Consolidated Financial Results for the year ended March 31, 2017 [Japanese GAAP]May 12, 2017
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 http://www.inpex.co.jp: Toshiaki Kitamura, President: Munehiro Hosono, General Manager, Corporate Communications Unit
TEL+81-3-5572-0233
Scheduled date of ordinary general meeting of shareholders : June 27, 2017
Scheduled date of filing Financial Report: June 28, 2017
Scheduled date of payment of cash dividends: June 28, 2017
: Yes
Preparation of supplementary explanatory materials
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, 2017 (April 1, 2016 - March 31, 2017)(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, 2017

Millions of yen%

874,423(13.4)

336,452(13.8)

333,891(10.9)

46,168

175.2

March 31, 2016

1,009,564(13.8)

390,139(27.1)

374,771(34.8)

16,777(78.4)

Millions of yen%

Millions of yen%

Millions of yen%(Note): Consolidated comprehensive income: for the year ended March 31, 2017, ¥43,905 million; ( %)for the year ended March 31, 2016, ¥(166,368) 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, 2017

31.61

1.6

7.7

38.5

March 31, 2016

11.49

0.6

8.5

38.6

(Reference): Net assets excluding non-controlling interests:

for the year ended March 31, 2017, ¥ 2,175 million
for the year ended March 31, 2016, ¥ (20,696) 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, 2017

4,312,174

3,207,542

68.3

2,015.38

As of March 31, 2016

4,369,841

3,178,803

67.1

2,008.34(Reference): Net assets excluding non-controlling interests: as of March 31, 2017, ¥ 2,943,169 million
as of March 31, 2016, ¥ 2,932,892 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, 2017

Millions of yen

Millions of yen

Millions of yen

Millions of yen

275,81053,483(65,428)

316,790

March 31, 2016

183,707(543,534)

156,726

53,813

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, 2016
March 31, 2017
For the year ending
March 31, 2018
(forecast)

Yen

Yen

Yen

Total cash
dividends(Annual)

Total

Cash dividends as apercentage of net
assets(Consolidated)

Payout ratio(Consolidated)

Yen

Yen

Millions of yen

%

%

9.00
9.00

9.00
9.00

18.00
18.00

26,286
26,286

156.7
56.9

0.9
0.9

9.00

9.00

18.00

55.9

(Note): Above information of "Dividends" is regarding common stock. For information regarding Class A stock (which is not listed), please refer to
Exhibit "Dividends of Class A stock ".

3. Forecasted Consolidated Operating Results for the year ending March 31, 2018 (April 1, 2017 - March 31, 2018)(Figures in % represent the changes from the corresponding period of the previous fiscal year)

Net sales
For the six months ending
September 30, 2017
For the year ending
March 31, 2018

Operating income

Net income
attributable toowners of parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen

431,000

10.6

155,000

12.3

167,000

26.3

844,000(3.5)

303,000(9.9)

329,000(1.5)

Net income
per share%Yen

24,000

52.6

16.43

47,0001.8

32.18% Millions of yen*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: Yes: None1,462,323,600 shares as of March 31, 2017
1,462,323,600 shares as of March 31, 2016
1,966,500 shares as of March 31, 2017
1,966,400 shares as of March 31, 2016
1,460,357,146 shares for the year ended March 31, 2017
1,460,357,200 shares for the year ended March 31, 2016

(Reference) Non-Consolidated Financial Results
1. Financial results for the year ended March 31, 2017 (April 1, 2016 - March 31, 2017)(1) Operating results(Figures in % represent the changes from the previous fiscal year)

Net sales
For the year ended
March 31, 2017
March 31, 2016

For the year ended
March 31, 2017
March 31, 2016

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

258,160
324,969(20.6)(22.2)

64,79285,394(24.1)(38.9)

122,317
56,102118.0(77.3)

88,9208,473

949.4(94.3)Net income pershare—basic
Yen
60.89
5.80

Net income pershare—dilutedYen(2) Financial position
Total assets
As of March 31, 2017
As of March 31, 2016

Net assets

Net assets as apercentage of total assets

Net assets per share

Millions of yen

Millions of yen%

Yen

3,137,704
3,328,919

2,404,076
2,339,920

76.6
70.3

1,646.22
1,602.29(Reference): Net assets: as of March 31, 2017, ¥ 2,404,076 million
as of March 31, 2016, ¥ 2,339,920 million*Indication of audit procedure implementation status
This finantial report is not subject to the audit procedure.
*Explanation regarding the appropriate use of estimated consolidated financial results
The aforementioned forecasts "3. Forecasted Consolidated Operating Results for the year ending March 31, 2018" are based on thecurrently 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, 2016
3,600.00
3,600.00
7,200.00
March 31, 2017
3,600.00
3,600.00
7,200.00
For the year ending
3,600.00
March 31, 2018
3,600.00
7,200.00(forecast)(Note): The Company conducted a stock split at a ratio of 1:400 of common stock with October 1, 2013 as the effective date,however, for Class A stock (which is not listed), no stock split was implemented. The article, which shows that dividends of Class A
stock are equivalent to dividends of a common stock prior to the stock split, is specified in the Articles of Incorporation.

Index of the Attachments
1. Summary of Operating Results and other2(1) Summary of Consolidated Operating Results

2(2) Summary of Consolidated Financial Position

3(3) Summary of Cash Flows

4(4) Outlook for the Next Period

4(5) Dividend policy and Dividends for the year ended March 31, 2017 and for the year ending March 31, 2018

4

2. Overview of the INPEX CORPORATION Group5

3. Management Policy

6(1) Basic Management Strategy

6(2) Medium- to Long-Term Management Strategy, Management Indices and Challenges

6

4. Basic Rationale for Selection of Accounting Standards

9

5. Consolidated Financial Statements and Principal Notes

10(1) Consolidated Balance Sheet

10(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

12

Consolidated Statement of Income

12

Consolidated Statement of Comprehensive Income13(3) Consolidated Statement of Changes in Net Assets

14(4) Consolidated Statement of Cash Flows

16(5) Notes to Consolidated Financial Statements

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

18(Basis of Presenting Consolidated Financial Statements)

18(Changes in the Presentation)

22(Changes in Accounting Estimates)

22(Consolidated Balance Sheet)

23(Consolidated Statement of Income)25(Consolidated Statement of Comprehensive Income)28(Consolidated Statement of Changes in Net Assets)

29(Consolidated Statement of Cash Flows)31(Segment Information and Others)

32(Financial Instruments)

36(Securities)

40(Derivative Transactions)

42(Per Share Information)

43(Significant Subsequent Events)

43(Omissions of Disclosure)43

6. Non-Consolidated Financial Statements

44(1) Non-Consolidated Balance Sheet

44(2) Non-Consolidated Statement of Income47(3) Non-Consolidated Statement of Changes in Net Assets

48(4) Notes to Non-Consolidated Financial Statements

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

52
53

7. Other(1) Production, Orders Received and Sales Performance53

1

1. Summary of Operating Results and other(1) Summary of Consolidated Operating Results
In the fiscal year ended March 31, 2017, the Japanese economy continued on a path of gradual recovery overall driven by
improvements in employment and income levels, although improvement in certain segments of the economy was delayed.
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 at US$38.67 per barrel on April 1, 2016 and increased to US$52.51 per
barrel in early June due to concerns over crude oil supply shortages caused by large-scale wildfires in Canada and politicalinstability in Libya and Nigeria.
Thereafter, the index dropped to US$41.80 per barrel in early August due to increased oil production from major OPEC countries.
The index then bounced back following the agreement in principle to reduce oil production at the OPEC Meeting in late
September contrary to market expectations, and rose to US $53.14 in mid-October. While the index then dropped again to
US$44.43 in mid-November due to high levels of output in Russia, Saudi Arabia and other countries as well as skepticism over
OPEC s plans to cut back on production, the agreement to reduce production at the OPEC Meeting in late November was aturning point that saw the index rise again and reach a high of US$57.10 in early January.
Brent then hovered at around US$55 per barrel for some time, after which it dropped in early March following revelations that the
U.S. crude oil inventory had risen to unprecedented levels, ultimately closing at US$52.83 per barrel on March 31, 2017.
Meanwhile, in Japan too, the prices of crude oil and petroleum products shifted in correlation with international oil prices. The
INPEX Group s average crude oil sales price for the fiscal year ended March 31, 2017 reflected this shift and fell to US$46.41 per
barrel, down US$1.54 from the previous fiscal year.
The foreign exchange market, another important factor that affects the business of our Group, began to trade at ¥112 level against
the U.S. dollar. In late-April, the Bank of Japan passed on the additional monetary easing and United States included Japan in the
Monitoring List. Therefore, the Yen appreciated to ¥105 level.
Thereafter the suggestion by Chairman of Federal Reserve Board Yellen, which showed a possibility to rise Federal Funds rate
within a few months, brought the dollar buying to ¥111 level. However, Current Employment Statistics (CES) in early-June
was much lower than the market forecast, which brought the Yen buying. In addition, Brexit was passed on in late-June, which
accelerated the Yen buying to under ¥100 level for the first time in two and a half years. From July onward, the Yen has remainedin steadiness roughly ¥100 to ¥105 level to the U.S. dollar.
In November, Donald Trump won United States Presidential election against the market forecast, which raise the expectation foreasing the restrictions and changing the trade policy and finance policy. In addition, after FOMC appreciated the interest-rate in
December, the Yen depreciated to ¥118 level.
In March, FOMC appreciated the interest-rate again. The Yen has remained in steadiness in the anticipation of the interest-rate
appreciation. TTM closed at ¥112.20 to the U.S. dollar which turned out to be ¥0.49 higher than that of the fiscal year end of
March 31, 2016.
Reflecting these situations, the average sales exchange rate for our Group for this fiscal year was ¥108.60 to the U.S. dollar, whichis ¥11.95 higher than that of the previous fiscal year.
Consolidated net sales for the year ended March 31, 2017 decreased by ¥135.1 billion, or 13.4%, to ¥874.4 billion from theprevious fiscal year due to a decrease in unit sales price and the appreciation of the Japanese yen against the U.S. dollar.
Net sales of crude oil decreased by ¥62 billion, or 9.1%, to ¥617.1 billion, and net sales of natural gas decreased by ¥74.1 billion,
or 23.4%, to ¥242.5 billion.
Sales volume of crude oil increased by 4,980 thousand barrels, or 4.2%, to 122,207 thousand barrels. Sales volume of natural gas
increased by 5,778 million cf, or 1.7%, to 342,994 million cf. Sales volume of overseas natural gas decreased by 213 million cf, or
0.1%, to 271,699 million cf, and sales volume of domestic natural gas increased by 161 million ㎥, or 9.2%, to 1,910 million ㎥(71,295 million cf).
The average sales price of overseas crude oil decreased by US$1.54, or 3.2%, to US$46.41 per barrel. Meanwhile, the averagesales price of overseas natural gas decreased by US$1.39, or 21.1%, to US$5.19 per thousand cf. In addition, the average sales
price of domestic natural gas decreased by ¥8.93, or 17.1%, to ¥43.36 per ㎥.
The decrease of ¥135.1 billion in net sales was mainly derived from the following factors: regarding net sales of crude oil andnatural gas, an increase in sales volume contributing ¥34.8 billion to the increase, a decrease in unit sales price pushing sales downof ¥85.9 billion, the appreciation of the Japanese yen against the U.S. dollar contributing ¥85.1 billion to the decrease, and anincrease in net sales excluding crude oil and natural gas of ¥1.0 billion.
Cost of sales for the year ended March 31, 2017 decreased by ¥72.9 billion, or 13.8%, to ¥453.8 billion due mainly to theappreciation of the Japanese yen against the U.S. dollar. Exploration expenses increased by ¥0.5 billion, or 9.2%, to ¥6.7 billion.
Selling, general and administrative expenses decreased by ¥9.1 billion, or 10.5%, to ¥77.3 billion. As a result, operating income
decreased by ¥53.6 billion, or 13.8%, to ¥336.4 billion.

