Consolidated Financial Results for the Six Months Ended September 30, 2018
(Japanese Accounting Standards)
November 6, 2018
Tokyo Stock Exchange
http://www.mmc.co.jp/

Name of Listed Company: Mitsubishi Materials Corporation
Listing:
Stock Code:
5711
URL:
Representative: Naoki Ono, President
Contact:
Nobuyuki Suzuki, General Manager, Corporate Communications Dept., General Affiars Dept.,
Human Resources & General Affairs Div.
Tel: +81-3-5252-5206
Scheduled filing date of Quarterly Report:
November 6, 2018
Scheduled date of start of dividend payment:
December 4, 2018
Supplementary materials for the quarterly financial results: Yes
Investor conference for the quarterly financial results:
Yes (For Institutional Investors)(Amounts of less than million yen are omitted.)

1. Results of the first six months ended September 30, 2018 (From April 1, 2018 to September 30, 2018)(1) Consolidated Results of Operations (cumulative)(Figures in percentages denote the year-on-year change.)
Net salesFirst six months ended September 30, 2018
First six months ended September 30, 2017
(Note) Comprehensive income:Operating profit

Net income
attributable toowners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

855,268
725,450

17.9
20.3

27,59436,479-24.4
33.5

33,06739,530-16.4
51.9

14,84920,148

-26.3
-31.8

The first six months ended September 30, 2018: 6,648 million yen (-78.2%)
The first six months ended September 30, 2017: 30,532 million yen (–%)

Net income
per share

Diluted net income
per share
YenFirst six months ended September 30, 2018
First six months ended September 30, 2017

Yen

–
–

113.39153.83(2) Consolidated Financial Position
Total assets
As of September 30, 2018
As of March 31, 2018

Shareholders’equity ratio

Net assets

Million yen

Million yen%

2,007,706
2,011,067

770,049
768,495

33.7
33.9(Reference) Shareholders’ Equity:
As of September 30, 2018: 675,990 million yen
As of March 31, 2018: 682,471 million yen(Note) The Company has been applying “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 on
February 16, 2018) from the beginning of the first three months ended June 30, 2018. Individual figures related to the period ended March 31,2018 have had the accounting standards applied retroactively.

2. Dividend Payments
Dividends per share(Record date)

First quarter

Second quarter

Third quarter

Yen

Yen

Yen

Year ended March 31, 2018

–

30.00

Year ending March 31, 2019

–

40.00

Year ending March 31, 2019 (Forecast)Year-end

Annual
Yen

Yen

–

50.00

80.00

–

40.00

80.00

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

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

Net salesYear ending March 31, 2019

Operating profit

Ordinary income

Net income
attributable toowners of parent

Net income
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

1,660,000

3.8

53,000-27.2

64,000-19.6

25,000-27.7

190.90(Note) Revision to forecast published most recently: Yes

* Notes(1) Significant changes of subsidiaries during the term under review (changes in specific subsidiaries accompanied bya change in the scope of consolidation):
None(2) Application of specific accounting treatment:

Yes(Note) For details, please see “(4) Notes to consolidated quarterly financial statements (Application of special accounting
treatment in the preparation of the quarterly consolidated financial statements)” under “2. Consolidated Financial
Statements and Key Notes” on page 13.

(3) Changes in accounting policies, changes of accounting estimates and restatement(i)
Changes in accounting policies due to amendments to accounting standards:(ii) Other changes in accounting policies:(iii) Changes in accounting estimates:(iv) Restatements:

