Consolidated Financial Results for the year ended March 31, 2019 [Japanese GAAP]May 13, 2019
Note: The following report is an English translation of the Japanese-language original.
Company name
Code number
Representative
Contact person: INPEX CORPORATION
Stock Exchange on which the Company is listed : Tokyo Stock Exchange: 1605
URL https://www.inpex.co.jp: Takayuki Ueda, President: Munehiro Hosono, General Manager, Corporate Communications Unit
TEL+81-3-5572-0233
Scheduled date of ordinary general meeting of shareholders : June 25, 2019
Scheduled date of filing Financial Report: June 26, 2019
Scheduled date of payment of cash dividends: June 26, 2019
Preparation of supplementary explanatory materials: Yes
Meeting of financial results presentation: Yes (for institutional investors and analysts)(Amounts less than one million yen are rounded off)
1. Consolidated Financial Results for the year ended March 31, 2019 (April 1, 2018 - March 31, 2019)(1) Consolidated operating results(Figures in % represent the changes from the previous fiscal year)

Net sales

Operating income

Net income attributableto owners of parent

Ordinary income

For the year ended
March 31, 2019

Millions of yen%

Millions of yen%

971,3884.0

474,28132.7

519,278

34.1

96,106

138.1

March 31, 2018933,701

6.8

357,3636.2

387,269

16.0

40,362(12.6)

Millions of yen%

Millions of yen%(Note): Consolidated comprehensive income: for the year ended March 31, 2019, ¥116,061 million; ( %)for the year ended March 31, 2018, ¥(42,266) million; ( %)Net income pershare—basic

Net income pershare—diluted

Net income
as a percentage of net
assets excluding noncontrolling interests

Ordinary income
as a percentage of
total assets

Operating income
as a percentage ofnet sales

Yen

Yen

%

%

%

For the year ended
March 31, 2019

65.81

3.2

11.5

48.8

March 31, 2018

27.64

1.4

9.0

38.3

(Reference): Equity in earnings (losses) of affiliates: for the year ended March 31, 2019, ¥ 28,363 million
for the year ended March 31, 2018, ¥ 4,192 million(2) Consolidated financial position
Total assets

Net assets

Net assets excluding
Net assets excluding
non-controlling interests
non-controlling interests
as a percentage of total
per share
assetsMillions of yen

Millions of yen%

Yen

As of March 31, 2019

4,793,545

3,257,584

62.7

2,058.95

As of March 31, 2018

4,252,386

3,158,868

68.6

1,997.24(Reference): Net assets excluding non-controlling interests: as of March 31, 2019, ¥ 3,006,480 million
as of March 31, 2018, ¥ 2,916,680 million(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of the year

For the year ended
March 31, 2019

Millions of yen

Millions of yen

Millions of yen

Millions of yen

238,566(682,005)

405,184

239,652

March 31, 2018278,539(351,908)

34,742

276,079

2. Dividends
Cash dividends per share
At 1st
At 2ndAt 3rdAt fiscal
quarter end quarter end quarter end year end
For the year ended
March 31, 2018
March 31, 2019
For the year ending
December 31, 2019
(forecast)

Yen

Yen

Yen

Total

Total cash
dividends(Annual)Cash dividends as apercentage of net
assets(Consolidated)

Payout ratio(Consolidated)

Yen

Yen

Millions of yen

%

%

9.00
9.00

9.00
15.00

18.00
24.00

26,28635,048

65.1
36.5

0.9
1.2

12.00

12.00

24.00

38.9

(Note): 1. Breakdown of year-end dividend for the year ended March 31, 2019: Ordinary dividend of 9.00 yen Commemorative dividend of 6.00 yen
2. "Dividends" as stated above refer to common stock. For information regarding Class A stock (not listed), please refer to Exhibit "Dividends of ClassA stock".
3. The Company plans to change its fiscal year-end from March 31 to December 31, effective the period ending December 2019, subject to shareholder
approval of a partial amendment to the Articles of Incorporation at the Annual General Meeting of Shareholders scheduled to be held in late June2019.

3. Forecasted Consolidated Operating Results for the year ending December 31, 2019 (April 1, 2019 - December 31, 2019)(Figures in % represent the changes from the corresponding period of the previous fiscal year)

Net sales
For the six months ending
September 30, 2019
For the year ending
December 31, 2019

Operating income

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen

549,000

25.3

244,000

7.8

228,000

958,000

442,000

430,000

Net income
attributable toowners of parent% Millions of yen(7.7)

44,00090,000Net income
per share

%

Yen

29.3

30.13
61.64

(Note): The Company plans to change its fiscal year-end from March 31 to December 31, effective the period ending December 2019, subject to shareholder
approval of a partial amendment to the Articles of Incorporation at the Annual General Meeting of Shareholders scheduled to be held in late June 2019.
The consolidated accounting period of the Company and its subsidiaries with provisional settlements of accounts* for fiscal 2019 will therefore be thenine-month period from April 1 to December 31, 2019, while the accounting periods of subsidiaries with a December 31 fiscal year-end will remainunchanged (January 1 - December 31, 2019).
*Subsidiaries with a December 31 fiscal year-end that provisionally settled their accounts on March 31 due to the relatively large impact of theirperformance on the Company's consolidated financial accounts.
[Reference]
Percentage figures below (adjusted % increase/decrease) represent year-on-year changes based on adjusted figures for the nine-month period (April 1 December 31, 2018) for the Company and subsidiaries with provisional settlements of accounts, and the twelve-month period (January 1 - December
31, 2018) for subsidiaries with a December 31 fiscal year-end.
(Millions of yen)
Net Sales
Operating income
Ordinary income
Net income attributable to owners of parent
958,000 19.7%
442,000
6.9%
430,000(3.5%)
90,000 72.1%

*Notes(1) Significant changes in scope of consolidation: None(Changes in the specified subsidiaries during the period due to change in scope of consolidation)(2) Changes in accounting policies, accounting estimates and restatement of corrections
1. Changes in accounting policies resulting from the revision of the accounting standards and other regulations
2. Other changes in accounting policies
3. Changes in accounting estimates
4. Restatement of corrections(3) Number of shares issued (Common stock)
1. Number of shares issued at the end of the period(including treasury stock):
2. Number of treasury stock at the end of the period:
3. Average number of shares:: None: None: None: None1,462,323,600 shares as of March 31, 2019
1,462,323,600 shares as of March 31, 2018
2,123,800 shares as of March 31, 2019
1,966,500 shares as of March 31, 2018
1,460,260,300 shares for the year ended March 31, 2019
1,460,357,100 shares for the year ended March 31, 2018

(Note): As of March 31, 2019, 157,300 shares of "the Board Incentive Plan Trust" are included in number of treasury stock at the end of the period.

(Reference) Non-Consolidated Financial Results
1. Financial results for the year ended March 31, 2019 (April 1, 2018 - March 31, 2019)(1) Operating results(Figures in % represent the changes from the previous fiscal year)

Net sales
For the year ended
March 31, 2019
March 31, 2018

For the year ended
March 31, 2019
March 31, 2018

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

136,137
233,574(41.7)(9.5)

12,821
46,390(72.4)(28.4)

39,45730,13630.9(75.4)

32,214
1,764(98.0)Net income pershare—basic
Yen
22.06
1.21

Net income pershare—diluted
Yen(2) Financial position
Total assets
As of March 31, 2019
As of March 31, 2018

Net assets

Net assets as apercentage of total assets

Net assets per share

Millions of yen

Millions of yen%

Yen

3,165,750
2,918,963

2,381,619
2,383,265

75.2
81.6

1,631.02
1,631.97(Reference): Net assets: as of March 31, 2019, ¥ 2,381,619 million
as of March 31, 2018, ¥ 2,383,265 million*This financial report is not subject to audit by certified public accountants or audit firms.
*Explanation regarding the appropriate use of estimated consolidated financial results
The aforementioned forecasts "3. Forecasted Consolidated Operating Results for the year ending December 31, 2019" are based on
the currently available information and contain many uncertainties. The final results might be significantly different from theaforementioned forecasts due to changes in business conditions including oil and natural gas price levels, production and sales plans,
project development schedules, government regulations and financial and tax schemes. Please refer to "1. (4) Outlook for the Next
Period" on page 4.

Exhibit:
Dividends of Class A stock
Cash dividends per share
At 1st quarter end At 2nd quarter end At 3rd quarter end At fiscal year end
Total
Yen
Yen
Yen
Yen
Yen
For the year ended
March 31, 2018
3,600.00
3,600.00
7,200.00
March 31, 2019
3,600.00
6,000.00
9,000.00
For the year ending
December 31, 2019
4,800.00
4,800.00
9,600.00(forecast)(Note): 1. Breakdown of year-end dividend for the year ended March 31, 2019: Ordinary dividend of 3,600.00 yen
Commemorative dividend: 2,400.00 yen
2. The Company conducted a stock split at a ratio of 1:400 of common stock efffective October 1, 2013. However, for ClassA stock (not listed), no stock split was implemented. The article specifying that dividends of Class A stock are equivalent
to dividends of common stock prior to the stock split is included in the Articles of Incorporation.
3. The Company plans to change its fiscal year-end from March 31 to December 31, effective the period ending December
2019, subject to shareholder approval of a partial amendment to the Articles of Incorporation at the Annual General
Meeting of Shareholders scheduled to be held in late June 2019.

Index of the Attachments
1. Summary of Operating Results and other…………………………………………………………………………………

2(1) Summary of Consolidated Operating Results……………………………………………………………………………

2(2) Summary of Consolidated Financial Position……………………………………………………………………………

3…………………………………………………………………………………………………

4……………………………………………………………………………………………

4(3) Summary of Cash Flows(4) Outlook for the Next Period(5) Dividend policy and Dividends for the year ended March 31, 2019 and for the year ending December 31, 2019………

5

2. Basic Rationale for Selection of Accounting Standards……………………………………………………………………

6

3. Consolidated Financial Statements and Principal Notes……………………………………………………………………

7………………………………………………………………………………………………

7(1) Consolidated Balance Sheet(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income……………………………

9………………………………………………………………………………………

9

Consolidated Statement of Comprehensive Income……………………………………………………………………

10(3) Consolidated Statement of Changes in Net Assets………………………………………………………………………

11…………………………………………………………………………………

13……………………………………………………………………………

15(4) Consolidated Statement of Cash Flows(5) Notes to Consolidated Financial Statements(Conditions or events that indicate there could be substantial doubt about……………………………………………………………………

15………………………………………………………………

15…………………………………………………………………………………………

19…………………………………………………………………………………………………

20(Consolidated Balance Sheet) ………………………………………………………………………………………………

21(Consolidated Statement of Income)23

the Company's ability to continue as a going concern)(Basis of Presenting Consolidated Financial Statements)(Changes in the Presentation)(Additional information)……………………………………………………………………………………

(Consolidated Statement of Comprehensive Income)……………………………………………………………………

25(Consolidated Statement of Changes in Net Assets)……………………………………………………………………

26…………………………………………………………………………………

28………………………………………………………………………………………

29…………………………………………………………………………………………………

33…………………………………………………………………………………………………………………

37(Consolidated Statement of Cash Flows)(Segment Information and Others)(Financial Instruments)(Securities)(Derivative Transactions)………………………………………………………………………………………………

38(Per Share Information)…………………………………………………………………………………………………

39(Significant Subsequent Events)(Omissions of Disclosure)…………………………………………………………………………………………

39………………………………………………………………………………………………

39

4. Non-Consolidated Financial Statements………………………………………………………………………………………

(1) Non-Consolidated Balance Sheet………………………………………………………………………………………

(2) Non-Consolidated Statement of Income…………………………………………………………………………………

(3) Non-Consolidated Statement of Changes in Net Assets(4) Notes to Non-Consolidated Financial Statements

40
40
43

…………………………………………………………………

44………………………………………………………………………

48(Conditions or events that indicate there could be substantial doubt about
the Company's ability to continue as a going concern)
5. Other……………………………………………………………………

48…………………………………………………………………………………………………………………………

49(1) Production, Orders Received and Sales Performance……………………………………………………………………

