Summary of Consolidated Financial Statements for the Year Ended December 31, 2014
(Japanese GAAP)
February 12, 2015
Company name

HORIBA, Ltd.

Listing code

6856

Listed stock exchanges: Tokyo

Representative

Atsushi Horiba, Chairman, President and CEO

URL: http://www.horiba.com
TEL: (81)75-313-8121

Contact
Junichi Tajika, Department Manager, Financial & Control Division, Accounting Dept.
Scheduled date of start of dividend payment: March 9, 2015
(Figures have been rounded down to the nearest million yen)

1. Consolidated Results for the Year Ended December 31, 2014 (January 1, 2014 - December 31, 2014)(Percentages represent changes from the previous year)(1) Consolidated Operating Results
Net Sales
Operating Income
Ordinary Income
Net Income%

Millions of yen%

Year ended 12/31/14
153,065
17,214
16,454
10.8
25.3
26.0
Year ended 12/31/13
138,136
13,733
13,056
17.5
16.9
15.0
(Note) Comprehensive Income: FY2014 12,528 million yen (-27.0%), FY2013 17,151 million yen (56.5%)

Millions of yen

10,589
8,999

17.7
21.7

%

Millions of yen

Millions of yen

%

%

%

Operating
Income to Net
Sales%

Year ended 12/31/14
250.28249.28
8.9
Year ended 12/31/13
212.76212.01
8.4(Reference) Equity in earnings of affiliates: FY2014 -660 million yen, FY2013 -103 million yen

8.3
7.6

11.2
9.9

Net Income per ShareNet Income per Share(Diluted)

Yen

Return on Equity

Yen

Ordinary Income
to Total Assets(2) Consolidated Financial Position
Total Assets

Shareholders' Equity
Ratio

Net Assets

Millions of yen

Millions of yen

Net Assets
per Share%

Yen

As of 12/31/14
207,335
124,31459.8
As of 12/31/13
189,269
114,545
60.3(Reference) Net assets excluding subscription rights to shares and minority interests in consolidated subsidiaries:
As of December 31, 2014: 123,924 million yen; As of December 31, 2013: 114,209 million yen

2,928.82
2,699.88(3) Consolidated Cash Flows
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash and Cash
Equivalents at end of
the period

Cash Flows from
Financing Activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

11,455
15,076(9,875)(8,111)

(273)
2,324

51,10949,246

Year ended 12/31/14
Year ended 12/31/13
2. Dividends

Dividend per shareFirst
quarter

SecondquarterYear ended 12/31/14
Year ending 12/31/15(Forecast)Year end

Total

Total Dividends(Annual)Payout Ratio(Consolidated)

Dividends to Net
Assets(Consolidated)

Yen

Yen

-

18.00

-

42.00

60.00

Millions of yen
2,538

%
28.2

%
2.4

-

25.00

-

42.00

67.00

2,834

26.8

2.4

-

28.00

-

42.00

70.00

Yen
Year ended 12/31/13

Thirdquarter

Yen

Yen

25.8

3. Consolidated Forecast for the Year Ending December 31, 2015 (January 1, 2015 - December 31, 2015)(Percentages represent changes from the same period in the previous year)

Net SalesFirst half
Full year

Operating Income

Ordinary Income

Net Income
per Share

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

78,000170,000

14.8
11.1

7,600
18,000

34.2
4.6

7,400
17,500

44.0
6.4

4,300
11,50065.9
8.6

101.63271.79

1

HORIBA, Ltd. (Consolidated)

Notes(1) Changes in significant subsidiaries during the period(Changes in specified subsidiaries that caused a change in the scope of consolidation): None
(2) Changes in accounting policies, accounting estimates and retrospective restatement① Changes in accounting policies associated with revision of accounting standards: Yes② Changes in accounting policies arising from other than the above: None
③ Changes in accounting estimates: None
④ Retrospective restatement: None
(3) Number of shares outstanding (common stock)
December 31, 2014
42,532,752
220,551
42,309,619① Shares issued (including treasury stock)② Treasury stock③ The average number of outstanding shares
during Jan. - Dec. in FY2014 and FY2013

December 31, 2013
42,532,752
231,183
42,299,616

Note 1. Indication regarding implementation status of audit procedures
These financial statements have not been prepared for the purpose of audit procedures pursuant to the Financial
Instruments and Exchange Act (FIEA). Audit procedures for financial statements were in the process of being
implemented as of the release of these financial statements.
Note 2. Appropriate use of business forecasts and other important information
The business forecasts stated herein are based on information currently available and certain assumptions for factors
which may affect business results. We do not warrant that these forecasts will be achieved. Actual results may differ
from the forecasts due to a range of factors. For additional information, please see "1. Operating Results" on page 3.

