Consolidated Financial Results for the Nine Months Ended December 31, 2017
(Japanese Accounting Standards)
February 13, 2018
Name of Listed Company: Mitsubishi Materials Corporation
Listing:
Tokyo Stock Exchange
Stock Code:
5711
URL:
http://www.mmc.co.jp/
Representative: Akira Takeuchi, President
Contact:
Nobuyuki Suzuki, General Manager, Corporate Communications Dept., General Affiars Dept.,
General Administration Div.
Tel: +81-3-5252-5206
Scheduled filing date of Quarterly Report:
February 13, 2018
Scheduled date of start of dividend payment:―
Supplementary materials for the quarterly financial results: Yes
Investor conference for the quarterly financial results:
Yes (For Institutional Investors)(Amounts of less than million yen are omitted.)

1. Results of the first nine months ended December 31, 2017 (From April 1, 2017 to December 31, 2017)(1) Consolidated Results of Operations (cumulative)(Figures in percentages denote the year-on-year change.)
Net salesFirst nine months ended December 31, 2017
First nine months ended December 31, 2016
(Note) Comprehensive income:Operating profit

Net income
attributable toowners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

1,147,047
956,344

19.9-9.4

54,98843,892

25.3-15.9

68,581
52,97729.5-4.5

43,73449,393

-11.5
-12.7

Nine months ended December 31, 2017: 105,073 million yen (124.6%)
Nine months ended December 31, 2016: 46,787 million yen (-3.9%)

Net income
per share

Diluted net income
per share
YenFirst nine months ended December 31, 2017
First nine months ended December 31, 2016

Yen

333.91377.06––* The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1, 2016. Accordingly, net income per share is calculated on theassumption that the consolidation of its shares was conducted at the beginning of the previous consolidated fiscal year.

(2) Consolidated Financial Position
Total assets

Shareholders’equity ratio

Net assets

Million yen

Million yen%

As of December 31, 2017
As of March 31, 2017

2,121,073
1,896,939

796,767
710,195

33.2
32.8(Reference) Shareholders’ Equity:

As of December 31, 2017: 704,849 million yen

As of March 31, 2017: 621,281 million yen

2. Dividend Payments
Dividends per share(Record date)

First quarter

Second quarter

Third quarter

Yen

Yen

Yen

Year ended March 31, 2017

–

2.00

–

Year ending March 31, 2018

–

30.00

–

Year-end

Annual
Yen

Yen

40.00

Year ending March 31, 2018 (Forecast)

–

50.00

80.00

(Note) Revision of dividend forecast published most recently: No* The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1, 2016. For the amount of dividends at the end of the second
quarter of the fiscal year ended March 31, 2017, the amount prior to the consolidation of shares is stated because the dividends were paid based on the number of shares
before the consolidation of shares.
For the year-end dividend per share in the fiscal year ended March 31, 2017, the amount after the consolidation of shares is stated and a hyphen is written for the annual
dividend because it cannot be simply combined.

3. Consolidated earnings forecast (From April 1, 2017 to March 31, 2018)(Figures in percentages denote the year-on-year change.)

Net salesYear ending March 31, 2018

Operating profit

Ordinary income

Net income
attributable toowners of parent

Net income
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

1,580,000

21.2

70,00017.1

78,00022.0

35,00023.4

267.23(Note) Revision to forecast published most recently: Yes

* Notes(1) Significant changes of subsidiaries during the term under review (changes in specific subsidiaries accompanied by achange in the scope of consolidation):
None(2) Application of specific accounting treatment:

Yes(Note) For details, please see “(3) Notes to consolidated quarterly financial statements (Application of special accounting
treatment in the preparation of the quarterly consolidated financial statements)” under “2. Consolidated Financial
Statements and Keynotes” on page 11.

(3) Changes in accounting policies, changes of accounting estimates and restatement(i)
Changes in accounting policies due to amendments to accounting standards:(ii) Other changes in accounting policies:(iii) Changes in accounting estimates:(iv) Restatements:

None
Yes
None
None

(Note) For details, please see “(3) Notes to consolidated quarterly financial statements (Changes in accounting policies)” under“2. Consolidated Financial Statements and Keynotes” on page 11.

