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The following is a summary of key questions and answers at the press conference and earnings briefing held on October 29,2019.

Press Conference

What is the purpose of acquiring treasury stock through a tender offer?

The primary purpose is to return profits to shareholders.

The shareholding ratio of NGK Insulators and Fuji Electric will fall below 50%. Do you intend to pursue independence of management?

We requested both companies to sell approximately 2.0 to 2.3 million shares, respectively. If this results in the shareholding ratio of both companies falling below 50%, we would see this as helping to increase independence of management.

You have described changes in the business environment. Will you be able to respond to such changes smoothly?

In order to respond to changes in the business environment, we will develop and implement initiatives to further increase our competitiveness.

Investor and Analyst Briefing

How are you going to use the treasury stock that you will acquire from NGK Insulators and Fuji Electric?

While we plan to retire some of them, specific details have not been decided yet. We will make another announcement once specific details are decided.

At the beginning of the fiscal year, you explained that the decline in profit, which was due to the impact of some projects with a low gross margin, had been factored into the earnings forecast for the fiscal year ending March 2020. Was there any change in the revised earnings forecast?

The factors causing a decline in profit, which were explained at the beginning of the fiscal year, have been factored into the revised earnings forecast without any change.

What scale of operation is METAWATER Research Institute aiming to achieve? What will happen to the open innovation through WBC, etc. which has been progressed over the years?

While we are not assuming much growth in the scale of operation at the moment, we can see a future business environment where human resources in various fields will eventually be required. We want to create a compensation structure that goes beyond the current framework in order to attract human resources and widen our pool of talented personnel. We will continue to make open innovation through WBC, etc.

How did you decide the scale, timing, and other details of the treasury stock purchase?

We took cash reserves and the impact on our balance sheet into consideration when deciding the scale so that we could implement the process without making any borrowing. We decided the timing based on stock market trends and our share prices.

What policy do NGK Insulators and Fuji Electric have for their shares in METAWATER after this treasury stock acquisition?

We are not in a position to comment on that.

After discussing the next Medium-term Business Plan, are you going to move in the direction of expanding orders or enhancing profitability in order to increase operating profits?

We are aiming to enhance profitability while continuing to invest in research & development and workstyle reforms. To do so, we will strive to further improve our competitiveness and reliability.

Why do the number of shares tendered between NGK Insulators and Fuji Electric differ?

When we asked each company to sell 2.0 to 2.3 million shares, NGK Insulators decided to sell 2.0 million shares while Fuji Electric decided to sell 2.2 million shares.

Will many large-scale projects improve profitability?

We don't foresee a major difference in the break-even point even with many large-scale projects.

Do you expect business to change as natural disasters, such as typhoons, increase?

We may have to increase our budget for recovery efforts due to an increase in major disasters. However, it is difficult to generalize as this may affect the budget for measures against the aging of facilities.

How are sales of UV-LED irradiation equipment going?

Negotiations are continuing. Since customer interest is high, we want to link them to future sales.

Comments

I appreciate management's decision to acquire treasury stock and would like to see similar efforts in the future.