Summary of 2nd Quarter Financial Results for year ended March 31, 2015
(Japan GAAP) (Consolidated)
October 29, 2014
Company name:
Stock exchange listings:
Securities code number:
URL:
Representative:

Mitsubishi Tanabe Pharma Corporation
Tokyo
4508

http://www.mt-pharma.co.jp/
Name: Masayuki Mitsuka
Title: President and Representative Director
Name: Kenji Hara
Title: General Manager, Corporate Communications Department
Telephone: (06) 6205-5211

For further information, please contact:

Planned date of filing of quarterly securities report: November 4, 2014
Planned date of start of dividend payments: December 1, 2014
Provision of supplementary explanatory materials for quarterly results: Yes
Quarterly results presentation: Yes (for institutional investors and investment analysts)
Notes; Amounts less than \ 1 million have been rounded.
Percentage changes in the list show change in comparison with the previous 2nd quarter.

1. Results for 2nd Quarter (April 1, 2014 to September 30, 2014)(1) Consolidated Business Results
Net sales
2nd Quarter of
Fiscal 2014
2nd Quarter of
Fiscal 2013

Operating income% change

Yen million% change

Yen million% change

198,883(1.9)

34,95414.8

35,455

10.1

202,834(0.5)

30,459(5.5)

32,198(2.8)

Net income per share

Net income
2nd Quarter of
Fiscal 2014
2nd Quarter of
Fiscal 2013

Ordinary income

Yen million

Yen million% change

Yen

Net income per share (diluted)
Yen

32,518

13.9

57.97

-

46.4

50.88

-

28,544(Note) Comprehensive Income \32,841 million, 15.7%(\28,378 million, 41.3% in 2nd Quarter of fiscal 2013)(2) Consolidated Financial Position
Total assets
As of September 30, 2014
As of March 31, 2014

(Note) Shareholders' equity \780,314 million

Equity ratio

Net assets
Yen million

903,051
886,476(\766,046 million in fiscal 2013)

Yen million%

792,272
777,837

86.4
86.4

2. Dividends
Dividends per share
2nd Quarter
3rd Quarter
Yen
Yen
Fiscal 2013
20.00
Fiscal 2014
20.00
Fiscal 2014(projected)(Note) Revision to recently announced dividend forecast: No(Record date)

1st Quarter
Yen-

Year-end
Yen
20.00
20.00

For the year

Yen
40.00
40.00

3. Forecasts for Fiscal 2014 (April 1, 2014 to March 31, 2015)
Full year

Net sales
Yen million
406,000% change(1.6)

Operating income
Yen million% change
60,0001.5

Net income per share
Net income
Yen
Yen million% change
Full year
40,500(10.8)
72.19(Note) Revision to recently announced consolidated results forecast: No

Ordinary income
Yen million% change
61,500(0.6)

※ Notes(1) Significant change involving subsidiaries during the period: No(Change in designated subsidiaries accompanying changes in the scope of consolidation)(2) Application of special accounting methods in the preparation of quarterly financial statements: No(3) Changes in accounting policies, changes in accounting estimates, and restatements
1. Change accompanying revision of accounting standards: Yes
2. Other changes: No
3. Change in accounting estimates: No
4. Restatements: No(Note) For details, please refer to “(1) Changes in accounting policies, changes in accounting estimates, and restatements” under “2. Items
Concerning Summary Data (The notes)” on page 5.
(4) Number of shares issued (common stock)
1. Number of shares issued at the end of the period (including treasury stock)
2nd Quarter of fiscal 2014
561,417,916 sharesFiscal 2013

561,417,916 shares

2. Number of shares of treasury stock at the end of the period
2nd Quarter of fiscal 2014
427,412 sharesFiscal 2013

426,862 shares

3. Average number of shares of during the period (cumulative total)
2nd Quarter of fiscal 2014
560,990,827 shares

2nd Quarter of fiscal 2013

560,992,600 shares*Note regarding implementation of quarterly review procedures
At the time when this summary of 2nd quarter financial results was released, the review procedures were in progress
for the quarterly financial statements in accordance with the Financial Instruments and Exchange Act.
*Explanation regarding the appropriate use of results forecasts and other matters of special note
(Note about forward-looking information)
In these materials, forecasts of results and other statements about the future are forward-looking statements based ona number of assumptions and beliefs in light of the information available to management as of the date of releaseof the materials and are subject to risks and uncertainties. Accordingly, the Company cannot make promises to achieve
such forecasts. Actual financial results may differ materially from these forecasts depending on a number ofimportant factors.
For matters related to results forecasts, please see page 4.
(Methods of obtaining the supplementary materials and the content of the results presentation)
・Supplementary materials are disclosed on TDnet on the same day and are made available on the Company's website.
・The Company plans to hold a results presentation for institutional investors and securities analysts on October 30, 2014 (Thursday).
The Company plans to make available on its website the content of the presentation (video) and the materials used in the presentation
immediately after the presentation is held.

