Consolidated Financial Results for the Nine Months Ended December 31, 2018
(Japanese Accounting Standards)
February 12, 2019
Tokyo Stock Exchange
http://www.mmc.co.jp/

Name of Listed Company: Mitsubishi Materials Corporation
Listing:
Stock Code:
5711
URL:
Representative: Naoki Ono, President
Contact:
Nobuyuki Suzuki, General Manager, Corporate Communications Dept., General Affiars Dept.,
Human Resources & General Affairs Div.
Tel: +81-3-5252-5206
Scheduled filing date of Quarterly Report:
February 12, 2019
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, 2018 (From April 1, 2018 to December 31, 2018)(1) Consolidated Results of Operations (cumulative)(Figures in percentages denote the year-on-year change.)
Net salesFirst nine months ended December 31, 2018
First nine months ended December 31, 2017

Operating profit

Net income
attributable toowners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

1,272,555
1,147,047

10.9
19.9

34,24854,988-37.7
25.3

42,067
68,581-38.7
29.5

12,83143,734

-70.7
-11.5

The first nine months ended December 31, 2018: -17,631 million yen (－%)
The first nine months ended December 31, 2017: 105,073 million yen (124.6%)(Note) Comprehensive income:Net income
per share

Diluted net income
per share
YenFirst nine months ended December 31, 2018
First nine months ended December 31, 2017

Yen

–
–

97.98
333.91(2) Consolidated Financial Position
Total assets
As of December 31, 2018
As of March 31, 2018

Shareholders’equity ratio

Net assets

Million yen

Million yen%

1,954,244
2,011,067

739,218
768,495

33.2
33.9(Reference) Shareholders’ Equity:
As of December 31, 2018: 648,479 million yen
As of March 31, 2018: 682,471 million yen(Note) The Company has been applying “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 on
February 16, 2018) from the beginning of the first three months ended June 30, 2018. Individual figures related to the period ended March 31,2018 have had the accounting standards applied retroactively.

2. Dividend Payments
Dividends per share(Record date)

First quarter

Second quarter

Third quarter

Yen

Yen

Yen

Year ended March 31, 2018

–

30.00

–

Year ending March 31, 2019

–

40.00

–

Year-end

Year ending March 31, 2019 (Forecast)

Annual
Yen

Yen

50.00

80.00

40.00

80.00

(Note) Revision of dividend forecast published most recently: No

3. Consolidated Earnings Forecast (From April 1, 2018 to March 31, 2019)(Figures in percentages denote the year-on-year change.)

Net salesYear ending March 31, 2019

Operating profit

Ordinary income

Net income
attributable toowners of parent

Net income
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

1,650,000

3.2

42,000-42.3

52,000-34.7

10,000

-71.1

76.36

(Note) Revision to forecast published most recently: Yes

* Notes(1) Significant changes of subsidiaries during the term under review (changes in specific subsidiaries accompanied bya change 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 Key Notes” 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
None
None
None

(4) Numbers of issued shares (common stock)(i)
Numbers of issued shares at end of terms (including treasury shares):
Nine months ended December 31, 2018:
131,489,535 sharesYear ended March 31, 2018:
131,489,535 shares(ii)
Numbers of treasury shares at end of terms:
Nine months ended December 31, 2018:536,278 sharesYear ended March 31, 2018:
527,089 shares(iii) Average number of shares issued during terms (quarterly cumulative period):
Nine months ended December 31, 2018:
130,957,722 shares
Nine months ended December 31, 2017:
130,975,076 shares* This quarterly financial summaries is not subject to a quarterly review by certified public accountants or audit firms.
* 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, 2018” on page 4 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 12, 2019. 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, 2018 ......................... 2(1) Details of operating results .............................................................................................................................2(2) Details of financial position ...........................................................................................................................4(3) Information on the consolidated earnings forecasts and other future forecasts ..............................................4
2. Consolidated Financial Statements and Key Notes ............................................................................................. 5(1) Consolidated balance sheet ............................................................................................................................5(2) Consolidated statement of income and consolidated statements of comprehensive income ..........................7
Consolidated statement of income.................................................................................................................. 7
Consolidated statements of comprehensive income ....................................................................................... 8(3) Notes to consolidated quarterly financial statements .....................................................................................9
Notes on assumptions for a going concern ..................................................................................................... 9
Segment information ...................................................................................................................................... 9
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
Additional information ................................................................................................................................. 11
Contingent liabilities .................................................................................................................................... 11
Important subsequent events ........................................................................................................................ 14–1–

