Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013
<Under Japanese GAAP>
February 8, 2013
These financial statements have been prepared for reference only in accordance with accounting principles and practices generally accepted in Japan.

NAGASE & CO., LTD.
Stock exchange listing: Tokyo, Osaka (First Sections)
Code number:
8012 (http://www.nagase.co.jp)
Representative:
Hiroshi Nagase, Representative Director and President
Contact:
Masanori Furukawa, General Manager, Corporate Accounting Division
Tel: +81-3-3665-3103
Filing of quarterly report (scheduled): February 12, 2013
Start of distribution of dividends (scheduled): Supplementary documents or quarterly financial results: None
Quarterly investors’ meeting: None
(Note: Amounts have been rounded down to the nearest million yen.)

1. Consolidated Results for the Third Quarter of the Fiscal Year Ending March 31, 2013
(April 1, 2012 to December 31, 2012)(1) Consolidated Operating Results(Percentages represent changes compared with same period of the previous fiscal year.)Net sales

For the third quarter ended
December 31, 2012
December 31, 2011
(Note)

Comprehensive income:Operating profit

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

502,760
472,469

6.4(5.4)

12,252
11,1949.5(28.0)

13,842
13,486

2.6(20.8)

11,2097,550

48.5(28.1)

Third quarter ended December 31, 2012:
Third quarter ended December 31, 2011:
Earnings per share

For the third quarter ended
December 31, 2012
December 31, 2011¥14,735 million (590.3%)¥2,134 million (72.4% decrease)

Earnings per share (diluted)
Yen

Yen

87.84
58.75




(2) Consolidated Financial Position
Total assets

Net worth ratio

Millions of yen%

478,834
450,842

225,319
212,74445.2
45.4

December 31, 2012
March 31, 2012
(Reference) Equity capital:

Net assets

Millions of yen

As of December 31, 2012:
As of March 31, 2012:¥216,617 million¥204,706 million

2. Dividends
Dividends per share
1Q
For the year ended (or ending)March 31, 2012
March 31, 2013
March 31, 2013 (estimate)(Note)

2Q

Financial year
end

3Q

Annual

Yen

Yen

Yen

Yen

Yen




12.00
13.00




12.00

24.00

13.00

26.00

Revisions to the latest projected dividends: No

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2013
(April 1, 2012 to March 31, 2013)(Percentages represent changes compared with the previous fiscal year)

Net sales
Full fiscal year
(Note)

Millions of yen

671,000

Operating profit% Millions of yen

6.2

16,400Ordinary income% Millions of yen

22.1

17,600Earnings per
share

Net income% Millions of yen

12.2

13,600

%

Yen

58.7

107.33

Revisions to the latest projected consolidated results: No*Notes(1) Changes in major subsidiaries during the period (changes in specified subsidiaries accompanying changes in thescope of consolidation): None
New: — (Company name:)
Excluded: — (Company name:)(2) Application of special accounting methods to the preparation of quarterly financial statements: No(3) Changes in accounting principles, changes in accounting estimates, and restatement of prior period financial
statements after error correctionsi.
Changes in accordance with revisions to accounting and other standards: No
ii. Changes in items other than (i) above: Yesiii. Changes in accounting estimates: Yes
iv. Restatement of prior period financial statements after error corrections: No(Note) For details, see page 6, “2. Summary Information (Notes) (3) Changes in Accounting Policies or
Presentation Methods in Consolidated Financial Statements.”(4) Number of shares issued and outstanding (common stock)i.
Number of shares issued and outstanding as of the fiscal period end (including treasury stock)
December 31, 2012
138,408,285 shares March 31, 2012
138,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
December 31, 2012
11,693,822 shares

March 31, 2012

Average number of shares during the nine-month period ended
December 31, 2012
127,614,463 shares December 31, 2011

9,893,787 shares

128,514,526 shares* Quarterly Review Implementation DisclosureThis quarterly report is exempt from the quarterly review procedure based upon the Financial Instruments andExchange Act. Furthermore, quarterly consolidated financial statements were undergoing the review procedure process
at the time of release.
* Cautionary Statement with Respect to Forecasts of Consolidated Business Results
The results forecasts presented in this document are based upon currently available information and assumptions
deemed rational. A variety of factors could cause actual results to differ materially from forecasts.
Please refer to “1. Qualitative Information (3) Qualitative Information Related to Earnings Forecasts” on page 5 of thisdocument.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

