FOR IMMEDIATE RELEASE

Kurita Water Industries Reports Earnings for the Full Year Ended March 2007
Tokyo, Japan April 27, 2007—Kurita Water Industries Ltd. (TSE Security Code 6370) announced net
sales of 197,146 million yen for the full year ended March 31, 2007 (April 1, 2006–March 31, 2007), andnet income of 14,207 million yen, or 110.42 yen per share.

Results of Operations
Total consolidated orders for the Kurita Group increased 4.7% from a year earlier to 192,529 million yen,while net sales grew 13.5% to 197,146 million yen. Operating income surged 40.2% to 24,276 million
yen and ordinary income also rose 36.9% to 25,226 million yen, resulting in net income of 14,207 million
yen, an increase of 35.1% over the prior year. In a breakdown by segment, water treatment chemicals
sales grew 3.9% year on year to 56,667 million yen compared to the previous year, while water treatment
facilities sales rose 17.9% to 140,479 million yen.
During the period, capital expenditures in the electronics industry were solid in Japan on the back ofbuoyant demand for liquid crystal display (LCD) TVs, plasma display panel (PDP) TVs, and so forth.
Overseas, large capital expenditures slowed down at some clients in Taiwan and South Korea. In thegeneral industry, both factory operating rates and capital expenditures remained robust, mainly in basic
materials sectors such as steel, oil refining and petrochemicals.
Taking into consideration the Group’s business performance, marked by the achievement of record
consolidated net income for the year, and the Group’s policy of rewarding its shareholders for theirsupport, the Company has decided to raise its year-end dividend by ¥4 to ¥15 per share. Since the interim
dividend was raised by ¥2 to ¥13 per share, the annual dividend will be ¥28 per share.

Segment Information
Water Treatment Chemicals
Total Group orders for the segment increased 4.9% from a year earlier to 56,560 million yen, while sales
grew 3.9% to 56,667 million yen and operating income rose 10.6% to 8,806 million yen.
During the period, the Group concentrated its efforts on securing stable order flows by promoting
packaged water treatment management contracts and expanding sales of mainstay products. The group
worked to achieve this by focusing on the “solutions business” aimed at accommodating clients’ needs toreduce environmental burdens, ensure stable factory operation, and improve productivity. Also, the Group
worked to ensure revenue and earnings by shifting its focus to high value-added products, responding to
the hike in raw materials costs, and reducing manufacturing and logistics costs.
Sales in the Japanese market were as follows. Of the Group’s mainstay products, sales for wastewater
treatment chemicals declined slightly from a year earlier due to intensified competition, for boiler water
treatment chemicals were largely flat, while sales for cooling water treatment chemicals increased slightly.
With regard to other products, sales for process treatment chemicals used in the oil refining andpetrochemical industry were largely flat, while sales for packaged water treatment management contracts
increased slightly, and sales for process treatment chemicals used in the paper and pulp industry increasedon the back of high factory operating rates at client companies.
Water Treatment Facilities
Total Group orders for the segment increased 4.6% from a year earlier to 135,969 million yen, while sales
grew 17.9% to 140,479 million yen and operating income surged 65.5% to 15,471 million yen.

1During the period, the Group further accelerated its drive to expand its unique businesses by actively
investing in service businesses including the ultra-pure water supply business and tool cleaning forsemiconductor and LCD production equipment. Also, in a bid to secure stable order flows, the Group
expanded its “solutions business” aimed at accommodating clients’ needs to increase productivity andreduce environmental burdens, and so forth. and strengthened sales to strategic clients. To ensure revenue
and earnings, the Group continued its efforts to improve design and installation productivity, reduce costand improve quality.
Orders for the Group’s mainline ultra-pure water production systems for the electronics industry increasedin Japan. In other industries, orders for water treatment facilities for the basic materials industry declined,reflecting a decrease in large orders from a year earlier. In service businesses, orders for the ultra-purewater supply business and orders for tool cleaning for semiconductor and LCD production equipment
surged, while those for related maintenance services increased slightly. With regard to soil remediation
business, orders for soil assessment and soil remediation surged on the back of increased land trading.
Net Sales
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Year ended March 2007
(April 1, 2006 to March 31, 2007)
Amount%56,66728.7 %
140,479
71.3 %
197,146
100.0%(Millions of yen)
Year ended March 2006
(April 1, 2005 to March 31, 2006)
Amount%54,54931.4%
119,133
68.6%
173,683
100.0%

