トクヤマ（4043） – Summary of Consolidated Financial Statements for the Third Quarter Fiscal 2021 (JPGAAP)

Summary of Consolidated Financial Statements for the Third Quarter Fiscal 2021 (JPGAAP) Tokuyama Corporation (URL https://www.tokuyama.co.jp/eng/) Representative:Contact: Stock exchange listings: Local Code : Tokyo 4043 January 31, 2022 Hiroshi Yokota, President and Representative Director Tetsuya Nakano, General Manager, Corporate Communications & Investor Relations Dept. +81-3-5207-2552Scheduled date of dividends payout : Preparation of supplementary quarterly explanatory materials: Yes Quarterly business results IR briefing to be held: – Yes (for institutional investors and analysts) 1. Consolidated results for fiscal third quarter ended Dec. 31, 2021 (Apr. 1, 2021 – Dec. 31, 2021)(1) Performance Note: All amounts are rounded down to the nearest million yen. Net sales Operating profit Ordinary profit (millions of yen) (millions of yen) (millions of yen) Year-on- year change [%] (21.1) (12.3) Year-on- year change [%] (16.6) (10.9) Year-on- year change [%] (4.2) (6.6) Third Quarter Fiscal 2021 Third Quarter Fiscal 2020 (Note) Comprehensive income: 3rd Q FY21: 14,644 million yen [(33.4)%] 3rd Q FY20: 21,991 million yen [19.3%] 211,609 220,923 17,118 21,700 17,665 21,181 Third Quarter Fiscal 2021 Third Quarter Fiscal 2020 (2) Consolidated financial positionDecember 31, 2021 March 31, 2021 (Reference) Shareholders’ equity: Profit attributable to owners of parent Basic earnings per share Diluted earnings per share (millions of yen) 13,376 19,318 Year-on-year change [%] (30.8) 7.3 (yen)185.87 278.14 (yen)- – Total assets Net assets (millions of yen) 402,253 386,794 Dec. 31, 2021: 208,252 million yen(millions of yen) 216,437205,261 Shareholders’ Equity ratio (%) 51.851.3 Mar. 31, 2021: 198,561 million yenNet assets per share (yen) 2,894.332,758.37 (Note)The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Corporate Accounting Standard No. 29, March 31, 2020), etc. effective from the beginning of the first quarter ended June 30, 2021 in accordance with transitional treatment. For more details, please refer to “2. Quarterly Consolidated Financial Statements and (4) Notes on Quarterly Consolidated Financial Statements (Changes in accounting policy)” on page 13 of the Accompanying Materials to this Summary of Quarterly Consolidated Financial Statement. 2. Dividends（Period） Fiscal 2020, ended Mar 31, 2021 Fiscal 2021, ending Mar 31, 2022 Fiscal 2021 （Forecast） Annual dividends per share 1st quarter (yen) 2nd quarter 3rd quarter (yen) (yen) Year-end (yen) Total (yen) –35.0035.00–35.00 70.0035.00 70.00(Note) Revision of the latest dividends forecast: No 13. Consolidated performance forecast for fiscal 2021 (April 1, 2021 – March 31, 2022)Net sales (% indicates the rate of change over the corresponding previous periods respectively)Basic earnings per share Operating profit Ordinary profit Profit attributable to owners of parent Fiscal 2021 (millions of yen) 293,000 (millions of (millions of (millions of [%] (3.1) yen) [%] 22,000 (28.9) yen) [%] 22,000 (28.6) yen) 22,000 [%](10.3) (yen)305.66 (Note) Revision of the latest consolidated performance forecast: No *Notes: No(1) Changes in significant subsidiaries during this period(2) Application of accounting methods specific to the preparation of the quarterly consolidatedfinancial statements: Yes(Note) For more details, please refer to “2. Quarterly Consolidated Financial Statements and (4) Notes onQuarterly Consolidated Financial Statements (Application of accounting methods specific to the preparation ofthe quarterly consolidated financial statements)” on page 12 of the Accompanying Materials to this Summaryof Quarterly Consolidated Financial Statement.(3) Changes of accounting policies, changes in accounting estimates, and retrospective restatementsi. Changes in accounting policy by revision of accounting standards: ii. Changes in accounting policy other than the above:iii. Changes in accounting estimates:iv. Retrospective restatements:YesNo No No (Note) For more details, please refer to “2. Quarterly Consolidated Financial Statements and (4) Notes on Quarterly Consolidated Financial Statements (Changes in accounting policy)” on page 13 of the Accompanying Materials to this Summary of Quarterly Consolidated Financial Statement. (4) Number of shares issued (in common stock)i.Number of shares issued at end of period(including treasury stock):72,088,327 Fiscal 2020:72,088,327ii. Number of treasury stock at end of period:136,675 Fiscal 2020:103,403iii. Average number of shares over period:71,968,075 3rd QuarterFiscal 2020:69,456,421 3rd QuarterFiscal 2021:3rd Quarter Fiscal 2021:3rd Quarter Fiscal 2021:(Note) Notice on the implementation of quarterly review procedures