Attachments
1. Qualitative Information ............................................................................................................... 2(1) Qualitative Information on Consolidated Operating Results ................................................. 2(2) Qualitative Information on Consolidated Financial Position ................................................. 5(3) Qualitative Information Related to Earnings Forecasts ......................................................... 5
2. Summary Information (Notes) .................................................................................................... 6(1) Changes of Classification of Specified Subsidiaries Accompanied by Changes in theConsolidation Scope .............................................................................................................. 6(2) Application of Special Accounting Methods in the Preparation of Quarterly Financial
Statements ............................................................................................................................. 6(3) Changes in Accounting Policies or Presentation Methods in Consolidated Financial
Statements ............................................................................................................................. 6
3. Quarterly Consolidated Financial Statements ............................................................................. 8(1) Quarterly Consolidated Balance Sheets................................................................................. 8(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income ....................................................................................................... 10
Quarterly Consolidated Statement of Income ...................................................................... 10
Quarterly Consolidated Statement of Comprehensive Income ............................................ 11(3) Quarterly Consolidated Statements of Cash Flows ............................................................. 12(4) Assumption for Going Concern ........................................................................................... 13(5) Significant Fluctuation in Shareholders’ Equity .................................................................. 13(6) Segment Information ........................................................................................................... 13
4. Supplementary Information....................................................................................................... 16(1) Overseas Sales ..................................................................................................................... 16-1-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

1. Qualitative Information(1) Qualitative Information on Consolidated Operating Results
General Summary of Results
The market environment surrounding the Nagase Group during the cumulative consolidated third quarter remained
cloudy. Demand for rebuilding in the wake of the March 11 earthquake and growth in the smartphone and tablet
markets were offset by a slowdown in the global economy. This was compounded by lower sales among Japanese
auto makers in China due to anti-Japanese demonstrations, as well as weaker consumer sentiment in Japan.
Amid these conditions, the Company recorded domestic sales for the cumulative consolidated third quarter of¥274.45 billion. This was a ¥700 million (0.3%) year-on-year gain. Overseas sales amounted to ¥228.3 billion,
which was a year-on-year gain of ¥29.58 billion (14.9%). In total, net sales for the cumulative consolidated third
quarter amounted to ¥502.76 billion. This represented a ¥30.29 billion comparative increase, or a 6.4% gain.
The addition of HAYASHIBARA CO.,LTD.(Hayashibara) to the consolidation and the strong performance insmartphone and tablet materials sales led to gross profit of ¥62.21 billion (¥8.41 billion gain; 15.6% year-on-yearincrease). Gross profit ratio grew 1.0 points to 12.4% for the comparative period. The larger number ofconsolidated subsidiaries meant greater selling expenses and general and administrative expenses. Losses among
domestic and overseas manufacturing subsidiaries worsened. As a result, operating profit came in at ¥12.25
billion, a comparative gain of ¥1.05 billion (9.5%) year on year. The Company recorded ordinary income of¥13.84 billion, a ¥350 million (2.6%) year-on-year increase. This result was mainly due to decreases in foreignexchange gains and increased interest expense related to the Company’s acquiring funds for the purchase of
Hayashibara. During the cumulative period, the Company recorded impairment losses for production equipment at
manufacturing subsidiaries. The equipment in question is not likely to return to productive use. Despite theselosses, the Company recorded gains on sales of non-current assets in the course of replacing idle assets with
operating assets. These transactions contributed to net income of ¥11.2 billion for the consolidated cumulative
third quarter. This result represents a ¥3.65 billion (48.5%) year-on-year gain.
Segment Summary
Beginning April 2012, the Company has been executing on the “Change-S2014” three-year business plan. To
accomplish the goals set out in this plan, the Company reorganized four business segments (Chemicals, Plastics,
Electronics, and Life Sciences) away from product categories into segments to more fully concentrate thestrengths of our entire group, reflecting the respective positions of each business in the value chain, as well as withthe most closely aligned industries. This realignment has resulted in five segment categories: Functional Materials(located at the top of the value chain), Advanced Materials & Processing (located in the next stage of the value
chain), Electronics, Automotive & Energy, and Life & Healthcare (these last three segments functioning across allindustries). See “3. Quarterly Consolidated Financial Statements (6) Segment Information” for more detailregarding business segments, related industries, and products.
For presentation purposes, the Company has calculated cumulative consolidated figures and ratios for the third
quarter of the prior year according to the reportable segment classifications above.
1)