2

Other income decreased by ¥30.8 billion, or 44.1%, to ¥39.0 billion due to decreases in gain on sales of marketable securities anddividend income and others. Other expenses decreased by ¥43.6 billion, or 51.2%, to ¥41.6 billion due to decreases in equity inlosses of affiliates and provision for allowance for recoverable accounts under production sharing and others. As a result, ordinary
income decreased by ¥40.8 billion, or 10.9%, to ¥333.8 billion.
Extraordinary loss was ¥6.3 billion as a result of posting impairment loss for certain projects due to a drop in oil prices and others.
Total amount of current income taxes and deferred income taxes decreased by ¥83.0 billion, or 23.4%, to ¥271.3 billion, and net
income attributable to non-controlling interests was ¥9.9 billion. As a result of the above effects, net income attributable to ownersof parent for the year ended March 31, 2017 increased by ¥29.3 billion, or 175.2%, to ¥46.1 billion.
Financial results by segment are as follows:
1) JapanNet sales decreased by ¥6.9 billion, or 6.3%, to ¥102.6 billion due to a decrease in sales price of natural gas, despite anincrease in sales volume. Meanwhile, operating income increased by ¥5.9 billion, or 49.1%, to ¥18.0 billion due to a decreasein cost of sales and others.
2) Asia & Oceania
Net sales decreased by ¥84.7 billion, or 28.0%, to ¥218.0 billion due to decreases in sales volume and unit sales price, and theappreciation of the Japanese yen against the U.S. dollar. Operating income decreased by ¥45.6 billion, or 47.0%, to ¥51.5
billion.
3) Eurasia (Europe & NIS)
Net sales decreased by ¥6.6 billion, or 10.0% , to ¥60.1 billion due to a decrease in sales volume of crude oil, and theappreciation of the Japanese yen against the U.S. dollar. Operating income decreased by ¥1.7 billion, or 12.4%, to ¥12.1
billion.
4) Middle East & Africa
Net sales decreased by ¥34.3 billion, or 6.6%, to ¥482.1 billion due to a decrease in unit sales price and the appreciation of theJapanese yen against the U.S. dollar, despite an increase in sales volume. Operating income decreased by ¥13.9 billion, or4.8%, to ¥276.8 billion.
5) Americas
Net sales decreased by ¥2.4 billion, or 17.8% , to ¥11.2 billion due to a decrease in sales price of natural gas and theappreciation of the Japanese yen against the U.S. dollar, despite an increase in sales volume. Meanwhile, operating loss
decreased by ¥4.6 billion, or 33.1%, to ¥9.3 billion due to a decrease in cost of sales and others.
(2) Summary of Consolidated Financial Position
Consolidated total assets as of March 31, 2017 decreased by ¥57.6 billion to ¥4,312.1 billion from ¥4,369.8 billion as of March
31, 2016. Current assets decreased by ¥41.3 billion to ¥942.9 billion due to decreases in cash and deposits and others. Fixed assets
decreased by ¥16.2 billion to ¥3,369.2 billion due to decreases in investments and other assets and others.
Meanwhile, total liabilities decreased by ¥86.4 billion to ¥1,104.6 billion from ¥1,191.0 billion as of March 31, 2016. Current
liabilities decreased by ¥21.6 billion to ¥297.4 billion and long-term liabilities decreased by ¥64.7 billion to ¥807.1 billion.
Net assets increased by ¥28.7 billion, to ¥3,207.5 billion. Total shareholders' equity increased by ¥19.8 billion, to ¥2,556.8 billion.
Total accumulated other comprehensive income decreased by ¥9.6 billion to ¥386.3 billion and non-controlling interests increasedby ¥18.4 billion to ¥264.3 billion.

3(3) Summary of Cash Flows
As for cash flows for the year ended March 31, 2017, net cash provided by operating activities increased by ¥92.1 billion to¥275.8 billion from the previous fiscal year due mainly to decreases in income taxes paid and recoverable accounts under
production sharing (operating expenditures), despite a decrease in income before income taxes.
Net cash provided by investing activities was ¥53.4 billion due to an increase in proceeds from time deposits, the lack of paymentsfor purchases of mining rights, and decreases in payments for purchases of tangible fixed assets and others, meanwhile, net cashused in investment activities was ¥543.5 billion at the end of the previous fiscal year.
Net cash used in financing activities was ¥65.4 billion due to an increase in repayments of long-term debt and decreases inproceeds from long-term debt and proceeds from non-controlling interests for additional shares and others, meanwhile, net cash
provided by financing activities was ¥156.7 billion for the previous fiscal year.
After totaling ¥0.8 billion of the effect of exchange rate changes on cash and cash equivalents, the increase in cash and cash
equivalents for the year ended March 31, 2017 amounted to ¥262.9 billion. Cash and cash equivalents as of March 31, 2017
totaled ¥316.7 billion reflecting the above net increase of ¥262.9 billion, from ¥53.8 billion at the end of the previous fiscal year.
(4) Outlook for the Next Period
As for the outlook, consolidated net sales for the six months ending September 30, 2017 are expected to be ¥431.0 billion, toincrease by 10.6% compared with the six months ended September 30, 2016, and net sales for the year ending March 31, 2018 are
expected to be ¥844.0 billion, to decrease by 3.5% compared with the year ended March 31, 2017.
Operating income for the six months ending September 30, 2017 is expected to be ¥155.0 billion, to increase by 12.3% comparedwith the six months ended September 30, 2016, and operating income for the year ending March 31, 2018 is expected to be ¥303.0
billion, to decrease by 9.9% compared with the year ended March 31, 2017.
Ordinary income for the six months ending September 30, 2017 is expected to be ¥167.0 billion, to increase by 26.3% comparedwith the six months ended September 30, 2016, and ordinary income for the year ending March 31, 2018 is expected to be ¥329.0
billion, to decrease by 1.5% compared with the year ended March 31, 2017. Net income attributable to INPEX CORPORATION
for the six months ending September 30, 2017 is expected to be ¥24.0 billion, to increase by 52.6% compared with the six months
ended September 30, 2016, and net income attributable to INPEX CORPORATION for the year ending March 31, 2018 is
expected to be ¥47.0 billion, to increase by 1.8% compared with the year ended March 31, 2017.
Net sales for the year ending March 31, 2018 are expected to decrease due to the forecasted decrease in sales volume of crude oiland natural gas, and operating income, ordinary income for the year ending March 31, 2018 are also expected to decrease as well.
Net income attributable to INPEX CORPORATION for the year ending March 31, 2018 is expected to increase slightly year on
year, due in part to the lack of impairment loss.
In these estimates, the crude oil price is assumed to be US$50.0 per barrel (for Brent crude oil) with the exchange rate of theJapanese yen against the U.S. dollar at ¥110.0 through the year ending March 31, 2018.
(5) Dividend policy and dividends for the year ended March 31, 2017 and for the year ending March 31, 2018
In order to secure a stable and efficient supply of oil and gas resources, the INPEX CORPORATION Group aims to expand its
operating base, and will make the required investments to undertake exploration and development activities in Japan and overseas
as well as maintain and expand its supply infrastructure. The robust financial standing of the INPEX CORPORATION Group is
crucial for maintaining this level of investment. Therefore, our basic policy is to find a suitable balance between maximizing
corporate value through investing in the sustenance and expansion of our reserves as well as oil and gas production, and driving
direct shareholder returns via cash dividends, taking into account the Group's medium- to long-term perspectives.
In accordance with the policy outlined above, the Group has set the year-end dividend at ¥9 per common stock for the year ended
March 31, 2017. Combined with the mid-term dividend of ¥9 per common stock, the total dividend for the year is ¥18 percommon stock. Also in accordance with the policy, the Group has set the year-end dividend of ¥3,600 per Class A stock for theyear ended 31, 2017. Combined with the mid-term dividend of ¥3,600 per Class A stock, the total dividend for the year is ¥7,200
per Class A stock.
For the year ending March 31, 2018, the Group expects mid-term and year-end dividends each of ¥9 per common stock and¥3,600 per Class A stock, bringing total dividends to ¥18 per common stock and ¥7,200 per Class A stock.
The Group plans to allocate retained earnings to investments for the sustenance and expansion of its reserves as well as oil and gas
production, among other initiatives.

42. Overview of the INPEX CORPORATION GroupThe INPEX CORPORATION Group consists of INPEX CORPORATION, 74 subsidiaries (including 64 consolidated
subsidiaries), 26 affiliates (including 20 equity method affiliates) and their 3 subsidiaries (as of March 31, 2017). The Group
primarily engages in exploration, development, production and sales of crude oil and natural gas in Japan as well as in "Asia &Oceania", "Eurasia (Europe & NIS)", "Middle East & Africa" and "Americas".
The following diagram shows our Group's business flow.