This summary of quarterly consolidated financial statements is not subject to quarterly review procedures in line with the Financial Instruments and Exchange Act. At the point of disclosure of this summary of quarterly consolidated financial statements, the quarterly consolidated financial statements review procedures in line with the Financial Instruments and Exchange Act are underway. (Note) Cautions pertaining to appropriate use of performance forecast and other particular items (Cautions related to Forward-looking statement) The performance forecast and other forward-looking statements contained in this material have been prepared on the basis of information available at this point and certain assumptions which are judged to be rational, and may be substantially different from the actual performance because of various factors that may arise from now on. (Access to supplementary explanations on business results) The Company also supplementary materials “Presentation for IR Meeting” through TDnet at the same date. 2Contents for Accompanying Materials 1. Qualitative information on consolidated results for this quarter(1) Explanation concerning business results(2) Explanation concerning financial position(3) Explanation concerning information related to futureprediction such as consolidated performance forecast2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(2) Quarterly Consolidated Statements of Income(3) Quarterly Consolidated Statements of Comprehensive Income(4) Notes on Quarterly Consolidated Financial Statements(5) Segment Information(6) Material Subsequent Event………………… P. 2………………… P. 2………………… P. 6………………… P. 7………………… P. 8………………… P. 8………………… P. 10………………… P. 11………………… P. 12………………… P. 15………………… P. 171 1. Qualitative information on consolidated results for this quarter (1) Explanation concerning business results Consolidated results for the third quarter fiscal 2021 (April 1, 2021 – December 31, 2021) are summarized as follows: The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Corporate Accounting Standard No. 29, March 31, 2020), etc. effective from the beginning of the first quarter ended June 30, 2021 in accordance with transitional treatment. The effect of this change was to decrease net sales by ¥ 35,509 million and cost of sales by ¥ 35,509 million compared with the previous accounting method. For more details, please refer to “2. Quarterly Consolidated Financial Statements and (4) Notes on Quarterly Consolidated Financial Statements (Changes in accounting policy).” Net sales Ordinary profit Operating profit (Unit: Millions of yen) Profit attributable to owners of parent Third Quarter Fiscal 2021 Third Quarter Fiscal 2020 Rate of change (%) 211,609 220,923 (4.2) 17,118 21,700 (21.1) 17,665 21,181 (16.6) 13,376 19,318 (30.8) Net sales Cost of sales SG&A expenses expenses. Sales rose owing to higher petrochemical product sales prices and solid sales of semiconductor-related products. Nevertheless, net sales decreased 4.2%, or ¥ 9,314 million compared with the corresponding period of the previous year, to ¥ 211,609 million due to the application of Accounting Standard for Revenue Recognition, etc. Although raw material and fuel costs increased, cost of sales decreased 6.4%, or ¥ 9,718 million compared with the corresponding period of the previous year, to ¥ 141,845 million due to the application of Accounting Standard for Revenue Recognition, etc. SG&A expenses increased 10.5%, or ¥ 4,986 million compared with the corresponding period of the previous year, to ¥ 52,645 million mainly due to increases in logistics costs and R&D 2Operating profit and fuel costs. Operating profit decreased 21.1%, or ¥ 4,581 million compared with the corresponding period of the previous consolidated fiscal year, to ¥ 17,118 million. Despite upturn in export prices of vinyl chloride monomer, this decrease in operating profit was mainly due to higher raw material Non-operating income/expenses, Ordinary profit Non-operating income/expenses improved by ¥ 1,065 million compared with the corresponding period of the previous consolidated fiscal year. As a result of the above, ordinary profit decreased 16.6 %, or ¥ 3,516 million compared with the corresponding period of the previous consolidated fiscal year, to ¥ 17,665 million. Extraordinary income/losses, Profit before income taxes, Profit, Profit attributable to owners of parent Extraordinary income/losses improved by ¥ 1,653 million compared with the corresponding period of the previous consolidated fiscal year. As a result of the above, profit before income taxes decreased 8.6%, or ¥ 1,863 million compared with the corresponding period of the previous consolidated fiscal year, to ¥ 19,812 million. ¥ 13,386 million. Profit after deducting income taxes calculated in an appropriate way decreased 32.1%, or ¥ 6,336 million compared with the corresponding period of the previous consolidated fiscal year, to Profit attributable to owners of parent decreased 30.8%, or ¥ 5,942 million compared with the corresponding period of the previous consolidated fiscal year, to ¥ 13,376 million. 