None
None
None
None

(4) Numbers of issued shares (common stock)(i)
Numbers of issued shares at end of terms (including treasury shares):Six months ended September 30, 2018: 131,489,535 sharesYear ended March 31, 2018:
131,489,535 shares(ii)
Numbers of treasury shares at end of terms:
Six months ended September 30, 2018:
533,898 sharesYear ended March 31, 2018:
527,089 shares(iii) Average number of shares issued during terms (quarterly cumulative period):
Six months ended September 30, 2018: 130,959,327 shares
Six months ended September 30, 2017: 130,977,833 shares* This quarterly financial summaries is not subject to a quarterly review by certified public accountants or audit firms.
* Explanation about the proper use of financial forecasts and other special notes(Notes concerning forward-looking statements, etc.)
The operating results forecasts and other forward-looking statements contained in this report are based on information
currently available to the Company, as well as certain assumptions that the Company has judged to be reasonable. As
such, they do not constitute an assurance that the Company promises to achieve these projected results. Therefore,
readers are advised to note that the actual results may vary materially from the forecasts due to a variety of factors.
Please see “(3) Information on the consolidated earnings forecasts and other future forecasts” of “1. Qualitative
Information on Financial Results for the Six Months Ended September 30, 2018” on page 5 for the assumptions about
consolidated earnings forecasts.
(Procedure for obtaining supplementary information on quarterly financial results and quarterly financial briefing)
Mitsubishi Materials Corporation plans to hold a quarterly financial briefing for institutional investors on Tuesday,
November 6, 2018. The materials used at this briefing are disclosed on the TDnet and the Company’s web page at thetime that the quarterly financial results are announced.

Contents
1. Qualitative Information on Financial Results for the Six Months Ended September 30, 2018........................... 2(1) Details of operating results .............................................................................................................................2(2) Details of financial position ...........................................................................................................................5(3) Information on the consolidated earnings forecasts and other future forecasts ..............................................5
2. Consolidated Financial Statements and Key Notes ............................................................................................. 6(1) Consolidated balance sheet ............................................................................................................................6(2) Consolidated statement of income and consolidated statements of comprehensive income ..........................8
Consolidated statement of income.................................................................................................................. 8
Consolidated statements of comprehensive income ....................................................................................... 9(3) Consolidated statement of cash flows .......................................................................................................... 10(4) Notes to consolidated quarterly financial statements ................................................................................... 12
Notes on assumptions for a going concern ................................................................................................... 12
Segment information .................................................................................................................................... 12
Notes on significant changes in the amount of shareholders’ equity, if any ................................................ 13
Application of special accounting treatment in the preparation of the quarterly consolidated financial
statements ..................................................................................................................................................... 13
Additional information ................................................................................................................................. 13
Contingent liabilities .................................................................................................................................... 13
Important subsequent events ........................................................................................................................ 16–1–

1. Qualitative Information on Financial Results for the Six Months Ended September 30, 2018
(1) Details of operating results1) Overview of operating results
During the first half of the consolidated fiscal year under review, although signs of economic slowdown wereseen in China, moderate recovery was seen in the Asian economies of Thailand and Indonesia. In the UnitedStates, the economy continued to recover steadily.
In Japan, corporate earnings and employment and income conditions were on the road to recovery, andconsumer spending and capital expenditure showed signs of improvement.
Regarding the business environment for the Mitsubishi Materials Group, copper prices increased, and energy
prices rose.
Under these circumstances, consolidated net sales for the first half of the year under review totaled ¥855,268
million, up 17.9% year on year. Operating profit decreased 24.4% year on year, to ¥27,594 million, andordinary income fell 16.4%, to ¥33,067 million. Net income attributable to owners of parent was ¥14,849
million, down 26.3% year on year.
2) Overview by segments(Cement)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q2
95.6
10.6
11.0

FY 2019 Q1-Q2
98.5
6.9
7.1

(Billion yen)
Increase / Decrease (%)
2.9(3.0%)-3.7(-35.1%)-3.9(-35.4%)

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

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q2
374.5
10.8
14.2

FY 2019 Q1-Q2
480.8
8.9
12.2

(Billion yen)
Increase / Decrease (%)
106.3(28.4%)-1.9(-17.6%)-1.9(-13.7%)In the copper business, net sales increased and operating profit decreased, mainly attributable to increased
costs for smelting, despite the higher production volume at Naoshima Smelter & Refinery due to the absenceof periodic furnace repairs and higher copper prices.
In the gold and other valuable metals business, both net sales and operating profit grew, mainly due toincreased production as a result of a rise in the amount of gold and other valuable metals contained in raw
materials.
In the copper and copper alloy products business, net sales increased and operating profit decreased as a–2–

result of an increase in copper prices and a drop in sales of products for electronic materials.
As a result, overall the Metal business posted year-on-year increase in net sales, but operating profit declined.
Ordinary income decreased due to the decrease in operating profit.
(Advanced Materials & Tools)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q2
78.3
8.6
8.1

