Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016
<Under Japanese GAAP>
February 2, 2016
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 (First Section)
Code number:8012
URL (http: //www.nagase.co.jp/english/)Representative:
Kenji Asakura, Representative Director and President
Contact:
Akira Takami, General Manager, Accounting Division
TEL: +81-3-3665-3103
Filing of quarterly report (scheduled): February 5, 2016
Start of distribution of dividends (scheduled): Supplementary documents of quarterly financial results: Yes
Quarterly investors' meeting: No(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, 2016
(April 1, 2015 to December 31, 2015)(Percentages represent changes compared with same period of the previous fiscal year.)(1) Consolidated Operating Results
Net sales
For the third quarter ended
December 31, 2015
December 31, 2014

Operating income

Profit attributable toowners of the parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

566,524572,199(1.0)
5.4

14,825
14,2294.2
12.8

15,377
16,324

(5.8)
12.2

9,569
11,088(13.7)(0.6)(Notes) Comprehensive income

Third quarter ended December 31, 2015: ¥8,386million (74.8% decrease)
Third quarter ended December 31, 2014: ¥33,300million (21.2% increase)
Earnings per share

For the third quarter ended
December 31, 2015
December 31, 2014

Yen
75.33
87.29

Earnings per share (diluted)
Yen−−(2) Consolidated Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

December 31, 2015
March 31, 2015

557,464546,525

291,520
287,500

51.3
51.5

2,250.88
2,215.18(Reference) Equity capital

As of December 31, 2015: ¥285,931million
As of March 31, 2015: ¥281,398 million

2. Dividends
1Q
For the year ended (or ending)
Yen
March 2015−
March 2016−
March 2016 (estimate)(Note) Revisions to the latest projected dividends: No

2Q

Annual Dividends per Share
3Q
Fiscal year end

Annual

Yen

Yen

Yen

Yen

15.00
16.00

−
−

15.00

30.00

16.00

32.00

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2016
(April 1, 2015 to March 31, 2016)(Percentages represent changes compared with the corresponding periods of the previous fiscal year.)Net sales
Millions of yen

Full fiscal year

823,000

Operating income

Profit attributable toowners of the parent

Ordinary income

Earnings per
share% Millions of yen% Millions of yen% Millions of yen

%

Yen

8.3

7.4

1.1

6.9

95.25

19,50020,60012,100(Note) 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): No
New: ― (Company name:)
Excluded: ― (Company name:)(2) Application of special accounting methods to the preparation of quarterly financial statements: No(3) Changes of 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: Noiii. Changes in accounting estimates: No
iv. Restatement of prior period financial statements after error corrections: No(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, 2015
127,408,285 shares March 31, 2015
127,408,285 shares
ii.

iii.

Number of treasury stock as of the fiscal period end
December 31, 2015
377,160shares

March 31, 2015

Average number of shares during the period
December 31, 2015
127,031,533shares

December 31, 2014

376,363 shares

127,032,455shares* Quarterly Review Implementation DisclosureThis quarterly report is exempt from the quarterly review procedure based upon the Financial Instruments and ExchangeAct. Furthermore, quarterly consolidated financial statements were undergoing the review procedure process at the timeof release.
* Cautionary Statement with Respect to Forecasts of Consolidated Business Results
The earnings 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 4 of thisdocument.

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

Attachments
1. Qualitative Information

2(1) Business Performance2(2) Financial Position

3(3) Qualitative Information related to Earnings Forecasts

4

2. Summary Information (Notes)

4(1) Changes in significant subsidiaries during the period

4(2) Application of Special Accounting Methods to the Preparation of Quarterly Financial Statements

4(3) Changes in accounting policies, estimates and restatements

4(4) Additional Information

4

3. Quarterly Consolidated Financial Statements

5(1) Quarterly Consolidated Balance Sheets

5(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income

7(Quarterly Consolidated Statements of Income)Cumulative Third Quarter

7(Quarterly Consolidated Statements of Comprehensive Income)Cumulative Third Quarter8(3) Notes related to Quarterly Consolidated Financial Statements

9(Assumption for Going Concern)

9(Segment Information, etc.)9(Significant Fluctuations in Shareholders’ Equity)9(Significant Subsequent Events)

