Financial Information

Transcription

1 Balance Sheets Statements of Income Statements of Comprehensive Income Statements of Changes in Net Assets Statements of Cash Flows Notes to Financial Statements Independent Auditor's Report Note:Fiscal Year(FY) 216 in the following pages refers to the period beginning April 1, 216 and ended March 31, 217 Financial information URL JFE GROUP TODAY 217 6

2 JFE Holdings, Inc. and Subsidiaries March 31, 217 and 216 U.S. dollars () U.S. dollars () Cash and deposits (Notes 5 and 13) Notes and accounts receivable (3) Allowance for doubtful accounts Merchandise and finished goods Work in process Raw materials and supplies Other current assets (Note ) current assets 69,936 79,5 (1,416) 313,36 5,34 4,72 169,336 1,,46 64,654 72,639 (1,434) 311,234 43,657 42,46 166,672 1,77,29 $ 623,371 7,113,45 (12,621) 2,793,19 453,16 3,643,176 1,59,36 16,123,59 Short-term borrowings (3) Current portion of long-term debt (Notes 7 and 13) Commercial paper (3) Notes and accounts payable (3) Other current liabilities current liabilities 16, ,412, 446,645 33,433 1,39,45 116, ,623 36, 422, ,471 1,15,15 $ 953,436 1,313,949 71,37 3,91,14 2,945,29 9,265,157 Land (Note 9) Buildings and structures Machinery and equipment Construction in progress Subtotal Accumulated depreciation Property, plant and equipment, net Investments in unconsolidated subsidiaries and affiliates (Notes and 13) Investments in securities (Notes 6, and 13) Allowance for doubtful accounts Net defined benefit asset () Other assets (Note ) investments and other assets assets 496,67 1,27,45 5,11,74 59,92,196,255 (6,545,376) 1,65,79 349,64 372,196 (2,953) 13,67 144,16 76,343 4,336,69 497,25 1,6,573 5,719,146 5,91,1,96 (6,41,) 1,627,16 354, ,53 (4,521) 9,13 146,1 99,6 4,234,4 4,427,114 16,292,45 51,2, ,646 73,56,912 (5,341,4) 14,715,2 3,11,495 3,317,55 (26,321) 116,472 1,25,34 7,11,239 $ 3,649,335 Long-term debt (Notes 7 and 13) Deferred tax liabilities on revaluation reserve for land (Note 9) Net defined benefit liability () Other long-term liabilities long-term liabilities liabilities Common stock: Authorized 2,29,, shares Issued 614,43,399 shares as of March 31, ,43,399 shares as of March 31, 216 Capital surplus Retained earnings Treasury stock, at cost: 37,29,54 shares as of March 31, ,714,629 shares as of March 31, 216 shareholders equity Net unrealized gains and losses on securities Net unrealized gains and losses on hedges Revaluation reserve for land, net of tax (Note 9) Translation adjustments Remeasurements of defined benefit plans () accumulated other comprehensive income 1,113,9 9,11 123,745 12,4 1,374,1 2,414, , ,52 1,126,633 (17,53) 1,741,55 112,545 (544) 16,321 (3,596) (395) 124,33 969,99 9, ,23 114,31 1,21,776 2,376, , ,3 1,65,37 (17,654) 1,679,96 11,79 (3,119) 16,32 14,53 (5,13) 124,29 9,921,463 1,272 1,12,994 1,14,4 12,254,22 21,519,377 1,311,551 5,763,276 1,42,17 (1,594,197) 15,522,1 1,3,164 (4,4) 145,476 (32,52) (3,52) 1,1,29 Noncontrolling interests (Note 9) net assets liabilities and net assets 55,972 1,921,9 4,336,69 53,724 1,57,921 4,234,4 49,93 17,129,949 $ 3,649,335 The accompanying notes are an integral part of these statements. 61 JFE GROUP TODAY 217 JFE GROUP TODAY

3 Statements of Income JFE Holdings, Inc. and Subsidiaries Years ended March 31, 217 and 216 Statements of Comprehensive Income JFE Holdings, Inc. and Subsidiaries Years ended March 31, 217 and 216 U.S. dollars () U.S. dollars () Net sales Cost of sales 3,3,992 2,9,652 3,431,74 3,17,757 $ 29,494,536 25,756,769 Net income Other comprehensive income (7): 72,625 37,652 $ 647,339 Gross profit 419, ,92 3,737,757 Net unrealized gains and losses on securities 1,549 (9,43) 94,27 Selling, general and administrative expenses 322, ,343 2,75,416 Net unrealized gains and losses on hedges 3,192 (2,429) 2,451 Operating income 96,746 9,63 62,34 Revaluation reserve for land Translation adjustments (6,747) (12,2) (6,139) Non-operating income (expenses): Remeasurements of defined benefit plans 4,436 (11,967) 39,54 Interest income 1,474 1,19 13,13 Share of other comprehensive income of affiliates accounted for using equity method (11,74) (1,41) (14,323) Interest expense Dividends received (12,613) 9,566 (12,279) 1,43 (112,425) 5,266 other comprehensive income Comprehensive income (273) 72,352 (134,14) (97,161) (2,433) $ 644,95 Inventory related income Equity in earnings (losses) of affiliates 5,521 12,6 -- (,21) 49,211 17,14 comprehensive income attributable to: Foreign exchange losses (6,39) (5,914) (53,2) Shareholders of the parent 67,9 (99,629) $ 66,7 Other, net (21,926) (11,12) (195,436) Noncontrolling interests 4,363 2,467 3,9 Ordinary income 4,735 64, ,21 The accompanying notes are an integral part of these statements. Extraordinary income (Note 2) 2,737 1,97 14,3 Income before income taxes 15,472 74,337 94,119 Income taxes (6): Current 23,359 21,629 2,29 Deferred 9,47 15,54 4,561 32,46 36,64 292,771 Net income 72,625 37, ,339 Net income attributable to noncontrolling interests (4,65) (3,995) (41,759) Net income attributable to shareholders of the parent 67,939 33,657 $ 65,57 yen U.S. dollars () Net income per share $ 1.5 Cash dividends per share The accompanying notes are an integral part of these statements. 63 JFE GROUP TODAY 217 JFE GROUP TODAY