53. Management Policy(1) Basic Management Strategy
The INPEX Group positions itself to become a top class international oil and gas exploration and production company throughsustainable growth in the oil and gas development business. The Group s mission is to provide a stable and efficient supply ofenergy to its customers through the exploration and development of oil and natural gas resources throughout the world with theaim of becoming an integrated energy company that contributes to the prosperity and well-being of the communities it serves
and in which it operates.
With natural gas as our core business, we will grow into an integrated energy company by contributing to a stable energy
supply to broader communities. We will continue to play a significant role in enhancing Japan s energy self-sufficiency rate
while contributing to global economic growth and social development. Through these efforts, we intend to further advance our
reputation among our shareholders and more broadly our stakeholders as a company that plays an essential role in the global
community.
In May 2012, we set targets to achieve sustainable growth over the medium- to long-term, and laid out the MEDIUM- TO
LONG-TERM VISION OF INPEX—Ichthys and our growth beyond—to clarify key initiatives over the five years leading up to
the startup of the Ichthys LNG Project. The three growth targets outlined in the vision are: 1) Continuous Enhancement of our
E&P Activities; 2) Strengthening our Gas Supply Chain; and 3) Reinforcement of our Renewable Energy Initiatives. Our threemanagement policies designed to support these growth targets are: 1) Securing / Developing Human Resources and Building an
Efficient Organizational Structure; 2) Investment for Growth and Return for Shareholders; and 3) Responsible Management as a
Global Company. Through realizing its vision, the Group intends to further enhance its corporate value.
(2) Medium- to Long-Term Management Strategy, Business Environment and Operational Challenges
Based on our (1) Basic Management Strategy outlined above, we will adequately address the operational challenges below
taking into account our business environment.
Our challenges are as follows:
In its current business environment, the INPEX Group is faced with the immediate challenge of responding to the drop in oil
prices since the second half of 2014. To this end, we have until now worked on a continuous basis on evaluating individual
project investments and reducing operating expenditures as well as sales, general and administrative expenses. Going forward,
we will build a resilience that will allow us to ensure the continuity of efficient business operations even with oil prices
remaining at relatively low levels for a sustained period of time.
We will also make appropriate use of the Bill for the Act for Partial Revision of the Act on the Japan Oil, Gas and Metals
National Corporation, Independent Administrative Agency, which was passed last year in an effort to help Japan achieve its
independent development goals at an early stage. Business operations geared towards our medium to long-term growth must
proceed continuously and steadily. First, as for the continuous enhancement of our E&P activities, on the Ichthys LNG Project inAustralia, in February 2017 we completed construction of the Central Processing Facility (CPF) and Floating Production,
Storage and Offloading (FPSO) facility, which are key components of the project. In April 2017, the CPF sailed away en route to
the Ichthys Gas-condensate Field. Following the arrival of the CPF and the FPSO, installation and commissioning work will be
undertaken and production from the wellhead will commence. Thereafter, the Ichthys LNG Project will, during the current fiscal
year (ending March 31, 2018), begin production of condensate, LNG and LPG in sequence and then ship these products, and wewill continue to steadfastly work on development activities toward these targets. With regard to the Abadi LNG Project inIndonesia, in September 2015 we submitted to the Indonesian government authorities a revised plan of development (POD)
envisioning the adoption of a floating LNG with an annual LNG processing capacity of 7.5 million tons. In April 2016, wereceived a notification from the Indonesian government authorities instructing to re-propose a plan of development based on
onshore LNG development. Currently, we are continuing to work closely with the Indonesian government authorities aiming forthe early start-up of development. Elsewhere, we agreed in principle with the Abu Dhabi National Oil Company (ADNOC) toextend the duration of the joint development of the Satah and Umm Al Dalkh offshore oil fields in the United Arab Emirates inJanuary 2017. Meanwhile, we will continue our efforts to secure stable production at our existing projects including the Offshore
Mahakam Block in Indonesia, the ADMA Block offshore Abu Dhabi and the ACG oil fields in Azerbaijan. In terms of
exploration activities, we were jointly awarded an exploration license for Block 3 located in the Mexican sector of the northern
Gulf of Mexico in December 2016, and succeeded in discovering deposits of quality oil through the drilling of an exploration
well at the onshore Exploration Block 10 in the Republic of Iraq in February 2017. We continue to undertake exploration
activities aimed at the acquisition of new oil and gas reserves and pursue opportunities to join viable projects. Next, with regard
to strengthening our gas supply chain, construction work on the Toyama Line in Japan was completed in June 2016 and fulloperations along the pipeline commenced in October 2016 to respond to the growing demand for natural gas supplies. This will
strengthen the framework of a stable natural gas supply and is expected to lead to the efficient, long-term and stable supply ofnatural gas to potential customers based along the pipeline s route. Lastly, as for the reinforcement of renewable energy

6initiatives, we are advancing our efforts as an integrated energy company that contributes to the global community throughvarious initiatives including the commencement of commercial operations in March 2017 at the Sarulla Geothermal Independent
Power Producer Project in Indonesia.
The Group's fundamental business operation policies and initiatives to the address the challenges are as follows:
Continuous Enhancement of E&P Activitiesi) Balanced Asset Portfolio- Regional Diversification
The Group's operations have diversified beyond Japan, Asia, Oceania and the Middle East, where we have a wealth ofoperational experience, to include locations around the world such as the Caspian Sea region, Central and South America andAfrica. We will continue to pursue a portfolio of assets taking geographical mix into consideration.
- Crude Oil and Natural Gas Product Ratio
The INPEX Group's ratio of crude oil products versus natural gas products is approximately 67/33.
Crude oil, which has diverse applications and is considered a convenient fuel source that can be easily handled, transported
and stored, is widely used all over the world. As crude oil is a sensitive commodity, its sales prices are often influenced bymarket conditions. While crude oil customers are not bound to long-term sales contracts, capital investments in crude oil
production and transportation are relatively small in comparison to natural gas including LNG. Furthermore, the timerequired for crude oil development is comparatively short, enabling quick returns on investment once oil fields are
discovered.
Natural gas has the lowest environmental impact among fossil fuels, and demand for natural gas as a quick and effective
measure against global warming is expected to increase. Commercial production of natural gas requires substantial
investment and a long lead-time for the preparation of infrastructure such as liquefaction plants or pipelines. Since gas buyers
are also required to make large investments in LNG receiving facilities, stable and long-term sales and purchase contracts are
essential. Such LNG contracts, while influenced to an extent by oil price fluctuations, enable long-term profit stability.
When acquiring interests in new projects, it is important to achieve a sound balance between crude oil and natural gas
production to ensure efficient investment with a view to securing long-term cash flow.
- Balancing Project Stages (Exploration, Development and Production)
Because oil and gas reserves become depleted as production advances, the INPEX Group must constantly seek to acquire
fresh reserves to ensure stable profitability. For this, it is important to reinvest production revenue in exploration and create an
operational cycle of discovering, developing and producing at new oil and gas fields to generate revenue, ensuring the stability
and continuity of projects at every stage.
To maintain this cyclical balance, we will continue to focus on stable production at key assets including the Offshore
Mahakam Block, the ADMA Block and the ACG Oil Fields as well as the diligent development of the Ichthys LNG Project,while investing in new exploration opportunities.
ii) Implementation of Operator Projects
As Operator, we require significant management resources in terms of organization, human resources and financing.
However, being Operator also presents us with significant opportunities to acquire new participating interests throughimproved technological capabilities and greater recognition from oil and gas producing countries as well as international oil
companies. The group is committed to pursuing and implementing projects as Operator, starting with the Ichthys LNG
Project, by further enhancing its technological capabilities, ensuring safety in all operations and integrating with local
communities.
iii) Strengthening Relationships with Leading Oil and Gas Companies Globally
Developing oil and gas involves considerable risks. Large-scale projects in particular require investments too large for any
one company to shoulder individually. Companies therefore typically form consortiums to share the risks and jointly
undertake business operations. The INPEX Group is committed to increasing its chances of participating in viable projects,
expanding its business and dispersing risks through enhanced cooperation with major international oil companies and nationaloil companies in oil and gas producing countries as well as leading private oil resource developers, Japanese trading
companies and other energy-related enterprises.
Strengthening Gas Supply Chain
The INPEX Group aims to build a solid network of operations in the Japanese natural gas market, which represents a stablesource of revenue, and reorganized its natural gas business operations in Japan to respond to the growing competition7

triggered by the full liberalization of the Japanese gas retail market in April 2017. We will also strive to continue enhancing
our natural gas business in Japan through our natural gas trunk pipeline network supplying the promising markets in the
Kanto-Koshinetsu and Hokuriku regions, and plan to increase production at the Minami-Nagaoka gas field, one of the largest
gas fields in Japan. We also own numerous promising natural gas assets primarily in Australia and Indonesia. To ensure ourlong-term growth, we will actively pursue the strengthening of our gas supply chain by organically linking such international
assets and our infrastructure in Japan, with our Naoetsu LNG Terminal serving as the gateway.
Reinforcement of Renewable Energy Initiatives
As an E&P company, one of our most important challenges is to reduce environmental impact through greenhouse gas
reduction initiatives, etc. We are pursuing the development of renewable energy resources such as photovoltaic, wind powerand geothermal power generation and biomass fuels, as well as next-generation energy solution technologies based onhydrogen, fuel cells and high performance batteries in cooperation with Japanese and international companies, universities andorganizations. Through these activities, we seek to locate new business opportunities while helping reduce environmental
impact.
Securing / Developing Human Resources and Building an Efficient Organizational Structure
We introduced INPEX Values, a set of core values designed to be shared by all INPEX directors and employees, and areworking on creating foundations to establish a global HR management system. We continued to take steps to instill groupwide adherence to INPEX Values and are steadfastly pursuing measures in accordance with the INPEX Action Plan based on
the Act of Promotion of Women s Participation and Advancement in the Workplace. Going forward, we will continue todevelop an efficient organizational structure and secure experienced global talent.
Investment for Growth and Shareholder Returns
To ensure growth for the Group, we will progressively carry out investment activities in the medium- to long-term while
maintaining sound financial standing. With an eye on the Ichthys production startup schedule, we will look to deliver
appropriate shareholder returns that meet the standards of top-class international oil and gas E&P companies.
Responsible Management as a Global Companyi) CSR Management Promotion, Enhanced Stakeholder Communications and Corporate Governance
As a global entity, the INPEX Group has strived to develop a responsible management system. We are engaged in various
ways to progressively strengthen our CSR management under the guidance of the CSR Committee chaired by the President &CEO. We will continue to promote active disclosure practices so as to reach out to our stakeholders based in many locations
around the world. We have already implemented measures through the INPEX Advisory Committee to reinforce our corporate
governance from a global perspective, and will continue to strengthen internal management in accordance with the Corporate
Governance Code.
ii) Strengthening Health, Safety and Environment (HSE) Initiatives
We have organized our HSE management system based on global standards, and through the implementation andcontinuous enhancement of HSE activities, we have strived to ensure the safety and health of stakeholders involved in ourbusiness and to protect the environment. As for safety and health, we are implementing occupational safety control at drilling,
construction and operational sites, instilling process safety management practices essential for preventing major incidents anddisaster and managing the health of employees. We are also actively working on enhancing HSE competency through HSEtraining and personnel development, as well as the preparing emergency response manuals and strengthening corporate
preparedness through emergency response drills. In the area of environmental protection, we are making every effort tominimize the impact of our activities on the environment particularly in terms of global warming by means of greenhouse gas
emissions control, prevention of air pollution and water contamination, chemical substance control, effective utilization ofwater resources, prevention of soil pollution, waste management and biodiversity conservation. Through our global initiatives,
we will continue to suitably address and evaluate health and security risks in every country and area in which we operate, andimplement measures to mitigate risks.