Functional Materials

Overall, net sales in the Functional Materials segment experienced moderate growth. The decrease in domestic net
sales was offset by higher net sales in Southeast Asia and slightly higher net sales in Northeast Asia.
Our performance chemicals business reported minor overall gains in net sales. As plastic materials and additives
sales to Asia fell, sales of urethane materials to the automotive industry also declined due to the impact of falling
production of cars in China beginning in the third quarter. In contrast, the Company saw strong performance incoating raw materials sales for the domestic construction market and higher sales of additives to the Middle East.
These gains served to outpace the declines noted above.

-2-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

Sales decreased overall in our specialty chemicals business. While the organic synthetic products businessexperienced a minor decline, raw materials for industrial oil solutions (automotive market) and fluorochemicals
sales both fell compared to the same period in the prior fiscal year. At the same time, precision abrasive materials
sales for the hard disk drive market underperformed year on year.
As a result, net sales for the Functional Materials segment amounted to ¥139.25 billion, which was a ¥5.31 billion(4.0%) increase year on year. Segment operating profit came in at ¥4.42 billion—a ¥470 million drop (9.7%)
compared to the same period in the prior fiscal year.
2)

Advanced Materials & Processing

The Advanced Materials & Processing segment saw minor overall performance declines. While net sales grew inNortheast Asia and Southeast Asia, these gains were offset by significant declines in domestic performance.
The colors and imaging business reported declines overall. They dyes/additives business and information printing
materials business showed only minor gains for the period. At the same time, the Company’s reorganization ofcertain businesses into equity method affiliates (including dyestuffs and textile processing agents for the textile
processing industry) contributed to notably lower sales performance.
Our plastic business for office equipment and appliance increased overall. We did experience lower domestic sales
and lower raw materials exports to major users. However, we saw strong performance in plastics sales in Asia, as
well as higher year-on-year exports of molding tools.
As a whole, our business related to functional films and sheets and plastic molding products reported higher net
sales. Sales of liquid crystal polarizer film precision inspection systems were level with the same period in theprior fiscal year. Higher sales of anti-reflective sheets for game devices did much to contribute to overall growth in
this business.
As a result, net sales for the Advanced Materials & Processing segment amounted to ¥161.67 billion, a decrease of¥3.86 billion (2.3%) compared to the prior cumulative consolidated fiscal period. The Company reported operating
profit of ¥1.81 billion for the cumulative third quarter, which represents a ¥710 million (28.3%) year-on-year
decline.
3)

Electronics

Sales in the Electronics segment increased overall for the cumulative period. While we underperformed year on
year in Southeast Asia, we saw significant growth in Northeast Asia. As well, the Company recorded higher net
sales domestically, which also contributed to overall growth in the segment.
Net sales in the electronic chemicals business fell overall. We noted strong performance in sales for heavy
electrical equipment and mobile phone applications in our formulated epoxy resin business for the period.
However, a decline in sales of chemicals used in the manufacture of semiconductors and LCD panels led to thedrop in overall performance.
The Company recorded weak sales for film used in LCDs and materials in LED lighting applications during theperiod. In contrast, we noted strong performance in touch-panel material sales, which contributed to overall
growth for the electronics materials business.
As a result, we recorded cumulative total net sales of ¥87.49 billion in this segment for the third quarter,
representing a ¥4.77 billion (5.8%) increase year on year. Operating profit amounted to ¥5.08 billion, which was a¥210 million (4.4%) year-on-year increase.
4)

Automotive & Energy

Our automotive-related business saw growth overall for the cumulative period. During the first half of the fiscal
year, auto product increased significantly owing to reconstruction demand in the wake of March 11, eco-car-3-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

subsidies, and other domestic factors. Overseas as well, the Japanese auto makers produced cars in higher
numbers. These factors contributed to strong performance in raw materials and component sales for automotive
industry both in Japan and overseas. However, domestic sales for the third quarter fell sharply, owing to the end of
eco-car subsidies. As well, Japanese auto makers saw lower production in China due to anti-Japanesedemonstrations in that country. These factors led to lower net sales in Japan and China. However, strong
performance in North America and the ASEAN countries contributed to overall growth for the segment.
As a result, segment net sales for the cumulative consolidated third quarter amounted to ¥61.0 billion, representinga ¥5.65 billion (10.2%) increase year on year. Operating profit amounted to ¥550 million, a decline owing mainly
to poor performance in the energy business. This result was ¥220 million lower (29.1%) than the same cumulative
period in the prior fiscal year.
5)Life & Healthcare