(4) Numbers of issued shares (common stock)(i)
Numbers of issued shares at end of terms (including treasury shares):
Nine months ended December 31, 2017: 131,489,535 sharesYear ended March 31, 2017:
131,489,535 shares(ii)
Numbers of treasury shares at end of terms:
Nine months ended December 31, 2017:
523,092 sharesYear ended March 31, 2017:
507,863 shares(iii) Average number of shares issued during terms (quarterly cumulative period):
Nine months ended December 31, 2017: 130,975,076 shares
Nine months ended December 31, 2016: 130,995,924 shares* The Company consolidated its shares at a rate of one share for every 10 shares of its common stock, with October 1, 2016 as theeffective date. Subsequently, the average number of shares issued during terms are calculated based on the assumption that theconsolidation of shares was conducted at the beginning of the previous consolidated fiscal year.

* This quarterly financial summaries is not subject to a quarterly review.
* Explanation about the proper use of financial forecasts and other special notes(Notes concerning forward-looking statements, etc.)
The operating results forecasts and other forward-looking statements contained in this report are based on information
currently available to the Company, as well as certain assumptions that the Company has judged to be reasonable. As
such, they do not constitute an assurance that the Company promises to achieve these projected results. Therefore, readers
are advised to note that the actual results may vary materially from the forecasts due to a variety of factors.
Please see “(3) Information on the consolidated earnings forecasts and other future forecasts” of “1. Qualitative
Information on Financial Results for the Nine Months Ended December 31, 2017” on page 5 for the assumptions about
consolidated earnings forecasts.
(Procedure for obtaining supplementary information on quarterly financial results and quarterly financial briefing)
Mitsubishi Materials Corporation plans to hold a quarterly financial briefing for institutional investors on Tuesday,
February 13, 2018. The materials used at this briefing are disclosed on the TDnet and the Company’s web page at thetime that the quarterly financial results are announced.

Contents
1. Qualitative Information on Financial Results for the Nine Months Ended December 31, 2017 ................. 2(1) Details of operating results .................................................................................................................... 2(2) Details of financial position ................................................................................................................... 5(3) Information on the consolidated earnings forecasts and other future forecasts ..................................... 5
2. Consolidated Financial Statements and Keynotes ....................................................................................... 6(1) Consolidated balance sheet .................................................................................................................... 6(2) Consolidated statement of income and consolidated statements of comprehensive income ................. 8
Consolidated statement of income .......................................................................................................... 8
Consolidated statements of comprehensive income ............................................................................... 9(3) Notes to consolidated quarterly financial statements........................................................................... 10
Notes on assumptions for a going concern ........................................................................................... 10
Segment information............................................................................................................................. 10
Notes on significant changes in the amount of shareholders’ equity, if any ......................................... 11
Application of special accounting treatment in the preparation of the quarterly consolidated financial
statements ............................................................................................................................................. 11
Changes in accounting policies ............................................................................................................. 11
Additional information ......................................................................................................................... 11
Contingent liabilities ............................................................................................................................. 11
Significant subsequent events ............................................................................................................... 13
3. Others ........................................................................................................................................................ 16–1–

1. Qualitative Information on Financial Results for the Nine Months Ended December 31, 2017
(1) Details of operating results1) Overview of operating results
During the first nine months of the consolidated fiscal year under review, signs of recovery were seen in the
Asian economies of China, Thailand and Indonesia. In the United States, the economy remained on a moderate
recovery track.
In Japan, corporate earnings, employment, and income conditions were on the road to recovery, and consumer
spending and capital expenditure showed signs of improvement.
Regarding the business environment for the Mitsubishi Materials Group, the energy prices rose but the copper
prices increased, the yen remained weak, and demand for products used in the automotive and electronics
industry remained strong.
Under these circumstances, consolidated net sales for the first nine months of the year under review totaled¥1,147,047 million, up 19.9% year on year. Operating profit increased 25.3% year on year, to ¥54,988 million,
and ordinary income rose 29.5%, to ¥68,581 million. Net income attributable to owners of parent was ¥43,734
million, down 11.5% year on year.** The decrease in net income attributable to owners of parent in the first nine months of the fiscal year under review was caused by adecline in gain on sales of non-current assets.

