This document has been translated from Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese originals, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

August 4, 2016
MODEC, INC.
Toshiro Miyazaki, President & CEO
CodeContact
TEL

TSE 6269
Yasuhiro Takano
Executive Managing Officer+81-3-5290-1200

Recording of Gain on Revaluation of Derivatives and Foreign Exchange Loss andDifference Between Financial Forecast and Results for the Half-year Ended June 30, 2016
MODEC, INC. announced today that it has recorded a gain on revaluation of derivatives and foreignexchange loss for the second quarter of 2016 (from January 1, 2016 to June 30, 2016). The Company alsoannounced a difference between the consolidated financial forecast and the financial results for the half-year
ended June 30, 2016. The consolidated financial forecast for the half-year was announced on February 9, 2016.
1. Recording of Gain on Revaluation of Derivatives and Foreign Exchange LossThe Japanese yen appreciated from approximately 120 yen to 1 US dollar as of December 31, 2015 toapproximately 102 yen as of June 30, 2016. In accordance with the appreciation of the yen, 4,762 million yen of
foreign exchange loss was recognized for foreign currency denominated assets, and 2,977 million yen of gain
on revaluation of derivatives was recognized for the principal of cross-currency interest rate swap arranged foryen-denominated borrowings.
2. Half-year Consolidated Financial Forecast and Results (From January 1, 2016 to June 30, 2016)
ProfitOperatingOrdinary
Attributable
to Earnings per
Revenue
ProfitProfitOwners ofshare
ParentMillion yen
Million yen
Million yen
Million yenyen
Previous Forecast (A)120,000

3,500

7,000

4,000

70.91

Financial Results (B)104,031

2,344

6,069

4,405

78.09

Variance (B-A)(15,969)(1,156)

(931)

405

Variance (%)(13.3)(33.0)(13.3)

10.1

2015 Half-year
financial results

156,773(2,159)

2,688

(223)

(3.96)

Reasons for the difference between the financial forecast and the financial results for the half-year ended June30, 2016
With respect to the half-year consolidated financial results, revenue totaled 104,031 million yen because
the Japanese yen has appreciated more strongly against the US dollar than the Company assumed. While
profits from overseas affiliates were higher than the Company’s assumption, operating profit and ordinary
profit stood at 2,344 million yen and 6,069 million yen, respectively, mainly because a foreign exchange
loss was recognized as explained in the section above, and because the realization of deferred profits fromFPSO construction work, which was originally budgeted to be recognized in the second quarter, will berecognized in the third quarter.
-1-

The assumed exchange rate is revised from 115 yen to 110 yen to the US dollar; however, since there are
numerous uncertain factors, the Company has not revised the full-year consolidated financial forecast.
The consolidated financial forecast announced today is based on the information available as of August 4, 2016.
There is a possibility that the actual financial results might differ from the forecast due to various factors.

-2-