FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Nine Months ended
December 31, 2011
Tokyo, Japan, January 31, 2012—Kurita Water Industries Ltd. (TSE Securities Code6370) announced net sales of 133,404 million yen and net income of 10,754 million yen,or 84.91 yen per share, for the nine months ended December 31, 2011 (April 1, 2011 –December 31, 2011).
Results of Operations
Total consolidated orders for the Kurita Group in the nine months ended December 31,
2011 increased 9.7% versus the same period of the previous year to 138,194 million yen.
Net sales increased 3.2% year on year to 133,404 million yen. In terms of income,operating income increased 1.0% year on year to 19,586 million yen and ordinary
income increased 0.7% to 20,255 million yen. Net income totaled 10,754 million yen,down 10.3%.
Reviewing markets in which the Kurita Group operates, the Japanese market wassevere at the beginning of the fiscal year due to the lingering effects of the Great East
Japan Earthquake. Afterwards, however, corporate manufacturing activity recovered tonear-normal levels and reconstruction initiatives began in earnest. Overseas, newlyemerging economies were the main force behind moderate economic expansion, thoughsigns of slowing growth emerged due to the European debt crisis arising from the fiscal
plight of Greece.
Segment Information
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment in the nine-month
period were 42,330 million yen, down 0.3% versus the same period of the previous year,
while sales increased slightly to 42,393 million yen. Operating income declined 7.7% to7,194 million yen.
In the period, the Kurita Group strove to help customers in Japan restore theiroperations following the earthquake. In addition, the Group continued to strengthen
alliances between Group companies in Japan and overseas, while promoting a
consultative sales approach geared towards helping customers successfully meet suchchallenges as energy conservation and productivity enhancement.
In Japan, orders and sales of chemical-related equipment and systems increased intandem with earthquake recovery efforts, and initiatives to expand sales of chemicals
for reverse osmosis membranes further increased sales. Demand declined, however, forboiler water treatment chemicals and process treatment chemicals for the paper and pulp
and oil refining and petrochemical industries due to low capacity utilization rates atcustomer manufacturing facilities, mainly in the first quarter. Overseas, orders and salesof cooling water treatment chemicals and other core products increased as a result ofgrowing manufacturing activity, primarily in newly emerging economies.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment in the nine-month period
were 95,864 million yen, up 14.8% versus the same period of the previous year. Sales
increased 4.8% to 91,011 million yen, while operating income rose 6.9% to 12,392
million yen.
1

In the period, the Group strove to help Japanese customers restore their operations
following the earthquake. In addition, the Group aimed to increase orders by bolstering
its consultative sales approach towards key customers and by strengthening its sales
activities in Asia.
In the electronics industry, while orders in the ultrapure water supply businessdeclined slightly, orders for maintenance services increased mainly due to growing
demand for facility modification, and orders for ultrapure water production systems
from overseas semiconductor manufacturers also increased. In terms of sales to theelectronics industry, maintenance services sales increased, but sales in the ultrapure
water supply business declined slightly and sales of ultrapure water production systems
also showed a decline.
In general industries, orders and sales increased significantly as demand for water
treatment facilities from the domestic electric power industry surged during recovery
efforts following the earthquake. Demand for maintenance services, mainly in relation
to facility modification in industries such as electric power and food, also increased.
Financial Condition
Current assets totaled 129,300 million yen at the end of the fiscal third quarter(December 31, 2011), an increase of 11,448 million yen versus the end of the previous
fiscal year (March 31, 2011). This primarily reflects increases of 16,000 million yen inmarketable securities and 5,450 million yen in work in process outweighing the 10,331
million yen decrease in cash and deposits.
The decline in cash and deposits was the result of increased investment in negotiablecertificates of deposits, which are treated as marketable securities. The increase in workin process was the result of progress in water treatment facility construction, and theincrease in marketable securities is as stated above.
Noncurrent assets totaled 126,449 million yen at the end of the nine-month period, adecline of 8,997 million yen versus the end of the previous fiscal year. The decline wasmainly due to a 6,304 million yen decrease in property, plant and equipment and a 2,498
million yen decline in investments and other assets.
The decline in property, plant and equipment was due to the current period’s
depreciation on past years’ investments in ultrapure water supply business facilities
exceeding the current period’s investments in property, plant and equipment. The
decline in investments and other assets was the result of a decline in the market price ofmarketable securities.
Current liabilities totaled 33,940 million yen at the end of the nine-month period, adecrease of 831 million yen versus the end of the previous fiscal year. The change
mainly reflects a decline in income taxes payable, following annual tax return
adjustments, of 2,329 million yen outweighing an increase in trade accounts payable of
1,926 million yen.
Noncurrent liabilities totaled 18,837 million yen, a slight decrease of 338 million yen
versus the end of the previous fiscal year.
Net assets totaled 202,972 million yen at the end of the nine-month period, anincrease of 3,621 million yen versus the end of the previous fiscal year. The change
mainly reflects a 5,815 million yen increase in retained earnings outweighing a 2,166
million yen decline in accumulated other comprehensive income.
Retained earnings increased as the nine months’ net income of 10,754 million yen
exceeded the 4,939 million yen aggregate of the year-end dividend payment for theprevious year and the interim payment for the current year. Accumulated othercomprehensive income declined due to a decrease in unrealized gains onavailable-for-sale securities caused by the aforementioned decline in the market price ofmarketable securities.
2

