November 5, 2013
Taiyo Nippon Sanso Corporation

Consolidated Financial Performance for the First Half of Fiscal Year 2014
(Based on Japan GAAP)
1. Financial results for the first half (April 1, 2013 - September 30, 2013)(1) Operating results(Amounts less than ¥1 million are omitted)

Net sales(¥ million)

Operating income

YoY
ChangeOrdinary income

YoYChange(¥ million)

YoY
Change(¥ million)

Net income(¥ million)

YoY
ChangeFirst half of
FY2014

249,6219.4%

14,39614.6%

14,19917.9%12,229_%First half ofFY2013

228,272(2.8)%

12,566(20.3)%

12,042(24.8)%(7,910)_%Note: Comprehensive income
First half of FY2014: ¥30,112 million (_%)
First half of FY2013: ¥(10,620 million) (_%)
Earnings per

Diluted earnings per

share (Yen)share (Yen)First half of FY2014

31.53

-

First half of FY2013(19.93)-(2) Financial position
Total assets

Net assets(¥ million)(¥ million)

First half of FY2014(September 30, 2013)
FY2013 (March 31, 2013)

Equity ratio (%)

652,799

255,43835.6

615,820

224,253

33.1

Reference: Equity
First half of FY2014: ¥232,258 million
FY2013 full term: ¥203,771 million

12. Dividends
Annual Dividend
End of 1st quarterEnd of 2nd quarterEnd of 3rd quarter

Term endTotal

Yen

Yen

Yen

Yen

Yen

FY2013－

6.00

FY2014－6.00

FY2014 (est.)

－

6.00

12.00

－

6.00

12.00

Note: No revisions have been made to recently announced forecasts.
3. Forecasts for business operations for FY2014(full term; April 1, 2013 – March 31, 2014)
Net sales

FY2014(full term)

Operatingincome

Ordinary income

Earnings
per share

Net income(¥ million)

YoYChange(¥ million)

YoY
Change(¥ million)

YoY
Change(¥ million)

YoY
Change514,000

9.7%

30,00020.6%

28,80024.9%

19,400_(Yen)

47.47

Note: No revisions have been made to recently announced forecasts.
4. General information relating to the first half results
Overall business performance (consolidated basis)
During the first half (April 1, 2013 - September 30, 2013) of the fiscal year under review, theglobal economy remained lackluster overall. This was primarily attributable to financial
instability in the United States, which appears to be experiencing a gradual economic
recovery; the ongoing economic recession in Europe; and a slowing of economic growth inChina, India and other emerging markets. The outlook for the Japanese economy remained
uncertain due mainly to increases in electricity rates and raw material prices. This uncertainty
continued despite indications of an improvement in corporate performance centered on exportindustries, reflecting the weak yen and higher stock prices resulting from government andBank of Japan monetary easing policies.
Against this backdrop, first-half net sales on a consolidated basis increased 9.4% year
on year to ¥249,621 million, operating income rose 14.6% to ¥14,396 million, and ordinary
income improved 17.9% to ¥14,199 million. Net income for the first half stood at ¥12,229
million compared with a net loss of ¥7,910 million during the corresponding period of theprevious fiscal year.
A breakdown of business performance by operational segment is as follows.
(1) Industrial Gas
Despite a slight slowdown of sales to the chemical industry, sales in Japan to the steel industry,a key user of industrial gasses, remained firm. In addition, domestic sales of oxygen andnitrogen supplied onsite were all up year on year. However, shipping volume and sales ofliquid oxygen, liquid nitrogen and liquid argon decreased year on year because of an overall
2decline in demand from industries that use these items. Sales of machinery and equipment
dropped sharply year on year following a decline in orders. In overseas markets, sales inNorth America rose year on year, reflecting a rebound in the economy, while sales in Asia
increased substantially thanks to new consolidation effects.
As a result, sales in the Industrial Gas segment increased 10.6% year on year to¥163,992 million, but operating income fell 5.2% to ¥10,653 million due to a rise in costs
following a fall in industrial gas production volume in Japan and lower profit margins formachinery and equipment.
(2) Electronics
Amid an ongoing weakness in demand in the electronics industry, signs of a rebound incertain sectors became apparent. Accordingly, sales of electronic materials gases,
electronics-related equipment and installations, and semiconductor manufacturing equipment(MOCVD) rose above the low levels recorded in the corresponding period of the previousfiscal year.
As a result, sales in the Electronics segment increased 5.2% year on year to ¥48,553
million, and the segment posted operating income of ¥2,213 million compared with anoperating loss of ¥602 million in the same period of the previous fiscal year.
(3) Energy
Regarding LP gas, consumer demand declined amid higher-than-average temperatures
throughout the spring and summer, purchasing costs increased due mainly to the weak yen,and sales prices rose in line with higher purchasing costs.
As a result, sales in the Energy segment increased 6.4% year on year to ¥18,536
million, while operating income decreased 18.4% to ¥630 million.
(4) OtherIn the Medical Business, medical device sales were steady, but the volume and sales of
medical-use oxygen declined year on year. Sales in the Thermos Business jumped
significantly year on year because of strong sales mainly of sports-use vacuum bottles
following a heat wave. However, purchasing costs increased due to the weak yen.
As a result, sales in the Other segment increased 13.2% year on year to ¥18,538
million, but operating income decreased 14.8% to ¥1,511 million.
5. Explanation of revisions to consolidated financial forecasts(1) Revisions to financial forecasts
The Company has revised consolidated financial forecasts for the full fiscal year ending
March 31, 2014, which were announced on August 21, 2013, based on performance during
the second quarter of the fiscal year under review and current sales conditions. Revisedforecasts are as follows.
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Consolidated financial forecasts for the full fiscal year ending March 31, 2014 (April 1, 2013
to March 31, 2014)
Net
Operating Ordinary Net
incomeNet sales
incomeincome
incomeper share(yen)YenPrevious forecasts (announced (¥ million) (¥ million) (¥ million) (¥ million)
514,000
31,50029,30019,40050.02
on August 21, 2013) (A)514,000
30,00028,80019,400*47.47
Revised forecasts (B)0(1,500)(500)
0Change (B – A)
(4.8)
(1.7)
Percentage change (%)
468,387
24,88423,060(2,071)(5.25)
Reference: Consolidated
Financial Performance forFY2013*Calculations for the FY2014 net income per share revised forecast (B) includes the numberof new shares issued and treasury shares disposed, both of which were fully paid in by
third-party allotment on October 15, 2013.
(2) Reason for the revision
Despite the domestic and overseas shipping volumes primarily for liquid oxygen, nitrogenand argon falling below initial forecasts, the revised forecast for net sales remains unchanged
due to the yen being weaker compared with the initial exchange rate forecast (previous
forecast: US$1 = ¥90; revised forecast: US$1 = ¥97). Conversely, operating income isexpected to be below the previous forecast mainly because of lower shipping volume ofmainstay gasses and a lack of improvement in earnings in light of higher domestic electricity
costs. Consequently, ordinary income has been revised below the previous forecast despite
improvements in non-operating income and expenses. Net income remains unchanged fromthe previous forecast largely due to the posting of extraordinary income from the sale of fixed
assets and loss on liquidation of subsidiaries and affiliates as well as the expected loss on
disposal of fixed assets.
Note: The above forecasts are based on information available to the management of theCompany as of the time of writing, and may differ from actual results owing to a number offactors that may materialize subsequent to this announcement.

