MODEC, INC. and Consolidated Subsidiaries

Consolidated Financial Statements
As of December 31, 2008 and 2007
Together with Independent Auditors’ Report

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETS
December 31, 2008 and 2007ASSETS

Thousands of Japanese yen
CURRENT ASSETS:
Cash and time deposits
Accounts receivable – trade (Note 17)
Inventories (Note 2)
Short-term loans receivable (Note 17)
Short-term lease receivable
Deferred tax assets (Note 12)
Other current assets (Note 17)
Less- Allowance for bad debts
Total current assets
PROPERTY AND EQUIPMENT:
Buildings and equipment
VesselConstruction in progressLess- Accumulated depreciation

INTANGIBLE ASSETS (Note 4 and 11)
INVESTMENTS AND OTHER ASSETS:
Investment securities (Note 3)Long-term loans receivable from unconsolidated
subsidiaries and affiliated companies (Note 17)
Deferred tax assets (Note 12)
Other investments
Less- Allowance for bad debts

Total assets

Thousands of
U.S. dollars

2008

2007

2008

¥ 45,082,380
21,079,791
577,075
28,718,593－
1,741,907
3,941,782(2,738)101,138,790¥ 21,499,164
23,226,559
2,809,596
31,234,141
2,094,043
883,932
3,088,228(9,726)84,825,937$ 495,193
231,544
6,339
315,450－
19,13343,298(30)
1,110,927

1,701,321
6,294,317
1,027,910(4,590,062)
4,433,486

1,615,800
7,634,537
986,030(5,498,718)
4,737,649

18,688
69,138
11,290(50,418)
48,698

10,242,245

13,134,794

112,503

11,692,457

15,517,686

128,432

10,984,287
2,886,635
740,057(2,400)26,301,036

12,242,618
2,602,770
675,098(2,400)31,035,772

120,653
31,7078,129(26)
288,895¥ 142,115,557¥ 133,734,152$ 1,561,023

LIABILITIES AND NET ASSETS

Thousands of Japanese yen
CURRENT LIABILITIES:
Accounts payable – trade
Short-term loans payable (Notes 5 and 6)
Current portion of long-term loans payable (Note 5)
Accrued expenses
Income taxes payable (Note 12)
Provision for product warranty
Accrued Employees’ Bonuses
Accrued Directors’ Bonuses
Advances Received
Deferred tax liabilities (Note 12)
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term loans payable (Note 5)
Severance and retirement benefits
For employees (Note 9)
For directors and corporate auditors
Deferred tax liabilities (Note 12)Long-term account payable
Other long-term liabilities
Total long-term liabilities

Thousands of
U.S. dollars

2008

2007

2008

¥ 33,903,480
27,601,631
8,457,590
2,387,180
476,065
931,840
52,301－
15,599,505
32,776
1,761,662
91,204,030¥ 25,899,016
19,152,988
13,565,629
3,653,132
2,342,699
1,220,433
63,80024,000－7,538
2,559,773
68,489,008$ 372,402
303,181
92,90026,221
5,229
10,236574－
171,348360
19,3501,001,801

6,962,150

14,092,281

76,474150,418－
883,753
412,150
1,824,847
10,233,318

141,479
265,684
1,903,334－
810,530
17,213,308

1,652
－
9,707
4,527
20,045
112,405

12,391,600
13,121,672
17,876,221(1,641)
43,387,852

12,391,600
13,121,672
17,421,014(922)
42,933,364

136,112
144,131
196,355(18)
476,580(27,676)(212,474)(5,976,040)

12,519(114,483)
314,349(304)(2,334)(65,642)(6,216,190)

212,385(68,280)

3,506,547
40,678,209¥ 142,115,557

4,886,087
48,031,836¥ 133,734,152

38,517446,817$ 1,561,023

CONTINGENT LIABILITIES (Note 13)
NET ASSETS :SHAREHOLDERS’ EQUITY (Note 7):
Common stock;
Authorized – 102,868,000 shares
Issued – 37,408,000 shares
Capital surplus
Retained earnings
Less- Treasury stock, at cost
Total shareholders’ equity
ACCUMULATED GAINS (LOSSES) FROMVALUATION AND TRANSLATIONADJUSTMENTS
Net unrealized holding gains (losses) on securities
Unrealized losses on hedging derivatives,net of tax
Foreign currency translation adjustments
Total accumulated gains (losses) fromvaluation and translation adjustments
MINORITY INTERESTS IN CONSOLIDATEDSUBSIDIARIES
Total net assets
Total liabilities and net assets

The accompanying notes are an integral part of these balance sheets.

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31, 2008 and 2007

Thousands of Japanese yen

Thousands of
U.S. dollars

2008

2007

2008

¥ 143,669,121
130,931,898
12,737,223¥ 144,040,901
127,132,993
16,907,908$ 1,578,088
1,438,180
139,908

10,763,395
1,973,828

9,947,984
6,959,924

118,227
21,6812,646,485(1,557,272)(1,997,700)

3,579,808(3,679,818)(652,061)

29,069(17,105)(21,943)

1,581,641－

1,877,634
781,003

17,373－(1,942)(152,523)(21)－(117,566)
553,646(2,064,544)(256,572)(567,073)－(1,292)
6,081

INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS

2,527,474

6,392,851

27,762

INCOME TAXES (Note 12):Current
Deferred

2,648,778(1,712,621)

3,814,187(1,964,093)

29,095(18,812)INCOME BEFORE MINORITY INTERESTS

1,591,317

4,542,757

17,479233,535

43,4292,565¥ 1,357,782¥ 4,499,328$ 14,914

SALES (Note 17)
COST OF SALES
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (Note 10)
Operating profit
OTHER INCOME (EXPENSES):Interest income and dividend income (Note 17)
Interest expense
Foreign exchange loss, net
Equity in earnings of affiliates and unconsolidated
subsidiaries
Gain on sales of investment securities
Loss on disposal of property, equipment andintangible assets
Impairment loss on property, equipment andintangible assets (Note 11)
Other, net
Total other income (expenses)

MINORITY INTERESTSNET INCOME

Japanese yen

U.S. dollars

Net income per share (Note 8)¥36.30¥120.28$0.40

Dividends per share (Note 8)¥17.50¥15.00$0.19

The accompanying notes are an integral part of these statements.

