For the three months ended June 30, 2015

QUARTERLY REPORT

010_0774017502708.indd 2 2015/08/19 15:42:37

1

(1) Qualitative Information Relating to Consolidated Quarterly Operating Results

During the three-month period under review, the Company posted net sales of ¥33,273 million (up 34.0% year on year),

operating income of ¥1,738 million, and net income attributable to owners of the parent of ¥1,766 million.

Although orders received from the United States and Europe were lower than planned, those from Japan and China

exceeded the planned figures. Overall, orders received on a consolidated basis achieved progress as planned.

The details of orders by geographic region for the first quarter are as follows:

Makino Milling Machine Co., Ltd. and its Consolidated Subsidiaries in Japan

By virtue of a large increase in capital investments by customers, at a rate that exceeded our expectations, coupled with

subsidies from the government, the number of domestic orders received by Makino Milling Machine Co., Ltd. was the

highest since the financial crisis in 2008.

MAKINO ASIA PTE LTD

Orders received exceeded initial plans.

In China, our biggest market, demands of the auto industry for environmental measures and the improvement of

fuel efficiency continued. There were investments related to the development of new products for export in the IT

industry.

MAKINO INC.

Expansion of demand for machine tools in the United States, which had been continuing since 2010, has now leveled

off. A large project that we have been expecting to receive has also been delayed.

Although orders received during the first quarter were lower than expected, equipment utilization rates of

customers were still high and inquiries did not decrease. As such, the decline in orders is temporary, and the Company

does not expect this to lead to any significant changes.

MAKINO Europe GmbH

Orders received were lower than initial plans.

We will keep enhancing sales systems and structures for products especially for aircraft parts and endeavor to

achieve planned targets from the second quarter onward.

QUALITATIVE INFORMATION

010_0774017502708.indd 1 2015/08/19 15:42:37

2

(2) Qualitative Information on Consolidated Financial Position

Total assets on a consolidated basis at the end of the first quarter under review decreased by ¥264 million from the end

of fiscal 2015 to ¥245,192 million. Major changes included a decrease of ¥10,413 million in notes and accounts

receivable and an increase of ¥5,833 million in inventories.

Total liabilities decreased by ¥2,551 million from the end of fiscal 2015 to ¥125,069 million, primarily due to a

decrease of ¥1,835 million in notes and accounts payable.

Net assets increased by ¥2,287 million from the end of fiscal 2015 to ¥120,123 million, mainly due to an increase

of ¥1,373 million in foreign currency translation adjustments, and net income attributable to owners of the parent of

¥1,766 million.

(3) Qualitative Information on Consolidated Results Forecasts

The Company has not revised the consolidated results forecasts for the full year and the first half of the fiscal year under

review it announced previously (on April 30, 2015).

010_0774017502708.indd 2 2015/08/19 15:42:37

3

Millions of yenThousands of

dollars

March 31, 2015 June 30, 2015 June 30, 2015

ASSETS

Current assets:

Cash and time deposits ¥ 43,008 ¥ 45,286 $ 369,832

Marketable securities 1,005 1,004 8,199

Notes and accounts receivable 45,803 35,390 289,015

Inventories 57,053 62,887 513,572

Deferred income taxes 3,445 3,514 28,697

Other current assets 5,214 6,439 52,584

Allowance for doubtful accounts (1,030) (981) (8,011)

Total current assets 154,500 153,542 1,253,915

Investments and other assets:

Investment securities 24,669 24,512 200,179

Long-term loans receivable 526 518 4,230

Deferred income taxes 1,987 2,010 16,414

Net defined benefit assets 464 432 3,527

Other long-term assets 4,813 4,855 39,648

Allowance for doubtful accounts (420) (408) (3,331)

Total investments and other assets 32,041 31,922 260,694

Property, plant and equipment:

Land 16,767 16,985 138,709

Buildings and structures 64,315 65,972 538,766

Machinery and equipment 34,398 35,329 288,517

Lease assets 2,220 2,315 18,905

Construction in progress 1,851 1,104 9,015

119,553 121,706 993,924

Accumulated depreciation (60,638) (61,978) (506,149)

Total property, plant and equipment 58,914 59,728 487,774

Total assets ¥ 245,456 ¥ 245,192 $ 2,002,384

The accompanying notes are an integral part of these statements.

CONSOLIDATED BALANCE SHEETSMakino Milling Machine Co., Ltd. and Consolidated SubsidiariesMarch 31, 2015 and June 30, 2015

US$1=¥122.45

010_0774017502708.indd 3 2015/08/19 15:42:37

4

Millions of yenThousands of

dollars

March 31, 2015 June 30, 2015 June 30, 2015

LIABILITIES AND NET ASSETSCurrent liabilities:

Notes and accounts payable:

Trade ¥ 27,372 ¥ 25,537 $ 208,550 Other 8,909 7,940 64,842

Short-term loans 8,071 9,351 76,365 Current portion of long-term debt 3,908 2,977 24,311 Short-term lease obligations 283 290 2,368 Accrued expenses 9,862 9,626 78,611 Income taxes payable 1,706 852 6,957 Other current liabilities 3,862 4,073 33,262