46. Segment information(1) First Half, FY2013 (April 1, 2012 to September 30, 2012)
Industrial
Gas

Reportable segment
Electronics
EnergyOther(Note 1)(¥ million)
Total

Adjustments(Note 2)

Consolidated

Sales(1) Sales toexternal
148,30746,16917,42016,375228,272
228,272
Customers(2) Sales frominter-segment
760
59884
1,342
3,047
(3,047)transactions andtransfersTotal
149,067
46,22918,305
17,718231,320(3,047)228,272
Operating income(loss) [Segment
earnings (loss)]
11,237
(602)
773
1,773
13,181(614)
12,566Notes
1. Other businesses include the medical-related business, the Thermos business and real estateoperations.
2. The ¥614 million negative adjustment for segment earnings (loss) comprises ¥101 million ofinter-segment eliminations and companywide expenses of ¥716 million that were not allocated to any
particular reportable segment. These companywide expenses relate principally to basic researches thatwere not particularly allocated to reportable segments.

(2) First Half, FY2014 (April 1, 2013 to September 30, 2013)
IndustrialGas
Sales(1) Sales toexternalCustomers(2) Sales frominter-segment
transactions andtransfers
Total
Operating income[Segmentearnings]

163,992

Reportable segment
Electronics
EnergyOther(Note 1)
48,553

18,536

18,538(¥1 million)
Total

Adjustments Consolidated(Note 2)

249,621249,621
-834

53

1,020

1,670

3,579

(3,579)164,827

48,606

19,556

20,209253,200(3,579)249,621

10,653

2,213630

1,511

15,009(612)

14,396Notes
1. Other businesses include the medical-related business, the Thermos business and real estateoperations.
2. The ¥612 million negative adjustment for segment earnings comprises ¥234 million ofinter-segment eliminations and companywide expenses of ¥846 million that were not allocated to any
particular reportable segment. These companywide expenses relate principally to basic researches thatwere not particularly allocated to reportable segments.

