

1,830

2,014

1,184
35,683
93,182

1,113
58,442
121,845

30,00030,000762,992
762,992

762,992
762,992

4,112
321,793
325,905(5,248)
1,113,649

7,741
399,328
407,069(5,248)1,194,813(5,164)

13,210(5,164)

13,2101,108,485
1,201,667

1,208,024
1,329,869

更新日時:2010/05/12 14:25:00 印刷日時:10/05/12 14:25

ファイル名:⑤-2H22.3b個別PL【済】.DOC(2) Non-consolidated statements of income(Millions of yen)Accounts

For the year ended March 31, 2009

For the year ended March 31, 2010

151,451

347,770

Operating revenues
Net sales
Dividends income

9,433

-

Management consulting fee income

2,617

-

163,502347,770

Cost of sales

Total operating revenue

50,021

127,635

Gross profit

113,481

220,134

Exploration expenses

1,467

2,996

Selling, general and administrative expenses

22,62434,868Operating income

89,389182,269

Interest income

1,585

2,188

Interest income-securities

1,115

1,722

Dividends income

28,55932,682Other income

Other

2,497

3,829

Total other income

33,75840,423

174

604

4,816

20,161Other expenses
Interest expense
Provision of allowance for investment loss
in exploration
Loss on valuation of investment securities

26,700-Foreign exchange losses

12,01715,756

815

1,256

Other
Total other expenses

44,524

37,77978,623

184,913Gain on extinguishment of tie-in shares

266,950-

Ordinary income
Extraordinary income
Total extraordinary income

266,950-

Income before income taxes

345,574

184,913

Income taxes-current

36,47990,221

Income taxes-deferred(14,578)(1,769)Total income taxes

21,90188,451

Net income

323,672

96,46144

更新日時:2010/05/12 14:25:00

ファイル名:⑤-3H22.3ｃ個別SS【済】.doc

印刷日時:10/05/12 14:25(3) Non-consolidated statements of changes in net assets(Millions of yen)
For the year ended
March 31, 2009

For the year ended
March 31, 2010

30,00030,00030,00030,000

Balance at the beginning of the period

762,992

762,992

Balance at the end of the period

762,992

762,9922-

Disposal of treasury stock(2)-

Total changes during the period

(2)

-

-

-

762,994

762,992

Disposal of treasury stock(2)-

Total changes during the period(2)-762,992

762,992-

4,112

Provision of mine prospecting reserve

4,112

7,741

Reversal of mine prospecting reserve-(4,112)

4,112

3,629

4,112

7,741

21,092

321,793

Provision of mine prospecting reserve(4,112)(7,741)

Reversal of mine prospecting reserve

-

4,112

Dividends from surplus(18,846)(15,297)

Net income

323,672

96,461

Accounts
Shareholders’ equity
Common stock
Balance at the beginning of the period
Balance at the end of the period
Capital surplus
Legal capital surplus

Other capital surplus
Balance at the beginning of the period
Changes during the period

Balance at the end of the period
Total capital surplus
Balance at the beginning of the period
Changes during the period

Balance at the end of the period
Retained earnings
Other retained earnings
Mine prospecting reserve
Balance at the beginning of the period
Changes during the period

Total changes during the period
Balance at the end of the period
Retained earnings brought forward
Balance at the beginning of the period
Changes during the period

Disposal of treasury stock
Total changes during the period
Balance at the end of the period

45

(13)

-

300,700

77,535

321,793399,328

更新日時:2010/05/12 14:25:00

ファイル名:⑤-3H22.3ｃ個別SS【済】.doc

印刷日時:10/05/12 14:25(Millions of yen)
For the year ended
March 31, 2009

For the year ended
March 31, 2010

21,092

325,905

Provision of mine prospecting reserve--

Reversal of mine prospecting reserve--

Dividends from surplus(18,846)(15,297)

Net income

323,672

96,461(13)-

Accounts
Total retained earnings
Balance at the beginning of the period
Changes during the period

Disposal of treasury stock

304,812

81,164

325,905

407,069

Balance at the beginning of the period(2,215)(5,248)Changes during the period
Purchase of treasury stock(3,563)-

Disposal of treasury stock

530-

Total changes during the period
Balance at the end of the period
Treasury stock(3,032)-(5,248)(5,248)811,872

1,113,649

Cash dividends paid

(18,846)(15,297)

Net income
Purchase of treasury stock

323,672

96,461(3,563)-

Disposal of treasury stock

514-

301,777

81,164

1,113,649

1,194,813

Total changes during the period
Balance at the end of the period
Total shareholders’ equity
Balance at the beginning of the period
Changes during the period

Total changes during the period
Balance at the end of the period46

更新日時:2010/05/12 14:25:00

ファイル名:⑤-3H22.3ｃ個別SS【済】.doc

印刷日時:10/05/12 14:25(Millions of yen)
For the year ended
March 31, 2009

For the year ended
March 31, 201016

(5,164)(5,181)

18,375(5,181)

18,375(5,164)

13,21016(5,164)(5,181)

18,375(5,181)

18,375(5,164)

13,210811,888

1,108,485

Cash dividends paid

(18,846)(15,297)

Net income
Purchase of treasury stock

323,672

96,461(3,563)-

Disposal of treasury stock

514-(5,181)

