MODEC, INC. and Subsidiaries

CONSOLIDATED BALANCE SHEETMarch 31, 2007ASSETS

March 31, 2007
CURRENT ASSETS:
Cash and time deposits
Accounts receivable - trade
Inventories
Short-term loans receivable
Other current assets
Less-Allowance for bad debts
Total current assets
PROPERTY AND EQUIPMENT:
Buildings and equipment
VesselOther
Less-Accumulated depreciation

INTANGIBLE ASSETSOTHER ASSETS:
Investments securities
Long-term loans receivable fromunconsolidated subsidiaries and affiliatedcompanies
Long-term lease receivable
Other investments
Less-Allowance for bad debts

Total assets

Thousand of Japanese yen
March 31, 2006
December 31, 2006

¥18,643,160
27,677,528
2,254,369
35,476,681
7,223,654(703)
91,274,690¥28,530,894
17,524,070
1,889,708
3,178,518
5,247,433(3,283)56,367,342¥28,827,361
10,641,277
2,518,199
27,270,756
5,728,372(3,408)74,982,558

956,801
10,789,313
13,460(8,006,601)
3,752,974

870,134
10,695,748
305,682(7,572,504)
4,299,062

936,511
10,893,928
30,759(7,933,101)
3,928,097

14,807,787

5,514,111

15,119,857

12,161,682

9,040,162

11,127,213

6,978,810
2,037,925
2,193,250(2,400)23,369,269

45,975,142
4,592,530
1,426,706(6,400)61,028,142

13,782,627
2,565,483
1,846,815(2,400)29,319,738¥133,204,722¥127,208,659¥123,350,252

LIABILITIES AND SHAREHOLDERS' EQUITY

Thousand of Japanese yen
March 31, 2007
March 31, 2006
December 31, 2006
CURRENT LIABILITIES:
Accounts payable - trade
Short-term loans payable
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term loans payable
Severance and retirement benefits
For employees
For directors and corporate auditors
Deferred tax liabilities
Other long-term liabilities
Total long-term liabilities
NET ASSETSSHAREHOLDERS' EQUITY:
Common stock;authorized - 102,868,000 shares
outstanding - 37,408,000 shares
Capital surplus
Retained earnings
Less-Treasury stock at cost
Total shareholders' equity
DISCREPANCIES IN APPRAISALS andCONVERSIONS:Net unrealized holding gains on securities
Foreign currency translation adjustments
Total discrepancies in appraisals andconversions
MINORITY INTERESTS IN
CONSOLIDATED SUBSIDIARIES:
Total net assets
Total liabilities, net assets¥15,628,211
52,548,676
12,574,616
80,751,504¥18,797,346
49,650,255
11,651,266
80,098,869¥16,265,379
34,172,577
13,806,935
64,244,891

3,704,155

5,469,163

12,822,085

130,945
207,859
2,814,654
735,938
7,593,552

118,978
135,107
1,692,346
456,929
7,872,525

125,594
189,671
3,167,136
578,400
16,882,886

12,391,600
13,121,672
13,630,751(712)
39,143,311

12,391,600
13,121,672
10,686,351(712)
36,198,911

12,391,600
13,121,672
13,319,510(713)
38,832,070

671,4031,510,313

1,051,199
725,527

780,351
1,237,041

2,181,716

1,776,726

2,017,392

3,534,636
44,859,666¥133,204,722

1,261,626
39,237,263¥127,208,659

1,373,013
42,222,475¥123,350,252

MODEC, INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME
For 3 months ended March 31, 2007

SALES
COST OF SALES
Gross profit

January 1, 2007
throughMarch 31, 2007
¥36,931,079
34,269,199
2,661,880

Thousand of Japanese yen
January 1, 2006
January 1, 2006
throughthroughMarch 31, 2006
December 31, 2006
¥26,180,964¥99,149,334
24,261,575
89,767,807
1,919,389
9,381,527

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
Operating profit

2,055,841
606,039

1,299,555
619,834

5,887,123
3,494,405

OTHER INCOME (EXPENSES):Interest income and dividend income
Interest expense
Foreign exchange gain (loss), net
Equity in earnings of affiliates
Other, net
Total other income (expenses)

909,656(766,845)(99,372)
283,709(13,970)
313,178

813,547(620,175)(237,370)
255,47184,324
295,797

3,552,577(2,555,538)(1,106,006)
1,132,458
187,444
1,210,935

INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS

919,216

915,631

4,705,339

INCOME TAXES:
Current
Deferred

779,559(387,734)

384,633
45,212

2,636,783(1,511,569)

INCOME BEFORE MINORITY INTERESTS

527,392

485,786

3,580,125

MINORITY INTERESTS

11,11328,574274,376¥516,279¥457,212¥3,305,749¥13.80¥12.22¥88.37NET INCOME

Net income per share