Summary of Consolidated Financial Statements for the Third Quarter Fiscal 2016 (JPGAAP)
January 31, 2017
Tokuyama Corporation
Stock exchange listings:
Tokyo(URL http://www.tokuyama.co.jp/eng/)
Local Code :4043
Representative:
Hiroshi Yokota, President and Representative Director
Contact:
Taro Kobayashi, General Manager, Corporate Communications & Investor Relations Dept.
+81-3-5207-2552
Scheduled date for the filing of the quarterly consolidated financial statements: February 9, 2017
Scheduled date of dividends payout:
Preparation of supplementary quarterly explanatory materials: Yes
Quarterly business results IR briefing to be held:
Yes (for institutional investors and analysts)

1. Consolidated results for fiscal third quarter ended Dec. 31, 2016 (Apr. 1, 2016 – Dec. 31, 2016)(1) Performance

Note: All amounts are rounded down to the nearest million yen.
Net sales
Year-on(millions ofyear change
yen)
[%]

Operating income
Year-on(millions ofyear change
yen)
[%]

Ordinary income
Year-on(millions ofyear change
yen)
[%]

Third Quarter Fiscal 2016
218,100(3.8)
29,142125.2
25,173
168.2
Third Quarter Fiscal 2015
226,658
2.1
12,940(18.4)
9,386(15.1)(Note) Comprehensive income (loss): 3rd Q FY16: 26,637 million yen [-%] 3rd Q FY15: (118,527) million yen [-%]
Profit (loss) attributable toowners of parent
Year-on-year(millions of yen)change [%]Third Quarter Fiscal 2016
Third Quarter Fiscal 2015

24,866(115,806)-

Total assets

Net assets(millions of yen)(millions of yen)

Basic earnings(losses) per share

Diluted earnings
per share

(yen)

(yen)

70.01
(332.91)

58.37-

Shareholders’Equity ratio(%)

Net assets per
share
(yen)

(2) Consolidated financial position

Dec. 31, 2016
Mar. 31, 2016

405,362
401,342
Dec. 31, 2016:(Reference) Shareholders' equity:

108,157
60,20599,476 million yen

24.5
12.8
Mar. 31, 2016:

227.01147.9851,473 million yen

2. Dividends（Period）

1st quarter(yen)

Fiscal 2015, ended
Mar. 31, 2016
Fiscal 2016, ending
Mar. 31, 2017
Fiscal 2016
（Forecast）

Annual dividends per share
2nd quarter 3rd quarter
Year-end
(yen)

(yen)

-

0.00

-

-

0.00

-

Total

(yen)

(yen)

0.00

0.00

0.00

0.00

(Note) Revision of the latest dividends forecast: No

3. Consolidated performance forecast for fiscal 2016 (Apr. 1, 2016 – Mar. 31, 2017)(% indicates the rate of change over the corresponding previous periods respectively)
attributable to Basic earnings
Net sales
Operating income Ordinary income Profit
per shareowners of parent(millions

of
yen)

[%]

(millions

of
yen)

[%]

(millions

of
yen)

[%]

Fiscal 2016
291,000 (5.2)
33,000 43.0
27,000 52.3
(Note) Revision of the latest consolidated performance forecast: No

1(millionsofyen)

21,000

[%]

－

(yen)

58.18

*Notes(1) Changes in significant subsidiaries during this period (Apr. 1, 2016 – Dec. 31, 2016): No
Addition to the scope of consolidation: Reduction from the scope of consolidation: (Note) This item means changes in significant subsidiaries with changes in the scope of consolidation
during this period (Apr. 1, 2016 – Dec. 31, 2016).
(2) Application of accounting methods specific to the preparation of the quarterly consolidated
financial statements: Yes(3) Changes of accounting policies, changes in accounting estimates, and retrospective restatements
i. Changes of accounting policies by revision of accounting standards:
Yes
ii. Changes of accounting policies other than the above:
No
iii.Changes in accounting estimates:No
No
iv. Retrospective restatements:(4) Number of shares issued (in common stock)i.

Number of shares issued at end of period(including treasury stock):ii.

Number of treasury stock at end of period:iii. Average number of shares over period:

Third Quarter

Fiscal 2016:
Third Quarter

Fiscal 2016:
Third Quarter

Fiscal 2016:

349,671,876
1,845,549
347,833,274

Fiscal 2015: 349,671,876
Fiscal 2015:
Third Quarter

Fiscal 2015:

1,832,788
347,856,264(Note) Notice on the implementation of quarterly review proceduresThis summary of quarterly consolidated financial statements is not subject to quarterly review procedures inline with the Financial Instruments and Exchange Act. At the point of disclosure of this summary of quarterly
consolidated financial statements, the quarterly consolidated financial statements review procedures in linewith the Financial Instruments and Exchange Act are underway.