Recently, Mitsubishi Materials Corporation (the “Company”) discovered sequentially that the Company’s
consolidated subsidiaries Mitsubishi Cable Industries, Ltd., Mitsubishi Shindoh Co., Ltd., Mitsubishi
Aluminum Co., Ltd., Tachibana Metal Manufacturing Co., Ltd., and Diamet Corporation had delivered
products, etc. that deviated from customer standards or internal company specifications due to misconduct,
including the rewriting of inspection records data and the insufficient testing concerning some of the products
manufactured and sold in the past (the “Incident”). The Company sincerely apologizes to its customers,
shareholders, and all other parties affected by the Incident for any and all inconvenience. The effect of the
Incident on the consolidated financial results for the first nine months of the year under review is insignificant.
2) Overview by segments(Cement)

Net sales
Operating profit
Ordinary income

FY 2017 Q1-Q3
132.3
16.4
16.3

FY 2018 Q1-Q3
146.0
16.9
18.3

(Billion yen)
Increase / Decrease (%)
13.7(10.4%)
0.5(3.4%)
1.9(12.0%)

Sales volumes rose in Japan due to the firm performance of construction work of facilities related to the Tokyo
Olympic and Paralympic Games in the Tokyo metropolitan area, as well as disaster restoration work and roadrelated work in Kyushu, which also remained solid. However, mainly rising energy costs resulted in a decline
in operating profit, even as net sales increased.
In the United States, the sales volumes of ready-mixed concrete increased thanks to strong private-sector
demand related to housing and commercial facilities in Southern California. In addition, selling price of cement
grew year on year. As a result, both net sales and operating profit increased.
As a result, net sales and operating profit increased year on year for the entire Cement business. Ordinary
income also rose chiefly due to the increase in operating profit and increase in equity in earnings of affiliates.

–2–

(Metals)

Net sales
Operating profit
Ordinary income

FY 2017 Q1-Q3
459.6
12.4
22.9

FY 2018 Q1-Q3
607.9
17.0
30.5

(Billion yen)
Increase / Decrease (%)
148.2(32.3%)
4.5(36.8%)
7.5(33.1%)In the copper business, both net sales and operating profit rose, reflecting increase in the copper prices and arise in the amount contracted by Onahama Smelting and Refining Co., Ltd. despite periodic furnace repairs
conducted at Noshima Smelter & Refinery.
In the gold and other valuable metals business, net sales increased while operating profit decreased due to
growing costs despite a production hike reflecting, in particular, a rise in the amount of gold and other valuable
metals contained in the raw material ore.
In the copper and copper alloy products business, net sales and operating profit were up chiefly due to anincrease in sales of products for automobiles and the inclusion of the business results of MMC Copper Products
OY in the consolidated quarterly statements of income since the second quarter of the fiscal year.
As a result, the overall Metals business posted a year-on-year increase in net sales and operating profit.
Ordinary income increased due to a rise in operating profit and dividend income.
(Advanced Materials & Tools)

Net sales
Operating profit
Ordinary income

FY 2017 Q1-Q3
106.1
8.2
7.2

FY 2018 Q1-Q3
119.6
13.8
13.0

(Billion yen)
Increase / Decrease (%)
13.5(12.8%)
5.6(67.8%)
5.7(79.6%)In the cemented carbide products business, net sales and operating profit increased as a result of aggressive
efforts for sales promotion, in addition to higher demand in Japan, Europe, United States, and Southeast Asia.
In the high-performance alloy products business, sales of our mainstay sintering parts increased in Japan,
Europe, and the United States following the launch of new products in addition to growth in demand. As aresult, both net sales and operating profit increased.
As a result, the overall Advanced Materials & Tools business recorded year-on-year increases in net sales andoperating profit. Ordinary income also rose due to foreign exchange gains, in addition to higher operating profit.
(Electronic Materials & Components)

Net sales
Operating profit
Ordinary income

FY 2017 Q1-Q3
46.4
1.3
1.4

FY 2018 Q1-Q3
52.5
2.6
3.1

(Billion yen)
Increase / Decrease (%)
6.1(13.2%)
1.3(98.1%)
1.7(117.6%)In the advanced materials and chemical products business, net sales and operating profit increased,reflecting a rise in sales of products related to semiconductor manufacturing equipment, products fordisplays, and other products.
In the electronic components business, both net sales and operating profit also increased thanks to a higher–3–

volume of sales of products for home appliances and other products.
The polycrystalline silicon business recorded an increase in net sales and a decrease in operating profit, due toa fall in selling prices, despite an increase in sales volume based primarily on higher demand backed by thestrong semiconductor market.
As a result, the entire Electronics Materials & Components business registered year-on-year increases in net
sales and operating profit. Ordinary income rose as a result of higher operating profit and dividend income.
(Aluminum)

