FOR IMMEDIATE RELEASE
Kurita Water Industries Reports Earnings for the Six Months ended
September 30, 2011
Tokyo, Japan, October 31, 2011—Kurita Water Industries Ltd. (TSE Securities Code6370) announced net sales of 89,515 million yen for the first six months ended
September 30, 2011 (April 1, 2011 – September 30, 2011) and net income of 7,881
million yen, or 62.23 yen per share.
Results of Operations
Total consolidated orders for the Kurita Group in the first six months ended September
30, 2011 increased 9.4% versus the same period of the previous year to 98,436 millionyen. Net sales increased 2.1% year on year to 89,515 million yen. In terms of income,operating income decreased 2.9% year on year to 13,017 million yen. Ordinary income
totaled 13,384 million yen, down 3.7%, and net income totaled 7,881 million yen, down
3.9%.
Reviewing markets in which the Kurita Group operates, the Japanese market was
severe at the beginning of the fiscal year due to the lingering effects of the Great East
Japan Earthquake. Signs of recovery began to emerge, however, as corporate
manufacturing activity rebounded following the revival of supply chains. The Japanese
economy is expected to move towards moderate recovery. Overseas, economic growthcontinued, mainly in newly emerging economies. Overall, however, the future economic
outlook became more clouded due to increasing concerns over the impact of financial
instability in Europe on the global economy, as characterized by the fiscal plight ofGreece.
Segment Information
Water Treatment Chemicals
Total Group orders for the Water Treatment Chemicals segment in the six­month period
were 29,018 million yen, down 0.5% versus the same period of the previous year, andsales declined 0.2% to 28,617 million yen. Operating income declined 9.9% to 4,991
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 meetchallenges such as energy conservation and productivity enhancement.
In Japan, orders and sales of chemical­related equipment and systems increased intandem with earthquake recovery efforts. Demand declined, however, for boiler water
treatment chemicals and process treatment chemicals for the paper and pulp andpetrochemical industries due to low capacity utilization rates at customer manufacturing
facilities, mainly in the first quarter. Overseas, orders and sales increased on growing
manufacturing activity, primarily in newly emerging economies.
Water Treatment Facilities
Total Group orders for the Water Treatment Facilities segment in the six­month period
were 69,418 million yen, up 14.2% versus the same period of the previous year. Sales
increased 3.1% to 60,898 million yen, and operating income rose 1.9% to 8,027 million
1yen.
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 targeting key customers and by strengthening its sales activities inAsia.
In the electronics industry, while orders in the ultrapure water supply businessdeclined slightly, orders of maintenance services increased due to higher demand amongcustomers in Japan recovering from the earthquake and orders of ultrapure waterproduction systems also increased due to demand by overseas semiconductor
manufacturers. In terms of electronics industry sales, maintenance services sales
increased, but sales in the ultrapure water supply business slightly declined and sales ofultrapure water production systems declined.
In general industries, orders and sales of both water treatment facilities andmaintenance services increased, as demand from domestic electric power industry
surged during recovery efforts following the earthquake.
Financial Condition
Current assets totaled 128,652 million yen at the end of the first six months of thecurrent fiscal year (September 30, 2011), an increase of 10,800 million yen versus theend of the previous fiscal year (March 31, 2011). Increases of 18,000 million yen inmarketable securities and 2,371 million yen in work in process outweighed decreases of
8,560 million yen in cash and deposits and 1,458 million yen in trade accounts
receivable. The decrease in trade accounts receivable was the result of progress incollections since the end of the previous fiscal year. The decline in cash and deposits
was the result of increased investment in negotiable certificates of deposits, which aretreated as marketable securities. The increase in work in process was the result ofprogress in water treatment facility construction, and the increase in marketablesecurities is as stated above.
Noncurrent assets totaled 129,142 million yen at the end of the six months, a declineof 6,304 million yen versus the end of the previous fiscal year. The decline resulted
from a 4,856 million yen decrease in property, plant and equipment and a 1,341 million
yen decline in investments and other assets. The decline in property, plant andequipment was due to the current period’s depreciation on past years’ investments inultrapure water supply business facilities exceeding the current period’s investments inproperty, plant and equipment. The decline in investments and other assets was theresult of a decline in the market price of marketable securities.
Current liabilities totaled 34,936 million yen at the end of the six months, a slightincrease of 165 million yen versus the end of the previous fiscal year.
Noncurrent liabilities totaled 18,959 million yen, a slight decrease of 216 million
yen versus the end of the previous fiscal year.
Net assets totaled 203,898 million yen at the end of the six months, an increase of
4,547 million yen versus the end of the previous fiscal year. While retained earnings
increased 5,475 million yen, accumulated other comprehensive income declined 954
million yen. Retained earnings increased as the six months’ net income of 7,881 million
yen exceeded the year­end dividend payment of 2,406 million yen for the previous year.
Accumulated other comprehensive income declined due to a decline in unrealized gains
on available­for­sale securities caused by the aforementioned decline in the market priceof marketable securities.