(Note) Cautions pertaining to appropriate use of performance forecast and other particular items
The performance forecast and other forward-looking statements contained in this material have been
prepared on the basis of information available at this point and certain assumptions which are judged to
be rational, and may be substantially different from the actual performance because of various factors that
may arise from now on.

2

(Reference) Dividends for Class A shares
Dividends per share related to class shares are as follows:
Annual dividends per share
Class A shares
1st quarter2nd quarter3rd quarter
Year-end(Period)
(yen)
(yen)
(yen)
(yen)
Fiscal 2015, ended――――
Mar 31, 2016
Fiscal 2016, ending―――
Mar 31, 2017
Fiscal 2016
38,082.20(Forecast)

3

Total

(yen)
―

38,082.20

Contents for Accompanying Materials
1. Qualitative information on consolidated results for this quarter…………………

P. 2(1) Explanation concerning business results…………………

P. 2(2) Explanation concerning financial position…………………

P. 6…………………

P. 7

2. Consolidated Quarterly Financial Statements…………………

P. 8(1) Consolidated Quarterly Balance Sheets…………………

P. 8(2) Consolidated Quarterly Statements of Income…………………

P. 10(3) Consolidated Quarterly Statements of Comprehensive Income…………………

P. 11(4) Segment Information…………………

P. 12(3) Explanation concerning information related to future
prediction such as consolidated performance forecast

11. Qualitative information on consolidated results for this quarter(1) Explanation concerning business results
Consolidated results for the third quarter fiscal 2016 (accumulated figures, April 1, 2016 December 31, 2016) are summarized as follows:(Unit: Millions of yen)
Net sales

Operating income

Ordinary income

Profit (loss)
attributable toowners of parent

Third Quarter Fiscal 2016

218,100

29,142

25,17324,866

Third Quarter Fiscal 2015

226,658

12,9409,386(115,806)

(3.8)

125.2

168.2

-

Rate of change (%)

Net sales
Consolidated net sales decreased 3.8%, or ¥8,557 million compared with the corresponding
period of the previous year, to ¥218,100 million. Despite an increased sales volume inpolycrystalline silicon for both solar-cells and semiconductors, this was largely attributable toweak selling prices of petroleum products on the back of a downturn in domestic naphtha prices.
Cost of sales
Cost of sales decreased 12.6%, or ¥20,909 million compared with the corresponding period of
the previous year, to ¥145,331 million. Despite an increased sales volume in polycrystalline
silicon, this was due mainly to a downturn in raw material costs as a result of the drop in
domestic naphtha prices.
SG&A expenses
SG&A expenses decreased 8.1%, or ¥3,848 million compared with the corresponding period of
the previous year, to ¥43,627 million. This decrease primarily reflects a decrease in depreciation
cost of mission-critical systems and lower R&D expenses.
Operating income
Operating income increased 125.2%, or ¥16,201 million compared with the corresponding
period of the previous year, to ¥29,142 million. In addition to a downturn in production costs asa result of the drop in raw material and fuel prices, this was due mainly to operating rate
improvement and decreased depreciation expenses at Tokuyama Malaysia Sdn. Bhd.

2

Non-operating income/expenses, Ordinary income
Non-operating income/expenses deteriorated ¥413 million compared with the corresponding
period of the previous year, due chiefly to increase in trial production expenses at Tokuyama
Malaysia Sdn. Bhd.
As a result of the above, ordinary income increased 168.2%, or ¥15,787 million compared withthe corresponding period of the previous year, to ¥25,173 million.
Extraordinary income/losses, Income before income taxes, Profit/loss, Profit/loss
attributable to owners of parent
Extraordinary income/losses improved by ¥121,164 million compared with the corresponding
period of the previous year.
As a result of the above, income before income taxes improved by ¥136,952 million comparedwith the corresponding period of the previous year, to income of ¥29,730 million.
Income taxes decreased ¥3,952 million compared with the corresponding period of the previous
year. This was attributable to the decision on the business transfer of Tokuyama Malaysia Sdn.
Bhd. As a result of this, profit/loss improved by ¥140,904 million compared with thecorresponding period of the previous year, to profit of ¥25,727 million. Profit/loss attributableto owners of parent improved by ¥140,673 million compared with the corresponding period of
the previous year, to profit of ¥24,866 million.