Net sales
Operating profit
Ordinary income

FY 2017 Q1-Q3
120.4
7.6
7.6

FY 2018 Q1-Q3
114.9
4.4
4.0

(Billion yen)
Increase / Decrease (%)-5.4(-4.5%)-3.2(-42.5%)-3.5(-46.4%)In the aluminum can business, net sales and operating profit declined due to a fall in sales of both regular cansand bottle cans and rising costs of raw materials and energy.
In the rolled aluminum and processed aluminum products business, net sales and operating profit fell as a resultof lower sales, principally of can materials and plate products for Litho sheets, and a rise in energy costs.
As a result, the entire Aluminum business posted a year-on-year decrease in net sales and operating profit.
Ordinary income also declined due to a fall in operating profit.
(Others)

Net sales
Operating profit
Ordinary income

FY 2017 Q1-Q3
148.7
4.8
4.6

FY 2018 Q1-Q3
170.2
6.2
6.1

(Billion yen)
Increase / Decrease (%)
21.5(14.5%)
1.4(30.3%)
1.5(32.5%)In the energy-related business, net sales and operating profit increased due to a sales increase of coal thanks to
an improvement in the market condition.
In the “E-waste” (used electronics and electrical products) recycling business, both net sales and operating
profit increased with a rise in the recycling unit cost of valuables, in addition to continued firmness in recycling
volumes.
Total net sales and operating profit in the overall Others business excluding the energy-related business andthe “E-waste” (used electronics and electrical products) recycling business increased.
In the overall Others business, net sales and operating profit increased from a year earlier. Ordinary income
rose due to the rise in operating profit, in addition to an increase in dividend income.

–4–

(2) Details of financial position
Total assets at the end of the third quarter of the consolidated fiscal year under review stood at ¥2,121.0 billion, up¥224.1 billion from the end of the previous consolidated fiscal year. This result was mainly due to an increase ininventories.
Total liabilities were ¥1,324.3 billion, an increase of ¥137.5 billion from the end of the previous consolidated fiscal
year. This was principally a result of an increase in short-term loans payable.

(3) Information on the consolidated earnings forecasts and other future forecasts
In our consolidated earnings forecast for the full year of the fiscal year ending March 31, 2018, we have revised
the previous forecasts for net sales, operating profit, and ordinary income (announced on November 8, 2017) asshown below. The revised forecasts chiefly reflect that sales of cement in the United States and aluminum canslower than planned despite increase in sales of cemented carbide products and dividend income. In addition, therevised forecasts are also based on certain assumptions at the present time and take into consideration the impactof the issue of non-conforming products at consolidated subsidiaries of the Company. The forecast for net
income attributable to owners of parent is unchanged from the previously announced forecast because
improvement in extraordinary income and loss is expected.
Revised Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2018(from April 1, 2017 to March 31, 2018)

Net sales
Operating profit
Ordinary income
Net income attributableto owners of parent

Previous forecast
1,600.075.0
80.0

Current forecast
1,580.0
70.0
78.0

35.0

35.0

–5–

(Billion yen)
Increase / Decrease (%)
-1.3%
-6.7%
-2.5%
‐

2. Consolidated Financial Statements and Keynotes(1) Consolidated balance sheet
As of March 31, 2017
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Machinery and equipment, net
Land, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–6–(Million yen)
As of December 31, 2017

141,264
213,343
85,878
101,643
100,757
227,119(2,537)

102,518
254,116
101,952
166,507
134,468
239,848(2,598)867,469

996,814

199,758
260,805
205,661

202,229
258,934
219,469

666,226

680,633

43,43615,13847,40420,93858,574

68,342

252,067
58,151(5,549)318,618
60,916(4,252)

304,669

375,282

1,029,470

1,124,258

1,896,939

2,121,073

As of March 31, 2017
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of bonds payable
Income taxes payable
Provision
Gold payable
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Provision for environmental measures
Other provision
Net defined benefit liability
Other(Million yen)
As of December 31, 2017

114,502203,819
15,00016,154
13,518241,406
102,262

156,997
262,072
25,00010,412
7,871
255,195
116,861

706,665

834,41155,000254,41132,5685,502
56,03776,56050,000251,925
31,3952,523
56,946
97,102