2Cash FlowsAt September 30, 2011, Kurita had cash and cash equivalents totaling 10,294 million
yen, a decrease of 540 million yen versus March 31, 2011. Details regarding cash flows
are as follows.
Cash Flows from Operating Activities
Net cash provided by operating activities in the six months ended September 30, 2011
was 14,982 million yen (an increase of 1,273 million yen compared to the same periodof the previous year). This primarily reflects a net inflow comprising income before
income taxes and minority interests of 13,349 million yen, 7,904 million yen in
depreciation and amortization, and a decrease of 1,047 million yen in trade receivables,
which was partially offset by income taxes paid of 5,817 million yen and an increase of
2,560 million yen in inventories.
Cash Flows from Investing Activities
Investing activities used net cash of 12,727 million yen (a decrease of 2,905 million yen
versus the same period of the previous fiscal year). This primarily reflects an inflow
from an increase in time deposits of 8,042 million yen, and outflows from the purchaseand redemption of investment securities of 18,000 million yen, and payments forpurchase of property, plant and equipment for the ultrapure water supply and otherbusinesses, totaling 2,671 million yen.
Cash Flows from Financing Activities
Financing activities used net cash of 2,842 million yen (an increase of 353 million yen
from the same period of the previous year). The main use of cash was 2,416 million yen
in cash dividends paid.
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.

3

Financial Statements — Consolidated
Balance Sheets — Consolidated(millions of yen)

As ofMarch 31, 2011
AmountAssets
Current assets
Cash and deposits
Notes receivable ­ trade
Accounts receivable ­ tradeMarketable securities
Finished products
Work in processRaw materials
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 assets
Total 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
OtherTotal noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains on available­for­sale 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

As ofSeptember 30, 2011
Amount35,073
5,983
47,25720,000
1,303
2,643
1,533
4,098
(40)
117,852

26,513
6,514
45,79938,000
1,563
5,014
1,500
3,797
(51)
128,652

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

29,625
46,991
25,135
101,752
1,832

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

25,739(182)
25,556
129,142
257,794

1,402
15,058
5,626
2,336
938
9,407
34,771

1,639
15,431
5,264
2,801
872
8,926
34,936

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

10,097
162
8,699
18,95953,895

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

13,45011,426
190,429(9,641)
205,665623(764)(2,006)(2,148)
1,308
199,351
253,298

(589)
(764)
(1,748)(3,102)
1,336
203,898
257,794

4

Statements of Income and Comprehensive Income — Consolidated(millions of yen)Six months ended
September 30, 2010
AmountSix months ended
September 30, 2011
AmountNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and allowances
Provision for employees’ bonuses
R&D expenses
Other87,71289,51556,48658,226

31,22531,288

6,406

6,544

1,472

1,513

2,023

2,065

7,909

8,147

Total selling, general and administrative expenses
Operating incomeNon­operating income
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries
and affiliates
Other
Total non­operating incomeNon­operating expenses
Interest expense
Foreign exchange loss
Other
Total non­operating expenses
Ordinary income
Extraordinary losses
Disaster losses
Disaster recovery expenses
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in earnings of consolidated
subsidiaries

17,812

18,27013,41213,017

55

52

151

189

131

155

317

135

656

533

14

48

57

42

Net income

94

75

166

166

13,902

13,384

­

17

­

17­

35

13,902

13,349

5,624

5,445

8,278

7,904

76

22

8,202

7,881

5

(millions of yen)