Contents of supplement

１．

Qualitative Information for 2nd Quarter of FY2014 ································································································· 1(1) Explanation about results of operations ······················································································································· 1(2) Explanation about financial position ······························································································································· 2(3) Explanation about future prediction information of consolidated results forecasts ·································· 4２．

Items Concerning Summary Data (The notes) ·········································································································· 5(1) Changes in accounting policies, changes in accounting estimates, and restatements ····························· 5３．

Consolidated Financial Statements ································································································································ 6(1) Consolidated Balance Sheets ············································································································································ 6(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income ·················································································································································· 8Consolidated Statements of Income ····························································································································· 8Consolidated Statements of Comprehensive Income····························································································· 9(3) Consolidated Statements of Cash Flows ··················································································································· 10(4)Notes of Quarterly Consolidated Financial Statements···················································································· 11(Note regarding going concern assumption) ······································································································· 11(Note regarding substantial change in shareholders’ equity) ······································································ 11

１．[Qualitative Information for 2nd Quarter of FY 2014](1) Explanation about results of operations
Consolidated operating results in the second quarter of the fiscal year ended March 31, 2015 (April 1, 2014 toSeptember 30, 2014) were as follows.
(millions of yen)
2nd quarter of
FY 2013

2nd quarter of
FY 2014

Increase/
Decrease% change

Net Sales

202,834

198,883(3,951)(1.9)

Cost of sales

82,41478,176(4,238)

(5.1)

40.6%

39.3%

Gross profit

120,420

120,707287

0.2

SG&A expenses

89,96185,753(4,208)(4.7)

Operating Income

30,45934,954

4,495

14.8

Non-operating
income/loss

1,739

501

(1,238)

Ordinary Income

32,19835,455

3,257

Extraordinary
income/loss

11,075

10,901(174)

Net Income

28,54432,518

3,974

Cost of sales ratio

10.1

13.9

【Net sales】
Net sales decreased 1.9%, or ¥3.9 billion, year-on-year, to ¥198.8 billion.
(millions of yen)
2nd quarter of
FY 2013

2nd quarter of
FY 2014

Increase/

202,059

198,660(3,399)(1.7)

Domestic ethical drugs

170,977

155,204(15,773)(9.2)

Overseas ethical drugs

10,427

11,336909

8.7

OTC products

2,433

2,183

(250)

(10.3)

Others in Pharmaceuticals

18,22229,937

11,715

64.3

775

223

(552)

(71.2)

Pharmaceuticals

OthersDecrease% change

In the pharmaceuticals segment, net sales were ¥198.6 billion, down 1.7%, or ¥3.3 billion, year-on-year.

・

Domestic sales of ethical drugs decreased 9.2%, year-on-year, to \155.2 billion due to the influence of NHI
drug price revision in April 2014 and the growing impact of generics.

・Sales of others in pharmaceuticals increased 64.3%, year-on-year, to ¥29.9 billion due to the increase inroyalty revenue from Gilenya, for the treatment of multiple sclerosis, licensed to Novartis and fromINVOKANA, for the treatment of type2 diabetes mellitus, licensed to Janssen Pharmaceuticals.

-1-【Operating income】
Operating income increased 14.8%, or ¥4.4 billion, year-on-year, to ¥34.9 billion.

・Despite the influence of NHI drug price revision and the impact of generics, gross profit remained the samelevel as the previous second quarter at \120.7 billion due to the increase in royalty revenue. As a result, thecost of sales ratio improved by 1.3 percentage points, year-on-year, to 39.3%.

・

SG&A expenses decreased ¥4.2 billion, year-on-year, to \85.7 billion due to the decrease in R&D expenses
and the labor cost accompanying the decrease in retirement benefit expenses. R&D expenses were \31.9
billion, accounting for 16.1% of net sales.

【Ordinary income and net income】
Ordinary income was up 10.1%, or ¥3.2 billion, year-on-year, to ¥35.4 billion, and net income was up 13.9%, or ¥3.9
billion, year-on-year, to ¥32.5 billion.

・Extraordinary income was \13.5 billion, including gain on sales of property, plant and equipment andgain on sales of investment in securities. In the previous fiscal year the Company recorded
extraordinary income of \11.9 billion such as profit on arbitration award.