4 Statements of Changes in Net Assets JFE Holdings, Inc. and Subsidiaries Years ended March 31, 217 and 216 Shareholders equity Shareholders equity Common stock Capital surplus Retained earnings Treasury stock, at cost shareholders equity Common stock Capital surplus Retained earnings Treasury stock, at cost shareholders equity Balance at April 1, , ,121 1,66,517 (179,43) 1,61,35 Balance at April 1, , ,3 1,65,37 (17,654) 1,679,96 Cash dividends (34,619) (34,619) Cash dividends (5,76) (5,76) Net income attributable to shareholders of the parent 33,657 33,657 Net income attributable to shareholders of the parent 67,939 67,939 Acquisition of treasury stock (273) (273) Acquisition of treasury stock (216) (216) Disposal of treasury stock (527) 1, Disposal of treasury stock (1) 16 6 Change in shares of parent arising from transactions Change in treasury shares arising from change in equity with noncontrolling shareholders (74) (74) in entities accounted for using equity method Transfer from land revaluation account 1 1 Change in scope of equity method (572) (572) Net changes in items other than shareholders equity -- Change in shares of parent arising from transactions changes in items during the year (74) (1,479) 775 (1,444) with noncontrolling shareholders Balance at March 31, , ,3 1,65,37 (17,654) 1,679,96 Transfer from land revaluation account Net changes in items other than shareholders equity -- changes in items during the year 22 61,596 (199) 61,599 Balance at March 31, , ,52 1,126,633 (17,53) 1,741,55 Net unrealized gains and losses on securities Net unrealized gains and losses on hedges Revaluation reserve for land, net of tax Accumulated other comprehensive income Translation adjustments Remeasurements of defined benefit plans accumulated other comprehensive income Noncontrolling interests net assets Net unrealized gains and losses on securities Net unrealized gains and losses on hedges Revaluation reserve for land, net of tax Accumulated other comprehensive income Translation adjustments Remeasurements of defined benefit plans accumulated other comprehensive income Noncontrolling interests net assets Balance at April 1, ,733 (535) 15,654 41,17 6, ,57 51,5 1,99,23 Balance at April 1, ,79 (3,119) 16,32 14,53 (5,13) 124,29 53,724 1,57,921 Cash dividends (34,619) Cash dividends (5,76) Net income attributable to shareholders of the parent 33,657 Net income attributable to shareholders of the parent 67,939 Acquisition of treasury stock (273) Acquisition of treasury stock (216) Disposal of treasury stock 521 Disposal of treasury stock 6 Change in shares of parent arising from transactions Change in treasury shares arising from change in equity with noncontrolling shareholders (74) in entities accounted for using equity method Transfer from land revaluation account 1 Change in scope of equity method (572) Net changes in items other than shareholders equity (93,23) (2,54) 673 (26,64) (11,757) (133,296) 2,639 (13,657) Change in shares of parent arising from transactions changes in items during the year (93,23) (2,54) 673 (26,64) (11,757) (133,296) 2,639 (132,12) with noncontrolling shareholders 22 Balance at March 31, ,79 (3,119) 16,32 14,53 (5,13) 124,29 53,724 1,57,921 Transfer from land revaluation account Net changes in items other than shareholders equity 1,35 2,575 (6) (1,99) 4, ,24 2,2 changes in items during the year 1,35 2,575 (6) (1,99) 4, ,24 63,7 Balance at March 31, ,545 (544) 16,321 (3,596) (395) 124,33 55,972 1,921,9 The accompanying notes are an integral part of these statements. 65 JFE GROUP TODAY 217 JFE GROUP TODAY

5 Statements of Cash Flows JFE Holdings, Inc. and Subsidiaries Years ended March 31, 217 and 216 Common stock Capital surplus () Shareholders equity Retained earnings Treasury stock, at cost shareholders equity U.S. dollars () Balance at April 1, 216 $ 1,311,551 Cash dividends Net income attributable to shareholders of the parent Acquisition of treasury stock Disposal of treasury stock Change in treasury shares arising from change in equity in entities accounted for using equity method Change in scope of equity method Change in shares of parent arising from transactions with noncontrolling shareholders Transfer from land revaluation account Net changes in items other than shareholders equity changes in items during the year Balance at March 31, 217 $ 1,311,551 $ 5,761,476 1, 1, $ 5,763,276 $ 9,493,154 (51,412) 65,57 (9) (5,9) ,32 $ 1,42,17 $ (1,592,423) (1,925) 142 (1,773) $ (1,594,197) $ 14,973,75 (51,412) 65,57 (1,925) 53 (5,9) 1, ,59 $ 15,522,1 Cash flows from operating activities: Income before income taxes for: Depreciation and amortization Decrease in reserves Interest and dividend income Interest expense Changes in assets and liabilities: Changes in notes and accounts receivable Changes in inventories Changes in notes and accounts payable Other, net Subtotal Interest and dividend income received Interest paid Income taxes paid Net cash provided by operating activities 15,472 12,63 (6,241) (11,41) 12,613 (9,61) (17,7) 16,262 2,33 194,66 16,324 (12,46) (12,421) 15,41 74, ,946 (15,142) (11,62) 12,279 5,355 52,96 (24,64) (16,99) 3,53 17,244 (12,673) (37,521) 267,12 $ 94,119 1,627,934 (55,62) (9,413) 112,425 (7,567) (152,152) 144,95 1,121 1,729, ,53 (111,293) (11,713) 1,653,275 Net unrealized gains and losses on securities Balance at April 1, 216 $ 96,57 Cash dividends Net income attributable to shareholders of the parent Acquisition of treasury stock Disposal of treasury stock Change in treasury shares arising from change in equity in entities accounted for using equity method Change in scope of equity method Change in shares of parent arising from transactions with noncontrolling shareholders Transfer from land revaluation account Net changes in items other than shareholders equity 96,577 changes in items during the year 96,577 Balance at March 31, 217 $ 1,3,164 The accompanying notes are an integral part of these statements. Net unrealized gains and losses on hedges $ (27,1) 22,952 22,952 $ (4,4) Revaluation reserve for land, net of tax $ 145,53 (53) (53) $ 145,476 () Accumulated other comprehensive income Translation adjustments $ 129,271 (161,324) (161,324) $ (32,52) Remeasurements of defined benefit plans $ (45,726) 42,25 42,25 $ (3,52) accumulated other comprehensive income $ 1,17, $ 1,1,29 Noncontrolling interests $ 47,66 2,37 2,37 $ 49,93 net assets $ 16,56,46 (51,412) 65,57 (1,925) 53 (5,9) 1, 71 2, ,453 $ 17,129,949 Cash flows from investing activities: Payments for purchases of property, plant and equipment Proceeds from sales of property, plant and equipment Payments for purchases of investments in securities Proceeds from sales of investments in securities Proceeds from capital reduction of investments Other, net Net cash used in investing activities Cash flows from financing activities: (Decrease) increase in short-term borrowings, net Increase in long-term debt Repayments of long-term debt Payments for purchases of treasury stock Payments for dividends by parent company Other, net Net cash used in financing activities (226,327) 1,992 (9,676) 69, (163,799) (33,425) 291,232 (256,944) (216) (5,795) (13,1) (1,159) (25,992) 4,155 (29,74) 5,51 3,24 14,97 (137,321) 29,15 115,249 (262,42) (25) (34,551),322 (144,561) (2,17,354) 17,755 (6,246) 623,5 -- 2,763 (1,46,14) (297,932) 2,595,1 (2,29,257) (1,925) (51,653) (115,963) (161,59) Effects of exchange rate change on cash and cash equivalents 1,61 (6,3) 16,57 Net increase (decrease) in cash and cash equivalents 5,34 (2,19) 47,99 Cash and cash equivalents at beginning of the year 63,73 3, ,32 Increase in cash and cash equivalents at beginning of the year by newly consolidated or deconsolidated subsidiaries Cash and cash equivalents at end of the year (Note 5) ,33 1,15 63,73 1,114 $ 61,441 The accompanying notes are an integral part of these statements. 67 JFE GROUP TODAY 217 JFE GROUP TODAY 217 6