1. Qualitative Information on Financial Results for the Nine Months Ended December 31, 2018
(1) Details of operating results1) Overview of operating results
During the first nine months of the consolidated fiscal year under review, although signs of economic
slowdown were seen in China, moderate recovery was seen in the Asian economies of Thailand andIndonesia. In the United States, the economy continued to recover steadily.
In Japan, corporate earnings and employment and income conditions were on the road to recovery, andconsumer spending and capital expenditure showed signs of improvement.
Regarding the business environment for the Mitsubishi Materials Group, copper prices increased, and energy
costs rose.
Under these circumstances, consolidated net sales for the first nine months of the year under review totaled¥1,272,555 million, up 10.9% year on year. Operating profit decreased 37.7% year on year, to ¥34,248
million, and ordinary income fell 38.7%, to ¥42,067 million. Net income attributable to owners of parent was¥12,831 million, down 70.7% year on year.
2) Overview by segments
From the third quarter of the fiscal year, the reporting segments have been changed, among other changes.
The details are set forth in “2. (3) Notes to consolidated quarterly financial statements (segment information).”In this regard, in comparison with the data of the same quarter of the previous year below, the numerical dataobtained upon the reclassification of the numerical data for the same quarter of the previous year under thechanged segments is used.
(Advanced Products)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q3

FY 2019 Q1-Q3

393.4
14.6
14.6

435.3
10.8
10.6

(Billion yen)
Increase / Decrease (%)
41.9(10.7%)-3.8(-26.2%)-3.9(-27.0%)In the copper and copper alloy products business, net sales increased and operating profit decreased as aresult of an increase in the costs of raw materials, despite the sales increase that was mainly attributable to thecontribution of MMC Copper Products OY to the consolidated results from the beginning of the fiscal year.
In the electronics materials & components business, net sales increased and operating profit decreased,
mainly due to the effect of the falling sales prices of some electronic component products, despite an increasein sales of products related to semiconductor manufacturing equipment and products for automobiles.
In the aluminum products business, net sales increased due to a rise in aluminum prices, despite a decrease in
the sales volume of beverage aluminum bottle cans and plate products for litho sheets, which are the rolled
and processed products, among other products. In addition, energy costs rose. As a result, the aluminumproducts business posted an increase in net sales and a decrease in operating profit.
Consequently, net sales for the entire Advanced Products increased year on year, but operating profit
decreased. Ordinary income declined mainly due to the decrease in operating profit.

–2–

(Metalworking Solutions)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q3

FY 2019 Q1-Q3

119.6
13.8
13.0

130.0
13.7
12.7

(Billion yen)
Increase / Decrease (%)
10.3(8.6%)-0.1(-0.7%)-0.2(-2.2%)In the cemented carbide products business, net sales and operating profit increased as a result of strong
demand mainly in Japan, Europe, United States, China and Southeast Asia.
In the sintering parts, etc. business, net sales increased due to growth in demand for mainstay sintering partsin Japan and North America. However, the operating loss expanded due to the increased costs associated withquality inspection and shipments.
Consequently, net sales for the entire Metalworking Solutions business increased year on year, but operating
profit decreased. Ordinary income declined mainly due to the decrease in operating profit.
(Metals)(Billion yen)
Increase / Decrease (%)

FY 2018 Q1-Q3

FY 2019 Q1-Q3

Net sales

508.0

564.6

56.5

(11.1%)

Operating profit (loss)

9.4
23.1

-1.2
3.9

-10.6

(－%)

-19.2

(-83.0%)Ordinary income

In the copper business, both net sales and operating profit decreased, mainly due to the lower production
volume resulting from periodic furnace repairs at PT. Smelting in Indonesia and the increased costs for
smelting.
In the gold and other valuable metals business, both net sales and operating profit grew, mainly due toincreased production as a result of a rise in the amount of gold contained in raw materials.
As a result, overall the Metal business posted year-on-year increase in net sales, but operating profit declined.
Ordinary income decreased due to the decrease in operating profit and dividend income.
(Cement)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q3

FY 2019 Q1-Q3

146.0
16.9
18.3

151.0
11.7
12.2

(Billion yen)
Increase / Decrease (%)
4.9(3.4%)-5.2(-30.7%)-6.0(-33.1%)