8

4. Basic Rationale for Selection of Accounting Standards
The INPEX Group has been analyzing the differences between International Financial Reporting Standards (IFRS) andaccounting principles generally accepted in Japan. The Group will take into consideration the domestic and internationalsituations for appropriate adoption of the IFRS in the future.

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

As of March 31, 2016

As of March 31, 2017

(Assets)
Current assets
Cash and deposits

772,5284

Accounts receivable-trade652,614

4

56,46272,364Marketable securities

5,503

Inventories

1,

4

35,9151,

430,720

Deferred tax assets

2,852

7,264

Accounts receivable-other
Recoverable accounts under production
sharing
Other84,65083,29147,263

4

Less allowance for doubtful accounts
Less allowance for recoverable accounts under
production sharing
Total current assets

45,012

4(13,076)

68,403(20,763)(3,701)

984,345942,960

Buildings and structures, net

124,900

214,575

Wells, net

51,25744,980Machinery, equipment and vehicles, net

130,796

120,713Land

19,673

19,1891,407,490

1,511,660

18,495

17,478Fixed assets
Tangible fixed assets

Construction in progress
Other, net
Total tangible fixed assets

2,

4,

1,752,614

5

2,

4,

1,928,597

5

Intangible assets
Goodwill

67,55860,798

Exploration and development rights

146,262

154,556

Mining rights

318,438

298,370

9,212

7,528

541,471521,253

Other
Total intangible assets
Investments and other assets
Investment securities

3,Long-term loans receivable

4

213,730
4,230

3,

4

246,0854

134,235

Long-term time deposits
Recoverable accounts under production
sharing
Deferred tax assets

202,842

Other

71,357Less allowance for doubtful accounts
Less allowance for recoverable accounts under
production sharing(7,814)(8,282)(131,765)(116,842)(2,046)(2,769)1,091,410

919,362

3,385,496

3,369,213

4,369,841

4,312,174

Less allowance for investments in exploration
Total investments and other assets
Total fixed assets
Total assets

10

727,771

611,937

13,10525,750
4

29,248(Millions of yen)Accounts

As of March 31, 2016

As of March 31, 2017

(Liabilities)
Current liabilities
Accounts payable-trade47,351

51,105

Short-term loans

68,46844,252

Income taxes payable

42,84545,21979,62173,721

Accounts payable-other4

Provision for loss on business

2,920

Provision for exploration projects

4,781

4,478

Accrued bonuses to officers

55

62

Asset retirement obligations

2,233

4,301

Other

73,76971,403

Total current liabilities

319,127

297,465

Long-term debt

673,098

643,432

Deferred tax liabilities

56,04445,615

Provision for loss on business

4,737

Long-term liabilities

Accrued special repair and maintenance

293

331

Liability for retirement benefits

7,461

5,952

Asset retirement obligations

100,829

104,845

Other

29,445

6,989

Total long-term liabilities

871,911807,166

1,191,038

1,104,631

Common stock

290,809290,809

Capital surplus

676,273

676,273

Retained earnings

1,575,136

1,595,018

Treasury stock(5,248)(5,248)2,536,971

2,556,852

Unrealized holding gain on securities

4,958

6,479

Unrealized gain (loss) from hedging instruments(6,660)717

Translation adjustments

397,622

379,119

Total accumulated other comprehensive income

395,921386,316

245,910

264,372

Total net assets

3,178,803

3,207,542

Total liabilities and net assets

4,369,841

4,312,174

Total liabilities(Net assets)
Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income

Non-controlling interests11(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income(Millions of yen)
For the year ended
March 31, 2017

For the year ended
March 31, 2016

Accounts
Net sales

1,009,564

Cost of sales

526,757

2

Gross profit
Exploration expenses
Selling, general and administrative expenses

1,874,423

2

Operating income

453,8462

482,806

420,576

6,166

6,734

86,5001,

77,3892

390,139

336,452

Interest income

10,751

10,460

Dividend income

10,8252,802

Gain on sales of marketable securities

25,986

Gain on sales of investment securities

5,668

Other income

4,999

Equity in earnings of affiliates

2,175

Foreign exchange gain

2,964

Other

13,737

18,652

Total other income

69,93439,090Interest expense

4,198

5,228

Equity in losses of affiliates

20,696

Other expenses

Provision of allowance for doubtful accounts
Provision for allowance for recoverable accounts under
production sharing
Provision for exploration projects

121

8,308

25,026

14,374335

Foreign exchange loss

3,759

Loss on disposal of fixed assets

13,288

4,786

Other

21,635

5,193

Total other expenses

85,301

41,651

374,771

333,891

Ordinary income
Extraordinary loss
Impairment loss

3

45,884

3

6,366

Total extraordinary loss

45,884

6,366

Income before income taxes

328,887

327,525

Income taxes-current

356,585304,620

Income taxes-deferred(2,192)(33,227)

Total income taxes

354,393271,393

Net income (loss)(25,505)

56,131

Net income (loss) attributable to non-controlling interests(42,282)

9,963

Net income attributable to owners of parent

16,777

46,16812

Consolidated Statement of Comprehensive Income(Millions of yen)
For the year ended
March 31, 2017

For the year ended
March 31, 2016

Accounts

Net income (loss)(25,505)

56,131

Unrealized holding gain (loss) on securities(41,094)

1,522

Translation adjustments(129,078)(19,867)

29,3106,119

Other comprehensive income

Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income1

Comprehensive income(140,862)1(12,225)(166,368)

43,905

Owners of parent(104,487)

36,564Non-controlling interests(61,881)

7,341

Total comprehensive income attributable to13

(3) Consolidated Statement of Changes in Net Assets
For the year ended March 31, 2016
(Millions of yen)
Shareholders' equity
Common stock Capital surplus
Balance at the beginning of the period

290,809679,287

Retainedearnings

Treasury stock

Total
Shareholders'equity(5,248)2,549,494

1,584,645

Changes during the period
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders(3,014)(3,014)

Cash dividends paid

(26,286)(26,286)

Net income attributable to owners ofparent16,777

16,777(3,014)(9,509)(12,523)

676,273

1,575,136

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)2,536,971

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

46,049(36,423)

507,560

517,185

222,023

Total
net assets

3,288,703

Changes during the period
Change in treasury shares of parent
arising from transactions with
non-controlling shareholders(3,014)

Cash dividends paid

(26,286)

Net income attributable to owners ofparent16,777Purchase of treasury stock
Net changes in items other than those inshareholders' equity(41,090)

29,763(109,937)(121,264)

23,887(97,376)

Total changes during the period(41,090)

29,763(109,937)(121,264)

23,887(109,900)

Balance at the end of the period

4,958(6,660)397,622395,921245,910

3,178,803

14

For the year ended March 31, 2017
(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)2,536,971

1,575,136

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

(26,286)(26,286)

Net income attributable to owners ofparent46,16846,168Purchase of treasury stock

(0)

(0)

19,881(0)

19,881

1,595,018(5,248)2,556,852

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

290,809676,273

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

4,958(6,660)397,622395,921245,910Total
net assets

3,178,803

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

(26,286)

Net income attributable to owners ofparent46,168Purchase of treasury stock
Net changes in items other than those inshareholders' equity

(0)
1,521

7,377

(18,503)(9,604)

18,462

8,857

Total changes during the period

1,521

7,377

(18,503)(9,604)

18,462

28,739Balance at the end of the period

6,479

717

379,119

386,316

264,372

3,207,542

15

(4) Consolidated Statement of Cash Flows(Millions of yen)
For the year ended
March 31, 2016

Accounts

For the year ended
March 31, 2017

Cash flows from operating activities
Income before income taxes

328,887

327,525

Depreciation and amortization

86,791

91,159Impairment loss

45,884

6,366

Amortization of goodwill

6,760

6,760

Provision for allowance for recoverable accounts
under production sharing

29,843

15,934

Provision for exploration projects(4,399)(240)

Other provisions(4,352)

7,144

945

(1,483)(21,579)(13,262)Interest expense

3,464

5,228

Foreign exchange loss (gain)

15,0854,896

Equity in losses (earnings) of affiliates

20,696(2,175)

Loss (gain) on sales of marketable securities(25,986)

Loss (gain) on sales of investment securities(5,668)(4,999)Recovery of recoverable accounts under
production sharing (capital expenditures)

64,19979,873

Recoverable accounts under production
sharing (operating expenditures)(45,833)(2,823)

Accounts receivable-trade15,193(16,350)

Inventories(2,551)

5,592

Accounts payable-trade(4,389)4,299

Accounts receivable-other

41,632

11,569Accounts payable-other(13,746)

4,181

Advances received

2,882

280

Other

15,294

23,311

Subtotal

549,053552,790

Interest and dividends received

31,446

18,773

Interest paid

(3,205)(2,911)

Income taxes paid

(393,586)(292,840)

Net cash provided by (used in) operating activities

183,707275,810

Liability for retirement benefits
Interest and dividend income

16

(Millions of yen)
For the year ended
March 31, 2016

Accounts

For the year ended
March 31, 2017

Cash flows from investing activities
Payments for time deposits(544,330)(355,238)

Proceeds from time deposits

790,267

921,781

Payments for long-term time deposits(439,989)

Payments for purchases of tangible fixed assets(476,788)(278,359)