6 Notes to Financial Statements JFE Holdings, Inc. and Subsidiaries Years ended March 31, 217 and Basis of Presentation (c) Valuation of securities (j) Revenue recognition for long-term construction-type contracts 5. Cash and Cash Equivalents The accompanying consolidated financial statements of JFE Holdings, Inc. (the Company hereinafter) and consolidated subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company as required by the Financial Instruments and Exchange Act of Japan. The Company s overseas subsidiaries maintain their accounts and records in conformity with generally accepted accounting principles and practices prevailing in their respective countries of domicile. The notes to the consolidated financial statements include information that is not required under the Japanese GAAP but is presented herein as additional information. As permitted by the Financial Instruments and Exchange Act, s of less than one million yen have been omitted. Consequently, the totals shown in the accompanying consolidated financial statements (both in yen and U.S. dollars) do not necessarily agree with the sums of the individual s. Certain s in the prior years financial statements have been Available-for-sale securities Marketable: Valued primarily at market based on an average of the market prices for a period of one month prior to the settlement date. (Valuation differences are recorded as net unrealized gains and losses on securities, net of tax, in net assets in the balance sheets by the direct capitalization method, with the costs of sales calculated primarily by the moving average method.) Non-marketable: Valued primarily at cost by the moving average method. (d) Valuation of inventories Inventories are stated at cost determined by the weighted average method. These inventories with lower profitability are written down to their net realizable value. (e) Depreciation method for property, plant and equipment (except for leased assets) Depreciation is calculated primarily by the declining-balance method. The percentage-of-completion method (cost-comparison method to estimate the percentage of completion) is applied for construction contracts where the percentage of completion can be reliably estimated. For other contracts, the completed-contract method is applied. (k) tax return The Company files a consolidated tax return with certain domestic subsidiaries. (l) Per share information Basic net income per share is computed by dividing net income attributable to shareholders of the parent available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to shareholders of the parent used in the computation was 67,939 million ($65,57 thousand) and 33,657 million, and the average number of shares used in the computation was 576,66 thousand and 576,74 thousand for the years ended March 31, 217 and 216, respectively. Cash dividends per share shown in the consolidated statements of income are the s applicable to the respective year. Cash and cash equivalents at March 31, 217 and 216 consisted of the following: U.S. dollars Cash and deposits 69,936 64,654 $ 623,371 Time deposits with a maturity of more than three months (553) (7) (4,929) 69,33 63,73 $ 61,441 reclassified to conform to the 217 presentation. The translation of the Japanese yen s into U.S. dollars is included solely for the convenience of the reader, using the approximate exchange rate at March 31, 217, which was to US$1.. These convenient translations should not be construed as representations that the Japanese yen s have been, could have been, or could in the future be converted into U.S. dollars at this or any other rate of exchange. 2. Summary of Significant Accounting Policies (a) Consolidation principles The consolidated financial statements include the accounts of the Company s (f) Intangible assets (except for leased assets) Amortization of intangible assets is calculated primarily by the straight-line method. Amortization of the software for internal use is computed by the straight-line method based on the estimated useful lives (primarily 5 years). (g) Allowance for doubtful accounts The projected uncollectible is provided as the allowance using historical default rates in the past for ordinary credits and individual collectability assessments for credits deemed to have high likelihood of default and for other specific credits. 3. Changes in Accounting Policies and Adoption of New Accounting Standards Practical Solution on a Change in Depreciation Method due to Tax Reform 216 Pursuant to revisions to corporate tax law in Japan, effective from the year ended March 31, 217, the Company has adopted Practical Solution on a Change in Depreciation Method due to Tax Reform 216 (Practical Issues Task Force No. 32, issued on June 17, 216) and changed the depreciation method of facilities attached to buildings and structures acquired on or after April 1, 216 from the declining-balance method to the straight-line method. 315 domestic and foreign subsidiaries (the Group as JFE Holdings, Inc. consolidated group, hereinafter). All significant inter-company transactions and accounts are eliminated in consolidation. 62 affiliates are accounted for by the equity method whereby the Group includes in net income its share of income or losses of these companies, and records its investments at cost adjusted for its share of income, losses or dividends received. (b) Translation of foreign currencies Revenues and expenses are translated at the rates of exchange prevailing when transactions are made, and assets and liabilities are translated into Japanese yen at the exchange rates in effect on the respective balance sheet date. The balance sheet accounts of the foreign subsidiaries are translated into Japanese yen at the current exchange rates at the balance sheet dates except for shareholders equity, which is translated at historical rates. Differences (h) Retirement benefits The straight-line method is used to attribute expected retirement benefits to each period through the end of the year in calculating retirement benefit obligation. Prior service cost is primarily amortized in projected average years of service of the employees. Actuarial losses are primarily amortized in projected average years of service of the employees from the following fiscal year after the year in which they occurred. (i) Leases Leased assets under finance leases that do not transfer ownership to the lessees are capitalized and depreciated to a residual value of zero using the straight-line method with useful life defined by the terms of the contract. As a result, operating income increased by 397 million ($3,53 thousand) and ordinary income and income before income taxes increased by 399 million ($3,556 thousand) for the year ended March 31, Additional Information Implementation Guidance on Recoverability of Deferred Tax Assets Effective from the year ended March 31, 217, the Company has adopted Revised Implementation Guidance on Recoverability of Deferred Tax Assets (Accounting Standards Board of Japan Guidance No. 26, issued on March 2, 216). arising from such translation are shown as translation adjustments in a separate component of net assets in the balance sheets. 69 JFE GROUP TODAY 217 JFE GROUP TODAY 217 7