149

1. Summary of Operating Results and other(1) Summary of Consolidated Operating Results
In the fiscal year ended March 31, 2019, the outlook of the global economy remained uncertain despite the steady nature of the
U.S. economy, owing to U.S.-China trade disputes and the deceleration of the Chinese economy. The Japanese economy
continued on its trajectory of moderate recovery as consumption per capita and capital expenditures showed signs of growth ascorporate earnings and employment rates continued to improve.
Of the international crude oil price indices, which significantly influence the financial performance of the INPEX Group, Brent
crude, commonly considered a benchmark index, started the fiscal year at US$67.64 per barrel on April 1, 2018 and jumped to
US$79.80 per barrel in May 2018 on the back of concerns over tightened supply and demand due to a decrease in Iranian crude oil
exports following the announcement of the reinstatement of U.S. sanctions against Iran.
Thereafter, the price of Brent crude oil fell to US$70.76 per barrel in August reflecting concerns of growing U.S. crude oil
production and inventory, but rebounded to US$84.98 per barrel in October, buoyed by spreading concerns over supply shortages
driven by a decrease in Iranian oil exports in light of pending U.S. sanctions, suspicions that OPEC’s production hike to offset thiswould prove insufficient, and weakening growth in U.S. shale oil production.
In January 2019, however, the price of Brent crude oil fell dramatically to US$54.91 per barrel reflecting rising concerns of a
global economic slowdown, in addition to the announcement that the sanctions against Iran would be temporarily relaxed allowing
some countries to import oil from the country, and skepticism over OPEC’s willingness to comply with production cutbacks
following its meeting in December, which led to the relaxation of supply and demand. The Brent crude price ultimately closed out
the fiscal year at US$68.39 per barrel on March 31, 2019, lifted by expectations of a resolution to U.S.-China trade disputes andconcerns over the tightening of supply and demand as a result of coordinated production cutbacks by oil-producing countries.
Meanwhile, in Japan, the price of crude oil and petroleum products shifted in correlation with international oil prices. The INPEXGroup's average crude oil sales price for the fiscal year ended March 31, 2019 reflected this shift and rose to US$70.30 per barrel,
up US$14.00 year-on-year.
The foreign exchange market, another important factor that affects the business of our Group, began to trade at ¥106 level against
the U.S. dollar. After that, the U.S. dollar climbed to ¥114 level against the U.S. dollar because of steadily U.S. economic
indicators, U.S. corporate results and the stability of the world which was led by the realization of the summit between U.S. andNorth Korea, and so forth.
In October onward, escalation of the Trade War between U.S. and China led to the fall in the U.S. treasury bill interest rate andstock price. In December, Federal Open Market Committee (FOMC) revised the forecast of the number of rate hikes during 2019from three to two and U.S. IT company cut the outlook of the result. Under those circumstances, at the beginning of 2019,Japanese Yen plummeted.
After that slump, however, Japanese Yen rebounded because of the expectation of easing U.S. – China Trade War and steadily
U.S. economic indicators.
Finally, at the end of this period, TTM closed at ¥111.01 against the U.S. dollar which turned out to be ¥4.74 lower than that of
the fiscal year end of March 31, 2018.
Reflecting these situations, the average sales exchange rate for our Group for this fiscal year was ¥110.70 against the U.S. dollar,
which is ¥0.57 higher than that of the previous fiscal year.
Consolidated net sales for the year ended March 31, 2019 increased by ¥37.6 billion, or 4.0%, to ¥971.3 billion from the previous
fiscal year due to an increase in crude oil price.
Net sales of crude oil increased by ¥72.4 billion, or 10.2%, to ¥782.6 billion, and net sales of natural gas decreased by ¥37.3
billion, or 18.0%, to ¥170.7 billion.
Sales volume of crude oil decreased by 12,379 thousand barrels, or.11.0%, to 100,503 thousand barrels. Sales volume of natural
gas decreased by 31,965 million cf, or 12.1%, to 232,851 million cf. Sales volume of overseas natural gas decreased by 33,652
million cf, or 18.1%, to 151,922 million cf, and sales volume of domestic natural gas increased by 45 million ㎥, or 2.1%, to2,169 million ㎥ (80,930 million cf).
The average sales price of overseas crude oil increased by US$14.00, or 24.9%, to US$70.30 per barrel. Meanwhile, the averagesales price of overseas natural gas decreased by US$1.86, or 36.9%, to US$3.18 per thousand cf. In addition, the average sales
price of domestic natural gas increased by ¥7.10, or 15.3%, to ¥53.46 per ㎥. The average exchange rate of the Japanese yen
against the U.S. dollar on consolidated net sales appreciated by ¥0.57, or 0.5%, to ¥110.70 per U.S. dollar from the corresponding
period of the previous fiscal year.
The increase of ¥37.6 billion in net sales was mainly derived from the following factors: regarding net sales of crude oil andnatural gas, a decrease in sales volume pushing sales down of ¥99.3 billion, an increase in unit sales price contributing ¥139.1
billion to the increase, the appreciation of the Japanese yen against the U.S. dollar pushing sales down of ¥4.7 billion, and anincrease in net sales excluding crude oil and natural gas of ¥2.6 billion.

2

Cost of sales for the year ended March 31, 2019 decreased by ¥84.7 billion, or 17.0%, to ¥413.3 billion due to the absence of costof sales in the offshore Mahakam Block. Exploration expenses increased by ¥10.3 billion to ¥11.6 billion. Selling, general andadministrative expenses decreased by ¥4.8 billion, or 6.3% , to ¥72.1 billion. As a result, operating income increased by¥116.9 billion, or 32.7%, to ¥474.2 billion.
Other income increased by ¥15.6 billion, or 28.3% to ¥70.9 billion due to an increase in equity in earnings of affiliates and others.
Other expenses increased by ¥0.5 billion, or 2.2% to ¥25.9 billion. As a result, ordinary income increased by ¥132.0 billion, or
34.1%, to ¥519.2 billion.
Extraordinary loss was ¥25.2 billion as a result of posting impairment loss for certain projects due to the decline in forecasted
production volume and the decline in forecasted natural gas prices in the Americas.
Total amount of current income taxes and deferred income taxes increased by ¥87.8 billion, or 28.4%, to ¥397.2 billion, and net
income attributable to non-controlling interests was ¥0.6 billion. As a result of the above effects, net income attributable to ownersof parent for the year ended March 31, 2019 increased by ¥55.7 billion, or 138.1%, to ¥96.1 billion.
Financial results by segment are as follows:
1) JapanNet sales increased by ¥20.2 billion, or 16.9%, to ¥140.3 billion due to increases in sales volume and sales price of natural gas.
Operating income increased by ¥3.9 billion, or 15.7%, to ¥29.2 billion.
2) Asia & Oceania
Net sales decreased by ¥57.2 billion, or 38.4%, to ¥91.6 billion due to a decrease in sales volume, despite an increase in sales
price of crude oil. Operating income decreased by ¥1.0 billion, or 3.8%, to ¥27.3 billion.
3) Eurasia (Europe & NIS)
Net sales increased by ¥28.1 billion, or 31.7%, to ¥116.7 billion due to increases in sales volume and sales price of crude oil.
Operating income increased by ¥10.0 billion, or 46.8%, to ¥31.4 billion.
4) Middle East & Africa
Net sales increased by ¥49.1 billion, or 8.7%, to ¥614.4 billion due to an increase in sales price of crude oil, despite a decreasein sales volume. Operating income increased by ¥107.0 billion, or 35.1%, to ¥412.0 billion.
5) Americas
Net sales decreased by ¥2.6 billion, or 24.2%, to ¥8.3 billion due to a decrease in sales volume of crude oil, despite an increasein sales price of crude oil. Meanwhile, operating loss decreased by ¥1.9 billion, or 17.9%, to ¥8.7 billion due to a decrease incost of sales and others.
(2) Summary of Consolidated Financial Position
Consolidated total assets as of March 31, 2019 increased by ¥541.1 billion to ¥4,793.5 billion from ¥4,252.3 billion as of March
31, 2018. Current assets decreased by ¥8.6 billion to ¥457.7 billion due to a decrease in cash and deposits and others. Fixed assets
increased by ¥549.7 billion to ¥4,335.8 billion due to increases in tangible fixed assets, investments and other assets and others.
Meanwhile, total liabilities increased by ¥442.4 billion to ¥1,535.9 billion from ¥1,093.5 billion as of March 31, 2018. Current
liabilities increased by ¥66.5 billion to ¥372.0 billion and long-term liabilities increased by ¥375.8 billion to ¥1,163.9 billion.
Net assets increased by ¥98.7 billion, to ¥3,257.5 billion. Total shareholders' equity increased by ¥69.6 billion, to ¥2,637.8 billion.
Total accumulated other comprehensive income increased by ¥20.1 billion to ¥368.6 billion and non-controlling interests in net
assets increased by ¥8.9 billion to ¥251.1 billion.
The above comparisons to the previous fiscal year are made on the condition that "Partial Amendments to Accounting Standard
for Tax Effect Accounting"(ASBJ Statement No. 28, February 16, 2018) was adopted from the beginning of this fiscal year, andsuch amendments was also retrospectively applied to the balances as of the end of previous fiscal year.

3(3) Summary of Cash Flows
As for cash flows for the year ended March 31, 2019, net cash provided by operating activities decreased by ¥39.9 billion to¥238.5 billion from the previous fiscal year due mainly to an increase in income taxes paid.
Net cash used in investing activities increased by ¥330.0 to ¥682.0 billion due mainly to a decrease in proceeds from time
deposits, and an increase in long-term loans made.
Net cash provided by financing activities increased by ¥370.4 to ¥405.1 billiondue mainly to an increase in proceeds from longterm debt.
After totaling ¥1.8 billion of the effect of exchange rate changes on cash and cash equivalents, the decrease in cash and cash
equivalents for the year ended March 31, 2019 amounted to ¥36.4 billion. Cash and cash equivalents as of March 31, 2019 totaled¥239.6 billion reflecting the above net decrease of ¥36.4 billion, from ¥276.0 billion at the end of the previous fiscal year.
(4) Outlook for the Next Period
Forecasted consolidated operating results for the year ending December 2019 are based on a nine-month period (April 1 December 31, 2019) for the Company and subsidiaries with provisional settlements of accounts*1, and a twelve-month period(January 1 - December 31, 2019) for subsidiaries with a December 31 fiscal year-end, due to a planned change in the accounting
period.
(Billions of yen)
Fiscal Year Ended
March, 2019
Adjusted actual*2

Fiscal Year Ending
December, 2019
Forecasts

Adjusted
Year-on-Year
Increase/Decrease

Net Sales

800.1

958.0

19.7%

Operating Income

413.6

442.0

6.9%

Ordinary Income

445.6

430.0

(3.5%)Net income attributable toowners of parent

52.3

90.0

72.1%

*1 Subsidiaries with a December 31 fiscal year-end that provisionally settled their accounts on March 31 due to the relatively
large impact of their performance on the Company’s consolidated financial accounts.
*2 Figures for “Fiscal Year Ended March 2019 (Adjusted actual)” and “Adjusted Year-on-Year Increase/Decrease” are based on anine-month period (April 1 - December 31, 2018) for the Company and subsidiaries with provisional settlements of accounts, anda twelve-month period (January 1 - December 31, 2018) for subsidiaries with a December 31 fiscal year-end.
Consolidated net sales for the six months ending September 30, 2019 are expected to increase 25.3% year-on-year to ¥549.0
billion, and consolidated net sales for the year ending December 31, 2019 are expected to increase 19.7% adjusted year-on-year to¥958.0 billion.
Operating income for the six months ending September 30, 2019 is expected to increase 7.8% year-on-year to ¥244.0 billion, andoperating income for the year ending December 31, 2019 is expected to increase 6.9% adjusted year-on-year to ¥442.0 billion.
Ordinary income for the six months ending September 30, 2019 is expected to decrease 7.7% year-on-year to ¥228.0 billion, andordinary income for the year ending December 31, 2019 is expected decrease 3.5% adjusted year-on-year to ¥430.0 billion. Net
income attributable to owners of parent for the six months ending September 30, 2019 is expected to increase 29.3% year-on-yearto ¥44.0 billion, and net income attributable to owners of parent for the year ending December 31, 2019 is expected to increase
72.1% adjusted year-on-year to ¥90.0 billion.
Net sales for the year ending December 31, 2019 are expected to increase adjusted year-on-year mainly due to a steady production
ramp-up at the Ichthys LNG Project and the commencement of production at the Prelude FLNG Project despite an expected drop
in crude oil prices. Operating income for the year ending December 31, 2019 is expected to rise adjusted year-on-year despite anincrease in cost of sales and exploration expenses. Other income (expenses) is expected to fell due mainly to the absence oftemporary profit as posted in the year ended March 31, 2019(Adjusted actual). As a result, ordinary income for the year ending
December 31, 2019 is expected to drop adjusted year-on-year. Net income attributable to owners of parent for the year ending
December 31, 2019 is expected to increase adjusted year-on-year, due in part to the absence of impairment loss.
The above estimates are based on a crude oil price assumption of US$65.0 per barrel (Brent) at an exchange rate of ¥110 to the
U.S. dollar through the fiscal year ending December 31, 2019.