Proceeds from sales of tangible fixed assets

1,131

4,610

Payments for purchases of intangible assets(26,897)(21,953)

Proceeds from sales and redemptions of marketable securities

175,584

Payments for purchases of investment securities(6,876)(80,224)

Proceeds from sales and redemptions of investment securities

27,70010,600Investment in recoverable accounts under
production sharing (capital expenditures)(60,442)(37,325)

Decrease (increase) in short-term loans receivable(4,120)(1,322)Long-term loans made(215,709)(133,478)

Collection of long-term loans receivable

384,759

275

Payments for purchases of mining rights(134,516)

Other(13,305)

24,118Net cash provided by (used in) investing activities(543,534)

53,483

92(96)

Proceeds from long-term debt

127,120

11,760

Repayments of long-term debt

(26,868)(62,903)

Proceeds from non-controlling interests for additional shares

87,27916,109Cash dividends paid

(26,297)(26,286)

Cash dividends paid to non-controlling interests(4,524)(3,939)

(74)

(72)

156,726(65,428)(4,064)(887)

Net increase (decrease) in cash and cash equivalents(207,164)

262,977

Cash and cash equivalents at beginning of the period

260,978

53,813

Cash flows from financing activities
Increase (decrease) in short-term loans

Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of the period

11753,813

1

316,790

(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: 64
Names of major subsidiaries;
Japan Oil Development Co., Ltd., INPEX Alpha, Ltd., INPEX Natuna, Ltd., INPEX Sahul, Ltd., INPEX Southwest
Caspian Sea, Ltd., INPEX Gas British Columbia Ltd., JODCO Onshore Limited, INPEX North Caspian Sea, Ltd.,INPEX Browse, Ltd., INPEX Holdings Australia Pty Ltd, INPEX Ichthys Pty Ltd, INPEX Oil & Gas Australia Pty Ltd
and INPEX Masela, Ltd.
TEIKOKU OIL LIBYA UK LTD has been excluded from the scope of consolidation from this fiscal year due to completion ofliquidation.
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.
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: 20
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.

18

3. Closing dates for the fiscal year of consolidated subsidiaries
For the 48 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 10 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.
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.

19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 which are experiencing financial difficulties.
(b) Allowance for recoverable accounts under production sharing
Allowance for recoverable accounts under production sharing is provided for probable losses on specific investments
made under production sharing contracts.
(c) Allowance for investments in exploration
Allowance for investments in exploration is provided for future potential losses on investments in exploration companies
at an estimated amount based on the net assets of the investees.
(d) Provision for exploration projects
Provision for exploration projects is provided for future expenditures of consolidated subsidiaries at the exploration stage
based on a schedule of investments in exploration.
(e) Accrued bonuses to officers
Accrued bonuses to officers are provided at the expected payment amount for the fiscal year.
(f) 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.
(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, 2017. 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.

20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.

21

(Changes in the Presentation)(Consolidated Statement of Income)"Gain on sales of investment securities", previously included in "Other" in other income, is presented separately since it has
become more significant.
"Provision of allowance for doubtful accounts", previously included in "Other" in other expenses, is presented separately since it
has become more significant.
As a result, ¥19,406 million which was recorded as "Other" in other income on the consolidated statement of income in theprevious fiscal year is reclassified as ¥5,668 million of "Gain on sales of investment securities", and ¥13,737 million of "Other",and ¥21,756 million which was recorded as "Other" in other expenses is reclassified as ¥121 million of "Provision of allowancefor doubtful accounts", and ¥21,635 million of "Other".
(Consolidated Statement of Cash Flows)"Loss (Gain) on sales of investment securities", previously included in "Other" in cash flows from operating activities, ispresented separately since it has become more significant.
As a result, ¥9,625 million which was recorded as "Other" in cash flows from operating activities on the consolidated statementof cash flows in the previous fiscal year is reclassified as ¥5,668 million of "Loss (gain) on sales of investment securities", and¥15,294 million of "Other".
(Changes in Accounting Estimates)(Change in useful life)
The Company reviewed the period of economic estimated use of structures (pipelines) considering the progress of initiatives on
strengthening our gas supply chain defined in the "Medium- to Long-Term Vision", actual use records and others since the
Toyama Line commences operation this fiscal year. It was confirmed that they could be used longer than their conventional useful
lives, which had been based on the method prescribed in the Corporation Tax Act, and the Company has changed their useful
lives from the year ended March 31, 2017.
As a result, compared with the conventional method, operating income, ordinary income and income before income taxes for theyear ended March 31, 2017 increased by ¥7,171 million, respectively.

22

(Consolidated Balance Sheet)*1 Major accounts included in inventories
As of March 31, 2016
Millions of yen

Millions of yen

7,910

6,861

643

99

27,361

23,759Merchandise and finished goods
Work in process
Raw materials and supplies

As of March 31, 2017

*2 Accumulated depreciation of tangible fixed assets
As of March 31, 2016

As of March 31, 2017

¥ 700,783 million

Accumulated depreciation of tangible fixed assets¥ 762,321 million*3 The Company has the following investments in subsidiaries and affiliates.
As of March 31, 2016

As of March 31, 2017

Millions of yen

Millions of yen

Investment securities (equities)

120,068

163,526(of which investment in jointly controlled entities)(7,124)(62,417)*4 Assets provided as collateral and collateral-backed debt are as follows:Collateralized Assets
As of March 31, 2016

As of March 31, 2017

Millions of yen

Millions of yen

Cash and deposits

1,507

222

Inventories

8,861

8,533

150

149

Construction in progress

945,517

1,119,049

Investment securities

15,03962,492Land

Long-term loans receivable

131,261

Other

15,113

10,147

Total

986,189

1,331,855

The above is mainly related to Ichthys LNG Project Finance, and the others which pledged as collateral for liabilities of affiliates
excluding the Ichthys LNG Project Finance.
Collateral-backed debt
As of March 31, 2016

As of March 31, 2017

Millions of yen
Accounts payable-other

531

Total

531

23

Millions of yen

*5 Accumulated advanced depreciation deducted from acquisition costs of fixed assets related to contribution and others
As of March 31, 2016

As of March 31, 2017

Millions of yen

Millions of yen

1,393

1,393

Machinery, equipment and vehicles

221

207

Land

84

84

Buildings and structures

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, 2016

As of March 31, 2017
Millions of yen

Millions of yen

Ichthys LNG Pty Ltd*1

470,635

Ichthys LNG Pty Ltd*1

562,236

Tangguh Trustee*2

17,778Tangguh Trustee*2

18,997

Sakhalin Oil and Gas Development Co.,
Ltd.

1,924

Sakhalin Oil and Gas Development Co.,
Ltd.

2,046

Japan Canada Oil Sands Limited

1,690Japan Canada Oil Sands Limited

1,683

INPEX Offshore North Campos, Ltd.

590

Oceanic Breeze LNG Transport S.A.

216

Oceanic Breeze LNG Transport S.A.

215

Employees (housing loans)

51

Employees (housing loans)

63

Total

492,898585,233*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 for the year ended March 31, 2017 inculdes the amount (¥4,320 million) for the construction of Train-3,
based on the Company's participating interest as the guarantor of indebtedness.)(2) Guarantee for derivatives
As of March 31, 2016
¥ (7,643) million

Ichthys LNG Pty Ltd

As of March 31, 2017
¥ (212) million

The aforementioned derivative transactions are utilized to hedge exchange rate fluctuation risk regarding payments ofdevelopment costs for the Ichthys LNG project. The amount is valuation gain (loss) on the derivatives.
(3) 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, 2016
Completion guarantee (the Company's portion)¥ 901,540 million

24

As of March 31, 2017
¥ 903,862 million

(Consolidated Statement of Income)*1 Major accounts included in selling, general and administrative expenses are as follows:
For the year ended
March 31, 2016

For the year ended
March 31, 2017

Millions of yen

Millions of yen

Personnel expenses

22,641

21,737(Including provision for accrued retirement benefits to employees

1,386

671)

53

62)

Taxes

4,109

3,078

Freight expenses

11,176

9,862

Depreciation expenses

25,113

20,124

Amortization of goodwill

6,760

6,760

(Including provision for accrued bonuses to officers*2 Research and development expenses included in general and administrative expenses and production cost:
For the year ended
For the year ended
March 31, 2016
March 31, 2017
¥ 754 million

25¥ 1,983 million

*3 Impairment loss
The Company groups mining area and other assets as a basic unit that generates cash inflows independently of other groups ofassets. Due to impact from deteriorating business environments based on such factors as the drop in oil prices, the Company
reduced the respective carrying amounts of the assets listed below to recoverable amounts, posting the reductions as impairment
loss.
For the year ended March 31, 2016
Use

Location

Assets related to Keathley
Canyon Blocks
874/875/918/919 (Lucius Oil
Field)

U.S. Gulf of Mexico

Assets related to JPDA06-105
Block (Kitan Oil Field)

Timor Sea Joint Petroleum
Development Area (JPDA),
the Commonwealth ofAustralia / the Democratic
Republic of Timor-LesteClassification
Wells

2,335

Machinery, equipment and vehicles

4,378

Mining rights

19,735

Subtotal

26,450

Wells

2,701

Machinery, equipment and vehicles

2,517

Construction in progress

2,184

Subtotal

7,403

Buildings and structures
Wells
Assets related to the shale gas
project in the Horn River area

Assets related to Copa
Macoya Block

British Columbia, Canada

Bolivarian Republic ofVenezuela

744

Mining rights

471

Other

104

Subtotal

4,570

Buildings and structures

73

Wells

945

Machinery, equipment and vehicles
Construction in progress
Subtotal
Buildings and structures

UAE

392
2,858

Machinery, equipment and vehicles

Other

Assets related to Abu Al
Bukhoosh Block

Impairment loss
(Millions of yen)

76
2,587
2
3,685
75

Wells

1,201

Machinery, equipment and vehicles

1,294

Construction in progress

576

Other

42

Subtotal

3,191

Other

583

Total

45,884

The recoverable amount of the assets related to Keathley Canyon Blocks 874/875/918/919 (Lucius Oil Field), the shale gas
project in the Horn River area and Abu Al Bukhoosh Block is reasonably estimated by discounting the future cash flows at a rateof 6.5%. The recoverable amount of the assets related to JPDA06-105 Block (Kitan Oil Field) and Copa Macoya Block isestimated at zero.

