Change in the Depreciation Method for Property, Plant and Equipment From the Declining-Balance Method to the Straight-Line Method

「As a result, compared with the previous method, operating income for the current consolidated fiscal year increased by ¥7,464 million, while ordinary income and net income before income taxes and other adjustments each increased by ¥7,470 million.」

「Previously, our company and its domestic consolidated subsidiaries primarily used the declining-balance method to depreciate property, plant and equipment, excluding lease assets. However, buildings acquired on or after 1 April 1998, excluding building fixtures, and building fixtures and structures acquired on or after 1 April 2016 were depreciated using the straight-line method. From the current interim consolidated accounting period, we have changed to the straight-line method. Our group is making major capital investments under the 26 Medium-Term Management Plan, centered on strengthening its plants and mines, with the aim of establishing a long-term, stable production system. After reviewing the depreciation method for property, plant and equipment in connection with this initiative, we determined that changing from the previous declining-balance method to the straight-line method, which allocates costs evenly, would more appropriately reflect the expected long-term, stable operation of production facilities. As a result, compared with the previous method, operating income for the current interim consolidated accounting period increased by ¥3,032 million, while ordinary income and interim net income before income taxes and other adjustments each increased by ¥3,033 million.」