4

(5) Dividend policy and dividends for the year ended March 31, 2019 and for the year ending December 31, 2019
Based on the shareholder return policy outlined in the Medium-term Business Plan 2018-2022 announced in May 2018, INPEXCORPORATION (INPEX) will seek in principle to maintain stable dividend payouts and enhance shareholder returns in stages
during the period covered by the Business Plan in accordance with the improvement in the Company’s financial performance,with the payout ratio set at 30% or higher.
In accordance with the policy stated above, INPEX has set the year-end dividend at ¥15 (adding a commemorative dividend of ¥6
to an ordinary dividend of ¥9) per common stock for the year ended March 31, 2019. Combined with the mid-term dividend of ¥9per common stock, the planned total dividends for the year ended March 31, 2019 are ¥24 per common stock. INPEX has also set
the year-end dividend of ¥6,000 (adding a commemorative dividend of ¥2,400 to an ordinary dividend of ¥3,600) per Class A
stock for the year ended March 31, 2019. Combined with the mid-term dividend of ¥3,600 per Class A stock (unlisted), theplanned total dividends for the year ended March 31, 2019 are ¥9,600 per Class A stock.
For the year ending December 31, 2019, INPEX expects mid-term and year-end dividends of ¥12 each, bringing the total
dividends to ¥24 per common stock. INPEX expects mid-term and year-end dividends of ¥4,800 each, bringing the total dividend
to ¥9,600 per Class A stock.
The Group conducted a stock split at a ratio of 1:400 of common stock effective October 1, 2013. However, for Class A stock, nostock split was implemented. The article, which outlines that Class A stock dividends are equivalent to common stock dividends
prior to the stock split, is specified in the Articles of Incorporation.

5

2. Basic Rationale for Selection of Accounting Standards

The INPEX Group has been analyzing the differences between International Financial Reporting Standards (IFRS)
and accounting principles generally accepted in Japan. The Group will take into consideration the domestic andinternational situations for appropriate adoption of the IFRS in the future.

6

3. Consolidated Financial Statements and Principal Notes(1) Consolidated Balance Sheet(Millions of yen)Accounts

As of March 31, 2018

As of March 31, 2019

(Assets)
Current assets
Cash and deposits

276,1024

Accounts receivable-trade

66,900Inventories

1,

4

32,321

4

40,997

Accounts receivable-other239,675

4

1,

4

92,217

4

40,100430,64471,014

Other

68,331Less allowance for doubtful accounts(20,984)(13,257)

Total current assets

466,350

457,711

Buildings and structures, net

201,045

187,191

Wells, net

38,323259,310

Machinery, equipment and vehicles, net

99,472

1,304,356

Land

19,09818,9301,678,743

506,399

7,936

2,805

Fixed assets
Tangible fixed assets

Construction in progress
Other, net
Total tangible fixed assets

2,

4,2,044,619

5

2,

4,

2,278,994

5

Intangible assets
Goodwill

54,03747,276

Exploration and development rights

153,168

152,977

Mining rights

328,086

314,759

6,210

5,200

541,502520,213

Other
Total intangible assets
Investments and other assets
Investment securities

3,Long-term loans receivable
Recoverable accounts under production
sharing
Deferred tax assets
Other

4

367,4174

295,8614

Less allowance for doubtful accounts
Less allowance for recoverable accounts under
production sharing
Less allowance for investments in exploration
Total investments and other assets
Total fixed assets
Total assets

7

3,

4

419,0644592,786

589,098

568,059

20,316

13,746

11,3594

17,258

(849)

(789)

(81,625)(70,017)(1,664)(3,482)

1,199,913

1,536,625

3,786,035

4,335,834

4,252,386

4,793,545

(Millions of yen)Accounts

As of March 31, 2018

As of March 31, 2019

(Liabilities)
Current liabilities
Accounts payable-trade

45,67532,205

Short-term loans

71,250127,184

Income taxes payable

17,234

19,281

Accounts payable-other

94,360113,179

Provision for loss on business

9,887

9,971

Provision for exploration projects

4,005

7,303

Accrued bonuses to officers

62

96

Asset retirement obligations

407

3,309

Other

62,55559,469Total current liabilities

305,439

372,000

Long-term debt

627,326

1,014,013

Deferred tax liabilities

36,19525,129Long-term liabilities

Provision for stocks payment

21

Accrued special repair and maintenance

380

479

Liability for retirement benefits

5,937

6,265

Asset retirement obligations

111,128

110,107

7,110

7,943

788,078

1,163,961

1,093,517

1,535,961

Common stock

290,809290,809

Capital surplus

673,574

673,574Retained earnings

1,609,094

1,678,914

Treasury stock(5,248)(5,434)2,568,230

2,637,863

Unrealized holding gain (loss) on securities

10,217

2,831

Unrealized gain (loss) from hedging instruments

25,724

6,359

Translation adjustments

312,507359,425

Total accumulated other comprehensive income

348,449

368,616

242,188

251,103

Total net assets

3,158,868

3,257,584

Total liabilities and net assets

4,252,386

4,793,545

Other
Total long-term liabilities
Total liabilities(Net assets)
Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income

Non-controlling interests8(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income(Millions of yen)
For the year ended
March 31, 2019

For the year ended
March 31, 2018

Accounts
Net sales

933,701

Cost of sales

498,039

2

Gross profit
Exploration expenses
Selling, general and administrative expenses

1,

971,3882

Operating income

413,300

2

435,662

558,088

1,327

11,67976,9711,

2

72,127357,363474,281Interest income

6,477

7,644

Dividend income

4,778

6,760

Equity in earnings of affiliates

4,192

28,363

197

8,357

Other income

Reversal of allowance for doubtful accounts
Gain on reversal of allowance for recoverable accounts
under production sharing

17,528Compensation income

12,625

7,498

Foreign exchange gain

1,941

Other

9,467

10,358

Total other income

55,26670,924

7,075

17,333

Other expenses
Interest expense
Provision for allowance for recoverable accounts under
production sharing

1,468

Provision for exploration projects

203

Foreign exchange loss

10,472

Other

7,812

6,923

Total other expenses

25,36025,927387,269

519,278

Ordinary income
Extraordinary loss
Impairment loss

3

79,9703

25,236

Total extraordinary loss

79,97025,236

Income before income taxes

307,299

494,042

Income taxes-current

308,351

399,919

Income taxes-deferred

1,048(2,660)Total income taxes

309,399397,258

Net income (loss)(2,100)96,783

Net income (loss) attributable to non-controlling interests(42,462)677

Net income attributable to owners of parent

40,362

96,106

9

Consolidated Statement of Comprehensive Income(Millions of yen)
For the year ended
March 31, 2019

For the year ended
March 31, 2018

Accounts

Net income (loss)(2,100)96,783

3,711(7,387)

Translation adjustments(68,317)46,094

Share of other comprehensive income of affiliates
accounted for by the equity method

24,439(19,429)

Other comprehensive income
Unrealized holding gain (loss) on securities

Total other comprehensive income1

Comprehensive income(40,166)

1

19,277(42,266)

116,061

2,495

116,273(44,762)(211)

Total comprehensive income attributable to
Owners of parent
Non-controlling interests10(3) Consolidated Statement of Changes in Net Assets
For the year ended March 31, 2018
(Millions of yen)
Shareholders' equity
Common stock Capital surplus
Balance at the beginning of the period

290,809676,273

Retainedearnings

Treasury stock

Total
Shareholders'equity(5,248)2,556,852

1,595,018

Changes during the period
Change in ownership interest of parent
arising from transactions with
non-controlling shareholders(2,699)(2,699)Cash dividends paid

(26,286)(26,286)

Net income attributable to owners ofparent40,36240,362(2,699)14,076

11,377

673,574

1,609,094

Purchase of treasury stock
Net changes in items other than those inshareholders' equity
Total changes during the period
Balance at the end of the period

290,809(5,248)2,568,230

Accumulated other comprehensive income
Total
NonUnrealized Unrealized
accumulated controllingholding gain gain (loss) Translation
otherinterests(loss) on from hedging adjustments
comprehensive
securities
instruments
incomeBalance at the beginning of the period

6,479

717

379,119

386,316

264,372

Total
net assets

3,207,542

Changes during the period
Change in ownership interest of parent
arising from transactions with
non-controlling shareholders(2,699)Cash dividends paid

(26,286)

Net income attributable to owners ofparent40,362

Purchase of treasury stock
Net changes in items other than those inshareholders' equity

3,737

25,007(66,612)(37,866)(22,184)(60,051)

Total changes during the period

3,737

25,007(66,612)(37,866)(22,184)(48,674)

Balance at the end of the period

10,21725,724

312,507348,449

242,188

3,158,868

11

For the year ended March 31, 2019
(Millions of yen)
Shareholders' equity
Common stock Capital surplus
Balance at the beginning of the period

290,809673,574Retainedearnings

Treasury stock

Total
Shareholders'equity(5,248)2,568,230

1,609,094

Changes during the period
Change in ownership interest of parent
arising from transactions with
non-controlling shareholders
Cash dividends paid

(26,286)(26,286)

Net income attributable to owners ofparent96,106

96,106

Purchase of treasury stock

(186)

(186)

69,820(186)

69,633

1,678,914(5,434)

2,637,863

Net changes in items other than those inshareholders' equity
Total changes during the period
Balance at the end of the period

290,809673,574

Accumulated other comprehensive income
Total
NonUnrealized Unrealized
accumulated controllingholding gain gain (loss) Translation
otherinterests(loss) on from hedging adjustments
comprehensive
securities
instruments
incomeBalance at the beginning of the period

10,21725,724

312,507348,449

242,188

Total
net assets

3,158,868

Changes during the period
Change in ownership interest of parent
arising from transactions with
non-controlling shareholders
Cash dividends paid

(26,286)

Net income attributable to owners ofparent96,106

Purchase of treasury stock(186)

Net changes in items other than those inshareholders' equity(7,386)(19,365)

46,918

20,166

8,914

29,081

Total changes during the period(7,386)(19,365)

46,918

20,166

8,914

98,715

Balance at the end of the period

2,831

6,359

359,425

368,616

251,1033,257,584

12

(4) Consolidated Statement of Cash Flows(Millions of yen)
For the year ended
March 31, 2018

Accounts

For the year ended
March 31, 2019

Cash flows from operating activities
Income before income taxes

307,299

494,042

Depreciation and amortization

92,805

106,899

Impairment loss

79,97025,236

Amortization of goodwill

6,760

6,760

(21,190)

1,241

Provision for exploration projects

(458)

3,660

Other provisions

6,810(5,781)

19

383(11,255)(14,405)

Interest expense

7,075

17,333Foreign exchange loss (gain)

11,048(1,047)

Equity in losses (earnings) of affiliates(4,192)(28,363)

Recovery of recoverable accounts under
production sharing (capital expenditures)