FY 2019 Q1-Q2
87.2
9.9
9.3

(Billion yen)
Increase / Decrease (%)
8.9(11.4%)
1.2(14.6%)
1.2(15.2%)In the cemented carbide products business, net sales and operating profit increased as a result of strong
demand mainly in Japan, Europe, United States, China and Southeast Asia.
In the high-performance alloy products business, net sales increased due to growth in demand for mainstay
sintering parts in Japan and North America. However, the operating loss expanded due to the increased costs
associated with quality inspection and shipments.
As a result, overall the Advanced Materials & Tools business recorded year-on-year increases in net sales
and operating profit. Ordinary income also rose due to the higher operating profit.
(Electronic Materials & Components)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q2
34.0
1.8
2.3

FY 2019 Q1-Q2
36.1
1.6
3.0

(Billion yen)
Increase / Decrease (%)
2.1(6.4%)-0.1(-9.7%)
0.7(32.7%)In the advanced materials and chemical products business, net sales and operating profit increased, reflecting
a rise in sales of products related to semiconductor manufacturing equipment and other products.
In the electronic components business, net sales increased while operating profit declined due to the effect offalling sales prices of products for optical communication related equipment, although the sales of products
for home appliances and products for automobiles increased.
The polycrystalline silicon business recorded decreases in both net sales and operating profit due to a fall insales prices, in addition to a decrease in sales volume mainly due to the impact of postponement of sales tosome customers to the second half or thereafter.
As a result, the entire Electronics Materials & Components business registered a year-on-year increase in net
sales but a year-on-year decline in operating profit. Ordinary income increased as a result of the higher
dividend income despite the decrease in operating profit.

–3–

(Aluminum)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q2
77.5
3.9
3.7

FY 2019 Q1-Q2
77.0
1.3
1.1

(Billion yen)
Increase / Decrease (%)-0.5(-0.7%)-2.6(-67.1%)-2.6(-70.5%)In the aluminum beverage can business, net sales and operating profit declined due to a fall in sales of bottlecans and rising costs of raw materials and energy, despite an increase in sales of regular cans.
In the rolled aluminum and processed aluminum products business, although sales of can materials and plateproducts for litho sheets declined, aluminum prices rose and sales of heat exchanger sheet materials forautomobiles increased. Energy costs also rose. As a result of these developments, net sales increased, but
operating profit declined.
As a result, the entire Aluminum business posted year-on-year decreases in net sales and operating profit.
Ordinary income also declined due to the fall in operating profit.
(Others)

Net sales
Operating profit
Ordinary income

FY 2018 Q1-Q2
106.4
3.9
4.4

FY 2019 Q1-Q2
113.3
3.8
4.7

(Billion yen)
Increase / Decrease (%)
6.8(6.5%)-0.0(-0.7%)
0.3(8.6%)In the energy-related business, although sales volume of coal decreased, due to a rise in sales prices of coal,both net sales and operating profit increased.
In the environmental recycling business, both net sales and operating profit increased with a rise in therecycling unit price of valuables, in addition to an increase in recycling volumes.
Although total net sales in the Others business excluding the energy-related business and the environmental
recycling business increased, operating profit decreased.
In the overall Others business, net sales increased from a year earlier, while operating profit decreased.
Ordinary income increased mainly due to a rise in dividend income, despite the fall in operating profit.