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7. Important subsequent events
1. Business combination by means of acquisition
The Company resolved at a Board of Directors’ meeting held on September 11, 2013 topurchase all the shares of Pacific Medico Co., Ltd. in order to make it a subsidiary. The sharepurchase took place on October 1, 2013.
(1) Overview of business combination(i) Outline of the acquired company
Name of acquired company:
Pacific Medico Co., Ltd.
Details of business:
Develop, manufacture and sale of mechanicalventilators, portable suction devices, pulse
oxymeters and other respiratory care-related
medical devices(ii) Main reasons for business combination
The Company’s medical business is centered on the manufacture and sale of medical gasses,
related equipment and devices as well as the sale of medical devices used mainly in homeoxygen therapy (HOT). As one of the medical business’ medium- to long-term plans, theCompany is working to strengthen its business base as a manufacturer while promoting M&A,
product development and other business strategies.
Consequently, the Company has acquired Pacific Medico Co., Ltd., which isaggressively expanding its businesses by leveraging its strong points—development andextensive product lineups—which meet a broad array of needs in the respiratory care sector.
Particularly in mechanical ventilators used at home (intended for tracheostomy patients),
Pacific Medico Co., Ltd. commands the top share in the domestic market; possesses a productlineup focusing on imported devices; and boasts abundant experience and achievements in therespiratory care business through such actions as purchasing plants that have enhanced its
manufacturing position.
The Company has recently made a full-fledged entry into the advanced medical
device business (which includes mechanical ventilators) through the acquisition of Pacific
Medico Co., Ltd. in order to expand into the respiratory care business domain. In addition,Pacific Medico Co., Ltd. will strengthen its sleep care business by focusing on thedevelopment of diagnostic devices for sleep apnea syndrome as well as upgrading diagnostic
and therapeutic environments.
(iii) Date of business combination
October 1, 2013(iv) Legal form of business combination
Share purchase paid in cash
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(v) Corporate name after business combination
No change(vi) Percentage of voting rights acquired
100.0%(vii) Main rationale for selecting the acquiring company
The Company purchased all the shares of Pacific Medico Co., Ltd. in cash.
(2) Cost of acquiring Pacific Medico Co., Ltd. and breakdown
Consideration for acquisition¥6,500 million
Costs directly incurred for the acquisition
Currently being calculated
Acquisition costs
Currently being calculated(3) Amount of goodwill generated,, reason for the generation, amortization method andperiod
Amount of goodwill generated is currently being calculated.
2. Issuance of new shares and disposition of treasury shares by way of third-party allotment
The Company resolved at a Board of Directors meeting held on September 26, 2013 toconclude a capital and business alliance agreement with Mitsubishi Chemical Holdings
Corporation (“MCHC”) as well as issue new shares and dispose of treasury shares by way ofthird-party allotment, with MCHC as the allottee. Payment procedures were completed on
October 15, 2013 pertaining to the issuance of new shares and disposition of treasury sharesby way of third-party allotment.
Issuance of new shares and disposition of treasury shares by way of third-party allotment(1) Issuance of new shares by way of third-party allotment(i) Type and number of shares issued 30,000,000 shares of common stock of theCompany(ii) Issue price (paid in)¥687 per share(iii)Total issue price (paid in)¥20,610,000,000(iv) Total amount of stated capital and capital reserve increased
Stated capital: ¥10,305,000,000
Capital reserve: ¥10,305,000,000(v) Due date for payment
October 15, 2013(vi) Allottee and the number of shares allotted
The Company allotted 30,000,000 shares to MCHC by way of third-party allotment.

7(2) Disposition of treasury shares by way of third-party allotment(i) Type and number of treasury shares disposed
15,096,000 shares of the Company’s common stock(ii) Amount disposed of (paid in)¥687 per share(iii) Total amount disposed of (paid in)¥10,370,952,000(iv) Due date for payment
October 15, 2013(v) The party to whom shares were disposed of, and the number of shares disposed of
The Company allotted 15,096,000 shares to MCHC by way of third-party allotment.
Use of funds(i) Capital investments for enhancing industrial gas manufacturing capability outside JapanThe Company aims to increase industrial gas manufacturing capability outside Japan byapportioning the raised funds to capital investments (including air separation plants andhydrogen producers), mainly in the petrochemical industry in North America, and mainly inthe petrochemical and semi-conductor industries in Vietnam and the Philippines.
(ii) Capital investment for enhancing product production capability in JapanThe Company aims to increase the manufacturing capability in Japan by apportioning theraised funds to capital investments concerning liquefied carbon dioxide gas, labeled water foroxygen stable isotopes (Water-18O) (Note), and other industrial and medical gases.
(Note) Labeled water for oxygen stable isotopes (Water-18O) is produced by enriching the oxygen stable
isotopes with the mass number of 18, included in natural oxygen at an extremely tiny amount, at a percentage of98% or more. They are used as the material of the diagnostic reagent for the positron emission tomography(PET), which is effective at detecting early stage cancer and at prognosis monitoring.

(iii) Strategic investment and financing in North America, Asia, and other countries or regions
inside and outside JapanThe Company’s management policy is to “further strengthen our domestic operatingfoundation” and “grow our promising overseas businesses.” It therefore believes that astrategic business alliance or capital alliance is a useful means to achieve this end. Thus, theCompany intends to apportion the raised funds to strategic investments for expanding its
business scale, such as, in Japan, by purchasing Pacific Medico Co., Ltd., which is a medical
device manufacturer in Japan, in contemplation of expanding the medical business; and in theNorth American and the Asian region, by purchasing distributor companies or local gas
manufacturers.

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