2

HORIBA, Ltd. (Consolidated)1. Operating Results(1) Operating Results Analysis(For details, see page 18, “HORIBA, Ltd. Financial Highlights for the Year Ended December 31, 2014”)(i) Operating Results for the year ended December 31, 2014
During the fiscal year ended December 31, 2014, global economic conditions recovered moderately on an
overall basis. In the U.S., economic conditions steadily recovered, supported by an increase in personal
consumption. The European economy continued to experience a mild pickup, but the recovery came to a
standstill in the second half due to the impact of the worsening Russian economy and fiscal austerity invarious countries. In emerging nations, the pace of economic growth in China became moderate, but apickup gradually emerged in India after the general election. In contrast, stagnant conditions associatedmainly with domestic demand intensified in Brazil and Russia.
In Japan, after consumer spending accelerated temporarily due to rush demand prior to the consumption
tax increase in the first quarter of the fiscal 2014, weakness became apparent mainly because of a reaction
to this from April onward. However, the weakness of consumer spending gradually eased and economic
conditions underwent a moderate recovery.
The annual average exchange rates for 2014 were 105.79 yen against the U.S. dollar and 140.35 yen
against the euro, marking respective depreciation of 7.6% against the U.S. dollar and 7.5% against the euro,
compared to the fiscal 2013.
In the analytical and measurement equipment industry, semiconductor-related demand expanded, as
aggressive capital investment at semiconductor makers continued from the second half of the fiscal 2013.
In the automotive industry as well, capital investment and R&D investment by domestic and overseas
automakers were strong as in the fiscal 2013. Moreover, in the environmental equipment industry, demand
for stack gas analysis for thermal power plants and factories in China and other countries increased.
In this operating environment, HORIBA, Ltd. (“the Company”) and its consolidated subsidiaries (together“the HORIBA Group” or “HORIBA” as a consolidated group) promoted reinforced measures that eachdivision carried out in the fiscal 2014. The Automotive Test Systems segment expanded sales of newemission measurement systems that were launched in 2013 and also promoted expansion of the MCT(Mechatronics) business acquired from Carl Schenck AG in Germany in 2005. The segment thereby
captured measurement demand in both the emissions measurement and MCT businesses. In addition, theProcess & Environmental Instruments & Systems segment pursued business expansion in the oil refining
market, including shale gas and oil, as HORIBA had acquired the U.S. company Cameron’s process
analytical product line in 2013. In the Medical-Diagnostic Instruments & Systems segment, HORIBA
launched new products aimed at the Chinese market that were developed by concentrating technologicalcapabilities in both Japan and France to meet growing demand for blood testing in China. In the
Semiconductor Instruments & Systems segment, the HORIBA Advanced Technology Center, which has
been under construction since 2013, is scheduled to commence full-scale operation soon. This will
accelerate the speed of product development and enhance productivity in semiconductor-related
businesses. Finally, in the Scientific Instruments & Systems segment, HORIBA acquired thespectrofluorimetric analysis business of Photon Technology International (U.S.), and by combining thesewith the spectrofluorimetric technologies possessed by the HORIBA Group, the segment aims to increase
sales in the pharmaceutical, food and life science markets, where analysis demand is growing.
Furthermore, to reinforce the supervisory function for U.S. operations, HORIBA moved and concentrated
the U.S. head office in the State of California. In Japan, HORIBA also started construction of HORIBABIWAKO E-HARBOR in Shiga Prefecture, which is scheduled for completion in the fall of 2015, in order tobolster development and production capabilities in the gas measurement area in the Automotive Test

3

HORIBA, Ltd. (Consolidated)Systems segment and the Process & Environmental Instruments & Systems segment. In addition, HORIBA
is introducing the HORIBA Group’s enterprise resource planning system (GEO system), which is aimed at
speeding up management decision-making and standardizing operational processes. During the fiscal 2014,
HORIBA newly introduced the system in France, South Korea and India while also carrying out system
renewals in Germany and China.
Against the background of the yen’s depreciation, as a result of such measures and sales efforts, sales
increased by 10.8% from a year earlier to 153,065 million yen. Operating income rose by 25.3% to 17,214
million yen, ordinary income increased by 26.0% to 16,454 million yen and net income was up 17.7% to10,589 million yen.
The operating results of each business segment are summarized as follows.
(Automotive Test Systems)
In addition to an increase in capital spending and R&D spending by automakers in Asia, Europe and the
U.S., sales in Europe and the U.S. increased after conversion to yen because of the weaker yen.
Consequently, segment sales increased by 11.1% year-on-year to 55,001 million yen, and operating income
increased by 35.9% to 5,827 million yen.
(Process & Environmental Instruments & Systems)
Sales of stack gas analyzers for power plants and factories increased in Japan and China, and sales ofwater quality analyzers were firm in Asia including China and South Korea. In Europe, sales of portable gas
analyzers increased.
As a result, segment sales increased by 11.9% year-on-year to 16,465 million yen, and operating income
increased by 58.9% to 2,007 million yen.
(Medical-Diagnostic Instruments & Systems)
Sales in Europe and the U.S. increased after conversion to yen because of the weaker yen, but sales ofblood cell testing instruments were weak in various countries. Moreover, profitability declined mainly due to
R&D expenditure for new product development in Europe and expenses to reinforce sales channels inNorth America.
As a result, segment sales increased by 0.8% year-on-year to 27,037 million yen, and operating income
decreased by 29.3% to 1,717 million yen.
(Semiconductor Instruments & Systems)
Owing to increased production at semiconductor production equipment manufacturers, sales of mass flow
controllers, a core product, were robust, and they increased substantially in the fourth quarter especially.
As a result, segment sales increased by 19.8% year-on-year to 28,934 million yen and operating income
rose by 34.1% to 6,455 million yen.
(Scientific Instruments & Systems)
In addition to higher sales stemming from the acquisition of the operations of Photon Technology
International (U.S.) in the first quarter, sales were firm in the second half as demand increased due tohigher R&D expenditure at government laboratories and universities in Europe. Moreover, sales in Europe
and the U.S. increased after conversion to yen because of the weaker yen, resulting in segment sales of
25,627 million yen, up 11.8% year-on-year, and operating income of 1,206 million yen, up 28.6%.

4

HORIBA, Ltd. (Consolidated)