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the years ended December 31, 2008 and 2007
Thousands of Japanese yen
Accumulated gains (losses) from valuationand translation adjustments

Shareholders' equity

Balance at December
31, 2006

Commonstock

CapitalsurplusRetainedearnings

Treasurystock at
cost

Total
shareholders'equityNet
unrealized
holding
gains(losses) on
securities

12,391,600

13,121,672

13,319,511(713)

38,832,070

780,351

Unrealized
losses on
hedging
derivatives,
net of tax

Foreigncurrencytranslation
adjustments

Total
accumulated
gains (losses)
from valuationand translation
adjustments－

1,237,041

2,017,392

Minority
interests inconsolidated
subsidiaries

Total net
assets1,373,013

42,222,475

Net income

4,499,328

4,499,328－

4,499,328

Cash dividends paid

(514,356)(514,356)－(514,356)

133,666

133,666－

133,666

(209)

－

(209)

(767,832)(767,832)(114,483)(114,483)(922,692)(922,692)

Increase due tochanges inaccounting standardof subsidiaries
Purchases oftreasury stock(209)

Decrease due tochanges in fairmarket values ofavailable-for-salesecurities－

Unrealized losses on
hedging derivatives,
net of tax－

Adjustments fromtranslation offoreign currency
financial statements－

Increase in minority
interests inconsolidated
subsidiaries－－(17,135)－

OthersBalance at December
31, 2007(17,135)
12,391,600

13,121,672

17,421,014(922)

42,933,364(767,832)(114,483)(922,692)

12,519(114,483)

314,349

212,385

3,513,074

3,513,074(17,135)
4,886,087

48,031,836

Net income

1,357,782

1,357,782－

1,357,782

Cash dividends paid

(607,874)(607,874)－(607,874)

(719)

－

(719)

(40,195)(40,195)(97,991)(97,991)(6,290,389)(6,290,389)

Purchases oftreasury stock(719)

Decrease due tochanges in fairmarket values ofavailable-for-salesecurities－

Unrealized losses on
hedging derivatives,
net of tax－

Adjustments fromtranslation offoreign currency
financial statements－

Decrease inminority interests inconsolidated
subsidiaries－－(294,701)－

OthersBalance at December
31, 2008(294,701)

12,391,600

13,121,672

17,876,221(1,641)

43,387,852(40,195)(97,991)(6,290,389)(27,676)(212,474)(5,976,040)(6,216,190)(1,379,540)(1,379,540)(294,701)

3,506,547

40,678,209

Thousands of U.S. dollars
Accumulated gains (losses) from valuationand translation adjustments

Shareholders' equity

Commonstock

Balance at December
31, 2007

136,112

Capitalsurplus144,131

Retainedearnings

Treasurystock atcost

191,356

(10)

Total
shareholders'equity471,588Net
unrealized
holding
gains(losses) on
securities

Unrealized
losses on
hedging
derivatives,
net of tax

Foreigncurrencytranslation
adjustments

Total
accumulated
gains (losses)
fromvaluation andtranslation
adjustments

138(1,258)

3,453

2,333

Minority
interests inconsolidated
subsidiaries

53,670Total net
assets527,591

Net income

14,914

14,914－

14,914

Cash dividends
paid(6,677)(6,677)－(6,677)

(8)

－

(8)

(442)

(442)

(1,076)(1,076)(69,095)(69,095)

Purchases oftreasury stock(8)

Decrease due tochanges in fairmarket values ofavailable-for-salesecurities－

Unrealized losses
on hedging
derivatives, net oftax－

Adjustments fromtranslation offoreign currency
financialstatements－

Decrease inminority interests
in consolidated
subsidiaries－－(3,237)－

OthersBalance at December
31, 2008(3,237)

136,112

144,131

196,355(18)

476,580（442）(1,076)(69,095)(304)(2,334)(65,642)

The accompanying notes are an integral part of these statements.

(68,280)(15,153)(15,153)(3,237)38,517446,817

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWSFor the years ended December 31, 2008 and 2007

Thousands of Japanese yen
CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes
and minority interests to net cash provided byoperating activities:
Depreciation and amortization
Amortization of goodwill
Provision for (reversal of) allowance for bad debts
Provision for severance and retirement benefits for
employees
Provision for severance and retirement benefits for
directors and corporate auditors
Provision for (reversal of) product warrantyInterest income and dividend income
Interest expense
Foreign exchange loss
Equity in earnings of affiliates and unconsolidated
subsidiaries
Impairment loss on property, equipment andintangible assets
Gain on sales of investment securities
Losses on disposal of property, equipment andintangible assets
Changes in assets and liabilities:
Decrease (Increase) in– Accounts receivable - trade– Inventories
Increase (Decrease) in– Accounts payable - trade– Consumption tax payable– Long-term account payable
Other, net
Interest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities

Thousands of
U.S. dollars

2008

2007

2008

¥ 2,527,474¥ 6,392,851$ 27,762

1,619,061
26,486(6,988)

1,656,996
26,486
6,318

17,784
291
(77)

8,939

184,630

98－(88,695)(2,646,485)
1,557,272
1,250,114

76,013
661,398(3,579,808)
3,679,818
20,129－(974)(29,069)
17,105
13,731(1,581,641)(1,877,634)(17,373)－－

2,064,544(781,003)

－
－

1,942

152,523

21

13,730,163
1,985,827(9,312,149)(692,137)

150,815
21,813

12,840,329(24,989)
146,466
1,960,319
33,305,594
2,222,316(1,905,656)(4,827,577)¥ 28,794,677

8,215,369－－
132,715
7,027,059
3,756,458(3,720,049)(3,251,472)¥ 3,811,996

141,041(274)
1,609
21,532365,835
24,410(20,932)(53,027)$ 316,286

Thousands of Japanese yen

Thousands of
U.S. dollars

2008

2007

2008

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment andintangible assets
Purchases of investments in affiliates
Increase in short-term loans receivable
Disbursement of long-term loans receivableCollection of long-term loans receivable
Purchases of investment in subsidiaries
Proceeds from capital reduction in affiliates
Proceeds from sale of investment in subsidiaries
Proceeds from sale of investment securities
Other, net
Net cash used in investing activities¥(2,817,745)(9,596)(17,847,688)(2,927,509)
15,326,306(89,642)
1,677,648－－(271,865)(6,960,091)¥(3,091,453)(4,739,027)(2,165,522)(27,914,524)
24,553,357(942,733)－
3,538,960
909,490(35,929)(9,887,381)$(30,951)(105)(196,042)(32,156)
168,347(985)
18,428－－(2,987)(76,451)

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from minority interests payment
Cash dividends paid
Cash dividends paid to minority interests
Other, net
Net cash provided by (used in) financing activities

13,827,838
8,869,279(16,610,818)
12,572(607,428)－(718)
5,490,725(12,325,662)
18,135,929(5,663,979)－(514,844)(130,142)(210)(498,908)

151,888
97,422(182,456)
138(6,672)－(9)60,311(4,050,648)(809,511)(44,493)

23,274,663(7,383,804)

255,653

21,443,557

28,827,361

235,540¥44,718,220¥21,443,557$491,193

EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF
YEARThe accompanying notes are an integral part of these statements.