Total current liabilities 63,976 60,650 495,304

Long-term liabilities:Long-term debt 50,219 50,933 415,949 Long-term lease obligations 1,197 1,217 9,938 Net defined benefit liabilities 3,367 3,372 27,537 Allowance for directors’ and

corporate auditors’ retirement benefits 52 54 440 Deferred income taxes 6,689 6,591 53,826 Other long-term liabilities 2,117 2,249 18,366

Total long-term liabilities 63,643 64,419 526,084

Net assets:Shareholders’ equity

Common stock, no par value 19,263 19,263 157,313 Authorized : 300,000,000 shares

Issued : 119,944,543 shares

as of March 31 and June 30, 2015

Capital surplus 32,595 32,602 266,247 Retained earnings 54,866 55,743 455,230 Treasury stock (4,794) (4,782) (39,052)8,712,596 and 8,689,861 shares

as of March 31 and June 30, 2015 respectively

Total shareholders’ equity 101,930 102,826 839,738 Accumulated other comprehensive income

Unrealized gains on available-for-sale

securities 13,811 13,800 112,699 Deferred losses on hedges (4) (3) (24)Foreign currency

translation adjustments 4,269 5,642 46,075 Remeasurements of defined benefit plans (2,814) (2,792) (22,801)

Total accumulated other comprehensive income 15,261 16,646 135,941 Non-controlling interests (Note 3) 644 650 5,308

Total net assets 117,836 120,123 980,996 Total liabilities and net assets ¥ 245,456 ¥ 245,192 $ 2,002,384

The accompanying notes are an integral part of these statements.

US$1=¥122.45

010_0774017502708.indd 4 2015/08/19 15:42:37

5

The accompanying notes are an integral part of these statements.

The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF INCOMEMakino Milling Machine Co., Ltd. and Consolidated SubsidiariesFor the three months ended June 30, 2014 and 2015

Millions of yenThousands of

dollars

Three months ended June 30, 2014

Three months ended June 30, 2015

Three months ended June 30, 2015

Net sales ¥ 24,828 ¥ 33,273 $ 271,727 Cost of sales 17,315 23,063 188,346

Gross profit 7,512 10,209 83,372

Selling, general and administrative expenses 7,433 8,470 69,171 Operating income 79 1,738 14,193

Other income (expenses):Interest and dividend income 136 409 3,340 Interest expense (155) (125) (1,020)Gain on sales of property, plant and equipment 33 15 122 Gain on sales of investment securities — 33 269 Loss on disposal of property, plant and equipment (1) (11) (89)Exchange gain (loss), net (67) 270 2,204 Other, net 76 112 914

Income before income taxes 101 2,443 19,951 Income taxes (Note 2) 35 670 5,471 Net income (Note 3) 65 1,773 14,479 Net income attributable to non-controlling interests (Note 3) 6 6 48 Net income attributable to owners of the parent (Note 3) ¥ 59 ¥ 1,766 $ 14,422

Yen Dollars

Per share of common stock:Net income attributable to owners of the parent (Note 3) - Basic ¥ 0.53 ¥ 15.88 $ 0.12 - Diluted 0.47 14.06 0.11

US$1=¥122.45

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEMakino Milling Machine Co., Ltd. and Consolidated SubsidiariesFor the three months ended June 30, 2014 and 2015

Millions of yenThousands of

dollars

Three months ended June 30, 2014

Three months ended June 30, 2015

Three months ended June 30, 2015

Net income (Note 3) ¥ 65 ¥ 1,773 $ 14,479 Other comprehensive income (loss):

Unrealized losses on available-for-sale securities (116) (9) (73)Deferred gains on hedges 9 0 0 Foreign currency translation adjustments (498) 1,373 11,212 Remeasurements of defined benefit plans 58 22 179

Other comprehensive income (loss) (546) 1,386 11,318 Total comprehensive income (loss) ¥ (481) ¥ 3,159 $ 25,798

Total comprehensive income (loss) attributable to:Owners of the parent (487) 3,152 25,741 Non-controlling interests (Note 3) 6 7 57

¥ (481) ¥ 3,159 $ 25,798

US$1=¥122.45

010_0774017502708.indd 5 2015/08/19 15:42:38

6

1. Basis of Presenting Financial StatementsThe accompanying consolidated financial statements of Makino Milling Machine Co., Ltd. (the “Company”) have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its related accounting regulations, and in conformity with accounting principles and practices generally accepted and applied in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards. In preparing the consolidated financial statements, certain reclassifications and rearrangements have been made to the financial statements issued domestically in Japan in order to present these statements in a form which is more familiar to the readers outside Japan. In addition, the notes to the consolidated financial statements include information which is not required under generally accepted accounting principles and practices in Japan but is presented herein as additional information. Amounts of less than one million yen have been omitted as permitted under generally accepted accounting principles and practices in Japan. As a result, the totals shown in the accompanying consolidated financial statements (both in yen and dollars) do not necessarily agree with the sum of individual amounts. The United States dollar amounts presented in the accompanying consolidated financial statements are included solely for convenience and are stated, as a matter of arithmetical computation only, at the rate of ¥122.45 = US$1, which was the prevailing exchange rate on June 30, 2015.