Despite the firm performance of construction work of facilities related to the Tokyo Olympic and Paralympic
Games in the Tokyo metropolitan area, as well as the extension work of the Hokuriku Shinkansen in the
Hokuriku area in Japan, mainly rising energy costs resulted in a decline in operating profit, even as net sales
increased.
In the United States, although the sales price of ready-mixed concrete rose, given an increase in fuel andother costs, net sales increased and operating profit decreased.
Consequently, net sales for the entire Cement business increased year on year, but operating profit decreased.
Ordinary income declined mainly due to the decrease in operating profit.

–3–

(Others)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q3

FY 2019 Q1-Q3

170.2
6.2
6.1

182.5
7.5
9.0

(Billion yen)
Increase / Decrease (%)
12.2(7.2%)

1.2(20.3%)

2.9(46.8%)In the energy-related business, although sales volume of coal decreased, due to a rise in sales prices of coal,both net sales and operating profit increased.
In the environment recycling business, net sales increased and operating profit decreased due to the costs
incurred for the launch of new business, despite a rise in the recycling unit price of valuables as well as anincrease in recycling volumes.
Although total net sales in the Others business excluding the energy-related business and the environmental
recycling business increased, operating profit decreased.
In the overall Others business, both net sales and operating profit increased year on year. Ordinary income
also rose due to the increase in operating profit and decrease in equity in losses of affiliates.

(2) Details of financial position
Total assets at the end of the third quarter of the consolidated fiscal year under review stood at ¥1,954.2 billion,
down ¥56.8 billion from the end of the previous consolidated fiscal year. This result was mainly due to adecrease in investment securities.
Total liabilities were ¥1,215.0 billion, a decrease of ¥27.5 billion from the end of the previous consolidated fiscal
year. This decrease was chiefly attributable to a fall in notes and accounts payable - trade.

(3) Information on the consolidated earnings forecasts and other future forecasts
For the fiscal year ending March 31, 2019, the Company expects operating profit and ordinary income todecrease from the previous forecast due to a decline in sales in the Metals business, which was mainly caused by
the delay in the re-start of operation at PT. Smelting in Indonesia following the furnace repairs, as well as
lower-than-projected sales in the Advanced Products. Net income attributable to owners of parent is also
expected to be lower than the previous forecast, reflecting an increase in impairment loss, among other factors.
Revisions to Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2019(from April 1, 2018 to March 31, 2019)

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

Previous forecast
1,660.0
53.0
64.0

Current forecast
1,650.0
42.0
52.0

25.0

10.0

(Billion yen)
Increase / Decrease (%)
-0.6
-20.8
-18.8
-60.0

(Note) The above forecast has been prepared on assumed economic conditions, market trends, and other factors foreseeable as of the date ofthis announcement, and the results may differ from the forecasts due to various factors arising in the future.

–4–

2. Consolidated Financial Statements and Key Notes(1) Consolidated balance sheet
As of March 31, 2018
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–5–(Million yen)
As of December 31, 2018

93,389260,427
91,772132,043
142,275
227,686(2,518)95,924
254,91293,252
132,847
138,609
233,121(2,906)

945,077

945,762204,513
236,709204,336

210,993
237,110
213,574

645,559

661,678

44,636
19,93842,26918,50864,57460,777

303,924
56,228(4,297)

236,445
53,624(4,044)355,855

286,025

1,065,989

1,008,481

2,011,067

1,954,244

As of March 31, 2018
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds payable
Commercial papers
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
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity(Million yen)
As of December 31, 2018

158,369
206,142
25,000–9,151
13,228
246,227
118,880

137,173
213,195–
20,0006,306
7,106
251,977
121,594

777,001

757,353

50,000240,292
37,8332,370
51,64783,42750,000248,582
42,1792,756
49,73664,416

465,570

457,671

1,242,571

1,215,025

119,457
92,422
361,430(2,089)119,457
92,422364,514(2,117)571,222574,277

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

95,487
1,068
33,071(10,312)(8,066)

51,256
2,046
32,974(5,190)(6,884)

Total accumulated other comprehensive income

111,249

74,20286,02390,739Non-controlling interests
Total net assets
Total liabilities and net assets–6–768,495