MODEC, Inc. and Consolidated Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting and Reporting Policies(a) Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of MODEC, Inc. (“the Company”) havebeen prepared in accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act and its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to application and disclosure requirements of International Financial
Reporting Standards.
The accounts of the Company’s overseas subsidiaries are based on their accounting records
maintained in conformity with generally accepted accounting principles prevailing in therespective countries of domicile. The accompanying consolidated financial statements havebeen restructured and translated into English with some expanded descriptions from theconsolidated financial statements of the Company prepared in accordance with Japanese
GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as
required by the Financial Instruments and Exchange Act. Some supplementary information
included in the statutory Japanese language consolidated financial statements, but not required
for fair presentation, is not presented in the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars are included solely for theconvenience of readers outside Japan, using the prevailing exchange rate at December 31,
2008, which was ¥91.04 to U.S. $1. The convenience translations should not be construed as
representations that the Japanese yen amounts have been, could have been, or could in the
future be, converted into U.S. dollars at this or any other rate of exchange.
(b) Principles of Consolidation and Equity Method
The accompanying consolidated financial statements include the accounts of the Company
and 21 of its subsidiaries for the year ended December 31, 2008 and 20 of its subsidiaries forthe year ended December 31, 2007. Material inter-company balances, transactions and profits
have been eliminated in consolidation.
Investments in significant unconsolidated subsidiaries and affiliates, which were 16
companies for the year ended December 31, 2008 and 14 companies for 2007 were accounted
for by using the equity method.

Another 2 subsidiaries and 1 affiliate for the year ended December 31, 2008 were notconsolidated or not applied equity method as they would not have a material effect on theaccompanying consolidated financial statements.
The consolidated financial statements are required to include the accounts of the Company
and significant companies that are controlled by the Company through substantial ownershipof more than 50% of the voting rights or through ownership of a high percentage of the voting
rights, even if it is equal to or less than 50%, and existence of certain conditions evidencing
control by the Company of decision-making bodies of such companies.
Investments in significant unconsolidated subsidiaries and affiliates, of which the Company
has ownership of 20% or more but less than or equal to 50%, and of 15% or more and lessthan 20% and can exercise significant influences over operating financial policies of investees,
have been accounted for by the equity method.
All consolidated subsidiaries have the same balance sheet date, December 31, corresponding
with that of the Company.
(c) Valuation of Assets and Liabilities of Subsidiaries
In the elimination of investments in subsidiaries, the assets and liabilities of the subsidiaries,
including the portion attributable to minority shareholders, were evaluated using the fair value
at the time the Company acquired the control of the respective subsidiaries.
(d) Goodwill
The excess of cost over the underlying investments in consolidated subsidiaries is recognized
as goodwill and is amortized using the straight-line method over their estimated useful lives,
except for goodwill recognized in consolidated subsidiaries located in the U.S.A., which isaccounted for in accordance with accounting principles generally accepted in U.S.A. (“U.S.
GAAP”).
The excess of cost over the underlying investments in affiliates accounted for under the equity
method is treated in the same manner.
(e) Securities
In accordance with the Japanese accounting standard for financial instruments, all companies
required to examine the intent of holding each security and classify those securities as (a)securities held for trading purposes (“trading securities”), (b) debt securities intended to beheld to maturity (“held-to-maturity debt securities”), (c) equity securities issued byunconsolidated subsidiaries and affiliated companies, and (d) all other securities that are notclassified in any of the above categories (“available-for-sale securities”).
Based on the examination of the intent of holding, the Company classifies its securities as
equity securities issued by unconsolidated subsidiaries and affiliated companies and availablefor-sale securities. Available-for-sale securities maturing within one year from the balance
sheet date are included in current assets. Other securities are included in investments
securities. The Company does not have trading securities or held-to-maturity debt securities.
Equity securities issued by unconsolidated subsidiaries and affiliated companies that are notaccounted for by equity method are stated at moving-average cost. Available-for-salesecurities with available fair market values are stated at fair market value as of balance sheet
dates. Unrealized gains and losses on these securities are reported, net of applicable income
taxes, as a separate component of shareholders’ equity. Realized gains and losses on sale ofsuch securities are computed using moving-average cost. Available-for-sale securities without
available fair market values are stated at moving-average cost.
(f) Inventories
Both raw materials and costs of uncompleted contracts are stated at cost, determined on an
individual project basis.
(g) Property and Equipment
Property and equipment are carried at cost. Depreciation of Floating Production Storage &Offloading Systems (“FPSOs”) and Floating Storage & Offloading Systems(“FSOs”), ownedby the consolidated overseas subsidiaries are calculated using the straight-line method basedon their lease term or their economic useful lives.
Depreciation of property and equipment other than FPSOs and FSOs are calculated as follows.
The Company depreciates property and equipment using the declining-balance method basedon their useful lives and residual values prescribed by the Japanese corporation tax laws andregulations, except for buildings acquired after March 31, 1998, which are depreciated using
the straight-line method. Consolidated overseas subsidiaries depreciate property andequipment using the straight-line method based on their useful lives.
(Additional Information)
Pursuant to the revision of the Japanese Corporate Tax Law, as for the property and equipment
acquired before April 1, 2007 and depreciated to their final limit, the residual values of them

depreciated using the straight-line method in the following five fiscal years. This change has
no material impact on the financial statements.
(h) Intangible Assets
The Company amortizes software costs used internally using the straight-line method over theestimated useful life (5 years), and amortizes intangible assets using the straight-line method
based on useful lives and residual values prescribed by the Japanese corporation tax laws andregulations.
Intangible assets of consolidated subsidiaries located in the U.S.A., are accounted for inaccordance with U.S. GAAP.
Mining rights of consolidated overseas subsidiaries are amortized using the production
method based on forecasted production amounts.
(i) Allowance for Bad Debts
The Company provides for a sufficient allowance for bad debts to cover probable losses oncollection by estimating uncollectable amounts individually in addition to amounts forpossible losses based on actual losses on collection in the past.
(j) Accrued Employees’ Bonuses
The Company accrues employees’ bonuses based on the estimated amounts to be paid in thesubsequent period.
(k) Accrued Directors’ Bonuses
The Company accrues directors’ bonuses based on the estimated amounts to be paid in thesubsequent period.