9

4. Supplementary Information

10(1) Overseas Sales

10

- 1 -

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

1. Qualitative Information(1) Business Performancea. General Summary of Results
While corporate earnings continued to improve, weakness in exports and personal consumption growth kept the Japanese
economy at a standstill throughout the third quarter of the consolidated fiscal year. Despite an ongoing recovery in the U.S.
economy, an even greater degree of deceleration in the Chinese economy clouds the overall future direction of global economic
trends.
In this environment, the Company recorded domestic sales of ¥272.26 billion for the cumulative consolidated third quarter,
which represented a 3.0% decrease year on year. Overseas sales amounted to ¥294.26 billion (0.9% increase). In total, theCompany recorded ¥566.52 billion, a 1.0% decrease.
The Company recorded gross profit of ¥69.8 billion (1.4% increase). Operating income amounted to ¥14.82 billion (4.2%
increase). The Company recorded ordinary income in the amount of ¥15.37 billion (5.8% decrease), a decline mainly due to aloss in equity of affiliates and a downturn in foreign exchange gains. Profit attributable to owners of the parent amounted to¥9.56 billion (13.7% decrease). This decline was mainly due to higher tax expenses.

b. Segment Summary
Functional Materials
The Functional Materials segment reported lower net sales compared to the same period in the prior fiscal year. Growthoverseas, particularly in the Americas and China, could not outpace the decline in domestic sales.
The performance chemicals business recorded lower net sales. While overseas sales grew in China and the Americas, domestic
weakness in automotive production volume and slow demand for house paints resulted in lower sales of coating raw materials
and urethane materials.
The speciality chemicals business also reported lower net sales. While sales of chemicals for semiconductor-related products tothe electronics industry were strong, sales of plastic additives and processing oils were comparatively sluggish.
As a result, the segment recorded net sales of ¥119.02 billion, representing a ¥7.82 billion (6.2%) decrease year on year.
Operating income for the segment was ¥2.98 billion, representing a ¥170 million (5.4%) decrease.

Advanced Materials & Processing
The Advanced Materials & Processing segment reported higher net sales driven by higher performance in Northeast Asia,
Southeast Asia, Europe, and the United States, while domestic sales decreased.
The colors and imaging business recorded higher net sales. Despite lower sales of materials for LCD TV reflectors andconductive materials, the business experienced increase in sales of dyes and additives, information printing materials, antireflective optical sheets, and plastic materials.
The segment's business selling plastics and other products to the office equipment, appliance and video game device markets
reported higher net sales. This result stems mainly from gains in Northeast Asia and Southeast Asia, in contrast to lower salesin Japan.
As a result, net sales for the segment amounted to ¥197.58 billion, a ¥6.42 billion (3.4%) increase. Operating income increased¥240 million (6.6%), reaching ¥3.91 billion for the period.

Electronics
The Electronics segment reported lower net sales compared to the same period in the prior fiscal year. While sales
Europe and the United States, these gains could not compensate for lower revenues in Japan and Northeast Asia.

- 2 -

in

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

The electronic chemicals business recorded gains. Despite lower sales for chemicals used in LCD panel manufacturing, salesof epoxy resin rose year on year..
The electronic materials business reported lower sales overall, mainly due to a decline in revenues for liquid crystal-related
products caused by slowing growth in China's smartphone market.
As a result, the segment recorded net sales of ¥99.29 billion, representing a ¥17.34 billion (14.9%) decrease. Operating income
amounted to ¥5.31 billion, ¥880 million (19.9%) higher. This result was mainly due to the impact of the Company's Taiwanesesubsidiary recording an allowance for doubtful accounts during the prior fiscal year.

Automotive & Energy
Net sales for the Company's automobile-related business were level with the same period in the prior fiscal year. Whiledomestic sales were affected by lower automotive production, sales of products for certain car models rose over the period.
Overseas, the business saw strong sales in the Americas, China, and Southeast Asia, driving sales higher.
As a result, segment net sales amounted to ¥87.24 billion, a ¥6.46 billion (8.0%) increase. Operating income was ¥1.02 billion,
representing a ¥750 million (42.4%) decrease. This decrease was mainly due to expenses incurred in connection with thelaunch of a new business in Japan.