480,079

489,894

1,186,744

1,324,306

119,457
92,422
333,526(2,017)

119,457
92,422368,863(2,074)543,390578,669

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

55,226888
34,930(1,418)(11,735)

102,607(1,516)34,924(252)(9,584)

Total accumulated other comprehensive income

77,891

126,179

88,91391,918

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

Non-controlling interests
Total net assets
Total liabilities and net assets–7–710,195

796,767

1,896,939

2,121,073

(2) Consolidated statement of income and consolidated statements of comprehensive income
Consolidated statement of income
Consolidated first nine months

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Equity in earnings of affiliates
Rent income on non-current assets
Other
Total non-operating profit
Non-operating expenses
Interest expenses
Settlement expenses of remaining business in mines
Loss on retirement of non-current assets
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on reversal of loss on valuation of investment
securities
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on sales of investment securities
Loss on sales of non-current assets
Subsidiary transfer cost
Loss on valuation of investment securities
Other
Total extraordinary losses
Income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Million yen)
Nine Months Ended
December 31, 2016
(Apr. 1, 2016– Dec 31, 2016)
956,344807,859
148,484
104,591
43,892–8–

Nine Months Ended
December 31, 2017
(Apr. 1, 2017– Dec 31, 2017)
1,147,047
981,607
165,440
110,451
54,988405
14,368
1,867
3,661
1,577
21,879579
18,252
2,267
3,595
2,081
26,776

3,812
2,439
2,374
4,167
12,79352,977

3,788
3,029
2,710
3,655
13,184
68,581

16,039

2,365

–

1,145

3,169
470
19,680

981
6
4,499

–
73
107
109
222
512
72,145
17,45454,6905,296
49,393

490
283
40
–
136
952
72,12819,74652,381
8,646
43,734

Consolidated statements of comprehensive income
Consolidated first nine months(Million yen)
Nine Months Ended
December 31, 2016
(Apr. 1, 2016– Dec 31, 2016)

Net income
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
Equity in earnings of affiliates
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests–9–

Nine Months Ended
December 31, 2017
(Apr. 1, 2017– Dec 31, 2017)

54,69052,381

13,472(4,941)(15,752)
2,618(3,299)47,519(2,521)
4,595
2,104
993

(7,902)

52,691

46,787105,073

46,191

95,360596

9,712

(3) Notes to consolidated quarterly financial statements
Notes on assumptions for a going concern
N/A

Segment information[Segment Information]
I. For the nine months ended December 31, 2016 (from April 1, 2016 to December 31, 2016)
Sales and income of reporting segments(Million yen)

AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

129,989

453,958

94,39541,727(2) Withinconsolidated group

2,334

5,695

11,747

4,673

Total

132,323459,654

106,143

16,38022,9387,259

Amountindicated intheAdjustment
consolidated
amountquarterlystatements
of income

OthersTotal

118,805

117,467

956,344–956,344

1,621

31,24257,315(57,315)–

46,400120,427

148,709

1,013,659(57,315)

956,344

1,459

7,619

4,674

60,332(7,354)

52,977

Net sales

Segment income

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estate business,and engineering-related services.
2. “Adjustment amount” of segment income of -¥7,354 million includes the elimination of intersegment transactionsof ¥21 million and corporate expenses of -¥7,376 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses that do not belong to the reporting
segments, basic experiment and research expenses, and financial revenue and expenses.
3. Segment income has been adjusted together with ordinary income on the consolidated quarterly statements of income.

II. For the nine months ended December 31, 2017 (from April 1, 2017 to December 31, 2017)
1. Sales and income of reporting segments(Million yen)

AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

143,337

600,864

110,954

45,824(2) Withinconsolidated group

2,706

7,074

8,739

Total

146,044

607,939

18,34030,536

Amountindicated intheAdjustment
consolidated
amountquarterlystatements
of income

OthersTotal

114,343

131,722

1,147,047–

1,147,047

6,709

632

38,51264,375(64,375)–

119,693

52,533

114,975

170,235

1,211,422(64,375)

1,147,047

13,036

3,176

4,086

6,195

75,371(6,789)68,581

Net sales

Segment income

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estate business,and engineering-related services.
2. “Adjustment amount” of segment income of -¥6,789 million includes the elimination of intersegment transactionsof ¥74 million and corporate expenses of -¥6,864 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses that do not belong to the reporting
segments, basic experiment and research expenses, and financial revenue and expenses.
3. Segment income has been adjusted together with ordinary income on the consolidated quarterly statements of income.

