Consolidated Financial Results for the Three Months Ended June 30, 2018
(Japanese Accounting Standards)
August 7, 2018
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:
August 7, 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 three months ended June 30, 2018 (From April 1, 2018 to June 30, 2018)(1) Consolidated Results of Operations (cumulative)(Figures in percentages denote the year-on-year change.)
Net salesFirst three months ended June 30, 2018
First three months ended June 30, 2017
(Note) Comprehensive income:Operating profit

Net income
attributable toowners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

420,049
333,316

26.0
11.5

16,887
17,307-2.4
31.2

18,07821,640

-16.5
79.4

9,883
11,630-15.0
8.0

The first three months ended June 30, 2018: 5,521 million yen (-60.0%)
The first three months ended June 30, 2017: 13,808 million yen (–%)

Net income
per share

Diluted net income
per share
YenFirst three months ended June 30, 2018
First three months ended June 30, 2017

Yen

–
–

75.47
88.80

(2) Consolidated Financial Position
Total assets
As of June 30, 2018
As of March 31, 2018

Shareholders’equity ratio

Net assets

Million yen

Million yen%

2,006,314
2,011,067

768,968
768,495

33.9
33.9(Reference) Shareholders’ Equity:
As of June 30, 2018: 679,626 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

Yen

–
–

Year ended March 31, 2018Year ending March 31, 2019Year ending March 31, 2019 (Forecast)Third quarter

Yen

Year-end

Yen

Annual
Yen

Yen

30.00

–

50.00

80.00

40.00

–

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 sales

Six months ending
September 30, 2018Year 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

820,000

13.0

32,000-12.3

33,500-15.3

19,000-5.7

145.08

1,660,000

3.8

67,000-8.0

79,000-0.8

35,0001.2

267.26(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):Three months ended June 30, 2018:
131,489,535 sharesYear ended March 31, 2018:
131,489,535 shares(ii)
Numbers of treasury shares at end of terms:
Three months ended June 30, 2018:529,397 sharesYear ended March 31, 2018:
527,089 shares(iii) Average number of shares issued during terms (quarterly cumulative period):
Three months ended June 30, 2018:
130,961,338 shares
Three months ended June 30, 2017:
130,979,953 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 First Quarter Ended June 30, 2018” 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,
August 7, 2018. The materials used at this briefing are disclosed on the TDnet and the Company’s web page at the timethat the quarterly financial results are announced.

Contents
1. Qualitative Information on Financial Results for the First Quarter Ended June 30, 2018 .................................. 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 Key Notes ............................................................................................. 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
Additional information ............................................................................................................................... 11
Contingent liabilities .................................................................................................................................. 11
Important subsequent events ...................................................................................................................... 14–1–

1. Qualitative Information on Financial Results for the First Quarter Ended June 30, 2018
(1) Details of operating results1) Overview of operating results
During the first quarter of the consolidated fiscal year under review, signs of recovery continued in the Asian
economies of China, Thailand and Indonesia. 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 foreignexchange markets were characterized by year on year yen appreciation.
Under these circumstances, consolidated net sales for the first quarter under review totaled ¥420,049 million,
up 26.0% year on year. Operating profit decreased 2.4% year on year, to ¥16,887 million, and ordinary
income fell 16.5%, to ¥18,078 million. Net income attributable to owners of parent was ¥9,883 million, down
15.0% year on year.
2) Overview by segments(Cement)

Net sales
Operating profit
Ordinary income

FY 2018 Q1
47.5
5.2
5.3

FY 2019 Q1
48.6
3.8
3.9

(Billion yen)
Increase / Decrease (%)
1.0(2.3%)-1.4(-28.0%)-1.3(-24.9%)

Sales volumes rose in Japan due to the firm performance of construction work of facilities related to theTokyo Olympic and Paralympic Games in the Tokyo metropolitan area, as well as the extension work of the
Hokuriku Shinkansen in the Hokuriku area. However, mainly rising energy costs resulted in a decline inoperating profit, even as net sales increased.
In the United States, sales of ready-mixed concrete declined, mainly due to the absence of carry-over demandfollowing bad weather. As a result, both net sales and operating profit declined.
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.
(Metals)

Net sales
Operating profit
Ordinary income

FY 2018 Q1
158.5
3.7
7.8

FY 2019 Q1
236.8
5.8
5.6

(Billion yen)
Increase / Decrease (%)
78.2(49.4%)
2.0(54.7%)-2.1(-27.9%)In the copper business, both net sales and operating profit rose, reflecting the higher production volume at
Naoshima Smelter & Refinery due to the absence of periodic furnace repairs and higher copper prices.
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 and other valuable metals contained in raw
materials.
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 other use.