26

For the year ended March 31, 2017
Use

Location

Classification
Buildings and structures
Wells

Assets related to the shale gas
project in the Horn River area

Assets related to Yabase Oil
Field

Assets related toSouth Natuna Sea Block B
Other

British Columbia, Canada

Akita City, Akita, etc.

Republic of Indonesia

Impairment loss
(Millions of yen)
225
1,689

Machinery, equipment and vehicles

421

Mining rights

268

Other

27

Subtotal

2,630

Buildings and structures

650

Wells

11

Machinery, equipment and vehicles

906

Land

442

Other

17

Subtotal

2,027

Exploration and development rights

1,702
6
6,366

Total

The recoverable amount of the assets related to the shale gas project in the Horn River area is reasonably estimated bydiscounting the future cash flows at a rate of 8.3%. The recoverable amount of the assets related to South Natuna Sea Block B isestimated at zero. The recoverable assets of the land related to Yabase Oil Field is estimated by the net realized value of theassets (of which based on reasonably adjusted the valuation amount for real estate tax purposes), and the others are estimated at
zero.

27

(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, 2016
March 31, 2017
Millions of yen

Millions of yen

Amount recognized during the period(15,819)

8,327

Amount of reclassification adjustment(27,567)(5,029)(43,387)

3,297

2,293

(1,775)(41,094)

1,522

Amount recognized during the period(128,941)(19,877)

Amount of reclassification adjustment

(137)

9

(129,078)(19,867)

8,667(2,837)

Amount of reclassification adjustment

(153)

(553)

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

20,796

9,510

29,3106,119(140,862)(12,225)

Unrealized holding gain (loss) on securities

Before income tax effectAmount of income tax effectUnrealized holding gain (loss) on securities
Translation adjustments

Translation adjustments
Share of other comprehensive income of affiliates accounted for by theequity method
Amount recognized during the period28

(Consolidated Statement of Changes in Net Assets)
For the year ended March 31, 2016
1. Type and number of shares issued and treasury stock(Shares)

Balance as ofApril 1, 2015

Increase

Decrease

Balance as ofMarch 31, 2016

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

1,966,400

1,966,400

Total

1,966,400

1,966,400

Total
Treasury stock

2. Share subscription rights
None
3. Dividends(1) Cash dividends paid
Resolution
Ordinary general
meeting of shareholders
June 24, 2015
Board of directors'
meetingNovember 10, 2015

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, 2015

June 25, 2015

0

3,600

March 31, 2015

June 25, 2015

13,143

9 September 30, 2015

December 1, 2015

03,600 September 30, 2015

December 1, 2015

(2) Dividends, whose record date was in the year ended March 31, 2016, and whose effective date will be in the next fiscal year
Resolution

Type ofshare

Source ofdividends

Ordinary general
meeting of shareholders
June 28, 2016

Commonstock
Class Astock

Retainedearnings
Retainedearnings

Cash dividends
paid(Millions of yen)

29

Dividends
per share(Yen)

Record date

Effective date

13,143

9March 31, 2016

June 29, 2016

0

3,600

March 31, 2016

June 29, 2016

For the year ended March 31, 2017
(Shares)

1. Type and number of shares issued and treasury stock
Balance as ofApril 1, 2016

Decrease

Increase

Balance as ofMarch 31, 2017

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

1,966,400

100

1,966,500

Total

1,966,400

100

1,966,500(Note):The increase of 100 shares in treasury stock of common stock was due to purchase of less-than-one -voting-unit shares.
2. Share subscription rights
None
3. Dividends(1) Cash dividends paid
Resolution
Ordinary general
meeting of shareholders
June 28, 2016
Board of directors'
meetingNovember 11, 2016

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, 2016

June 29, 2016

0

3,600

March 31, 2016

June 29, 2016

13,143

9 September 30, 2016

December 1, 2016

03,600 September 30, 2016

December 1, 2016

(2) Dividends, whose record date was in the year ended March 31, 2017, and whose effective date will be in the next fiscal year
Resolution

Type ofshare

Source ofdividends

Ordinary general
meeting of shareholders
June 27, 2017

Commonstock
Class Astock

Retainedearnings
Retainedearnings

Cash dividends
paid(Millions of yen)

30

Dividends
per share(Yen)

Record date

Effective date

13,143

9March 31, 2017

June 28, 2017

0

3,600

March 31, 2017

June 28, 2017

(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, 2016

For the year ended
March 31, 2017

Millions of yen

Millions of yen

Cash and deposits

772,528

652,614

Time deposits for more than three months and others(718,715)(335,823)

53,813

316,790

Cash and cash equivalents

31

(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), "Middle East & Africa" (mainly UAE) and "Americas."
The Company produces oil and natural gas in each segment. In addition, the Company conducts marketing activities for
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."
As described in "Changes in accounting policies", The Company reviewed the period of economic estimated use of structures(pipelines) considering the progress of initiatives on strengthening our gas supply chain defined in the "Medium- to Long-Term
Vision", actual use records and others since the Toyama Line commences operation this fiscal year. It was confirmed that they
could be used longer than their conventional useful lives, which had been based on the method prescribed in the Corporation Tax
Act, and the Company has changed their useful lives from the year ended March 31, 2017.
As a result, compared with the conventional method, "Japan" segment income for the year ended march 31, 2017 increased by¥7,171 million.
3. Information on sales and income (loss), assets, and other items by reportable segment
For the year ended March 31, 2016 (April 1, 2015 through March 31, 2016)(Millions of yen)
Reportable segments
Eurasia
Middle East
(Europe
Americas& Africa& NIS)

Adjustments Consolidated
*1
*2

Japan

Asia &
Oceania

109,601

302,871

66,851

516,513

13,726

1,009,564

1,009,564

Total

109,601

302,871

66,851

516,513

13,726

1,009,564

1,009,564

Segment income (loss)

12,096

97,204

13,831

290,865(14,001)

399,996(9,856)

390,139

Segment assets

338,026

1,729,119

576,842

412,576

165,633

3,222,199

1,147,642

4,369,841

Total

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

Other items
Depreciation and23,17010,142
14,755
16,43985,151
1,639
86,791
20,642amortization
(192)
(192)
6,952
6,760
Amortization of goodwill
Investment to affiliates
accounted for by the
1,683
73,32735,535110,546
110,546
equity method
Increase of tangible fixed
assets and intangible
59,368308,433
24,156
210,659
4,798
607,415
1,651
609,067
assetsNote: 1. (1) Adjustments of segment income of ¥(9,856) million include elimination of inter-segment transactions of ¥202 million
and corporate expenses of ¥(10,059) 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 ¥1,147,642 million include elimination of inter-segment transactions of ¥(1,971)
million and corporate assets of ¥1,149,614 million. Corporate assets are mainly goodwill, cash and deposits, investment
securities and assets concerned with the administrative divisions that are not allocated to a reportable segment.
(3) Adjustments of depreciation and amortization of ¥1,639 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 increase of tangible fixed assets and intangible assets of ¥1,651 million consist mainly of capital
expenditure to corporate assets.
2. Segment income is reconciled with operating income on the consolidated statement of income.

32

For the year ended March 31, 2017 (April 1, 2016 through March 31, 2017)(Millions of yen)
Reportable segments
Eurasia
Middle East
(Europe
Americas& Africa& NIS)

Adjustments Consolidated
*1
*2

Japan

Asia &
Oceania

102,659

218,099

60,191

482,182

11,290874,423

874,423

Total

102,659

218,099

60,191

482,182

11,290874,423

874,423

Segment income (loss)

18,03351,565

12,112276,870(9,360)349,221(12,769)

336,452

Segment assets

320,852

1,997,494

600,854446,791

137,119

3,503,111

809,062

4,312,174

Total

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

Other items
Depreciation and
16,991
21,622
10,32729,297
11,40589,645
1,513
91,159amortization
(192)
(192)
6,952
6,760
Amortization of goodwill
Investment to affiliates
accounted for by the
1,965
116,619
252
34,772
153,611280
153,892
equity method
Increase of tangible fixed
assets and intangible
15,082
197,957
19,87042,9673,329
279,207573
279,780
assetsNote: 1. (1) Adjustments of segment income of ¥(12,769) million include elimination of inter-segment transactions of ¥13 million
and corporate expenses of ¥(12,782) 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 ¥809,062 million include elimination of inter-segment transactions of ¥(2) million andcorporate assets of ¥809,064 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 ¥1,513 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 ¥280 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 ¥573 million consist mainly of capital
expenditure to corporate assets.
2. Segment income is reconciled with operating income on the consolidated statement of income.

33

(Relative information)
For the year ended March 31, 2016 (April 1, 2015 through March 31, 2016)
1. Products and service information(Millions of yen)
Natural gas(excluding LPG)

Crude oil
Sales to third parties

679,241

LPG

306,205

Total

Other

10,555

13,561

1,009,564

2. Geographical information(1) Sales(Millions of yen)
Asia & Oceania(excluding Singapore)Japan
491,204

Other

Singapore

279,531

98,862

Total
139,965

1,009,564

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

Australia
291,248

Total

Other
1,209,074

252,291

1,752,614

3. Information by major customer
None
For the year ended March 31, 2017 (April 1, 2016 through March 31, 2017)
1. Products and service information(Millions of yen)
Natural gas(excluding LPG)

Crude oil
Sales to third parties

617,194

LPG

235,793

Other
6,781

Total

14,653

874,423

2. Geographical information(1) Sales(Millions of yen)
Asia & Oceania(excluding Singapore)Japan409,945

Other

Singapore

296,733

91,226

Total
76,518874,423

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

Australia
282,442

Other
1,390,187

Total
255,96834

1,928,597

3. Information by major customer
None(Information on impairment loss from fixed assets by reportable segment)
For the year ended March 31, 2016 (April 1, 2015 through March 31, 2016)(Millions of yen)
Reportable segments
Japan
Impairment loss

Asia &
Oceania

Eurasia(Europe& NIS)

Middle East
Americas& Africa

7,403

3,191

35,289Total

Eliminations
and other

45,884

Total

45,884

For the year ended March 31, 2017 (April 1, 2016 through March 31, 2017)(Millions of yen)
Reportable segments

Impairment lossJapan

Asia &
Oceania

2,033

1,702

Eurasia(Europe& NIS)

Middle East
Americas& Africa

Total

2,630

6,366

Eliminations
and other

Total

6,366

(Information on amortization of goodwill and unamortized balance by reportable segment)
For the year ended March 31, 2016 (April 1, 2015 through March 31, 2016)(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(1,970)(1,970)69,52967,558March 31, 2016
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, 2017 (April 1, 2016 through March 31, 2017)(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(1,778)(1,778)62,576
60,798March 31, 2017
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

35

(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 of 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 have been
providing long-term loans for the construction or expansion of domestic gas infrastructure. The Company generally borrows
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 are considered to be of
low-risk and high-liquidity. The Company limits the use of derivative transactions for managing risks of forecasted
transactions and portfolio assets, and does not engage in speculative derivative transactions.
(2) Details of financial instruments, associated risk and risk management(Credit risks 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. As for bonds, the Company mainly holds bonds with short-term
maturities by considering medium- to long-term cash outflow forecast and market price fluctuation risk.
(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. As a result of fiscal year-end conversion, yen appreciation causes a foreign exchange loss
on assets and foreign exchange gain on liabilities while yen depreciation causes foreign exchange loss on assets and foreignexchange gain on liabilities. 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 for
the Ichthys Project and others, 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. For derivative transactions exposed to market
price fluctuation, market values of these derivatives are regularly reported to the Executive Committee, and the Company onlytransacts 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 be prepared 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.

