FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Six Months Ended September
30, 2013
Tokyo, Japan, October 31, 2013—Kurita Water Industries Ltd. (TSE Securities Code6370) announced net sales of 82,772 million yen and net income of 4,104 million yen,or 34.44 yen per share, for the six months ended September 30, 2013 (April 1, 2013 –September 30, 2013).
Results of Operations
Total consolidated orders for the Kurita Group in the six months ended September 30,
2013, decreased 4.6% versus the same period of the previous fiscal year, to 89,739
million yen. Net sales declined 8.3% year on year, to 82,772 million yen. In terms ofincome, operating income declined 38.3% year on year to 6,702 million yen, andordinary income fell 36.9% to 7,158 million yen. Net income amounted to 4,104 million
yen, down 15.6%.
During the six months under review, the global economy recovered moderately,
backed by the strong U.S. economy, but nonetheless remained uncertain, reflecting thesluggish European economy and a slowdown in emerging economies, including China.
In Japan, corporate earnings started to increase with new economic policies and acorrection to the strong yen, but capital expenditure and production did not improvesignificantly.
In this environment, the results of the Kurita Group (Kurita Water Industries and its
consolidated subsidiaries and equity method affiliates) fell short of the earnings forecast
made at the beginning of the fiscal year under review.
As capacity utilization was slow to recover and capital expenditure was weak at theGroup’s main customers, namely manufacturers in Japan, major products and services
saw declines in orders and sales. In the electronic industry overseas, capital
expenditures in water treatment facilities were cancelled or postponed. Reflecting this,sales in the Water Treatment Chemicals segment rose only slightly from a year earlier,and sales in the Water Treatment Facilities segment declined. Income fell sharply froma year ago because of the decrease in sales, unprofitable projects in the water treatment
facilities projects overseas, and an increase in selling, general and administrative
expenses associated with the expansion of the workforce overseas.
Segment Information
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment in the six-month periodstood at 29,327 million yen, up 2.2% versus the same period of the previous fiscal year.
Sales increased 0.5%, to 28,806 million yen, while operating income declined 5.3%, to
4,433 million yen.
In Japan, with low capacity utilization at customers’ plants, orders for and sales ofmainstay boiler water treatment chemicals, waste water treatment chemicals, andprocess treatment chemicals for the pulp and paper industries declined. Overseas, orders
for and sales of cooling water treatment chemicals, waste water treatment chemicals,
and reverse osmosis membrane treatment chemicals increased, especially in China andSoutheast Asia, partly due to a weaker yen. In the entire segment, both orders and salesrose slightly. Selling, general and administrative expenses increased, reflecting an
increase in the overseas workforce.