– 10 –

2. Matters relating to the change in the reporting segments, etc.
(Changes in the depreciation method of property, plant and equipment)
As stated in “Changes in accounting policies”, as the deprecation method applied to production facilities forelectronic materials and components of the Company and its consolidated subsidiaries in Japan, the decliningbalance method was mainly used, but the method has been changed to the straight-line method from the firstquarter of the current consolidated fiscal year.
As a result of changing the depreciation method, segment income has increased ¥219 million in the first ninemonths of the current consolidated fiscal year, compared with the case in which the past method is used.

Notes on significant changes in the amount of shareholders’ equity, if any
N/AApplication of special accounting treatment in the preparation of the quarterly consolidated
financial statements
The Company calculates tax expenses by rationally assuming an effective tax rate after applying tax effectaccounting to income before income taxes for the consolidated fiscal year, including the third quarter under review,
and multiplying income before income taxes for the first nine months by the estimated effective tax rate.

Changes in accounting policies(Changes in the depreciation method of property, plant and equipment)
As the deprecation method applied to production facilities for electronic materials and components of the Company
and its consolidated subsidiaries in Japan, the declining-balance method was mainly used, but the method has beenchanged to the straight-line method from the first quarter of the current consolidated fiscal year. This change has
been made based on our judgment that the straight-line method is more reasonable, given that production facilities
are expected to operate stably over a long period of time and that the investment effect is expected to emerge
evenly, as a result of examining the depreciation method in the wake of the formulation of the Medium-Term
Management Strategy (FY2018 to FY2020).
As a result of changing the depreciation method, operating profit, ordinary income and income before income
taxes have increased ¥219 million, respectively, in the first nine months of the current consolidated fiscal year,
compared with the case in which the past method is used.

Additional information(Provision for environmental measures)
In regards to expenses for specific countermeasure work to prevent mining-induced pollution and expenses forcountermeasure work to stabilize collection sites in abandoned mines managed by the Group, we have recorded a
provision for expenses whose estimated amount has been fixed because the details of the construction work havebeen determined. However, there are some forms of countermeasure work for which the amount cannot becalculated reasonably because the details of construction work are undecided due to the fact that the mostappropriate construction method for the landscape and existing equipment have yet to be selected, even thoughspecific countermeasure work is necessary.

Contingent liabilities(Matters concerning taxation in Indonesia)
Previous consolidated fiscal year (As of March 31, 2017)
On December 30, 2014, PT. Smelting in Indonesia, a consolidated subsidiary of the Company (hereinafter the“Consolidated Subsidiary”) received a notice of reassessment in an amount of US$47 million (¥5,370 million– 11 –

