IMMEDIATE RELEASE

Kurita Water Industries Reports Earnings for the Six Months ended
September 30, 2010
Tokyo, Japan, October 29, 2010—Kurita Water Industries Ltd. (TSE Securities Code6370) announced net sales of 87,712 million yen for the six months ended September 30,
2010 (April 1, 2010 – September 30, 2010) and net income of 8,202 million, or 63.76
yen per share.
Results of Operations
Total consolidated orders for the Kurita Group in the six months ended September 30,
2010, were up 2.1% versus the year-ago first half (six months ended September 30,2009) to 89,946 million yen, and net sales increased 4.6% to 87,712 million yen.
Operating income was 13,412 million yen, up 4.1% versus the year-ago first half;
ordinary income was 13,902 million yen, up 5.6%; and net income was 8,202 million
yen, up 0.7%.
Markets in which the Kurita Group operates remained adverse during the six months
ended September 30, 2010. Although capacity utilization at customer plants improved
amid signs of a pickup in some areas of the economy, new capital expenditure in Japanremained at low levels.
Overview by Segment
The Kurita Group is composed of segments delineated according to the products andservices handled by each of its business divisions. These reportable segments
correspond to the segments that the Group has used thus far, namely the Water
Treatment Chemicals segment and the Water Treatment Facilities segment.
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment were 29,156 million
yen, up 8.9% versus the year-ago first half, and sales increased 7.5% to 28,663 million
yen. Operating income rose 30.9% to 5,538 million yen.
During the six months ended September 30, 2010, the Kurita Group bolstered sales
efforts by strengthening intra-group alliances and pursued order bookings throughconsultative sales to help customers successfully meet challenges such as productivity
enhancement and environmental mitigation.
In Japan, orders for and sales of boiler water treatment chemicals, cooling water
treatment chemicals, and wastewater treatment chemicals, the Group’s mainstay
products, increased versus the year-ago first half, primarily in response to improvements
in capacity utilization at customer plants.
Overseas, orders and sales increased in response to recoveries in production in various
industries, mainly in Asia, and more determined sales activities by the Group.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment were 60,789 million yen,down 0.9% versus the year-ago first half, and sales rose 3.3% to 59,048 million yen.
Operating income fell 8.9% to 7,875 million yen.
During the six months ended September 30, 2010, the Group worked to generate
profits by focusing on service businesses and endeavored to expand order bookings bystepping up both consultative sales targeting key customers and sales activities in Asia,1with emphasis on China.
In the electronics industry, orders for the ultrapure water supply business were flatversus the year-ago first half, but orders for ultrapure water production systems
increased overseas. Orders for maintenance services rose due to recovery inmaintenance services demand at customer plants in Japan. Sales of ultrapure waterproduction systems increased on the back of progress on projects in Japan and overseas.
Sales of maintenance services also rose.
In general industries, orders for water treatment facilities from the food and steel
industries declined versus the year-ago first half, and orders for soil remediation
services also fell. Sales of water treatment facilities declined amid a lull in sales fromlarge projects in the steel industry. Meanwhile, sales of maintenance services roseslightly versus the year-ago first half.
Financial Condition
Current assets totaled 115,666 million yen at the end of the fiscal second quarter(September 30, 2010), an increase of 6,369 million yen versus the end of the previousfiscal year (March 31, 2010). The increase was mainly due to increases of 8,872 million
yen in cash and deposits and 2,392 million yen in work in process, which were partially
offset by declines of 3,848 million yen in trade accounts receivable and 2,000 million
yen in marketable securities. The increase in cash and deposits resulted from steadyprogress with collections and a decrease in negotiable certificates of deposits, which aretreated as marketable securities. The increase in work in process was due to ongoingworks in the water treatment facilities business. The decreases in trade accounts
receivable and marketable securities are stated above.
Noncurrent assets totaled 135,662 million yen at the end of the fiscal second quarter, adecline of 6,661 million yen versus the end of the previous fiscal year. The decline ismainly due to a 5,978 million yen decrease in property, plant and equipment due todepreciation on past years’ investments in ultrapure water supply business facilities
exceeding current period investments in property, plant and equipment.
Current liabilities totaled 34,607 million yen at the end of the fiscal second quarter, adecrease of 3,985 million yen versus the end of the previous fiscal year. The change ismainly due to decreases of 1,883 million yen in income taxes payable and 2,371 million
yen in other current liabilities. The decline in income taxes payable is due to annual tax
payments. The decline in other current liabilities is primarily due to a decline in
consumption tax payable resulting from annual tax payment and decreases in otheraccrued payables.
Noncurrent liabilities totaled 19,143 million yen at the end of the fiscal first quarter, aslight increase of 55 million yen versus the end of the previous fiscal year.
Net assets totaled 197,577 million yen at the end of the fiscal second quarter, an
increase of 3,638 million yen versus the end of the previous fiscal year. The change ismainly due to a 8,202 million yen increase in retained earnings owing to first-half net
income, which was partially offset by a 2,444 million yen decrease in retained earnings
due to dividend payments, and a 2,141 million yen decrease in valuation and translation
adjustments due to a decrease in unrealized gains on available-for-sale securities
reflecting a drop in the market prices of investment securities held by the Group.
Outlook for the Fiscal Year Ending March 31, 2011
The Group believes that it is on course to achieve its earnings forecasts for the full fiscal
year ending March 31, 2011, which are detailed in its consolidated earnings release (andin Japanese in the kessan tanshin) for the fiscal year ended March 31, 2010, issued on
April 30, 2010.
2Financial Statements — Consolidated
Balance Sheets — Consolidated(millions of yen)