53,46533,127

Recoverable accounts under production
sharing (operating expenditures)

9,632

4,639

Accounts receivable-trade

2,846(25,372)

Inventories(2,097)(11,359)

Accounts payable-trade20,604(13,427)

Accounts receivable-other(287)(11,666)

Accounts payable-other

12,221

14,408Advances received

4,848

4,443

Other

12,467

17,017

Subtotal

588,395

617,768

Interest and dividends received

24,45921,120Interest paid

(5,077)(12,242)

Income taxes paid

(329,238)(388,080)

Net cash provided by (used in) operating activities

278,539

238,566

Provision for allowance for recoverable accounts
under production sharing

Liability for retirement benefits
Interest and dividend income13

(Millions of yen)
For the year ended
March 31, 2018

Accounts

For the year ended
March 31, 2019

Cash flows from investing activities
Payments for time deposits(259,990)(249,615)

Proceeds from time deposits

593,900

249,616

Payments for purchases of tangible fixed assets(271,324)(210,732)

Proceeds from sales of tangible fixed assets

236

209

Payments for purchases of intangible assets(1,364)(809)

Payments for purchases of investment securities(127,785)(104,766)

Investment in recoverable accounts under
production sharing (capital expenditures)(24,135)(31,631)50

813(172,533)(262,671)

Collection of long-term loans receivable

273

264

Payments for purchases of mining rights(100,906)(107,862)

11,67135,179(351,908)(682,005)

392

1,840

Proceeds from long-term debt

77,612497,777

Repayments of long-term debt

(39,250)(76,185)

Proceeds from non-controlling interests for additional shares

27,570

14,118Cash dividends paid

(26,291)(26,290)

Cash dividends paid to non-controlling interests(2,523)(5,832)Other(2,766)(242)

Net cash provided by (used in) financing activities

34,742405,184

Effect of exchange rate changes on cash and cash equivalents(2,083)

1,827

Net increase (decrease) in cash and cash equivalents(40,711)(36,427)

Cash and cash equivalents at beginning of the period

316,790276,079

Decrease (increase) in short-term loans receivable
Long-term loans madeOther
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans

Cash and cash equivalents at end of the period

114276,0791

239,652

(5) Notes to Consolidated Financial Statements(Conditions or events that indicate there could be substantial doubt about the Company's ability to continue as a going concern)
None(Basis of Presenting Consolidated Financial Statements)
1. Scope of consolidation
Number of consolidated subsidiaries: 65
Names of major subsidiaries;
Japan Oil Development Co., Ltd., INPEX Alpha, Ltd., INPEX Sahul, Ltd., INPEX Southwest Caspian Sea, Ltd.,JODCO Onshore Limited, JODCO Lower Zakum Limited, INPEX North Caspian Sea, Ltd., INPEX Browse, Ltd.,INPEX Holdings Australia Pty Ltd, INPEX Ichthys Pty Ltd, INPEX Oil & Gas Australia Pty Ltd, INPEX Masela, Ltd., and
INPEX FINANCIAL SERVICES SINGAPORE PTE. LTD.
During this period:
Number of companies newly included in the scope of consolidation: 3
Number of companies excluded from the scope of consolidation: 2
Details for the above changes:
1) INPEX Solutions, LTD. and JODCO Exploration Limited have been newly included due to establishment of the company.
2) INPEX Canada, Ltd. has been excluded due to a merger.
3) INPEX North Peru has been excluded due to completion of liquidation.
Names of major non-consolidated subsidiaries:
Sakata Natural Gas, Co., Ltd., Teikoku Oil de Burgos, S.A. de C.V. and TELNITE CO., LTD.
(Reason for exclusion from the scope of 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.
Name of an entity that is not accounted for as our subsidiary even though the Company owns the majority vote:
Ichthys LNG Pty Ltd(Reason for not accounted for as our subsidiary)
The Company owns the majority vote of Ichthys LNG Pty Ltd through INPEX Holdings Australia Pty Ltd. However, sinceboth parties' affirmative votes are required for important resolutions based on the shareholders agreement between INPEX
Holdings Australia Pty Ltd and TOTAL E&P Holding Ichthys, Ichthys LNG Pty Ltd is considered to be an affiliate accounted
for by the equity method.

15

2. Application of equity method
Number of non-consolidated subsidiaries accounted for by the equity method: None
Number of affiliates accounted for by the equity method: 21
Names of major affiliates:
Angola Block 14 B.V., MI Berau B.V., Angola Japan Oil Co., Ltd., INPEX Offshore North Campos, Ltd. and Ichthys LNG Pty
LtdNames of major non-consolidated subsidiaries and affiliates not accounted for by the equity method:
Sakata Natural Gas, Co., Ltd., Teikoku Oil de Burgos, S.A. de C.V., TELNITE CO., LTD. and Tangguh project management
Co., Ltd.
(Reason for not applying the equity method)
These subsidiaries and affiliates are not accounted for by the equity method because their total net income (the equity portion)and total retained earnings (the equity portion) do not have significant impact on the consolidated financial statements.
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, theCompany used the financial statements of each affiliate prepared as of its closing date. For certain affiliates, however, theCompany used financial statements prepared for consolidation purposes as of the consolidated closing date.
3. Closing dates for the fiscal year of consolidated subsidiaries
For the 49 companies for which the closing dates 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 11 companies including, but not limited to, Japan Oil Development, Co., Ltd., INPEX Southwest Caspian Sea, Ltd.,INPEX North Caspian Sea, Ltd., INPEX Holdings Australia Pty Ltd and INPEX Ichthys Pty Ltd, we use their financial
statements for the year ended on the consolidated closing date even though their closing date is December 31.

16

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 the applicable income taxes, included directly in net assets. Cost of securities sold is determined by themoving-average method.
Without a determinable market value
Other securities without a determinable market value are stated at cost determined by the moving-average method.
(b) Derivatives
Fair value(c) Inventories
Overseas inventories
Carried mainly at cost, determined by the average cost 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)2) Depreciation method of significant depreciable assets(a) Tangible fixed assets (except leased assets)
Depreciation of overseas mining facilities is mainly computed by the unit-of-production method. For other tangible 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 years(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-of-production method.
Other
Other intangible assets are mainly amortized by the straight-line method.
Software for internal use is amortized by the straight-line method over 5 years.
(c) Leased assets
Leased assets for financing lease transactions whose ownership are not to be transferred:
Depreciation of these assets is calculated based on the straight-line method over the lease period assuming no residual
value.

173) 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 withrespect to ordinary receivables, plus an estimate of uncollectible amounts determined by reference to specific doubtfulreceivables from customers 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 amount based on the net assets of the investees.
(d) Provision for loss on business
Provision for loss on business is provided for future potential losses on crude oil and natural gas development, production
and sales business individually estimated for each project.
(e) Provision for exploration projects
Provision for exploration projects is provided for future expenditures of consolidated subsidiaries at the exploration stage
based on a schedule of investments in exploration.
(f) Accrued bonuses to officers
Accrued bonuses to officers are provided at the expected payment amount for the fiscal year.
(g) Provision for stocks payment
Provision for stocks payment is provided to prepare for payments of stock benefits to directors and other under the sharedelivery rule. The amount is based on the expected stock benefit payable for the fiscal year.
(g) Accrued special repair and maintenanceAccrued special repair and maintenance are provided for planned major repair and maintenance activities on tanks incertain subsidiaries at the amounts accumulated through the next activity.
4) Accounting for retirement benefits(a) Method of attributing expected retirement benefits to proper periods
When calculating retirement benefit obligations, the benefit formula method is used for attributing expected retirement
benefits to periods through March 31, 2019. Because certain subsidiaries are classified as small enterprises, a simplified
method (the amount which would be required to be paid if all active employees voluntarily terminated their employment
as of the balance sheet date) is applied for the calculation of the retirement benefit obligation for those subsidiaries.
(b) Method of recognizing for actuarial differences
Actuarial gains and losses are charged or credited to income as incurred.
5) 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 in foreign currencies are translated into yen at the exchange rates prevailing at
the balance sheet date. The resulting exchange gain or loss is credited or charged to income.
The revenue and expense accounts of the overseas 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 at the balance sheet
date. Translation differences are presented as a component of translation adjustments and non-controlling interests.

186) Accounting for major hedge transactions(a) Hedge accounting
The special treatment is applied to the interest rate swaps that meet certain criteria. For certain equity-method affiliates, thedeferred hedge accounting method is adopted.
(b) Hedging instruments and hedged items
Hedging instruments: Interest rate swap transactions
Hedged items: Interest payments on borrowings(c) Hedging policy
Derivative transactions are limited to the scope of actual demand, and the Company does not engage in speculative
derivative transactions.
(d) Hedge effectiveness assessment method
The Company does not perform hedge effectiveness assessment of interest rate swap transactions since the special
treatment is applied.
7) Amortization of Goodwill
Goodwill is amortized by the straight-line method over 20 years.
8) Scope of cash and cash equivalents in consolidated statement of cash flows
Cash (cash and cash equivalents) in the consolidated statement of cash flows consisted of cash on hand, cash in banks
which can be withdrawn on demand, and short-term investments with a maturity of three months or less when purchased
which can easily be converted to cash and are subject to little risk of change in value.
9) 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 are recorded as "Recoverable accounts under production sharing" so long as they are recoverable under
the terms of the relevant contract. When the Company receives crude oil and natural gas in accordance with the contract,
an amount corresponding to the purchase costs of the products (i.e., a cost recovery portion of the investments) is released
from this account.
(Changes in the Presentation)(Changes in resulting from "Partial Amendments to Accounting Standard for Tax Effect Accounting")"Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) was
adopted from the beginning of this fiscal year. As a result, deferred tax assets are classified as "Investments and other assets" anddeferred tax liabilities are classified as "Long-term liabilities" respectively.
As a result, ¥53 million out of ¥3,231 million which was recorded as "deferred tax assets" in "current assets" on the consolidatedbalance sheet in the previous fiscal year is included in 20,316 million which is presented in "deferred tax assets" in "investments
and other assets", and ¥3,754 million which was recorded as "deferred tax liabilities" in "current liabilities" on the consolidatedbalance sheet in the previous fiscal year is included in ¥36,195 million which is presented in "deferred tax liabilities" in "Longterm liabilities".
Total assets for the previous fiscal year decreased by 3,178 million since the deferred tax assets and deferred tax liabilities of thesame taxable entity should be offset against each other.
(Consolidated Statement of Income)"Reversal of allowance for doubtful accounts", previously included in "Other" in other income, is presented separately since it
has become more significant.
As a result, ¥9,664 million which was recorded as "Other" in other income on the consolidated statement of income in theprevious fiscal year is reclassified as ¥197 million of "Reversal of allowance for doubtful accounts", and ¥9,467 million of"Other".
"Provision for loss on business", previously presented separately in other expenses, is included in "Other" since it has becomeless significant.
As a result, ¥3,264 million which was recorded as "Provision for loss on business" in other expenses on the consolidated
statement of income in the previous fiscal year is reclassified as "Other".

19

(Additional information)(Stock-based remuneration system for directors)
At the Company's 12th Ordinary Meeting of Shareholders held on June 26, 2018, the Company resolved to introduce a stockbased remuneration system (the System for Directors of the Company and Executive Officers of the Company excluding Outside
Directors and non-residents of Japan; hereinafter collectively referred to as Directors) with the aim of increasing the incentive for
Directors to contribute to the medium-to long-term improvement of the corporate value of the Company by making clear the link
between the remuneration of Directors and the Company's stock price. In the introduction of the System, a structure called "theBoard Incentive Plan Trust" shall be adopted.
1) Outline of the System"The Board Incentive Plan Trust" is a system under which shares of the Company and the amount of money equivalent to theproceeds from the disposal of shares of the Company will be delivered and provided to the Directors according to theirpositions and other factors, covering the five calender years from 2018 to 2023.
2) Shares of the Company that remain in the trust
Shares of the Company that remain in the trust are recorded as treasury stock in the net asset with the book value of the trust(excluding incidental expenses). The book value and numbers of the treasury stock at March 31, 2019 are ¥186 million and
157,300 shares, respectively.