3(Operating results by segment) Effective from the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, the Company has reviewed our business segment and changed them to six segments: Chemicals, Cement, Electronics Materials, Life Science, Eco Business and Others. Data for the corresponding period of the previous fiscal year has been adjusted to reflect this change to enable the year-on-year comparison presented as follows. Sales Reportable segment (Unit: Millions of yen) Chemicals Cement Electronic Materials Life Science Eco Business Others Total Adjustment Figures in quarterly consolidated profit statement 72,486 38,219 53,499 23,464 26,310 221,031 (9,422) 211,609 58,021 67,378 44,063 19,611 49,126 244,806 (23,883) 220,923 7,051 6,605 24.9 (43.3) 21.4 19.6 6.8 (46.4) (9.7) – (4.2) Third Quarter Fiscal 2021 Third Quarter Fiscal 2020 Rate of change (%) Operating profit (loss) (Unit: Millions of yen) Reportable segment Chemicals Cement Electronic Materials Life Science Eco Business Others Total Adjustment Figures in quarterly consolidated profit statement 9,918 (1,087) 8,961 3,815 4,967 4,976 4,099 1,904 (520) (416) 2,860 4,682 20,238 (3,119) 23,924 (2,223) 17,118 21,700 10.7 – (0.2) 115.3 – (38.9) (15.4) – (21.1) (Note) Sales and operating profit (loss) in each segment include inter-segment transactions. Third Quarter Fiscal 2021 Third Quarter Fiscal 2020 Rate of change (%) Chemicals Caustic soda earnings declined. This downturn in earnings was due to manufacturing costs rising as a result of higher raw material and fuel costs. Earnings from vinyl chloride monomer increased due to the upturn in export prices. Downturn in vinyl chloride resin earnings was due to rising manufacturing costs as a result of higher raw material and fuel costs. Decrease in earnings from soda ash and calcium chloride was owing to the upswing in raw material and fuel costs triggering an increase in manufacturing costs. 4As a result of the above, segment net sales increased 24.9% compared with the corresponding period of the previous consolidated fiscal year, to ¥ 72,486 million and operating profit increased 10.7 % to ¥ 9,918 million. The segment reported higher earnings on higher sales. Cement Despite shipments of being in line with the corresponding period of the previous year, cement earnings deteriorated due to manufacturing costs rising as a result of higher raw material costs. As a result of the above, segment net sales decreased 43.3% compared with the corresponding period of the previous year, to ¥ 38,219 million and operating loss amounted to ¥ 1,087 million (Posted operating profit of ¥ 3,815 million in the corresponding period of the previous year). Electronic Materials remote work. Despite an increase in raw material costs, earnings from semiconductor-grade polycrystalline silicon increased owing to firm sales on the back of the introduction of 5G and an increase in IC Chemicals earnings decreased despite sales volumes increasing mainly overseas. This downturn largely reflected higher raw material costs. Despite an upswing in raw material costs, earnings from fumed silica increased owing to higher sales volume centered on applications for semiconductor abrasives. Thermal management materials earnings were in line with the corresponding period of the previous year. Although sales volume was solid, this largely reflected higher R&D expenses at the Center for Commercialization of Advanced Technology. As a result of the above, segment net sales increased 21.4% compared with the corresponding period of the previous consolidated fiscal year, to ¥ 53,499 million and operating profit decreased 0.2% to ¥ 4,967 million. The segment reported lower earnings on higher sales. Life Science Dental materials earnings grew thanks to a recovery in shipments to Europe and the United States, which had declined as a result of the spread of COVID-19. Plastic lens-related materials earnings increased owing to a recovery in shipments to Europe and the United States of eyeglass lens photochromic materials, which had declined as a result of the spread of COVID-19. volume of generic pharmaceuticals. Pharmaceutical ingredients and intermediates earnings increased, owing mainly to a robust sales As a result of the above, segment net sales increased 19.6% compared with the corresponding period of the previous consolidated fiscal year, to ¥ 23,464 million and operating profit increased 115.3% to ¥ 4,099 million. The segment reported higher earnings on higher sales. 