As of
September 30, 2010
AmountAssets
Current 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 assetsTotal assets
Liabilities
Current liabilities
Notes payable – trade
Accounts payable - trade
Income taxes payable
Accrued employees’ bonuses
Other allowances
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
Valuation and translation adjustments
Unrealized gains on available-for-sale securities
Unrealized gains (losses) on revaluation of land
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

As ofMarch 31, 2010
Amount25,235
6,296
46,12726,500
1,379
4,992
1,257
3,929
(52)
115,666

16,363
5,393
49,97528,500
1,334
2,600
1,186
4,075
(132)
109,297

33,616
52,66524,241
110,522
2,033

35,68551,65929,154
116,500
2,173

23,274(167)
23,106135,662251,328

23,854(205)
23,649142,323
251,620

1,704
14,855
5,547
2,829
635
9,035
34,607

1,198
15,632
7,430
2,377
546
11,406
38,592

9,710
434
8,998
19,14353,751

9,465
449
9,172
19,08857,68013,45011,426
178,475(4,859)198,493

13,45011,426
172,717(4,855)
192,738364(764)(1,890)(2,290)
1,374
197,577
251,328

1,989
(764)
(1,374)(149)
1,350
193,939
251,620

3

Statements of Income — Consolidated(millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and directors’ remuneration
Provision for employees’ bonusesR&D expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain from cancellation of contracts
Total extraordinary income
Extraordinary losses
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
Net income

Six months ended
September 30, 2009
Amount83,81553,881
29,933Six months ended
September 30, 2010
Amount87,71256,486
31,225

6,004
1,332
1,958
7,759
17,055
12,878

6,406
1,472
2,023
7,909
17,812
13,412

46
128

55
151

131

131

136
443

317
656

17
138
155
13,166

14
57
94
166
13,902

679
679

-

136
136
13,7095,514-

13,902
5,624
8,278

53

76

8,142

8,202

4

Statements of Cash Flows — Consolidated(millions of yen)Six monthsended
September 30,
2009
AmountSix months
ended
September 30,
2010
AmountCash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in allowances(Increase) decrease in notes and accounts receivable - trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable - trade
Income taxes paid
OtherNet cash provided by (used in) operating activities

13,709
7,468
(24)
9,284
(1,970)(3,501)(4,011)
1,326
22,28013,902
8,010
626
2,977
(2,563)(543)(7,365)(1,334)
13,709Cash 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 marketable securities
Payments for purchases of property, plant and equipment
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(2,099)2,916(15,487)
42(5)
(995)
1,051
(14,579)(14,996)
1,055(36,000)
38,500(2,366)19(1,706)(289)
151(15,632)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
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

40
(214)
(4)
(2,182)(78)(2,438)

200
(234)
(3)
(2,441)(11)(2,489)

814

(179)

6,075
25,262(4,592)
20,59060

46

31,39816,044

Effect of exchange rate changes on cash and cash
equivalentsNet increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Increase in cash and cash equivalents from newly
consolidated subsidiaries
Cash and cash equivalents at the end of the period

5Notes on the Going-concern Assumption
Six months ended September 30, 2010 (April 1, 2010 – September 30, 2010)

Not applicable

Segment Information
Business segment information
Six months ended September 30, 2009 (April 1, 2009 – September 30, 2009)(millions of yen)Sales(1) Sales to outside customers(2) Inter-segment sales ortransfers
Total
Operating income

Water
Treatment
Chemicals

Water
Treatment
Facilities

26,665

57,15083,815-83,815

195

42237

(237)

-

26,8604,230

57,192
8,647

84,052
12,878(237)
083,815
12,878

Total

Eliminationor corporate

Consolidated

Geographical segment information
Six months ended September 30, 2009 (April 1, 2009 – September 30, 2009)(millions of yen)

Otherregions

Japan
Total
Sales
(1) Sales to outside customers
77,018
6,796
83,815(2) Inter-segment sales or750
140
891
transfers
Total
77,7696,937
84,707
Operating income
12,160661
12,821
Notes:
1. Geographic segmentation is based on geographic proximity.
2. “Other regions” in the above table consists of Asia and other areas.