20

(Consolidated Balance Sheet)*1 Major accounts included in inventories
As of March 31, 2018
Millions of yen

Millions of yen

8,095

8,561

291

321

23,934

31,218Merchandise and finished goods
Work in process
Raw materials and supplies

As of March 31, 2019

*2 Accumulated depreciation of tangible fixed assets
As of March 31, 2018
Accumulated depreciation of tangible fixed assets

As of March 31, 2019¥ 825,311 million¥ 854,351 million*3 The Company has the following investments in subsidiaries and affiliates.
As of March 31, 2018

As of March 31, 2019

Millions of yen

Millions of yen

Investment securities (equities)

282,432

345,550(of which investment in jointly controlled entities)(181,935)(252,447)*4 Assets provided as collateral and collateral-backed debt are as follows:Collateralized Assets
As of March 31, 2018

As of March 31, 2019

Millions of yen

Millions of yen

3,763

18,150Cash and deposits

9,489

Accounts receivable-trade
Inventories

7,910

12,957

Wells

227,482

Machinery, equipment and vehicles

1,223,590

Land

141

148

Construction in progress

1,245,155

19,530Investment securities

182,049

252,521Long-term loans receivable

293,788586,822

Other

4,101

4,477

Total

1,736,911

2,355,170

The above is mainly related to the Ichthys LNG Project Finance, and includes others that are pledged as collateral for liabilities ofaffiliates.

*5 Accumulated advanced depreciation deducted from acquisition costs of fixed assets related to contribution and others
As of March 31, 2018

As of March 31, 2019

Millions of yen

Millions of yen

1,393

1,393

Machinery, equipment and vehicles

193

193

Land

84

84

Buildings and structures21

6 Contingent liabilities(1) The Company and its consolidated subsidiaries are contingently liable as guarantors of indebtedness of the following
companies:
As of March 31, 2018

As of March 31, 2019
Millions of yen

Millions of yen

Ichthys LNG Pty Ltd*1

533,241

Tangguh Trustee*2

19,982 Tangguh Trustee*2

24,331

Sakhalin Oil and Gas Development Co.,
Ltd.

1,938

Japan Canada Oil Sands Limited

1,665Japan Canada Oil Sands Limited

1,594

Oceanic Breeze LNG Transport S.A.

861

Employees (housing loans)24

Oceanic Breeze LNG Transport S.A.

209

Employees (housing loans)

33

Total

Ichthys LNG Pty Ltd*1

556,998508,275

535,158*1 Debt for investment funds of the Ichthys LNG project.
*2 Debt for investment funds of Tangguh LNG project through MI Berau B.V. and MI Berau Japan Ltd.
(The aforementioned Debt includes the amount (¥9,154 million and ¥16,377 million as of March 31, 2018 and 2019, respectively)
for the construction of Train-3, based on the Company's participating interest as the guarantor of indebtedness.)(2) Completion guarantee
In connection with the Ichthys LNG project financing, the Company and other project participants provide lenders with a guaranteeof liabilities during the construction phase based on each participating interest in addition to collateralizing its assets.
The portion guaranteed by the Company is as follows:
As of March 31, 2018
Completion guarantee (the Company's portion)¥ 857,530 million

22

As of March 31, 2019
¥ 845,999 million

(Consolidated Statement of Income)*1 Major accounts included in selling, general and administrative expenses are as follows:
For the year ended
March 31, 2018

For the year ended
March 31, 2019

Millions of yen

Millions of yen

Personnel expenses

23,42722,596(Including provision for accrued retirement benefits to employees

1,160

1,181)

62

96)

Taxes

(Including provision for accrued bonuses to officers

4,506

4,429

Freight expenses

11,117

11,083

Depreciation expenses

18,606

14,468

Amortization of goodwill

6,760

6,760

*2 Research and development expenses included in general and administrative expenses and production cost:
For the year ended
For the year ended
March 31, 2018
March 31, 2019
¥ 978 million

23¥ 579 million

*3 Impairment loss
For the year ended March 31, 2018
The Company groups mining area and other assets as a basic unit that generates cash inflows independently of other groups ofassets. In light of the decline in forecasted natural gas prices in the Americas, the recoverble amount of these groups of assets
expected to decrease, the Company reduced the respective carrying amounts of the assets listed below to recoverable amounts,
posting the reductions as impairment loss.

Use

Location

Classification

Impairment loss
(Millions of yen)

Buildings and structures
Assets related to the shale gas
project in Canada

British Columbia, Canada

2,677

Wells

4,020

Machinery, equipment and vehicles

11,391Mining rights

48,428

Other

9,725

Subtotal

76,243

Other

3,726

Total

79,970

The recoverable amount of the assets related to the shale gas project in Canada (Horn River, Cordova and Liard areas) isreasonably estimated by discounting the future cash flows at rates ranging from 9.9% to 16.2%.
For the year ended March 31, 2019
The Company groups mining area and other assets as a basic unit that generates cash inflows independently of other groups ofassets. In light of the decline in forecasted production volume and the decline in forecasted natural gas prices in the Americas,
the recoverble amount of these groups of assets expected to decrease, the Company reduced the respective carrying amounts of
the assets listed below to recoverable amounts, posting the reductions as impairment loss.

Use

Location

Classification

Impairment loss
(Millions of yen)

Wells
Assets related to Van Gogh
Oil Field / Coniston Oil Field

Commonwealth of Australia

449

Machinery, equipment and vehicles

6,503

Construction in progress

3,116

Other
Subtotal

15
10,085

Buildings and structures
Assets related to the shale gas
project in Canada

British Columbia, Canada

23

Wells

4,580

Other

4,999

Subtotal

9,603

Other

5,547

Total

25,236

The recoverable amount of the assets related to Van Gogh Oil Field and Coniston Oil Field is reasonably estimated bydiscounting the future cash flows at a rate of 9.1%. The recoverable amount of the assets related to the shale gas project inCanada is estimated at zero.

24

(Consolidated Statement of Comprehensive Income)*1 Reclassification adjustments and income tax effects allocated to each component of other comprehensive income
For the year ended
For the year ended
March 31, 2018
March 31, 2019
Millions of yen

Millions of yen

Amount recognized during the period

4,951(10,007)

Amount of reclassification adjustment(0)

Unrealized holding gain (loss) on securities

Before income tax effect

4,951(10,007)

Amount of income tax effect(1,240)2,620

Unrealized holding gain (loss) on securities

3,711(7,387)

Amount recognized during the period(68,261)

44,459Amount of reclassification adjustment

(55)

1,635

(68,317)46,09423,906(21,234)

Amount of reclassification adjustment

391

224

Adjustment for acquisition cost of assets
Share of other comprehensive income of affiliates accounted for by
the equity method
Total other comprehensive income

141

1,581

24,439(19,429)(40,166)

19,277

Translation adjustments

Translation adjustments
Share of other comprehensive income of affiliates accounted for by theequity method
Amount recognized during the period

25

(Consolidated Statement of Changes in Net Assets)
For the year ended March 31, 2018
1. Type and number of shares issued and treasury stock(Shares)

Balance as ofApril 1, 2017

Increase

Balance as ofMarch 31, 2018

Decrease

Number of shares
Common stock

1,462,323,600

1,462,323,600

Class A stock1

1

1,462,323,601

1,462,323,601

Common stock

1,966,500

1,966,500

Total

1,966,500

1,966,500

Total
Treasury stock

2. Share subscription rights
None
3. Dividends(1) Cash dividends paid
Resolution
Ordinary general
meeting of shareholders
June 27, 2017
Board of directors'
meetingNovember 8, 2017

Type of share

Cash dividends paid
(Millions of yen)

Commonstock
Class Astock
Commonstock
Class Astock

Dividends
per share(Yen)

Record date

Effective date

13,143

9March 31, 2017

June 28, 2017

0

3,600

March 31, 2017

June 28, 201713,143

9 September 30, 2017

December 1, 2017

03,600 September 30, 2017

December 1, 2017

(2) Dividends, whose record date was in the year ended March 31, 2018, and whose effective date will be in the next fiscal year
Resolution

Type ofshare

Source ofdividends

Ordinary general
meeting of shareholders
June 26, 2018

Commonstock
Class Astock

Retainedearnings
Retainedearnings

Cash dividends
paid(Millions of yen)

26

Dividends
per share(Yen)

Record date

Effective date

13,143

9March 31, 2018

June 27, 2018

0

3,600

March 31, 2018

June 27, 2018

For the year ended March 31, 2019
1. Type and number of shares issued and treasury stock(Shares)

Balance as ofApril 1, 2018

Increase

Decrease

Balance as ofMarch 31, 2019

Number of shares
Common stock

1,462,323,600

1,462,323,600

Class A stock1

1

1,462,323,601

1,462,323,601

Total
Treasury stock
Common stock

1,966,500

157,300

2,123,800

Total

1,966,500

157,300

2,123,800(Note): 1. The increase of 157,300 shares in treasury stock of common stock was due to acquisition of the Company's shares by"the Board Incentive Plan Trust"
2. The number of treasury shares of common stock as of March 31, 2019 includes 157,300 shares of the Company heldby "the Board Incentive Plan Trust".
2. Share subscription rights
None
3. Dividends(1) Cash dividends paid
Resolution

Type of share

Cash dividends paid
(Millions of yen)

Dividends
per share(Yen)

Record date

Effective dateCommon13,143
9March 31, 2018
June 27, 2018
stock
Class A
03,600
March 31, 2018
June 27, 2018stock
Common13,143
9 September 30, 2018 December 3, 2018
Board of directors'stockmeeting
Class A
November 7, 2018
03,600 September 30, 2018 December 3, 2018stock
(Note): "Total dividend" as determined by the resolution of Board of Directors' meeting on November 7, 2018 includes ¥1 millionof dividends on the Company's shares held by "the Board Incentive Plan Trust".
Ordinary general
meeting of shareholders
June 26, 2018

(2) Dividends, whose record date was in the year ended March 31, 2019, and whose effective date will be in the next fiscal year
Resolution

Type ofshare

Source ofdividends

Cash dividends
paid(Millions of yen)

Dividends
per share(Yen)

Record date

Effective dateCommon Retained
21,90515 March 31, 2019
June 26, 2019
earnings
stockClass A
Retained
06,000 March 31, 2019
June 26, 2019stock
earnings(Note): "Total dividend" as determined by the resolution of Ordinary general meeting of shareholders on June 25, 2019 includes¥2 million of dividends on the Company's shares held by "the Board Incentive Plan Trust".
Ordinary general
meeting of shareholders
June 25, 201927

(Consolidated Statement of Cash Flows)*1 Cash and cash equivalents at the end of the period are reconciled to the account reported in the consolidated balance sheet as
follows:
For the year ended
March 31, 2018
Cash and deposits
Time deposits for more than three months and others
Cash and cash equivalents

28

For the year ended
March 31, 2019

Millions of yen

Millions of yen

276,102239,675

(22)

(23)

276,079

239,652

(Segment Information and Others)(Segment information)
1. Overview of reportable segments
The reportable segments for the Group's oil and natural gas development activities are composed of individual mining area andothers for which separate financial information is available in order for the Board of Directors to make Group management
decisions.
Since the Group operates oil and natural gas businesses globally, the Group's reportable segments are the mining areas and others
by geographical region, categorized in "Japan", "Asia & Oceania" (mainly Indonesia, Australia and East Timor), "Eurasia (Europe& NIS)" (mainly Azerbaijan and Kazakhstan), "Middle East & Africa" (mainly UAE) and "Americas."
The Company produces oil and natural gas in each segment. In addition, the Company conducts purchasing and marketing
activities for natural gas and petroleum products and others in "Japan" segment.
2. Basis of measurement of sales and income (loss), assets, and other items by reportable segment
Accounting policies for the reportable segments are substantially the same as those described in "Basis of Presenting Consolidated
Financial Statements."
Internal sales between segments are based on prices for third-party transactions.
3. Information on sales and income (loss), assets, and other items by reportable segment
For the year ended March 31, 2018 (April 1, 2017 through March 31, 2018)(Millions of yen)
Reportable segments
Adjustments Consolidated
*1
*2