5Eco Business To make the environment segment one of our business pillars of the future, we consolidated the environment-related businesses scattered within the Group and newly established them as a segment that aims for new business development from the current fiscal year. Segment net sales increased 6.8% compared with the corresponding period of the previous year, to ¥ 7,051 million and operating loss amounted to ¥ 520 million (posted operating loss of ¥ 416 million in the corresponding period of the previous year). (2) Explanation concerning financial position (Status of assets, liabilities and net assets) As of December 31, 2021, total assets amounted to ¥ 402,253 million, an increase of ¥ 15,458 million compared with those as of March 31, 2021. This increase primarily reflects the increase of property, plant and equipment, raw materials and supplies, merchandise and finished goods, accounts receivable – trade, work in process and merchandise and finished goods of ¥ 11,078 million, ¥ 8,029 million, ¥ 7,200 million, ¥ 3,012 million and ¥ 2,781 million respectively, despite the decrease of cash and deposits of ¥ 18,157. Total liabilities amounted to ¥ 185,815 million, up ¥ 4,282 million compared with those as of March 31, 2021. The principal factor is the increase in notes and accounts payable – trade of ¥ 11,723 million, despite decrease in long-term loans borrowings and current portion of long-term loans borrowings of ¥ 5,067 million and other current liabilities of ¥ 2,340 million. Net assets totaled ¥ 216,437 million, an increase of ¥11,176 million compared with those as of March 31, 2021. This mainly reflected the increase of ¥ 8,578 million in retained earnings primarily due to posting profit attributable, and the increase of non-controlling interests and foreign currency translation adjustment of ¥ 1,485 million and ¥ 1,277 million respectively. 6(3) Explanation concerning information related to future prediction such as consolidated performance forecast Notwithstanding anxieties toward raw material and fuel prices, and other factors, Tokuyama’s business performance is currently trending within anticipated parameters. Therefore, the Company has not revised the performance forecasts, announced on October 28, 2021. Details will be disclosed in a timely manner should the need to revise performance forecasts. The performance forecast has been prepared on the basis of information available at this point and certain assumptions which are judged to be rational, and may be substantially different from the actual performance because of various factors that may arise from now on. 7 2. Quarterly Consolidated Financial Statements (1) Quarterly Consolidated Balance Sheets3/31/2021(Millions of yen)12/31/2021Assets　Current assets　　Cash and deposits　　Notes and accounts receivable – trade　　Notes receivable – trade　　Accounts receivable – trade　　Lease receivables　　Merchandise and finished goods　　Work in process　　Raw materials and supplies　　Other　　Allowance for doubtful accounts　　Total current assets　Non-current assets　　Property, plant and equipment　　　Buildings and structures　　　　Accumulated depreciation　　　　Buildings and structures, net　　　Machinery, equipment and vehicles　　　　Accumulated depreciation　　　　Machinery, equipment and vehicles, net　　　Tools, furniture and fixtures　　　　Accumulated depreciation　　　　Tools, furniture and fixtures, net　　　Land　　　Leased assets　　　　Accumulated depreciation　　　　Leased assets, net　　　Construction in progress　　　Total property, plant and equipment　　Intangible assets　　　Goodwill　　　Leased assets　　　Other　　　Total intangible assets　　Investments and other assets　　　Investment securities　　　Long-term loans receivable　　　Deferred tax assets　　　Retirement benefit asset　　　Other　　　Allowance for doubtful accounts　　　Total investments and other assets　　Total non-current assets　Total assets83,68170,901－－2514,67410,99513,9305,666(115)199,760105,028(76,427)28,601459,039(413,493)45,54522,827(19,995)2,83131,9036,900(2,431)4,46910,674124,02586431,7511,88227,1712,09416,40710,6604,854(61)61,126187,034386,79465,523－8,56969,6411217,45614,00821,9605,344(62)202,455108,016(78,065)29,950471,759(420,755)51,00323,083(20,205)2,87831,9608,678(3,092)5,58613,724135,10472292,2062,30927,9621,98616,41810,9145,146(44)62,383199,798402,253 8Liabilities　Current liabilities　　Notes and accounts payable – trade　　Short-term borrowings　　Current portion of long-term borrowings　　Lease obligations　　Income taxes payable　　Provision for bonuses　　Provision for share awards　　Provision for repairs　　Provision for decommissioning and removal　　Provision for product warranties　　Provision for loss on compensation for damage　　Provision for environmental measures　　Provision for loss on disaster　　Provision for restructuring　　