Year ended March 2007
(April 1, 2006 to March 31, 2007)
Amount%56,56029.4 %
135,969
70.6 %
192,529100.0%(Millions of yen)
Year ended March 2006
(April 1, 2005 to March 31, 2006)
Amount%53,90329.3%
130,00770.7%
183,910100.0%

Year ended March 2007
(April 1, 2006 to March 31, 2007)
Amount%3,499
6.3
51,83093.7
55,330100.0(Millions of yen)
Year ended March 2006
(April 1, 2005 to March 31, 2006)
Amount%3,607
6.0
56,34094.0
59,947100.0

Order Intake
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Order Backlog
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Significant Events that Occurred during the Period(1) Payment of penalty and surcharge in connection with the violation of the Antimonopoly Act
Kurita Water Industries Ltd. was ordered to pay a criminal penalty of 160,000,000 yen and also received
an order from the Japan Fair Trade Commission to pay a surcharge of 328,860,000 yen for committing an
act that violated a provision of the Act Concerning Prohibition of Private Monopolization and
Maintenance of Fair Trade (Antimonopoly Act). This occurred in connection with the bidding process fora project to construct sludge treatment (human waste treatment) facilities. The criminal penalty andsurcharge were recognized as extraordinary losses.
To prevent the reoccurrence of this, or the occurrence of any similar violations, the Company withdrew
from all business activities mandated by the state and municipal governments and other organizational
bodies.

(2) Migration to Corporate-type Defined Contribution Pension Plan
The Company previously adopted the Termination Allowance Plan and Qualified Retirement Pension
Plan as its retirement benefit scheme. The Company’s Board of Directors, at the meeting held on January
31, 2007, resolved that the Company migrate from the Qualified Retirement Pension Plan to the
Corporate-type Defined Contribution Pension Plan, effective April 1, 2007. Under the previous pension

2

plan, unfunded portions of plan assets adversely affected the Company’s business results, an effect related
to asset management performance and the market value of plan assets. The introduction of the
Corporate-type Defined Contribution Pension Plan will eliminate asset management risks associated withplan assets and projected benefit obligations, enabling the Company to reduce the impact on its businessresults.

Outlook for the Fiscal Year Ending March 31, 2008
The Group forecasts 207,000 million yen in net sales, 28,000 million yen in ordinary income, and 15,700
million yen in net income for the full year ending March 31, 2008.
While the Group expects the market to remain solid supported by strong factory operating rates andcapital expenditures, it also expects demand for large capital expenditures in the domestic electronics
industry to run its course. In addition, the potential impact of U.S. and Asian (mainly Chinese) economic
trends, movements in crude oil prices and foreign exchange movements on corporate profits remains a
concern.
Under such an environment, to further ensure the achievement of targets set in the new medium-term
management plan, G-8 (Growth 2008), the Group will aggressively expand its business by accelerating
the ultra-pure water supply business and other services, and expanding business globally. In addition, theGroup will focus on improving quality by strengthening compliance and internal controls, which are
fundamental for Group management and operation, and by developing its human resources.

