May 14, 2010

Business Performance for Fiscal Year 2010
(on a consolidated basis)
1. Outline of business operations for FY2010 (April 1, 2009 to March 31, 2010)(1) Operating results(Amounts less than ¥1 million are omitted)
Net sales

Operating income
YoY(¥ million)

YoY(¥ million)changeRecurring income(¥ million)changeNet income

YoY(¥ million)changeYoYchangeFY2010433,390(12.6)%

27,556(5.5)%

27,058(3.2)%

15,748(4.7)%

FY2009495,746(2.4)%

29,164 (24.8)%

27,948(27.4)%

16,533(24.6)%

Earnings per share(Yen)

ROEROA

Operating margin

FY2010

39.39

8.3%

4.7%

6.4%

FY2009

41.21

8.6%

5.2%

5.9%

(2) Financial position(As of end of terms; amounts less than ¥1 million are omitted)
Total assets
Net assets
Net assets
Equity ratio (%)(¥ million)(¥ million)
per share (¥)
617,215
212,39632.3
497.92FY2010 full term (March 31, 2010)
FY2009 full term (March 31, 2009)

534,350

194,25033.9

452.67

Notes:
EquityFY2010 full term: ¥199,078 million
FY2009 full term: ¥181,037 million

2. Forecasts for business operations for the FY2011 full term (April 1, 2010 – March 31, 2011)
Net sales(¥ million)
FY2011 (firsthalf)
FY2011 (fullterm)

Operating income

YoYchange(¥ million)

YoYchange(Amounts less than ¥1 million are omitted)
Recurring
Earnings per
Net income
incomeshare
YoY (¥ million YoY(¥ million)(Yen)change)change230,000