Consolidating the functional saccharides business of Hayashibara (acquired during the previous fiscal year; net
sales of ¥18.53 billion for the third quarter of the fiscal year ending March 2013), the Company saw significant
overall growth in this segment.
Sales in the Company’s fine chemicals business grew overall compared to the cumulative consolidated third
quarter in the prior fiscal year. Sales of pharmaceutical raw materials and intermediates were level year on year,
while in vitro diagnostics and medical materials experienced strong sales. Functional saccharide sales performed
well, particularly sales of trehalose for the food industry. We also saw strong sales of enzyme and fermentation
products in the food and starch saccharide market.
Our beauty care products business includes sales of cosmetics and health foods. We saw lower year-on-year sales
in this business, despite higher sales of health food products and other new products marketed to younger
consumers. The gains were more than offset by lower sales for cosmetics products introduced during the priorfiscal year.
As a result, segment net sales amounted to ¥52.74 billion for the cumulative consolidated third quarter, which wasan ¥18.48 billion (54.0%) increase year on year. Operating profit amounted to ¥2.91 billion, representing a ¥2.46
billion (546.1%) increase year on year.
6)

Other

No special matters to disclose.

-4-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

(2) Qualitative Information on Consolidated Financial Position
Assets, Liabilities and Net Assets
As of the end of the cumulative consolidated third quarter, current assets amounted to ¥307.09 billion. This
represents an increase of ¥24.81 billion compared to the end of the prior consolidated fiscal year. This increase
was mainly due to increases in cash and time deposits resulting from the issuance of ¥30.0 billion in unsecured
corporate bonds (¥20.0 billion of the proceeds used to repay short-term loans) and increases in inventories.
Increased land and buildings led to higher tangible fixed assets, resulting in growth of ¥3.17 billion in non-current
assets compared to the end of the prior consolidated fiscal year. As a result, non-current assets as of the end of thethird quarter amounted to ¥171.73 billion. Consolidated total assets at the end of the period reached ¥478.83
billion, an increase of ¥27.99 billion over the end of the prior consolidated fiscal year.
Liabilities increased by ¥15.41 billion compared to the end of the prior consolidated fiscal year, amounting to¥253.51 billion. This increase was mainly due to issuances of unsecured corporate bonds and increased notes andaccounts payable. These increases were offset somewhat by decreases in short-term loans.
Consolidated net assets as of the end of the fiscal third quarter amounted to ¥225.31 billion, representing an
increase of ¥12.57 billion compared to the end of the prior consolidated fiscal year. In addition to recording ¥11.2
billion in quarterly net income, the Company also saw improved translation adjustment figures due to theweakened yen.
As a result of the preceding, shareholders’ equity ratio fell by 0.2 points from 45.4% at the end of the priorconsolidated fiscal year, down to 45.2%.
Cash Flows
Cash and cash equivalents (“Cash”) increased by ¥8.32 billion. Cash from operating activities amounted to ¥8.97
billion. Cash used in investing activities amounted to a net outflow of ¥7.58 billion, while cash from financing
activities amounted to ¥6.17 billion. The Company saw an additional ¥910 million in new funding via newly
consolidated entities and also recorded an increase in cash flows of ¥3.72 billion due to changes in fiscal years ofconsolidated subsidiaries. As a result, consolidated Cash increased by ¥12.96 billion (+45.5%) compared to theend of the prior consolidated fiscal year, amounting to a total of ¥41.47 billion.
(Cash Flows from Operating Activities)
Cash flows from operating activities for the consolidated third quarter amounted to ¥8.97 billion. This increase
was mainly due to ¥5.54 billion in depreciation and amortization (no cash effects) and ¥16.63 billion in net income
before taxes, offset slightly by ¥5.89 billion in income tax payments and ¥4.09 billion in increased inventories.
(Cash Flows from Investing Activities)
Cash used in investing activities during the consolidated third quarter amounted to ¥7.58 billion. The Group sold¥3.07 billion in property, plant, and equipment, but paid ¥9.67 billion for tangible and intangible fixed assets
during the period.
(Cash Flows from Financing Activities)
Cash flows from financing activities for the consolidated third quarter amounted to ¥6.17 billion. This result was
mainly due to cash inflow from unsecured corporate bond issuances in the amount of ¥29.85 billion, offset by
repayments of loans in the amount of ¥22.79 billion.

