Taiheiyo Cement : The Third Quarter of Fiscal 2017

February 10, 2017

The accompanying consolidated financial results are not intended to present the financial results in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan.

(All yen figures are rounded down to the nearest one million yen.)

1. Consolidated Financial Results for the Third Quarter of Fiscal 2017 (April 1, 2016 through December 31, 2016)

2. Operating Results

   Net Sales		Operating income		Ordinary income		Profit attributable to Owners of parent
   3Q FY3/17	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%
   	592,207	△5.5	44,234	2.2	44,060	3.7	57,117	114.9
   3Q FY3/16	626,562	0.7	43,264	△10.0	42,471	△15.9	26,575	△21.7

   *comprehensive income : Fiscal 2017 3Q 34,979 Fiscal 2016 3Q 21,944

   EPS	Diluted EPS
   3Q FY3/17	Yen	Yen
   	46.01	-
   3Q FY3/16	21.63	-

3. Financial Position

4. Total assets	Total net assets	Equity ratio
   3Q FY3/17	Millions of Yen	Millions of Yen	%
   	1,036,707	386,353	33.7
   FY3/16	1,014,075	357,073	31.4

   *Equity : Fiscal 2017 3Q 349,030 Fiscal 2016 318,285

5. Dividends

   Dividend per share
   1Q	2Q	3Q	4Q	Total
   FY3/16	Yen	Yen	Yen	Yen	Yen
   	-	3.00	-	3.00	6.00
   FY3/17	-	3.00	-
   FY3/17(forecast)	3.00	6.00

6. Consolidated Results Forecast for the Fiscal 2017 (April 1, 2016 through March 31, 2017)

7. Net sales		Operating income		Ordinary income		Profit attributable to Owners of parent		EPS
   FY3/17	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%	Yen
   	805,000	△3.6	62,000	2.6	57,000	△5.4	52,000	42.8	41.68

   This forecast is based on the information available at the date of publication of this material and assumptions at the same date with respect to the various factors which might have impact on the future financial results. Actual results may differ materially from this forecast due to various factors.

   Consolidated Balance Sheets

   All yen figures are rounded down to the nearest one million yen.

   (Millions of Yen)

   Item	FY3/16 (As of 3/31/16)	3Q FY3/17 (As of 12/31/16)
   Assets	53,539	65,851
   Current assets
   Cash and deposits
   Notes and accounts receivable-trade	161,392	187,898
   Merchandise and finished goods	31,187	28,399
   Work in process	1,485	2,689
   Raw materials and supplies	42,624	39,554
   Other	19,627	27,113
   Allowance for doubtful accounts	(938)	(1,064)
   Total current assets	308,918	350,442
   Noncurrent assets	132,708	134,710
   A. Property, plant and equipment
   Buildings and structures, net
   Machinery, equipment, and vehicles, net	147,151	134,625
   Land	140,726	158,498
   Other, net	67,024	63,023
   Total property, plant and equipment	487,611	490,858
   B. Intangible assets	6,432	3,570
   Goodwill
   Other	37,487	34,331
   Total intangible assets	43,919	37,901
   C. Investments and other assets	115,443	83,027
   Investment securities
   Assets for retirement benefits	8,968	9,865
   Other	55,870	72,195
   Allowance for doubtful accounts	(6,655)	(7,583)
   Total investments and other assets	173,626	157,504
   Total noncurrent assets	705,156	686,264
   Total assets	1,014,075	1,036,707

   All yen figures are rounded down to the nearest one million yen.

   (Millions of Yen)

   Item	FY3/16 (As of 3/31/16)	3Q FY3/17 (As of 12/31/16)
   Liabilities	73,893	84,320
   Current liabilities
   Notes and accounts payable-trade
   Short-term loans payable	160,421	142,389
   Current portion of bonds	450	10,170
   Income taxes payable	8,351	20,132
   Provision for bonuses	5,723	3,200
   Other provision	751	520
   Other	71,637	75,497
   Total current liabilities	321,229	336,231
   Noncurrent liabilities	46,155	36,045
   Bonds payable
   Long-term loans payable	187,471	168,470
   Liability for retirement benefits	22,814	22,300
   Provision for directors' retirement benefits	433	435
   Provision for special repairs	245	107
   Other provision	747	983
   Asset retirement obligations	7,990	7,908
   Other	69,915	77,873
   Total noncurrent liabilities	335,772	314,123
   Total liabilities	657,002	650,354
   Net assets	86,174	86,174
   Shareholders' equity
   Capital stock
   Capital surplus	50,925	59,351
   Retained earnings	188,731	238,545
   Treasury stock	(979)	(8,795)
   Total shareholders' equity	324,851	375,275
   Accumulated other comprehensive income	4,755	7,589
   Valuation difference on available-for-sale securities
   Deferred gains or losses on hedges	16	219
   Revaluation reserve for land	4,665	5,065
   Foreign currency translation adjustment	(4,174)	(30,361)
   Retirement benefits liability adjustments	(11,829)	(8,757)
   Total accumulated other comprehensive income	(6,566)	(26,244)
   Non-controlling interests	38,787	37,322
   Total net assets	357,073	386,353
   Total liabilities and net assets	1,014,075	1,036,707

   Consolidated Statements of Income

   A All yen figures are rounded down to the nearest one million yen.

   (Millions of Yen)

   Item	3Q FY3/16 (4/1/15- 12/31/15)	3Q FY3/17 (4/1/16- 12/31/16)
   Net sales	626,562	592,207
   Cost of sales	483,410	447,152
   Gross profit	143,152	145,054
   Selling, general and administrative expenses	99,887	100,820
   Operating income	43,264	44,234
   Non-operating income	422	412
   Interest income
   Dividends income	573	618
   Equity in earnings of unconsolidated subsidiaries and affiliates	3,476	3,201
   Other	3,270	1,820
   Total non-operating income	7,742	6,052
   Non-operating expenses	4,886	3,789
   Interest expenses
   Other	3,649	2,436
   Total non-operating expenses	8,535	6,226
   Ordinary income	42,471	44,060
   Extraordinary income	448	426
   Gain on disposal of property, plant, and equipment
   Gain on sales of investment securities	755	3,971
   Gain on bargain purchase	-	16,874
   Other	76	33
   Total extraordinary income	1,281	21,305
   Extraordinary loss	1,595	1,495
   Loss on disposal of property, plant, and equipment
   Loss on step acquisitions	-	3,034
   Other	618	304
   Total extraordinary losses	2,213	4,835
   Income before income taxes and non-controlling interests	41,538	60,531
   Income taxes-current	13,471	1,533
   Profit	28,066	58,997
   Profit attributable to non-controlling interests	1,491	1,879
   Profit attributable to owners of parent	26,575	57,117