Other　　Total current liabilities　Non-current liabilities　　Long-term borrowings　　Lease obligations　　Deferred tax liabilities　　Provision for retirement benefits for directors (and other officers)　　Provision for share awards　　Provision for repairs　　Provision for decommissioning and removal　　Allowance for loss on compensation for building materials　　Provision for environmental measures　　Retirement benefit liability　　Asset retirement obligations　　Other　　Total non-current liabilities　Total liabilitiesNet assets　Shareholders’ equity　　Share capital　　Capital surplus　　Retained earnings　　Treasury shares　　Total shareholders’ equity　Accumulated other comprehensive income　　Valuation difference on available-for-sale securities　　Deferred gains or losses on hedges　　Foreign currency translation adjustment　　Remeasurements of defined benefit plans　　Total accumulated other comprehensive income　Non-controlling interests　Total net assetsTotal liabilities and net assets3/31/2021(Millions of yen)12/31/202139,5471,8508,8991,2042,3753,057334,8841,100951224017－20,07983,30882,8123,671247201－1,3401,0281241371,991566,61398,224181,53310,00023,455157,332(349)190,4383,274(19)2,1652,7028,1226,700205,261386,79451,2701,05022,6521,2484,2341,485－5,1271,2274410725－4317,739106,25763,9913,882335191211,599728961162,043566,49479,558185,81510,00023,455165,910(413)198,9523,138(9)3,4422,7279,2998,185216,437402,253 9 (2) Quarterly Consolidated Statements of IncomeQ3 FY2020 YTD(Millions of yen)Q3 FY2021 YTDNet salesCost of salesGross profitSelling, general and administrative expenses　Selling expenses　General and administrative expenses　Total selling, general and administrative expensesOperating profitNon-operating income　Interest income　Dividend income　Share of profit of entities accounted for using equity method　Equipment sale income　Other　Total non-operating incomeNon-operating expenses　Interest expenses　Provision for decommissioning and removals　Equipment cost of sales　Other　Total non-operating expensesOrdinary profitExtraordinary income　Gain on sale of non-current assets　Gain on sale of investment securities　Gain on sale of shares of subsidiaries and associates　Subsidy income　Gain on insurance claims　Compensation for damage income　Gain on sales of patent right and other　Gain on liquidation of subsidiaries and associates　Gain on step acquisitions　Other　Total extraordinary incomeExtraordinary losses　Loss on sale of non-current assets　Impairment losses　Loss on disaster　Loss on tax purpose reduction entry of non-current assets　Loss on disposal of non-current assets　Provision for decommissioning and removals　Other　Total extraordinary lossesProfit before income taxesIncome taxesProfitProfit attributable to non-controlling interestsProfit attributable to owners of parent220,923151,56369,35930,29917,35947,65921,700643817355752,1083,8651,1614665622,1934,38421,18194574690191－1,477197125542,983－825101－4888582152,48921,6751,95219,72340419,318211,609141,84569,76333,51319,13152,64517,118111471885－3,1274,5961,041427－2,5804,04917,665468137－86－2,218－－－352,94636315567419－11779919,8126,42513,3861013,376 10 (3) Quarterly Consolidated Statements of Comprehensive IncomeProfitOther comprehensive income　Valuation difference on available-for-sale securities　Deferred gains or losses on hedges　Foreign currency translation adjustment　Remeasurements of defined benefit plans, net of tax　Share of other comprehensive income of entities accounted for using　 equity method　Total other comprehensive incomeComprehensive incomeComprehensive income attributable to　Comprehensive income attributable to owners of parent　Comprehensive income attributable to non-controlling interestsQ3 FY2020 YTD(Millions of yen)Q3 FY2021 YTD19,72313,3861,928153879(73)2,26821,99121,578413(131)101,37123(15)1,25714,64414,55786 11(4) Notes on Quarterly Consolidated Financial Statements (Going Concern Assumption) Not applicable. Not applicable. Not applicable. (Major Changes in Shareholders’ Equity) (Changes in significant subsidiaries during this period) (Application of accounting methods specific to the preparation of the quarterly consolidated financial statements) (Calculation of Tax Expense) The Company rationally estimated the effective tax rate after the application of accounting policy for deferred tax, which was applied to the profit/loss before income tax for the consolidated fiscal year under review including the third quarter consolidated accounting period for the consolidated fiscal year ending March 31, 2022, and calculated the tax expense by multiplying the estimated effective tax rate to the profit/loss before income tax. However, if the application of said estimated effective tax rate reduces the rationality of the calculation of tax expense, the Company applies the effective statutory tax