・Extraordinary loss was \2.6 billion, including loss on liquidation of subsidiaries and affiliates and loss on
impairment of fixed assets.

【Comprehensive income】
Net income before minority interests was ¥31.7 billion and other comprehensive income was ¥1.0 billion. As aresult, comprehensive income was ¥32.8 billion. Comprehensive income attributable to shareholders of theCompany was ¥33.8 billion.

(2) Explanation about financial position【Balance sheets】(millions of yen)
End of FY 2013
(As of March 31, 2014)

End of 2nd quarterof FY 2014
(As of September 30, 2014)

Increase/
Decrease

Current assets

540,492

580,460

39,968Fixed assets

345,984

322,591(23,393)

Total assets

886,476

903,051

16,575

Liabilities

108,639

110,779

2,140

Net assets

777,837

792,272

14,435886,476

903,051

16,575

Total liabilities and net assets

Total assets at the end of the second quarter were ¥903.0 billion, an increase of ¥16.5 billion from the end of theprevious fiscal year. Major factors causing changes in the balance sheet in comparison with the previous year-end
were as follows.

・Marketable securities and deposits increased. Consequently, total current assets were up ¥39.9 billion, to¥580.4 billion.

-2-

・

Net defined benefit asset decreased due to the adjustment at the beginning of the current fiscal year withthe application of revised accounting standard for retirement benefits. Consequently, total fixed assets
were down ¥23.3 billion from the previous fiscal year-end, to ¥322.5 billion.

・

Income taxes payable increased. As a results, total liabilities were up ¥2.1 billion, to ¥110.7 billion.

・

Total net assets were up by ¥14.4 billion, to ¥792.2 billion. Net income was ¥32.5 billion, dividends paid
totaled ¥11.2 billion, and the adjustment at the beginning of the current fiscal year with the application ofrevised accounting standard for retirement benefits was \8.3 billion. As a result, retained earnings increased\12.9 billion. The equity ratio was 86.4%, compared with 86.4% a year earlier.

【Cash flows】(millions of yen)
2nd quarter of

2nd quarter of

Increase/

FY 2013

FY 2014

Decrease

Operating activities

36,781

25,366(11,415)

Investing activities(9,095)(7,318)

1,777

Financing activities(10,854)(11,381)(527)

Change in cash and cash equivalents

17,468

7,353(10,115)

At beginning of year

58,74584,957

26,212At end of period

76,21392,31016,097

Net increase in cash and cash equivalents was \7.3 billion, and the balance of cash and cash equivalents at the endof the period under review was ¥92.3 billion.

・ Net cash provided by operating activities was ¥25.3 billion. Cash inflows included income before income taxes
and minority interests of ¥46.3 billion, while cash outflows included income taxes paid of ¥9.6 billion.

・ In investing activities, there were purchase of marketable securities and increase in deposits as a factor for
cash outflow. On the other hands, there were proceeds from sales of property, plant and equipment andshares of subsidiaries and affiliates as a factor for cash inflow. Consequently, net cash used in investing
activities was ¥7.3 billion.

・ Net cash used in financing activities was \11.3 billion, due in part to dividends paid.

-3-(3) Explanation about future prediction information of consolidated results forecasts
There are no revisions to the consolidated operating results forecasts that were announced on October 21, 2014.

【Consolidated results forecasts for full-year of the current fiscal year (released on October 21, 2014) 】(millions of yen)
Results in

Forecasts for

Increase/

FY 2013

FY 2014

Decrease% change

Net sales

412,675

406,000(6,675)(1.6)

Operating income

59,11960,000881

1.5Ordinary income

61,87361,500

(373)

(0.6)

Net income

45,39340,500(4,893)(10.8)-4-

２．[Items Concerning Summary Data (The notes)](1) Changes in accounting policies, changes in accounting estimates, and restatements
Concerning the Accounting Standard for Retirement Benefits (ASBJ Statement No. 26 on May 17, 2012) and
Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25 on May 17, 2012), theCompany has applied the text in Paragraph 35 of the Accounting Standard for Retirement Benefits and thetext in Paragraph 67 of the Guidance on Accounting Standard for Retirement Benefits from the first quarterof the fiscal year under review, revising its method of calculating retirement benefit obligations and priorservice costs. The method of attributing expected benefit has been changed from a straight-line basis to abenefit formula basis. The bond period used as the basis for determining the discount rate has been changed
from a method of referring to the average period to the expected date of payment for retirement benefits to
one using a single weighted average discount rate for each expected retirement benefit payment period andexpected retirement benefit payment amount.
Regarding the application of the Accounting Standard for Retirement Benefits, in accordance with thetransitional treatment stipulated in paragraph 37, from the beginning of the first quarter of the fiscal year
under review the amount of change resulting from the method of calculating retirement benefit obligations
and prior service costs is added to or deducted from retained earnings.
As a result, net defined benefit asset decreased \11,830 million, net defined benefit liability increased \1,046
million, and retained earnings decreased ¥8,313 million at the beginning of the first quarter of the fiscal year
under review. Furthermore, operating income, ordinary income, and income before income taxes for the firsthalf of the fiscal year under review each increased ¥340 million.

