March 13, 2007

MODEC, INC.
Kenji Yamada, President & CEO
Code: TSE 6269
Contact: Yasuhiro Takano, General Manager
Corporate Planning & Strategies
TEL: 03-5800-6081

Revision of 2006 Full-Year Financial Results

MODEC, INC. today announced the revision of the 2006 Full-Year Financial Results which wereannounced on February 14, 2007.

1. Reason for the revision
Consolidated Balance Sheets and Consolidated Statements of Cash Flows
Following the auditor’s comments, accounting procedure regarding MODEC (U.S.A.), INC. which
acquired the stock of SOFEC, INC. on December 31, 2006 was revised.

2. Revised financial statements (attached)MODEC, INC. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
December 31, 2006ASSETS

Thousand of Japanese yen2006
2005
CURRENT ASSETS:
Cash and time deposits
Accounts receivable - trade
Inventories
Short-term loans receivable
Short-term lease receivable
Deferred tax assets
Other current assets
Less-Allowance for bad debts
Total current assets
PROPERTY AND EQUIPMENT:
Buildings and equipment
VesselConstruction in progressLess-Accumulated depreciation

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

Total assets¥28,827,361
10,641,277
2,518,199
27,270,756
2,352,593
335,004
3,040,775(3,408)74,982,558¥25,061,948
16,409,320
2,237,994
255,827
2,145,448
156,195
2,568,466(3,013)
48,832,185

936,512
10,893,929
30,759(7,933,102)
3,928,098

774,407
10,236,883
3,735,215(7,651,566)
7,094,939

15,119,857

5,246,688

11,127,213

8,463,479

13,782,627
2,565,483
1,339,169
507,646(2,400)29,319,738

28,289,633
5,043,801
1,345,512
388,817(6,400)43,524,842¥123,350,252¥104,698,654

LIABILITIES AND SHAREHOLDERS' EQUITY

Thousand of Japanese yen
2006
2005
CURRENT LIABILITIES:
Accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Provision for product warranty
Deferred tax liabilities
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 andconversionsMINORITY INTERESTS IN
CONSOLIDATED SUBSIDIARIES:
Total net assets
Total liabilities, net assets¥16,265,379
34,172,577
2,955,844
5,025,736
1,842,845
791,649
7,941
3,182,917
64,244,891¥18,889,959
27,960,410
3,107,316
1,692,027
345,594504,574
725,719
3,205,519
56,431,118

12,822,085

6,478,169

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

113,839
120,9441,548,182
355,674
8,616,808

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

12,391,600
13,121,672
10,434,178(547)35,946,903

780,351
1,237,041

865,195
1,031,558

2,017,392

1,896,753

1,373,013
42,222,475¥123,350,252

1,807,072
39,650,729¥104,698,655

MODEC, INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWSFor the year ended December 31, 2006

Thousand of Japanese yen
2006
2005
CASH FLOWS FROM OPERATINGACTIVITIES:
Income before income taxes and minority
interests
Adjustments to reconcile income before
income taxes and minority interests to net
cash provided by operating activities:
Depreciation and amortization
Amortization of consolidated differencesProvision for (reversal of) allowance forbad debts
Provision for severance and retirement
benefits for employees
Provision for severance and retirement
benefits for directors and corporate
Provision for product warrantyInterest income and dividend income
Interest expense
Foreign exchange loss
Equity in earnings of affiliates
Changes in assets and liabilities:
Decrease (Increase) in– Accounts receivable - trade– Inventories– Consumption taxes refund
Increase (Decrease) in– Accounts payable - trade
Bonuses paid to directors
Other, net

Interest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities¥4,705,339¥5,408,058

743,185
26,486

1,116,419
26,486(3,605)(2,379)11,755

10,73068,727283,263(3,552,577)
2,555,538(38,532)(1,132,458)

15,964
139,505(1,287,727)
1,261,365
131,722(763,396)

9,513,598(247,482)
34,7001,407,818(2,072,878)(51,674)(2,992,120)(18,000)
2,637,460
12,595,276

7,614,825(13,000)
1,424,803
14,366,641

2,593,165(2,478,193)(994,212)
11,716,036

1,132,849(1,513,965)(2,107,517)
11,878,008

Thousand of Japanese yen
2006
2005
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and equipment andintangible assets
Purchases of investments in affiliates
Disbursement of short-term loans
Collection of short-term loans receivable
Disbursement of long-term loans
Collection of long-term loans receivable
Purchase of investment in subsidiaries
Other, net
Net cash used in investing activities¥(1,384,713)(2,535,886)(12,572,739)
6,124,975(32,315,137)
28,476,911(5,836,635)
0(20,043,223)¥(4,399,785)(2,613,862)
0
10,699,185(25,660,021)
426,203－(1,500)(21,549,780)

CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from short-term loans payable
Repayment of short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Issuance of shares
Cash dividends paid to minority interests
Cash dividends paid
Other, net
Net cash provided by financing activities

30,187,221(24,223,706)
10,010,576(3,052,688)－(632,527)(420,837)(166)
11,867,872

13,853,314
0
3,075,259(8,225,701)
10,679,122(81,202)(297,379)(316)
19,003,097

223,651

1,668,696

3,764,336

11,000,021

25,061,948

14,061,927

1,077－¥28,827,361¥25,061,948

EFFECT OF EXCHANGE RATE CHANGESON CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
INCREASE IN CASH AND CASH
EQUIVALENTS DUE TO ADDITIONAL orEXCLUSION OF CONSOLIDATEDSUBSIDIARIESCASH AND CASH EQUIVALENTS AT
ENDING OF YEAR