–4–

(2) Details of financial position
Total assets at the end of the second quarter of the consolidated fiscal year under review stood at ¥2,007.7 billion,
down ¥3.3 billion from the end of the previous consolidated fiscal year. This result was mainly due to a decrease
in investment securities despite increase in inventories.
Total liabilities were ¥1,237.6 billion, a decrease of ¥4.9 billion from the end of the previous consolidated fiscal
year. This decrease was chiefly attributable to a fall in accounts payable.
The status of cash flow and factors contributing to these amounts in each category for the first six months of the
fiscal year under review are as follows:(Cash Flow from Operating Activities)
Net cash provided by operating activities totaled ¥13.1 billion (an increase of ¥8.7 billion from the first half ofthe previous fiscal year) mainly because of the posting of income before income taxes.
(Cash Flow from Investing Activities)
Net cash used in investing activities totaled ¥34.9 billion (a decrease of ¥43.2 billion from the first half of theprevious fiscal year) chiefly attributable to purchase of property, plant and equipment.
(Cash Flow from Financing Activities)
Net cash provided by financing activities totaled ¥19.6 billion (a decrease of ¥0.1 billion from the first half of theprevious fiscal year) mainly as a result of raising the ¥21.8 billion cash used by operating activities and investing
activities through commercial paper.
As a result of adding a net increase (decrease) in cash and cash equivalents mainly due to the effect of theexchange rate changes to the above, cash and cash equivalents at the end of the second quarter under review
stood at ¥92.2 billion (up ¥4.8 billion from the end of the previous fiscal year).

(3) Information on the consolidated earnings forecasts and other future forecasts
In our consolidated earnings forecasts for the full year of the fiscal year ending March 31, 2019, we have revised
the previous forecasts (announced on August 7, 2018) as shown below, considering the strong sales of theAdvanced Materials & Tools Business, a fall in metal prices and an increase in costs for smelting in the Metals
business, as well as a fall in the sales of the Cement business below the estimate, among other factors.
Revisions to Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2019(from April 1, 2018 to March 31, 2019)(Billion yen)
Increase / Decrease (%)

Previous forecast

Current forecast

Net sales

1,660.0

1,660.0－

Operating profit
Ordinary income
Net income attributableto owners of parent

67.0
79.0

53.0
64.0

-20.9
-19.0

35.0

25.0

-28.6

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

–5–

2. Consolidated Financial Statements and Key Notes(1) Consolidated balance sheet
As of March 31, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Machinery and equipment, net
Land, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–6–(Million yen)
As of September 30, 2018

93,389260,427
91,772132,043
142,275
227,686(2,518)97,178259,678
90,011
160,294
148,111
224,912(2,854)

945,077

977,333

204,513
236,709204,336

204,086
238,356
213,899645,559

656,343

44,636
19,93843,774
18,67864,57462,452

303,924
56,228(4,297)264,299
51,254(3,975)355,855

311,577

1,065,989

1,030,373

2,011,067

2,007,706

As of March 31, 2018
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds payable
Commercial papers
Income taxes payable
Provision
Gold payable
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Provision for environmental measures
Other provision
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity(Million yen)
As of September 30, 2018

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

145,137
221,217–50,0008,135
12,351
240,453
117,293

777,001

794,590

50,000240,292
37,8332,370
51,64783,42750,000232,950
36,431
2,731
49,754
71,199465,570443,067

1,242,571

1,237,657

119,457
92,422
361,430(2,089)119,457
92,422
371,744(2,110)571,222581,515

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

95,487
1,068
33,071(10,312)(8,066)71,788(1,262)33,000(1,853)(7,196)

Total accumulated other comprehensive income

111,249

94,47586,023

94,058Non-controlling interests
Total net assets
Total liabilities and net assets–7–768,495

770,049

2,011,067

2,007,706

(2) Consolidated statement of income and consolidated statements of comprehensive income
Consolidated statement of income
Consolidated first six months

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodRent income on non-current assets
Other
Total non-operating profit
Non-operating expenses
Interest expenses
Settlement expenses of remaining business in mines
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on liquidation of subsidiaries and associates
Gain on sales of non-current assets
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Impairment loss
Loss on sales of non-current assets
Loss on sales of investment securities
Other
Total extraordinary losses
Income before income taxes
Income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Million yen)
Six Months Ended
September 30, 2017
(Apr. 1, 2017–Sep. 30, 2017)
725,450
616,750
108,700
72,22036,479–8–Six Months Ended
September 30, 2018
(Apr. 1, 2018–Sep. 30, 2018)855,268
750,493
104,775
77,18027,594

