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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.

October 31, 2017
Consolidated Financial Report for theSecond Quarter of the Year Ending March 31, 2018
Name of Listed Company ZEON CORPORATION
Ticker Code 4205
(URL http://www.zeon.co.jp)
Listed Stock Exchanges Tokyo Stock Exchange
Representative
President
Name
Kimiaki Tanaka
Contact
Director and Corporate Officer
Name
Takeo Furuya
TEL: +81-3-3216-2747
Scheduled Date of the Submission November 13, 2017
Scheduled Date of Dividend Payments December 6, 2017of the Quarterly Report
Note: All amounts less than one million yen in the tables are rounded off.

1. Consolidated Performance for 2nd quarter of the year ending March 31, 2018
(April 1, 2017 to September 30, 2017)(1) Consolidated operating results (Cumulative)(Percentage figures respectively indicate year-over-year changes from the same period of the previous fiscal year.)Net sales

2Q period ended
September 30, 2017
2Q period ended
September 30, 2016

Operating income

Ordinary income

Net income
attributable toowners of parent

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

166,672

18.9

19,90750.6

21,65979.0

14,341

77.7

140,201(8.0)

13,217 (20.0)

12,101 (29.5)

8,071 (26.3)

Note: Comprehensive income (loss):2Q of the year ending March 31, 2018: 19,180 million yen (—%);
2Q of the year ended March 31, 2017: (1,086 million yen) (—%)

Net income per share

Fully diluted net income
per share

YenYen2Q period ended
September 30, 2017
2Q period ended
September 30, 2016

64.60

64.52

36.37

36.32

(2) Consolidated financial position

2Q period ended
September 30, 2017
Year ended March31, 2017

Total assets

Net assets

Millions of yen

Millions of yen

434,861

263,61959.5

411,415

244,634

58.4

Reference: Equity:
As of September 30, 2017: 258,804 million yen

Equity ratio%

As of March 31, 2017: 240,189 million yen-1-

[Translation for reference only]
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.

2. Cash Dividends
Record dateYear ended March 31, 2016
Year ending March 31, 2017
Year ending March 31, 2017 (Forecast)

Cash dividend per share
3Q endYear-end

1Q end2Q end

Yen

Yen

Yen

Yen

Full year
Yen

—
—

8.00
8.00

—

8.00

16.00

—

9.00

17.00

Note: Revisions to the most recently disclosed dividend forecasts: No

3. Projected Consolidated Performance for the Year Ending March 31, 2018
(From April 1, 2017 to March 31, 2018)(Percentage figures respectively indicate changes from the previous year.)

Operatingincome

Net sales

Ordinary income

Net income
attributable toowners of parent

Net income
per share

Millionsof yen%Millionsof yen%

Millionsof yen%

Millionsof yen%

Yen

Year ending March 31,325,000
2017 (Full year)(13.0)

35,000(13.8)

38,000(19.5)

25,0008.0

112.62

Note: Revisions to the most recently disclosed dividend forecasts: No

4. Other Matters(1) Significant changes of specified subsidiaries during the three-month period under review (Changes ofSpecified Subsidiaries Accompanied by Change in Scope of Consolidation): No(2) Application of special accounting methods for the preparation of quarterly consolidated financial statements:
Yes(3) Changes in accounting principle, procedures and presentation on preparation of consolidated financialstatements(i) Changes due to amendment in accounting standards: No(ii) Changes except above (i): No(iii) Changes in accounting estimates: No(iv) Restatement of revisions: No(4) Number of shares outstanding (Common stock)(i) Number of shares outstanding at the end of the period (Including treasury stock)
As of September 30, 2017: 237,075,556 shares
As of March 31, 2017: 237,075,556 shares(ii) Number of treasury stock outstanding
As of September 30, 2017: 15,054,236 shares
As of March 31, 2017: 15,093,031 shares(iii) Average number of shares during the period
2Q ended September 30, 2017: 221,999,195 shares 2Q ended September 30, 2016: 221,934,333 sharesThis quarterly financial report is not subject to the quarterly review required under the Financial
Instruments and Exchange Act.
Note concerning appropriate use of performance forecasts, etc.
The projected performance figures in this report are based on information available to Zeon’s management at
the time this report was prepared and are not intended to be interpreted as goals the company will achieve.
Accordingly, users should be aware that actual results may differ materially from any expressed future
performance herein due to various factors.

-2-

[Translation for reference only]
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.

5. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)Previous fiscal year
(As of March 31, 2017)(Assets)
Current assets
Cash and bank deposits
Notes and accounts receivable—trade
Electronically recorded monetary claims
Merchandise and products
Work in process
Raw materials and supplies
Accounts receivable—other
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, netLand
Construction in progress
Other property, plant and equipment, net
Total property, plant and equipment
Intangible assets
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other investments and assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-3-

As of September 30,
2017

11,67770,222
2,782
43,734
5,145
12,97829,328
3,799
2,959
(91)
182,533

27,88077,0983,493
40,4503,316
13,28526,364
3,767
5,144
(87)
200,710

44,66760,351
18,6988,046
6,297
138,058

44,18555,27918,323
10,054
6,204
134,045

3,857
3,857

3,510
3,510

76,828273
10,099(233)
86,967
228,883
411,415

86,745
258
9,827
(234)
96,596234,150434,861[Translation for reference only]
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.
(Millions of yen)Previous fiscal year
(As of March 31, 2017)(Liabilities)
Current liabilities
Notes and accounts payable—trade
Electronically recorded monetary claims
Short-term loans payable
Current portion of bonds payable
Income taxes payable
Reserve for bonuses
Other reserves
Other current liabilities
Total current liabilities
Long-term liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Net defined benefit liability
Other reserves
Other long-term liabilities
Total long-term liabilities
Total liabilities(Net Assets)
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-4-

