I will now explain the results from the 2nd quarter and first half of fiscal year
ending March, 2014.

First, let me go over the highlights from the first half results.

Due to factors including the weak yen, we achieved our sales and profit goals
for the first half and saw profitability improvement over the previous quarteras well.
By segment, our Interventional Systems business in Europe and U.S., which
has been a company driver, was able to overcome a tough market
environment to continue its double-digit growth. In addition, we successfullylaunched our new peripheral and neuro endovascular products, which are an
important strategy in our mid-term plan. In Blood Management business, wewere able to maintain solid profit despite a decline in blood use. In General
Hospital, we continued to make improvements to plant productivity for newproducts.

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Here are our financial results.

The yen has gotten weaker compared to last year, and the first half averagerate was 99 yen to the dollar and 130 yen to the euro. This weak yen helped
spur our sales to 226 billion yen, or an 18% increase from the previousperiod. This sales figure includes a 27.1 billion yen boost due to currency
exchange.
Gross margin dropped 0.6% point from the same period last year, when
productivity made large contributions. Influenced by currency exchange,
SG&A increased by 20% from the last period, but when currency exchange isexcluded, we controlled SG&A growth to remain within the range of salesgrowth. As a result, our operating income was 30.5 billion yen, or 8% above
the previous period. Exchange rates accounted for 8.1 billion yen of thisoperating income.
Ordinary income grew 22% to 29.6 billion yen, due to currency exchange
profit driven by the weak yen. The net income for this period was 19.5 billion
yen, or a 34% increase that was also affected by factors including corporate
taxes. The first half results were more or less according to our performanceprojections.

3This chart shows growth by business segment and region. Parentheses
indicate the growth rate, excluding currency exchange and the home therapy
business that was transferred out of the portfolio in February.
In General Hospital, the commissioned portion of our domestic Drug & Device
business and our DM business maintained good results. Outside Japan,
North America and Europe remained at low growth, with factors including
continuing restructuring of low-profit businesses. However, we have begun
sales of high margin products including Smart Pumps, and expect the goodeffects of those to steadily appear.
In Cardiac and Vascular, our peripheral stent “Misago,” which is one focus
area of the mid-term plan, grew as planned. Overseas, the interventional
systems business has maintained double-digit growth. In particular, accessproducts led by TRI-related devices have driven stable growth. The shipment
delays caused by the computer system launch in Europe, which wementioned in the first quarter report, are on their way to resolution. The issues
with neuro endovascular product inventory adjustment at our China distributor
have been resolved.
In the Blood Management business, our automated blood component
collection system, which includes BCT products, performed well. We
proceeded with introduction of our automated blood processing system, which
contributes to more efficient blood center operations in Europe. We also
expanded therapeutic apheresis overseas.

4I will now explain the status of SG&A expenses.

SG&A increased 20%, but only 5% when currency exchange is excluded.
General administrative expenses were focused on strengthening sales force
in the Europe Interventional Systems and neuro endovascular businesses.
We continue to spend R&D funds on proactive investment in Interventional
Systems and Blood Management product development. On the whole, wekept our SG&A increase within the sales increase.

5I will now share our operating income variance analysis.

Our profit was affected positively by the 8.1 billion yen in currency exchange,and increased sales. Negative factors included expenses incurred inlaunching new products and depreciation of newly introduced manufacturingequipment. These factors are in an improving trend compared with the firstquarter. Other negative factors included prices, the US medical device tax,
and the inventory valuation that boosted the last period. The operating profit
was 30.5 billion yen, or a 2.3 billion yen increase.

6I will now explain revenue trends for the four quarters of the past year.

We can report good numbers, and we look forward to continuing improvementin profitability as set forth in our mid-term plan.

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As this graph shows, we have achieved steady improvement in our grossprofit and operating margins, even when excluding the effects of currencyexchange.

8Here are our achievements in comparison to our projections for the first half.
We had the tail wind of currency exchange, but our results were more or lesswhat we originally projected.