12.7%

15,00017.5%

14,200 14.9%

8,000 17.2%

20.01

480,000

10.8%

32,50017.9%

30,500 12.7%

17,000

42.52

17.9%

3. Business Performance and Financial Results (consolidated basis)
Business performance for FY2010(1) Overview
During the reporting term (ended March 31, 2010), the Japanese economy suffered from a
production slowdown in manufacturing industries as a whole at the start of the term as a result of
the global recession that began in 2008 stemming from the U.S. financial crisis. However, sincethen, demand has swiftly recovered in Asian countries including China. The effects of policies tostimulate domestic demand focusing on eco-friendly automobiles and energy-saving home
appliances also appeared, leading to a moderate recovery of demand through the end of the fiscalyear.
In the Company’s main user industries, despite a modest economic rally in North America,
demand recovery was driven largely by LCD panels, semiconductors, high-end steel materials forautomobiles and general-purpose resins from Asian countries including China. Steel, chemicals andelectronics industries in particular showed promising signs.
Amid these circumstances, as a result of concerted efforts made by the Group to increase
earnings, demand for gases, especially in Japan, steadily recovered, but demand for equipment
and installation/construction services dropped sharply because of weak capital investments.
Furthermore, the modest economic recovery staged in North America, which fell below forecast,and the sudden appreciation of the yen resulted in sales of ¥433, 390 million, a 12.6% year-on-year
decline, during the reporting term.
On the earnings front, as a result of continued efforts to achieve greater distribution efficiency ofliquefied gas as well as to focus on further Groupwide cost reductions, operating income came to¥27,556 million (down 5.5% year on year) and recurring income came to ¥27,058 million (down3.2%.). Net income came to ¥15,748 million (down 4.7%) due chiefly to extraordinary losses
including a loss on disposal of noncurrent assets and a gain on sales of subsidiaries’ stocks recorded
as extraordinary income.
On a non-consolidated basis, sales were down 15.8% year on year to ¥224,742 million, while
operating income edged up 1.1% to ¥14,315 million, recurring profit increased 8.4% to ¥15,899
million, and net income climbed 28.1% to ¥10,595 million.
(2) Breakdown of business performance by operational segment
Gas Business
The Group’s mainline gases – oxygen, nitrogen, and argon – saw increased exports in relatedindustries including electronics, automotive and petrochemical products, as well as the beginningof a partial recovery thanks to the effects of policies to stimulate domestic demand. Such promising
signs as a rebound in shipment volumes gradually emerged from around the fourth quarter of FY2009 and the first quarter of FY 2010.
Shipments of oxygen for supply through a pipeline (on-site plants) rallied thanks to increased
demand in China and Asia for high-end steel plates for automobiles and other applications andhigher demand for petrochemical products. Because demand for liquefied gas, especially for use intransportation equipment, electric furnaces and metal processing, has recovered at only a moderatepace, total oxygen sales fell below the previous fiscal year’s level.
2On the other hand, steady demand from steelmakers, chemical companies, and electronics
manufacturers for nitrogen for use in ensuring process safety and for purging (protection fromimpurities), as well as new demand for its use in Sharp Corporation’s plant for large LCD panels
that began operation in Sakai City, Osaka Prefecture, contributed to earnings. Nevertheless, sincedemand for liquefied gas in Japan has only modestly recovered, total nitrogen sales fell below theprevious fiscal year’s level.
Although there were signs of recovering demand for argon for use in semiconductor silicon
crystals and stainless steel smelting, shipments and sales of argon fell below the previous year’slevel owing to a sharp decline in demand for its use in welding due to weak public-sector
investments and construction demand.
Despite a rebound in electronics-related demand for LCD panels, semiconductors and otherproducts, as well as new demand from large LCD panel plants, sales of electronic materials gases
fell below the previous year’s level due to a modest recovery in demand from North America.
Sales of LP gas fell below the previous term’s level in the wake of decreasing demand anddeclining import prices.
Sales of other gases fell below the previous year’s level on the back of weak domestic demandprimarily for carbon dioxide, helium and hydrogen.
As a result, sales of the Gas Business declined 8.9% year on year to ¥300,451 million.
Machinery & Equipment Business
The TNSC Group’s machinery and equipment business was also heavily impacted by the global
financial crisis and its concomitant economic downturn. Our main customer industries made sharp
cuts in expenditures on plant and equipment, and sales fell below the previous year’s level in both
the domestic and overseas markets.
In the field of electronics-related equipment, despite large projects that are progressing well,sales fell below the previous year’s level owing to a significant decrease in the replacement ofequipment following the economic recession in Japan and the review and postponement of newinvestments.
In the field of chemical compound semiconductor manufacturing equipment (MOCVD),
business inquiries from Japan and abroad intensified thanks to rapidly expanding LED demand forbacklights in LCDs and lighting as well as increased chemical compound semiconductor devices
demand for equipment and machinery, causing sales to exceed those of the previous year.
Sales of welding equipment and materials fell below the previous year’s level as a result of a
sharp decline in domestic demand for transportation and construction equipment due in part todecreased public-sector investment and the postponement of private capital investment, inaddition to later-than-expected economic recovery in North America.
Sales of air separation plants were below those of the previous year because of generally weakcapital investment plans in the steel, chemical and electronics industries.
Despite steady demand for cryogenic equipment from universities and research institutions,amidst a continuing long-term slump in demand from the government sector for equipment related
to aerospace research, business conditions were harsh due to the effects of the protracted slowdown
in large-scale capital investments in the private sector.
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As a result of the foregoing, sales for the reporting term by the Group’s Machinery & Equipment
Business decreased 22.7% from the previous year, to ¥113,997 million.
Housewares Business and Others
In the Housewares Business, earnings exceeded those of the previous term thanks to favorable
shipments of sports bottles, the mainstay product of Thermos K.K., and portable mugs, a popularproduct.
As a result, sales for this business rose 2.5% year on year, to ¥18,941 million.
(3) Prospects for FY 2011
Present global economic conditions appear to be on a general recovery trend with continued growthin emerging nations such as China and India and the effects of economic measures in the U.S.
beginning to appear. Moreover, although domestic demand is likely to remain lackluster, exports toAsian countries including China are a growth engine that is driving the economy back on track to amodest recovery. Amid these circumstances, in the fiscal year ending March 31, 2011, the final
year of the current medium-term business plan, the TNSC Group will take steps to further improveearnings by implementing key strategies including the focusing of its business resources on
growing markets and industries.
Business performance forecasts for FY 2011
(Billions of yen)
Net sales

Operating income

Recurring income

Net income

FY2011

480

32.5

30.5

17.0

FY2010

433.3

27.5

27.0

15.7

YoY decrease (%)

10.8

17.9

12.7

7.9

Note: For the purposes of these forecasts, the average exchange rate of the Japanese yen against the U.S. dollar inFY 2011 is assumed to be ¥90/$1.

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4. Segment information(1) Results by operating segment
FY2009 (April 1, 2008 to March 31, 2009)(Millions of yen)

I. Sales and operating
incomeSales(1) Sales to externalcustomers(2) Sales frominter-segment
transactions andtransfers
Total
Operating expenses
Operating income
II. Assets,
depreciation,impairment and capital
expenditures
AssetsDepreciation
Impairment loss
Capital expenditures

Gas Business

Machinery andEquipment Business

329,813

147,445

20Housewares
Business andOthers

Total

Eliminations Consolidatedor Corporate

18,488495,746-495,746

23,36257

23,441(23,441)-

329,834
307,384
22,449170,807
159,219
11,587

18,546
16,3132,232

519,187
482,917
36,269(23,441)(16,335)(7,105)495,746466,582
29,164

390,458
25,141
58,86279,7572,454
7,939

19,405767
667

489,62128,36367,46944,729(23)
141(1,459)534,350
28,339141
66,010FY2010 (April 1, 2009 to March 31, 2010)(Millions of yen)
Gas Business