1

Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment in the six-month periodamounted to 60,411 million yen, down 7.6% versus the same period of the previous
fiscal year. Sales declined 12.3% to 53,965 million yen, and operating income dropped
63.1% to 2,276 million yen.
In Japan, orders for and sales of water treatment facilities in the electric powerindustry declined from the same period of the previous fiscal year due to the completionof demand related to reconstruction after the Great East Japan Earthquake. Orders forand sales of water treatment facilities and maintenance services decreased in theelectronics industry due to a slow recovery in capital expenditure demand and capacity
utilization at customers’ plants. Orders and sales in the ultrapure water supply businessfell slightly with contracts changing in the previous fiscal year. Overseas, both orders
and sales declined due to cancellations of orders and postponements of thecommencement of work for large projects in the electronics industry in East Asia.
Because of cost increases, the cost rate worsened at certain projects.
Financial Condition
Assets, liabilities and net assets
Current assets totaled 151,689 million yen at the end of the second quarter (September
30, 2013), an increase of 4,815 million yen versus the end of the previous fiscal year
(March 31, 2013). This was mainly a result of increases of 10,000 million yen inmarketable securities and 1,816 million yen in work in process, which outweighed adecline of 7,988 million yen in trade accounts receivable.
The decline in trade accounts receivable was the result of progress in collecting
receivables and weaker sales in the first half under review than in the second half of theprevious fiscal year. The rise in marketable securities was attributable chiefly to a rise innegotiable deposits which are treated as marketable securities. The increase in work inprocess was mainly the result of progress in construction work in the water treatment
facilities business.
Noncurrent assets totaled 114,277 million yen at the end of the first half (September
30, 2013), a decline of 2,428 million versus the end of the previous fiscal year. The
decline was principally attributable to a 4,924 million yen decrease in property, plantand equipment, which was partly offset by a 2,565 million yen rise in investments andother assets. The decline in property, plant and equipment was due to depreciation ofultrapure water supply business facilities exceeding capital expenditures. The increase
in investments and other assets reflected a rise in unrealized gains on investment
securities due to rises in the market prices of the shares held by the Group.
Current liabilities totaled 32,483 million yen at the end of the period, a decline of
2,932 million versus the end of the previous fiscal year. This was mainly a result of
declines of 2,062 million yen in trade accounts payable and 1,817 million yen in“Other” current liabilities.
Noncurrent liabilities totaled 18,970 million yen at the end of the period, a slightdecrease of 76 million yen versus the end of the previous fiscal year.
Net assets totaled 214,512 million yen at the end of the period, an increase of 5,394
million yen versus the end of the previous fiscal year primarily due to a 1,601 million
yen increase in shareholders’ equity and a 3,714 million yen rise in accumulated othercomprehensive income. The increase in shareholders’ equity resulted from net incomeof 4,104 million yen exceeding year-end dividends of 2,502 million yen for the previous
fiscal year. The increase in accumulated other comprehensive income is a result of a2,601 million yen rise in unrealized gains on available-for-sale securities due to theincrease in unrealized gains on investment securities and a 1,113 million yen increase in2

foreign currency translation adjustments associated with a weaker yen. Certain shares oftreasury stock were cancelled, which did not affect total net assets but reduced treasury
stock 21,859 million yen (an increase in net assets) and retained earnings by the sameamount.
Cash flows
Consolidated net cash and cash equivalents at the end of the first half of the fiscal year
(September 30, 2013) stood at 27,784 million yen, a decrease of 5,528 million from theend of the previous fiscal year (March 31, 2013). Cash flows in each category and theirmain factors are outlined below.
Cash flows from operating activities
Net cash provided by operating activities during the first half of the fiscal year ending
March 31, 2014, totaled 14,432 million yen, a decrease of 2,181 million yen from a year
ago. Inflows from income before income taxes and minority interests (6,658 millionyen), depreciation and amortization (7,364 million), and a decrease in trade notes andaccounts receivable (7,699 million yen) were partially offset by income taxes paid
(2,735 million yen), an increase in inventories (2,395 million yen), and a decrease intrade notes and accounts payable (2,474 million yen).
Cash flows from investing activities
Net cash used in investing activities stood at 17,575 million yen, a decrease of 3,010
million yen from a year earlier, primarily reflecting net deposits into time deposit
accounts of 4,258 million yen, net payments for the purchase of marketable securities(after the deduction of proceeds from sale and redemption of marketable securities) of
10,000 million yen, and payments for the purchase of property, plant and equipment,
including capital expenditures for ultrapure water supply business, of 3,152 million yen.
Cash flows from financing activities
Net cash used in financing activities came to 2,820 million yen, a decrease of 515
million yen from a year earlier, attributable mainly to cash dividends paid of 2,513
million yen.
Outlook for the Fiscal Year Ending March 31, 2014
Capacity utilization and capital expenditure at customers’ plants have been slow torecover, and the recovery is expected to take time before it influences the Group’s
results. Considering the situation, the Company has determined that it is difficult toachieve the initial earnings forecast and, on October 11, 2013, revised the earnings
forecasts for the fiscal year ending March 31, 2014, which it announced on April 30,
2013. For details, please refer to the “Kurita Water Industries Revises Earnings
Forecast” announced on October 11, 2013.