739,218

2,011,067

1,954,244

(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
Share of profit of entities accounted for using equity
methodRent 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 liquidation of subsidiaries and associates
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on reversal of loss of valuation of investment
securities
Other
Total extraordinary income
Extraordinary losses
Provision for environmental measures
Impairment loss
Loss on valuation of investment securities
Loss on sales of non-current assets
Loss on sales 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, 2017
(Apr. 1, 2017–Dec. 31, 2017)
1,147,047
981,607
165,440
110,451
54,988–7–

Nine Months Ended
December 31, 2018
(Apr. 1, 2018–Dec. 31, 2018)
1,272,555
1,121,653
150,901
116,653
34,248579
18,252820
13,169

2,267

1,525

3,595
2,081
26,776

3,746
1,913
21,175

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

3,579
2,132
1,373
6,270
13,35642,067

–
2,365
981

506
462
269

1,145

170

6
4,499

–
1,409

–
41
–
283
490
136
952
72,12819,74652,381
8,646
43,734

6,530
3,868
2,779
41
–
178
13,39830,077
12,785
17,291
4,460
12,831

Consolidated statements of comprehensive income
Consolidated first nine months(Million yen)
Nine Months Ended
December 31, 2017
(Apr. 1, 2017–Dec. 31, 2017)

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
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests–8–

Nine Months Ended
December 31, 2018
(Apr. 1, 2018–Dec. 31, 2018)

52,381

17,29147,519(2,521)
4,595
2,104

(44,444)
1,224
7,625
1,188

993

(518)

52,691(34,923)

105,073(17,631)

95,360(24,223)

9,712

6,592

(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, 2017 (from April 1, 2017 to December 31, 2017)
Sales and income of reporting segments(Million yen)

Adjustment
amountAmountindicated intheconsolidated
quarterlystatements ofincome1,147,047–

1,147,047

190,483(190,483)–

170,235

1,337,530(190,483)

1,147,047

6,195

75,362(6,781)

68,581

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Othersbusiness

Total(1) Outside customers

383,705

110,954377,326

143,337

131,722(2) Withinconsolidated group

9,759

8,739

130,765

2,706

38,512

Total

393,465

119,693508,091

146,044

14,636

13,03623,154

18,340Net sales

Segment income

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estatebusiness, and engineering-related services.
2. “Adjustment amount” of segment income of -¥6,781 million includes the elimination of intersegment transactionsof ¥82 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 ofincome.

–9–II. For the nine months ended December 31, 2018 (from April 1, 2018 to December 31, 2018)
1. Sales and income of reporting segments(Million yen)

Adjustment
amountAmountindicated intheconsolidated
quarterlystatements ofincome1,272,555–

1,272,555

36,502

191,021(191,021)–

151,014

182,505

1,463,577(191,021)

1,272,555

12,263

9,096

48,739(6,672)

42,067

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Othersbusiness

Total(1) Outside customers

424,925

120,900

432,163

148,562

146,003(2) Withinconsolidated group

10,471

9,105

132,490

2,452

Total

435,397130,005

564,653

10,691

12,751

3,936

Net sales

Segment income

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estatebusiness, and engineering-related services.
2. “Adjustment amount” of segment income of -¥6,672 million includes the elimination of intersegment transactionsof -¥89 million and corporate expenses of -¥6,583 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 ofincome.

2. Matters regarding the change of the reporting segments, among other changes
At the meeting of the Board of Directors held on August 7, 2018, the Company resolved to partially change theorganization of business division. This change was made on October 1, 2018.
The Copper & Copper Alloy Products in the Metals Company, the Electronic Materials & Components
Company and the Aluminum Div. are integrated to “Advanced Products Company” as a single in-housecompany, it aims to strengthen its product planning, marketing and proposal capabilities for key areas and main
customers in a cross-functional manner.
Associated with this, the Company has changed the method of business segmentation from the “Cement
Business”, “Metals Business”, “Advanced Materials & Tools Business”, “Electronic Materials & Components
Business”, “Aluminum Business” and “Others business” to the “Advanced Products”, “Metalworking Solutions
Business”, “Metals Business”, “Cement Business” and “Others business”.
In this regard, the segment information for the first nine months of the previous consolidated fiscal year that is
disclosed herein is made according to the changed method of segmentation.

– 10 –

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 underreview, and multiplying income before income taxes for the first nine months by the estimated effective tax rate.