(3) Qualitative Information Related to Earnings Forecasts
The projected full-year consolidated results for fiscal 2012 announced on November 9, 2012 have not beenrevised.

-5-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

2. Summary Information (Notes)(1) Changes of Classification of Specified Subsidiaries Accompanied by Changes in the Consolidation
Scope
No matters to report.

(2) Application of Special Accounting Methods in the Preparation of Quarterly Financial Statements
No matters to report.

(3) Changes in Accounting Policies or Presentation Methods in Consolidated Financial Statements(Changes in Accounting Policies which are Difficult to Distinguish from Changes in Accounting Estimates)
Change in Depreciation Method for Property, Plant and Equipment
To date, the Company and its domestic consolidated subsidiaries have depreciated property, plant, and equipment
under the declining balance method (except for buildings purchased after April 1, 1998). Overseas consolidated
subsidiaries have used the straight-line method of depreciation. However, beginning with the consolidated firstquarter of the fiscal year ending March 2013, the Company and its domestic consolidated subsidiaries havechanged to the straight-line method for depreciating property, plant, and equipment.
Under the guidance of the “CHANGE” 11 medium-term business plan (fiscal 2009 through fiscal 2011), theNagase Group had been engaged in building stronger research, development and manufacturing functions. The
current “Change-S2014” medium-term business plan (fiscal 2012 through fiscal 2014) keeps the Group’s attention
focused on these same areas, while calling for significant increases in capital investment.
With increased capital investment, greater investment in Group manufacturing companies, and full-scale
operations of manufacturing facilities beginning this fiscal year, the Company has reexamined its depreciation
policies for property, plant, and equipment. Company management concluded that manufacturing facilities andequipment will likely be used consistently and reliably over the course of many years, determining that adopting
the use of the straight-line method of depreciation to allocate depreciation expense evenly over the useful lives ofsuch manufacturing equipment would more appropriately reflect actual characteristics of the Group’s business.
With this change in accounting policy, depreciation and amortization for the consolidated third quarter is ¥1,523
million lower than under the previous method, leading to a ¥1,385 million increase in operating profit, and a¥1,401 million increase in both ordinary income and net income before income taxes.
(Changes in Accounting Estimates)
Changes in Estimated Useful Lives of Property, Plant, and Equipment
The Company and some consolidated subsidiaries have changed the estimated useful lives of certain items ofproperty, plant, and equipment beginning with the consolidated first quarter of the fiscal year ending March 2013.
In conjunction with these changes, depreciation and amortization for the consolidated third quarter is ¥67 million
greater than compared to calculations using prior useful lives. Operating profit, ordinary income, and net income
before income taxes are each lower by a comparative ¥65 million.
(Additional Information)
Beginning with the consolidated first quarter for the fiscal year ending March 2013, 22 consolidated subsidiaries
have changed their fiscal year ends (December; February for TOTAKU INDUSTRIES, INC,) to match theCompany’s fiscal year end. This change should allow the Nagase Group to better understand Group financial
performance, to ensure more rapid implementation of management policies, and to lead to more appropriate
information disclosures. To date, the Group has been making the necessary material consolidation adjustments fortransactions occurring on the Company’s fiscal closing date for the Group’s 10 consolidated subsidiaries and three-6-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

equity method affiliates for which a December year end is mandated by local law. Now, the Company will
implement a consolidation method for quarterly financial statements based on a provisional close at the quarterly
fiscal closing date.
The Company has recorded an increase to retained earnings for ¥609 million, representing profits from the periodof January 1, 2012 (from March 1, 2012 for Totaku Industries, Inc.) through March 31, 2012. The Company has
disclosed changes in cash flows affecting quarterly consolidated statements of cash flows in “Increase (decrease)in cash and cash equivalents accompanying changes in fiscal years of consolidated subsidiaries.”-7-