9Next, I will speak about our operating cash flow.

We were able to achieve an operating cash flow of 37.6 billion yen thanks toan increase in profit before taxes and a partial corporate tax refund that
resulted from the reorganization of US subsidiaries. We balanced thedistribution of this cash flow carefully, with 25.2 billion yen to growthinvestment in the Terumo Yamaguchi Plant and Blood Management businessproduction at the Vietnam Plant, 7.5 billion yen toward debt repayment, and4.2 billion yen to fund a dividend.
We will continue in the second half to appropriately manage our cash flow.

10Now I will explain our efforts in the first and second halves.

11In the Interventional Systems business, the domestically sold intravascularultrasound IVUS performed well with sales of 2.8 billion yen, and grew to a
30% market share. The new IVUS catheter launched in May enables
observation of lesions that were previously inaccessible, and will more
broadly support our PCI therapeutic strategy. Terumo is the only company
worldwide to offer both IVUS and OFDI, and we plan to expand PCI on thestrength of imaging.

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In peripheral intervention for the abdominal area, we began sales of ourocclusion balloon Attendant Delta, which is capable of delivering chemotreatment directly to cancer-affected areas of the liver. The balloon profile has
been designed to be smaller and thereby increases accessibility.
It has also been designed to be smoothly maneuverable when used over a
guide wire inside blood vessels. This development and capability havegarnered praise at the clinical level for enabling the use of multiple devices,and contributed to increasing sales to 300 million yen in the first half.

13In our Blood Management business, two products drove the 6% growth weexperienced in the first half.
First was our automated blood processing system. We offer a whole blood
automated processing system that contributes to more efficient work at blood
centers and consistent blood preparations quality.
The second product was our therapeutic plasma exchange and cell therapysystem. We are currently encouraging upgrades from COBE Spectra, which
has a large market share, to our new Optia product. We are also accelerating
our protocol development to expand applications and diversify the therapies
that Optia can deliver.

14I will now touch on the launch status of pipeline products included in our midterm plan.
The chart on this slide lists the pipeline products from our mid-term plan
which were scheduled for launch this period. We launched all products ontime, just as in the first quarter.

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The Glidesheath slender is a TRI sheath. Sheaths which are inserted fromthe wrist of course need to have a narrow outer diameter; this product has
been further slimmed down. The inner diameter remains the same, though.
This means we are able to provide gentler care to elderly and female patients
while maintaining usability. We are aiming for 1 billion yen in sales in FY2014.

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I will now explain the efforts we plan for the second half.

In order to achieve our goals for the next period and our mid-term plan, wewill continue to launch new pipeline products as well as enhanced existingones, while also expanding the number of countries and regions where wesell.
Our first-half investment in the TCVS quality management system was slightly
higher than projections, at 2.7 billion yen. This investment amount is expected
to drop to half of that in the second half, and we expect to recover our sales in
the next fiscal year.
We already reported that General Hospital experienced a first-quarter
increase in costs due to the introduction of new products; we continue tomake improvements to that situation.

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This shows pipeline products scheduled for launch in the second half.

In the Interventional Systems, we plan to expand our neuro intervention field
product. We will also launch the needleless line, which is one of our solution
in the “total safety” initiative for the General Hospital segment.

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Hiryu Plus has been just launched this month. It features a three-layer balloon
construction that maintains pressure resistance while improving flexibility. We
have also made improvements to the shaft structure to give the overallsystem more maneuverability.
We believe this product will breathe new life into the mature domestic PTCA
balloon market, and our goal is 1.6 billion yen in sales for FY2014.

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Through these and other efforts, we have been able to achieve our initial plan
for revenue. We ask for your continued support. In currency exchange, wemaintain 95 yen to the dollar and 123 yen to the euro for the second half.
This concludes my remarks for the second quarter and first half of the year
ending March 2014. Thank you.

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