18,375

Accounts
Valuation, translation adjustments and others
Unrealized holding gain (loss) on securities
Balance at the beginning of the period
Changes during the period
Other changes in items other than those inshareholders’ equity (net)Total changes during the period
Balance at the end of the period
Total valuation and translation adjustments
Balance at the beginning of the period
Changes during the period
Other changes in items other than those inshareholders’ equity (net)Total changes during the period
Balance at the end of the period
Total net assets
Balance at the beginning of the period
Changes during the period

Other changes in items other than those inshareholders’ equity (net)Total changes during the period
Balance at the end of the period

47

296,596

99,5391,108,485

1,208,024

2ファイル名:(4) Conditions or events that indicate there could be substantial doubt about the Company’s ability to continue as a going concern
None

6 Other(1) Changes in directors and statutory auditors of the Company
Not applicable for the current fiscal year. Information will be disclosed promptly at the point of which disclose is required.
(2) Production, orders received and sales performance1) Actual production
The following table shows actual production by business segment:
For the year ended
Business segment
Category
March 31, 200981 MMbbls
Crude oil
(223 Mbbls per day)
398 Bcf
Natural gas(1,090 MMcf per day)
148 MMboe
Subtotal(405 Mboe per day)
Crude oil andnatural gas
Petroleum
236 Mkl
products(1,484 Mbbls)
IodineNotes:

496 tons

For the year ended
March 31, 2010
80MMbbls(218 Mbbls per day)
410 Bcf( 1,123 MMcf per day)
148 MMboe(405 Mboe per day)
240 Mkl(1,512 Mbbls)
453 tons

Electric power
109 millions kWh
137 millions kWhgeneration
1. The volume of LPG produced overseas is included in ‘Crude oil.’ On the other hand, the volume of LPG
produced in the domestic refinery is included in ‘Petroleum Products.’
2. A portion of crude oil production volume is consumed as material for petroleum products.
3. A portion of crude oil and natural gas production volume is consumed as fuel to generate electricity.
4. The production by the Company’s affiliates accounted for by the equity method is included in the figures
above. Also the production volume is a result for the year ended March 31 regardless of a closing date offiscal periods of its subsidiaries or affiliates.
5. The production volume of crude oil and natural gas under the production sharing contracts entered into by
INPEX Group corresponds to the net economic take of the group.
Figures calculated by multiplying the gross production volume by the Company’s interest share are 122
MMbbls (335 Mbbls per day) of crude oil, 550 Bcf (1,507 MMcf per day) of natural gas, and in total 214
MMboe (586 Mboe per day). For calculating the gas production based on interest share, 100% of the gas
production volume measured at wellhead (separator gas) had been used until the year ended March 31, 2009.
However, from the year ended March 31, 2010, the Company applies marketable gas volume basicallyadjusted for delivery specifications, excluding own fuel consumption, re-injection, losses as flare, diffusion,
process loss and inert gas generated at plant etc.
6. Boe stands for barrels of oil equivalent.
7. The volume of petroleum products is converted to bbl in parenthesis. Applied coefficient is 6.29 bbls per kl.
8. Iodine is refined by other company on consignment.
9. Figures are rounded to the nearest whole number.

2) Orders received
Disclosure on this information is omitted because the amount of orders received is accounted for a minor portion of total
sales. In addition, there is no production for orders received in crude oil and natural gas business.

48

2ファイル名:

3) Actual salesa) The Company takes back the full amount of crude oil produced overseas allocated to us under production sharing
contracts and produced under concession agreements, and sell it to domestic and foreign customers. The Company
sells natural gas produced in Indonesia in the form of LNG to Japanese power companies, city gas companies andcustomers in South Korea, Taiwan and other countries through PERTAMINA. In addition, the Company sells natural
gas produced in Japan to customers using our pipeline.
b) Sales by business segment during each period were as follows:(Millions of yen)
For the year ended
For the year ended
Business segment
Category
March 31, 2009
March 31, 2010
Crude Oil

75,427 Mbbls

650,352

401,076 MMcf
Crude oil andnatural gas

76,095 Mbbls

486,920

416,684 MMcf
398,266

Natural Gas
LPG: 2,067 Mbbls

326,412
LPG: 3,377 Mbbls

Others25,69324,507

Subtotal

1,074,312

837,840

1,852

2,586

1,076,164

840,427

Other
Total

Notes: 1. The above amounts do not include the related consumption tax.
2. The Companys’ subsidiaries of which closing date for fiscal year is December 31 are principally consolidated
their operating results for the year ended December 31 except those subsidiaries prepared their financial
statement for consolidation purpose as of the consolidation closing date. However, the significant effects of thedifference in fiscal periods were properly adjusted in consolidation.
3. Sales volumes are rounded to nearest whole number.
4. Sales for major customers and sales as a percentage of total net sales are as follows. Sales amount of PERTAMINA
consists mostly of natural gas and over half of them are sold to Japanese customers in the form of LNG.

Customer

PERTAMINA

For the year ended
March 31, 2009
AmountRatio（％）（Millions of yen）

For the year ended
March 31, 2010
AmountRatio（％）（Millions of yen）

315,889

240,137

29.4

49

28.6