(ii) Outlook for the Year Ending December 31, 2015
Regarding the outlook for global economy in the fiscal 2015, the U.S. economy is expected to continue
recovery, although caution is required regarding the impact of moves to normalize monetary policy. In
Europe, although caution is needed regarding the handling of the debt problems of various national
governments and geopolitical risks, economies are likely to show a gradual recovery. In emerging countries
such as China and India, there are risks such as trends in real estate prices and financial markets, but
economies are projected to recover gradually.
In Japan, amid a continued improvement in the employment and wages environments, the economy islikely to recover moderately, due in part to the impact of lower oil prices and the effect of various economic
policies.
Against this background, HORIBA’s forecasts for fiscal 2015 are shown below.
Our assumed foreign exchange rates are 110 yen against the U.S. dollar (vs. 105.79 yen in fiscal 2014) and
135 yen against the euro (vs. 140.35 yen in fiscal 2014).
Net sales of 170,000 million yen, up 11.1% y-o-yNet sales are expected to increase by 16,934 million yen from the previous year to 170,000 million yen.
In the Automotive Test System Segment, on the back of an increasing trend of capital and R&D investment
by automakers, the segment’s major customers, sales of emission measurement systems, and various
products in the MCT business are expected to increase.
In the Process & Environmental Instruments & Systems segment, demand for stack gas analyzers is
projected to be favorable in China and other Asian countries as in the previous year, and HORIBA also
expects demand for water quality analyzers to grow in Japan and overseas.
In the Medical-Diagnostic Instruments & Systems segment, we are aiming for higher sales of blood cell
testing instruments in various Asian countries, as well as in Japan.
In the Semiconductor Instruments & Systems segment, demand for semiconductor production equipment is
projected to be firm, as was the case in fiscal 2014, and we expect demand to remain favorable through thefirst half.
In the Scientific Instruments & Systems segment, we expect demand to increase on the back of theJapanese government budget and an earnings recovery at private-sector in Asia, as well as in Japan.
Operating income of 18,000 million yen, up 4.6% y-o-yOperating income is likely to rise by 785 million yen from the previous year to 18,000 million yen.
In the Automotive Test Systems segment, HORIBA expects a sharp increase in sales in the MCT business,a reduction in costs for new emission measurement systems, and a profit improvement in the driving
management systems business. However, as costs for moving to HORIBA BIWAKO E-HARBOR that isbeing constructed in Shiga Prefecture will be incurred, we are projecting only a slight rise in operating
income.
In the Semiconductor Instruments & Systems segment, we forecast continued aggressive capital
investment at semiconductor makers and sales increase of mass flow controllers, HORIBA’s major product.
In the Process & Environmental Instruments & Systems Segment, the Medical-Diagnostic Instruments &Systems Segment, and the Scientific Instruments & Systems Segment, we foresee profits to be at a similarlevel to those of the previous year.

5

HORIBA, Ltd. (Consolidated)Ordinary income of 17,500 million yen, up 6.4% y-o-y
Our forecasts incorporate a net non-operating loss of 500 million yen (compared to a net non-operating lossof 759 million yen in fiscal 2014), assuming foreign exchange losses and some uncertain non-operating
expenses.
By including this factor in addition to an expected increase in operating income, ordinary income isexpected to increase by 1,045 million yen from the previous year to 17,500 million yen.
Net income of 11,500 million yen, up 8.6% y-o-yAs ordinary income is expected to increase, net income is forecast to increase by 910 million yen from theprevious year to 11,500 million yen, while a net extraordinary loss of 700 million yen (compared to a net
extraordinary loss of 189 million yen in fiscal 2014) has been incorporated in our forecasts, assuming
generation of some extraordinary losses.
(Note) The above forecasts have been made on the basis of information available as of February 12, 2015,
but owing to the existence of various uncertain elements, it is possible that actual performance will varyconsiderably from those forecasts.
(2) Basic Policy for Profit Distribution and Dividends for the Year Ended December 31, 2014 and theYear Ending December 31, 2015
At the board of directors’ meeting held on February 14, 2013, HORIBA decided to adopt a basic dividend
policy in which the Company will maintain a total shareholder return ratio of around 30% of consolidated net
income of the Company. According to its basic policy, we have decided to pay a year-end dividend of 42
yen per share. Combined with the interim dividend that has been paid out, the annual dividend is 67 yen.
As regards the dividend forecast for the fiscal year ending December 31, 2015, we expect to increase theannual dividend by 3 yen from the fiscal 2014 to 70 yen.
The Company will continue to make effective use of internal reserves to improve corporate value throughprofit growth and focus on investing in growth areas, and it will make profit returns to shareholders that arelinked to consolidated earnings.

6

HORIBA, Ltd. (Consolidated)2. Management Policies(1) Basic Management Policies
As a manufacturer of analytical equipment that is developing its business worldwide, the HORIBA Groupaims to be a truly global company. Our basic philosophy is to contribute to society by preserving theenvironment, bringing human health and greater convenience and safety to society, and promoting thedevelopment of science and technology through our business activities, which focus on analyticaltechnologies and span a variety of industrial fields in the global market.
In addition, HORIBA Group has long focused on consolidated-based management and promoted thereinforcement of alliances and the integration of its 38 companies throughout the world by utilizing ourhuman and technological resources.
(2) Management Target Indices
The HORIBA Group established the Mid-Long Term Management Plan in 2011 with numerical targets set
for 2015. The HORIBA Group is launching various measures to achieve the numerical targets of 150 billion
yen in consolidated net sales, an operating income ratio of 13% or more, and ROE of 11% or more.
In 2014, the fourth year of the plan, HORIBA recorded net sales of 153.0 billion yen, an operating income
ratio of 11.2%, and ROE of 8.9%. We achieved the net sales target of the plan a year ahead of schedule.
(3) Challenges for HORIBA: Mid-Long Term Business Strategies of HORIBAThe HORIBA Group’s business consists of five segments: Automotive Test Systems, Process andEnvironmental Instruments & Systems, Medical-Diagnostic Instruments & Systems, Semiconductor
Instruments & Systems and Scientific Instruments & Systems. Each segment operates business in adifferent market, which enables each to exert its strengths and complement the weaknesses of each other.
Our aim is to achieve well-balanced growth with this structure. Technologies and know-how in all segments
are shared mutually. The transfer of human and other resources among segments gives us the strategic
flexibility to temporarily integrate resources in a favorably performing business while alleviating the burden
to a certain extent in an underperforming business. This enables us to achieve efficient management.
Moreover, we aim to evolve and perfect the management principle of the “HORIBA Group is One
Company.” which was launched in fiscal March 2004, and establish a corporate structure that enables us togenerate steady high earnings.
The primary measures of the Mid-Long Term Management Plan for fiscal 2011 to fiscal 2015 are as follows:

Primary measure 1: Building a corporate structure that enables us to generate stable highearnings

1. Select and invest heavily in focused businesses
Thanks to aggressive investments under the previous Mid-Long Term Management Plan, theMedical-Diagnostic Instruments & Systems and the Semiconductor Instruments & Systems segments havegrown to contribute to HORIBA’s overall earnings, with to their high profitability. In other words, focusedinvestments in these two businesses have changed HORIBA’s earnings structure from being highly
dependent on the Automotive Test Systems segment to be a more well-balanced earnings structure thatenables us to generate stable high earnings. In addition, we plan to focus on water quality-related products
which belong to the Process & Environmental Instruments & Systems, the Scientific Instruments & Systems,
and the Semiconductor Instruments & Systems segments. Because of their high near-term growth potential,
we will concentrate our human and R&D resources in this area and accelerate its global development. In
the Automotive Test Systems segment, we will also continue to strengthen our structure for enhancing our
profitability, evidenced by improvement in profitability of the MCT business acquired in 2005.