7 6. Securities The following is a summary of available-for-sale securities at March 31, 217 and 216: 7. Long-term Debt Long-term debt at March 31, 217 and 216 consisted of the following: Marketable: Cost lower than book value: Equity securities Bonds Sub total Cost exceeding book value: Equity securities Other Sub total Book value (Estimated fair value) 325, ,545 4,446 4, ,992 Cost, net of accumulated impairment losses 156, ,161 6,654 6, ,15 Available-for-sale securities Unrealized gain (loss) 169,33 169,33 (2,27) (2,27) 167,176 Book value (Estimated fair value) 319,16 319,16 33,994 33, ,1 FY215 Cost, net of accumulated impairment losses 159, ,513 4,927 4,927 2,44 Unrealized gain (loss) 159,52 159,52 (6,933) (6,933) 152,569.5% yen bonds, due May % yen bonds, due June % yen bonds, due September % yen bonds, due September % yen bonds, due April 217.4% yen bonds, due March % yen bonds, due September 224 Loans, principally from banks and insurance companies, due Less current portion long-term debt U.S. dollars 2, 3, 15, 3, 1, 2, 1,135,51 (147,412) 1,113,9 2, 3, 2, 15, 3, 1, 2, 1,1,613 (256,623) 969,99 $ 17, ,43 133,71 267,43 9,134 17,269 1,121,231 (1,313,949) $ 9,921,463 Cost lower than book value: Equity securities Bonds Sub total Cost exceeding book value: Equity securities Other Sub total Book value (Estimated fair value) $ 2,91,729 2,91,729 39,629 39,629 $ 2,941,367 Available-for-sale securities Cost, net of accumulated impairment losses $ 1,391,933 1,391,933 59,31 59,31 $ 1,451,243 Unrealized gain (loss) $ 1,59,76 1,59,76 (19,671) (19,671) $ 1,49,114. Pledged Assets At March 31, 217 and 216, pledged assets were as follows: Property, plant and equipment Investments in securities Investments in unconsolidated subsidiaries and affiliates Other assets U.S. dollars 3, , $ 2,6 1,7 1,72 2,95 The Company sets up collateral on the shares of consolidated subsidiaries of 242 million ($2,157 thousand), which is carrying value on the non-consolidated financial statements of consolidated subsidiaries at March 31, 217. There was no such collateral at March 31, 216. Available-for-sale securities that the Group sold during the years ended March 31, 217 and 216 were as follows: Equity securities: Proceeds from sales Aggregate gain on sales Aggregate loss on sales U.S. dollars 7,43 33,495 (3,349) 3,54 15,95 (4) $ 627,45 29,556 (29,51) 9. Revaluation of Land for Business In the years ended March 31, 21 and 22, part of the subsidiaries and affiliates revaluated the land for business purposes based on the Law Concerning Revaluation of Land and its amendment issued on March 31, 21 and 22, respectively. Revaluation differences, net of the portion charged to deferred tax liabilities on revaluation reserve for land and noncontrolling interests, were recorded as revaluation reserve for land, net of tax in net assets. The fair value of these lands is lower than the revaluated book value, and the difference was 16,756 million ($149,353 thousand) and 16,772 million on March 31, 217 and 216, respectively. The impairment losses on available-for-sale securities for the years ended March 31, 217 and 216 were 16 million ($1,426 thousand) and 1,429 million, respectively. 71 JFE GROUP TODAY 217 JFE GROUP TODAY

8 1. Retirement Benefits Defined benefit plans The changes in retirement benefit obligation for the years ended March 31, 217 and 216 were as follows: U.S. dollars Balance at beginning of year 277,121 24,72 $ 2,47,14 Service cost 13,73 13,97 122,141 Interest cost 1,391 1,522 12,39 Actuarial losses 2,15 3,24 17,96 Retirement benefits paid (2,975) (27,7) (25,267) Prior service cost ,4 Other (2,313) (136) (2,616) Balance at end of year 263,2 277,121 $ 2,346,4 The changes in plan assets for the years ended March 31, 217 and 216 were as follows: U.S. dollars Balance at beginning of year 16,941 17,61 $ 1,434,539 Expected return on plan assets 2,99 3,25 25,4 Actuarial losses 5,1 (13,74) 52,42 Contributions from the employer 2,29 6,45 25,216 Retirement benefits paid (1,293) (13,149) (163,53) Other (1,646) (193) (14,671) Balance at end of year 152,611 16,941 $ 1,36,29 Reconciliation between the balances of retirement benefit obligation and plan U.S. dollars Net defined benefit liability 123, ,23 $ 1,12,994 Net defined benefit asset Net liability and asset recorded (13,67) (9,13) (116,472) on the consolidated balance sheet 11, ,179 $ 96,513 The components of retirement and pension costs for the years ended March 31, 217 and 216 were as follows: U.S. dollars 13,73 1,391 (2,99) 2, ,42 13,97 1,522 (3,25) ,73 $ 122,141 12,39 (25,4) 24,645 1,176 2,977 $ 137,516 Service cost Interest cost Expected return on plan assets Recognized actuarial losses Amortization of prior service cost Other The components of remeasurements of defined benefit plans (before income tax effect) in other comprehensive income for the years ended March 31, 217 and 216 were as follows: U.S. dollars Prior service cost $ 1,435 Actuarial (gains) losses (6,723) 17,566 (59,925) (6,561) 17,69 $ (5,41) The components of plan assets at March 31, 217 and 216 were as follows: General account Equity securities Bonds Cash and deposits Others 35% % FY215 37% % 3% and 36% of the total plan assets is retirement benefit trust at March 31, 217 and 216, respectively. The expected long-term rate of return on plan assets is determined considering current and expected distribution of plan assets and current and expected long-term rate of return derived from various components of the plan assets. Principal assumptions used for the actuarial calculation for the years ended March 31, 217 and 216 were as follows: Discount rate Primarily.3% Expected long-term rate of return on plan assets Primarily 1.% Expected rate of salary increase Primarily.9-3.% FY215 Primarily.3% Primarily 1.5% Primarily.9-3.% Defined contribution plans The required contribution to the defined contribution plan by the Group was 3,69 million ($32,16 thousand) and 3,412 million for the years ended March 31, 217 and 216, respectively. At March 31, 217 and 216, the Group provided the guarantees of bank loans and others for the following companies: U.S. dollars 1,96,512 2,32 2,477 2, ,957 9,491 1,21 2,999 1,223 14,995 $ 16,999 75,71 25,242 22,7 19,76,414 $ 32,5 Formosa Ha Tinh (Cayman) Limited Japan-Brazil Niobium Corporation Kawarin Enterprise Pte. Ltd. Al Gharbia Pipe Company JIM Technology Corporation Japan Tunnel Systems Corporation Others In addition to above, at March 31, 217 and 216, the Group provided the following guarantees of the possible obligations in the future for Byerwen Coal Pty. Ltd. and MIZUSHIMA ECO-WORKS CO., LTD.: U.S. dollars Guarantee limit 1,291 1,9 $ 91,72 assets and net defined benefit liability and net defined benefit asset recorded on the consolidated balance sheets at March 31, 217 and 216 was as follows: U.S. dollars Funded retirement benefit obligation 217, ,54 $ 1,942,695 Fair value of plan assets (152,611) (16,941) (1,36,29) 65,34 7,912 52,44 Unfunded retirement benefit obligation 45,337 Net liability and asset recorded on the consolidated balance sheet 11,677 45, ,179 44,19 $ 96,513 The components of remeasurements of defined benefit plans (before income tax effect) in accumulated other comprehensive income at March 31, 217 and 216 were as follows: U.S. dollars Unrecognized prior service cost (295) 1 $ (2,629) Unrecognized actuarial losses 53 7,194 4, ,24 $ 2, Contingencies At March 31, 217 and 216, trade notes discounted or endorsed were as follows: U.S. dollars Trade notes discounted,66 2,132 $ 77,422 Trade notes endorsed 1, ,564 At March 31, 217 and 216, commitments outstanding for loan commitments were 21 million ($2,54 thousand) and 61 million, respectively. 73 JFE GROUP TODAY 217 JFE GROUP TODAY