Income before minority interests
Other comprehensive income
Unrealized gains on available­for­sale securities
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

Six months ended
September 30, 2010
AmountSix months ended
September 30, 2011
Amount

8,278

7,904

(1,623)(1,211)

(508)

248

(51)

27

(2,182)

(935)

6,096

6,968

6,061

6,927

35

416

Statements of Cash Flows — Consolidated(millions of yen)

Cash 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
Other
Net cash provided by (used in) operating activities
Cash 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
Cash flows from financing activities
Net increase (decrease) in short­term borrowings
Income from long­term 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
Effect of exchange rate changes on cash and cash
equivalents
Net 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

Six months
ended
September 30,
2010
AmountSix months
ended
September 30,
2011
Amount13,902

13,349

8,010

7,904

626

271

2,977

1,047

(2,563)(2,560)

(543)

434

(7,365)(5,817)(1,334)353

13,70914,982(14,996)(19,647)

1,055

27,689(36,000)(39,000)

38,50021,000(2,366)(2,671)19

8(1,706)

(6)

(289)

(319)

151

219

(15,632)(12,727)

200

(182)

­

2(234)

(244)

(3)

(1)

(2,441)(2,403)

(11)

(13)

(2,489)(2,842)(179)

47(4,592)(540)

20,59010,83446­

16,044

10,2947

(4) Notes on the Going­concern Assumption
Six months ended September 30, 2011 (April 1, 2011 – September 30, 2011)

Not applicable(5) Segment Information
1. Sales and income by reportable segment
Six months ended September 30, 2010 (April 1, 2010 – September 30, 2010)(millions of yen)

Reportable segments
Water
Water
Treatment
Treatment
Total
Chemicals
Facilities
Sales
Sales to outside customers
Inter­segment sales or transfers
Total
Segment incomeAmounts reported onthe quarterlyAdjustments statements of income(note 1)
(note 2)

28,663
187
28,85059,04885
59,13387,712272
87,984

­
(272)
(272)

87,712­
87,712

5,538

7,875

13,413(0)

13,412Six months ended September 30, 2011 (April 1, 2011 – September 30, 2011)(millions of yen)

Reportable segment
Water
Water
Treatment
Treatment
Chemicals
Facilities
TotalSales
Sales to outside customers
Inter­segment sales or transfers
Total
Segment income
Notes:

28,617
197
28,814
4,991

60,89892
60,991
8,027

89,515290
89,806
13,018Amounts reported on
the quarterly
Adjustments statements of income(note 1)
(note 2)­(290)(290)(0)

89,515­89,51513,017

1. Adjustments related to sales represents elimination of inter­segment sales. Resultantadjustment of segment income is reflected in segment income Adjustments.
2. Segment income is shown at the operating income level.
(6) Notes on Significant Changes in Shareholders’ Equity
Six months ended September 30, 2011 (April 1, 2011 – September 30, 2011)

Not applicable8

4. Other Information — Consolidated(1) Order Intake(millions of yen)

Business segmentWater Treatment Chemicals
Water Treatment Facilities
Total

Six months ended September 30,
2010
2011
Amount%Amount29,15632.4
29,01860,78967.6
69,41889,946100.0

98,436

%
29.5
70.5
100.0

(2) Net Sales(millions of yen)

Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

Six months ended September 30,
2010
2011
Amount%Amount28,66332.7
28,61759,04867.3
60,89887,712100.0
89,515

%
32.0
68.0
100.0

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

Business segment
Water Treatment ChemicalsSix months ended September 30,
2010
2011
Amount%Amount
436
25.9
667%
25.2

Water Treatment Facilities

1,247

74.1

1,984

74.8

Total

1,683

100.0

2,652

100.0

(4) Depreciation (Property, Plant and Equipment)(millions of yen)Six months ended September 30,
Business segment
Water Treatment Chemicals
Water Treatment Facilities
Total

2010
Amount
583

2011
%
7.6

Amount
563

%

7,087

92.4

7,015

92.6

7,670

100.0

7,579

100.0

7.4

9