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2012)ASSETS
Current assets
Cash and time deposits
Notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Less allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible fixed assets
Goodwill
Technology-based assets
Other
Total intangible fixed assets
Investments and other assets
Investments in securities
Long-term loans receivable
Deferred tax assets
Other
Less allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term debt
Accrued income taxes
Deferred tax liabilities
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term debt
Deferred tax liabilities
Accrued retirement benefits for employees
Other
Total long-term liabilities
Total liabilities-8-

Third Quarter, Current
Consolidated Fiscal Year
(December 31, 2012)

29,184
197,70241,087
1,292
2,879
4,067
7,299
(1, 235)
282,280

42,351
200,405
47,965
1,281
3,369
4,294
8,523
(1,095)
307,096

56,727

61,23032,07921,6693,705
57,45430,967
20,487
4,214
55,66949,014
1,122
896
3,612
(266)
54,379168,561
450,842

48,762
736
839
4,888
(388)
54,838
171,738
478,834

109,163
38,633
11,551
3,170
50
3,632
198
15,290181,689

112,132
23,594
10,395
1,818
26
2,420
172
16,000166,562
38,2007,251
10,032922
56,407238,097

30,00038,172
7,250
10,503
1,026
86,953
253,515

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

(Millions of yen)
Prior Consolidated Fiscal Year
(March 31, 2012)
Net Assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Total accumulated other comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets-9-

Third Quarter, Current
Consolidated Fiscal Year
(December 31, 2012)

9,699
10,041
186,907(5, 460)
201,188

9,699
10,041
196,188(7,109)208,819

12,731(21)(9,191)
3,518
110
7,927
212,744
450,842

12,866(19)(5,049)
7,797
50
8,651
225,319478,834

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income(Quarterly Consolidated Statement of Income)(Cumulative Third Quarter)(Millions of yen)
Cumulative Third Quarter,
Prior Consolidated Fiscal Year
(April 1, 2011 –December 31, 2011)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income
Investment profit on equity method
Foreign exchange gain
Other
Non-operating income, total
Non-operating expenses
Interest expenses
Other
Non-operating expenses, total
Ordinary income
Extraordinary gains
Gain on sale of non-current assets
Gain on sale of investment securities
Other
Total extraordinary gains
Extraordinary losses
Loss on sale of non-current assets
Loss on disposal of non-current assets
Impairment loss
Loss on sale of investments securities
Loss on valuation of investments securities
Other
Total extraordinary losses
Income before income taxes
Income taxes
Deferred taxes
Total income taxes
Income before minority interests
Minority interests
Net income- 10 -

Cumulative Third Quarter,
Current Consolidated
Fiscal Year
(April 1, 2012 –December 31, 2012)

472,469
418,670
53,79942,604
11,194

502,760
440,546
62,21349,96012,252

169
1,035
230
289
691
607
3,023

164
1,139
218
677
202
401
2,804

483
249
732
13,486

824
390
1,215
13,842

14
1,148
131
1,293

3,143
610
60
3,813

4
109
435
5
241

797
13,982
5,400
254
5,654
8,328
777
7,550

15
125
438
0
128
309
1,017
16,637
4,916
(149)
4,767
11,870660
11,209

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

(Quarterly Consolidated Statement of Comprehensive Income)(Cumulative Third Quarter)(Millions of yen)
Cumulative Third Quarter,
Prior Consolidated Fiscal Year
(April 1, 2011 –December 31, 2011)
Income before minority interests
Other comprehensive loss
Unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Shareholders of the Company
Minority interests- 11 -

Cumulative Third Quarter,
Current Consolidated
Fiscal Year
(April 1, 2012 –December 31, 2012)

8,328

11,870(3,419)(2)(2,701)

132
1
2,375

(70)

355

(6,193)
2,134

2,865
14,735

1,697
437

13,786949

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)
Cumulative Third Quarter,
Prior Consolidated Fiscal Year
(April 1, 2011 –December 31, 2011)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Provision for accrued retirement benefits for employees(decrease)
Interest income and dividend income
Interest expenses
Foreign exchange gain (loss)(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Taxes paid
Cash flows from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Cash from sales of property, plant and equipment
Payment for acquisition of intangible fixed assets
Purchase of investments securities
Cash from sale of investment securities
Change in short-term loans (increase)
Other
Cash flows from investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans, net
Proceeds from long-term loans
Repayment of long-term debt
Proceeds from issuance of bondPurchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other
Cash flows from financing activities
Effects of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Increase in cash and cash equivalents accompanying
consolidation
Increase (decrease) in cash and cash equivalents
accompanying changes in fiscal years of consolidated
subsidiaries
Cash and cash equivalents at end of the period- 12 -