9 12. Leases The Group leases certain buildings and structures, machinery and equipment, office space and other assets. As discussed in Note 2 (i), lease assets under finance leases that do not transfer ownership to lessees are capitalized and depreciated to residual value of zero using the straight-line method with useful life defined by the terms of the contract. Future minimum lease payments subsequent to March 31, 217 and 216 for non-cancelable operating leases are summarized as follows: As a lessee: (Year ending March 31) and thereafter and thereafter As a lessor: (Year ending March 31) and thereafter and thereafter 13. Financial Instruments 3,21 19,46 22,6 2,34 15,37 17, U.S. dollars $ 29, ,974 $ 22,22 U.S. dollars $ 1,274 5,677 $ 6,952 (a) Overview (1) Group policy for financial instruments The Group raises funds mainly through the bank loans or by commercial paper/ bond issues based on the capital investment plans considering the stability of the fund and financing costs. Temporary surplus of funds are operated only for short-term investments. Derivative transactions are only utilized to hedge the following risks and the Group does not enter into derivative transactions for trading or speculative purposes. (2) Types of financial instruments and related risk and risk management Trade receivables such as notes and accounts receivable are exposed to credit risk. The Group manages this risk by monitoring the financial conditions of its customers periodically. Some trade receivables are sold before their maturities. Trade payables such as notes and accounts payable are due within one year. Some accounts receivable and accounts payable are denominated in foreign currency and exposed to foreign currency risk. Foreign exchange forward contracts are utilized in a timely manner to hedge the net balance of foreign currencies received from export and foreign currencies paid for raw material purchase. Stocks as investment securities are exposed to market fluctuation risk. Investment securities denominated in foreign currencies are exposed to foreign currency risk. Investment securities mainly consist of securities of companies with which a business relationship has been established and the Group reviews these fair values periodically. Debts and bonds are managed so as not to concentrate the maturities considering the liquidity risk. Variable interest rate debts are exposed to interest fluctuation risk. Some of the debts and bonds, which are exposed to interest fluctuation risk, are hedged by the interest rate swap agreements to correspond with and to decrease interest payments. Derivative transactions are exposed to market fluctuation risk of future foreign exchange and interest rates. However, the Group utilizes the derivative transactions to correspond with the actual demands of imports and exports, debts and bonds, and thus the risk is limited to the extent of opportunity loss. The Group enters into derivative transactions only with financial institutions with high credit ratings, and thus there is almost no credit risk, which is the risk of default by the counterparties bankruptcy, etc. The Group implemented the internal rules of derivative transactions and transactions are operated based on these rules. Derivative transactions are executed based on the above internal rules, which require getting the approval from the financial operating officer. The balances, fair values and valuation differences are reported to the management meetings periodically. subsidiaries operate the derivative transactions based on the internal rules. (3) Supplemental information on fair value of financial instruments As well as the values based on market prices, fair values of financial instruments include values, which are reasonably calculated in cases where market prices do not exist. As the calculation of those values uses certain assumptions, those values may vary in cases where different assumptions are applied. Also, for the contract regarding derivative transactions described in 4. Derivatives and Hedging Activities, the contract itself does not indicate market risk related to derivative transactions. (b) Fair value of financial instruments Carrying value on the consolidated balance sheets, fair value and difference at March 31, 217 and 216 are as follows. The financial instruments whose fair value is extremely difficult to determine are not included below. FY215 Carrying value Fair value Difference Carrying value Fair value Difference Cash and deposits 69,936 69,936 64,654 64,654 Notes and accounts receivable 79,5 79,5 72,639 72,639 Investments in securities: Available-for-sale securities 329, , ,1 353,1 assets 1,197,96 1,197,96 1,13,33 1,13,33 Notes and accounts payable 446, , , ,331 Short-term borrowings 16,966 16, , ,759 Commercial paper,, 36, 36, Current portion of long-term debt 147, , , , Long-term debt: Bonds 75, 75, , 125,93 93 Long-term borrowings 1,3,9 1,41,5 3,76 44,99 53,44,413 liabilities 1,22,113 1,26,64 4,534 1,1,75 1,11,229 9,524 Derivative transactions*1: Hedge accounting not applied Hedge accounting applied 1,27 1,27 (3,7) (3,7) derivative transactions 1,349 1,349 (3,35) (3,35) Carrying value Fair value Difference Cash and deposits Notes and accounts receivable Investments in securities: Available-for-sale securities assets Notes and accounts payable Short-term borrowings Commercial paper Current portion of long-term debt Long-term debt: Bonds Long-term borrowings liabilities Derivative transactions*1: Hedge accounting not applied Hedge accounting applied derivative transactions *1 Derivative transactions are presented on a net basis and net liability position is shown in parenthesis. $ 623,371 7,113,45 2,941,367 $ 1,67,1 $ 3,91,14 953,436 71,37 1,313,949 66,5 9,252,954 $ 16,241,313 $ 1,256 1,75 $ 12,24 $ 623,371 7,113,45 2,941,367 $ 1,67,1 $ 3,91,14 953,436 71,37 1,314,19 675,95 9,26,549 $ 16,21,736 $ 1,256 1,75 $ 12,24 $ $ $ 24 6,57 33,55 $ 4,413 $ $ - 75 JFE GROUP TODAY 217 JFE GROUP TODAY