Outlook by Segment
Water Treatment Chemicals
In water treatment chemicals, factory operating rates at clients, which have a large impact on the Group’s
order intake, are expected to remain solid, as seen a year earlier. However, there are concerns that cost
cutting efforts by clients and cost increases in this segment due to rising basic materials costs, as well asother factors, may adversely affect the segment’s profitability. Under such circumstances, the Group aims
to further expand sales of its mainstay products, including boiler water treatment chemicals and coolingwater treatment chemicals. The Group will also strive to maintain and increase order flows moving torapidly offer water treatment technologies and services that accommodate clients’ needs. The Group willcontinue its efforts to maintain profitability by accelerating development and the expansion of sales ofcompetitive and profitable new products, while at the same time reducing manufacturing and logistics
costs and reviewing its business operations.
Water Treatment Facilities
Capital expenditures on water treatment facilities in the overall manufacturing sector are largely expected
to be robust, although there are concerns that reductions in the scale of capital expenditure projects inelectronics industries may adversely affect the segment’s performance. Under such an environment, theGroup aims to accelerate its shift into service businesses. In particular, it will expand its uniquebusinesses, such as the ultra-pure water supply business and tool cleaning for semiconductor and LCD
production equipment. Overseas, the Group will concentrate sales efforts on Asian markets centering on
Taiwan, South Korea and China, and on strategic clients, while also expanding its domestically provenbusiness models in these markets to secure order flows. Furthermore, the Group will focus on securing
revenues by driving forward initiatives to achieve higher quality, lower cost and higher design andinstallation productivity.

Profit Distribution
In consideration of its full-year business performance, marked by the achievement of record consolidated
net income, future business growth plans, and the Group’s policy of rewarding its shareholders for theirsupport, the Company plans to raise its year-end dividend by ¥4 to ¥15 per share. Since the Company
raised its interim dividend by ¥2 to ¥13 per share, the annual dividend for the year is expected to be ¥28
per share. For the year ending March 31, 2008, the Company plans to pay an interim dividend of ¥15 pershare and a year-end dividend of ¥17 per share, totaling an annual dividend of ¥32 per share.

3

Moving forward, the Company will continue its commitment to its basic policy of maintaining stabledividend payments. The Company will strive to increase dividends while taking account of trends in its
business results and increasing and utilizing retained earnings. Although the Company has the option of
discontinuing the restriction on the frequency of dividend payments per year, the Company will continue
to maintain its policy of paying dividends semiannually because it determines dividends based on interim
and full-year business results.

Financial Condition (Cash Flows)
Consolidated net cash and cash equivalents at the end of the period were 37,442 million yen, representing
an increase of 7,571 million yen, or 25.3%, from the end of the previous fiscal year.
Net cash provided by operating activities amounted to 27,070 million yen, an increase of 13,214 million
yen from a year earlier. This is primarily due to the cash inflows from income before income taxes, which
totaled 24,591 million yen, and depreciation and amortization totaling 6,512 million yen, which werepartly offset mainly by the payment of income taxes in the amount of 8,032 million yen.
Net cash used in investing activities was 16,453 million yen, an increase of 4,135 million yen from a year
earlier, primarily reflecting the fact that net sales of investment securities of 3,009 million yen were morethan offset by a payment of 18,846 million yen associated with acquisition of tangible fixed assets forbusiness purposes.
Net cash used in financing activities was 3,458 million yen, an increase of 942 million yen from a year
earlier, mainly reflecting dividend payments of 3,174 million yen.

Cash Flow Indicators

Equity ratio (%)
Equity ratio (based on market
capitalization) (%)
Interest-bearing debt to cash
flow ratio (%)
Interest coverage ratio (X)Fiscal year
ended March
31, 2004
70.1
96.3

Fiscal year
ended March
31, 2005
70.9
112.7

Fiscal year
ended March
31, 2006
68.3
152.3

Fiscal year
ended March
31, 2007
66.7
155.9

21.3

13.8

8.9

4.1

206.4

230.5

322.2

601.6

Notes
1. These indicators are calculated using financial figures calculated on a consolidated basis.
2. Market capitalization is calculated by multiplying the closing stock price at the end of the period by the
number of shares issued and outstanding (excluding treasury shares) at the end of the period.
3. Cash flows from operating activities are used in the calculation.
4. Interest-bearing debt includes debts recorded on the consolidated balance sheet that incur interest
payments.