As of September 30,
2017

63,851
2,834
18,037
—
5,018
1,556
2,238
20,719114,253

67,1103,310
17,853
10,000
5,797
1,516
1,252
20,724
127,561

20,0005,140
8,776
12,760626
5,225
52,528
166,781

10,0003,409
11,804
11,843
1,503
5,120
43,680171,242

24,21119,128
179,390(12,275)
210,454

24,211
19,131
193,335(12,244)
224,433

27,767(1)
4,474(2,505)29,736
222
4,224
244,634
411,415

33,4660
2,985(2,080)34,371
212
4,603
263,619434,861[Translation for reference only]
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.

(2) Consolidated Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gain
Share of profit of investments accounted for using the equity
methodMiscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange loss
Depreciation of inactive non-current assets
Miscellaneous loss
Total non-operating expenses
Ordinary income
Extraordinary gains
Compensation income
Gain on sales of investment securities
Gain on extinguishment of tie-in shares
Other
Total extraordinary gains
Extraordinary losses
Loss on disposal of fixed assets
Loss on liquidation of subsidiaries and affiliates
Loss on abolishment of retirement benefit plan
Other
Total extraordinary losses
Income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent-5-

For the six months
ended September 30,
2016
140,201
99,13441,067
27,85013,217For the six months
ended September 30,
2017
166,672
117,145
49,52829,621
19,907

56
868
——

53
1,219
606
133

301
1,225

302
2,312

269
1,860
111
99
2,340
12,101

172
—
263
126
56021,659

486
9—
94
589

—
30
67
0
97

274
1,371
—
55
1,699
10,991
2,622
8,369

268
—
501
25
794
20,961
6,446
14,515

298

174

8,071

14,341

[Translation for reference only]
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.

(3) Statement of Comprehensive Income(Millions of yen)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of profit of investments accounted for using the equity
methodTotal other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests-6-

For the six months
ended September 30,
2016
8,369

For the six months
ended September 30,
2017
14,515(1,499)3(8,307)349

5,727
1(1,511)425—

25(9,455)(1,086)

4,666
19,180(1,097)
11

18,954226

[Translation for reference only]ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.

(4) Cash Flow Statement

Net cash provided by operating activities
Income before income taxes
Depreciation and amortization
Gain on goodwill
Increase (decrease) in provision for loss on liquidation ofsubsidiaries and associates
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expense
Decrease (increase) in notes and accounts
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Other, net
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments of loans receivableCollection of loans receivable
Net decrease (increase) in time deposits
Purchase of long-term prepaid expenses
Other, net
Net cash provided by (used in) investing activities
Net cash used in financing activities
Net increase (decrease) in short-term loans payable
Increase (decrease) in commercial papers
Proceeds from long-term loans payable
Repayment of long-term loans payable
Cash dividends paid
Cash dividends paid to non-controlling interests
Other, net
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change of scope of consolidation
Increase in cash and cash equivalents resulting from merger
with unconsolidated subsidiaries
Cash and cash equivalents at end of period-7-

For the six months
ended September 30,2016(Millions of yen)
For the six months
ended September 30,
2017

10,991
9,362
335

20,961
9,713
335

1,204

—

(241)
(924)
269
(1,897)
5,783
1,512
(409)
25,9871,670(268)(4,847)
138
22,678(905)(1,272)
172(7,724)
4,457
3,806
855
30,3991,412(169)(5,418)164
26,388(12,497)(345)(3,035)2,923
143(8)
35(12,784)(4,657)
(624)
(595)
577
(1,118)(556)
148(6,824)

(13)
3,000
500
(10,239)(1,772)(5)(102)(8,631)
(866)
397
6,832

1,041
(1,500)—(2,713)(1,806)(67)
127(4,918)132
14,77811,368

611

0

—

284

7,840

26,430[Translation for reference only]
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT
This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, theJapanese-language original shall take precedence.

(4) Segment Information
Previous 2nd quarter cumulative period (From April 1, 2016 to September 30, 2016)

Net sales(1) Sales to third parties(2) Intersegment sales andtransfers
Total
Segment income

Elastomer

Specialty
Materials

Sub Total

80,69436,452864
81,558
8,318

Other

Total

117,146

23,055140,201—

140,201

—

864

181

1,045

(1,045)—36,452
4,697

118,01013,01423,236
1,347

141,246
14,362(1,045)(1,145)140,201
13,217

Current 2nd quarter cumulative period (From April 1, 2017 to September 30, 2017)

Net sales(1) Sales to third parties(2) Intersegment sales andtransfers
Total
Segment income(Millions of yen)

Elastomer

Specialty
Materials

Sub Total

97,55643,091894
98,44911,394

Adjustment Consolidated(Millions of yen)

Other

Total

140,647

26,025

166,672—

166,672

—

894

136

1,030

(1,030)—43,091
8,193

141,541
19,586

26,161
1,621

167,70221,207(1,030)(1,300)166,672
19,907-8-

Adjustment Consolidated