Japan

Asia &
Oceania

Eurasia(Europe& NIS)

120,059

148,836

88,597565,243

10,964

933,701

933,701

Total

120,059

148,836

88,597565,243

10,964

933,701

933,701

Segment income (loss)

25,25628,405

21,395305,055(10,656)

369,456(12,093)357,363

Segment assets

303,133

2,342,417

619,794

511,036

57,186

3,833,568

418,818

4,252,386

Middle East
Americas& Africa

Total

Net sales(1) Sales to third parties(2) Intercompany sales andtransfers between
segments

Other items
Depreciation and
17,941
14,0539,691
36,892
12,90091,4801,325
92,805amortization
(192)
(192)
6,952
6,760
Amortization of goodwill
Investment to affiliates
accounted for by the
1,980
237,959915
31,712
272,567298
272,866
equity method
Increase of tangible fixed
assets and intangible
2,975
228,823
7,040
149,217
1,785
389,841
1,065
390,906
assetsNote: 1. (1) Adjustments of segment income of ¥(12,093) million include elimination of inter-segment transactions of ¥17 million
and corporate expenses of ¥(12,110) million. Corporate expenses are mainly amortization of goodwill and generaladministrative expenses that are not allocated to a reportable segment.
(2) Adjustments of segment assets of ¥418,818 million include elimination of inter-segment transactions of ¥(2) million andcorporate assets of ¥418,820 million. Corporate assets are mainly goodwill, cash and deposits, investment securities andassets concerned with the administrative divisions that are not allocated to a reportable segment.
(3) Adjustments of depreciation and amortization of ¥1,325 million consist mainly of depreciation of corporate assets.
(4) Adjustments of amortization of goodwill of ¥6,952 million consist of amortization of goodwill not attributable to areportable segment.
(5) Adjustments of investment to affiliates accounted for by the equity method of ¥298 million consist of investment toaffiliates accounted for by the equity method not attributable to a reportable segment.
(6) Adjustments of increase of tangible fixed assets and intangible assets of ¥1,065 million consist mainly of capital
expenditure to corporate assets.
2. Segment income is reconciled with operating income on the consolidated statement of income.

29

For the year ended March 31, 2019 (April 1, 2018 through March 31, 2019)(Millions of yen)
Reportable segments
Japan

Asia &
Oceania

Eurasia(Europe& NIS)

140,311

91,630116,718

Middle East
Americas& Africa

Total

Adjustments Consolidated*1*2

Net sales(1) Sales to third parties(2) Intercompany sales andtransfers between
segments

614,420

8,308

4,810

971,388971,388
4,810(4,810)Total

140,31196,440116,718

614,420

8,308

976,199(4,810)971,388

Segment income (loss)

29,21027,336

31,405412,064(8,751)

491,264(16,983)

474,281

Segment assets

291,284

2,971,494

600,987

530,432

42,317

4,436,516

357,029

4,793,545

Other items
Depreciation and
17,561
34,134
7,092
38,769
7,957
105,515
1,384
106,899
amortization
(192)
(192)
6,952
6,760
Amortization of goodwill
Investment to affiliates
accounted for by the
1,921
301,699
8,117
22,771
334,511
1,473
335,984
equity method
Increase of tangible fixed
assets and intangible
3,865
241,755
6,388
61,437
3,476
316,924
777
317,701
assetsNote: 1. (1) Adjustments of segment income of ¥(16,983) million include elimination of inter-segment transactions of ¥13 million
and corporate expenses of ¥(16,996) million. Corporate expenses are mainly amortization of goodwill and generaladministrative expenses that are not allocated to a reportable segment.
(2) Adjustments of segment assets of ¥357,029 million include elimination of inter-segment transactions of ¥(1) million andcorporate assets of ¥357,030 million. Corporate assets are mainly goodwill, cash and deposits, investment securities andassets concerned with the administrative divisions that are not allocated to a reportable segment.
(3) Adjustments of depreciation and amortization of ¥1,384 million consist mainly of depreciation of corporate assets.
(4) Adjustments of amortization of goodwill of ¥6,952 million consist of amortization of goodwill not attributable to areportable segment.
(5) Adjustments of investment to affiliates accounted for by the equity method of ¥1,473 million consist of investment toaffiliates accounted for by the equity method not attributable to a reportable segment.
(6) Adjustments of increase of tangible fixed assets and intangible assets of ¥777 million consist mainly of capital
expenditure to corporate assets.
2. Segment income is reconciled with operating income on the consolidated statement of income.

30

(Relative information)
For the year ended March 31, 2018 (April 1, 2017 through March 31, 2018)
1. Products and service information(Millions of yen)
Natural gas(excluding LPG)

Crude oil
Sales to third parties

710,277

LPG

202,054

Other
6,047

Total

15,322

933,701

2. Geographical information(1) Sales(Millions of yen)Japan

Asia & Oceania
428,652

Other

Total

405,422

99,627

933,701

Note: Sales by geographical area is determined based upon the final destination and customer.
(2) Tangible fixed assets(Millions of yen)Japan

Australia
264,548

Other

Total

1,537,732

242,338

2,044,619

3. Information by major customer(Millions of yen)
Customer

Sales

Relative reportable segment

Shell International Eastern Trading
Company

107,654

Middle East & Africa

For the year ended March 31, 2019 (April 1, 2018 through March 31, 2019)
1. Products and service information(Millions of yen)
Crude oil
Sales to third parties

Natural gas(excluding LPG)

782,695

LPG

169,205

Other
1,504

Total

17,983

971,388

2. Geographical information(1) Sales(Millions of yen)Japan

Asia & Oceania
423,090

Other

378,956

Total
169,342971,388

Note: Sales by geographical area is determined based upon the final destination and customer.
(2) Tangible fixed assets(Millions of yen)Japan

Australia
245,338

UAE

1,774,223

Other
228,92031

Total
30,512

2,278,994

3. Information by major customer(Millions of yen)
Customer

Sales

Relative reportable segment

JXTG Nippon Oil & Energy Corporation

99,554

Middle East & Africa(Information on impairment loss from fixed assets by reportable segment)
For the year ended March 31, 2018 (April 1, 2017 through March 31, 2018)(Millions of yen)
Reportable segments
Japan
Impairment loss

Asia &
Oceania

Eurasia(Europe& NIS)

3,630

Middle East
Americas& Africa

Total

96

79,97076,243Eliminations
and other

Total

79,970For the year ended March 31, 2019 (April 1, 2018 through March 31, 2019)(Millions of yen)
Reportable segments

Impairment lossJapan

Asia &
Oceania

5,547

10,085

Eurasia(Europe& NIS)

Middle East
Americas& Africa

Total

9,603

25,236

Eliminations
and other

Total

25,236(Information on amortization of goodwill and unamortized balance by reportable segment)
For the year ended March 31, 2018 (April 1, 2017 through March 31, 2018)(Millions of yen)
Reportable segments
Japan

Asia &
Oceania

Eurasia(Europe& NIS)

Middle East Americas& Africa*1

Total

Eliminations
and other
*2

Total

Balance as of(1,586)(1,586)55,62354,037
March 31, 2018
Note: 1. This is the unamortized balance of negative goodwill acquired before April 1, 2010 and net amount of goodwill is stated on
the balance sheet.
2. This is the unamortized balance of goodwill not attributable to a reportable segment.
3. Please refer to "Segment information" regarding to the amounts of amortization of goodwill.
For the year ended March 31, 2019 (April 1, 2018 through March 31, 2019)(Millions of yen)
Reportable segments
Japan

Asia &
Oceania

Eurasia(Europe& NIS)

Middle East Americas& Africa*1

Total

Eliminations
and other
*2

Total

Balance as of(1,393)(1,393)
48,67047,276
March 31, 2019
Note: 1. This is the unamortized balance of negative goodwill acquired before April 1, 2010 and net amount of goodwill is stated on
the balance sheet.
2. This is the unamortized balance of goodwill not attributable to a reportable segment.
3. Please refer to "Segment information" regarding to the amounts of amortization of goodwill.
(Information on negative goodwill by reportable segment)
None

32

(Financial Instruments)
1. Status of financial instruments(1) Policy regarding financial instruments
The Company raises funds for oil and gas development and production, construction or expansion of gas infrastructure
primarily from cash flow on hand and from bank loans. Oil and gas development projects are primarily funded from long-termloans that the Company has secured from the Japan Bank for International Cooperation, Japanese commercial banks andothers. Japan Oil, Gas and Metals National Corporation has provided guarantees for the principal on certain outstanding
amounts of the Company's long-term loans. The Development Bank of Japan and Japanese commercial banks and others haveprovided long-term loans for the construction or expansion of domestic gas infrastructure. The Company generally borrows
loans with variable interest rates, while some loans are with a fixed interest rate depending on the nature of each project.
Regarding the financing policy, the Company manages funds mainly from deposits and government bonds, which areconsidered to be of low-risk and high-liquidity. The Company limits the use of derivative transactions for managing risks offorecasted transactions and portfolio assets, and does not engage in speculative derivative transactions.
(2) Details of financial instruments, associated risk and risk management(Credit risk related to trade receivables)
Trade receivables such as accounts receivable-trade and accounts receivable-other are comprised mainly from sales of crude
oil and natural 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 andreduction 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 Executive Committee. For shares of stock, the Company mainly holds shares of trading partners andothers to establish close and smooth relationships for the purpose of maintaining a medium- to long-term stable business. A
part of these shares are held for the purpose of investment.
(Interest rate fluctuation risk related to short-term loans and long-term debt)
Loans are mainly used to fund oil and natural gas development projects and construction or expansion of domestic gas
infrastructure and others. The borrowing period is determined considering the financial prospects of the project and useful
lives of the facilities. Loans with variable interest rates are exposed to interest rate fluctuation risk, however, the Company
analyzes the impact of interest rate fluctuation at the time of borrowing and on an annual basis, and leverages fixed-rate-loans
or interest rate swaps as necessary.
(Exchange rates fluctuation risk related to assets and liabilities in foreign currencies)
As most of the Company's business is conducted overseas, the Company is exposed to exchange rate fluctuation risk due to alarge portion of monetary assets and liabilities held in foreign currencies such as cash and deposits, accounts receivables andloans required in overseas projects. For this reason, the Company endeavors to reduce exchange rate fluctuation risk by
maintaining the position between assets and liabilities in foreign currencies. In addition to planned expenditures in foreign
currencies, the Company manages exchange rate fluctuation risk through derivative transactions such as foreign exchange
forwards and others as necessary.
(Management of derivative transactions)
For the above derivative transactions, the Company follows its internal rules. Market values of these derivatives are regularly
reported to the Executive Committee, and the Company only transacts with financial institutions with high credit ratings to
reduce counterparty risks for the use of derivatives.
(Management of the liquidity risk related to financing)
The finance and accounting division controls cash management based on a monthly financing plan prepared by each project
division and secures sufficient liquidity on hand to prepare for liquidity risk.
(3) Supplementary explanation of items related to the market value of financial instruments
For nominal amounts and others regarding derivative transactions on "Derivatives Transactions", its amounts do not indicate
market risks related to derivative transactions.

33

2. Fair value of financial instruments
Carrying value on the consolidated balance sheets, fair value and the difference between them are as shown below. Items forwhich it is extremely difficult to determine market value are not included in the following table (Please refer to Note 2).
As of March 31, 2018

(Millions of yen)
Carrying value

Fair value

Difference(1) Cash and deposits

276,102276,102(2) Accounts receivable-trade

66,90066,900(3) Investment securities

58,25358,253(4) Long-term loans receivable

295,861

295,861

Total assets

697,117

697,117(1) Short-term loans

71,25069,588(1,661)(2) Long-term debt

627,326

600,954(26,372)698,577

670,543(28,034)

50

50

Total liabilities
Derivatives (*)(*) Net claims and debts arising from derivative transactions are presented on a net basis. In case the total amount is a debt
amount, the above figure is negative.
As of March 31, 2019

(Millions of yen)
Carrying value

Fair value

Difference(1) Cash and deposits

239,675

239,675(2) Accounts receivable-trade92,217

92,217(3) Investment securities

48,244

48,244(4) Long-term loans receivable592,786

592,786

Total assets

972,924

972,924(1) Short-term loans

127,184

126,524(660)(2) Long-term debt

1,014,013

1,000,538(13,474)

1,141,197

1,127,062(14,134)

57

57

Total liabilities
Derivatives (*)(*) Net claims and debts arising from derivative transactions are presented on a net basis. In case the total amount is a debt
amount, the above figure is negative.