rate. 12(Changes in accounting policy) (Application of Accounting Standard for Revenue Recognition) The Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Corporate Accounting Standard No. 29, March 31, 2020) and other related standards from the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, and has decided to recognize revenue at the amount expected to be received in exchange for the promised goods or services when control of the goods or services is transferred to the customer. The main change due to the adoption of the Accounting Standard for Revenue Recognition is the revenue recognition for agent transactions. The application of the Accounting Standard for Revenue Recognition, etc. is subject to the transitional treatment provided for in the proviso of Paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of the retrospective application, assuming the new accounting policy had been applied to periods prior to the beginning of the first quarter ended June 30, 2021 was added to or subtracted from the beginning balance of retained earnings of the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, and thus the new accounting policy was applied from the beginning balance; provided, however, that the new accounting policy was not retrospectively applied to contracts where recognitions of nearly all the revenue amounts for periods prior to the beginning of the first quarter ended June 30, 2021 were subject to the previous treatment, by applying the method provided for in Paragraph 86 of the Accounting Standard for Revenue Recognition. As a result, for the third quarter consolidated accounting period for the fiscal year ending March 31, 2022, net sales decreased by ¥ 35,509 million and cost of sales decreased by ¥ 35,509 million. In addition, there was no impact on operating profit, ordinary profit, profit before income taxes, and retained earnings at the beginning of the fiscal year ending March 31, 2022. Due to the application of Accounting Standard for Revenue Recognition, “Notes and accounts receivable – trade” which were included in “Current assets” in the consolidated balance sheets for the previous fiscal year, are divided into “Notes receivable – trade” and “accounts receivable – trade” from the first quarter ended June 30, 2021. In accordance with transitional treatment stipulated in Article 89-2 of the Accounting Standard for Revenue Recognition, figures for the previous fiscal year have not been restated in accordance with the new approach to presentation. 13(Application of Accounting Standard for Fair Value Measurement) The Company has applied the Accounting Standard for Fair Value Measurement (ASBJ Corporate Accounting Standard No. 30, July 4, 2019) from the beginning of the first quarter ended June 30, 2021, and the new accounting policies set forth by the Accounting Standard for Fair Value Measurement will be applied in the future in accordance with the transitional treatment set forth in Paragraph 19 of the Accounting Standard for fair Value Measurement and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Corporate Accounting Standard No. 10, July 4, 2019). There is no effect on quarterly consolidated statements. (Additional Information) (Application of tax effect accounting associated with the transition from the consolidated taxation system to the group tax sharing system) With regard to the transition to the group tax sharing system established under the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 8 of 2020) and the items for which the nonconsolidated taxation system was revised in line with the transition to the group tax sharing system, pursuant to Paragraph 3 of the “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (ASBJ PITF No. 39, issued on March 31, 2020), the Company and certain domestic consolidated subsidiaries did not apply the provision of Paragraph 44 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, issued on February 16, 2018), and the amounts of deferred tax assets and deferred tax liabilities are based on the provisions of the tax laws before the revision. 14(5) Segment information Third Quarter Fiscal 2020 (April 1, 2020 –December 31, 2020) 1. Information on net sales as well as profit and loss by reportable segment Chemicals Cement Electronic Materials Life Science Eco Business Others*1 Total Adjustment*2 Reportable segments Sales Sales to customers Inter-segment sales/transfer Total Segment profit (loss) 57,440 66,905 35,338 18,788 6,322 36,126 220,923 581 473 8,724 822 282 12,999 23,883 (23,883) – 58,021 8,961 67,378 3,815 44,063 4,976 19,611 1,904 6,605 (416) 49,126 4,682 244,806 23,924 (23,883) (2,223) 220,923 21,700 (Millions of yen) Figures in quarterly consolidated income statement*3 220,923 – *1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, the segment includes overseas sales companies, a distribution company, a real estate business, etc. *2 The segment profit (loss) adjustment amount consists mainly of basic R&D expenses that are not allocable to a specific reportable segment and the amount of inter-segment eliminations. *3 With regard to segment profit (loss), operating profit in the quarterly consolidated statement of profit has been calculated by making an adjustment to the sum total of the reportable segments’ profit and the “Others” segment’s profit. 