Life & Healthcare
The Life & Healthcare segment reported higher sales with strong performance in both domestic and overseas markets.
The life & healthcare products business recorded increase in domestic and overseas sales of TREHA™ and other products tothe food materials industry. In the skin care and toiletries field, the business recorded higher sales of AA2G™, particularly tomajor customers in Japan. The segment also showed strong performance in sales of raw materials to the same skin care andtoiletries markets. In the pharmaceuticals and medical fields, sales of raw pharmaceuticals, intermediates, and medical
materials rose slightly. As a result, the business reported higher overall net sales.
The beauty care products business, which includes sales of cosmetics and health foods, reported a decrease in net sales. Net
sales growth for new products launched during the second half of the year could not outpace the decrease in existing productsales.
As a result, segment net sales amounted to ¥62.86 billion, which was a ¥6.59 billion (11.7%) increase. Operating income
increased ¥270 million (11.4%), reaching ¥2.64 billion.

Other
No special matters to disclose.

(2) Financial Position
As of the end of the consolidated third quarter, current assets amounted to ¥339.9 billion. This represented an increase of¥10.05 billion compared to the end of the prior consolidated fiscal year, mainly due to increases in notes and accounts
receivable that outpaced declines in inventories. Non-current assets amounted to ¥217.56 billion, up ¥880 million. This was
mainly due to fair value increases in investments in securities. As a result, total assets increased by ¥10.93 billion compared tothe end of the prior consolidated fiscal year, up to ¥557.46 billion.
Liabilities amounted to ¥265.94 billion, up ¥6.91 billion. This was mainly due to increases in notes and accounts payable.
Net assets amounted to ¥291.52 billion, up ¥4.02 billion. This was mainly due to profit attributable to owners of the parent of¥9.56 billion, partly offset by a decrease in translation adjustments.
As a result, the Company reported a shareholders' equity ratio of 51.3%, down 0.2 points.

- 3 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016(3) Qualitative Information related to Earnings Forecasts
The Company has made no changes its full-year consolidated earnings forecasts as originally published on May 8, 2015.

2. Summary Information (Notes)(1) Changes in significant subsidiaries during the period
No matters to report.

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

(3) Changes in accounting policies, estimates and restatements
No matters to report.

(4) Additional Information
The Company has adopted the provisions of Paragraph 39 of the Accounting Standard for Consolidated Financial Statements(ASBJ Statement No. 22, September 13, 2013). Accordingly, the Company has changed its presentation with respect toquarterly net income, as well as changing its presentation from “minority interests” to “non-controlling interests.” To reflect
these changes in presentation, the Company has reclassified its financial statements for the third quarter of the priorconsolidated fiscal year and its financial statements for the prior consolidated fiscal year.

- 4 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets

Prior Consolidated Fiscal Year
(March 31, 2015)
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- 5 -(Millions of yen)
Third Quarter, Current
Consolidated Fiscal Year
(December 31, 2015)

40,575208,209
63,719
1,668
3,625
4,058
8,797
(806)
329,848

44,916
218,62158,672
1,541
3,865
4,238
8,871
(823)
339,903

66,77466,43327,626
16,942
4,276
48,844

26,40815,7604,570
46,73992,638
1,139
2,381
6,277
(1,378)101,058
216,677
546,525

96,544
1,079
1,710
5,196
(143)
104,387
217,560
557,464NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

Prior Consolidated Fiscal Year
(March 31, 2015)
LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans
Current portion of long-term loans
Current portion of bonds
Accrued income taxes
Deferred tax liabilities
Accrued bonuses for employees
Accrued bonuses for directors
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term loans
Deferred tax liabilities
Net defined benefit liability
Other
Total long-term liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Net unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 6 -(Millions of yen)
Third Quarter, Current
Consolidated Fiscal Year
(December 31, 2015)

105,737
31,3886,377
10,000
2,268
19
4,314
213
16,105
176,424

111,971
32,191
6,993
2,093
25
2,483
161
15,883
171,804

20,00030,322
20,272
10,803
1,201
82,600259,025

30,00030,972
20,855
10,977
1,332
94,138265,943

9,699
11,654205,203(228)
226,328

9,699
11,654
210,825(230)
231,949

44,9203
9,478
666
55,0696,102
287,500
546,525

46,4880
7,304
188
53,981
5,589
291,520
557,464NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)Cumulative Third Quarter

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Equity in earnings of affiliates
Foreign exchange gain
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of non-current assets
Gain on sale of investment securities
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
Loss on sales of investments in capital
Loss on sales of investments in capital of subsidiaries
and affiliates
Loss on withdrawal from employees’ pension funds
Other
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit for the period
Profit attributable to non-controlling interests
Profit attributable to owners of the parent(Millions of yen)
Cumulative Third Quarter, Prior
Cumulative Third Quarter,
Consolidated Fiscal Year
Current Consolidated Fiscal Year
(April 1, 2014 (April 1, 2015 December 31, 2014)
December 31, 2015)
572,199566,524
503,330
496,720
68,86869,80354,63854,97814,22914,825