-5-3. Consolidated Financial Statements(1) Consolidated Balance Sheets(millions of yen)Year
Accounts

As of

As of

March 31, 2014

September 30, 2014

AmountAmountAssetsCurrent assets
Cash and time deposits

27,18724,085

Notes and accounts receivable, trade123,537

127,045

Marketable securities

106,470

128,182

Merchandise and finished goods

70,40674,385998

923

Raw materials and supplies

22,29622,484

Deposits

172,149

182,468

Deferred income taxes

8,153

10,997

Other

9,335

9,932

(39)

(41)

540,492

580,460

Buildings and structures, net

33,39833,449Machinery, equipment and vehicles, net

16,384

14,667

Tools, furniture and fixtures, net

6,017

5,735

Land

38,34637,192

Leased equipment, net

542

559

Construction in progress

3,653

5,574

Total property, plant and equipment

98,34097,176

Goodwill

96,18090,543software

3,891

4,489

Other

33,021

31,237

Total intangible fixed assets

133,092

126,269

Investment in securities

71,58367,774

Deferred income taxes

677

496

Net defined benefit asset

16,305

6,555

Other

25,98924,323(2)(2)

Total investments and other assets

114,552

99,146

Total fixed assets

345,984

322,591

886,476

903,051

Work in process

Less allowance for doubtful receivables
Total current assets
Fixed assets
Property, plant and equipment

Intangible fixed assets

Investments and other assets

Less allowance for doubtful receivables

Total assets-6-

(millions of yen)Year
Accounts

As of

As of

March 31, 2014

September 30, 2014

AmountAmountLiabilities
Current liabilities
Notes and accounts payable, trade33,98632,389

Short-term debt

1,225

－

128

125

Accounts payable, other

16,773

16,680

Income taxes payable

10,161

16,469Reserve for employees' bonuses

10,169

9,902

－

1,356

Current maturities of long-term debt

Provision for loss on liquidation of subsidiaries and affiliates

116

146

Other

9,279

10,211

Total current liabilities

81,83787,278958

935

Deferred income taxes
Reserve for health management allowances for
HIV compensation
Reserve for health management allowances for
SMON compensation

13,356

9,811

1,576

1,576

2,976

2,773

Reserve for HCV litigation

2,634

2,355

Net defined benefit liability

2,146

2,969

Other

3,156

3,082

Total long-term liabilities

26,802

23,501

Total liabilities

108,639

110,779

Common stock

50,00050,000Capital surplus

451,186

451,186

Retained earnings

266,575

279,561

(490)

(491)

767,271780,256

8,747

8,978

493

－

Translation adjustments(2,399)(1,419)Remeasurements of defined benefit plans(8,066)(7,501)

Total accumulated other comprehensive income(1,225)58

Other reserve

Long-term liabilities
Long-term debt, less current maturities

Net assets
Shareholders' equity

Treasury stock, at cost
Total shareholders' equity
Accumulated other comprehensive income
Unrealized holding gains (losses) on securities
Deferred (losses) gains on hedges

Minority interests

11,791

11,958

Total net assets

777,837

792,272

886,476

903,051

Total liabilities and net assets-7-

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(millions of yen)Year
Accounts