(l) Provision for Product Warranty
Provision for product warranty is provided based on the estimated amounts for covering theprobable product warranties.
(m) Severance and Retirement Benefits for Employees
The Company and some overseas consolidated subsidiaries have unfunded lump-sum
severance and retirement payment plans for employees. Under these plans, employees whose
employment is terminated or who retire are entitled to benefits which are, in general,determined on the basis of length of service and current basic salary at the time of termination
or retirement. If the termination is involuntary, the employees are generally entitled to larger
benefits than in the case of voluntary termination or retirement.
In accordance with the Japanese accounting standard for employees’ severance and pension
benefits, a “simpler method” can be adopted to calculate severance and retirements benefits
for employees if the number of employees is less than 300. Therefore the Company adopts the“simpler method”, and records severance and retirement benefits for employees at the amounts
payable if all employees voluntarily terminated their employment at the balance sheet date.
The Company and some overseas consolidated subsidiaries also adopt defined contribution
pension plans.
(n) Severance and Retirement Benefits for Directors and Corporate Auditors
Subject to shareholders’ approval, directors and corporate auditors customarily receive lumpsum payments upon retirement under an unfunded retirement allowances plan.
The Company records severance and retirement benefits for directors and corporate auditors at
the amounts payable if all directors and corporate auditors voluntarily terminated theiremployment at the balance sheet date.
(Additional Information)
In the year ended December 31, 2008, the company abolished the severance and retirement
benefits plan to directors and corporate auditors in accordance with a resolution of the generalshareholders’ meeting held on March 28, 2008. As a result, the amount to be paid was fixed
and the provision was reclassified as long-term account payable at December 31, 2008.
(o) Translation of Foreign Currency Accounts
Foreign currency transactions are translated into Japanese yen using the exchange rate ineffect at the time of each transaction or at the applicable exchange rates under forward
exchange contracts.
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the
year-end exchange rate, and the resulting gains or losses are included in other income(expenses) in the statement of income.
Financial statements of consolidated overseas subsidiaries are translated into Japanese yen
using the exchange rates prevailing at the end of each fiscal year, except the exchange rates in
effect at the date of transactions are used for shareholders’ equity. The Company records
foreign currency translation adjustments in the shareholders’ equity.

(p) Finance Lease Transactions without Transfer of Ownership
Finance lease transactions, other than those that transfer ownership of the leased property to
the lessee, are accounted for in the same way as operating lease transactions.
(q) Derivative Transactions and Hedge Accounting
Derivative financial instruments of the Company are stated at fair value and gains or losses arerecognized for changes in the fair value unless derivative financial instruments are used forhedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, theCompany defers recognition of gains or losses resulting from changes in fair value ofderivative financial instruments until the related losses or gains on the hedged items arerecognized.
However, in cases where forward foreign exchange contracts are used as hedges and meetcertain hedging criteria, forward foreign exchange contracts and hedged items are accounted
for in the following manner.
1) If a forward foreign exchange contract is executed to hedge existing foreign currency
receivables or payables,a) the difference, if any, between the Japanese yen amount of the hedged foreign
currency receivable or payable translated using the spot rate at the inception date of
the contract and the book value of the receivable or payable is recognized in theincome statement in the period which includes the inception date, andb) the discount or premium on the contract (that is, the difference between the Japanese
yen amount of the contract translated using the contracted forward rate and thattranslated using the spot rate at the inception date of the contract) is recognized over
the term of the contract.
2) If a forward foreign exchange contract is executed to hedge a future transaction
denominated in a foreign currency, the future transaction will be recorded using thecontracted forward rate, and no gains or losses on the forward foreign exchange contract
are recognized.
Also, if interest rate swap contracts are used as hedges and meet certain hedging criteria, thenet amount to be paid or received under the interest rate swap contract is added to or deductedfrom the interest on the assets or liabilities for which the swap contract was executed.
Some consolidated overseas subsidiaries adopt hedge accounting in accordance with
U.S.GAAP.

(r) Revenue Recognition
The Company recognizes revenues on contracts by the completed contract method, except for
those items whose contract amount is over 1 billion yen and whose term of construction isover one year in which cases the percentage of completion method is used.
Consolidated subsidiary located in the U.S.A. recognizes revenues on all contracts by thepercentage of completion method.
(s) Income Taxes
The Company provides income taxes at the amounts currently payable based on taxable
income for tax purposes that may be different from income for the accounting purposes. The
Company recognizes tax effects of temporary differences between the carrying amounts ofassets and liabilities for tax and financial reporting purposes. The asset and liability approachis used to recognize deferred tax assets and liabilities for the expected future tax consequencesof temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
(t) Cash Flow Statement
In preparing the consolidated statements of cash flows, cash on hand, readily available
deposits and short-term highly liquid investments with maturities not exceeding three months
at the time of purchase are considered to be cash and cash equivalents.
Reconciliations of cash and time deposits shown in the consolidated balance sheets and cash
and cash equivalents in the consolidated statements of cash flows as of December 31, 2008
and 2007 were as follows:
Thousands ofJapanese Yen

Thousands of
U.S. dollars

2008

2007

2008

Cash and time deposits
Less : Time deposits with maturities
exceeding three months¥45,082,380¥21,499,164$495,193¥(364,160)¥(55,607)$(4,000)

Cash and cash equivalents¥44,718,220¥21,443,557$491,193(u) Presentation of Current Liabilities
For the year ended December 31, 2008, the advances received which was previously
included in other current liabilities is now separately presented in current liabilities due tothe significant increase in balance to total liabilities and net assets.

2. Inventories
Inventories as of December 31, 2008 and 2007 consisted of the following:Thousands of
U.S. dollars

Thousands ofJapanese Yen
Raw materials
Costs of uncompleted contracts

2008¥53,745
523,330

2007¥53,745
2,755,851

2008
$590
5,749

¥577,075¥2,809,596$6,3393. Marketable Securities and Investment Securities(a) The following tables summarize acquisition costs, book values (fair values) of securities withavailable fair values as of December 31, 2008 and 2007
2008：
Available-for-sale securities:
Securities with book values exceedingacquisition costs:
Equity securities
Sub Total
Securities with book values notexceeding acquisition costs:
Equity securities
Sub Total
Total

2007：
Available-for-sale securities:
Securities with book values exceedingacquisition costs:
Equity securities
Sub Total
Securities with book values notexceeding acquisition costs:
Equity securities
Sub Total
Total

2008：
Available-for-sale securities:
Securities with book values exceedingacquisition costs:
Equity securities
Sub Total
Securities with book values notexceeding acquisition costs:
Equity securities
Sub Total
Total

Thousands of Japanese Yen
Acquisition cost
Book value
Differences

－
－

－
－

－
－

¥180,972
180,972¥180,972¥134,063
134,063¥134,063¥(46,909)(46,909)¥(46,909)

Thousands of Japanese Yen
Acquisition cost
Book value
Differences¥49,995
49,995¥89,991
89,991¥39,996
39,996130,977
130,977¥180,972

112,200
112,200¥202,191(18,777)(18,777)¥21,219

Thousands of U.S. dollars
Acquisition cost
Book value
Differences

－
－

－
－

－
－

$1,988
1,988$1,988$1,473
1,473$1,473$(515)(515)$(515)