Outlook for the Fiscal Year Ending March 31, 2012
The Group’s current outlook for the full year ending March 31, 2012 is consistent withthe targets disclosed in the April 28, 2011 financial results announcement.
Other Information(1) Accounting treatment specific to the preparation of quarterly consolidated financialstatementsa. 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.
Additional Information
In accordance with the promulgation on December 2, 2011 of a corporate tax law partial
amendment (statute no. 114 of 2011) and a reconstruction funding law (statue no. 117 of2011), normal effective statutory tax rate will change from 40.6% to 38.0% for the fiscal
years from April 1, 2012 through March 31, 2015, and to 35.6% from the fiscal years
beginning on and after April 1, 2015.
Given this change, Kurita Water Industries calculated the estimated effective tax rate forthe fiscal year ending March 31, 2012 by adding expected annual income tax payment
and expected annual income tax adjustment (calculated by estimating increase or
decrease of deferred tax assets and deferred tax liabilities), instead of using theestimated annual tax expense. As a result, the estimated effective tax rate was up to45.0%, which is 5.5% higher than it would have been under the previous method.
Due to this change, income taxes for the nine months ended December 31, 2011
increased by 1,076 million yen, while the quarterly net income decreased by the sameamount.
Other comprehensive income also increased by 111 million yen, as unrealized gains onavailable-for-sale securities decreased by 72 million yen and unrealized gains (losses)
on revaluation of land increased by 184 million yen.

3

Financial Statements — Consolidated
Balance Sheet — Consolidated
As ofMarch 31, 2011
AmountAssets
Current assets
Cash and deposits
Notes receivable - trade
Accounts receivable - tradeMarketable securities
Finished products
Work in process
Raw materials and supplies
OtherAllowance 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
OtherAllowance 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
Allowances
Other
Total current liabilities
Noncurrent liabilities
Accrued employees’ retirement benefits
Other allowances
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equityCommon 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(millions of yen)

As ofDecember 31, 2011
Amount35,073
5,983
47,25720,000
1,303
2,643
1,533
4,098
(40)
117,852

24,742
6,780
46,961
36,000
1,377
8,093
1,614
3,778
(47)
129,300

31,454
48,82626,328106,608
1,939

28,84345,122
26,337
100,304
1,746

27,081(184)
26,897
135,446
253,298

24,575(176)
24,399126,449
255,750

1,402
15,058
5,626
3,275
9,407
34,771

1,713
16,984
3,297
2,090
9,854
33,940

9,936
440
8,799
19,17553,946

10,289165
8,382
18,837
52,777

13,45011,426
184,954(9,640)200,191

13,45011,426
190,769(9,642)206,004623(764)(2,006)(2,148)
1,308
199,351
253,298(1,137)(580)(2,596)(4,314)
1,283
202,972
255,750