7

HORIBA, Ltd. (Consolidated)2. From business expansion driven by “technology development” to business expansion focusedon “customer oriented business model”
The HORIBA Group has developed product with its unique technologies and has provided distinguishedproducts to customers in the niche “analysis” market. Going forward, we will add application technologies to
products and transform our business model so that we can provide customers with proposals for efficiency
and laborsaving. By making proposals that encompass measurement methods and software, we will create
the industry standard, expand market share in each of the five business area, and thereby aim to become a
global leader in the analysis and measurement market.
Primary measure 2: Evolving and perfecting “One Company Management”

1. Organizational reform to enhance the corporate structureWith the aim of becoming a highly profitable company and enhance its global leadership as theheadquarters, HORIBA’s headquarters restructured its organization in January 2011. The R&D Division,
where operations had been separated by business segment, was reorganized by function so that
intra-segment information is shared and the capability to propose solutions is enhanced. We will alsoenhance the speed and quality of decision-making by clearly defining the responsibilities of persons incharge of development, production, and sales, who work under a newly-appointed person in charge ofoverall business strategies.
2. Efficient management by region
During the previous Management Plan, shared services which had been successful in the U.S., wasimplemented in Japan. In 2014, HORIBA moved forward with the consolidation and integration of the U.S.
head office. Going forward, we will introduce “shared services” in Europe and Asia with reference tosuccessful examples in the U.S. and Japan. We will also promote further efficiency by speeding up
management decision-making, and achieving a more specialized level of operations and cost reduction.
Primary measure 3: Accelerating establishment of global development and production system

The HORIBA Group will make further progress in establishing footholds, mainly in Asian countries. In 2011,
the first year of the Mid-Long Term Management Plan, HORIBA expanded the production capacity of the
Semiconductor Instruments & Systems segment by opening a joint-venture plant in China. As a foothold for
future business expansion, the Group opened representative offices in Vietnam and Indonesia, where
demand is rising and economic growth is pronounced even among South East Asian countries. From 2012
to 2013, in the Medical-Diagnostic Instruments & Systems segment, we completed the expansion of the
Aso factory in Kumamoto Prefecture, which had been promoted to cater for rising demand for testing
reagents in Japan. In addition, we relocated and expanded the reagent plant in Brazil and opened a newreagent plant in India. In the Scientific Instruments & Systems segment, we completed a R&D center inParis, France that will be the European central base for R&D activities. Moreover, with the aim of enhancing
the Semiconductor Instruments & Systems segment, we established a new development center in
Fukuchiyama City, Kyoto Prefecture, while also commencing work to expand the facilities in Kyoto City inorder to strengthen the development and production of semiconductor sensors that are incorporated in
HORIBA products.
In 2014, HORIBA also embarked on the construction of HORIBA BIWAKO E-HARBOR in Shiga Prefecture,
which we aim to complete in the fall of 2015. This move is aimed at reinforcing development and production
capabilities for gas measurement technology, which is an important technology in HORIBA’s Automotive
Test Systems and Process & Environmental Instruments & Systems segments.
Going forward, in other regions as well, HORIBA will accelerate the establishment of bases in the
Medical-Diagnostic Instruments & Systems and the Automotive Test Systems segments, where demand is
expected to grow in particular.

8

HORIBA, Ltd. (Consolidated)3. Consolidated Financial Statements(1) Consolidated Balance Sheets
Amount: millions of yen
FY2013(As of December 31,
2013)

FY2014(As of December 31,
2014)

Cash and bank deposits

42,22843,255Trade notes and accounts receivable

47,412

52,246

Marketable securities

10,271

11,380

Merchandise and finished goods

11,111

13,811Work in process

12,755

11,022

Raw materials and supplies

9,218

10,003

Deferred tax assets

3,186

3,635

Other current assets

4,967

5,348

Allowance for doubtful accounts(914)(1,023)140,235

149,680

Buildings and structures, net

14,025

17,154

Machinery, equipment and vehicles, net

4,461

4,802

Land

9,504

9,908

Construction in progress

1,763

3,817

Other property, plant and equipment, net

3,570

3,758

Total Property, Plant and Equipment

33,32639,441

Goodwill

314

418

Software

3,054

4,134

Other intangibles

1,741

1,801

Total Intangibles

5,110

6,353

Investment securities

6,090

7,122

Deferred tax assets

1,750

1,993

-

2

2,801

2,785

(45)

(44)

10,597

11,85949,03457,655

189,269

207,335

AssetsCurrent Assets:

Total Current Assets
Fixed Assets:
Property, Plant and Equipment:

Intangibles:

Investments and Other Non-Current Assets:

Net defined benefit asset
Other investments and other assets
Allowance for doubtful accounts
Total Investments and Other Non-Current Assets
Total Fixed Assets
Total Assets

9

HORIBA, Ltd. (Consolidated)Amount: millions of yen
FY2013(As of December 31,
2013)

FY2014(As of December 31,
2014)

