MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEET
September 30, 2014ASSETS
Millions ofJapanese yen
CURRENT ASSETS:
Cash and time deposits
Accounts receivable - trade
Inventories
Short-term loans receivable
Other current assets
Less-Allowance for bad debts
Total current assets¥26,933
153,274
5,846
5,616
13,083(494)
204,259

PROPERTY AND EQUIPMENT:
Vessels and equipment
Other
Total property and equipment

14,494
2,687
17,182INTANGIBLE ASSETS:

7,137

INVESTMENTS AND OTHER ASSETS:
Investment securities
Long-term loans receivable
Other investments
Less - Allowance for bad debts
Total investments and other assets

32,49336,625
6,904(1,655)74,367

Total assets* The figures are rounded down to the nearest million yen.

¥302,947

LIABILITIES AND NET ASSETS

Millions ofJapanese yen
CURRENT LIABILITIES:
Accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Advances received
Accrued employees’ bonuses
Accrued directors’ bonuses
Provision for product warranties
Other provisions
Other current liabilities
Total current liabilities¥139,928
7,661
1,928
8,985
6,311
2,223
101
11
4,416
5
3,139
174,713

LONG-TERM LIABILITIES:Long-term loans payable
Severance and retirement benefits for employees
Other long-term liabilities
Total long-term liabilities

14,158181
14,27828,617

Total liabilities

203,331

NET ASSETSSHAREHOLDERS' EQUITY:
Common stock;authorized - 102,868,000 shares
outstanding - 56,408,000 shares
Capital surplus
Retained earnings
Less - Treasury stock at cost
Total shareholders' equity

30,12230,852
28,922(1)
89,895

ACCUMULATED GAINS (LOSSES) FROM VALUATION
Unrealized gains/(losses) on available-for-sale securities, net of tax
Unrealized gains/(losses) on hedging derivative, net of tax
Foreign currency translation adjustments
Retirement liability adjustments for foreign consolidated subsidiaries, net of tax
Total accumulated gains (losses) from valuation(4)(8,831)
7,419(144)(1,560)MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES:

11,280Total net assets
Total liabilities and net assets* The figures are rounded down to the nearest million yen.

99,616¥302,947

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENT OF INCOME
For the nine months ended September 30, 2014SALESCOST OF SALES
Gross profit (loss)

Millions ofJapanese yen¥258,380
248,214
10,166SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating profit (loss)

9,143
1,023

OTHER INCOME (EXPENSES):Interest income and dividend income
Interest expense
Equity in earnings of affiliates and unconsolidated subsidiaries
Foreign exchange gain (loss), net
Impairment loss
Loss on liquidation of subsidiaries and affiliates
Other, net
Total other income (expenses)

2,006
(537)
3,606
540(604)(179)
834,915

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS:

5,938

INCOME TAXES:
Current
PriorDeferred

7,032
(4)
(2,320)

INCOME BEFORE MINORITY INTERESTS

1,231

MINORITY INTERESTS

1,224

NET INCOME¥6* The figures are rounded down to the nearest million yen.

Net income per share¥0.12

MODEC, INC. and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the nine months ended September 30, 2014

Millions ofJapanese yen
Income before minority interests
Other comprehensive income
Unrealized gains/(losses) on available-for-sale securities, net of tax
Unrealized gains/(losses) hedging derivatives, net of tax
Foreign currency transaction adjustments
Retirement liability adjustments for foreign consolidated subsidiaries
Share of other comprehensive income of associates accounted for using equity method
Total
Comprehensive income

(4)
(59)
1,945
0
(2,202)(320)¥910

Comprehensive income attributable to owners of the parent
Comprehensive income attributable to owners of minority interests(¥736)¥1,647* The figures are rounded down to the nearest million yen.

¥1,231

MODEC
2014 Third Quarter Financial Results
Supplementary Presentation

November 7, 2014

2014 Third Quarter - Operations Overview•Revenue totaled 258.3 billion yen,
55.6% increase on the same period last year
•FPSO construction progressed onschedule

Revenue(billion JPY)
300

3Q

Full year
254.4 258.3
186.8

200
146.6
115.0
100

166.0
129.9 128.2
78.502010•

Ordinary Profit was 6.7 billion yen•

Approx. 3 billion yen of unexpected cost
was incurred for troubleshooting ofmachinery and equipment breakdowns inthe charter business in Brazil

2011

2012

2013

2014

3Q Ordinary Profit(billion JPY)

Consolidated
After equity method portion adjustment
After deferred profit adjustment

15

13.4

12.5

10

•

4.5 billion yen of profit relating to FPSO
construction was deferred

6.7

5.6

5
2.00
2010

2011

2012

2013

2014

2

2014 Third Quarter - Operations Overview•Profit deferred during the construction
phase of FPSO MV24 will be realized in 4Q
2014 due to the commencement of charter
service.
In 3Q 2014, profit was depressed by theinfluence of deferred profit of MV24 project.

3Q Ordinary Profit(billion JPY)
15

13.1

106.7

•

2014 3Q exchange rate = 109.45 yenvs. 2013 3Q exchange rate = 97.69 yen

54.2

4.0
2.10
2010

2011

2012

2013

2014

Exchange Rate on Closing Dates ($/¥)(billion JPY)

2013 year end
105.37 yen(JPY)110.002014 3Q
109.45 yen

Increasein profit

Foreignexchange
3.0
impact Influence
4.3
of deferred
2.5
profitCost incurredin charter business
5.2
in Brazil

105.00100.0095.00

2012 year end
86.56 yen

90.00

2013 3Q
97.69 yen
13.1

85.00
6.7

80.00
75.00
20102011

2012

2013

2014 3Q2013 3Q

2014 3Q32014 Financial Forecast
Revenue(billion JPY)
300200Ordinary Profit
300.0
254.4

15.8
15186.8
146.6

129.9

13.0
9.2

10
6.1

100

5.0

5002010

2011

2012

2013

(billion JPY)
62.7

5.1

4.9

5.0

3.0

2011

2012

2011

2012

2013

2014(F)

Exchange Rate on Closing Dates ($/¥)

0
2010

2010

2014(F)Net Income

3(billion JPY)
20

2013

2014(F)(JPY)
110.00105.00100.00
95.00
90.00
85.00
80.00
75.00

105.37105.002013

2014(F)

86.56
81.52
77.74
2010

2011

2012

4