–2–

As a result, overall the Metals business posted year-on-year increases in net sales and operating profit.
Ordinary income decreased chiefly due to a fall in dividend income despite increase in operating profit.
(Advanced Materials & Tools)

Net sales
Operating profit
Ordinary income

FY 2018 Q1
39.0
4.2
3.9

FY 2019 Q1
44.8
5.9
5.4

(Billion yen)
Increase / Decrease (%)
5.8(15.0%)
1.6(39.4%)
1.5(38.3%)In the cemented carbide products business, net sales and operating profit increased as a result of aggressive
sales promotion efforts, in addition to higher demand in Japan and China.
In the high-performance alloy products business, net sales increased due to growth in demand for mainstay
sintering parts in Japan and North America. However, the operating loss expanded due to the increased costs
associated with quality inspection and shipments.
As a result, overall the Advanced Materials & Tools business recorded year-on-year increases in net sales
and operating profit. Ordinary income also rose due to the higher operating profit.
(Electronic Materials & Components)

Net sales
Operating profit
Ordinary income

FY 2018 Q1
17.4
1.4
1.4

FY 2019 Q1
18.7
1.2
1.3

(Billion yen)
Increase / Decrease (%)
1.2(7.0%)-0.2(-18.2%)-0.1(-10.4%)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 and other products.
In the electronic components business, net sales increased while operating profit declined due to the effect offalling selling prices of products for optical communication related equipment, although the sales of products
for home appliances and products for automobiles increased.
The polycrystalline silicon business recorded decreases in both net sales and operating profit due to a fall in
selling prices, despite an increase in sales volume based primarily on higher demand backed by the strong
semiconductor market.
As a result, the entire Electronics Materials & Components business registered a year-on-year increase in net
sales but a year-on-year decline in operating profit. Ordinary income decreased as a result of the lower
operating profit.

–3–

(Aluminum)

Net sales
Operating profit
Ordinary income

FY 2018 Q1
39.5
2.3
2.2

FY 2019 Q1
39.4
0.9
0.9

(Billion yen)
Increase / Decrease (%)-0.0(-0.1%)-1.3(-58.1%)-1.3(-58.7%)In the aluminum can business, net sales and operating profit declined due to a fall in sales of bottle cans andrising costs of raw materials and energy, despite an increase in sales of regular cans.
In the rolled aluminum and processed aluminum products business, sales of can materials and plate products
for litho sheets declined, despite higher sales of heat exchanger materials for automobiles. Energy costs alsorose. As a result of these developments, net sales increased, but operating profit declined.
As a result, the entire Aluminum business posted year-on-year decreases in net sales and operating profit.
Ordinary income also declined due to the fall in operating profit.
(Others)

Net sales
Operating profit
Ordinary income

FY 2018 Q1
50.7
1.6
1.9

FY 2019 Q1
49.9
1.2
2.0

(Billion yen)
Increase / Decrease (%)-0.8(-1.8%)-0.3(-20.4%)0.1(7.1%)In the energy-related business, net sales decreased while operating profit increased due to firmness in sales ofnuclear energy-related products despite decrease in sales of coal.
In the environmental recycling business, both net sales and operating profit increased with a rise in therecycling unit price of valuables, in addition to an increase in recycling volumes.
Total net sales and operating profit in the Others business excluding the energy-related business and theenvironmental recycling business decreased.
In the overall Others business, net sales and operating profit decreased from a year earlier. Ordinary income
increased mainly due to a rise in dividend income, despite the fall in operating profit.

–4–

(2) Details of financial position
Total assets at the end of the first quarter of the consolidated fiscal year under review stood at ¥2,006.3 billion,
down ¥4.7 billion from the end of the previous consolidated fiscal year. This result was mainly due to a decrease
in investment securities despite increase in inventories during the first quarter under review.
Total liabilities were ¥1,237.3 billion, a decrease of ¥5.2 billion from the end of the previous consolidated fiscal
year. This decrease was chiefly attributable to falls in income taxes payable and provision while long-term loans
payable increased during the first quarter under review.

(3) Information on the consolidated earnings forecasts and other future forecasts
The Company has postponed the expected periodic furnace repairs at PT. Smelting in Indonesia to the third
quarter of the consolidated fiscal year. As a result, sales of copper cathode is expected to increase. Therefore, theCompany revises the previous forecasts (announced on May 10, 2018) as follows for net sales of theconsolidated earnings forecast for the first half of the consolidated fiscal year ending March 31, 2019. While
ready-mixed concrete sales volumes in the U.S. fell short of the plan, sales of cemented carbide products enjoyedstrong sales. Considering these developments, there is no change from the previous announced figures regarding
operating profit, ordinary income and net income attributable to owners of parent.
With regard to the consolidated earnings forecast for the fiscal year ending March 31, 2019, there is no change
from the previous announced figures.
Revisions to Consolidated Earnings Forecasts for the First Six Months of the Fiscal Year Ending March 31, 2019(from April 1, 2018 to September 30, 2018)(Billion yen)Previous forecast
Current forecast
Increase / Decrease (%)
Net sales
800.0
820.0
2.5%
Operating profit

