[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.

October 31, 2016
Consolidated Financial Report for theSecond Quarter of the Year Ending March 31, 2017
Name of Listed Company ZEON CORPORATION
Ticker Code 4205
(URL http://www.zeon.co.jp)
Representative
President
Contact
Director and Corporate Officer
Scheduled Date of theSubmission of theQuarterly Report

Listed Stock
Exchanges
NameNameTEL
Scheduled Date ofDividend Payments

November 7, 2016

Tokyo Stock Exchange
Kimiaki Tanaka
Takeo Furuya+81-3-3216-2747
December 6, 2016

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, 2017
(April 1, 2016 to September 30, 2016)(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, 2016
2Q period ended
September 30, 2015

Operating incomeMillions of yen

Ordinary income%Millions of yen

Millions of yen%

140,201(8.0)

13,217 (20.0)

12,101 (29.5)

8,071 (26.3)

152,427(0.6)

16,51817,16010,946

13.8%

Net income
attributable toowners of parent
Millions of yen

10.3%

21.3

Note: Comprehensive income (loss):2Q of the year ending March 31, 2017: (1,086 million yen) (—%);
2Q of the year ended March 31, 2016: 5,178 million yen (−49.8%)

Net income per share

Fully diluted net income
per share

YenYen2Q period ended
September 30, 2016
2Q period ended
September 30, 2015

36.37

36.32

48.26

48.18

(2) Consolidated financial position

2Q period ended
September 30, 2016
Year ended March31, 2016

Total assets

Net assets

Millions of yen

Millions of yen

368,593

213,406

56.6

384,753

215,58654.8

Reference: Equity:
As of September 30, 2016: 208,510million yen

Equity ratio%

As of March 31, 2016: 210,780 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

—
—

7.00
8.00

—

8.00

15.00

—

8.00

16.00

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

3. Projected Consolidated Performance for the Year Ending March 31, 2017
(From April 1, 2016 to March 31, 2017)(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 31,280,000
2017 (Full year)(5.3)

28,000(6.2)

28,000(12.9)

19,0005.1

85.63

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: Yes(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, 2016: 237,075,556 shares
As of March 31, 2016: 237,075,556 shares(ii) Number of treasury stock outstanding
As of September 30, 2016: 15,089,824 shares
As of March 31, 2016: 15,179,841 shares(iii) Average number of shares during the period
2Q ended September 30, 2016: 221,934,333 shares
2Q ended September 30, 2015: 226,834,891
shares
Note regarding indication of status of implementation of the quarterly review procedure
This quarterly financial report is not subject to the quarterly review required under the Financial Instruments
and Exchange Act. The review of quarterly consolidated financial statements based on the Financial
Instruments and Exchange Act had not been completed as of the date of disclosure of this quarterly financial
report.
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, 2016)(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,
2016

7,963
64,7081,308
47,462
3,732
12,53426,601
4,607
4,070
(79)
172,907

8,673
62,5762,202
39,936
4,055
11,434
22,834
4,435
5,494
(71)
161,568

43,79347,28918,27623,293
5,875
138,526

43,38746,60618,14022,305
5,917
136,355

4,187
4,187

3,664
3,664

60,821
320
8,295
(302)
69,133211,846
384,753

58,352
312
8,640
(299)
67,005207,025
368,593

[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, 2016)(Liabilities)
Current liabilities
Notes and accounts payable—trade
Electronically recorded obligations
Short-term loans payable
Income taxes payable
Reserve for bonuses
Provision for loss on liquidation of subsidiaries andassociates
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 (losses) 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 30,2016

51,852
1,754
25,755
4,633
1,586

50,8362,240
17,714
2,922
1,291

3,268

3,530

3,017
22,563
114,427

3,210
24,506106,248

20,0009,309
6,463
13,383386
5,199
54,740169,167

20,000
6,254
4,918
12,729434
4,602
48,939155,187

24,211
18,387
159,255(12,345)
189,508

24,211
18,387
166,083(12,272)
196,410

17,713(3)
6,461(2,898)21,272
255
4,551
215,586
384,753

16,213(1)(1,563)(2,549)12,100204
4,692
213,406
368,593

[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
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange gain
Other non-operating expenses
Total non-operating expensesOrdinary income
Extraordinary gains
Compensation income
Other
Total extraordinary gains
Extraordinary losses
Loss on disposal of fixed assets
Loss on liquidation of subsidiaries and affiliates
Other
Total extraordinary losses
Income before income taxes
Income taxes
Net income
Net income attributable to owners of parent
Net income attributable to non-controlling interests-5-

For the six months
ended September 30,
2015
152,427
108,00344,42427,906
16,518For the six months
ended September 30,
2016
140,201
99,13441,067
27,85013,217

59
999
331
1,388

56
868
301
1,225

30927411
746
17,160

269
1,860
211
2,340
12,101

338
95
433

486
103
589

156
—769
925
16,6685,430
11,239

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

292

298

10,946

8,071

[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
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests-6-

For the six months
ended
September 30, 2015
11,239For the six months
ended
September 30, 2016
8,369

(6,488)(3)387
44(6,060)5,178(1,499)3(8,307)349(9,455)(1,086)

4,961
218(1,097)
11

[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 bonuses
Increase (decrease) in reserve for repair
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
Purchase of investment securities
Payments of loans receivableCollection of loans receivable
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
Proceeds from issuance of bonds
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
Cash and cash equivalents at end of period-7-

For the six months
ended September 30,2015)(Millions of yen)
For the six months
ended September 30,2016)

16,668
10,070
335
(676)
1,966

10,991
9,362
335
(278)
290

—

1,204

(580)
(1,057)309
324(3,442)
5,014(351)
28,5781,084(294)(4,348)825,028

(241)
(924)
269
(1,897)
5,783
1,512
(420)
25,9871,670(268)(4,847)
138
22,678(13,811)
(507)
(996)
(781)
406
(908)
(16,597)(12,497)(345)(21)(3,035)
2,923
191(12,784)

3,481(10,000)—(434)
10,000(1,586)
(5)
(104)
1,353
(43)
9,742
3,491

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

—

611

13,2337,840

[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, 2015 to September 30, 2015)

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

Elastomer

Specialty
Materials

Sub Total

92,27436,045854
93,127
10,786

Other

Total

128,319

24,108152,427—

152,427

—

854

207

1,061

(1,061)—

36,0455,280

129,172
16,06624,315
1,106

153,488
17,172(1,061)(654)

152,427
16,518Current 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 and loss

(Millions of yen)
Eliminations
Consolidated/Corporate

Elastomer

Specialty
Materials

Sub Total

80,69436,452864
81,558
8,318(Millions of yen)
Eliminations
Consolidated/Corporate

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
13,217-8-