4

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

Nine months ended
December 31, 2010
AmountNine months ended
December 31, 2011
AmountNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses

129,237

133,404

83,426

86,76845,81046,636

26,424

27,049Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries
and affiliates
OtherTotal non-operating income
Non-operating expenses
Interest expense
Other
Total non-operating expenses
Ordinary income
Extraordinary losses
Valuation loss on investment securities
Disaster losses and disaster recovery expenses
Loss on liquidation of businessTotal extraordinary losses
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in earnings of consolidated
subsidiaries

19,385

19,586

Net income

76

107

307

353

220

265

353

134

958

860

22

69

206

121

228

191

20,115

20,255

－

608

－

35

73

－

73

644

20,041

19,611

7,956

8,825

12,084

10,786100

31

11,984

10,754

5

Statement of Comprehensive Income(millions of yen)

Income before minority interests
Other comprehensive income
Unrealized gains on available-for-sale securities
Unrealized gains (losses) on revaluation of land
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
the parent company
Comprehensive income attributable to minority
interests

Nine months ended
December 31, 2010
AmountNine months ended
December 31, 2011
Amount12,08410,786(1,173)(1,758)

-184

(445)

(577)

(36)

(57)

(1,655)(2,207)

10,4298,578

10,3668,588

63(10)

6

Notes on the Going-concern Assumption
Nine months ended December 31, 2011 (April 1, 2011 – December 31, 2011)

Not applicable

Segment Information
1. Sales and income by reportable segment
Nine months ended December 31, 2010 (April 1, 2010 – December 31, 2010)
Reportable segments
Water
Water
Treatment
Treatment
Chemicals
Facilities
Total
Sales
Sales to outside customers
Inter-segment sales or transfers

TotalSegment income(millions of yen)Amounts reported on
the quarterly
Adjustments statements of income(note 1)
(note 2)

42,37386,863

129,237－

129,237

276

115

391

(391)

－

42,65086,979129,629

7,797

11,587

19,385

129,237(019,385

Nine months ended December 31, 2011 (April 1, 2011 – December 31, 2011)
Reportable segment
Water
Water
Treatment
Treatment
Facilities
Chemicals
Total
Sales
Sales to outside customers
Inter-segment sales or transfers
Total
Segment income(millions of yen)Amounts reported on
the quarterly
Adjustments statements of income(note 1)
(note 2)

42,393265
42,65891,011
198
91,209133,404463
133,868

－
(463)
(463)

133,404－
133,404

7,194

12,392

19,587(0)

19,586

Notes:

1. Adjustments related to sales represents 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.
Notes on Significant Changes in Shareholders’ Equity
Nine months ended December 31, 2011 (April 1, 2011 – December 31, 2011)

Not applicable7Supplementary Information — Consolidated(1) Order Intake(millions of yen)

Business segment
Water Treatment Chemicals

Nine months ended December 312010
2011
Amount%Amount42,47333.7
42,330%30.6

Water Treatment Facilities

83,53066.3

95,864

69.4

Total

126,004

100.0

138,194

100.0(2) Net Sales(millions of yen)

Business segment
Water Treatment Chemicals

Nine months ended December 31,
2010
2011
Amount%Amount42,37332.8
42,393%31.8

Water Treatment Facilities

86,863

67.2

91,011

68.2

Total

129,237

100.0

133,404

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

Business segment
Water Treatment Chemicals

Nine months ended December 31,
2010
2011
Amount%Amount
508
15.8
853

%
15.8

Water Treatment Facilities

2,721

84.2

4,562

84.2

Total

3,230

100.0

5,415

100.0

(4) Depreciation (Property, Plant and Equipment)(millions of yen)

Business segment
Water Treatment Chemicals

Nine months ended December 31,
2010
2011
Amount%Amount
887
7.7
867

%
7.6

Water Treatment Facilities

10,651

92.3

10,615

92.4

Total

11,539100.0

11,482100.08