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, regarding countermeasure work to stabilize large-scale collection sites, there weresome forms of countermeasure work for which the amount cannot be calculated reasonably because the details of
construction work are undecided due to the fact that the most appropriate construction method for the landscapeand existing equipment have yet to be selected, even though specific countermeasure work is necessary. The
details of the construction work were determined and the estimated amount of expenses was fixed in the firstnine months of the consolidated fiscal year under review, and we have thus recorded an extraordinary loss of¥6,530 million that was posted and included in the provision for environmental measures.
(Adoption of the “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.)
The Company has adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28 on February 16, 2018), etc. from the beginning of the first quarter of the fiscal year. As a result,deferred tax assets are presented in investments and other assets, and deferred tax liabilities are presented in
non-current liabilities.

Contingent liabilities(Matters concerning taxation in Indonesia)
Previous consolidated fiscal year (As of March 31, 2018)
On December 30, 2014, PT. Smelting in Indonesia, a consolidated subsidiary of the Company (hereinafter the“PTS”) received a notice of reassessment in an amount of US$47 million (¥5,085 million 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 PTS for the year ended December 31, 2009. On January 28, 2015, the PTS
made a provisional deposit of US$14 million (¥1,487 million) as a part of the additional collection.
However, the PTS 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 PTS based on a comparisonof 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 the PTS.
The written objection submitted by the PTS on March 25, 2015 was dismissed by the Indonesian National Tax
Authority on March 16, 2016. Therefore, the PTS filed a complaint to the Tax Court in Indonesia on June 6,2016 to present the fairness of the view of the Company and the PTS.
On December 22, 2016, the PTS received a notice of reassessment in an amount of US$34 million (¥3,637
million) from the Indonesian National Tax Authority, regarding its posting of raw material costs, etc. for the
fiscal year ended December 31, 2011.

– 11 –

However, the PTS 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 PTS and found to be unacceptable by the Company and the PTS.
On February 28, 2018, the PTS received a notice from the Indonesian National Tax Authority regarding thewritten objection submitted by the PTS on March 20, 2017, and the written objection of the PTS was acceptedfor US$28 million (¥3,012 million). For US$5 million (¥625 million), for which the written objection was
dismissed, the PTS has decided to file a complaint to the Tax Court in Indonesia.
On November 29, 2017, the PTS also received a notice of reassessment in an amount of US$22 million (¥2,425
million) from the Indonesian National Tax Authority, primarily regarding its posting of gains and losses on
hedging for the fiscal year ended December 31, 2012. On December 27, 2017, the PTS made a provisional
deposit of US$6 million (¥668 million) as part of the additional collection.
However, the PTS submitted a written objection to the Indonesian National Tax Authority on February 27, 2018,
because this assessment was a view that unilaterally negated the basis for recording gains and losses on hedging,etc. of the PTS and found to be unacceptable by the Company and the PTS.
Third quarter of the consolidated fiscal year under review (As of December 31, 2018)
On December 30, 2014, PT. Smelting in Indonesia, a consolidated subsidiary of the Company (hereinafter the“PTS”) received a notice of reassessment in an amount of US$47 million (¥5,313 million based on the exchange
rate at the end of the third quarter of the consolidated fiscal year under review) from the Indonesian National Tax
Authority, regarding the sales transaction pricing of the PTS for the year ended December 31, 2009. On January
28, 2015, the PTS made a provisional deposit of US$14 million (¥1,554 million) as a part of the additional
collection.
However, the PTS 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 PTS based on a comparisonof 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 the PTS.
The written objection submitted by the PTS on March 25, 2015 was dismissed by the Indonesian National Tax
Authority on March 16, 2016. Therefore, the PTS filed a complaint to the Tax Court in Indonesia on June 6,2016 to present the fairness of the view of the Company and the PTS.
On November 29, 2017, the PTS also received a notice of reassessment in an amount of US$22 million (¥2,533
million) from the Indonesian National Tax Authority, primarily regarding its posting of gains and losses on
hedging for the fiscal year ended December 31, 2012. On December 27, 2017, the PTS made a provisional
deposit of US$6 million (¥698 million) as part of the additional collection.
However, the PTS submitted a written objection to the Indonesian National Tax Authority on February 27, 2018,
because this assessment was a view that unilaterally negated the basis for recording gains and losses on hedging,etc. of the PTS and found to be unacceptable by the Company and the PTS.
On December 5, 2018, the PTS also received a notice of reassessment in an amount of US$15 million (¥1,688
million) from the Indonesian National Tax Authority, primarily regarding its posting of gains and losses on
hedging for the fiscal year ended December 31, 2014. On December 27, 2018, the PTS made a provisional
deposit of US$5 million (¥651 million) as part of the additional collection.
However, the PTS plans to submit a written objection to the Indonesian National Tax Authority, because thisassessment is a view that unilaterally negates the basis for recording gains and losses on hedging, etc. of the PTS
and has been found to be unacceptable by the Company and the PTS.
(Matters concerning Non-Conforming Products)
Previous consolidated fiscal year (As of March 31, 2018)– 12 –