(b) Proceeds from the sales of available-for-sale securities and realized gains on the sales ofavailable-for-sale securities for the years ended December 31, 2008 and 2007, were as follows:
Thousands of Japanese Yen
2008
2007
Proceeds from sales of available-for-salesecurities:
Realized gains on sales of available-forsale securities:

Thousands of
U.S. dollars
2008－¥ 933,180－－

781,003－(c) The following table summarizes book values of securities with no available fair values as ofDecember 31, 2008 and 2007

Thousands of Japanese Yen
2008
2007
Available-for-sale securities:
Unlisted equity securities
Investments in unconsolidated
subsidiaries and affiliates:
Total

Thousands of
U.S. dollars
2008¥ 200,111¥ 200,111$ 2,199

11,358,282

15,115,383

124,761¥11,558,393¥15,315,494$126,960

4. Goodwill
Goodwill included in intangible assets as of December 31, 2008 and 2007 were ¥6,293,626
thousand ($69,130 thousand) and ¥7,901,590 thousand, respectively.
5. Loans Payable
Short-term loans payable represent notes payable to banks due generally in twelve months andbearing an average interest rate of 2.9% and 5.8% as of December 31, 2008 and 2007, respectively.
Long-term loans payable as of December 31, 2008 and 2007 are summarized below:
Thousands ofJapanese Yen
Loans from banks and others due through 2017
Less: Current portion included in current
liabilities, at average rate of 4.7%
Loans from banks and others,
at average rate of 2.7% due through 2017
(Excluding current portion)

Thousands of
U.S. dollars

2008¥15,419,740

2007¥27,657,910

2008$169,374(8,457,590)(13,565,629)(92,900)¥6,962,150¥14,092,281$76,474

The aggregate annual maturities of long-term loans payable are summarized below:
Thousands ofJapanese Yen

Thousands of
U.S. dollars

2009¥8,457,590$92,9002010

1,051,804

11,5532011

1,066,706

11,717201220132014 and thereafter

1,082,615
1,463,758
2,297,267

11,892
16,07825,234¥15,419,740$169,374

Year ended December 31,

6. Lending Commitment
The Company has a commitment line agreement with a syndicate of five financial institutions forthe purpose of efficient providing operating funds. The commitment line amount is $150,000
thousand, and the amount of loans as of December 31, 2008 is $23,700 thousand.
7. Net Assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be
designated as common stock. However, a company may, by a resolution of the Board of Directors,
designate an amount not exceeding one-half of the price of the new shares as additional paid-in
capital, which is included in capital surplus.
Under The Japanese Corporate Law (“the Law”), in cases where a dividend distribution of surplus
is made, the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25% ofcommon stock over the total of additional paid-in-capital and legal earnings reserve must be set
aside as additional paid-in-capital or legal earnings reserve. Legal earnings reserve is included inretained earnings in the accompanying consolidated balance sheets.
Under the Law, all additional paid-in-capital and all legal earnings reserve may be transferred toother capital surplus and retained earnings, respectively, which are potentially available fordividends.
The maximum amount that the Company can distribute as dividends is calculated based on theunconsolidated financial statements of the Company in accordance with the Law.
At the annual shareholders’ meeting held on March 27, 2009, the shareholders approved cash
dividends amounting to ￥327,315 thousand ($3,595 thousand). Such appropriations have notbeen accrued in the consolidated financial statements as of December 31, 2008. Suchappropriations are recognized in the period in which they are approved by the shareholders.
8. Per Share Data
Net income per share is calculated based on the weighted average number of shares of common
stock outstanding during the fiscal year.
Diluted net income per share reflects the effect of potential dilution that could occur if securities orother contracts to issue common stock were exercised or converted into common stock. There isno outstanding potential common stock for the year ended December 31, 2008 and 2007.
Cash dividends per share shown for each fiscal year in the accompanying consolidated statements
of income represent dividends declared as applicable to the respective years.

9. Severance and Retirement Benefits for Employees
The severance and retirement benefits for employees included in the liability section of theconsolidated balance sheets as of December 31, 2008 and 2007 consisted of the following:Thousands of Japanese Yen

Projected benefit obligation
Severance and retirement benefits for
employees

Thousands of
U.S. dollars

2008

2007

2008

¥150,418¥141,479$1,652¥150,418¥141,479$1,652

Severance and retirement benefit expenses included in the consolidated statements of income forthe years ended December 31, 2008 and 2007 consisted of the following:Thousands of Japanese Yen

Thousands of
U.S. dollars

2008

2007

2008

Service costs – benefits earned during the year

¥39,308¥29,489$432

Others29,351
68,65928,236¥57,725

322$754

Severance and retirement benefit expenses
10. Research and Development Expenses

Research and development expenses included in selling, general and administration expenses were¥521,666 thousand ($5,730 thousand) and ¥268,004 thousand for the years ended December 31,
2008 and 2007 respectively.

11. Impairment loss on property, equipment and intangible assets
Impairment loss on property, equipment and intangible assets for the year ended December31,
2007 consisted of the following.
Location
Use
Type of asset
LANGSA field
Mining right
Intangible asset
North of SMATRA Island
Indonesia
The business assets are grouped by each company and idle assets are by individual assets.
FPSO/FSOs and Mining Rights which are considered smallest independent cash generating units,
are grouped by individual assets.
MODEC PRODUCTION (LANGSA) PTE, LTD. (“MPL”), a consolidated overseas subsidiary,owns a share of the mining rights of the LANGSA field. In 2007, MEDCO MOECO LANGSA
LTD., the operator of the field, drilled new oil wells in the field aiming for higher productionlevels. However, the resulting production has not met expectations, and as the outlook of future
production is unclear, MPL reduced the carrying amount of the mining rights to the recoverable
amount and recognized the reduced value as impairment loss of ¥2,064,544 thousand ($18,085
thousand) for the year ended December 31, 2007.
MPL measured the value in use as the recoverable amount, calculated by discounting future cash
flows at the interest rate of 5.33%
12. Income Taxes
The normal statutory income tax rate in Japan arising out of the aggregation of corporate,
enterprise and inhabitants taxes are 41% for the years ended December 31, 2008 and 2007.
The following table summarizes the significant differences between the statutory tax rate and theCompany and its consolidated subsidiaries’ effective tax rate for financial statement purposes forthe year ended December 31, 2007.
For fiscal 2008, a reconciliation is not required to be disclosed because the difference between therates is less than 5%.