362
6,729

514
9,660

1,694

757

2,406
2,204
13,396

2,536
1,480
14,950

2,532
2,348
5,465
10,34539,530

2,378
1,604
5,495
9,477
33,067

–
33
165
6
204

506
328
170
–
1,005

–
41
280
490
122
934
38,80013,807
24,993
4,844
20,148

2,779
1,539
40
–
19
4,378
29,693
9,948
19,744
4,895
14,849

Consolidated statements of comprehensive income
Consolidated first six months(Million yen)
Six Months Ended
September 30, 2017
(Apr. 1, 2017–Sep. 30, 2017)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests–9–

Six Months Ended
September 30, 2018
(Apr. 1, 2018–Sep. 30, 2018)

24,993

19,7443,202(2,122)
2,746
1,412

(23,951)(2,316)
12,901
875

300

(604)

5,539

(13,096)

30,532

6,648

25,054(1,959)

5,477

8,607

(3) Consolidated statement of cash flows(Million yen)
Six Months Ended
September 30, 2017
(Apr. 1, 2017–Sep. 30, 2017)
Cash flows from operating activities
Income before income taxes
Depreciation
Increase (decrease) in provision for environmental
measures
Increase (decrease) in provision
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on sales of property, plant and equipment
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Proceeds from sales of gold bullion
Purchase of gold bullion
Increase (decrease) in notes and accounts
payable-trade
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Loss on non-conforming products paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from liquidation of subsidiaries andassociates
Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from sales of shares of subsidiaries
resulting in change in scope of consolidation
Payments for sales of shares of subsidiaries resulting
in change in scope of consolidation
Payments of loans receivableCollection of loans receivable
Payments for transfer of business
Other
Net cash provided by investing activities– 10 –Six Months Ended
September 30, 2018
(Apr. 1, 2018–Sep. 30, 2018)

38,80027,776

29,69329,531(1,057)(1,401)(1,069)891(7,091)
2,532

(259)
(766)
(10,175)
2,378(1,694)

(757)

297
324
–

(287)
(171)
2,779

(24,903)

4,265(71,558)
72,398(52,123)(27,111)52,405(52,230)

35,883(17,520)(3,244)
16,1638,443(2,531)(17,696)
–
4,379

7,979
18,352
11,462(2,356)(12,926)(1,430)13,101(34,541)
144(1,251)
209(36,980)618(1,416)
344

–

2,160

273

–

(38,496)

–

185

–

(901)

–

(2,999)4,363(1,475)(3,679)(78,170)(1,339)572–
1,106(34,935)

Six Months Ended
September 30, 2017
(Apr. 1, 2017–Sep. 30, 2017)
Cash flows from financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Increase (decrease) in commercial papers
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Other
Net cash provided by 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 the beginning of
periodIncrease (decrease) in cash and cash equivalents
resulting from change of scope of consolidation
Increase (decrease) in cash and cash equivalents
resulting from change of accounting period of
consolidated subsidiary
Cash and cash equivalents at the end of period– 11 –Six Months Ended
September 30, 2018
(Apr. 1, 2018–Sep. 30, 2018)

2,810(2,591)

33,206(32,498)
20,000(15,000)
20,000(28)(5,239)(2,247)(1,217)
19,78526,254(20,141)–(25,000)
50,000(21)(6,548)(1,259)(1,089)19,602484

2,459(53,520)228

132,616

87,355

714

4,624

1,228

–

81,03992,208

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

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

AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

94,003

370,151

72,52329,592(2) Withinconsolidated group

1,681

4,370

5,787

4,416

Total

95,685374,52278,31011,042

14,211

8,139

Amountindicated intheAdjustment
consolidated
amountquarterlystatements
of income

OthersTotal

77,15382,025725,450–

725,450427

24,392

41,076(41,076)–

34,00977,580106,418

766,527(41,076)

725,450

2,311

3,758

4,401

43,863(4,332)39,530Net sales

Segment income

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estatebusiness, and engineering-related services.
2. “Adjustment amount” of segment income of -¥4,332 million includes the elimination of intersegment transactionsof -¥7 million and corporate expenses of -¥4,324 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses that do not belong to the reporting
segments, basic experiment and research expenses, and financial revenue and expenses.
3. Segment income has been adjusted together with ordinary income on the consolidated quarterly statements ofincome.