10 . Valuation method for financial instruments and information of investments in securities and derivative transactions Note 4. Scheduled maturities of short-term borrowings, current portion of long-term debt and long-term debt Assets: Cash and deposits and Notes and accounts receivable These are paid in short-term and the fair value approximates carrying value. Some accounts receivable are subject to the allocation treatment of the foreign exchange forward contracts. Securities Fair value of stocks is based on the quoted price on stock exchanges and that of bonds is based on the quoted price on bond markets or price presented by the counter party financial institutions. Please see Note 6. Securities regarding the information of the fair value for the investment in securities by classification. Liabilities: Notes and accounts payable, Short-term borrowings, Current portion of long-term debt (except for bonds due within one year) and Commercial paper These are paid in short-term and the fair value approximates the equivalent of carrying value. Some accounts payable are subject to the allocation treatment of the foreign exchange forward contracts. Bonds and bonds due within one year (included in current portion of long-term debt) Fair value of bonds is based on the quoted market price. Fair value of the bonds subject to the special treatment of the interest rate swaps are calculated by discounting the sum of principal and interest including the interest swap, using the reasonable interest rate applied to the same kind of bond issues. Long-term borrowings Fair value of long-term borrowings is estimated by discounting the sum of principal and interest, using the reasonable interest rate applied to the same kind of new borrowings. Fair value of the long-term borrowings subject to the special treatment of the interest rate swaps is calculated by discounting the sum of principal and interest including the interest swap, using the reasonable interest rate applied to the same kind of long-term debt. Derivative transactions Please see 4. Derivatives and Hedging Activities. Short-term borrowings Commercial paper Current portion of long-term debt Long-term debt: Bonds Long-term borrowings Due in one year or less 16,966, 147, ,379 Due in one year or less Due after one year through two years 15, 17,724 15,724 Due after one year through two years Due after two three years 52,119 52,119 Due after two three years FY215 Due after three four years 74,477 74,477 Due after three four years Due after four 3, 46,437 76,437 Due after four Due after 3, 694, ,331 Due after Note 2. Financial instruments whose fair value cannot be reliably determined Unlisted stock Subscription certificates Financial instruments above are not included in securities on the table in (b) Fair value of financial instruments because there are no market prices available and it is extremely difficult to determine the fair value. 41, FY215 Carrying value 41, U.S. dollars $ 37,44 5,339 Short-term borrowings Commercial paper Current portion of long-term debt Long-term debt: Bonds Long-term borrowings 116,759 36, 256,623 49,32 5, 97,42 147,42 15, 169,594 14,594 13, 13, 64,46 64,46 6, 499, ,636 Note 3. The redemption schedule for financial instruments and securities with maturities Due in one year or less Cash and deposits Notes and accounts receivable 69,936 64,74 Securities: Available-for-sale securities with maturities 71,65 Due after one year through Due after five ten years Due after ten years Due in one year or less 64, ,47 63,132 Due after one year through FY215 Due after five ten years Due after ten years Short-term borrowings Commercial paper Current portion of long-term debt Long-term debt: Bonds Long-term borrowings Due in one year or less $ 953,436 71,37 1,313,949 $ 2,33,72 Due after one year through two years $ 133,71 1,521,739 $ 1,655,441 Due after two three years $ 464,56 $ 464,56 Due after three four years $ 663,47 $ 663,47 Due after four $ 267,43 413,913 $ 61,317 Due after $ 267,43 6,1,4 $ 6,456,2 Due in one year or less Due after one year through Due after through ten years Due after ten years Cash and deposits Notes and accounts receivable Securities: Available-for-sale securities with maturities $ 623,371 5,72,53 $ 6,45,963 $ $ $ $ $ $ 77 JFE GROUP TODAY 217 JFE GROUP TODAY 217 7

11 14. Derivatives and Hedging Activities Derivative transactions for which hedge accounting is applied for the years ended March 31, 217 and 216 were as follows: Derivative transactions for which hedge accounting is not applied for the years ended March 31, 217 and 216 were as follows: Foreign exchange forward contracts: USD (Selling) EUR (Selling) THB (Selling) MYR (Selling) CNY (Selling) USD (Buying) EUR (Buying) GBP (Buying) CHF (Buying) THB (Buying) JPY (Buying) Commodity forward contracts: Nonferrous metal (Selling) Nonferrous metal (Buying) Contracted 9, , Recognized gain (loss) (22) 41 (1) () 15 (26) (17) Contracted 11, ,292 1, FY215 Recognized gain (loss) (19) (41) () () 44 () () Contracted $ 2,297 1,7 4,43 2,21 26,553 1, $ 2, Recognized gain (loss) $ 1,31 (196) 365 (9) () $ 1,4 $ (231) 71 $ (151) (a)currency related Hedged item Benchmark method Foreign exchange forward contracts: USD (Selling) EUR (Selling) GBP (Selling) SAR (Selling) KWD (Selling) THB (Selling) USD (Buying) EUR (Buying) GBP (Buying) CNY (Buying) THB (Buying) SAR (Buying) KWD (Buying) JPY (Buying) SGD (Buying) KRW (Buying) SEK (Buying) Allocation method Foreign exchange forward contracts: USD (Selling) (Forecasted transactions) Contract Fair value 3, , ,27 13, , (32) (17) () 1, (5) (2) (6) (1) () () FY215 Contract Fair value 2, , , , , (53) (311) (65) (2,49) (2) (24) () 1 Contract Fair value $ 33, ,25 32,72 3, ,27 12,55 3,66 1, ,472 2, ,23 $ (2,691) (151) () 1,473 5,33 (44) (17) (53) () () () EUR (Selling) THB (Selling) USD (Buying) EUR (Buying) Cross currency swap contracts: To receive USD floating and pay JPY fixed rates To receive USD floating and pay JPY floating rates and deposits received and deposits received Long-term Debt Long-term Debt 33, ,75 6, 25, ,997 6, 31,916 1,97 63,697 53,4 Fair value of derivative transactions is measured at the quoted price obtained from financial institutions.. Fair value of the foreign exchange forward contracts to which allocation treatment has been applied is included in the fair value of corresponding accounts receivable, accounts payable and long-term debt as hedged item. 79 JFE GROUP TODAY 217 JFE GROUP TODAY 217