3

(Operating results by segment)
Sales(Unit: Millions of yen)

Others

Total

Adjustment

Figures inquarterly
consolidated
incomestatement

38,296

39,468

246,531(28,430)

218,100

64,99343,33340,565

255,871(29,213)226,658(5.5)(11.6)

(2.7)

(3.7)

-

(3.8)

Reportable segment

Third Quarter
Fiscal 2016
Third Quarter
Fiscal 2015
Rate of change (%)

Chemicals

Specialty
Products

CementLife &
Amenity

60,00347,36961,392

66,12240,856

(9.3)

15.9

Operating income (loss)(Unit: Millions of yen)

Others

Total

Adjustment

Figures inquarterly
consolidated
incomestatement

4,107

4,593

30,280(1,138)29,142

4,131

4,986

4,065

15,022(2,081)

12,94051.8(17.6)

13.0

101.6

-

125.2

Reportable segment

Third Quarter
Fiscal 2016
Third Quarter
Fiscal 2015
Rate of change (%)

Chemicals

Specialty
Products

CementLife &
Amenity

9,823

5,484

6,271

5,623

(3,784)74.7-(Note) Sales and operating income (loss) in each segment include inter-segment transactions.

Chemicals
Sales of caustic soda were down compared with the corresponding period of the previous year.
While domestic sales volumes were steady, this decrease was attributable to weak trends in selling
prices.
Sales of vinyl chloride monomer (VCM) were down compared with the corresponding period of
the previous year. Despite an increase in the volume of export mainly for Asian market, thedecline was primarily due to weak trends in selling prices as a result of the drop in domestic
naphtha prices.
Sales of vinyl chloride resin declined. While a recovery in the number of housing starts and otherfactors contributed to firm trends in sales volumes, this downturn largely reflects weak selling
prices as a result of the drop in domestic naphtha prices. Earnings on the other hand improved
due mainly to the suspension of operations at the Chiba factory of Shin Dai-ichi Vinyl
Corporation.
With regard to soda ash and calcium chloride, sales were essentially unchanged from thecorresponding period of previous fiscal year. Despite decreased sales volume, this was mainly
owing to efforts to revise selling prices.
4

As a result of the above, segment net sales decreased 9.3% compared with the corresponding
period of the previous year, to ¥60,003 million and operating income increased 74.7% to ¥9,823
million. The segment reported higher earnings on lower sales.
Specialty Products
Sales of semiconductor-grade polycrystalline silicon increased. This was primarily due to robust
shipping reflecting the growing trend to highly functional mobile devices including smartphones.
Sales of solar-grade polycrystalline silicon increased on the back of higher sales volumes,reflecting the operating rate improvement at Tokuyama Malaysia Sdn. Bhd.
Sales of fumed silica decreased compared with the corresponding period of previous fiscal year.
In addition to the weak trend in sales of such applications as a polishing material for
semiconductors, this was mainly due to appreciated yen.
With regard to high-purity chemicals for electronics manufacturing, sales decreased comparedwith the corresponding period of the previous year. Despite robust sales volume in suchapplications as semiconductor manufacturing, this decrease was mainly owing to appreciated yen.
With regard to aluminum nitride, sales were essentially unchanged from the corresponding periodof the previous fiscal year. This was attributable to robust sales volumes in such applications used
for semiconductor manufacturing equipment.
As a result of the above, segment net sales increased 15.9% compared with the corresponding
period of the previous year, to ¥47,369 million and operating income improved to income of¥5,484 million (Posted operating loss of ¥3,784 million in the corresponding period of theprevious year). The segment reported higher earnings on higher sales.
CementSales of cement decreased. Despite an increase in the volume of exports on the back of robust
demand in the Asia region, this decrease was mainly due to the drop in export prices reflecting
such factors as the impact of appreciation in the value of the yen as well as a downturn in sales
volumes in Japan due to weak public- and private-sector demand. Meanwhile, successful steps
were taken to reduce manufacturing costs. In addition to a drop in raw material and fuel prices,
this reduction on manufacturing costs was mainly due to improvements in the basic unit ofproduction.
In the recycling and environment-related business, the Company accepted a higher volume ofwaste including coal ash compared with the previous fiscal year. As a result of this, sales
increased from the previous fiscal year.
Consolidated subsidiary net sales declined. This mainly reflected corrections to robust shipping
trends of such products as ready-mixed concrete targeting large-scale projects in thecorresponding period of the previous fiscal year.
As a result of the above, segment net sales decreased 5.5% compared with the corresponding
5

