Mitsubishi Paper Mills : Summary of Consolidated Financial Results for the Nine Months Ended December 31,2016(unaudited)

February 7, 2017

Summary of Consolidated Financial Results for the Nine Months Ended December 31, 2016 (unaudited)

Company name: Mitsubishi Paper Mills Limited Stock exchange listing: Tokyo Stock Exchange Code number: 3864

URL: http://www.mpm.co.jp/

Representative: Kunio Suzuki, President and Chief Executive Officer Contact: Hironori Oikawa, General Manager, Finance & Accounting Dept.

Phone: [phone]

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2016 (April 1, 2016 to December 31, 2016)

2. Consolidated Operating Results (% indicates changes from the previous corresponding period.)

   Net sales	Operating income	Ordinary income	Profit attributable to owners of parent
   Nine months ended December 31, 2016 December 31, 2015	Million yen % 150,822 (6.7) 161,722 1.7	Million yen % 3,200 65.4 1,935 -	Million yen % 2,250 110.0 1,071 -	Million yen % 988 1.1 977 -

   (Note) Comprehensive income: Nine months ended December 31, 2016: ¥2,069 million [491.7%]

   Nine months ended December 31, 2015: ¥349 million [-%]

   Earnings per share	Diluted earnings per share
   Nine months ended	Yen	Yen
   December 31, 2016	28.92	-
   December 31, 2015	28.61	-

   * The Company conducted a reverse stock split to consolidate every ten shares of common stock into one share on October 1, 2016. Earnings per share has been calculated assuming that the reverse stock split was conducted at the beginning of the previous consolidated fiscal year.

3. Consolidated Financial Condition

4. Total assets	Net assets	Equity ratio
   As of December 31, 2016	Million yen	Million yen	%
   	240,133	53,551	21.2
   As of March 31, 2016	241,155	51,492	20.4

   (Reference) Equity: As of December 31, 2016: ¥51,028 million

   As of March 31, 2016: ¥49,241 million

5. Dividends

   Annual dividends
   1st quarter-end	2nd quarter-end	3rd quarter-end	Year-end	Total
   Fiscal year ended March 31, 2016 Fiscal year ending March 31, 2017	Yen - -	Yen 0.00 0.00	Yen - -	Yen 0.00	Yen 0.00
   Fiscal year ending March 31, 2017 (Forecast)	0.00	0.00

   (Note) Revision to the forecast for dividends announced most recently: None

6. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2017 (April 1, 2016 to March 31, 2017)

7. (% indicates changes from the previous corresponding period.)

   Net sales	Operating income	Ordinary income	Profit attributable to owners of parent	Earnings per share
   Full year	Million yen % 207,000 (4.3)	Million yen % 4,500 16.2	Million yen % 2,500 12.8	Million yen % 1,000 (54.9)	Yen 29.25

   (Note) Revision to the financial results forecast announced most recently: None

   * The Company conducted a reverse stock split to consolidate every ten shares of common stock into one share on October 1, 2016. Accordingly, earnings per share has been calculated factoring in this reverse stock split.

   * Notes:

8. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): None

   New: - (Company name); Excluded: - (Company name)

9. Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: None

10. Changes in accounting policies, changes in accounting estimates and retrospective restatement

11. Changes in accounting policies due to the revision of accounting standards: Yes

12. Changes in accounting policies other than 1) above: None

13. Changes in accounting estimates: None

14. Retrospective restatement: None

15. Total number of issued shares (common shares)

16. Total number of issued shares at the end of the period (including treasury shares): December 31, 2016: 34,258,433 shares

    March 31, 2016: 34,258,433 shares

17. Total number of treasury shares at the end of the period: December 31, 2016: 75,496 shares

    March 31, 2016: 73,388 shares

18. Average number of shares during the period:

19. Nine months ended December 31, 2016: 34,184,398 shares

    Nine months ended December 31, 2015: 34,186,362 shares

    * The Company conducted a reverse stock split to consolidate every ten shares of common stock into one share on October 1, 2016. Number of issued shares at the end of the period, number of treasury shares at the end of the period and average number of shares during the period have been calculated assuming that the reverse stock split was conducted at the beginning of the previous consolidated fiscal year.

    • Presentation regarding the implementation status of the quarterly review procedures

      These quarterly financial results are outside the scope of quarterly review procedures under the Financial Instruments and Exchange Act. At the time of disclosure of these quarterly financial results, review procedures for the quarterly financial statements have not been completed.

    • Explanation of the proper use of financial results forecast and other notes

    The earnings forecasts and other forward-looking statements herein are based on information currently acquired by the Company and certain assumptions assessed to be reasonable. Actual results may differ significantly from these forecasts due to a wide range of factors.