12 (b) Interest rate related Benchmark method Interest rate swap agreements: To receive floating and pay fixed rates Special treatment Interest rate swap agreements: To receive floating and pay fixed rates To receive fixed rates and pay floating Long-term debt Bonds and long-term debt Contract 9,623 11,2 5, Fair value of derivative transactions is measured at the quoted price obtained from financial institutions.. Fair value of the interest rate swap agreements to which special treatment method has been applied is included in the fair value of corresponding bonds and long-term debt as hedged item. Fair value (3) Contract 11, ,5 6, FY215 Fair value (66) Contract $ 7,763 92,41 516,9 Fair value $ (2,674) The reconciliation of the difference between the statutory tax rate and the effective tax rate for the year ended March 31, 217 was not presented since the difference was less than 5% of the statutory tax rate. Act for partial amendment of the consumption tax act and others for the drastic reform of the taxation system for ensuring stable financial resources for social security and Act for partial amendment of the local tax act and the local allocation tax act and others for the drastic reform of the taxation system for ensuring stable financial resources for social security were enacted into law on November 1, 216, and a scheduled increase in the consumption tax rate to 17. Comprehensive Income 1 percent was postponed from April1, 217 to October 1, 219. Accordingly, scheduled abolishment of special local corporation tax, reimposition of corporate enterprise tax, amendment of local corporation tax rate and amendment of corporation tax rate for inhabitant tax were also postponed from the years beginning on or after April1, 217 to the years beginning on or after October 1, 219. There was no change on the effective statutory tax rate that was utilized for the measurement of deferred tax assets and deferred tax liabilities. However, the reclassification of national tax rate and local tax rate was made. As a result, deferred tax assets, net of deferred tax liabilities, increased by 6 million ($766 thousand) and income taxes deferred decreased by the same for the year ended March 31, Research and Development Expenses Research and development expenses charged to income were 35,536 million ($316,74 thousand) and 35,153 million for the years ended March 31, 217 and 216, respectively. 16. Income Taxes The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at March 31, 217 and 216 are presented below: Deferred tax assets: Loss carry-forwards Net defined benefit liability Loss on impairment of property, plant and equipment Accrued bonuses Elimination of unrealized gains on property, plant and equipment Provision for special repairs Others deferred tax assets Valuation allowance Deferred tax assets net of valuation allowances Deferred tax liabilities: Net unrealized gains and losses on securities Others deferred tax liabilities Net deferred tax assets 32,756 32,362 13,952 13,59 7,2 5,732 44, ,72 (6,73) 9,52 (49,552) (2,659) (7,212) 1,4 Reconciliation of the statutory tax rate to the effective tax rate for the year ended March 31, 216 was as follows: Statutory tax rate 33.% Entertainment and other non-deductible expenses 4.1 Dividend income and other non-taxable income (.7) Valuation allowance 1.1 Equity in earnings of affiliates 3.9 Other (1.) Effective tax rate 49.3% FY215 46,547 32,74 16,64 11,432 7,951 5,76 4,53 161,699 (59,59) 11,4 (46,191) (19,996) (66,17) 35,652 $ 291,96 2, ,36 116,4 69,542 51,91 393,234 1,335,74 (541,313) 793,76 (441,679) (14,142) (625,31) $ 167,929 Reclassification adjustments and income tax effects attributable to other comprehensive income for the years ended March 31, 217 and 216 were as follows: Net unrealized gains and losses on securities: Gains and losses arising during the year Reclassification adjustments Amounts before income tax effects Income tax effects Net unrealized gains and losses on securities Net unrealized gains and losses on hedges: Gains and losses arising during the year Reclassification adjustments Amounts before income tax effects Income tax effects Net unrealized gains and losses on hedges Revaluation reserve for land: Income tax effects Revaluation reserve for land Translation adjustments: arising during the year Reclassification adjustments Amounts before income tax effects Income tax effects Translation adjustments Remeasurements of defined benefit plans: arising during the year Reclassification adjustments Amounts before income tax effects Income tax effects Remeasurements of defined benefit plans Share of other comprehensive income of affiliates accounted for using equity method: Gains and losses arising during the year Reclassification adjustments Share of other comprehensive income of affiliates accounted for using equity method other comprehensive income 44,59 (3,67) 14,441 (3,92) 1,549 (1,673) 6,413 4,739 (1,547) 3,192 (6,713) (33) (6,747) (6,747) 3,791 2,77 6,561 (2,125) 4,436 (12,25) 545 (11,74) (273) (124,39) (12,55) (136,93) 46,465 (9,43) (3,42) (51) (3,561) 1,132 (2,429) (12,241) 32 (12,2) (12,2) (1,267) 56 (17,69) 5,731 (11,967) (1,16) (231) (1,41) (134,14) $ 396,72 (26,) 12,719 (34,691) 94,27 (14,912) 57,161 42,24 (13,79) 2,451 (59,35) (294) (6,139) (6,139) 33,79 24,69 5,41 (1,941) 39,54 (19,19) 4,57 (14,323) $ (2,433) 1 JFE GROUP TODAY 217 JFE GROUP TODAY 217 2