34

Note 1: Methods of calculating the fair value of financial instruments
Assets(1) Cash and deposits
Since the item is settled in a short period of time and its fair value is almost the same as the carrying value, the relevant
carrying value is used.
(2) Accounts receivable-trade
Since the item is settled in a short period of time and its fair value is almost the same as the carrying value, the relevant
carrying value is used.
(3) Marketable securities and investment securities
The fair value of shares is determined by the market prices of exchanges, and the fair value of bonds is determined by market
prices of exchanges or the prices presented by financial institutions. For further information on investment securities of eachholding purpose, please refer to "Securities" section of the notes to consolidated financial statements.
(4) Long-term loans receivable
The fair value of long-term loans receivable is calculated by applying a discount rate to the total of principal and interest. The
discount rate is based on the assumed interest rate if a similar new loan is entered into.
Liabilities(1) Short-term loans
The estimated 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 the item is settled in a shortperiod of time and its market value is almost the same as the carrying value.
(2) Long-term debt
The estimated fair value of long-term debt is calculated by applying a discount rate to the total of principal and interest. The
discount rate is based on the assumed interest rate if a similar new loan is entered into.
Derivatives
Please refer to "Derivative Transactions" section of the notes to consolidated financial statements.
Note 2: Carrying value of financial instruments for which it is extremely difficult to determine fair value(Millions of yen)
As of March 31, 2019

As of March 31, 2018
Unlisted securities
Stocks of subsidiaries and affiliates

26,731
282,432

25,268345,550

These financial instruments are not included in "Assets (3) Marketable securities and investment securities" as they have noquoted market prices and it is extremely difficult to determine their fair value. For shares of exploration companies, an allowance
for investments in exploration is provided at an estimated amount based on the financial position of the investees.

35

Note 3: Redemption schedules for monetary assets and securities with maturity dates subsequent to the fiscal closing dates are as
follows
As of March 31, 2018

(Millions of yen)
1 year or less

Cash and deposits
Accounts receivable-tradeLong-term loans receivable276,102
66,900

Total

343,002

More than 1 year
but less than 5
years

More than 5
years but lessthan 10 years

More than 10
years

784

295,076784

295,076

As of March 31, 2019

(Millions of yen)
1 year or less

Cash and deposits
Accounts receivable-tradeLong-term loans receivable

239,675
92,217

Total

331,893

More than 1 year
but less than 5
years

More than 5
years but lessthan 10 years

More than 10
years

2,005

2,005

588,775

2,005

2,005

588,775

Note 4: Maturities for long-term loans payable, leased liabilities and other interest-bearing debt subsequent to the fiscal closing
dates are as follows
As of March 31, 2018

(Millions of yen)
1 year or less

Short-term loans
Long-term debt
Lease obligations
Total

More than 1 year
but less than 5
years

More than 5
years but lessthan 10 years

More than 10
years

5,109
66,141
56

336,89778

167,7400122,688

71,306

336,976

167,741

122,688

As of March 31, 2019

(Millions of yen)
1 year or less

Short-term loans
Long-term debt
Lease obligations

More than 1 year
but less than 5
years

More than 5
years but lessthan 10 years

More than 10
years

127,184

Total

479,20248

492,626

42,183

31
127,215479,250492,626

42,18336

(Securities)
1. Other securities
As of March 31, 2018

(Millions of yen)Type of securities

Acquisition cost

Securities with carrying values exceeding theiracquisition costs(1) Stock(2) Bonds(3) Other

Carrying value

26,711

Subtotal
Securities with acquisition costs exceeding theircarrying values(1) Stock(2) Bonds(3) Other
Subtotal
Total

37,238

Unrealized gain
(loss)

10,527

2,178

5,641

3,462

28,88942,87913,98915,911

15,373(537)

15,91144,80015,37358,253(537)
13,452As of March 31, 2019

(Millions of yen)Type of securities

Acquisition cost

Securities with carrying values exceeding theiracquisition costs(1) Stock(2) Bonds(3) Other

Carrying value

6,637

Subtotal
Securities with acquisition costs exceeding theircarrying values(1) Stock(2) Bonds(3) Other
Subtotal
Total

Unrealized gain
(loss)

9,455

2,818

2,178

5,595

3,417

8,815

15,051

6,235

35,98433,193(2,791)

35,98444,80033,19348,244(2,791)3,444

2. Other securities sold for the fiscal years
For the year ended March 31, 2018
Type of securities(Millions of yen)
Proceeds from sales(1) Stock(2) Bonds
Public bonds
Corporate bonds
Other(3) Other

0

5,500

Total

5,500

For the year ended March 31, 2019
None

37

Gain on sales

Loss on sales

(Derivative Transactions)
1. Derivatives not subject to hedge accounting(1) Derivatives related to foreign currency
As of March 31, 2018

(Millions of yen)Type of derivatives

Contract
amounts

Due after one year

Valuation gain
(loss)

Fair value

Foreign exchange
forwards
42,494
Sell CAD
Buy USD(*) Fair value is the price obtained from the counterparty financial institutions.
Over-the-countertransactions

50

As of March 31, 201950

(Millions of yen)Type of derivatives

Contract
amounts

Due after one year

Foreign exchange
forwards
44,254
Sell CAD
Buy USD(*) Fair value is the price obtained from the counterparty financial institutions.
Over-the-countertransactions

Valuation gain
(loss)

Fair value
57

57

2. Derivatives subject to hedge accounting(1) Derivatives related to interest rate
As of March 31, 2018
Hedge accounting
method(Millions of yen)Type of derivatives

Principal items
hedgedContract
amounts

Due after one year

Fair value

Interest rate swaps
payment fixed,
Long-term debt
4,760
4,760
(*)
receipt fluctuated(*) Fair value of derivatives for which special treatment of interest rate swaps is applied is included in the estimated fair valueof the long-term debt since the interest rate swap is treated together with long-term debt subject to hedging.
Special treatment ofinterest rate swaps

As of March 31, 2019
Hedge accounting
method(Millions of yen)Type of derivatives

Principal items
hedgedContract
amounts

Due after one year

Fair value

Interest rate swaps
payment fixed,
Long-term debt
4,760
(*)
receipt fluctuated(*) Fair value of derivatives for which special treatment of interest rate swaps is applied is included in the estimated fair valueof the long-term debt since the interest rate swap is treated together with long-term debt subject to hedging.
Special treatment ofinterest rate swaps

38

(Per Share Information)
Net assets excluding non-controlling interests per share, net income per share and the calculation basis are as follows:
For the year ended
For the year ended
March 31, 2018
March 31, 2019(1) Net assets excluding non-controlling interests per share¥ 1,997.24
For the year ended
March 31, 2018

(2) Net income per share¥ 2,058.95
For the year ended
March 31, 2019

¥ 27.64¥ 65.81

40,362

96,106

0

0

(0)

(0)

40,362

96,106

1,460,357,100

1,460,260,300(Calculation basis)
Net income attributable to owners of parent(Millions of yen)Amount not attributable to common shareholders(Millions of yen)(of which Net income attributable to owners of parent
related to Class A stock)
Net income attributable to owners of parent related tocommon shareholders (Millions of yen)
Average number of common stock (shares)(Note): 1. Diluted net income per share is not presented because there are no dilutive potential of shares of common stock.
2. For the purpose of computing net assets excluding non-controlling interests per share, the Company's shares held by "theBoard Incentive Plan Trust" recorded as treasury stock under shareholders' equity are included in the treasury stock to be
deducted from the total number of shares issued at the end of the period. Additionally, in computing net income per share,
above shares of the Company are included in the treasury stock to be deducted from the average number of shares during
the period. The numbers of shares of treasury stock deducted from the total number of shares issued at the end of theperiod in computing net assets excluding non-controlling interests per share was 157,300 shares, and the numbers ofshares of treasury stock deducted from the average number of shares during the period in computing net income per share
was 96,800 shares.
(Significant Subsequent Events)
None(Omissions of Disclosure)With respect to information for standards issued but not effective, leases, related party transactions, tax accounting, asset
retirement obligations and retirement benefits plan respective disclosure has been omitted because it does not have significant
impact on the consolidated financial statements.

39

4. Non-Consolidated Financial Statements(1) Non-Consolidated Balance Sheet(Millions of yen)Accounts

As of March 31, 2018

As of March 31, 2019

(Assets)
Current assets
Cash and deposits

443

395

Accounts receivable-trade21,577

15,588Finished goods

2,409

2,250

203

299

Raw materials and supplies

9,825

17,114

Advance payments-trade

49

718

Prepaid expenses
Short-term loans receivable from subsidiaries andaffiliates
Deposit paid in subsidiaries and affiliates

259

287

177,881

166,198

523,907

701,826

Other

22,341

19,505

Allowance for doubtful accounts(62,686)(69,710)

Total current assets

696,212854,474

Buildings, net

16,231

15,134Structures, net

169,047

160,852642

759,33950,94510

15

Tools, furniture and fixtures, net

1,574

1,042

Land

16,89016,715

Leased assets, net

7743Construction in progress

816

328

Total tangible fixed assets

264,629

245,085

55,623

48,6702

2

Software

1,550

1,128

Other

3,973

3,732

Total intangible assets

61,15053,533Work in process and partly-finished construction

Fixed assets
Tangible fixed assets

Wells, net
Machinery and equipment, net
Vehicles, net

Intangible assets
Goodwill
Mining right40

(Millions of yen)Accounts

As of March 31, 2018

As of March 31, 2019

Investments and other assets
Investment securities
Investments in stock of subsidiaries and affiliates
Long-term loans receivable from employees
Long-term loans receivable from subsidiaries
and affiliates
Long-term prepaid expenses

73,91963,906

1,787,811

1,909,580

13
136,241

138,475

39

17
4,269

Deferred tax assets
Other

6,235

9,514

Allowance for doubtful accounts

(106)

(614)

Allowance for investments in exploration(107,183)(112,492)

Total investments and other assets

1,896,970

2,012,656

2,222,751

2,311,276

2,918,963

3,165,750

Accounts payable-trade

12,361

7,819

Short-term loans payable

33,515Current portion of long-term debt

38,56087,6804118

Accounts payable-other

23,863

16,582

Accrued expenses

3,142

4,486

Income taxes payable

3,528

1,873

Advances received

18

174

Deposits payable

257

2,103

1,984

3,100

Accrued bonuses to officers

62

96

Provision for loss on business

9,887

9,971

Asset retirement obligations

128

78

Other

248

467

127,600

134,454

Total fixed assets
Total assets(Liabilities)
Current liabilities

Lease obligations

Deposits received from subsidiaries and affiliates

Total current liabilities

41

(Millions of yen)Accounts

As of March 31, 2018

As of March 31, 2019

Long-term liabilities
Long-term debt

361,402596,838

44

26

Deferred tax liabilities

3,183

1,140

Accrued retirement benefits to employees

5,449

5,563

Lease obligations

Provision for stocks payment
Provision for loss on business of subsidiaries
and affiliates
Provision for loss on guarantees of subsidiaries
and affiliates
Asset retirement obligations

21
8,188

17,781

26,69323,657

2,964

4,450

169

195

408,097649,676535,697784,130

290,809290,809

Legal capital surplus

1,023,802

1,023,802

Total capital surplus

1,023,802

1,023,802

2,105

2,105

3,404

2,269

13,2139,428

1,044,989

1,055,837

1,063,713

1,069,641(5,248)(5,434)