Statutory tax rate
Non-deductible expenses for tax purposes
Offset of dividends from overseas consolidated subsidiaries
Non-deductible income excluded from accounting purposes
Deductible expenses excluded from accounting purposes
Income of foreign subsidiaries taxed at lower thanJapanese normal rate
Credit for foreign taxes
Tax loss carry forward
Equity in earning of affiliates and unconsolidated subsidiaries
Non-deductible withholding tax (foreign tax)
Income taxes for prior periods
Others
Effective tax rate

2007
41.0%
0.3
0.4
(0.3)
(4.4)
(0.6)
(0.6)
0.9
(12.0)
3.0
1.0
0.2
28.9%

Significant components of deferred tax assets and liabilities as of December 31, 2008 and 2007
were as follows:
Thousands ofJapanese Yen
2007
2008
Deferred tax assets:
Current assets:
Enterprise tax payable
Accrued employees’ bonuses
Provision for product warranty
Other Provisions
Tax loss carry forward
Undistributed profits in a tax haven
Foreign exchange losses
Loss on deferred hedge
Others
Sub total
Valuation Allowance
Offset to deferred tax liabilities (short-term)
Total
Fixed assets:
Unrealized inter-company profit on fixed
assetsTax loss carry forward
Loss on valuation of golf membership
Severance and retirement benefits for
employees
Severance and retirement benefits for
directors and corporate auditors
Long term account payable
Temporary difference for investment in
subsidiaries
Net unrealized holding losses on securities
Depreciation
Others
Sub total
Valuation allowance
Offset to deferred tax liabilities (long-term)
Total
Total deferred tax assets

Thousands of
U.S. dollars
2008¥ 29,691
21,443328,902
198,398
82,048135,435
901,838
91,503
250,617
2,039,875(135,435)(162,533)
1,741,907¥ 142,324
153,905359,245－－
31,99996,171－
170,132
953,776－(69,844)883,932

$ 326
236
3,613
2,179
901
1,488
9,906
1,005
2,753
22,406(1,488)(1,785)
19,1332,262,173
758,317
18,662

1,807,852
274,530
18,662

24,8488,330
205

61,67158,006677－
168,982

108,930－－
1,856

882,023
19,233－18,924
4,189,985(776,979)(526,371)
2,886,635¥ 4,628,542

882,023－
53,0048,558
3,211,565(293,192)(315,603)
2,602,770¥ 3,486,702

9,688
211
－
208
46,024(8,535)(5,782)
31,707$ 50,841

Thousands ofJapanese Yen
2007
2008
Deferred tax liabilities:
Current liabilities:
Reduction of tax rate in foreign subsidiaries
Others
Sub total
Offset to deferred tax assets (short-term)
TotalLong-term liabilities:
Finance lease
Depreciation
Net unrealized holding gains on securities
Difference on percentage-of-completion
methodOthers
Sub total
Offset to deferred tax assets (long-term)
Total
Total deferred tax liabilities
Net deferred tax assets

Thousands of
U.S. dollars
2008¥ (24,652)(170,657)(195,309)
162,533(32,776)¥ (7,538)(69,844)(77,382)
69,844(7,538)$ (270)(1,875)(2,145)
1,785
(360)

－
(1,232,284)－(308,697)(1,677,718)(8,700)－(13,536)－(177,840)－(1,410,124)
526,371(883,753)(916,529)(218,656)(5,165)(2,218,937)
315,603(1,903,334)(1,910,872)(1,953)－(15,489)
5,782(9,707)(10,067)¥ 3,712,013¥ 1,575,830$ 40,773

13. Contingent Liabilities and Commitments
As of December 31, 2008 and 2007, the Company was contingently liable for the following:Thousands ofJapanese Yen
Guarantees of bank loans and otherindebtedness for unconsolidated subsidiaries
and affiliates
Guarantees of interest rate swap contracts forunconsolidated subsidiaries and affiliates

Thousands of
U.S. dollars

2008

2007

2008

¥47,522,358¥15,427,317$521,994¥(9,617,667)(1,293,596)$(105,642)

The amounts of guarantees of interest rate swap contracts for unconsolidated subsidiaries andaffiliates represent fair values of the swap contracts.
14. Leases(a) As Lesseei)Information on a “as if capitalized” basis of leased property such as acquisition cost,
accumulated depreciation, obligations under finance leases and depreciation equivalent offinance leases that do not transfer ownership of the leased property to the lessee for theyears ended December 31, 2008 and 2007, were as follows:2008:

Thousands of Japanese Yen
Buildings
andequipment
Total

Acquisition cost
Accumulated depreciation¥3,100(3,100)－Net leased property

2007:

Thousands of Japanese Yen
Buildings
andequipment
Total

Acquisition cost
Accumulated depreciation¥3,100(2,893)¥ 207

Net leased property

2008:¥3,100(3,100)－¥3,100(2,893)¥ 207

Thousands of U.S. dollars
Buildings
andTotal
equipment

Acquisition cost
Accumulated depreciation

$34
(34)
－

Net leased property

$34
(34)
－

ii) Obligations under finance leases:
Thousands of
U.S. dollars

Thousands ofJapanese Yen
2007

2008
－
－
－

Due within one year
Due after one year
Total

¥ 236
－
¥236

2008
－
－
－

iii) Annual lease payments and depreciation equivalent and interest expense equivalent:Thousands ofJapanese Yen
Annual lease payments
Depreciation equivalentInterest expense equivalentThousands of
U.S. dollars

2008

2007

2008

¥236
207
2

¥707
620
30

$3
2
0

Depreciation equivalent is computed by a straight-line method over the lease period withno residual value. The difference between total lease payments and acquisition costs
under finance leases is recognized as interest expense equivalent, which is allocated to
relevant accounting period based on the interest method.

(b) As Lessor
There were no future lease receivables from operating lease transactions as of December 31,
2008 and 2007.

15. Derivative Transactions of the Company and its Consolidated Subsidiaries
The Company and its consolidated subsidiaries utilize forward foreign currency contracts in orderto hedge currency fluctuation risks arising from export of products in addition to hedging throughincreases in overseas production and overseas procurement of materials.
The Company and its consolidated subsidiaries also utilize interest rate swaps as derivativetransactions in order to hedge interest rate risks of bonds and loans payable.
As the derivative transactions are made solely with leading financial institutions, the Company andits consolidated subsidiaries do not expect any credit risks.
The Company follows its internal regulations for derivatives, which stipulates the policy,
objective, scope, organization, procedures, and financial institutions to deal with, and has areporting system for derivative transactions reflecting proper internal control functions.
The following summarizes hedging derivative financial instruments used and items hedged:
Hedging instruments:
Foreign exchange forward contracts
Currency swap contracts
Interest rate swap contracts

Hedged items:
Foreign currency receivables and payables
including future transactions
Foreign currency receivables and payables
Foreign currency bonds and loans payable

The Company evaluates hedge effectiveness on a semi-annual basis by comparing the cumulativechanges in cash flows from or the changes in fair value of hedged items with the corresponding
changes in the hedging derivative instruments.
Also, if interest rate swap contracts are used as hedges and meet certain hedging criteria, the net
amount to be paid or received under the interest rate swap contract is added to or deducted fromthe interest on the assets or liabilities for which the swap contract was executed.
Some consolidated overseas subsidiaries adopt hedge accounting in accordance with U.S.GAAP.