period of the previous year, to ¥61,392 million and operating income increased 51.8% to ¥6,271
million. The segment reported higher earnings on lower sales.
Life & Amenity
Sales of active pharmaceutical ingredients decreased. This reflected the decreased sales volume
of generic pharmaceuticals compared with the corresponding period of the previous fiscal year.
With regard to plastic lens-related materials, sales were essentially unchanged from thecorresponding period of the previous fiscal year. This reflected robust sales volumes ofphotochromic dye materials for eyeglass lenses.
With regard to microporous film, sales of such applications as sanitary articles including
disposable diapers at oversea consolidated subsidiaries decreased. As a result of this, sales
decreased compared with the corresponding period of the previous year.
With regard to polyolefin film, sales were declined compared with the corresponding period of
the previous year. Despite firm trends in sales mainly for application in packaging materials for
products sold at convenience stores, this decrease was largely the result of weak trends in selling
prices on the back of the decline in domestic naphtha prices.
With regard to dental materials and equipment, sales increased compared with the corresponding
period of the previous fiscal year, due to higher sales volumes of new products as well as
products targeting overseas markets.
With regard to medical diagnosis systems, sales increased compared with the corresponding
period of the previous year. This largely reflected robust sales of blood testing products.
In gas sensors, Figaro Engineering Inc. was removed from the Company’s scope of consolidation
effective from the second quarter of the fiscal year under review. This reflected the transfer of a
portion of the company’s shares.
As a result of the above, segment net sales decreased 11.6% compared with the corresponding
period of the previous year, to ¥38,296 million and operating income decreased 17.6% to ¥4,107
million. The segment reported lower earnings on lower sales.

(2) Explanation concerning financial position(Status of assets, liabilities and net assets)
As of December 31, 2016, total assets amounted to ¥405,362 million, an increase of ¥4,020
million compared with those as of March 31, 2016.
This increase primarily reflects an increase of ¥5,874 million in notes and accounts receivable
and an increase of ¥3,476 million in investment securities owing to fair market valuation, despitea decrease of ¥4,206 million in cash and deposits.
Total liabilities amounted to ¥297,204 million, down ¥43,931 million compared with those as of6

March 31, 2016.
This largely reflected the downturn in the balances of income taxes payable, current portion ofbonds, long-term loans payable and current portion of long-term loans payable, short-term loans
payable of ¥10,866 million, ¥10,000 million, ¥9,719 million, and ¥7,365 million, respectively.
Net assets totaled ¥108,157 million, an increase of ¥47,952 million compared with those as ofMarch 31, 2016.
This increase mainly reflects the increase in retained earnings of ¥24,866 million as a result of
posting profit attributable to owners of parent, and the increase in shareholders' equity of¥20,000 million as a result of issuance of class A shares.

(3) Explanation concerning information related to future prediction such as
consolidated performance forecast
Although the future business environment is uncertain because of the fluctuations in exchange
rate and raw material and fuel prices, the Company’s results were in line with our expectations at
this time. Therefore, the Company has not revised the performance forecasts, announced on
October 28, 2016.
The performance forecast has been prepared on the basis of information available at this pointand certain assumptions which are judged to be rational, and may be substantially different fromthe actual performance because of various factors that may arise from now on.

7

2. Consolidated Quarterly Financial Statements(1) Consolidated Quarterly Balance Sheets
Millions of yen
3/31/201612/31/2016
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Lease receivables and investment assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for investment loss
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

8

121,508
68,5696
14,012
10,882
15,933
4,256
8,788
(192)
243,766

117,301
74,443
6
16,445
8,983
16,594
3,014
8,726
(153)
245,363

101,982(74,022)
27,959461,619(410,707)
50,912
22,661(20,890)
1,771
31,3272,237(1,041)
1,196
6,597
119,764

99,922(72,283)
27,638451,050(404,511)
46,53821,903(20,312)1,590
31,0703,464(1,242)
2,221
10,847
119,907

3,738
41
2,613
6,393

2,699
38
2,554
5,291

15,765
3,094
610
8,057
4,190
(22)
(278)
31,417
157,575
401,342

19,241
2,931
1,048
8,459
3,297
(22)
(157)
34,799159,998
405,362Millions of yen
3/31/201612/31/2016
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Lease obligations
Income taxes payable
Deferred tax liabilities
Provision for bonuses
Provision for repairs
Provision for product warranties
Provision for loss on purchase contract
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors' retirement benefits
Provision for repairs
Allowance for loss on compensation for building materials
Provision for environmental measures
Provision for loss on purchase contract
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