2,373,077

2,378,819

Unrealized holding gain on securities

10,1882,800

Total valuation, translation adjustments and others

10,1882,800

2,383,265

2,381,619

2,918,963

3,165,750

Other
Total long-term liabilities
Total liabilities(Net assets)
Shareholders' equity
Common stock
Capital surplus

Retained earnings
Other retained earnings
Reserve for advanced depreciation of
non-current assets
Reserve for special depreciation
Mine prospecting reserve
Retained earnings brought forward
Total retained earnings
Treasury stock
Total shareholders' equity
Valuation, translation adjustments and others

Total net assets
Total liabilities and net assets

42

(2) Non-Consolidated Statement of Income(Millions of yen)
For the year ended
March 31, 2019

For the year ended
March 31, 2018

Accounts
Net sales

233,574

136,137

Cost of sales

144,627

80,684Gross profit

88,94755,452519

146

Selling, general and administrative expenses

42,03642,485

Operating income

46,39012,821

Interest Income

14,567

13,668Dividend income

31,65037,995

Guarantee commission received

17,764

19,408

Exploration expenses

Other income

Foreign exchange gain

924

Other

2,824

2,065

Total other income

66,80774,062

Interest expenses

9,119

12,526

Loss on valuation of shares of subsidiaries and affiliates

18,303

Provision of allowance for doubtful accounts

36,757

7,018

Provision of allowance for investment loss
in exploration

3,546

11,120

Provision for loss on business

3,264

84

351

7,878

2,086

4,085

Other expenses

Provision for loss on business of subsidiaries andaffiliates
Provision for loss on guarantees of subsidiaries andaffiliates
Foreign exchange loss

6,958

Other

2,674

4,712

Total other expenses

83,06247,42630,13639,457

Ordinary income
Extraordinary income
Gain on extinguishment of tie-in shares

760

Total extraordinary income

760

Extraordinary loss
Impairment loss

3,630

5,547

Total extraordinary loss

3,630

5,547

Income before income taxes

26,506

34,671

Income taxes-current

19,958

6,149

Income taxes-deferred

4,783(3,692)

Total income taxes

24,741

2,456

Net income

1,764

32,21443

(3) Non-Consolidated Statement of Changes in Net Assets
For the year ended March 31, 2018
(Millions of yen)
Shareholders' equity
Capital Surplus
Commonstock

Balance at the beginningof the period

290,809

Retained earnings

Other retained earnings
Reserve forLegal capital Total capital advanced Reserve forMine
surplussurplusdepreciation
specialprospectingof nondepreciation
reservecurrent assets
1,023,802

1,023,802

2,108

4,536

10,035Retainedearnings
brought
forward1,071,554

Changes during the period
Reversal of reserve foradvanced depreciationof non-current assets
Reversal of reserve for
special depreciation
Provision of mineprospecting reserve
Reversal of mineprospecting reserve(3)

3(1,132)

1,132
6,528

(6,528)(3,350)3,350

Cash dividends paid

(26,286)

Net income

1,764

Purchase of treasury stock
Other changes in items
other than those inshareholders' equity(net)Total changes during theperiodBalance at the end of the period

290,809

1,023,802

1,023,802

44(3)(1,132)

3,177(26,564)

2,105

3,404

13,213

1,044,989

Valuation, translation
adjustments and others

Shareholders' equity
Retainedearnings

Total valuation,
Total net assets
Total
Unrealized
translation
Treasury stock Shareholders' holding gain on
adjustments andTotal retained
equitysecurities
othersearnings
Balance at the beginningof the period

1,088,235(5,248)2,397,599

6,476

6,476

2,404,076

Changes during the period
Reversal of reserve foradvanced depreciationof non-current assets
Reversal of reserve for
special depreciation
Provision of mineprospecting reserve
Reversal of mineprospecting reserve
Cash dividends paid
Net income(26,286)(26,286)(26,286)

1,764

1,764

1,764

Purchase of treasury stock
Other changes in items
other than those inshareholders' equity(net)Total changes during theperiodBalance at the end of theperiod(24,522)
1,063,713(5,248)

45

3,711

3,711

3,711

(24,522)

3,711

3,711

(20,810)

2,373,077

10,188

10,1882,383,265

For the year ended March 31, 2019
(Millions of yen)
Shareholders' equity
Capital Surplus
Commonstock

Balance at the beginningof the period

290,809

Retained earnings

Other retained earnings
Reserve forLegal capital Total capital advanced Reserve forMine
surplussurplusdepreciation
specialprospectingof nondepreciation
reservecurrent assets
1,023,802

1,023,802

2,105

3,404

13,213Retainedearnings
brought
forward1,044,989

Changes during the period
Reversal of reserve foradvanced depreciationof non-current assets
Reversal of reserve for
special depreciation
Provision of mineprospecting reserve
Reversal of mineprospecting reserve(1,134)

1,134
3,769

(3,769)(7,553)

7,553

Cash dividends paid

(26,286)

Net income

32,214Purchase of treasury stock
Other changes in items
other than those inshareholders' equity(net)Total changes during theperiodBalance at the end of the period

290,809

1,023,802

1,023,802

46

2,105

(1,134)(3,784)

10,847

2,269

9,428

1,055,837

Valuation, translation
adjustments and others

Shareholders' equity
Retainedearnings

Total valuation,
Total net assets
Total
Unrealized
translation
Treasury stock Shareholders' holding gain on
adjustments andTotal retained
equitysecurities
othersearnings
Balance at the beginningof the period

1,063,713(5,248)2,373,077

10,188

10,1882,383,265

Changes during the period
Reversal of reserve foradvanced depreciationof non-current assets
Reversal of reserve for
special depreciation
Provision of mineprospecting reserve
Reversal of mineprospecting reserve
Cash dividends paid

(26,286)(26,286)(26,286)

Net income

32,21432,21432,214

(186)

(186)

Purchase of treasury stock
Other changes in items
other than those inshareholders' equity(net)Total changes during theperiodBalance at the end of theperiod(186)(7,388)(7,388)(7,388)

5,927

(186)

5,741

(7,388)(7,388)(1,646)

1,069,641(5,434)

2,378,819

2,800

2,800

2,381,61947

(4) Notes to Non-Consolidated Financial Statements(Conditions or events that indicate there could be substantial doubt about the Company's ability to continue as a going concern)
None

48

5. Other(1) Production, Orders Received and Sales Performance1) Actual production
The following table shows actual production by segment:
Segment

Category

For the year ended March 31, 2018

For the year ended March 31, 2019

1.4 MMbbls(3.7 Mbbls per day)
53.1 Bcf(145.6 MMcf per day)11.3 MMboe(31.1 Mboe per day)

1.3 MMbbls(3.5 Mbbls per day)48.0 Bcf(131.6 MMcf per day)10.3 MMboe(28.2 Mboe per day)554.5 tons

560.7 tons

198.1 million kWh

204.7 million kWh

7.8 MMbbls(21.4 Mbbls per day)
136.8 Bcf
(374.9 MMcf per day)
33.4 MMboe(91.4 Mboe per day)

6.9 MMbbls(18.9 Mbbls per day)
146.0 Bcf
(400.1 MMcf per day)34.3 MMboe(94.1 Mboe per day)205.1 million kWh402.3 million kWh15.1 MMbbls(41.5 Mbbls per day)
7.8 Bcf(21.4 MMcf per day)16.5 MMboe(45.3Mboe per day)17.0 MMbbls(46.5 Mbbls per day)10.0 Bcf(27.4 MMcf per day)18.7 MMboe(51.3Mboe per day)23.4 Mtons

87.7 Mtons

93.9 MMbbls(257.2 Mbbls per day)
2.0 MMbbls(5.4 Mbbls per day)
39.3 Bcf(107.8 MMcf per day)
9.1 MMboe(24.9 Mboe per day)
120.1 MMbbls(329.1 Mbbls per day)
237.1 Bcf
(649.7 MMcf per day)
164.2 MMboe(449.9 Mboe per day)

84.4 MMbbls(231.2 Mbbls per day)
1.2 MMbbls(3.2 Mbbls per day)
32.8 Bcf(89.9 MMcf per day)
7.1 MMboe(19.5 Mboe per day)
110.7 MMbbls(303.3 Mbbls per day)
236.9 Bcf
(649.0 MMcf per day)
154.9 MMboe(424.3 Mboe per day)554.5 tons

560.7 tons

403.3 million kWh606.9 million kWh

23.4 Mtons

87.7 Mtons

Crude oil
Natural gas
Japan

Subtotal
IodineElectric power generation
Crude oil
Natural gas

Asia & Oceania
Subtotal
Electric power generation
Crude oil
Eurasia(Europe & NIS)

Natural gas
Subtotal
SulfurMiddle East & Africa

Crude oil
Crude oil

AmericasNatural gas
Subtotal
Crude oil
Natural gas

Total

Subtotal
IodineElectric power generation
SulfurNote: 1. The volume of LPG produced overseas is included in 'Crude oil'.
2. A portion of crude oil and natural gas production volume is consumed as fuel to generate electricity.
3. 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 years ended March 31 regardless of a closing date of fiscal periods of its subsidiaries or affiliates.
4. 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 139.9 MMbbls (383.4 Mbbls per day) of crude oil,
286.7 Bcf (785.3 MMcf per day) of natural gas, and in total 193.2 MMboe (529.4 Mboe per day) for the year ended March 31, 2018, and 124.9
MMbbls (342.2 Mbbls per day) of crude oil, 253.4 Bcf (694.2 MMcf per day) of natural gas, and in total 172.0 MMboe (471.1 Mboe per day) for theyear ended March 31, 2019.
5. Boe means barrels of oil equivalent.
6. Iodine is refined by other company on consignment.
7. Figures are rounded to the first decimal place.

492) Orders received
Disclosure on this information is omitted because the amount of orders received is accounted for a minor portion of total sales.
3) Actual sales
The following table shows sales by segment:(Millions of yen)Segment

Category

For the year ended March 31, 2018 For the year ended March 31, 2019
Sales volume

6,299

789 Mbbls

6,478

Natural gas(excluding LPG)

79,243 MMcf

98,43180,930 MMcf

115,939

5 Mbbls

38

4 Mbbls

29

LPG
Other

15,29017,862

Subtotal

120,059

140,311

Crude oil

6,554 Mbbls

42,771

5,621 Mbbls

40,975Natural gas(excluding LPG)

137,371 MMcf

100,056

106,703 MMcf

49,180LPG

1,181 Mbbls

6,009

200 Mbbls

1,474

148,836

91,630

Crude oil

13,266 Mbbls

87,22615,115 Mbbls

114,622Natural gas(excluding LPG)

7,808 MMcf

1,339

9,996 MMcf

1,974

Middle East & Africa

Americas

Net sales

940 Mbbls

Subtotal

Eurasia(Europe & NIS)

Sales volume

Crude oilJapan

Asia & Oceania

Net sales

Other

31

120

Subtotal

88,597116,718

Crude oil

90,412 Mbbls

565,243

78,048 Mbbls

614,420

Crude oil

1,710 Mbbls

8,737

930 Mbbls

6,198

Natural gas(excluding LPG)

40,394 MMcf

2,227

35,223 MMcf

2,110

Subtotal

10,964

8,308

Crude oil

112,882 Mbbls

710,277

100,503 Mbbls

782,695

Natural gas(excluding LPG)

264,816 MMcf

202,054

232,851 MMcf

169,205

LPG

1,186 Mbbls

6,047

204 Mbbls

1,504

Total

Other

15,322

17,983

Total

933,701

971,388

Note: 1. The above amounts do not include the related consumption tax.
2. The Company's 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 statements for consolidation purpose as of the consolidation closing date. However, thesignificant effects of the difference in fiscal periods were properly adjusted in consolidation.
3. Sales volumes are rounded to the nearest whole number.
4. Sales for a major customer and sales as a percentage of total net sales are as follows.

For the year ended
March 31, 2019

CustomerAmount(Millions of yen)

JXTG Nippon Oil & Energy Corporation

Ratio
(%)
99,55450

10.2