Eliminationor corporate

Consolidated-

83,815(891)-(891)
57

83,815
12,878Overseas sales
Six months ended September 30, 2009 (April 1, 2009 – September 30, 2009)(millions of yen)Asia5,243-

North
America
781-

EuropeOtherTotal
I. Overseas sales
683
1,042
7,751
II. Consolidated net sales
83,815
III. Ratio of overseas sales to total
6.3%
0.9%
0.8%
1.2%
9.2%
consolidated salesNotes:
1. Geographic segmentation is based on geographic proximity.
2. Major countries or regions in each category are as follows:(1) Asia:
Korea, China, Taiwan, Singapore, Indonesia, and Thailand(2) North America:
U.S.A.
(3) Europe:
Germany(4) Other areas:
Brazil3. “Overseas sales” comprises sales by the Company and its consolidated subsidiaries in countries orregions other than Japan.

6Additional information
Effective the first quarter of the fiscal year ending March 31, 2011, the Company adopted the Revised
Accounting Standard for Disclosures about Segments of an Enterprise and Related Information (ASBJ
Statement No. 17, revised March 27, 2009) and its accompanying Guidance on the Accounting Standardfor Disclosures about Segments of an Enterprise and Related information (Guidance No. 20, March 21,2008).
1. Overview of reportable segments
The Company’s reportable segments are components of the Company about which separate financial
information is available. These segments are subject to periodic examinations to enable the Company’sboard of directors to decide how to allocate resources and assess performance.
The Company’s business divisions are based on product and service categories. Each of the divisionsconduct business based on comprehensive strategies formulated for the products and services that theyhandle. The Company’s consolidated subsidiaries conduct business under relevant business divisions’supervision.
The Group’s operations are therefore segmented based on the products and services handled by eachof the divisions. The Company’s reportable segments correspond to the segments it has used thus far,namely the Water Treatment Chemicals segment and Water Treatment Facilities segment.
The Water Treatment Chemicals segment manufactures and sells water treatment chemicals andequipment and provides maintenance services. The Water Treatment Facilities segment manufacturers
and sells water treatment equipment and facilities, provides ultrapure water, chemical cleaning, toolcleaning, soil and groundwater remediation services, and provides maintenance services thatencompass operation, maintenance, and management of water treatment facilities.

2. Sales and income by reportable segment
Six months ended September 30, 2010 (April 1, 2010 – September 30, 2010)(millions of yen)

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities
TotalSales(1) Sales to outside customers
28,66359,04887,712(2) Inter-segment sales or transfers
187
85272
Total
28,85059,13387,984
Segment income
5,538
7,875
13,413
Notes:
1. “Adjustments” represent the elimination of inter-segment transactions.
2. Segment income represents operating income.

Amounts reported on
the quarterly
Adjustments statements of income(note 1)
(note 2)
(272)
(272)
(0)

87,712
87,712
13,412

Notes on Significant Changes in Shareholders’ Equity
Six months ended September 30, 2010 (April 1, 2010 – September 30, 2010)

Not applicable7

Other Information — Consolidated
Order Intake(millions of yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2009
2010
Amount%Amount26,77530.4
29,156%32.4

Water Treatment Facilities

61,325

69.6

60,789

67.6

Total

88,101

100.0

89,946

100.0

Net Sales(millions of yen)

Business segment
Water Treatment Chemicals

Six months ended September 30,
2009
2010
Amount%Amount26,66531.8
28,663%32.7

Water Treatment Facilities

57,15068.2

59,048

67.3

Total

83,815100.0

87,712100.0

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

Business segment
Water Treatment Chemicals

Six months ended September 30,
2009
2010
Amount%Amount
403
10.2
436%
25.9

Water Treatment Facilities

3,554

89.8

1,247

74.1

Total

3,958

100.0

1,683

100.0

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

Business segment
Water Treatment Chemicals

Six months ended September 30,
2009
2010
Amount%Amount
630
8.8
583%
7.6

Water Treatment Facilities

6,510

91.2

7,087

92.4

Total

7,141

100.0

7,670

100.08