2. Income TaxesThe Company estimates an annual effective tax rate derived from projected annual income before taxes and calculates interim income taxes by applying the effective tax rate to the income before taxes at the end of each interim period.

3. Business Combinations and Non-Controlling InterestsEffective April 1, 2015, the Company adopted “Revised Accounting Standard for Business Combinations” (ASBJ Statement No. 21), “Revised Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22) and “Revised Accounting Standard for Business Divestitures” (ASBJ Statement No. 7). Under these standards, minority interests have been renamed non-controlling interests, and net income includes an amount attributable to non-controlling interests.

4. DividendsA summary of information regarding dividends is as follows:(1) Dividends paid in the three months ended June 30, 2014

Resolution Class of shares Amount of dividends Dividend per share

Funds fordividends Record date Effective date

General shareholders’ meeting (June 25, 2014)

Common stock ¥ 556 million ¥5.00 Retained earnings March 31, 2014 June 26, 2014

(2) Dividends in respect of the three months ended June 30, 2014 which become payable after the balance sheet date Such dividends were not declared.

(3) Dividends paid in the three months ended June 30, 2015

Resolution Class of shares Amount of dividends Dividend per share

Funds for dividends Record date Effective date

General shareholders’ meeting (June 24, 2015)

Common stock¥ 889 million ¥8.00 Retained

earnings March 31, 2015 June 25, 2015$ 7,260 thousand $0.06

(4) Dividends in respect of the three months ended June 30, 2015 which become payable after the balance sheet date Such dividends were not declared.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSMakino Milling Machine Co., Ltd. and Consolidated Subsidiaries

010_0774017502708.indd 6 2015/08/19 15:42:38

7

5. Cash Flows Consolidated statements of cash flows for the three months ended June 30, 2014 or 2015 have not been prepared.Depreciation and amortization for the three months ended June 30, 2014 and 2015 are as follows:

Three months ended June 30,

Millions of yenThousands of

dollars

2014 2015 2015

Depreciation and amortization ¥1,163 ¥1,310 $10,698

6. Segment InformationReportable segment informationThe Group’s reportable segments are defined as individual units where independent financial information is available and which are subject to regular review by the board of directors to evaluate their results and decide the allocation of management resources. The reportable segments are summarized as follows: Reportable segment I is a segment for which Makino Milling Machine Co., Ltd. is responsible. Its main areas are Japan, the Republic of Korea, China, Oceania, Russia, Norway, the United Kingdom, and all other areas not included in reportable segments II, III or IV. Reportable segment II is a segment for which MAKINO ASIA PTE LTD (Singapore) is responsible. Its main areas are China, ASEAN and India. Reportable segment III is a segment for which MAKINO INC. (Mason, Ohio, the United States of America) is responsible. It covers all countries in North and South America. Reportable segment IV is a segment for which MAKINO Europe GmbH (Hamburg, Germany) is responsible. It covers all countries in the European continent except Norway.

Three months ended June 30, 2014 (Millions of yen)

I II III IV Total

Net sales:

External customers ¥ 7,463 ¥ 5,917 ¥ 8,552 ¥ 2,894 ¥24,828

Intersegment 9,934 2,169 55 31 12,190

Total 17,398 8,087 8,607 2,925 37,018

Segment income (loss) ¥ 477 ¥ 427 ¥ (143) ¥ (73) ¥ 687

Three months ended June 30, 2015 (Millions of yen)

I II III IV Total

Net sales:

External customers ¥ 9,863 ¥ 9,098 ¥11,351 ¥2,959 ¥33,273

Intersegment 11,841 2,189 125 38 14,194

Total 21,705 11,288 11,476 2,998 47,468

Segment income (loss) ¥ 1,113 ¥ 823 ¥ 308 ¥ (90) ¥ 2,155

010_0774017502708.indd 7 2015/08/19 15:42:38

8

Three months ended June 30, 2015 (Thousands of dollars)

I II III IV Total

Net sales:

External customers $ 80,547 $74,299 $92,699 $24,164 $271,727

Intersegment 96,700 17,876 1,020 310 115,916

Total 177,256 92,184 93,719 24,483 387,652

Segment income (loss) $ 9,089 $ 6,721 $ 2,515 $ (734) $ 17,599

Three months ended June 30,

Millions of yen

Thousands of dollars

2014 2015 2015Segment income ¥ 687 ¥2,155 $17,599 Elimination (608) (416) (3,397)Consolidated operating income ¥ 79 ¥1,738 $14,193

010_0774017502708.indd 8 2015/08/19 15:42:38

9

010_0774017502708.indd 9 2015/08/19 15:42:39

10

010_0774017502708.indd 10 2015/08/19 15:42:39

3-19, Nakane 2-chome, Meguro-ku, Tokyo 152-8578, JapanPhone : +81-3-3717-1151Fax : +81-3-3725-2105URL : http://www.makino.co.jp/

010_0774017502708.indd 1 2015/08/19 15:42:37