The following tables summarize market value information as of December 31, 2008 and 2007 ofderivative transactions for which hedge accounting has not been applied:Thousands of Japanese Yen
Notional amountDue after one
Market value
Total
year

2008:
Currency related derivatives:
Foreign exchange forward contracts:
To buy U.S. dollars
Euro
Singapore dollars
Norwegian krone
To sell U.S. dollars
Foreign currency option contracts:
Purchased call option
Written put option¥4,212,272
12,288
16,216,048
1,078,560––¥3,723,607–¥4,182,309
11,704
16,116,916
1,067,344¥ (29,963)(584)(99,132)(11,216)¥10,105,570–¥9,434,991¥670,579¥529,684¥3,802,386
1,901,193¥219,071
109,535¥54,298(304,164)¥54,298(304,164)¥(249,866)

Thousands of Japanese Yen
Notional amountDue after one
Market value
year
Total

2007:

Unrealized
gain (loss)

Unrealized
gain (loss)

Currency related derivatives:
Foreign exchange forward contracts:
To sell U.S. dollars
Foreign currency option contracts:
Purchased call option
Written put option¥15,666,712–¥16,130,746¥(464,034)¥(464,034)¥2,301,168
1,179,903¥230,117
115,058¥41,058(46,321)¥41,058(46,321)¥(5,263)

2008:

Thousands of U.S. dollars
Notional amountDue after one
Market value
Total
year

Currency related derivatives:
Foreign exchange forward contracts:
To buy U.S. dollars
Euro
Singapore dollars
Norwegian krone$46,268
135
178,120
11,847––$40,901–$45,939129
177,031
11,724$ (329)(6)(1,089)(123)$111,001–$103,636$7,365$5,818$41,766
20,883$2,406
1,203$596(3,341)$596(3,341)$(2,745)

To sell U.S. dollars
Foreign currency option contracts:
Purchased call option
Written put option

Unrealized
gain (loss)

16. Segment Information
Industry segment information for the years ended December 31, 2008 and 2007 is not disclosed
because the Company and its consolidated subsidiaries operate a single business relevant tofloating production facilities.
Geographical segment information by area for the years ended December 31, 2008 and 2007 is asfollows:
Thousands of Japanese Yen

Japan

Asia

CentralandSouth
America

Sales:
Outside customers
Inter segment¥35,322,213
2,858,868¥ 8,604,579
999,219¥ 1,058,323–¥88,505,734 ¥10,178,272
6,435,896–¥143,669,121–
10,293,983 ¥ (10,293,983)

Total

38,181,081

9,603,798

1,058,323

94,941,630 10,178,272

153,963,104(10,293,983)

143,669,121

Operating expenses

36,534,553

9,501,291

1,181,518

95,229,998

9,915,954

152,363,314(10,668,021)

141,695,293

Operating profit (losses)¥1,646,528

102,507(123,195)(288,368)

262,318

1,599,790

374,038

1,973,828

Assets¥88,966,901¥7,941,679¥2,683,125¥63,559,575 ¥1,374,122¥164,525,402¥ (22,409,845)¥142,115,557

Japan

Asia

CentralandSouth
America

North
America

Others

Total

Corporate
andElimination

Consolidated

Sales:
Outside customers
Inter segment¥55,699,571
1,800,180¥ 8,582,684
398,781¥ 1,746,752–¥77,199,193
8,055,126

812,701–¥144,040,901
10,254,087–¥ (10,254,087)¥ 144,040,901
–

Total

57,499,751

8,981,465

1,746,752

85,254,319

812,701

154,294,988(10,254,087)

144,040,901

Operating expenses

52,683,212

8,781,470

1,510,701

84,003,490

687,210

147,666,083(10,585,106)

137,080,977

Operating profit¥4,816,539

199,995

236,051

1,250,829

125,491

6,628,905

331,019

6,959,924

Assets¥83,305,186¥10,703,924¥6,284,134¥42,932,423 ¥16,308,200¥159,533,868¥ (25,799,716)¥133,734,152

Japan

Asia

CentralandSouth
America

Sales:
Outside customers
Inter segment$387,986
31,402$94,514
10,976

Total

419,388

Operating expenses

401,302

Operating profit (losses)

2008:

North
America

Others

Total

Corporate
andElimination

Consolidated¥ 143,669,121–

Thousands of Japanese Yen

2007:

Thousands of U.S. dollars

2008:

AssetsNorth
America

Others

Total

Corporate
andElimination$11,625–$972,163
70,693$111,800–$1,578,088
113,071–$(113,071)$1,578,088–

105,490

11,625

1,042,856

111,800

1,691,159(113,071)

1,578,088

104,364

12,9781,046,024

108,919

1,673,587(117,180)

1,556,407

18,086

1,126(1,353)(3,168)2,881

17,572

4,109

21,681$977,229$87,233$29,472$698,150$15,093$1,807,177$(246,154)$1,561,023

Consolidated

The overseas sales of the Company and its consolidated subsidiaries for the years ended December
31, 2008 and 2007 consisted of the following:Thousands of Japanese Yen