Cumulative Third Quarter,
Current Consolidated
Fiscal Year
(April 1, 2012 –December 31, 2012)

13,9825,166
1

16,637
5,543
1,206

964

437

(1,204)483(350)(20,554)(7,354)
20,334(3, 508)
7,958
1,323
(466)
(7,387)
1,428(1,304)
824
(360)
1,786
(4,096)(2,058)(4,538)14,077
1,547(754)(5,892)
8,977(6,396)40(1,115)
(292)
1,278
(271)
(1,074)(7,832)(8,407)
3,073(1,266)
(146)
856
(665)
(1,028)(7,585)6,459
600(1,545)(0)(3,212)
(401)
(91)
1,808

(17,004)
4,575(5,792)
29,855(1,649)(3,189)
(540)
(82)
6,172

(794)

760

(5,390)47,202

8,325
28,517

165

915



3,721

41,977

41,479

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

(4) Assumption for Going Concern
No matters to report.

(5) Significant Fluctuations in Shareholders’ Equity
No matters to report.

(6) Segment Information
I

Nine months ended December 31, 2011 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Other(Note) 1

Corporate(Note) 2

To Quarterly
Consolidated
Adjustments Statements of(Note) 3
Income(Note) 4

Advanced
Life &
Functional
Automotive
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

133,947

165,533

82,722

55,34834,255471,807662

472,469472,469

Intersegments
sales and transfers

4,011

1,789

548

1,718

498

8,567

3,854

12,421

(12,421)



Total

137,959

167,323

83,27057,06734,753

480,374

4,516

484,891

(12,421)472,469

4,898

2,530

4,873

780

451

13,535129

13,665(3,029)559

11,194Total

Net sales
Sales tocustomers

Segment income(loss)(Notes)1. Other is a business segment consisting of businesses not included in reportable segments, and includes distribution services, information
processing services, and professional services.
2. Corporate segment income represents expenses not allocated to reportable segments or Other.
3. Adjustments are eliminations of intersegment translations.
4. The sum of segment income totals, Corporate and Adjustments is equivalent to operating profit as presented in the consolidated statements ofincome.

II Nine months ended December 31, 2012 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Other(Note) 1

Corporate(Note) 2

To Quarterly
Consolidated
Adjustments Statements of(Note) 3
Income(Note) 4

Advanced
Functional
Automotive Life &Materials & Electronics
Materials& Energy Healthcare
Processing

Total

139,258

161,672

87,49561,00552,742502,174585

502,760

502,760

Intersegments
sales and transfers

1,810

1,720

2,446

1,018

337

7,333

3,882

11,215

(11,215)

Total

141,069

163,393

89,94262,02353,079509,507

4,468

513,975

(11,215)

502,760

4,425

1,813

5,087

553

2,913

14,793

253

15,046(3,070)276

12,252Total

Net sales
Sales tocustomers

Segment income(loss)(Notes)1. Other is a business segment consisting of businesses not included in reportable segments, and includes distribution services, information
processing services, and professional services.
2. Corporate segment income represents expenses not allocated to reportable segments or Other.
3. Adjustments are eliminations of intersegment translations.
4. The sum of segment income totals, Corporate and Adjustments is equivalent to operating profit as presented in the consolidated statements ofincome.