2. Information on impairment loss on fixed assets and goodwill by reported segment (Significant impairment loss on fixed assets) Not applicable. 15Third Quarter Fiscal 2021 (April 1, 2021 –December 31, 2021) 1. Information on net sales as well as profit and loss by reportable segment and a breakdown of earnings Chemicals Cement Electronic Materials Life Science Eco Business Others*1 Total Adjustment*2 Reportable segments Sales Sales to customers Inter-segment sales/transfer Total Segment profit (loss) 72,191 37,793 52,915 23,440 7,066 18,262 211,609 294 425 584 24 45 8,047 9,422 (9,422) – 72,486 9,918 38,219 (1,087) 53,499 4,967 23,464 4,099 7,051 (520) 26,310 2,860 221,031 20,238 (9,422) (3,119) 211,609 17,118 (Millions of yen) Figures in quarterly consolidated income statement*3 211,609 – *1 The “Others” segment comprises businesses other than those of the reportable segments. Specifically, the segment includes overseas sales companies, a distribution company, a real estate business, etc. *2 The segment profit (loss) adjustment amount consists mainly of basic R&D expenses that are not allocable to a specific reportable segment and the amount of inter-segment eliminations. *3 With regard to segment profit (loss), operating profit in the quarterly consolidated statement of profit has been calculated by making an adjustment to the sum total of the reportable segments’ profit and the “Others” segment’s profit. *4 Net sales are not presented separately from earnings derived from contracts with customers and other earnings because the amount of other earnings is insignificant. 2. Information on changes in reportable segments Effective from the first quarter consolidated accounting period for the fiscal year ending March 31, 2022, the Company has reviewed our business segment and changed them to six segments: Chemicals, Cement, Electronics Materials, Life Science, Eco Business and Others. The segment information for the third quarter of the consolidated accounting period for the fiscal year ending March 31, 2021 is disclosed based on the reporting segment classification after this change. The Company has applied the Accounting Standard for Revenue Recognition, etc. and changed the method of accounting for revenue recognition from the beginning of the first quarter ended June 30, 2021 as described in above “Changes in accounting policy.” Therefore, the Company has similarly changed the measuring method of segment profit or loss. As a result of this change, net sales in the Chemicals, Cement, Electronics Materials, Eco Business and Others segments decreased by ¥ 1,033 million, ¥ 33,270 million, ¥ 110 million, ¥ 556 million and ¥ 17,348 million, respectively, compared with the previous method for the third quarter consolidated accounting period for the fiscal year ending March 31, 2022. The total decrease in net sales after taking into account intersegment eliminations and corporate expenses is ¥ 35,509 million. There is no effect on segment profit (loss). 3.Information on amortization of goodwill and unamortized balance by reportable segment Not applicable. 16(6) Material Subsequent Event (Issuance of Bonds) At a meeting of its Board of Directors held on January 26, 2022, Tokuyama passed a comprehensive resolution regarding the issuance of domestic unsecured straight bonds. Brief details are presented as follows. 1. Type of bond 2. Total amount of bonds offered Up to ¥15,000,000,000 Domestic unsecured straight bonds However, multiple issues within this range are 3. Coupon rate 4. Redemption period 5. Redemption method not precluded Less than 0.6% Less than 10 years Redeemed in full upon maturity However, buy-back and early redemption provisions may be applied 6. Payment amount ¥100 per amount of ¥100 of each bond in each case 7. Collateral and guarantees No collateral or guarantee will be provided 8. Issuance period January 26, 2022 (date of the Board of Directors meeting) 9. Use of funds 10. Other to March 31, 2022 Repayment of fiscal 2022 debt Decisions regarding matters listed above and all other matters necessary for the issuance of the offered bonds shall be made at the discretion of the Company’s President within the scope specified above at the time of each issuance 17