Trade notes and accounts payable

16,40915,406

Short-term loans payable

6,606

10,832

Accounts payable - other

12,112

14,457

Accrued income taxes

3,523

5,220

Deferred tax liabilities

87

88

Accrued bonuses to employees

905

908

Accrued bonuses to directors and corporate auditors

56

62

Reserve for product warranty

1,492

1,525

Other current liabilities

10,943

10,500Total Current Liabilities

52,13859,003

Corporate bonds

15,00015,000Long-term loans payable

2,576

2,209

659

174

2,406

-

Net defined benefit liability

-

2,264

Provision for loss on dissolution of the employees’
pension fund

-

1,870

Other non-current liabilities

1,942

2,497

Total Non-Current Liabilities

22,58524,01774,72383,020Common stock

12,011

12,011

Capital surplus

18,717

18,717Retained earnings

78,477

86,218

(765)

(730)

108,441

116,216

2,296

2,041

3

18

Foreign currency translation adjustments

3,468

5,630

Remeasurements of defined benefit plans

-

16

5,768

7,707

335

389

0

0

114,545

124,314

189,269

207,335

Liabilities
Current Liabilities:

Non-Current Liabilities:

Deferred tax liabilities
Employees' retirement benefits

Total Liabilities
Net Assets
Shareholders' Equity

Treasury stock
Total Shareholders' Equity
Accumulated Other Comprehensive Income
Net unrealized holding gains on securities
Deferred gains or losses on hedges

Total Accumulated Other Comprehensive Income
Subscription Rights to Shares
Minority Interests in Consolidated Subsidiaries
Total Net Assets
Total Liabilities and Net Assets

10

HORIBA, Ltd. (Consolidated)(2) Consolidated Statements of Income and Consolidated Comprehensive Income Statements(Consolidated Statements of Income)Amount: millions of yen
FY2014(For the year ended
December 31, 2014)

FY2013(For the year ended
December 31, 2013)
Net sales

138,136

153,065

Cost of sales

80,62587,884Gross Income

57,51065,181

Selling, general and administrative expenses

43,77747,966

Operating Income

13,733

17,214

Non-Operating Income
Interest income

176

235

Dividend income

117

102

Subsidy income

70

147

Other

191

152

Total non-operating income

556

638

Interest expense

560

545

Foreign exchange losses

274

111

Equity in losses of affiliates

103

660

Other

294

80

1,232

1,398

13,056

16,454Gain on sales of fixed assets

431

9Gain on sale of investment securities

17

1,804

Gain on sales of subsidiaries and affiliates' stocks

67-

Reversal of provision for compensation losses

173

103

Gain on bargain purchase64-

Total extraordinary gain

753

1,918

Non-Operating Expense

Total non-operating expense
Ordinary Income
Extraordinary Gain

Extraordinary Loss
Loss on sales of fixed assets

70Loss on disposal of fixed assets

65

110

Loss on impairment of fixed assets

190

42

Loss on valuation of investment securities

15-

Loss on sales of shares of subsidiaries and associates-

0

Provision for loss on dissolution of the employees’
pension fund

-

1,954

277

2,107

13,532

16,265

4,280

6,662

Total extraordinary loss
Income before Income Taxes and Minority Interests
Income taxes (current)
Income taxes (deferred)
Total income taxes
Income before Minority Interests
Minority interests (losses) in earnings of consolidated
subsidiaries
Net Income

11

299

(985)

4,580

5,676

8,951

10,588

(47)

(0)

8,999

10,589HORIBA, Ltd. (Consolidated)

(Consolidated Statements of Comprehensive Income)Amount: millions of yen
FY2014(For the year ended
December 31, 2014)

FY2013(For the year ended
December 31, 2013)
Income before Minority Interests

8,951

10,588

1,308

(254)

3

15

Foreign currency translation adjustments

6,896

2,132

Remeasurements of defined benefit plans

-

16

(8)

29

Other Comprehensive Income
Net unrealized holding gains on securities
Deferred gains or losses on hedges

Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income

8,199

1,939

17,151

12,528

Parent company portion of comprehensive income

17,193

12,528

Minority interests portion of comprehensive income

(42)

(0)

Comprehensive Income(Breakdown of comprehensive income)

12

HORIBA, Ltd. (Consolidated)

(3) Consolidated Statement of Changes in Net Assets
FY2013 (For the year ended December 31, 2013)
Amount: Millions of yen
Shareholders' Equity
Common stock
Beginning balance

Capital surplus
12,011

Treasury stock

Retained earnings
18,717

Total Shareholders' Equity(780)

71,725

101,674

Changes during the period
Dividend from earnings(2,241)(2,241)

Net income

8,999

8,999

Disposal of treasury stock

(5)

14

9

OthersTotal changes during the periodEnding balance

-

-

6,752

14

6,766

12,011

18,71778,477(765)

108,441

Accumulated Other Comprehensive Income
Net unrealized
holding gains on
securities
Beginning balance

Foreign currencytranslation
adjustments

Deferred gains orlosses on hedges

987-(3,413)

Total Accumulated
Other
Comprehensive
IncomeSubscription Rights
to Shares

Minority Interests inConsolidated
Subsidiaries

Total Net Assets(2,426)245

42

99,536

Changes during the period
Dividend from earnings(2,241)

Net income

8,999

Disposal of treasury stock
Others

9
1,308

3

6,882

8,194

90

(42)

8,242

Total changes during the period

1,308

3

6,882

8,194

90

(42)

15,009Ending balance

2,296

3

3,468

5,768

335

0

114,545

13

HORIBA, Ltd. (Consolidated)

FY2014 (For the year ended December 31, 2014)
Amount: Millions of yen
Shareholders' Equity
Common stock
Beginning balance

Retained earnings

Capital surplus
12,01178,477

18,717

Total Shareholders' Equity

Treasury stock

108,441(765)

Changes during the period
Dividend from earnings(2,834)(2,834)

Net income

10,58910,589
(0)

(0)

(13)

35

21

7,740

35

7,775

86,218(730)

116,216

Purchase of treasury stock
Disposal of treasury stock
Others-Total changes during the period-

12,011Ending balance

18,717

Accumulated Other Comprehensive Income

Beginning balance

Net unrealized
holding gains on
securities

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustments

Remeasurementsof defined benefit
plans

2,296

3

3,468

-

Subscription
Total Accumulated
Rights to Shares
Other
Comprehensive
Income5,768

335

Minority Interests
in Consolidated
Subsidiaries

Total Net Assets

0114,545

Changes during the period
Dividend from earnings(2,834)