- 13 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

2. Changes in Reportable Segments(Changes in Business Classifications)
Beginning April 2012, the Company has been executing on the “Change-S2014” three-year business plan. To
accomplish the goals set out in this plan, beginning with the consolidated first quarter of the fiscal year ending
March 2013, the Company reorganized four business segments (Chemicals, Plastics, Electronics, and Life Sciences)away from product categories into segments to more fully concentrate the strengths of our entire group, reflecting
the respective positions of each business in the value chain, as well as with the most closely aligned industries. This
realignment has resulted in five segment categories: Functional Materials (located at the top of the value chain),
Advanced Materials & Processing (located in the next stage of the value chain), Electronics, Automotive & Energy,
and Life & Healthcare (these last three segments functioning across all industries). Reportable segments have also
been reclassified to reflect this change.
Segment information for the consolidated cumulative third quarter of the fiscal year ended March 2012 has been
prepared under this new classification method, as noted in “1. Information related to net sales and income (loss) byreportable segment.”
The following describes the major products and services handled by each reportable segment.
The Functional Materials segment is engaged in the sales of materials for paints/inks, urethane materials, plastic
materials, plastic additives, industrial oil solutions, surfactants, fluorochemicals, encapsulant materials, silicone
materials, precision electronics abrasives, and more for the paints/inks, resins, urethane foam, organic synthesis,
surfactants, semiconductor, HDD-related industries.
The Advanced Materials & Processing segment is engaged in the sales of dyestuffs, dyes, functional dyes,
information printing products, thermoplastic resins, thermosetting resins, synthetic rubber, inorganic materials,
plastics products, resins molding tools/dies, external inspection equipment for the dye/additive, information printing,textile processing, raw resin material, resin molding, functional film and sheet and other industries.
The Electronics segment is engaged in the sales of pre-processing materials and devices for LCD/semiconductors,
materials for LCD panels, materials and devices for semiconductor assembly, low-temperature/vacuum equipment,
high-function epoxy resins, and more for the display, touch panel, LCD, semiconductor, electronic components,
heavy electrical and other industries.
The Automotive & Energy segment is engaged in sales of plastic products, thermoplastic resins, thermosetting
resins, resins molding tools/dies, battery materials, solar cell/secondary battery-related materials and more for the
automotive, automotive component, and energy industries.
The Life & Healthcare segment is engaged in the sales of pharmaceutical/agricultural chemicals and materials,
research products, in vitro diagnostics, enzymes, food additives, additives for cosmetics, feeds/fertilizers for thepharmaceutical, food, and cosmetics industries. In addition, this segment sells cosmetics, health foods, and beauty
foods directly to consumers.
(Changes in Accounting Policies which are Difficult to Distinguish from Changes in Accounting Estimates)
Changes in Depreciation Method for Property, Plant, and Equipment
To date, the Company and its domestic consolidated subsidiaries have depreciated property, plant, and equipment
mainly under the declining balance method. Overseas consolidated subsidiaries have mainly used the straight-line
method of depreciation. However, beginning with the consolidated first quarter of the fiscal year ending March
2013, the Company and its domestic consolidated subsidiaries have changed to the straight-line method for
depreciating property, plant, and equipment.
In conjunction with this change in depreciation method, net income by segment for the consolidated third quarter
increased by ¥188 million (Functional Materials), ¥139 million (Advanced Materials & Processing), ¥574 million(Electronics), ¥136 million (Automotive & Energy), ¥98 million (Life & Healthcare), and ¥247 million (Corporate).
- 14 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

(Changes in Accounting Estimates)
Changes in the Estimated Useful Lives of Property, Plant, and Equipment
The Company and some consolidated subsidiaries have changed the estimated useful lives of certain items ofproperty, plant, and equipment beginning with the consolidated first quarter of the fiscal year ending March 2013.
In conjunction with this change, net income by segment for the consolidated cumulative third quarter decreased by¥64 million (Electronics) and ¥1 million (Automotive & Energy) compared with segment income calculated using
the former useful lives.

- 15 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2013

4. Supplementary Information(1) Overseas Sales
Nine months ended December 31, 2011 (consolidated)
I

Overseas sales(Millions of yen)II

Consolidated sales(Millions of yen)

III Ratio of overseas sales toconsolidated sales (%)

Northeast Asia

Southeast Asia

North America

Europe & Others

115,699

56,12916,346

10,538

Total
198,713472,469

24.5

11.9

3.5

2.2

Northeast Asia

Southeast Asia

North America

Europe & Others

132,763

64,61018,231

12,69742.1

Nine months ended December 31, 2012 (consolidated)
I

Overseas sales(Millions of yen)II

Consolidated sales(Millions of yen)

III Ratio of overseas sales toconsolidated sales (%)

Total
228,302502,760

26.4

12.9

3.6

2.5

(Note)
1. Sales in overseas markets consist of net sales of the Company and consolidated subsidiaries in other countries or regions.
2. Countries/regions are determined by geographical proximity.
3. Major countries in each region(1) Northeast Asia......Taiwan, China(2) Southeast Asia......Singapore, Thailand(3) North America......U.S.
(4) Europe & Others......Germany- 16 -

45.4