Business Risks
Major risk factors that could affect the Group’s future performance include, but are not limited to,
economic trends, capital expenditure trends in water treatment facilities and factory operating rates atclient companies, price movements in basic materials, and competition with other industry players.

4Factors that may affect the Group’s business performance
The performance of the water treatment chemicals business is affected by fluctuations in demand levels
reflecting changes in factory operating rates at companies in steel, petroleum refining and petrochemical,
and pulp and paper industries, the Group’s main sources of clients for the business. The Group’s businessperformance is also affected by movements in basic materials prices reflecting trends in crude oil prices.
The performance of the water treatment facilities business is affected by demand fluctuations caused bytrends in capital expenditures at companies in electronics related industries, the Group’s main source ofclients for the business.
The Group considers the potential impact of exchange rate movements on its business performance to be
insignificant as its overseas operations account for only a small proportion of its overall sales, and are
distributed across a number of currencies.

About the Kurita GroupThe Kurita Group provides a wide range of products, technologies, and maintenance services related towater treatment. The two core lines of the Group’s business consist of: 1) water treatment chemicals used
for boiler water, cooling water, wastewater and in manufacturing processes, and 2) water treatment
facilities such as ultra-pure water production systems and wastewater treatment facilities. The businessscope of both lines includes production, sales, and maintenance services. For additional information about
the Kurita Group, please visit the Company’s website at: www.kurita.co.jp/english

Forward-Looking Statements
This news release contains various forward-looking statements which are based on current expectations ofand assumptions regarding future events. Except for the historical information contained herein, allfigures and statements with respect to future performance, projections and business plans of the Kurita
Group constitute forward-looking statements. Although Kurita believes that its expectations andassumptions are reasonable, actual results and trends in the Group’s performance could differ materiallyfrom those expressed or implied by such figures and statements because of risks and uncertainties

5Condensed Financial Statements - Consolidated
Condensed Balance Sheets - Consolidated(In million yen)

[Assets]
Current assets
Cash and deposits
Notes receivable - trade
Accounts receivable - tradeMarketable securities
Inventories
Deferred tax assets
Other
Allowance for doubtful accounts
Fixed assets
Tangible fixed assets
Intangible fixed assets
Investments and other assets
Total assets[Liabilities]
Current liabilities
Notes payable - trade
Accounts payable - trade
Short-term borrowings
Accounts payable - other/Accrued
expenses
Income taxes payable
Advances received
Accrued employees’ bonuses
Allowance for product warranty
Other
Fixed liabilities
Long-term borrowings
Deferred tax liabilities related torevaluation
Accrued employees’ retirement benefits
Accrued retirement benefits for directors
and corporate auditors
Other
Total liabilities

As ofMarch 31, 2007
(A)

As of
March 31, 2006
(B)

137,004
37,761
10,32066,7605,830
12,065
2,713
1,716
(164)
98,13367,2882,607
28,237
235,137

125,231
30,107
10,11566,957
6,162
8,070
2,170
1,773
(125)
87,542
53,991
2,863
30,687
212,774

11,773
7,654
205
(197)
(332)
3,995
543
(57)
(39)
10,591
13,297(256)(2,450)22,36365,4962,433
32,318333
13,141
7,498
4,920
2,327
1,230
1,291
11,44096

54,877
1,638
28,773320
13,493
4,376
2,055
2,362
739
1,118
11,233
180

10,619
795
3,545
13
(352)
3,122
2,865
(35)
491
173
207
(84)

1,526

1,526

-

8,392

8,261

131

696

488

208

729
76,937

777
66,111(48)
10,826(A) – (B)6

(In million yen)