3

Other Information(1) Changes in significant subsidiaries during the six months ended September 30, 2013
There were no changes in specified subsidiaries that would have changed the scope of
consolidation.
Starting the first quarter under review, the equity method is applied to a newly
established company and a company whose significance has increased.
(2) Accounting treatment specific to the preparation of quarterly consolidated financial
statements
Tax expense
The Company calculates tax expense by producing a reasonable estimate of theeffective tax rate after applying tax-effect accounting to income before income taxes
and minority interests for the fiscal year and then multiplying quarterly income before
income taxes and minority interests by this estimated effective tax rate.

4

Financial Statements — Consolidated
Balance Sheet — Consolidated(Million yen)

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings (net)
Machinery and equipment (net)Other (net)Total property, plant and equipment
Intangible fixed assets
Investments and other assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Notes payable – trade
Accounts payable - trade
Income taxes payable
Provision for bonuses
Other provision
Other
Total current liabilities
Noncurrent liabilities
Accrued employees’ retirement benefits
Other allowances
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains on available-for-sale securities
Unrealized gains (losses) on revaluation of land
Foreign currency translation adjustments
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

As ofMarch 31, 2013
Amount

As of
September 30, 2013
Amount43,0396,10855,27934,000
1,445
2,238
1,191
3,676
(104)
146,874

41,805
7,214
47,29144,000
1,642
4,054
1,747
4,019
(85)
151,689

23,69336,173
26,95486,8201,619

22,02536,50523,36581,8961,550

28,506(241)
28,265
116,705
263,580

31,207(377)
30,830114,277
265,966

1,451
16,522
2,509
2,362
1,187
11,38235,415

1,590
14,460
2,315
2,793
1,757
9,565
32,483

10,835165
8,045
19,04654,462

11,07894
7,798
18,97051,454

13,45011,426
202,807(21,859)
205,826

13,45011,426
182,550(0)207,427

4,079
(564)
(1,469)2,045
1,246
209,118
263,580

6,680
(564)
(356)
5,759
1,326
214,512265,966

5

Statements of Income and Comprehensive Income — Consolidated
Statement of Income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors' and corporate auditors' compensations,salaries and allowances
Provision for bonuses
Research and development expenses
Other
Total Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries andaffiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of noncurrent assets
Gain on discontinuation of approved retirement annuity
system (closed-type)
Total extraordinary gains
Extraordinary losses
Impairment losses
Provision for building demolition expenses
Valuation loss on investment securities
Contribution
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in earnings of consolidated subsidiaries
Net income

Six months ended
September 30, 2012
Amount90,23660,29429,942Six months ended
September 30, 2013
Amount82,77256,02526,747

6,716

7,101

1,527
2,183
8,660
19,08810,854

1,544
2,204
9,193
20,044
6,702

75
187

84
169

173

107

148
584

164
526

48
54
103
11,335

31
39
70
7,158

1,046

–

137

–

1,184

–

1,001
434
2,343
–
3,778
8,741
3,834
4,906
41
4,865

–
–
–
* 500
500
6,658
2,536
4,121
16
4,104

6

Statement of Comprehensive Income(Million yen)

Income before minority interests
Other comprehensive income
Unrealized gains on available-for-sale securities
Foreign currency translation adjustments
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Components:
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to minority interests

Six months ended
September 30, 2012
Amount4,906

Six months ended
September 30, 2013
Amount
4,121

514
6

2,593
1,132

9

54

531
5,437

3,781
7,902

5,388

7,818

49

84

7

Statement of Cash Flows — Consolidated(Million yen)Six months ended
September 30, 2012
AmountCash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in provision(Gains) losses on sale/disposal of property, plant andequipment
Impairment loss
Valuation (gain) loss on investment securities(Increase) decrease in notes and accounts receivable trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable trade
Income taxes paid
Other
Net cash provided by (used in) operating activities
Cash flows from investing activities
Deposits into time deposit accounts
Withdrawals from time deposits
Payments for purchases of marketable securities
Proceeds from sale and redemption of marketablesecurities
Payments for purchases of property, plant andequipment
Proceeds from sale of property, plant and equipment
Payments for purchases of investment securities
Other payments
Other proceeds
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term loans payable
Repayment of finance lease obligations
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of theperiodCash and cash equivalents at the end of the period