36

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, 2016

(Millions of yen)
Carrying value

Fair value

Difference(1) Cash and deposits

772,528

777,134(2) Accounts receivable-trade56,462

56,462(3) Investment securities

61,423

61,423

890,413895,020

4,606(1) Short-term loans

68,46868,361(107)(2) Long-term debt

673,098

663,984(9,113)

741,567

732,346(9,221)

(270)

(270)

Total assets

Total liabilities
Derivatives (*)4,606(*) 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, 2017

(Millions of yen)
Carrying value

Fair value

Difference(1) Cash and deposits

652,614652,696(2) Accounts receivable-trade72,36472,364(3) Marketable securities and Investment securities

58,80158,801

Total assets

783,780

783,861

81(1) Short-term loans

44,252

43,967(285)(2) Long-term debt

643,432

635,082(8,349)687,684

679,049(8,635)43

43

Total liabilities
Derivatives (*)81(*) 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.
Note 1: Methods of calculating the fair value of financial instruments
Assets(1) Cash and deposits
The fair value of current portion of long-term time deposits included in cash and deposits, 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
deposit is entered into. For the other cash and deposits, 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) 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.

37

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, 2017

As of March 31, 2016
Unlisted securities
Stocks of subsidiaries and affiliates

32,239120,068

29,260163,526

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.
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, 2016
(Millions of yen)More than 1 year
More than 5More than 10
1 year or lessbut less than 5
years but less
years
years
than 10 years
772,528
Cash and deposits
Accounts receivable-trade56,462
Investment securities
Other securities:
Public bonds
Corporate bonds
5,500
Other bonds
Other
Long-term time deposits
202,842
Total
828,990
208,342
As of March 31, 2017

(Millions of yen)
1 year or less

Cash and deposits
Accounts receivable-tradeMarketable securities
Other securities:
Public bonds

652,61472,364

Corporate bonds
Other bonds
Other
Total

5,500

730,47938

More than 1 year
but less than 5
years

More than 5
years but lessthan 10 years

More than 10years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, 2016

(Millions of yen)
1 year or less

Short-term loans
Long-term debt
Lease obligations
Total

5,181
63,28755
68,524More than 1 year
but less than 5
years
329,726105
329,831More than 5
years but lessthan 10 years
252,2621
252,263

As of March 31, 2017

More than 10
years
91,10991,109(Millions of yen)

1 year or less
Short-term loans
Long-term debt
Lease obligations
Total

4,947
39,30464
44,31739

More than 1 year
but less than 5
years
353,524
112
353,636More than 5
years but lessthan 10 years
199,1940
199,194

More than 10
years
90,71390,713

(Securities)
1. Other securities
As of March 31, 2016

(Millions of yen)Type of securities

Acquisition cost

Securities with carrying values exceeding theiracquisition costs(1) Stock(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Subtotal
Securities with acquisition costs exceeding theircarrying values(1) Stock

Carrying value

Unrealized gain
(loss)

14,582

22,888

8,306

5,500

5,508

8

2,461

4,970

2,509

22,54333,368

10,82433,67628,054(5,621)

33,67656,22028,054
61,423(5,621)5,202(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Subtotal
Total
As of March 31, 2017

(Millions of yen)Type of securities

Acquisition cost

Securities with carrying values exceeding theiracquisition costs(1) Stock(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Subtotal
Securities with acquisition costs exceeding theircarrying values(1) Stock

Carrying value

Unrealized gain
(loss)

33,90440,368

6,464

5,500

5,503

3

2,178

4,963

2,784

41,58350,835

9,252

8,717

7,965

(751)

8,717
50,3007,965
58,801

(751)
8,500

(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Subtotal
Total

40

2. Other securities sold for the fiscal years
For the year ended March 31, 2016
Type of securities(Millions of yen)
Proceeds from sales(1) Stock(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Total

Gain on sales

Loss on sales

31,20530,90659
8

2102,666
164,777

31,632
31,7002

For the year ended March 31, 2017
Type of securities(Millions of yen)
Proceeds from sales(1) Stock(2) Bonds
Public bonds
Corporate bonds
Other(3) Other
Total

41

Gain on sales

10,6004,999

10,6004,999

Loss on sales

(Derivative Transactions)
1. Derivatives not subject to hedge accounting(1) Derivatives related to foreign currency
As of March 31, 2016

(Millions of yen)Type of derivatives

Contract
amounts

Due after one
year

Foreign exchange
forwards
37,451
Sell CAD
Buy USD(*) Fair value is the price obtained from the counterparty financial institutions.
Over-the-countertransactions

Valuation gain
(loss)

Fair value(270)

As of March 31, 2017

(270)

(Millions of yen)Type of derivatives

Contract
amounts

Due after one
year

Foreign exchange
forwards
39,981
Sell CAD
Buy USD(*) Fair value is the price obtained from the counterparty financial institutions.
Over-the-countertransactions

Valuation gain
(loss)

Fair value
4343

2. Derivatives subject to hedge accounting(1) Derivatives related to interest rate
As of March 31, 2016
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, 2017
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

42

(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, 2016
March 31, 2017
(1) Net assets excluding non-controlling interests per share¥ 2,008.34
For the year ended
March 31, 2016

(2) Net income per share¥ 2,015.38
For the year ended
March 31, 2017

¥ 11.49¥ 31.61

16,777

46,168

0

0

(0)

(0)

16,777

46,1681,460,357,200

1,460,357,146(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): Diluted net income per share is not presented because there are no dilutive potential of shares of common stock.

(Significant Subsequent Events)
None(Omissions of Disclosure)With respect to information for 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.

43

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

As of March 31, 2016

As of March 31, 2017

(Assets)
Current assets
Cash and deposits

753,729

617,554

Accounts receivable-trade16,962

22,403Marketable securities

5,503

Finished goods

2,588

2,233

377

58

Raw materials and supplies

12,833

9,701

Advance payments-trade

108

72

2,796

401

195,708

420,507

295

5,758

Work in process and partly-finished construction

Prepaid expenses
Short-term loans receivable from subsidiaries andaffiliates
Deferred tax assets
Recoverable accounts under production sharing

47,263

Other

46,41537,249Allowance for doubtful accounts(10,191)(23,547)

Allowance for investments in exploration
Allowance for recoverable accounts under
production sharing
Total current assets(14,961)(11,158)(3,701)

1,006,661

1,130,302

Buildings, net

15,564

17,119Structures, net

100,628

176,747

581

1,218

60,51165,71131

16

Tools, furniture and fixtures, net

3,029

2,263

Land

17,467

16,984111

120

Construction in progress

94,887

3,047

Total tangible fixed assets

292,813283,229

69,52962,5762

2

Software

2,428

2,080

Other

4,270

3,982

Total intangible assets

76,23068,642

Fixed assets
Tangible fixed assets

Wells, net
Machinery and equipment, net
Vehicles, net

Leased assets, net

Intangible assets
Goodwill
Mining right44

(Millions of yen)Accounts

As of March 31, 2016

As of March 31, 2017

Investments and other assets
Investment securities
Investments in stock of subsidiaries and affiliates

78,11868,964

1,493,189

1,491,638

Long-term loans receivable from employees
Long-term loans receivable from subsidiaries
and affiliates
Long-term prepaid expenses

21

10

222,426

210,091

131

50

Long-term time deposits

202,842

Recoverable accounts under production sharing

95,827

Other

8,187

7,386

(11,298)(17,490)

Allowance for doubtful accounts
Allowance for recoverable accounts under
production sharing
Allowance for investments in exploration(131,204)(105,122)

Total investments and other assets

1,953,214

1,655,530

2,322,258

2,007,401

3,328,919

3,137,704

Accounts payable-trade

2,543

2,956

Current portion of long-term debt

9,096

10,17644

53

Accounts payable-other

11,457

13,867

Accrued expenses

3,398

2,781

Income taxes payable

8,529

9,902

Advances received

2,396

44

Deposits payable

308

270

593,474

337,33955

62(5,027)

Total fixed assets
Total assets(Liabilities)
Current liabilities

Lease obligations

Deposits received from subsidiaries and affiliates
Accrued bonuses to officers
Provision for loss on business

2,920

Asset retirement obligations

158

163

Other

406

129

631,868

380,666

Total current liabilities

45

(Millions of yen)Accounts

As of March 31, 2016

As of March 31, 2017

Long-term liabilities
Long-term debt

332,921333,708

76

86

Deferred tax liabilities

2,877

2,919

Accrued retirement benefits to employees

7,043

5,506

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

4,737

Lease obligations

6,196

7,568

2,950

2,985

327

187

357,130

352,961

988,999733,627

290,809290,809

Legal capital surplus

1,023,802

1,023,802

Total capital surplus

1,023,802

1,023,802

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

225

2,108

7,480

4,536

Reserve for overseas investment loss

35,226

Mine prospecting reserve

20,44810,035Retained earnings brought forward

962,221

1,071,554

1,025,601

1,088,235(5,248)(5,248)2,334,965

2,397,599

Unrealized holding gain on securities

4,954

6,476

Total valuation, translation adjustments and others

4,954

6,476

2,339,920

2,404,076

3,328,919

3,137,704

Total retained earnings
Treasury stock
Total shareholders' equity
Valuation, translation adjustments and others

Total net assets
Total liabilities and net assets

46

(2) Non-Consolidated Statement of Income(Millions of yen)
For the year ended
March 31, 2016