based on the exchange rate at the end of the previous consolidated fiscal year) from the Indonesian National Tax
Authority regarding the sales transaction pricing of the Consolidated Subsidiary for the year ended December 2009.
On January 28, 2015, the Consolidated Subsidiary made a provisional deposit of US$14 million (¥1,570 million)
as a part of the additional collection.
However, the Consolidated Subsidiary submitted a written objection to the Indonesian National Tax Authority on
March 25, 2015, because this assessment, which claimed there was a sales shortage on the part of the Consolidated
Subsidiary based on a comparison of the profit margin ratio with other companies selected by the Indonesian
National Tax Authority, was highly unreasonable and found to be unacceptable by the Company and theConsolidated Subsidiary.
The written objection submitted by the Consolidated Subsidiary on March 25, 2015 was dismissed by theIndonesian National Tax Authority on March 16, 2016. Therefore, the Consolidated Subsidiary filed a complaint
to the Tax Court in Indonesia on June 6, 2016 to present the fairness of the view of the Company and theConsolidated Subsidiary.
On December 22, 2016, the Consolidated Subsidiary received a notice of reassessment in an amount of US$34
million (¥3,841 million) from the Indonesian National Tax Authority, regarding its posting of raw material costs
for the fiscal year ended December 2011.
However, the Consolidated Subsidiary submitted a written objection to the Indonesian National Tax Authority on
March 20, 2017, because this assessment was a view that unilaterally negated the basis for recording raw materials
costs, etc. of the Consolidated Subsidiary and found to be unacceptable by the Company and the Consolidated
Subsidiary.
Third quarter of the consolidated fiscal year under review (As of December 31, 2017)
On December 30, 2014, PT. Smelting in Indonesia, a consolidated subsidiary of the Company (hereinafter the“Consolidated Subsidiary”) received a notice of reassessment in an amount of US$47 million (¥5,409 million
based on the exchange rate at the end of the third quarter of the consolidated fiscal year under review) from theIndonesian National Tax Authority, regarding the sales transaction pricing of the Consolidated Subsidiary for theyear ended December 2009. On January 28, 2015, the Consolidated Subsidiary made a provisional deposit of
US$14 million (¥1,582 million) as a part of the additional collection.
However, the Consolidated Subsidiary submitted a written objection to the Indonesian National Tax Authority on
March 25, 2015, because this assessment, which claimed there was a sales shortage on the part of the Consolidated
Subsidiary based on a comparison of the profit margin ratio with other companies selected by the Indonesian
National Tax Authority, was highly unreasonable and found to be unacceptable by the Company and theConsolidated Subsidiary.
The written objection submitted by the Consolidated Subsidiary on March 25, 2015 was dismissed by theIndonesian National Tax Authority on March 16, 2016. Therefore, the Consolidated Subsidiary filed a complaint
to the Tax Court in Indonesia on June 6, 2016 to present the fairness of the view of the Company and theConsolidated Subsidiary.
On December 22, 2016, the Consolidated Subsidiary received a notice of reassessment in an amount of US$34
million (¥3,869 million) from the Indonesian National Tax Authority, regarding its posting of raw material costs
for the fiscal year ended December 2011.
However, the Consolidated Subsidiary submitted a written objection to the Indonesian National Tax Authority on
March 20, 2017, because this assessment was a view that unilaterally negated the basis for recording raw materials
costs, etc. of the Consolidated Subsidiary and found to be unacceptable by the Company and the Consolidated
Subsidiary.
On November 29, 2017, the Consolidated Subsidiary received a notice of reassessment in an amount of US$22
million (¥2,579 million) from the Indonesian National Tax Authority, primarily regarding its posting of gains or– 12 –

losses on hedging for the fiscal year ended December 2012. On December 27, 2017, the Consolidated Subsidiarymade a provisional deposit of US$6 million (¥711 million) as part of the additional collection.
However, the Consolidated Subsidiary plans to submit a written objection to the Indonesian National Tax
Authority, because this assessment was a view that unilaterally negated the act of recording gains or losses onhedges, etc. of the Consolidated Subsidiary and was found to be unacceptable by the Company and theConsolidated Subsidiary.
(Matters concerning Non-Conforming Products)
Third quarter of the consolidated fiscal year under review (As of December 31, 2017)
Mitsubishi Materials Corporation discovered sequentially that the Company’s consolidated subsidiaries Mitsubishi
Cable Industries, Ltd., Mitsubishi Shindoh Co., Ltd., Mitsubishi Aluminum Co., Ltd., Tachibana Metal
Manufacturing Co., Ltd., and Diamet Corporation had delivered products, etc. that deviated from customer
standards or internal company specifications due to misconduct, including the rewriting of inspection records data
and the insufficient testing concerning some of the products manufactured and sold in the past (the “Incident”).
We are currently proceeding with explanation and confirmation of safety to customers.
Mitsubishi Cable Industries, Ltd. had its ISO 9001 and JIS Q 9100 certifications revoked, Mitsubishi Shindoh Co.,
Ltd. had its ISO9001 certification partially revoked and temporarily suspended, and its JIS certification temporarilysuspended, and Mitsubishi Aluminum Co., Ltd. had its ISO 9001 certification temporarily suspended and its JIS
certifications revoked by each of the accrediting agencies respectively.
On December 1, 2017, the Company established a Special Investigation Committee to grant this committee theauthority, among other things, to conduct an investigation into the facts, causes and effects of this matter andformulate measures for the Mitsubishi Materials Group. The Company received an interim report from the Special
Investigation Committee dated December 28, 2017.
The subsequent progress of the Incident may affect the Company’s consolidated financial results if the Company
pays compensation cost to customers or other affected parties or otherwise incurs a loss, since it is difficult torationally estimate the impact amount at the present time, it is not reflected in the quarterly consolidated financial
statements.