Net income

10,589Purchase of treasury stock(0)

Disposal of treasury stock

21
(254)

15

2,161

16

1,939

53

(0)

1,992

Total changes during the period

(254)

15

2,161

16

1,939

53

(0)

9,768

Ending balance

2,041

18

5,630

16

7,707

389

0

124,314

Others14

HORIBA, Ltd. (Consolidated)

(4) Consolidated Statements of Cash Flows
Amount: millions of yen
FY2014(For the year ended
December 31, 2014)

FY2013(For the year ended
December 31, 2013)
Cash Flows from Operating Activities:
Income before income taxes and minority interests
Depreciation expense
Loss on impairment of fixed assets
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in employees' retirement benefits
Increase (decrease) in net defined benefit liability
Increase (decrease) in directors' and corporate auditors'
retirement benefits
Increase (decrease) in provision for loss on dissolution of the employees'
pension fundInterest and dividend income
Interest expense
Foreign exchange losses (gains)
Loss (gain) on sales of fixed assets
Loss on disposal of fixed assets
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes (paid) refund
Net Cash Provided by (used in) Operating Activities
Cash Flows from Investing Activities:
Increase in time deposits
Decrease in time deposits
Decrease in time deposits restricted for use
Payments for purchase of marketable securities
Proceeds from sales or redemption of marketable securities
Payments for purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchase of intangibles
Proceeds from sales of intangibles
Payments for purchase of investment securities
Proceeds from sales or redemption of investment securities
Proceeds from sales of stocks of subsidiaries and affiliates
Payments of loans receivableCollection of loans receivable
Payments for transfer of business
Other, net
Net Cash Provided by (used in) Investing Activities(2,363)1,505
32(2,404)
2,103(6,040)870(1,535)
0
(23)
32
77
(27)
23
(322)
(41)
(8,111)(2,843)2,988
32(3,008)2,706(7,806)85(1,846)(1,859)
2,184
1
(39)
25
(658)
163
(9,875)

Cash Flows from Financing Activities:
Proceeds from issuance of corporate bonds
Payments for redemption of corporate bonds
Net increase (decrease) in short-term borrowings
Increase in long-term debt
Repayments of long-term debt
Repayments on finance lease obligations
Net decrease (increase) of treasury stock
Cash dividends paid
Net Cash Provided by (used in) Financing Activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period

14,919(10,106)
185
1,285(1,534)(183)
0(2,242)
2,324
1,098
10,38838,85849,246

3,294
269
(803)
(200)
(0)
(2,833)
(273)
556
1,863
49,246
51,10915

13,532
4,182
190
96
(160)
104
-

16,265
4,815
42
89
68
(214)

(195)

-

-

1,870

(294)
560
(17)
(424)
65
15
(17)
(4,222)
(630)
1,989
2,910
17,684289(591)(2,307)
15,076

(337)
545
(237)
(9)
110
(1,804)(2,718)12(1,943)514
17,069346(538)(5,422)
11,455HORIBA, Ltd. (Consolidated)

(5) Changes in Accounting Policies(Application of Accounting Standard for Retirement Benefits)
HORIBA has applied “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012,“the Standard”) and “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25,
May 17, 2012, “the Guidance”) from fiscal 2014, with the exception of provisions in clause 35 of theStandard and clause 67 of the Guidance. Under the Standard, the difference between projected benefit
obligation and pension assets is recognized as net defined benefit liability. Unrecognized actuarial
differences and unrecognized prior service costs are recognized as net defined benefit liability.
The application of the Standard and the Guidance, is subject to the transitional accounting treatment inclause 37 of the Standard. In fiscal 2014, remeasurements of defined benefit plans is included inaccumulated other comprehensive income to reflect the impact of this change.
As a result of this change, we posted net defined benefit asset of 2 million yen and net defined benefit
liability of 2,264 million yen, and accumulated other comprehensive income increased by 16 million yen in
fiscal 2014. This application had immaterial impact on net assets per share.
(6) Changes in Method of Presentation(Consolidated balance sheets)“Provision for compensation losses” under non-current liabilities which was presented separately in fiscal
2013 is immaterial, therefore it is included in “Other non-current liabilities” in fiscal 2014. The consolidated
financial statements for fiscal 2013 have been restated to reflect this change in method of presentation.
As a result, 158 million yen presented as “Provision for compensation losses” under non-current liabilities in
the consolidated balance sheets for fiscal 2013, is restated to present as “Other non-current liabilities”.
(Consolidated statements of income)“Equity in losses of affiliates” which was included in “Other” under non-operating expense in fiscal 2013, ispresented separately due to increase in materiality in fiscal 2014. The consolidated financial statements forfiscal 2013 have been restated to reflect this change in method of presentation.
As a result, 398 million yen presented as “Other” under non-operating expense in the consolidated
statements of income for fiscal 2013, is restated to present 103 million yen for “Equity in losses of affiliates”
and 294 million yen for “Other”.
(Consolidated statements of cash flows)“Increase (decrease) in provision for compensation losses” under cash flows from operating activities which
was presented separately in fiscal 2013 is immaterial, therefore it is included in “Other, net” in fiscal 2014.
The consolidated financial statements for fiscal 2013 have been restated to reflect this change in method ofpresentation.
As a result, -299 million yen presented as “Increase (decrease) in provision for compensation losses” undercash flows from operating activities in the consolidated statements of cash flows for fiscal 2013, is restatedto present as “Other, net”.
(7) Additional Information(Special dissolution of employees’ pension fund)
As it was resolved to adopt Japanese government policy to carry out special dissolution of the employees’
local pension fund (general type) in which the Company and a domestic consolidated subsidiary are
members, HORIBA posted an estimated loss that will arise in relation to the dissolution.
Consequently, we posted provision for loss on dissolution of the employees’ pension fund of 1,954 million