2008:
Overseas sales

Asia

Oceania

North
America

Other

Total

¥19,923,452¥28,879,845¥25,580,699¥57,267,836¥11,668,537¥11,397¥143,331,766

－

－

－

－

－

－

¥143,669,121

13.9%

20.1%

17.8%

39.9%

8.1%

0.0%

99.8%

Consolidated sales
The ratio ofconsolidated sales

AfricaCentralandSouth America

Thousands of Japanese Yen

2007:
Overseas sales

North
America

Other

Total

¥43,003,318¥37,451,000¥496,405¥143,828,361

－

－

－

－

¥144,040,901

27.2%

29.9%

26.0%

0.3%

99.9%

Asia

AfricaOceania¥19,851,863¥3,847,376¥39,178,399

－

－

13.8%

2.7%

Consolidated sales
The ratio ofconsolidated sales

CentralandSouth America

Thousands of U.S. dollars
CentralandSouth America

2008:
Overseas net sales

Asia

AfricaOceania$218,842$317,222$280,983$629,040

Consolidated sales

－

－

－

－

13.9%

20.1%

17.8%

39.9%

The ratio ofconsolidated sales

North
America$128,169

8.1%

Other

Total

$126

$1,574,382－$1,578,088

0.0%

99.8%

17. Related Party Transactions
Significant related party transactions and corresponding balances between the Company andunconsolidated subsidiaries and affiliates for the year ended December 31, 2008 and 2007 are as
follows:
Thousands ofJapanese Yen
Related party
MODEC FPSO B.V.
MODEC Venture 10 B.V.
MODEC Venture 11 B.V.
MODEC Venture 11 B.V.
MODEC Venture 11 B.V.
Rong Doi MV12 PTE LTD.
Espadarte MV14 B.V.
Espadarte MV14 B.V.
Espadarte MV14 B.V.
Espadarte MV14 B.V.
PRA-1 MV15 B.V.
PRA-1 MV15 B.V.
PRA-1 MV15 B.V.
PRA-1 MV15 B.V.
Stybarrow MV16 B.V.
Stybarrow MV16 B.V.
Stybarrow MV16 B.V.
Stybarrow MV16 B.V.
IMC-MODEC JV 1 INC.
Rang Dong MV17 B.V.
Rang Dong MV17 B.V.
Rang Dong MV17 B.V.
Rang Dong MV17 B.V.
Opportunity MV18 B.V.
Opportunity MV18 B.V.
Opportunity MV18 B.V.
Opportunity MV18 B.V.
Opportunity MV18 B.V.
Song Doc MV19 B.V.
Song Doc MV19 B.V.

Transactions
Collection of loans for capital
expenditure
Operation of FPSO
Guarantees of bank loans
Guarantees of performance
Operation of FPSO
Guarantees of bank Loans
Construction & Operation of FPSO
Disbursement for loans for capital
expenditure
Collection of loans for capital
expenditure
Interest Income
Construction of FSO
Disbursement for loans for capital
expenditure
Collection of loans for capital
expenditure
Interest Income
Construction & Operation of FPSO
Disbursement for loans for capital
expenditure
Interest Income
Collection of loans for capital
expenditure
Disbursement for loans for capital
expenditure
Construction & Operation of FSO
Collection of loans for capital
expenditure
Disbursement for loans for capital
expenditure
Guarantees of performance
Construction of FPSO
Disbursement for loans for capital
expenditure
Collection of loans for capital
expenditure
Interest Income
Guarantees of performance
Construction of FPSO
Disbursement for loans for capital
expenditure

2008

Thousands of
U.S. dollars
2007

2008

¥1,659,088－$18,224

2,747,694－－
1,948,838
2,083,642
2,189,747－－¥343,137
684,960－
2,952,584
4,074,822
2,795,793

30,181－－
21,40622,887
24,053－－

13,943,826

－

－
－
－

542,401
4,983,076
2,385,137－－－

8,909,225

2,746,848

97,861－
2,382,131－

750,210
14,287,189
2,788,134－
26,166－－9,238,041

637,521－－
101,472－

1,634,747－

3,327,234－

36,547－

3,157,348－

1,517,668－

16,670－17,014,319
12,435,155

1,141,600
27,545,319
19,207,929－－
136,590－

9,560,590

186,888654,498－
9,379,603
5,105,132－
8,162,440
6,989,599
3,036,295

7,189－
103,027
56,076

Thousands ofJapanese Yen
Related party
Gas Opportunity MV20 B.V.
Gas Opportunity MV20 B.V.
Gas Opportunity MV20 B.V.
Gas Opportunity MV20 B.V.
Jubilee Ghana MV21 B.V.
Jubilee Ghana MV21 B.V.
Jubilee Ghana MV21 B.V.
Jubilee Ghana MV21 B.V.
Tupi Pilot MV22 B.V.
Tupi Pilot MV22 B.V.
Tupi Pilot MV22 B.V.
Tupi Pilot MV22 B.V.

Transactions
Construction of FPSO
Guarantees of bank loans
Disbursement for loans for capital
expenditure
Collection of loans for capital
expenditure
Construction of FPSO
Guarantees of bank loans
Disbursement for loans for capital
expenditure
Collection of loans for capital
expenditure
Construction of FPSO
Guarantees of bank loans
Disbursement for loans for capital
expenditure
Collection of loans for capital
expenditure

2008

Thousands of
U.S. dollars
2007

2008

19,849,086
16,933,440
3,111,120－－－

218,026
186,000
34,173

2,988,740－

32,82915,681,924
11,502,411
4,998,611－－－

172,253
126,345
54,906

3,074,820－

33,774

12,392,692
14,591,784
5,196,908－－－

136,124
160,279
57,084

1,890,063－

20,761Thousands ofJapanese Yen
Related party
MODEC FPSO B.V.
MODEC FPSO B.V.
MODEC VENTURE 10 B.V.
MODEC VENTURE 11 B.V.
MODEC VENTURE 11 B.V.
Espadarte MV14 B.V.
Espadarte MV14 B.V.
Espadarte MV14 B.V.
PRA-1 MV 15 B.V.
PRA-1 MV 15 B.V.
PRA-1 MV 15 B.V.
PRA-1 MV 15 B.V.
Stybarrow MV16 B.V.
Stybarrow MV16 B.V.
Stybarrow MV16 B.V.
Stybarrow MV16 B.V.
Rang Dong MV17 B.V.
Rang Dong MV17 B.V.
Opportunity MV18 B.V.
Opportunity MV18 B.V.
Opportunity MV18 B.V.
Song Doc MV19 B.V.
Gas Opportunity MV20 B.V.
Jubilee Ghana MV21 B.V.
Jubilee Ghana MV21 B.V.
Tupi Pilot MV22 B.V.

Balances
Accounts receivable - tradeLong-term loans receivable
Long-term loans receivable
Long-term loans receivable
Accounts receivable - tradeLong-term loans receivable
Accounts receivable - trade
Accrued interest income
Accounts receivable - trade
Short-term loans receivable
Long-term loans receivable
Accrued interest income
Accounts receivable - trade
Short-term loans receivable
Accrued interest incomeLong-term loans receivable
Accounts receivable – tradeLong-term loans receivable
Accounts receivable – trade
Short-term loans receivable
Accrued interest income
Short-term loans receivable
Accounts receivable – trade
Accounts receivable – trade
Short-term loans receivable
Short-term loans receivableThousands of
U.S. dollars

2008

2007

－
－
1,820,800－
197,351
2,103,024
101,336－－－
1,290,492－
337,062－－
458,842
630,401
4,043,852
229,219
17,662,968
55,264
6,857,670
3,079,522
2,403,257
1,245,009
2,868,067

1,343,709
1,912,180
2,283,200
1,246,627－
2,637,096
662,762
15,823298,865
9,523,194
1,618,218
220,766
4,767,165
9,727,975
7,350－－
2,545,297
6,402,624
8,856,306－
2,431,736
－
－
－
－

2008
－
－
20,000－2,168
23,1001,113－－－
14,175
－
3,702
－
－
5,040
6,924
44,4182,518
194,013607
75,32633,826
26,39813,67531,503