    Quarterly Consolidated Financial Statements

20. Quarterly Consolidated Balance Sheets

    Assets

    (Million yen) As of March 31, 2016 As of December 31, 2016

    Current assets
    Cash and deposits	11,381	13,340
    Notes and accounts receivable - trade	48,338	48,768
    Merchandise and finished goods	27,458	24,752
    Work in process	7,646	6,377
    Raw materials and supplies	10,399	10,515
    Other	4,870	6,073
    Allowance for doubtful accounts	(188)	(233)
    Total current assets	109,907	109,595
    Non-current assets

    Property, plant and equipment

    Buildings and structures, net	28,350	27,336
    Machinery, equipment and vehicles, net	55,571	52,345
    Land	22,518	22,106
    Construction in progress	535	860
    Other, net	2,899	2,501
    Total property, plant and equipment	109,875	105,151
    Intangible assets
    Other	225	173
    Total intangible assets	225	173
    Investments and other assets
    Investment securities	18,554	22,537
    Other	2,932	2,777
    Allowance for doubtful accounts	(338)	(100)
    Total investments and other assets	21,147	25,214
    Total non-current assets	131,248	130,538

    Total assets 241,155 240,133

    (Million yen)

    As of March 31, 2016 As of December 31, 2016

    Liabilities

    Current liabilities

    Notes and accounts payable - trade	23,245	27,899
    Short-term loans payable	81,176	76,223
    Income taxes payable	345	329
    Other	13,910	15,271
    Total current liabilities	118,677	119,723
    Non-current liabilities
    Long-term loans payable	57,443	52,779
    Reserve for loss on dissolution of employee's fund	121	121
    Net defined benefit liability	9,165	8,890
    Asset retirement obligations	884	887
    Other	3,370	4,179
    Total non-current liabilities	70,985	66,858
    Total liabilities	189,663	186,581
    Net assets
    Shareholders' equity
    Capital stock	32,756	32,756
    Capital surplus	7,456	7,456
    Retained earnings	7,447	8,436
    Treasury shares	(145)	(146)
    Total shareholders' equity	47,514	48,501
    Accumulated other comprehensive income
    Valuation difference on available-for-sale securities	3,014	5,185
    Foreign currency translation adjustment	1,577	568
    Remeasurements of defined benefit plans	(2,864)	(3,227)
    Total accumulated other comprehensive income	1,727	2,526
    Non-controlling interests	2,250	2,523
    Total net assets	51,492	53,551

    Total liabilities and net assets 241,155 240,133

21. Quarterly Consolidated Statements of Income and Comprehensive Income

Quarterly Consolidated Statements of Income Nine Months Ended December 31

For the nine months ended

December 31, 2015

(Million yen) For the nine months ended

December 31, 2016

Net sales 161,722 150,822

Cost of sales 136,395 124,471

Gross profit 25,327 26,350

Selling, general and administrative expenses 23,39123,149

Operating income 1,9353,200

Non-operating income

Interest income 3932

Dividend income 400410

Royalty income 184149

Compensation income 20211

Foreign exchange gains 67 －

Other 458 269

Total non-operating income 1,1701,073

Non-operating expenses

Interest expenses 1,7541,625

Foreign exchange loss － 53

Other 279 344

Total non-operating expenses 2,0332,023

Ordinary income 1,0712,250

Extraordinary income

Gain on disposal of non-current assets 1,457 14

Gain on sales of investment securities 0 233

Reversal of allowance for doubtful accounts for

subsidiaries and affiliates 197 －

Other	23	63
Total extraordinary income	1,679	311
Extraordinary losses
Loss on disposal of non-current assets	359	502
Special retirement expenses	263	238
Business restructuring cost	188	135
Other	32	87
Total extraordinary losses	843	963
Income before income taxes	1,907	1,598
Income taxes	917	571
Profit	990	1,026
Profit attributable to non-controlling interests	12	37

Profit attributable to owners of parent 977 988

Quarterly Consolidated Statements of Comprehensive Income Nine Months Ended December 31

For the nine months ended

December 31, 2015

(Million yen) For the nine months ended

December 31, 2016

Profit 990 1,026

Other comprehensive income

Valuation difference on available-for-sale securities (11) 2,477

Foreign currency translation adjustment (361) (942)

Remeasurements of defined benefit plans, net of tax (263) (303)

Share of other comprehensive income of entities

accounted for using equity method (4)(187)

Total other comprehensive income	(640)	1,042
Comprehensive income	349	2,069
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	287	1,787

Comprehensive income attributable to non-controlling

interests

61

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