Akebono Brake Industry : Announcement regarding Non-operating Income (Consolidated), Deferred Tax Assets (Consolidated and Non-consolidated), Extraordinary Losses (Non-consolidated), and Revision of the Earnings Forecast for the Fiscal Year Ending March 31, 2024

(NOTE) This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail.

Date: May 13, 2024

Company Name: Akebono Brake Industry Co., Ltd.

Representative: Yasuhiro Miyaji, President & CEO

(Securities Code: 7238; TSE Prime Market)

Announcement regarding Non-operating Income (Consolidated), Deferred Tax Assets (Consolidated and Non-consolidated), Extraordinary Losses (Non-consolidated), and Revision of the Earnings Forecast for the Fiscal Year Ending March 31, 2024

The Akebono Group (hereinafter "Akebono") hereby announces recording non-operating income (consolidated), deferred tax assets (consolidated and non-consolidated), and extraordinary losses (non- consolidated) on financial results for the fiscal year ending March 31, 2024. Akebono also reports a revision of the earnings forecast for the consolidated fiscal year ending March 31, 2024, in "Consolidated Financial Results for the Year Ended March 31, 2023 [Japanese GAAP]" disclosed on May 12, 2023.

1. Non-operating Income in Consolidated Financial Results (Foreign Exchange Gains)

Akebono will record foreign exchange gains of 1.0 billion yen in consolidated financial results for the fourth quarter of the fiscal year ending March 31, 2024, as a result of recent fluctuations in foreign exchange markets. These foreign exchange gains occurred in relation to loans of foreign currency to affiliated companies due to fluctuations in exchange rates.

The amount of foreign exchange gains and losses by quarter is shown in the table below.

1Q	2Q	3Q	4Q	1-4Q
1.5 billion yen	0.8 billion yen	(0.8 billion yen)	1.0 billion yen	2.5 billion yen

2. Deferred Tax Assets in Consolidated and Non-consolidated Financial Results

After careful consideration of the recoverability of deferred tax assets, due to the expected collection of loss carryforwards Akebono will record a profit on income taxes - deferred of 1.2 billion yen in consolidated financial results, and 1.3 billion yen in non-consolidated financial results.

3. Extraordinary Losses in Non-consolidated Financial Results (Provision of Allowance for Doubtful Accounts)

As a result of a review of the collectability of short-term loans receivable from subsidiaries and associates in the U.S. (Akebono Brake Corporation), Akebono will record provision of allowance for doubtful accounts of 4.0 billion yen.

It will be recorded only on a non-consolidated basis and eliminated on a consolidated basis. Therefore, there is no impact on consolidated earnings.

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4. Revised Consolidated Earnings Forecast (Details of Revision)

Revised Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March 31, 2024)

													(Unit: Million yen)
		Net Sales			Operating			Ordinary			Profit Attributable			EPS
				Profit			Profit			to Owners of Parent			(Yen)
Previous Forecast (A)	167,300	3,500	2,300	0	0.00
Revised Forecast (B)	166,300	3,200	3,800	3,500	26.20
Change (B - A)	(1,000)	(300)	1,500	3,500
Percentage Change (%)	(0.6)	(8.6)	65.2		－
(Reference) Actual	135,984	185	2,256	960	7.19
Results for FY2022*

*Fiscal year ended on March 31, 2023 (April 1, 2022 - March 31, 2023)

(Reasons for Revision of Forecast)

Net sales and operating profit are largely expected to meet the previous forecast disclosed in the "Consolidated Financial Results for the Year Ended March 31, 2023 [Japanese GAAP]" on May 12, 2023, although regional differences persisted.

Ordinary profit and profit attributable to owners of parent are expected to exceed the previous forecast due to the recording of foreign exchange gains and deferred tax assets.

Reference: Difference between Previous Forecast and Revised Forecast by Region		(Unit: Billion Yen)
			Net Sales				Operating Profit
		Previous	Revised	Change	Change (%)	Previous		Revised	Change	Change (%)
		Forecast	Forecast	Forecast		Forecast
	Japan	68.9	67.6	(1.3)	(2%)	2.7		2.8	+ 0.1	+ 4%
	N. America	48.6	50.6	+ 2.0	+ 4%	(2.5)		(3.2)	(0.7)	－
	Europe	13.1	14.0	+ 0.9	+ 7%	0.2		0.5	+ 0.3	+ 150%
	China	15.0	13.2	(1.8)	(12%)	0.0		0.1	+ 0.1	－
	Thailand	8.1	7.3	(0.8)	(10%)	0.8		0.7	(0.1)	(13%)
	Indonesia	24.9	24.9	－	－	2.1		2.1	－	－
	Asia Subtotal	48.0	45.4	(2.6)	(5%)	2.9		2.9	－	－
	Eliminations	(11.3)	(11.3)	－	－	0.2		0.2	－	－
	Total	167.3	166.3	(1.0)	(1%)	3.5		3.2	(0.3)	(9%)

Exchange rates: 1 U.S. Dollar = 141.2 Yen, 1 Euro = 157.7 Yen

Asia subtotal is the simple sum of net sales and operating profit for China, Thailand and Indonesia.

(Note) The above forecasts were prepared using information available as of the date of this announcement. Actual earnings may differ from forecasts due to various reasons.

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