32.0

32.0

－

Ordinary income

33.5

33.5

－

Net income attributable toowners of parent

19.0

19.0

－

–5–

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–6–(Million yen)
As of June 30, 2018

93,389260,427
91,772132,043
142,275
227,686(2,518)82,956
260,844
98,588
155,544
138,788
223,662(2,747)

945,077

957,636

204,513
236,709204,336

205,933
237,969
208,325

645,559652,228

44,636
19,93844,33019,22364,57463,554

303,924
56,228(4,297)285,885
51,319(4,310)355,855

332,894

1,065,989

1,048,677

2,011,067

2,006,314

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 June 30, 2018

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

155,847
199,158
10,00020,0004,686
6,512
243,849
119,670

777,001

759,723

50,000240,292
37,8332,370
51,64783,42750,000259,383
37,183
2,648
50,91577,489465,570

477,621

1,242,571

1,237,345

119,457
92,422
361,430(2,089)119,457
92,422366,706(2,096)571,222576,490

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)

85,661(509)
33,071(7,369)(7,718)

Total accumulated other comprehensive income

111,249

103,135

86,02389,342

Non-controlling interests
Total net assets
Total liabilities and net assets–7–768,495

768,968

2,011,067

2,006,314

(2) Consolidated statement of income and consolidated statements of comprehensive income
Consolidated statement of income
Consolidated first three 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
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on liquidation of subsidiaries and associates
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Impairment loss
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)Three Months Ended
June 30, 2017
(Apr. 1, 2017–Jun. 30, 2017)
333,316
279,944
53,372
36,06417,307–8–

Three Months Ended
June 30, 2018
(Apr. 1, 2018–Jun. 30, 2018)
420,049364,529
55,52038,633
16,887

187
5,937

245
3,314

600

354

1,156
1,274
9,155

1,243
510
5,668

1,247
–
3,575
4,822
21,640

1,217
1,131
2,127
4,476
18,078

–
126
17
143

506
170
85
762

5
–
25
30
21,754
7,122
14,632
3,001
11,630

686
334
0
1,020
17,8206,223
11,5961,713
9,883

Consolidated statements of comprehensive income
Consolidated first three months(Million yen)Three Months Ended
June 30, 2017
(Apr. 1, 2017–Jun. 30, 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–9–

Three Months Ended
June 30, 2018
(Apr. 1, 2018–Jun. 30, 2018)

14,632

11,596(179)(1,432)(103)815(9,908)(1,603)
5,834
350

76

(748)

(823)

(6,075)13,808

5,521

10,729

1,663

3,078

3,858

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

Segment information[Segment Information]
I. For the three months ended June 30, 2017 (from April 1, 2017 to June 30, 2017)
Sales and income of reporting segments(Million yen)

AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

46,798156,377

36,157

15,291(2) Withinconsolidated group

799

2,209

2,874

2,202

Total

47,598

158,587

39,032

5,314

7,858

3,976

Amountindicated intheAdjustment
consolidated
amountquarterlystatements
of income

OthersTotal

39,29339,398333,316–

333,316

241

11,396

19,723(19,723)–

17,49339,53550,794353,040(19,723)

333,316

1,489

2,231

1,936

22,806(1,165)

21,640Net 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 -¥1,165 million includes the elimination of intersegment transactionsof -¥54 million and corporate expenses of -¥1,111 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.

II. For the three months ended June 30, 2018 (from April 1, 2018 to June 30, 2018)
Sales and income of reporting segments(Million yen)

AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

48,009234,555

41,971

16,519(2) Withinconsolidated group

664

2,294

2,913

Total

48,674

236,849

3,991

5,667

Amountindicated intheAdjustment
consolidated
amountquarterlystatements
of income

OthersTotal

39,262

39,730420,049–

420,049

2,205

218

10,16918,467(18,467)–

44,884

18,72539,481

49,900438,517(18,467)

420,049

5,498

1,334

920

2,073

19,486(1,407)

18,078Net 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 -¥1,407 million includes the elimination of intersegment transactionsof ¥59 million and corporate expenses of -¥1,467 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.

– 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 first quarter underreview, and multiplying income before income taxes for the first quarter 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 aresome 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.
(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 underreview. 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.
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.

– 11 –

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.
First quarter of the consolidated fiscal year under review (As of June 30, 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 (¥5,291 million based on the exchange
rate at the end of the first 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 (¥1,547 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 (¥2,523
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 (¥696 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.
(Matters concerning Non-Conforming Products)
Previous consolidated fiscal year (As of March 31, 2018)
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– 12 –

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.
First quarter of the consolidated fiscal year under review (As of June 30, 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.
First quarter of the consolidated fiscal year under review (As of June 30, 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.

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Important subsequent events(Change the method of business segmentation)
At the meeting of the Board of Directors held on August 7, 2018, the Company has resolved to partially change
the organization of business division effective 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 decided to change 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”.
Information on net sales and profits for each reporting segment for the first quarter of the consolidated fiscal year
under review based on the business segments after the change is currently under calculation.

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