Machinery andEquipment BusinessHousewares
Business andOthers

Total

Eliminations Consolidate
or Corporate
dI. Sales and operating
incomeSales(1) Sales to external
300,451
113,997
18,941 433,390
433,390
customers(2) Sales frominter-segment
5
10,012
34
10,052(10,052)
transactions andtransfers
Total
300,457
124,009
18,976 443,442(10,052)
433,390
Operating expenses
278,014
117,362
15,563 410,940(5,105)405,834
Operating income
22,4436,646
3,412
32,502(4,946)27,556
II. Assets,depreciation,impairment and capital
expenditures
Assets464,741
70,93921,641 557,322
59,893
617,215
Depreciation
28,044
1,811
748
30,604(461)
30,143
Impairment loss570
570
Capital expenditures
32,4255,875
1,442
39,743(1,377)38,366
Notes:
1. Segmentation method
Products (whether developed and/or made in-house or by other companies [i.e. bought-in merchandise]) areallocated to one of the three segments of the Gas Business, the Machinery and Equipment Business, and theHousewares Business and Others.
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2. The principal products and services included in the three segments are shown in the table below.
Business segment
Main products
Oxygen, nitrogen, argon, carbon dioxide, helium, rare gases such as xenon and neon,hydrogen, medical gases (oxygen, dinitrogen monoxide), specialty gases (semiconductor
Gas Businessmaterials gases, standard reference gas), dissolved acetylene, liquid petroleum gas(LPG), other gases, stable isotopes, equipment lease
Cutting and welding equipment, welding materials, cylinders, semiconductor relatedengineering/equipment, semiconductor manufacturing equipment, medical equipment,
Machinery andair separation plants (oxygen, nitrogen, argon, rare gases), cryogenic air separation
Equipment
plants, ultra-low-temperature equipment, high-vacuum equipment, pressure swing
Business
adsorption (PSA) gas generators, hydrogen generators, gas compressors, gas expanders,liquefied gas storage/pumps, vacuum brazing, atomic power/space development
equipment and other related equipment
Housewares
Stainless steel vacuum bottles (household, laboratory), vacuum thermal insulation
Business andcooking pots, assembly, processing and inspection of electronic components,
maintenance of facilities, other outsourced business
Others
3. The operating expenses of “Eliminations or corporate” included operating expenses of ¥3,541 million that could
not be allocated to any particular segment. The majority of these items consist of expenses incurred by theCompany’s administrative divisions.
4. The assets of “Elimination or corporate” included Companywide assets totaling ¥86,215 million. The majorityof these were monetary assets that were being managed, investment securities and assets related to theadministrative division.

(2) Results by geographical segment
FY 2009 (April 1, 2008 to March 31, 2009)
NorthAmericaJapan
I. Sales and operating income
Sales(1) Sales to external customers(2) Sales from inter-segment
transactions
Total
Operating expenses
Operating income
II. Assets

Othercountries

Total

Eliminations
or Corporate

Consolidated

383,936

82,00629,802495,746-495,746

7,177

9,985

3,298

20,461(20,461)-

391,114368,386
22,728324,729

91,992
83,462
8,529
102,332

33,101
31,513
1,587
34,653516,208
483,362
32,846
461,715(20,461)(16,779)(3,682)
72,635495,746466,582
29,164534,350

Eliminations
or Corporate

Consolidated

FY 2010 (April 1, 2009 to March 31, 2010)
NorthAmerica

Japan

Other
countries

Total

I. Sales and operating income
Sales(1) Sales to external customers
334,444
77,554
21,391 433,390
433,390(2) Sales from inter-segment
3,390
5,776
3,136
12,303(12,303)transactions
Total
337,834
83,331
24,528 445,694(12,303)433,390
Operating expenses
313,80278,36922,934 415,106(9,271)
405,834
Operating income
24,0314,962
1,594
30,587(3,031)
27,556
II. Assets
332,399
163,106
35,898 531,404
85,810617,215
Notes:
1. Principal countries in the North America and Other Countries segments are as follows:(1) North America: The United States of America(2) Other countries: Singapore, Malaysia, Philippines, China, Taiwan etc.
2. The operating expenses of “Eliminations or corporate” included operating expenses of ¥3,541 million that could
not be allocated to any particular segment. The majority of these items consist of expenses incurred by theCompany’s administrative divisions.
3. The assets of “Elimination or corporate” included Companywide assets totaling ¥86,215 million. The majorityof these were monetary assets that were being managed, investment securities and assets related to theadministrative division.
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