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

AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

97,123476,066

81,19931,646(2) Withinconsolidated group

1,471

4,787

6,075

Total

98,595

480,854

7,138

12,264

Amountindicated intheAdjustment
consolidated
amountquarterlystatements
of income

OthersTotal

76,66592,568855,268–

855,268

4,528

409

20,74638,018(38,018)–

87,27436,174

77,074

113,314893,287(38,018)

855,268

9,378

3,067

1,106

4,780

37,735(4,668)33,067

Net sales

Segment income

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estatebusiness, and engineering-related services.
2. “Adjustment amount” of segment income of -¥4,668 million includes the elimination of intersegment transactionsof -¥0 million and corporate expenses of -¥4,667 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses that do not belong to the reporting
segments, basic experiment and research expenses, and financial revenue and expenses.
3. Segment income has been adjusted together with ordinary income on the consolidated quarterly statements ofincome.

– 12 –

Notes on significant changes in the amount of shareholders’ equity, if any
N/AApplication of special accounting treatment in the preparation of the quarterly consolidated
financial statements
The Company calculates tax expenses by rationally assuming an effective tax rate after applying tax effectaccounting to income before income taxes for the consolidated fiscal year, including the second quarter underreview, and multiplying income before income taxes for the first half by the estimated effective tax rate.

Additional information(Provision for environmental measures)
In regards to expenses for specific countermeasure work to prevent mining-induced pollution and expenses forcountermeasure work to stabilize collection sites in abandoned mines managed by the Group, we have recorded a
provision for expenses whose estimated amount has been fixed because the details of the construction work havebeen determined. However, regarding countermeasure work to stabilize large-scale collection sites, there aresome forms of countermeasure work for which the amount cannot be calculated reasonably because the details of
construction work are undecided due to the fact that the most appropriate construction method for the landscapeand existing equipment have yet to be selected, even though specific countermeasure work is necessary.
(Adoption of the “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.)
The Company has adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28 on February 16, 2018), etc. from the beginning of the first quarter of the fiscal year. As a result,deferred tax assets are presented in investments and other assets, and deferred tax liabilities are presented in
non-current liabilities.

Contingent liabilities(Matters concerning taxation in Indonesia)
Previous consolidated fiscal year (As of March 31, 2018)
On December 30, 2014, PT. Smelting in Indonesia, a consolidated subsidiary of the Company (hereinafter the“PTS”) received a notice of reassessment in an amount of US$47 million (¥5,085 million based on the exchange
rate at the end of the previous consolidated fiscal year) from the Indonesian National Tax Authority, regarding
the sales transaction pricing of the PTS for the year ended December 31, 2009. On January 28, 2015, the PTS
made a provisional deposit of US$14 million (¥1,487 million) as a part of the additional collection.
However, the PTS submitted a written objection to the Indonesian National Tax Authority on March 25, 2015,
because this assessment, which claimed there was a sales shortage on the part of the PTS based on a comparisonof the profit margin ratio with other companies selected by the Indonesian National Tax Authority, was highly
unreasonable and found to be unacceptable by the Company and the PTS.
The written objection submitted by the PTS on March 25, 2015 was dismissed by the Indonesian National Tax
Authority on March 16, 2016. Therefore, the PTS filed a complaint to the Tax Court in Indonesia on June 6,2016 to present the fairness of the view of the Company and the PTS.
On December 22, 2016, the PTS received a notice of reassessment in an amount of US$34 million (¥3,637
million) from the Indonesian National Tax Authority, regarding its posting of raw material costs, etc. for the
fiscal year ended December 31, 2011.
However, the PTS submitted a written objection to the Indonesian National Tax Authority on March 20, 2017,
because this assessment was a view that unilaterally negated the basis for recording raw materials costs, etc. of
the PTS and found to be unacceptable by the Company and the PTS.