16

HORIBA, Ltd. (Consolidated)yen under extraordinary loss in the consolidated statements of income, and provision for loss on dissolutionof the employees’ pension fund of 1,870 million yen under non-current liabilities in the consolidated balance
sheets.
(Revision of amount of deferred tax assets and deferred tax liabilities due to change in rate ofcorporate and other income taxes)
The “Act for Partial Amendment of the Income Tax Act” (2014, Act No. 10) was promulgated on March 31,
2014 in Japan, and special corporate tax for reconstruction was no longer imposed from the fiscal year
beginning on and after April 1, 2014. Consequently, the statutory effective tax rate used to calculatedeferred tax assets and deferred tax liabilities will change from the current 37.9% to 35.5% for a temporary
difference which is expected to be reversed in the fiscal year beginning on January 1, 2015.
Owing to this change in the tax rate, the amount of deferred tax assets (the amount after deducting theamount of deferred tax liabilities) has decreased by 134 million yen and the amount of income taxes(deferred) has increased by the same amount.
(8) Significant Subsequent Events(Acquisition of treasury stock)
The board of directors’ meeting of the Company held on February 12, 2015 passed a resolution to acquire
treasury stock pursuant to the Company’s articles of incorporation in accordance with paragraph 1, article
459 of the Companies Act of Japan.
1. Reason for acquisition of treasury stock
In order to enhance the return of profits to shareholders, the Company has decided to acquire treasury
stock.
2. Details of acquisition(1) Type of shares to be acquired: Common stock of the Company(2) Total number of shares to be acquired: Up to 300,000 shares(0.71% of total shares outstanding (excluding treasury stock))(3) Total amount of acquisition: Up to 1,000 million yen(4) Method of acquisition: Open market purchase by a trust bank(5) Period of acquisition: From February 24, 2015 to April 23, 2015
(9) Change in Corporate Officers
To be appointed as new junior corporate officer effective on April 1, 2015
Mr. Hiroo Chihara, Present General Manager of Production Division

17

HORIBA, Ltd. (Consolidated)4. Supplemental Information
HORIBA, Ltd. Financial Highlights for the Year Ended December 31, 2014
1. Consolidated Financial Results

Net Sales

Amount: millions of yen

12/2014
Result12/2013
ResultFull year

Full year

Amount153,065

138,136 +14,929

17,214

13,733+3,480Operating Income Ratio

11.2%

9.9%

+1.3P

16,454

13,056+3,397

10.8%

9.5%

+1.3P

Ordinary Income Ratio

Net Income

Changes

12/2015
Forecast

Changes

Ratio

Full year

Amount

1st half

Amount+10.8%

170,000+16,934

78,000+10,065+25.3%

18,000

+785

7,600

+1,938

10.6%

-0.6P

9.7%

+1.4P

17,500+1,0457,400+2,261

10.3%

-0.5P

9.5%

+1.9P

Changes

Operating Income
Ordinary Income

12/2015
Forecast+26.0%

10,5898,999+1,58911,500

+910

4,300

+1,707Net Income Ratio

6.9%

6.5%

+0.4P

6.8%

-0.1P

5.5%

+1.7P

US$

105.79

97.73

+8.06

110.00+4.21

110.00

+7.54

Euro

140.35129.78+10.57135.00-5.35

135.00-5.42+17.7%

2. Consolidated Segment Results
Net Sales

Automotive

Amount: millions of yen

12/2014
Result12/2013
ResultFull year

Full year

Amount12/2015
Forecast

Ratio

Full year

Changes

Changes

12/2015
Forecast

ChangesAmount

1st half

Amount55,001

49,524+5,476+11.1%

64,000+8,998Process&Environmental

16,465

14,711+1,753+11.9%

18,500

Medical27,037

26,832

+204

+0.8%

28,500

Semiconductor

28,93424,153+4,780+19.8%

Scientific

25,627

22,913+2,713

153,065

138,136 +14,929

12/2014
Result12/2013
ResultFull year

Full year

Total

Operating Income

Automotive

5,827

Process&Environmental

2,007

Medical

1,717

Semiconductor

6,455

25,000+3,736+2,0349,300+1,038+1,462

14,200+612

31,000+2,06517,000+3,839+11.8%

28,000+2,372

12,500+837+10.8%

170,000+16,934

78,000+10,065

12/2015
Forecast

Changes

12/2015
Forecast

Changes

Full year

Amount

1st half

AmountChangesAmount

Ratio

4,287

+1,540+35.9%

6,000

+172

1,500

+629

1,263

+744

+58.9%

2,100

+92

1,100

+20

2,429

-712

-29.3%

1,800

+82

900

-96

4,815

+1,640+34.1%

6,800

+344

4,000

+1,325

Scientific

1,206

937

+268

+28.6%

1,300

+93

100

+58

Total

17,214

13,733+3,480+25.3%

18,000

+785

7,600

+1,938

18

HORIBA, Ltd. (Consolidated)3. Consolidated Segment Sales by Destination

Amount: millions of yen

12/2014
Result12/2013
ResultFull year

Full year

Amount55,001

49,524+5,476

Japan

15,392

17,072

Asia

15,58911,834

Americas(*)

8,125

7,317

Europe15,893

Process&Environmental

16,465

Automotive

Changes

12/2015
Forecast

Changes

Full year

Amount

1st half

Amount+11.1%

64,000+8,99825,000+3,736-1,679-9.8%

16,800+1,407

7,800

+706

+3,755+31.7%

15,800

+210

5,800

+856

+807

+11.0%

10,600+2,4744,800+1,046

13,299+2,593+19.5%

20,800+4,906

6,600+1,127

14,711+1,753+11.9%

18,500+2,0349,300+1,038

12/2015
Forecast

Ratio

Changes

Japan

8,420

8,143

+277

+3.4%

9,100

+679

4,800

+379

Asia

3,361

2,308

+1,053+45.6%

4,100

+738

2,200

+460

Americas(*)

2,312

2,191

+121

+5.5%

2,800

+487

1,200

+181

Europe

2,369

2,068

+301

+14.6%

2,500

+130

1,100

+18

Medical27,037

26,832

+204

+0.8%

28,500+1,462

14,200

+612

Japan

5,252

5,387

-134

-2.5%

5,700

+447

2,800

+209

Asia

3,513

3,668

-154

-4.2%

4,300

+786

2,200

+533

Americas(*)

