Mitsubishi Paper Mills : Summary of Consolidated Financial Results for the Six Months Ended September 30,2016(unaudited)

November 11, 2016

Summary of Consolidated Financial Results for the Six Months Ended September 30, 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 Six Months Ended September 30, 2016 (April 1, 2016 to September 30, 2016)

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

   Net sales	Operating income	Ordinary income	Profit attributable to owners of parent
   Six months ended September 30, 2016 September 30, 2015	Million yen % 100,375 (6.2) 107,046 2.0	Million yen % 1,980 233.1 594 -	Million yen % 500 310.1 122 -	Million yen % (294) - (512) -

   (Note) Comprehensive income: Six months ended September 30, 2016: ¥(1,122) million [-%]

   Six months ended September 30, 2015: ¥(1,719) million [-%]

   Earnings per share	Diluted earnings per share
   Six months ended	Yen	Yen
   September 30, 2016	(8.61)	-
   September 30, 2015	(14.99)	-

   * 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 September 30, 2016	Million yen	Million yen	%
   	230,342	50,361	20.9
   As of March 31, 2016	241,155	51,492	20.4

   (Reference) Equity: As of September 30, 2016: ¥48,121 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: Yes

   * 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): September 30, 2016: 34,258,433 shares

    March 31, 2016: 34,258,433 shares

17. Total number of treasury shares at the end of the period: September 30, 2016: 74,002 shares

    March 31, 2016: 73,388 shares

18. Average number of shares during the period:

19. Six months ended September 30, 2016: 34,184,762 shares

    Six months ended September 30, 2015: 34,186,626 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 September 30, 2016

    Current assets
    Cash and deposits	11,381	9,419
    Notes and accounts receivable - trade	48,338	44,942
    Merchandise and finished goods	27,458	25,794
    Work in process	7,646	6,454
    Raw materials and supplies	10,399	9,802
    Other	4,870	5,105
    Allowance for doubtful accounts	(188)	(232)
    Total current assets	109,907	101,288
    Non-current assets

    Property, plant and equipment

    Buildings and structures, net	28,350	27,487
    Machinery, equipment and vehicles, net	55,571	53,211
    Land	22,518	22,156
    Construction in progress	535	1,467
    Other, net	2,899	2,572
    Total property, plant and equipment	109,875	106,896
    Intangible assets
    Other	225	189
    Total intangible assets	225	189
    Investments and other assets
    Investment securities	18,554	19,278
    Other	2,932	2,796
    Allowance for doubtful accounts	(338)	(106)
    Total investments and other assets	21,147	21,968
    Total non-current assets	131,248	129,054

    Total assets 241,155 230,342

    (Million yen)

    As of March 31, 2016 As of September 30, 2016

    Liabilities

    Current liabilities

    Notes and accounts payable - trade	23,245	23,594
    Short-term loans payable	81,176	75,083
    Income taxes payable	345	362
    Other	13,910	14,255
    Total current liabilities	118,677	113,295
    Non-current liabilities
    Long-term loans payable	57,443	53,644
    Reserve for loss on dissolution of employee's fund	121	121
    Net defined benefit liability	9,165	8,783
    Asset retirement obligations	884	886
    Other	3,370	3,249
    Total non-current liabilities	70,985	66,685
    Total liabilities	189,663	179,981
    Net assets
    Shareholders' equity
    Capital stock	32,756	32,756
    Capital surplus	7,456	7,456
    Retained earnings	7,447	7,152
    Treasury shares	(145)	(145)
    Total shareholders' equity	47,514	47,219
    Accumulated other comprehensive income
    Valuation difference on available-for-sale securities	3,014	3,218
    Foreign currency translation adjustment	1,577	749
    Remeasurements of defined benefit plans	(2,864)	(3,066)
    Total accumulated other comprehensive income	1,727	902
    Non-controlling interests	2,250	2,239
    Total net assets	51,492	50,361

    Total liabilities and net assets 241,155 230,342

21. Quarterly Consolidated Statements of Income and Comprehensive Income

Quarterly Consolidated Statements of Income Six Months Ended September 30

For the six months ended September 30, 2015

(Million yen) For the six months ended

September 30, 2016

Net sales 107,046 100,375

Cost of sales 90,934 82,896

Gross profit 16,111 17,478

Selling, general and administrative expenses 15,51615,498

Operating income 5941,980

Non-operating income

Interest income 2720

Dividend income 232234

Royalty income 180143

Compensation income 9208

Foreign exchange gains 164 －

Other 272 162

Total non-operating income 886769

Non-operating expenses

Interest expenses 1,1861,111

Other 171 157

Foreign exchange loss － 979

Total non-operating expenses 1,3582,249

Ordinary income 122500

Extraordinary income

Gain on disposal of non-current assets 54 10

Gain on sales of investment securities 0 233

Reversal of allowance for doubtful accounts for

subsidiaries and affiliates 197 －

Other	11	32
Total extraordinary income	264	276
Extraordinary losses
Loss on disposal of non-current assets	313	445
Special retirement expenses	157	153
Business restructuring cost	145	135
Other	6	85
Total extraordinary losses	622	819
Loss before income taxes	(235)	(43)
Income taxes	234	206
Loss	(469)	(249)
Profit attributable to non-controlling interests	42	44

Loss attributable to owners of parent (512) (294)

Quarterly Consolidated Statements of Comprehensive Income Six Months Ended September 30

For the six months ended September 30, 2015

(Million yen) For the six months ended

September 30, 2016

Loss (469) (249)

Other comprehensive income

Valuation difference on available-for-sale securities (834) 219

Foreign currency translation adjustment (264) (768)

Remeasurements of defined benefit plans, net of tax (173) (153)

Share of other comprehensive income of entities

accounted for using equity method 22 (171)

Total other comprehensive income	(1,249)	(873)
Comprehensive income	(1,719)	(1,122)
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	(1,691)	(1,119)

Comprehensive income attributable to non-controlling

interests

(27)

(2)