– 13 –

On February 28, 2018, the PTS received a notice from the Indonesian National Tax Authority regarding thewritten objection submitted by the PTS on March 20, 2017, and the written objection of the PTS was acceptedfor US$28 million (¥3,012 million). For US$5 million (¥625 million), for which the written objection was
dismissed, the PTS has decided to file a complaint to the Tax Court in Indonesia.
On November 29, 2017, the PTS also received a notice of reassessment in an amount of US$22 million (¥2,425
million) from the Indonesian National Tax Authority, primarily regarding its posting of gains and losses on
hedging for the fiscal year ended December 31, 2012. On December 27, 2017, the PTS made a provisional
deposit of US$6 million (¥668 million) as part of the additional collection.
However, the PTS submitted a written objection to the Indonesian National Tax Authority on February 27, 2018,
because this assessment was a view that unilaterally negated the basis for recording gains and losses on hedging,etc. of the PTS and found to be unacceptable by the Company and the PTS.
Second quarter of the consolidated fiscal year under review (As of September 30, 2018)
On December 30, 2014, PT. Smelting in Indonesia, a consolidated subsidiary of the Company (hereinafter the“PTS”) received a notice of reassessment in an amount of US$47 million (¥5,436 million based on the exchange
rate at the end of the second quarter of the consolidated fiscal year under review) from the Indonesian National
Tax Authority, regarding the sales transaction pricing of the PTS for the year ended December 31, 2009. On
January 28, 2015, the PTS made a provisional deposit of US$14 million (¥1,589 million) as a part of theadditional collection.
However, the PTS submitted a written objection to the Indonesian National Tax Authority on March 25, 2015,
because this assessment, which claimed there was a sales shortage on the part of the PTS based on a comparisonof the profit margin ratio with other companies selected by the Indonesian National Tax Authority, was highly
unreasonable and found to be unacceptable by the Company and the PTS.
The written objection submitted by the PTS on March 25, 2015 was dismissed by the Indonesian National Tax
Authority on March 16, 2016. Therefore, the PTS filed a complaint to the Tax Court in Indonesia on June 6,2016 to present the fairness of the view of the Company and the PTS.
On November 29, 2017, the PTS also received a notice of reassessment in an amount of US$22 million (¥2,592
million) from the Indonesian National Tax Authority, primarily regarding its posting of gains and losses on
hedging for the fiscal year ended December 31, 2012. On December 27, 2017, the PTS made a provisional
deposit of US$6 million (¥715 million) as part of the additional collection.
However, the PTS submitted a written objection to the Indonesian National Tax Authority on February 27, 2018,
because this assessment was a view that unilaterally negated the basis for recording gains and losses on hedging,etc. of the PTS and found to be unacceptable by the Company and the PTS.
(Matters concerning Non-Conforming Products)
Previous consolidated fiscal year (As of March 31, 2018)
Mitsubishi Materials Corporation discovered that the Company’s consolidated subsidiaries Mitsubishi Cable
Industries, Ltd., Mitsubishi Shindoh Co., Ltd., Mitsubishi Aluminum Co., Ltd., Tachibana Metal ManufacturingCo., Ltd. and Diamet Corporation had delivered products, etc. that deviated from customer standards or internal
company specifications due to misconduct, including the rewriting of inspection records data and the insufficienttesting concerning some of the products manufactured and sold in the past.
Based on the above fact, some of the aforementioned subsidiaries received notification of revocation of their JIS
certification and ISO certifications from the accrediting agencies.
Since quality control related problems were also discovered with respect to the copper slag products
manufactured at the Company's Naoshima Smelter & Refinery, the Company reported the fact to the Japan
Quality Assurance organization (JQA) and a special inspection was conducted. As a result, JQA revoked the JIS– 14 –