Six months ended
September 30, 2013
Amount

8,741
7,647
603

6,658
7,364
1,215

(1,034)

7

1,001
2,343

–
–

7,577

7,699

(662)

(2,395)(3,108)(2,474)(7,022)526
16,613(2,735)(906)
14,432(12,224)
18,192(59,500)(10,606)
6,348(52,000)

32,00042,000(1,973)(3,152)

3,342
(6)
(508)
93
(20,585)

5
(6)
(333)
169
(17,575)

(597)
57
(256)
(1)
(2,525)(12)(3,335)

(2)
–
(301)
(0)
(2,500)(13)(2,820)44435(7,263)(5,528)19,82533,313

12,562

27,7848

Notes to Consolidated Financial Statements(Notes on the Going-concern Assumption)
Six months ended September 30, 2013 (April 1, 2013 – September 30, 2013)
Not applicable(Notes on Statement on Income)* Contribution
Six months ended September 30, 2013 (April 1, 2013 – September 30, 2013)
The Company made an additional contribution of 500 million yen to the basic fund of the Kurita Water
and Environment Foundation and posted the amount as a contribution in extraordinary losses.
(Notes on Significant Changes in Shareholders’ Equity)
Six months ended September 30, 2013 (April 1, 2013 – September 30, 2013)
Under a resolution at a meeting of the Board of Directors held on July 30, 2013, the Company canceled
13,635,662 shares of its treasury stock on August 6, 2013. The cancellation has not changed the total
amount of shareholders’ equity, but treasury stock declined 21,859 million yen (an increase inshareholders’ equity), and retained earnings fell by the same amount.
(Segment Information)
1. Sales and income by reportable segment
Six months ended September 30, 2012 (April 1, 2012 – September 30, 2012)(Million yen)

Reportable Segments

Amounts
reported on
Adjustments the quarterly
statements of(note 1)income(note 2)Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

Sales
Sales to outside customers
Inter-segment sales or transfers

28,674
144

61,562
97

90,236
242

–
(242)

90,236–

Total

28,81861,66090,478(242)

90,236

Segment income

4,681

6,161

10,842

11

10,854Six months ended September 30, 2013 (April 1, 2013 – September 30, 2013)(Million yen)

Reportable Segment

Sales
Sales to outside customers
Inter-segment sales or transfers
Total
Segment income

Water
Treatment
Chemicals

Water
Treatment
Facilities

Total

28,806122
28,9294,433

53,965
114
54,0802,276

82,772237
83,0096,710

Amounts
reported on
Adjustments the quarterly
statements of(note 1)income(note 2)
–
(237)
(237)
(7)

82,772–82,772
6,702

Notes:
1. Adjustments related to sales represent elimination of inter-segment sales. Resultant adjustment of segment
income is reflected in segment income Adjustments.
2. Segment income is shown at the operating income level.

9Supplementary Information — Consolidated(1) Order Intake(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2012
2013
%
AmountAmount28,69430.5
29,327%
32.7

Water Treatment Facilities

65,376

69.5

60,411

67.3

Total

94,070100.089,739100.0(2) Net Sales(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2012
2013
Amount%Amount
28,67431.8
28,806%
34.8

Water Treatment Facilities

61,56268.2

53,965

65.2

Total

90,236100.0

82,772

100.0(3) Capital Expenditures (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2012
2013
Amount%Amount
804
28.2
816

%
41.2

Water Treatment Facilities

2,050

71.8

1,166

58.8

Total

2,855

100.0

1,982

100.0

(4) Depreciation (Property, Plant and Equipment)(Million yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2012
2013
Amount%Amount
529
7.2
549

%
7.8

Water Treatment Facilities

6,832

92.8

6,534

92.2

Total

7,361

100.0

7,083

100.0

10