20150129_100en For Immediate Release

January 29, 2015

sident

Relations Center

Announcement of Recognition of Loss on Business of Subsidiaries and Affiliates

Nippon Steel & Sumitomo Metal Corporation (the "Company") posted a loss on business of subsidiaries and affiliates as a special loss in its consolidated financial statements for the first three quarters of fiscal 2014 (April 1, 2014―December 31, 2014). The details are as follows:

1. Details of the loss on business of subsidiaries and affiliates

(1) Reason for the loss

The Company's affiliated company accounted for by equity method, VALLOUREC & SUMITOMO TUBOS DO BRASIL LTDA. ("VSB"), is now in the process of achieving full operation, but the recent rapid decline in oil prices is expected to impair the business environment surrounding the oil and gas related markets and future profits of VSB.
In view of such changes in the business environment, the Company has revised its forecasts for VSB's future profits and cash flows. The Company reduced its book value of investment in VSB and posted a loss on business of subsidiaries and affiliates under consolidated special loss, equivalent to the amount of the loss calculated by re-evaluating the VSB's fixed assets to their recoverable value.
The Company and its partner for VSB, Vallourec, will continue to implement every measure to improve profitability of VSB project. The measures include maximizing efforts to improve productivity and reduce costs and shifting VSB's production focus to more high-end area. In addition to such measures, both partners are considering together all the possibilities to enhance VSB's performance.

(2) The amount of the loss

68.6 billion yen

[Outline of VSB]

Corporate name:VALLOUREC & SUMITOMO TUBOS DO BRASIL LTDA. Location:Jeceaba, Minas Gerais State, Brazil

Establishment:July 2007

Capital:BRL 5,376 million

Investment ratios:Vallourec group: 56.0%,

Nippon Steel & Sumitomo Metal Corporation group: 40.4％, Sumitomo Corporation: 3.6%

Business activities:Production of seamless pipes and other related products

Production capacity:600Kt / year of seamless pipes

Major facilities:Upstream facilities for iron & steel making process

Seamless pipe mill and finishing facilities

Employees:Approximately 2,400

For more information, please contact:
Public Relations Center, General Administration Division
TEL: +81-3-6867-2135, 2146, 2977, 5807

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