certification for copper slag products manufactured at the Company’s Naoshima Smelter & Refinery.
Depending on the progress of the above mentioned issues, the Company’s consolidated business results may beaffected, due to costs incurred to compensate customers and other parties and other losses. However, suchamounts which are currently difficult to estimate are not reflected in the consolidated financial statements.
Second quarter of the consolidated fiscal year under review (As of September 30, 2018)
Mitsubishi Materials Corporation discovered that the Company’s consolidated subsidiaries had delivered
products, etc. that deviated from customer standards or internal company specifications due to misconduct,
including the rewriting of inspection records data and the insufficient testing, concerning some of the products
manufactured and sold in the past.
Based on the above fact, some of the aforementioned subsidiaries received notification of revocation of their JIS
certification and ISO certifications from the accrediting agencies.
In addition, in relation to this misconduct, the Company's consolidated subsidiaries: Mitsubishi Cable Industries,
Ltd., Mitsubishi Aluminum Co., Ltd. and Diamet Corporation and the former officers of Mitsubishi Cable
Industries, Ltd. and Diamet Corporation were indicted on a charge of violation of the Unfair Competition
Prevention Act in September 2018.
Depending on the progress of the above mentioned issues, the Company’s consolidated business results may beaffected, due to costs incurred to compensate customers and other parties and other losses. However, suchamounts which are currently difficult to estimate are not reflected in the quarterly consolidated financial
statements.
(On-site inspection by the Japan Fair Trade Commission)
Previous consolidated fiscal year (As of March 31, 2018)
Universal Can Corporation, a consolidated subsidiary of the Company, was on-site inspected by the Japan Fair
Trade Commission on February 6, 2018, due to suspected of violating the Antimonopoly Act concerning thetransaction of empty cans for beverages.
The subsequent progress of this matter may affect the Company’s consolidated financial results, since it isdifficult to rationally estimate the impact amount at the present time, it is not reflected in the consolidated
financial statements.
Second quarter of the consolidated fiscal year under review (As of September 30, 2018)
Universal Can Corporation, a consolidated subsidiary of the Company, was on-site inspected by the Japan Fair
Trade Commission on February 6, 2018, due to suspected of violating the Antimonopoly Act concerning thetransaction of empty cans for beverages.
The subsequent progress of this matter may affect the Company’s consolidated financial results, since it isdifficult to rationally estimate the impact amount at the present time, it is not reflected in the quarterly
consolidated financial statements.

– 15 –

Important subsequent events(Change the method of business segmentation)
At the meeting of the Board of Directors held on August 7, 2018, the Company resolved to partially change theorganization of business division. This change was made on October 1, 2018.
The Copper & Copper Alloy Products in the Metals Company, the Electronic Materials & Components
Company and the Aluminum Div. are integrated to “Advanced Products Company” as a single in-housecompany, it aims to strengthen its product planning, marketing and proposal capabilities for key areas and main
customers in a cross-functional manner.
Associated with this, the Company has decided to change the method of business segmentation from the“Cement Business”, “Metals Business”, “Advanced Materials & Tools Business”, “Electronic Materials &Components Business”, “Aluminum Business” and “Others business” to the “Advanced Products”,“Metalworking Solutions Business”, “Metals Business”, “Cement Business” and “Others business”.
Information on net sales and profits for each reporting segment for the first half of the consolidated fiscal year
under review based on the business segments after the change is as provided below.
For the six months ended September 30, 2018 (from April 1, 2018 to September 30, 2018)
Sales and income of reporting segments(Million yen)

Adjustment
amountAmountindicated intheconsolidated
quarterlystatements ofincome855,268–

855,268

121,357(121,357)–

113,314976,626(121,357)

855,268

4,780

37,645(4,578)33,067

Advanced
Products

Metalworking
Solutions
Business

MetalsBusiness

CementBusiness

Othersbusiness

Total(1) Outside customers

283,386

81,199300,990

97,12392,568(2) Withinconsolidated group

7,140

6,075

85,923

1,471

20,746

Total

290,527

87,274

386,914

98,595

8,174

9,378

8,173

7,138

Net sales

Segment income

Notes: 1. “Others business” includes nuclear energy-related services, environmental and recycling-related business, realestate business, and engineering-related services.
2. “Adjustment amount” of segment income of -¥4,578 million includes the elimination of intersegment transactionsof ¥89 million and corporate expenses of -¥4,667 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses that do not belong to the reporting
segments, basic experiment and research expenses, and financial revenue and expenses.
3. Segment income has been adjusted together with ordinary income on the consolidated quarterly statements ofincome.

– 16 –