[Minority interests]
Minority interests[Shareholders’ equity]
Common stock
Additional paid-in capital
Retained earnings
Net unrealized gains (losses) onrevaluation of land
Revaluation surplus of other securities
Foreign currency translation adjustments
Treasury stock
Total shareholders’ equity
Total liabilities, minority interests andshareholders’ equity[Net assets]
Shareholders’ capital
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

As ofMarch 31, 2007
(A)

As of
March 31, 2006
(B)

-

1,295

-

-

13,45011,426
122,350

-

-

(740)

-

-

3,873
(200)
(4,793)
145,366--

212,774-

153,519
13,45011,426
133,446(4,803)
3,252
1,427
158,200
235,137--(A) – (B)7

Condensed Statements of Income - Consolidated(In million yen)

Year ended
March 31, 2007 (A)Year ended
March 31, 2006 (B)(A) – (B)

Amount197,146
137,819
59,326

%
100.0
69.9
30.1

Amount173,683
122,630
51,052

%
100.0
70.6
29.4

Amount23,463
15,1898,274

35,05017.8

33,741

19.4

1,309

Income before income taxes
Income taxes
Current
Deferred
Minority interests in earnings ofconsolidated subsidiaries

24,276
1,242
293
25,226634
24,591

12.3
0.6
0.1
12.8
0.3
12.5

17,3111,334
220
18,4251,205
1,430
18,200

10.0
0.7
0.1
10.6
0.7
0.8
10.5

6,965
(92)
73
6,801
(1,205)
(796)
6,391

11,131(1,061)

5.6
(0.5)

7,395
100

4.2
0.1

3.736
(1,161)

314

0.2

184

0.1

130

Net income

14,207

7.2

10,5196.1

3,688

Net sales
Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating income
Non-operating income
Non-operating expense
Ordinary income
Extraordinary gains
Extraordinary losses

8Statements of Cash Flows - Consolidated(In million yen)AmountYear ended
March 31, 2006
(B)
Amount24,5916,512(56)

18,200
4,906
846
(24)

6,391
1,606
(846)
(32)

(172)

(266)

94

(66)

238

(304)

103

(447)

550

119
694
(566)
(350)
50
745
141
708
(3,945)
98
2,192
2,846
1,256
(230)
34,673
649
360
(45)
(536)
(8,032)
27,070

(56)
(510)
(452)
(328)
41
311
(1,205)411(5,259)
156
175
2,314
1,077
362
(180)
(212)
20,096
589
374
(43)
(179)
(6,981)
13,856

175
1,204
(114)
(22)
9
434
1,205
(270)
5,967
(4,101)
(77)
(122)
1,769
894
180
(18)
14,577
60
(14)
(2)
(357)
(1,051)
13,214

Cash flows from investing activities
Deposits into time deposit accounts
Withdrawals from time deposits
Payments for purchases of marketable securities
Proceeds from sale of marketable securities
Payments for purchases of tangible fixed assets
Proceeds from sale of tangible fixed assets
Payments for purchases of investment securities
Proceeds from sale of investment securities
Other expenses
Other income
Net cash used in investing activities

(113)
34
(11,124)
14,843(18,846)
43(1,224)
514
(786)
205
(16,453)(305)
314(10,807)
10,239(10,962)817(3,914)
2,785
(986)
500
(12,318)

192
(280)
(317)
4,604
(7,884)(774)
2,690(2,271)200(295)(4,135)

Cash flows from financing activities
Proceeds from and repayment of short-term borrowings
Proceeds from and repayment of long-term borrowings
Acquisition of treasury stock
Dividends paid
Dividends paid to minority shareholders
Payment by minority shareholders
Net cash used in financing activities

(81)
(192)
(10)
(3,086)(88)(3,458)

220
(84)
(11)
(2,572)(106)
38(2,516)

(301)
(108)
1
(514)
18
(38)
(942)

280

173

107

7,438

(804)

8,242

29,87130,365

(494)

132

310

(178)