6,739

6,521

+217

+3.3%

6,800

+60

3,400

-20

Europe11,531

11,255

+276

+2.5%

11,700

+168

5,800

-108

Semiconductor

28,93424,153+4,780+19.8%

31,000+2,06517,000+3,839Japan

11,391

10,756

+635

+5.9%

12,600+1,2086,700+1,005Asia

11,1338,301+2,832+34.1%

11,300

+166

6,300

+1,343

Americas(*)

4,598

3,850

+747

+19.4%

5,000

+401

3,000

+1,205

Europe

1,811

1,245

+565

+45.4%

2,100

+288

1,000

+284

Scientific

25,627

22,913+2,713+11.8%

28,000+2,372

12,500

+837

Japan

6,970

7,136

-165

-2.3%

7,300

+329

3,500

+160

Asia

5,486

4,872

+613

+12.6%

6,700+1,213

3,000

+396

Americas(*)

6,065

5,196

+869

+16.7%

6,700

+634

3,000

+259

5,708

+1,396+24.5%

7,300

+194

3,000

+21

138,136 +14,929+10.8%

170,000+16,934

78,000+10,065

Europe

Total

7,105

153,065
Japan

47,42848,496-1,067-2.2%

51,500+4,07125,600+2,461

Asia

39,08530,985+8,099+26.1%

42,200+3,114

19,500+3,590Americas(*)

27,841

25,077+2,763+11.0%

31,900+4,05815,400+2,671

38,71033,577+5,133+15.3%

44,400+5,68917,500+1,341

Europe(Note) Americas includes all countries in North America and South America.

19

HORIBA, Ltd. (Consolidated)5. Consolidated Financial Results (Quarterly Comparison)

Net Sales
Operating Income

1Q

33,3703,370

12/2014 Result
2Q
3Q

34,563
2,291

33,1142,140

Amount: millions of yen
4Q

1Q

52,016
9,412

28,7382,340

12/2013 Result
2Q
3Q

30,944
1,633

32,5952,470

4Q

45,857
7,289

Operating Income Ratio

10.1%

6.6%

6.5%

18.1%

8.1%

5.3%

7.6%

15.9%

Ordinary Income

3,325

1,812

2,006

9,309

2,344

1,395

2,327

6,989

Ordinary Income Ratio

10.0%

5.2%

6.1%

17.9%

8.2%

4.5%

7.1%

15.2%

Net Income

1,246

1,346

1,352

6,644

1,370

1,159

1,692

4,777

Net Income Ratio

3.7%

3.9%

4.1%

12.8%

4.8%

3.7%

5.2%

10.4%

US$
Euro

102.77140.80102.15140.04103.87137.66114.37142.9092.46
122.0699.00
129.1899.03
131.17100.43136.71

6. Consolidated Segment Results (Quarterly Comparison)
Net Sales

Automotive
Process&Environmental

Medical
Semiconductor
Scientific
Total
Operating Income

Automotive
Process&Environmental

Medical
Semiconductor
Scientific
Total

1Q

9,337
4,324
6,738
7,333
5,637
33,37012/2014 Result
2Q
3Q

11,925
3,936
6,849
5,827
6,025
34,563

10,941
3,537
6,150
6,783
5,701
33,114

4Q

1Q

22,796
4,666
7,299
8,990
8,264
52,016

9,956
3,131
6,348
4,326
4,975
28,738Automotive
Process&Environmental

Medical
Semiconductor
Scientific
Total
Backlog

Automotive
Process&Environmental

Medical
Semiconductor
ScientificTotal

10,359
3,232
6,753
5,626
4,971
30,944

11,398
3,530
6,457
5,958
5,251
32,595

17,810
4,816
7,272
8,241
7,716
45,8571Q

12/2014 Result
2Q
3Q

4Q

1Q

12/2013 Result
2Q
3Q

4Q

904
653
475
1,596
(260)
3,370

(33)
425
520
1,077
301
2,291

4,507
558
716
2,403
1,227
9,412

897
356
530
506
48
2,340

320
2
499
1,050
(239)
1,633

2,508
651
871
2,165
1,092
7,289

Amount: millions of yen
12/2013 Result
2Q
3Q
4Q

449
369
4
1,377
(61)
2,140

7. Consolidated Orders and Backlog Information (Quarterly Comparison)
OrdersAmount: millions of yen
12/2013 Result
2Q
3Q
4Q

1Q

9,234
4,251
7,326
6,938
5,566
33,317
1Q

31,317
3,780
2,899
2,758
7,599
48,355

12/2014 Result
2Q
3Q

13,937
3,714
6,395
5,869
5,888
35,806

15,438
4,708
6,293
7,986
6,167
40,593

12/2014 Result
2Q
3Q

33,329
3,559
2,445
2,800
7,462
49,59837,826
4,730
2,588
4,003
7,928
57,076

4Q

1Q

19,261
4,564
6,986
9,646
9,182
49,64012,840
3,913
6,742
4,650
5,306
33,453

4Q

1Q

34,290
4,628
2,275
4,659
8,846
54,701

31,412
3,357
3,059
2,079
5,521
45,43012,515
3,842
6,483
5,118
6,169
34,129

562
251
527
1,092
35
2,470

10,387
4,138
6,072
6,963
6,197
33,758

12/2013 Result
2Q
3Q

33,568
3,967
2,790
1,571
6,719
48,61632,557
4,575
2,404
2,576
7,665
49,778

16,673
4,095
7,179
8,818
7,721
44,487
4Q

31,420
3,853
2,311
3,152
7,670
48,408

Contact
Eita Uesugi, Corporate & Segment Strategy Division, HORIBA, Ltd.
2, Miyanohigashi-cho, Kisshoin, Minami-ku, Kyoto 601-8510, Japan
E-mail: eita.uesugi@horiba.com

20

HORIBA, Ltd. (Consolidated)