Accounts

For the year ended
March 31, 2017

Net sales

324,969

258,160

Cost of sales

190,103

148,521

Gross profit

134,866

109,639

Exploration expenses

3,059

3,879

Selling, general and administrative expenses

46,41240,967

Operating income

85,39464,792

Interest Income

16,331

20,472

Dividend income

23,69087,273Gain on sales of marketable securities

25,986

Guarantee commission received

13,106

17,574

Other

8,774

12,715

Total other income

87,889138,036

Loss on valuation of shares of subsidiaries and affiliates

44,04642,246

Provision of allowance for doubtful accounts

16,944

14,546

Other income

Other expenses

Provision for allowance for recoverable accounts under
production sharing
Provision of allowance for investment loss
in exploration
Provision for loss on business of subsidiaries andaffiliates

13,345

4,479

2,939

2,423

Foreign exchange loss

28,300

7,137

Other

10,659

9,677

Total other expenses

117,182

80,511

56,102

122,317945

Ordinary income
Extraordinary loss
Impairment loss

2,033

Total extraordinary loss

2,033

Income before income taxes

56,102120,283

Income taxes-current

49,57438,559

Income taxes-deferred(1,945)(7,196)

Total income taxes

47,62931,362

Net income

8,473

88,92047

(3) Non-Consolidated Statement of Changes in Net Assets
For the year ended March 31, 2016
(Millions of yen)
Shareholders' equity
Capital Surplus

Retained earnings

Other retained earnings
CommonReserve forReserve
Legal capital Total capital advanced Reserve for
stock
for
Mine
surplussurplusdepreciation
specialoverseas prospectingof nondepreciation investment reserve
current assets
loss
Balance at the beginningof the period

290,809

1,023,802

1,023,802

70

10,942

34,834

14,952

Changes during the period
Provision of reserve foradvanced depreciationof non-current assets
Reversal of reserve foradvanced depreciationof non-current assets
Provision of reserve for
special depreciation
Reversal of reserve for
special depreciation
Provision of reserve foroverseas investment loss
Reversal of reserve foroverseas investment loss
Provision of mineprospecting reserve
Reversal of mineprospecting reserve

155

122
(3,584)392

7,826(2,331)

Cash dividends paid
Net income
Purchase of treasury
stock
Other changes in items
other than those inshareholders' equity(net)Total changes during theperiodBalance at the end of theperiod290,809

1,023,802

1,023,802

48

155(3,462)

392

5,495

225

7,480

35,226

20,448

Valuation, translation
adjustments and others

Shareholders' equity

Retained earnings
Other
Total
retained
Unrealized valuation,
Total
Treasury
earnings
Total
Shareholders' holding gain translation
stock
retained
Retainedon securities adjustments
equityearnings
earnings
and othersbrought
forwardBalance at the beginningof the period

982,614 1,043,414(5,248)2,352,778

45,88545,885

Total net
assets2,398,664

Changes during the period
Provision of reserve foradvanced depreciationof non-current assets
Reversal of reserve foradvanced depreciationof non-current assets
Provision of reserve for
special depreciation
Reversal of reserve for
special depreciation
Provision of reserve foroverseas investment loss
Reversal of reserve foroverseas investment loss
Provision of mineprospecting reserve
Reversal of mineprospecting reserve
Cash dividends paid
Net income
Purchase of treasury
stock
Other changes in items
other than those inshareholders' equity(net)Total changes during theperiodBalance at the end of theperiod

(155)

(122)
3,584
(392)

(7,826)2,331(26,286)(26,286)(26,286)(26,286)

8,473

8,473

8,473

8,473

(20,393)(17,813)962,221 1,025,601(5,248)49(40,931)(40,931)(40,931)(17,813)(40,931)(40,931)(58,744)2,334,965

4,954

4,954

2,339,920

For the year ended March 31, 2017
(Millions of yen)
Shareholders' equity
Capital Surplus

Retained earnings

Other retained earnings
CommonReserve forReserve
Legal capital Total capital advanced Reserve for
stock
for
Mine
surplussurplusdepreciation
specialoverseas prospectingof nondepreciation investment reserve
loss
current assets
Balance at the beginningof the period

290,809

1,023,802

1,023,802

225

7,480

35,226

20,448Changes during the period
Provision of reserve foradvanced depreciationof non-current assets
Reversal of reserve foradvanced depreciationof non-current assets
Provision of reserve for
special depreciation
Reversal of reserve for
special depreciation
Provision of reserve foroverseas investment loss
Reversal of reserve foroverseas investment loss
Provision of mineprospecting reserve
Reversal of mineprospecting reserve

1,937
(54)

(2,943)(35,226)
5,322(15,734)

Cash dividends paid
Net income
Purchase of treasury
stock
Other changes in items
other than those inshareholders' equity(net)Total changes during theperiodBalance at the end of theperiod290,809

1,023,802

1,023,802

50

1,883

(2,943)

2,108

4,536

(35,226)(10,412)
10,035

Valuation, translation
adjustments and others

Shareholders' equity

Retained earnings
Other
Total
retained
Unrealized valuation,
Total
Treasury
earnings
Total
Shareholders' holding gain translation
stock
retained
Retainedon securities adjustments
equityearnings
earnings
and othersbrought
forwardBalance at the beginningof the period

962,221 1,025,601(5,248)2,334,965

4,954

4,954

Total net
assets2,339,920

Changes during the period
Provision of reserve foradvanced depreciationof non-current assets
Reversal of reserve foradvanced depreciationof non-current assets
Provision of reserve for
special depreciation
Reversal of reserve for
special depreciation
Provision of reserve foroverseas investment loss
Reversal of reserve foroverseas investment loss
Provision of mineprospecting reserve
Reversal of mineprospecting reserve(1,937)54

2,943

35,226(5,322)
15,734

Cash dividends paid

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

Net income

88,92088,92088,92088,920(0)(0)

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

(0)

1,522

1,522

1,522

62,634(0)62,634

1,522

1,522

64,156

1,071,554 1,088,235(5,248)2,397,599

6,476

6,476

2,404,076

109,33351

(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

52

7. 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, 2016

For the year ended March 31, 2017

1.2 MMbbls(3.2 Mbbls per day)
43.8 Bcf(119.7 MMcf per day)
9.4 MMboe(25.7 Mboe per day)

1.3 MMbbls(3.5 Mbbls per day)48.2 Bcf(132.0 MMcf per day)10.3 MMboe(28.3 Mboe per day)

514.0 tons

565.2 tons

203.6 million kWh203.2 million kWh17.6 MMbbls(48.0 Mbbls per day)
265.6 Bcf
(725.7 MMcf per day)
67.6 MMboe(184.6 Mboe per day)13.1 MMbbls(36.0 Mbbls per day)244.1 Bcf
(668.7 MMcf per day)59.2 MMboe(162.3 Mboe per day)

Crude oil
Natural gas
Japan

Subtotal
IodineElectric power generation
Crude oil
Natural gas

Asia & Oceania
Subtotal

6.3 million kWh

Electric power generation
11.8 MMbbls(32.3 Mbbls per day)

Crude oil
Eurasia(Europe & NIS)

Crude oil
Crude oil

AmericasNatural gas
Subtotal
Crude oil
Natural gas

Total

514.0 tons

565.2 tons

203.6 million kWh

209.5 million kWhNatural gas
Subtotal

Middle East & Africa

11.8 MMboe(32.3 Mboe per day)
90.9 MMbbls(248.4 Mbbls per day)
2.7 MMbbls(7.3 Mbbls per day)
32.0 Bcf(87.5 MMcf per day)
8.4 MMboe(22.9 Mboe per day)
124.2 MMbbls(339.2 Mbbls per day)
341.4 Bcf
(932.9 MMcf per day)
188.1 MMboe(513.8 Mboe per day)11.6 MMbbls(31.8 Mbbls per day)
1.9 Bcf( 5.3 MMcf per day)11.9 MMboe(32.7Mboe per day)
98.5 MMbbls(269.8 Mbbls per day)
2.7 MMbbls(7.3 Mbbls per day)
42.6 Bcf(116.7 MMcf per day)10.3 MMboe(28.3 Mboe per day)
127.1 MMbbls(348.3 Mbbls per day)
336.8 Bcf
(922.7 MMcf per day)
190.3 MMboe(521.3 Mboe per day)Subtotal
IodineElectric power generation

Note: 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 146.1 MMbbls (399.2 Mbbls per day) of crude oil,
432.0 Bcf (1,180.4 MMcf per day) of natural gas, and in total 227.1 MMboe (620.5 Mboe per day) for the year ended March 31, 2016, and 150.5
MMbbls (412.2 Mbbls per day) of crude oil, 422.9 Bcf (1,158.6 MMcf per day) of natural gas, and in total 229.9 MMboe (629.8 Mboe per day) for theyear ended March 31, 2017.
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.

53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, 2016 For the year ended March 31, 2017
Sales volume

Japan

Asia & Oceania

4,505

900 Mbbls

5,148

Natural gas(excluding LPG)

65,304 MMcf

91,492

71,295 MMcf

82,8297 Mbbls

41

5 Mbbls

27

LPG
Other

13,561

14,653

Subtotal

109,601

102,659

Crude oil

13,505 Mbbls

82,06912,246 Mbbls

61,260Natural gas(excluding LPG)

238,759 MMcf

210,288

230,183 MMcf

150,084

LPG

2,354 Mbbls

10,514

1,855 Mbbls

6,753

302,871
11,666 Mbbls

218,099
11,336 Mbbls

59,915

1,947 MMcf

275

66,85160,191

Crude oil

89,486 Mbbls

516,51395,495 Mbbls

482,182

Crude oil

1,829 Mbbls

9,301

2,230 Mbbls

8,686

Natural gas(excluding LPG)

33,153 MMcf

4,425

39,569 MMcf

2,603

Subtotal

Total

66,851Natural gas(excluding LPG)
Subtotal

Americas

Net sales

741 Mbbls

Crude oil

Middle East & Africa

Sales volume

Crude oil

Subtotal

Eurasia(Europe & NIS)

Net sales

13,726

11,290

Crude oil

117,227 Mbbls

679,241

122,207 Mbbls

617,194Natural gas(excluding LPG)

337,216 MMcf

306,205

342,994 MMcf

235,793

LPG

2,361 Mbbls

10,555

1,860 Mbbls

6,781

Other

13,561

14,653

Total

1,009,564

874,423

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.

54