April 01, 2013-

April 01, 2014-

September 30, 2013

September 30, 2014

AmountAmount202,834

Net sales

198,883

Cost of sales

82,41478,176Gross profit

120,420

120,707

Advertising expenses

1,869

1,803

Sales promotion expenses

4,772

4,784

Salaries and allowances

13,054

13,138Provision for bonuses

5,461

5,341

Retirement benefit expenses

1,485

626

Selling, general and administrative expenses

693

855

Research and development expenses

34,286

31,931

Amortization of goodwill

5,263

5,396

Other

23,07821,879Total selling, general and administrative expenses

89,96185,753Operating income

30,45934,954

Interest income

782

756

Dividend income

452

409

Equity in earning of affiliates284

8

Foreign exchange income

1,104

4

Depreciation and amortization

Non-operating income

Other
Total non-operating income

956

575

3,578

1,752

Non-operating expenses
Interest expense

41

96

Donations

247

343

1,551

812

Other
Total non-operating expenses

1,839

1,251

Ordinary income

32,19835,455Gain on sales of property, plant and equipment－

11,923Gain on sales of investment in securities

－

1,069

Profit on arbitration award

11,011－Gain on step acquisitions

930

－

－

560

11,941

13,552800854

Extraordinary gain

Gain on sales of shares of subsidiaries and affiliates
Total extraordinary income
Extraordinary loss
Loss on impairment of fixed assets
Loss on valuation of investment in securities－

130

Loss on liquidation of subsidiaries and affiliates

－

1,438

Other

66

229

866

2,651

Income before income taxes and minority interests

43,27346,356

Income taxes-current

14,365

16,068

Income taxes-deferred332(1,466)

Total income taxes

14,697

14,602

Net income before minority interests

28,57631,754

Total extraordinary losses

Minority interests
Net income

-8-

32

(764)

28,54432,518(Consolidated Statements of Comprehensive Income)(Millions of yen)Year
Accounts

April 01, 2013-

April 01, 2014-

September 30, 2013

September 30, 2014

AmountAmount28,576

Net income before minority interests

31,754

Other comprehensive income
Unrealized holding gains (losses) on securities

(632)

232

Deferred (losses) gains on hedges

(558)

(493)

Translation adjustments

969

797

Remeasurements of defined benefit plans, net of tax－

529

Other comprehensive income (loss) of equity method companies
attributable to the Company

23

22

(198)
28,3781,087
32,841

28,106272

33,801(960)

Total other comprehensive income (loss)
Comprehensive income
Comprehensive income (loss) attributable to:Shareholders of the Company
Minority interests-9-(3) Consolidated Statements of Cash Flows(millions of yen)

April 01, 2013September 30, 2013

Year
Accounts

April 01, 2014September 30, 2014

Cash flows from operating activities:
Income before income taxes and minority interests

43,27346,356

Depreciation and amortization

4,304

4,466

800

854

5,263
(572)
1,202
(364)
－
(1,234)－－－(11,011)
(930)
－
2,117
(3,443)(700)(1,249)1,612
39,0681,315(42)
12,208(15,768)
36,781

5,396
－
－
(279)
(2,080)(1,165)
1,356(560)(11,818)－－(1,069)(3,275)(3,971)(1,719)(1,309)2,791
33,974
1,204
(117)
－
(9,695)25,366(12,000)
34,847(7,948)833(267)(5,050)7(1,079)(997)(3,459)4,011－(17,897)(96)(9,095)(33,800)
20,511(782)
2,876(10,319)(4,889)11,078
(831)
(97)
－
1,297
7,600
－
38
(7,318)(25)
433(11,219)－(43)(10,854)636
17,46858,74576,213(1,209)－(11,219)
1,127(80)(11,381)
686
7,353
84,95792,310Loss on impairment of fixed assets
Amortization of goodwill
Increase (decrease) in accrued retirement benefits for employees
Decrease (increase) in prepaid pension expenses
Increase (decrease) in reserve for HCV litigation
Decrease (increase) in net defined benefit asset
Interest and dividend income
Increase (decrease) in loss on liquidation of subsidiaries and affiliates
Loss (gain) on sales of shares of subsidiaries and affiliates
Loss (gain) on sale of property, plant and equipment
Profit on arbitration award
Loss (gain) on step acquisitions
Loss (gain) on sale of investment in securities
Decrease (increase) in notes and accounts receivable, trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable, trade
Increase (decrease) in accounts payable, other
Other, net
SubtotalInterest and dividends received
Interest paid
Proceeds from arbitration award
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchase of marketable securities
Proceeds from sales and redemption of marketable securities
Increase in time deposits
Decrease in time deposits
Increase in deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible fixed assets
Purchase of investment in securities
Purchase of investment in subsidiaries
Proceeds from sales and redemption of investment in securities
Proceeds from sales of shares of subsidiaries and affiliates
Purchase of investment in subsidiaries resulting in consolidation scope change
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Increase (decrease) in short-term debt, net
Increase (decrease) in long-term debt
Cash dividends paid
Proceeds from stock issuance to minority shareholders
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the period- 10 -

(4) Notes of Quarterly Consolidated Financial Statements(Note regarding going concern assumption)
Not applicable.

(Note regarding substantial change in shareholders' equity)
Not applicable.

- 11 -