- 7 -

152
1,173
192
540
708
449
3,215

154
1,264
220
463
2,103

776
344
1,120
16,324

804
109
259
376
1,550
15,377

385
3
389

38
70
109

69
52
73
0
72
20

19
117
764
9
-

171

-

166
627
16,086
5,018
(491)
4,527
11,559470
11,0886917
14,569
4,284
533
4,818
9,751
181
9,569

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

(Quarterly Consolidated Statements of Comprehensive Income)Cumulative Third Quarter

Profit for the period
Other comprehensive income
Net unrealized holding gain on securities
Deferred (loss) gain on hedges
Translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests(Millions of yen)
Cumulative Third Quarter, Prior
Cumulative Third Quarter,
Consolidated Fiscal Year
Current Consolidated Fiscal Year
(April 1, 2014 (April 1, 2015 December 31, 2014)
December 31, 2015)
11,559
9,751

- 8 -

13,377
(10)
7,870
(211)

1,560
(3)
(2,129)
(478)

715

(313)

21,74133,300(1,364)
8,386

32,073

8,481

1,227

(95)

NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016(3) Notes related to Quarterly Consolidated Financial Statements(Assumption for Going Concern)
No matters to report.

(Segment Information, etc.)
I Nine months ended December 31, 2014 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
Reportable Segments
Advanced
Functional
Automotive
Life &
Materials & Electronics
Materials& Energy Healthcare
Processing

Total

Other
(Note) 1

Total

To Quarterly
Consolidated
Corporate Adjustments
Statements of(Note) 3(Note) 2
Income(Note) 4

Net sales
Sales tocustomers
Intersegment
sales/transfers
Total
Segment income(loss)

126,850

191,166

116,642

80,77756,268571,706

493

572,199－－

572,199

1,851

1,697

580

2,114

225

6,469

3,987

10,457－(10,457)－

128,701

192,864

117,223

82,891

56,494578,176

4,480

582,656－(10,457)

572,199

3,151

3,676

4,432

1,776

2,372

15,409220

15,629(1,716)316

14,229(Note) 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 (loss) represents expenses not allocated to reportable segments or Other.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment Income (loss) Total, Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.
II Nine months ended December 31, 2015 (consolidated)
1. Information related to net sales and income (loss) by reportable segment(Millions of yen)
To Quarterly
Consolidated

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

Total

Other
(Note) 1

Total

Corporate Adjustments
Statements of(Note) 3(Note) 2
Income(Note) 4

Net sales
Sales tocustomers

119,024

197,587

99,29987,24262,861

566,016508

566,524－－566,524

Intersegment
sales/transfers

1,462

1,707

782

1,953

369

6,275

4,578

10,853－(10,853)－

Total

120,487

199,294

100,081

89,196

63,231

572,292

5,086

577,378－(10,853)

566,524

2,980

3,919

5,315

1,023

2,643

15,882

191

16,073(1,586)338

14,825

Segment income(loss)(Note) 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 (loss) represents expenses not allocated to reportable segments or Other.
3. Adjustments are eliminations of intersegment transactions.
4. The sum of Segment Income (loss) Total, Corporate, and Adjustments is equivalent to operating profit as presented in the
consolidated statements of income.

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

(Significant Subsequent Events)
No matters to report.

- 9 -NAGASE & CO., LTD. (8012)
Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2016

4. Supplementary Information(1) Overseas Sales
Nine months ended December 31, 2014 (consolidated)
Northeast Asia

I

North America

Europe & Others

Total

Overseas Sales(Millions of yen)

II

Southeast Asia

167,562

90,94521,092

11,969291,570

Consolidated sales
572,199(Millions of yen)
III Ratio of overseas sales toconsolidated sales (%)

29.3

15.9

3.7

2.1

51.0

Nine months ended December 31, 2015 (consolidated)
Northeast Asia

I

North America

Europe & Others

Total

Overseas Sales(Millions of yen)

II

Southeast Asia

174,604

84,11623,116

12,425294,263

Consolidated sales
566,524(Millions of yen)
III Ratio of overseas sales toconsolidated sales (%)

30.8

14.9

4.1

2.1

(Note)
1. Overseas sales 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- 10 -

51.9