935,388
9,382
17,036
10,000356
11,888
2
1,830
1,480
85
2,656
23,093
113,200

37,9382,016
15,788
－
567
1,021
0
918
1,732
59
2,558
19,72382,32734,400172,877
931
457
231
3,691
384
85
2,716
1,354
6
10,799227,935
341,136

34,400164,406
1,821
497
134
2,804
329
173
333
1,416
6
8,553
214,877
297,204

53,45857,532(61,281)(1,439)48,27010,00041,54545,212(1,444)
95,313(1,020)
(526)
2,362
2,386
3,202
8,732
60,205
401,342

447
(299)
1,574
2,441
4,163
8,681
108,157
405,362(2) Consolidated Quarterly Statements of Income
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Compensation income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Trial production expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Subsidy income
Gain on write-off debts
Other
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Impairment loss
Loss on disaster
Loss on reduction of non-current assets
Loss on disposal of non-current assets
Provision for environmental measures
Loss on transfer from business divestitures
Litigation expenses
Total extraordinary losses
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

10

Millions of yen
Q3 FY2015 YTD Q3 FY2016 YTD
226,658
218,100
166,240
145,331
60,41772,76928,772
18,70347,476
12,94028,274
15,352
43,627
29,142

105
448
593
－
414
1,083
2,646

39
234
723
464
436
1,194
3,093

3,611
377
2,211
6,201
9,386

3,187
1,853
2,021
7,061
25,17344,066
066
3,318
－
25
－
1,067
8,477

14
1
1,934
2,298
1,268
1,300
6,818

71
124,600
5
26
324
－
－
56
125,085(107,221)
7,955(115,176)
629(115,806)

3
1,475
15
50
423
101
98
91
2,261
29,730
4,003
25,727860
24,866

(3) Consolidated Quarterly Statements of Comprehensive Income

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of the Parent
Non-controlling interests

11

Millions of yen
Q3 FY2015 YTD Q3 FY2016 YTD(115,176)
25,727(2,258)
(150)
(787)
(3)
(151)
(3,350)(118,527)

1,451
230
(593)
55
(235)
909
26,637(119,130)603

25,827809

(4) Segment information
Third Quarter Fiscal 2015 (accumulated figures, Apr. 1, 2015 – Dec. 31, 2015)
1. Information on sales and income (loss) by reportable segment(Millions of yen)
Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment income

Chemicals

Specialty
Products

Cement65,592529
66,122
5,623

30,25910,59640,856(3,784)64,879114
64,993
4,131Life &
Amenity

41,8191,514
43,333
4,986

Others*1

Total

24,107
16,45740,565
4,065

226,658
29,213
255,871
15,022Adjustment*2

Figures inquarterly
consolidated
incomestatement*3(29,213)(29,213)(2,081)

226,658
226,658
12,940*1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, thesegment includes overseas sales companies, a distribution company, a real estate business, etc.
*2 The segment income adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment.
*3 With regard to segment income, operating income in the quarterly consolidated statement of income has
been calculated by making an adjustment to the sum total of the reportable segments’ income and the “Others”
segment’s income.

Third Quarter Fiscal 2016 (accumulated figures, Apr. 1, 2016– Dec. 31, 2016)
1. Information on sales and income (loss) by reportable segment(Millions of yen)
Reportable segments

Sales
Sales to customers
Inter-segment sales/transfer
Total
Segment income (loss)

Chemicals

Specialty
Products

Cement59,384618
60,003
9,823

39,0808,289
47,3695,484

61,29993
61,392
6,271

Life &
Amenity

36,714
1,581
38,296
4,107

Others*1

Total

21,621
17,84739,468
4,593

218,100
28,430246,531
30,280Adjustment*2

Figures inquarterly
consolidated
incomestatement*3(28,430)(28,430)(1,138)218,100
218,100
29,142*1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, thesegment includes overseas sales companies, a distribution company, a real estate business, etc.
*2 The segment income adjustment amount consists mainly of basic R&D expenses that are not allocable to a
specific reportable segment.
*3 With regard to segment income, operating income in the quarterly consolidated statement of income has
been calculated by making an adjustment to the sum total of the reportable segments’ income and the “Others”
segment’s income.

12