Mitsubishi Materials Corporation discovered that the Company’s consolidated subsidiaries Mitsubishi Cable
Industries, Ltd., Mitsubishi Shindoh Co., Ltd., Mitsubishi Aluminum Co., Ltd., Tachibana Metal ManufacturingCo., 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 insufficienttesting concerning some of the products manufactured and sold in the past.
Based on the above fact, some of the aforementioned subsidiaries received notification of revocation of their JIS
certification and ISO certifications from the accrediting agencies.
Since quality control related problems were also discovered with respect to the copper slag products
manufactured at the Company's Naoshima Smelter & Refinery, the Company reported the fact to the Japan
Quality Assurance organization (JQA) and a special inspection was conducted. As a result, JQA revoked the JIS
certification for copper slag products manufactured at the Company’s Naoshima Smelter & Refinery.
Depending on the progress of the above mentioned issues, the Company’s consolidated business results may beaffected, due to costs incurred to compensate customers and other parties and other losses. However, suchamounts which are currently difficult to estimate are not reflected in the consolidated financial statements.
Third quarter of the consolidated fiscal year under review (As of December 31, 2018)
Mitsubishi Materials Corporation discovered that the Company’s consolidated subsidiaries 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.
Based on the above fact, some of the aforementioned subsidiaries received notification of revocation of their JIS
certification and ISO certifications from the accrediting agencies.
Depending on the progress of the above mentioned issues, the Company’s consolidated business results may beaffected, due to costs incurred to compensate customers and other parties and other losses. However, suchamounts which are currently difficult to estimate are not reflected in the quarterly consolidated financial
statements.
(On-site inspection by the Japan Fair Trade Commission)
Previous consolidated fiscal year (As of March 31, 2018)
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.
The subsequent progress of this matter may affect the Company’s consolidated financial results, since it isdifficult to rationally estimate the impact amount at the present time, it is not reflected in the consolidated
financial statements.
Third quarter of the consolidated fiscal year under review (As of December 31, 2018)
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.
The subsequent progress of this matter may affect the Company’s consolidated financial results, since it isdifficult to rationally estimate the impact amount at the present time, it is not reflected in the quarterly
consolidated financial statements.

– 13 –

Important subsequent events(Change the method of business segmentation)
At the meeting of the Board of Directors held on February 12, 2019, the Company has resolved to partiallychange the organization of the business division effective of April 1, 2019.
The coal-related business in the “Others business” has changed to the “Cement Business,” in which coal is usedas thermal energy, to achieve more efficient business management.
Information on net sales and profits for each reporting segment for the first nine months of the consolidated
fiscal year under review based on the business segments after the change is as provided below.
For the nine months ended December 31, 2018 (from April 1, 2018 to December 31, 2018)
Sales and income of reporting segments(Million yen)

Adjustment
amountAmountindicated intheconsolidated
quarterlystatements ofincome1,272,555–

1,272,555

31,513

186,600(186,600)–

192,610

136,488

1,459,155(186,600)

1,272,555

15,723

5,636

48,739(6,672)

42,067

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Othersbusiness

Total(1) Outside customers

424,925

120,900

432,163

189,589

104,975(2) Withinconsolidated group

10,471

9,105

132,490

3,020

Total

435,397130,005

564,653

10,691

12,751

3,936

Net sales

Segment income

Notes: 1. “Others business” includes nuclear energy-related services, environmental and recycling-related business, realestate business, and engineering-related services.
2. “Adjustment amount” of segment income of -¥6,672 million includes the elimination of intersegment transactionsof -¥89 million and corporate expenses of -¥6,583 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 ofincome.

– 14 –