37,442

29,871

7,571

Year ended
March 31, 2007

(A)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Impairment losses
Amortization of consolidation goodwill
Equity in earnings of unconsolidated subsidiaries andaffiliates
Increase/decrease in accrued bonuses
Increase/decrease in allowance for employees’ retirement
benefits
Increase/decrease in allowance for doubtful accounts
Increase/decrease in other allowancesInterest and dividend income
Other non-operating income
Interest expense
Other non-operating expenses and extraordinary losses
Gains/losses on sale of investment securities
Gains/losses on sale/disposal of tangible fixed assets
Increase/decrease in notes and accounts receivables - trade
Increase/decrease in inventories
Decrease in other current assets
Increase in notes and accounts payable-trade
Increase in advances received
Increase in other current liabilities
Bonus paid to directors
Other
Sub totalInterest and dividend received
Other non-operating income received
Interest paid
Other non-operating expenses paid
Income taxes paid
Net cash provided by operating activities

Effect of exchange rate changes on cash and cash
equivalents
Increase/decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of theperiodCash and cash equivalents of newly consolidated
subsidiaries at the beginning of the period
Cash and cash equivalents at the end of the period(A) – (B)
Amount9

Segment Information
By business type for year ended March 31, 2007

(April 1, 2006 to March 31, 2007)(In million yen)

I. Sales and operating income
Sales(1) Sales to outside customers(2) Inter-segment sales
Total
Operating cost and expenses
Operating income
II. Assets, depreciation andcapital expenditures
AssetsDepreciation and amortization
Capital expenditures

Water
treatmentchemicals

Watertreatment
facilities

Total

56,667262
56,93048,123
8,806

140,47978
140,557
125,086
15,471

197,146340
197,487
173,20924,278

(340)
(340)
(339)
(1)

197,146
197,146
172,870
24,27637,726
1,648
1,324

141,952
4,864
18,238

179,679
6,512
19,56355,458-235,137
6,512
19,563

By business type for year ended March 31, 2006

Eliminationor corporate

Consolidated(April 1, 2005 to March 31, 2006)(In million yen)

I. Sales and operating income
Sales(1) Sales to outside customers(2) Inter-segment sales
Total
Operating cost and expenses
Operating income
II. Assets, depreciation andcapital expenditures
AssetsDepreciation and amortization
Impairment losses
Capital expenditures

Water
treatmentchemicals

Watertreatment
facilities

Total

54,549322
54,872
46,910
7,961

119,133
573
119,706
110,357
9,349

173,683895
174,578
157,268
17,310

(895)
(895)
(895)
0

173,683
173,683
156,372
17,311

46,191
1,608
2,018

124,280
3,298
14,519170,471
4,906
16,53742,302
846-

212,774
4,906
846
16,537

Eliminationor corporate

Consolidated

10

Overseas SalesYear ended March 31, 2007 (April 1, 2006 to March 31, 2007)(In million yen)

I. Overseas sales
II. Consolidated net sales
III. Ratio of overseas sales to total
consolidated sales

Asia

North
America

Europe

Other

Total

22,635
-

3,424
-

1,296
-

2,171
-

29,528
197,146

11.5%

1.7%

0.7%

1.1%

15.0%

Year ended March 31, 2006 (April 1, 2005 to March 31, 2006)(In million yen)

I. Overseas sales
II. Consolidated net sales
III. Ratio of overseas sales to total
consolidated sales

Asia

North
America

Europe

Other

Total

16,602
-

2,340
-

1,121
-

1,724
-

21,788
173,683

9.6%

1.3%

0.6%

1.0%

12.5%

Notes:
1. Geographic segmentation is based on geographic proximity.
2. Major countries or regions in each segment are as follows:(1) Asia:
South Korea, China, Taiwan, Singapore, Indonesia, and Thailand(2) North America:
U.S.A.
(3) Europe:
Germany(4) Other areas:
Brazil3. “Overseas sales” includes sales by the Company and its consolidated subsidiaries to the countries
or regions other than Japan.

11