Significant subsequent events
At the meeting of the Board of Directors held on November 29, 2017, the Company passed a resolution to sell all
shares of Mitsubishi Materials Real Estate Corporation (“MMRE”), a consolidated subsidiary of the Company, toFortress Value Properties Holdings GK (“Fortress”), and signed a share sale and purchase agreement on the sameday. The shares are scheduled to be transferred on February 28, 2018.
Ahead of the share transfer, the Company passed a resolution at the Board of Directors’ meeting held on November
29, 2017 to have MMRE take over part of the Company’s real estate business through an absorption-type company
split, and conducted such company split on February 1, 2018.
MMRE passed a resolution at the Board of Directors’ meeting held on November 29, 2017 to transfer part of its
real estate business to Materials Real Estate Corporation (the “New Company”), a company incorporated througha split-off type of incorporation-type company split, and carried out the incorporation-type company split on
February 1, 2018.
1. Transactions, etc. under common control (absorption-type company split)(1) Overview of transaction
i. Name and details of the applicable business
Name of the business: Part of the Company’s real estate businessType of the business: Sales and leasing of real estate, etc.

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ii. Date of the business combination
February 1, 2018iii. Legal form of the business combination
Simple absorption-type company split in which the Company is split through an absorption-type company
split and MMRE is the successor company
iv. Name of the company after the business combination
Mitsubishi Materials Real Estate Corporationv. Other matters concerning the overview of transaction
The purpose of this company split is to transfer part of the Company’s real estate business to MMRE aheadof the transfer of all shares of MMRE to Fortress based on the agreement with Fortress.
(2) Overview of accounting procedures to implement
The procedures will be treated as transactions under common control based on the “Accounting Standard forBusiness Combinations” and “Implementation Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures.”
2. Transactions, etc. under common control (incorporation-type company split)(1) Overview of transaction
i. Name and details of the applicable business
Name of the business: Part of MMRE’s real estate businessType of the business: Contract management of real estate, forests, etc.
ii. Date of the business combination
February 1, 2018iii. Legal form of the business combination
Simple incorporation-type company split in which MMRE is split through an incorporation-type company
split and the New Company is the successor company.
iv. Name of the company after the business combination
Materials Real Estate Corporationv. Other matters concerning the overview of transaction
This is a split-off type of incorporation-type company split, in which all shares of the New Company areallotted to the Company on the effective date of the split. The purpose is to retain part of MMRE’s realestate business in the Mitsubishi Materials Group ahead of the transfer of all shares of MMRE to Fortressbased on the agreement with Fortress.
(2) Overview of accounting procedures to implement
The procedures will be treated as transactions under common control based on the “Accounting Standard forBusiness Combinations” and the “Implementation Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures.”(Additional information)
Business divestitures (sales of shares of a subsidiary (plan))(1) Overview of business divestitures
i. Name of the buyer
Fortress Value Properties Holdings GK
ii. Details of divested business
Mitsubishi Materials Real Estate Corporation (details of business: real estate lease and sports facility– 14 –

operation)iii. Main reason for the business divestitures
The Company has established group-wide policy of “optimization of business portfolio,” “Comprehensive
Efforts to Increase Business Competitiveness,” and “creation of new products and business” in its MediumTerm Management Strategy (the “Mid-term Strategy”) for the period between FY2018 and FY2020.
Regarding the“optimization of business portfolio,” the Company plans to determine the appropriate
direction for business characteristics and define issues before implementing business selection andconcentration to improve its capital efficiency.
MMRE primarily operates the real estate lease business as the core real estate company in the Mitsubishi
Materials Group. The Company, however, has concluded that transferring MMRE operating a leasebusiness to Fortress, which has considerable expertise in real estate management, will be the optimal
strategy for achieving the Group’s Mid-term Strategy and for the future development of MMRE. The
Company has implemented the share transfer for this reason.
iv. Date of the business divestitures
February 28, 2018 (plan)v. Other matters concerning the overview of transaction including legal form
Share transfer in which only cash and other assets are received as compensation received.
(2) Reporting segment in which the divested business was included
Others business– 15 –

3. Others(On-site inspection by the Japan Fair Trade Commission)
Universal Can Corporation, a consolidated subsidiary of the Company, was on-site inspected by the Japan Fair
Trade Commission on February 6, 2018, due to suspected of violating the Antimonopoly Act concerning thetransaction of empty cans for beverages.

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