13 1. Segment Information power retail service. purchases, processes and sells steel products, raw materials for (a) Overview of reportable segments steel production, nonferrous metal products, food, etc. The Group places three operating companies, JFE Corporation, JFE Corporation and JFE Shoji, and executes business based on an (b) Method of calculating net sales, income (loss), assets, liabilities operating system specifically designed for its industry under the Company as a and other items by reportable segment holding company. The reportable segments are identified by products and Accounting policies of the reportable segments are consistent with those services belonging to the operating companies. described in Note 2. Summary of Significant Accounting Policies. Income by Products and services for each reportable segment are as follows: reportable segment is based on ordinary income. Intersegment transactions are produces and sells a wide range of steel products, steel processed based on prevailing market price. products and raw materials and operates peripheral business, such as transporting, and maintenance and construction of equipment. provides engineering services for energy, urban environment, steel construction, industrial machines and systems, recycle service and electric (c) Net sales, income (loss), assets, liabilities and other items by reportable segment Sales: Sales to customers Intersegment sales or transfers Sales to customers Intersegment sales or transfers Sales to customers Intersegment sales or transfers Sales to customers Intersegment sales or transfers Sales to customers Intersegment sales or transfers Sales to customers Intersegment sales or transfers 1,5,929 4,199 2,349, ,22 9, ,136 1,391,42 279,19 1,671,32 3,3,992 1,137,35 4,446,29 (1,137,35) (1,137,35) 3,3,992 3,3,992 1,569,51 75,655 2,445,173 37,75 9,26 397,577 1,474,471 21,973 1,756,445 3,431,74 1,167,455 4,599,195 (1,167,455) (1,167,455) 3,431,74 3,431,74 $ 13,37,456 7,56,379 $ 2,93,44 $ 3,79,956,35 $ 3,79,342 $ 12,46,114 2,4,537 $ 14,94,66 $ 29,494,536 1,137,311 $ 39,631,56 $ (1,137,311) $ (1,137,311) $ 29,494,536 $ 29,494,536 Segment income: Segment assets: Depreciation: Amortization of goodwill: Interest income: 4,544 26,616 21,34,996 (4,26) 4,735 27,17 2,3 15,76 63, ,239 $ 361,36 237,24 194, ,261 (37,971) $ 755,21 3,723,479 3,596,123 $ 33,19,45 39,445 37,767 3,4, , ,73 5,733,71 4,757,19 4,56,674 42,43,4 (421,129) (351,79) (3,753,712) 4,336,69 4,234,4 $ 3,649, , ,952 $ 1,512,6 7,536 7,37 67,171 5,457 5,95 4,64 12, ,94 1,627, ,63 177,946 $ 1,627, $ 1,331 1,76 11,63 1,15 1,72 16,177 3,146 3,724 2, ,146 3,739 $ 2,41 1,334 1,51 $ 11, ,69 1,11 1,646 16,142 (336) (455) (2,994) 1,474 1,19 $ 13,13 3 JFE GROUP TODAY 217 JFE GROUP TODAY 217 4

14 Interest expense: Equity in earnings and loss of affiliates: Investment in affiliates accounted for using equity method: Increase in property, plant and equipment and intangible assets: 11, ,533 13,261 (647) 12,613 11, ,73 13,236 (957) 12,279 $ 11,39 3,137 13,664 11,21 (5,767) $ 112,425 13,539 (1,923) $ 12, ,646 1, ,91 15,735 (9,737) 14,253 (3,729) 915 (33,23) 12,6 (,21) $ 17,14 26,161,351 1,454 26,96 56, ,63 272,123 7,2 11,74 291,27 6, ,792 $ 2,39,239 74,436 93,11 2,557,75 55,45 $ 3,62,92 217,443 1,2 6,52 234, ,76 197,76 9,1 5, , ,515 $ 1,93,167 96,443 57,955 2,92,575 $ 2,92,592 (d) Information about products and services Information about products and services has not been disclosed since the classification by products and services is the same as the reportable segment. (e) Information by geographical area (1) Sales FY215 Japan Others Japan Others Japan Others Sales 2,251,636 1,57,356 3,3,992 2,252,169 1,179,57 3,431,74 $ 2,69,45 $ 9,424,69 $ 29,494,536 (2) Property, plant and equipment Information about property, plant and equipment has not been disclosed since property, plant, and equipment in Japan constituted more than 9% of property, plant and equipment on the consolidated balance sheets. (f) Information about major customers Information about major customer has not been disclosed since there were no external customers who constituted more than 1% of net sales on the consolidated statements of income. (g) Information about impairment loss by reportable segment Impairment loss 726, ,4 FY215 Impairment loss 3, ,6 4,993 Impairment loss $ 6,471 $ 71,37 $ 5,99 $ 3,57 (h) Information on unamortized balance of goodwill by reportable segment Unamortized balance 565 4,57 5,137 FY215 Unamortized balance 1 7,139 6,374 13,515 Unamortized balance $ $ 5,36 $ 4,734 $ 45,7 5 JFE GROUP TODAY 217 JFE GROUP TODAY 217 6

15 (i) Information about gain on negative goodwill by reportable segmen No gain on negative goodwill was recognized for the years ended March 31, 217 and Impairment Loss The Company classified long-lived assets as idle assets, leased assets, project-oriented assets and business-oriented assets and grouped each of those classified assets into the minimum unit which will generate cash flows independent of other assets or group of assets. For the year ended March 31, 217, primarily the book value of the goodwill and intangible assets recorded in accordance with acquisition of plant engineering company in Germany were totally written down because the originally planned income is not expected any longer. The Company recognized loss on impairments of 9,4 million ($3,57 thousand), including 4,236 million ($37,757 thousand) for goodwill, 2,619 million ($23,344 thousand) for other intangible assets and 2,553 million ($22,756 thousand) for buildings and structures. For the year ended March 31, 216, primarily the book value of the interest in natural resources in Australia and the business assets, etc. in China were reduced to the recoverable because of the deteriorated business environment. The Company recognized loss on impairments of long-lived assets totaling 4,993 million, including 1,63 million for investments and other assets, 1,195 million for land, 1,34 million for machinery and equipment and 1,125 million for buildings and structures. The recoverable s for the interest in natural resources and the business assets, etc. are principally measured at their values in use, which were calculated by discounting the future cash flows at discount rates of 6.4% and 6.%, respectively. 2. Extraordinary Income For the years ended March 31, 217 and 216, extraordinary income consisted of the following: Gain on sales of investments in securities Loss on impairment of property, plant and equipment 3,145 (9,4) 15,9 (4,993) $ 26,695 (3,57) 21. Net Income per Share Diluted net income per share is not shown due to no dilutive stocks for the years ended March 31, 217 and 216. (Year ended March 31, 217) shares Yen U.S. Dollars Net Income attributable to Weighted average shareholders of the parent shares Net income per share Net income attributable to shareholders of the parent available to common shareholders 67, , $ 1.5 (Year ended March 31, 216) shares Yen Net Income attributable to shareholders of the parent Weighted average shares Net income per share Net income attributable to shareholders of the parent available to common shareholders 33, , JFE GROUP TODAY 217 JFE GROUP TODAY 217

16 2-2-3 Uchisaiwaicho, Chiyoda-ku, Tokyo 1-11, Japan Copyright 217 JFE Holdings, Inc. All Rights Reserved.